As filed with the Securities and Exchange Commission on April 22, 2002

Registration No. 333-44900

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

----------------------

POST-EFFECTIVE AMENDMENT NO. 6 TO
FORM S-11
REGISTRATION STATEMENT
Under
The Securities Act of 1933

----------------------

WELLS REAL ESTATE INVESTMENT TRUST, INC.
(Exact name of registrant as specified in governing instruments)

6200 The Corners Parkway, Suite 250
Norcross, Georgia 30092
(770) 449-7800
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)

Donald Kennicott, Esq.
Michael K. Rafter, Esq.
Holland & Knight LLP
One Atlantic Center, Suite 2000
1201 West Peachtree Street, N.W.
Atlanta, Georgia 30309-3400
(404) 817-8500
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Agent for Service)

----------------------

Maryland                             58-2328421
(State or other                       (I.R.S. Employer
Jurisdiction of Incorporation)            Identification Number)

----------------------

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_] ___________

If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [_] ___________

If this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [_] ___________

If delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box. [_] ___________

Approximate date of commencement of proposed sale to the public: As
soon as practicable following effectiveness of this Registration Statement.

----------------------

[The following is text to a sticker to be attached to the front cover page of
the prospectus in a manner that will not obscure the Risk Factors:]

SUPPLEMENTAL INFORMATION - The prospectus of Wells Real Estate
Investment Trust, Inc. consists of this sticker, the prospectus dated December
20, 2000, Supplement No. 1 dated February 5, 2001, Supplement No. 2 dated April
25, 2001, Supplement No. 3 dated July 20, 2001, Supplement No. 4 dated August
10, 2001, Supplement No. 5 dated October 15, 2001, Supplement No. 6 dated
January 20, 2002, Supplement No. 7 dated March 30, 2002 and Supplement No. 8
dated April 15, 2002 (the supplements are contained inside the back cover page
of the prospectus). Supplement No. 1 includes descriptions of acquisitions of
interests in office buildings in Houston, Texas, Minnetonka, Minnesota and
Oklahoma City, Oklahoma. Supplement No. 2 includes updated financial statements,
prior performance tables and certain other revisions to the prospectus.
Supplement No. 3 includes descriptions of acquisitions of interests in office
buildings in Nashville, Tennessee and Jacksonville, Florida and certain other
revisions to the prospectus. Supplement No. 4 includes descriptions of an
acquisition of an office building in Quincy, Massachusetts, the initial
transaction under the Section 1031 Exchange Program and certain other revisions
to the prospectus. Supplement No. 5 includes descriptions of acquisitions of
office buildings in Houston, Texas, Millington, Tennessee and Cary, North
Carolina, the acquisition of a build-to-suit property in Irving, Texas, the
declaration of fourth quarter dividends and certain other revisions to the
prospectus. Supplement No. 6 includes descriptions of acquisitions of office
buildings in Tamarac, Florida, Schaumburg, Illinois and Sarasota, Florida, the
acquisition of an interest in an office and assembly building in Parker,
Colorado, revisions to the "Suitability Standards" section, revisions to the
"Plan of Distribution" section and certain other revisions to the prospectus.
Supplement No. 7 includes updated financial statements, prior performance tables
and certain other revisions to the prospectus. Supplement No. 8 includes
descriptions of acquisitions of buildings in Houston, Texas, Atlanta, Georgia,
Lakewood, Colorado, Farmington Hills, Michigan, Kalamazoo, Michigan, and
certain other revisions to the prospectus.

WELLS REAL ESTATE INVESTMENT TRUST, INC.

Up to 125,000,000 shares offered to the public
___________________________________

Wells Real Estate Investment Trust, Inc. (Wells REIT) is a real estate
investment trust. We invest in commercial real estate properties primarily
consisting of high grade office buildings which are leased to large corporate
tenants. We currently own interests in 26 office buildings located in 15 states.

We are offering and selling to the public up to 125,000,000 shares for $10
per share and up to 10,000,000 shares to be issued pursuant to our dividend
reinvestment plan at a purchase price of $10 per share. An additional 5,000,000
shares are being registered which are reserved for issuance at $12 per share to
participating broker-dealers upon their exercise of warrants.

You must purchase at least 100 shares for $1,000.

The most significant risks relating to your investment include the following:

.    lack of a public trading market for the shares

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

.    authorization of substantial fees to the advisor and its affiliates

.    borrowing - which increases the risk of loss of our investments

.    conflicts of interest facing the advisor and its affiliates

You should see the complete discussion of the risk factors beginning on page 16.

The Offering:

.    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 for reimbursement of marketing expenses 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.
.    The offering will terminate on or before December 19, 2002.

Neither the Securities and Exchange Commission, the Attorney General of the
State of New York nor any other state securities regulator has approved or
disapproved of these securities or determined if this prospectus is truthful or
complete. It is a criminal offense if someone tells you otherwise.

The use of projections or forecasts in this offering is prohibited.  No one
is permitted to make any oral or written predictions about the cash benefits or
tax consequences you will receive from your investment.

WELLS INVESTMENT SECURITIES, INC.
December 20, 2000

TABLE OF CONTENTS

Questions and Answers About this Offering....................................................   1
Prospectus Summary...........................................................................   9
Risk Factors.................................................................................  16
Investment Risks..........................................................................  16
Real Estate Risks.........................................................................  20
Federal Income Tax Risks..................................................................  24
Retirement Plan Risks.....................................................................  24
Suitability Standards........................................................................  25
Estimated Use of Proceeds....................................................................  26
Management...................................................................................  28
General...................................................................................  28
Committees of the Board of Directors......................................................  30
Executive Officers and Directors..........................................................  31
Compensation of Directors.................................................................  34
Independent Director Stock Option Plan....................................................  34
Independent Director Warrant Plan.........................................................  36
2000 Employee Stock Option Plan...........................................................  37
Limited Liability and Indemnification of Directors, Officers, Employees and other
Agents...................................................................................  37
The Advisor...............................................................................  39
The Advisory Agreement....................................................................  40
Shareholdings.............................................................................  43
Affiliated Companies......................................................................  43
Management Decisions......................................................................  45
Management Compensation......................................................................  46
Stock Ownership..............................................................................  49
Conflicts of Interest........................................................................  51
Interests in Other Real Estate Programs...................................................  51
Other Activities of Wells Capital and its Affiliates......................................  52
Competition...............................................................................  52
Affiliated Dealer Manager.................................................................  53
Affiliated Property Manager...............................................................  53
Lack of Separate Representation...........................................................  53
Joint Ventures with Affiliates of Wells Capital...........................................  53
Receipt of Fees and Other Compensation by Wells Capital and its Affiliates................  53
Certain Conflict Resolution Procedures....................................................  54
Investment Objectives and Criteria...........................................................  55
General...................................................................................  55
Acquisition and Investment Policies.......................................................  56
Development and Construction of Properties................................................  58
Acquisition of Properties from Wells Development Corporation..............................  58
Terms of Leases and Tenant Creditworthiness...............................................  60
Joint Venture Investments.................................................................  61
Borrowing Policies........................................................................  62
Disposition Policies......................................................................  62
Investment Limitations....................................................................  63
Change in Investment Objectives and Limitations...........................................  65
Description of Properties....................................................................  65

i

General...................................................................................  65
Joint Ventures with Affiliates............................................................  67
The Motorola Plainfield Building..........................................................  69
The Quest Building........................................................................  70
The Delphi Building.......................................................................  71
The Avnet Building........................................................................  71
The Siemens Building......................................................................  72
The Motorola Tempe Building...............................................................  73
The ASML Building.........................................................................  74
The Dial Building.........................................................................  75
The Metris Building.......................................................................  76
The Cinemark Building.....................................................................  77
The Gartner Building......................................................................  78
The Marconi Building......................................................................  79
The Johnson Matthey Building..............................................................  80
The Alston Power Richmond Building........................................................  81
The Sprint Building.......................................................................  83
The EYBL CarTex Building..................................................................  84
The Matsushita Building...................................................................  85
The AT&T Building.........................................................................  86
The PwC Building..........................................................................  88
The Fairchild Building....................................................................  89
The Cort Furniture Building...............................................................  90
The Iomega Building.......................................................................  91
The Interlocken Building..................................................................  91
The Ohmeda Building.......................................................................  93
The Alston Power Knoxville Building.......................................................  94
The Auaya Building........................................................................  95
Property Management Fees..................................................................  96
Real Estate Loans.........................................................................  96
Management's Discussion and Analysis of Financial Condition and Results of Operations........  97
Liquidity and Capital Resources...........................................................  97
Cash Flows From Operating Activities......................................................  99
Cash Flow From Investing Activities.......................................................  99
Cash Flows From Financing Activities......................................................  99
Results of Operations..................................................................... 100
Subsequent Events......................................................................... 100
Property Operations....................................................................... 100
Inflation................................................................................. 114
Prior Performance Summary.................................................................... 114
Publicly Offered Unspecified Real Estate Programs......................................... 115
Federal Income Tax Considerations............................................................ 123
General................................................................................... 123
Requirements for Qualification as a REIT.................................................. 125
Failure to Qualify as a REIT.............................................................. 130
Sale-Leaseback Transactions............................................................... 130
Taxation of U.S. Shareholders............................................................. 130
Treatment of Tax-Exempt Shareholders...................................................... 132
Special Tax Considerations for Non-U.S. Shareholders...................................... 133
Statement of Stock Ownership.............................................................. 135
State and Local Taxation.................................................................. 135

ii

Tax Aspects of Our Operating Partnership...........................................        135
ERISA Considerations..................................................................        139
Plan Asset Considerations..........................................................        140
Other Prohibited Transactions......................................................        141
Annual Valuation...................................................................        142
Description of Shares.................................................................        142
Common Stock.......................................................................        143
Preferred Stock....................................................................        143
Meetings and Special Voting Requirements...........................................        143
Restriction on Ownership of Shares.................................................        144
Dividends..........................................................................        145
Dividend Reinvestment Plan.........................................................        146
Share Redemption Program...........................................................        146
Restrictions on Roll-Up Transactions...............................................        147
Business Combinations..............................................................        149
Control Share Acquisitions.........................................................        149
The Operating Partnership Agreement...................................................        150
General............................................................................        150
Capital Contributions..............................................................        151
Operations.........................................................................        151
Exchange Rights....................................................................        152
Transferability of Interests.......................................................        153
Plan of Distribution..................................................................        153
Supplemental Sales Material...........................................................        158
Legal Opinions........................................................................        159
Experts...............................................................................        159
Audited Financial Statements.......................................................        159
Unaudited Financial Statements.....................................................        159
Additional Information................................................................        160
Glossary..............................................................................        160
Financial Statements..................................................................        161
Prior Performance Tables..............................................................        215
Subscription Agreement................................................................  Exhibit A
Amended and Restated Dividend Reinvestment Plan.......................................  Exhibit B

iii

Questions and Answers About this Offering

Below we have provided some of the more frequently asked questions and
answers relating to an offering of this type. Please see the "Prospectus
Summary" and the remainder of this prospectus for more detailed information
about this offering.

--------------------------------------------------------------------------------

Q:   What is a REIT?

A:   In general, a REIT is a company that:

.    pays dividends to investors of at least 95% of its taxable income each
year for years prior to 2001 and 90% of its taxable income for all
future years beginning with the year 2001;

.    avoids the "double taxation" treatment of income that generally
results 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;

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

.    offers the benefit of a diversified real estate portfolio under
professional management.

--------------------------------------------------------------------------------

Q:   What is Wells Real Estate Investment Trust, Inc.?

A:   Our REIT was formed in 1997 as a Maryland corporation to acquire commercial
real estate properties such as high grade office buildings and lease them
on a triple-net basis to companies that typically have a net worth in
excess of $100,000,000.
--------------------------------------------------------------------------------

Q:   Who will choose which real estate properties to invest in?

A:   Wells Capital, Inc. (Wells Capital) is our advisor and makes
recommendations on all property acquisitions to our board of directors. Our
board of directors must approve all of our acquisitions.

--------------------------------------------------------------------------------

Q:   Who is Wells Capital?

A:   Wells Capital is a Georgia corporation formed in 1984. As of September 30,
2000, Wells Capital had sponsored public real estate programs which have
raised in excess of $567,927,422 from approximately 32,868 investors and
which own and operate a total of 52 commercial real estate properties.

--------------------------------------------------------------------------------

Q:   Does Wells Capital use any specific criteria when selecting a potential
property acquisition?

A:   Yes. Wells Capital generally seeks to acquire office buildings located in
densely populated suburban markets leased to large corporations on a
triple-net basis. Typically, each of our corporate tenants have a net worth
in excess of $100,000,000. Current tenants of public real

1

estate programs sponsored by Wells Capital include The Coca-Cola Company,
Motorola, Fairchild Technologies, Siemens Automotive,
PricewaterhouseCoopers, IBM, and Dial Corporation.

--------------------------------------------------------------------------------

Q.   Do you currently own any real estate properties?

A.   Yes. As of the date of this prospectus, our REIT has acquired and owns
interests in 26 real estate properties.

We own the following properties directly:

------------------------------------------------------------------------------------------------------------------
Tenant                                   Building Type                     Location                    Occupancy
------------------------------------------------------------------------------------------------------------------

Motorola, Inc.                           Office Building                   Plainfield, New Jersey          100%
------------------------------------------------------------------------------------------------------------------
Delphi Automotive Systems, Inc.          Office Building                   Troy, Michigan                  100%
------------------------------------------------------------------------------------------------------------------
Avnet, Inc.                              Office Building                   Tempe, Arizona                  100%
------------------------------------------------------------------------------------------------------------------
Motorola, Inc.                           Office Building                   Tempe, Arizona                  100%
------------------------------------------------------------------------------------------------------------------
ASM Lithography, Inc.                    Office and Warehouse Building     Tempe, Arizona                  100%
------------------------------------------------------------------------------------------------------------------
Dial Corporation                         Office Building                   Scottsdale, Arizona             100%
------------------------------------------------------------------------------------------------------------------
Metris Direct, Inc.                      Office Building                   Tulsa, Oklahoma                 100%
------------------------------------------------------------------------------------------------------------------
Cinemark USA, Inc. and                   Office Building                   Plano, Texas                    100%
The Coca-Cola Company
------------------------------------------------------------------------------------------------------------------
Marconi Data Systems,                    Office, Assembly and              Wood Dale, Illinois             100%
Inc.                                   Manufacturing Building
------------------------------------------------------------------------------------------------------------------
Alstom Power, Inc.                       Office Building                   Richmond, Virginia              100%
------------------------------------------------------------------------------------------------------------------
Matsushita Avionics Systems Corporation  Office Building                   Lake Forest, California         100%
------------------------------------------------------------------------------------------------------------------
Pennsylvania Cellular Telephone Corp.    Office Building                   Harrisburg, Pennsylvania        100%
------------------------------------------------------------------------------------------------------------------
PricewaterhouseCoopers                   Office Building                   Tampa, Florida                  100%
------------------------------------------------------------------------------------------------------------------

We own interests in the following real estate properties through joint
ventures with affiliates:

-------------------------------------------------------------------------------------------------------------------
Tenant                                   Building Type                     Location                     Occupancy
-------------------------------------------------------------------------------------------------------------------

Quest Software, Inc.                     Office Building                   Irvine, California              100%
-------------------------------------------------------------------------------------------------------------------
Siemens Automotive Corporation           Office Building                   Troy, Michigan                  100%
-------------------------------------------------------------------------------------------------------------------
Gartner Group, Inc.                      Office Building                   Ft. Myers, Florida              100%
-------------------------------------------------------------------------------------------------------------------
Johnson Matthey, Inc.                    Research and Development,         Tredyffrin Township,            100%
Office and Warehouse           Pennsylvania
Building
-------------------------------------------------------------------------------------------------------------------
Sprint Communications                    Office Building                   Leawood, Kansas                 100%
Company L.P.
-------------------------------------------------------------------------------------------------------------------
EYBL CarTex, Inc.                        Manufacturing and Office          Fountain Inn, South             100%
Building                       Carolina
-------------------------------------------------------------------------------------------------------------------

2

--------------------------------------------------------------------------------------------------------------------
Tenant                                   Building Type                     Location                     Occupancy
--------------------------------------------------------------------------------------------------------------------

Fairchild Technologies U.S.A., Inc.      Manufacturing and Office          Fremont, California             100%
Building
--------------------------------------------------------------------------------------------------------------------
Cort Furniture Rental Corporation        Office and Warehouse Building     Fountain Valley,                100%
California
--------------------------------------------------------------------------------------------------------------------
Iomega Corporation                       Office Building                   Ogden City, Utah                100%
--------------------------------------------------------------------------------------------------------------------
ODS Technologies, L.P. and GAIAM, Inc.   Office Building                   Broomfield, Colorado            100%
--------------------------------------------------------------------------------------------------------------------
Ohmeda, Inc.                             Office Building                   Louisville, Colorado            100%
--------------------------------------------------------------------------------------------------------------------
Alstom Power, Inc.                       Office Building                   Knoxville, Tennessee            100%
--------------------------------------------------------------------------------------------------------------------
Avaya, Inc.                              Office Building                   Oklahoma City, Oklahoma         100%
--------------------------------------------------------------------------------------------------------------------

If you want to read more detailed information about each of these
properties, see the "Description of Properties" section of this prospectus.

--------------------------------------------------------------------------------

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:   Our leases are "triple-net" leases, generally having terms of seven to ten
years, many of which have renewal options for an additional five to ten
years. "Triple-net" means that the tenant is responsible for repairs,
maintenance, property taxes, utilities, insurance and other operating
costs. We often enter into leases where we have responsibility for
replacement of specific structural components of a property such as the
roof of the building or the parking lot.

--------------------------------------------------------------------------------

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." We
use this structure because a sale of property directly to the REIT is
generally a taxable transaction to the selling

3

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 shareholders. The amount of each dividend
distribution is determined by the board of directors and typically depends
on the amount of distributable funds, current and projected cash
requirements, tax considerations and other factors. However, in order to
remain qualified as a REIT, we must make distributions of at least 95% of
our REIT taxable income each year for years prior to 2001 and 90% of our
REIT taxable income for all future years beginning with the year 2001.

--------------------------------------------------------------------------------

Q:   How do you calculate the payment of dividends to shareholders?

A:   We calculate our quarterly dividends using daily record and declaration
dates so your dividend benefits will begin to accrue immediately upon
becoming a shareholder.

--------------------------------------------------------------------------------

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:

Annualized
Percentage Return
on an Investment
Quarter              Amount                   of $10 per Share
-------              ------                   ----------------

3/rd/ Qtr. 1998      $0.15 per share          6.00%
4/th/ Qtr. 1998      $0.16 per share          6.50%

1/st/ Qtr. 1999      $0.17 per share          7.00%
2/nd/ Qtr. 1999      $0.17 per share          7.00%
3/rd/ Qtr. 1999      $0.17 per share          7.00%
4/th/ Qtr. 1999      $0.17 per share          7.00%

1/st/ Qtr. 2000      $0.17 per share          7.00%
2/nd/ Qtr. 2000      $0.18 per share          7.25%
3/rd/ Qtr. 2000      $0.19 per share          7.50%
4/th/ Qtr. 2000      $0.19 per share          7.50%

4

--------------------------------------------------------------------------------

Q:   May I reinvest the dividends I am supposed to receive 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.

--------------------------------------------------------------------------------

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 received due to the fact that depreciation
expenses reduce taxable income but do not reduce cash available for
distribution. Amounts not subject to tax immediately 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 commercial real estate
such as high grade office 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.

Until we invest the proceeds of this offering in real estate, we may invest
in short-term, highly liquid investments. These short-term investments will
not earn as high of a return as we expect to earn on our real estate
investments, and we cannot guarantee how long it will take to fully invest
the proceeds in real estate.

We received approximately $132,181,919 in gross offering proceeds from the
sale of 13,218,192 shares of common stock in our initial public offering,
which commenced on January 30, 1998 and was terminated on December 19,
1999. Of the $132,181,919 raised in the initial offering, we invested a
total of $111,032,812 in real estate properties. As of December 10, 2000,
we had received approximately $169,671,659 in gross offering proceeds from
the sale of 16,967,166 shares of common stock in our second offering, which
commenced on December 20, 1999 and was terminated on December 19, 2000. Of
this additional $169,671,659 raised in the second offering, we invested or
expect to invest approximately $142,524,194 in real estate properties.

5

--------------------------------------------------------------------------------

Q:   What kind of offering is this?

A:   We are offering the public up to 125,000,000 shares of common stock on a
"best efforts" basis.

--------------------------------------------------------------------------------

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 December 19, 2002.

--------------------------------------------------------------------------------

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. The purchase price will be placed into an account with
Bank of America, N.A., where your funds will be held, along with those of
other subscribers, until we withdraw funds for the acquisition of real
estate properties or the payment of fees and expenses.

6

--------------------------------------------------------------------------------

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."

In addition, after you have held your shares for at least one year, you may
be able to have your shares repurchased by the Wells REIT pursuant to our
share redemption program. See the "Description of Shares -- Share
Redemption Program" section of the prospectus.

If we have not listed the shares on a national securities exchange or over-
the-counter market by January 30, 2008, our articles of incorporation
require us to begin selling our properties and other assets and return the
net proceeds from these sales to our shareholders through distributions.

--------------------------------------------------------------------------------

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 31 of this prospectus for a more
detailed description of the background and experience of each of our
directors.

.    Leo F. Wells, III - President of the Wells REIT and founder of Wells
Real Estate Funds in 1985 and has been involved in real estate sales,
management and brokerage services for over 27 years;

.    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;

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

.    Richard W. Carpenter - President and a director of Realmark Holdings
Corp., a residential and commercial real estate developer;

.    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;

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

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

7

.    Walter W. Sessoms - Former executive officer of BellSouth
Telecommunications, Inc.; and

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

--------------------------------------------------------------------------------

Q:   Will I be notified of how my investment is doing?

A:   You will receive periodic updates on the performance of your investment
with us, including:

.    Four detailed quarterly dividend reports;

.    Three quarterly financial reports;

.    An annual report; and

.    An annual IRS Form 1099.

--------------------------------------------------------------------------------

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:

Investor Services Department
Wells Capital, Inc.
Suite 250
6200 The Corners Parkway
Norcross, Georgia 30092
(800) 448-1010 or (770) 449-7800
www.wellsref.com

8

Prospectus Summary

This prospectus summary highlights selected information contained
elsewhere in this prospectus. It is not complete and does not contain all of
the information that is important to your decision whether to invest in the
Wells REIT. To understand this offering fully, you should read the entire
prospectus carefully, including the "Risk Factors" section and the financial
statements.

Wells Real Estate Investment Trust, Inc.

Wells Real Estate Investment Trust, Inc. is a REIT that owns net leased
commercial real estate properties. We currently own interests in 26
commercial real estate properties located in 15 states. Our office is located
at 6200 The Corners Parkway, Suite 250, Norcross, Georgia 30092. Our
telephone number outside the State of Georgia is 800-448-1010 (770-449-7800
in Georgia). We refer to Wells Real Estate Investment Trust, Inc. as the
Wells REIT in this prospectus.

Our Advisor

Our advisor is Wells Capital, Inc., which is responsible for managing
our affairs on a day-to-day basis and for identifying and making acquisitions
on our behalf. We refer to Wells Capital, Inc. as Wells Capital in this
prospectus.

Our Management

Our board of directors must approve each real property acquisition
proposed by Wells Capital, as well as certain other matters set forth in our
articles of incorporation. We have nine members on our board of directors.
Seven of the directors are independent of Wells Capital and have
responsibility for reviewing its performance. Our directors are elected
annually by the shareholders.

Our REIT Status

As a REIT, we generally are not subject to federal income tax on income
that we distribute to our shareholders. Under the Internal Revenue Code,
REITs are subject to numerous organizational and operational requirements,
including a requirement that they distribute at least 95% of their taxable
income for years prior to 2001 and at least 90% of their taxable income for
all future years beginning with the year 2001. If we fail to qualify for
taxation as a REIT in any year, our income will be taxed at regular corporate
rates, and we may be precluded from qualifying for treatment as a REIT for
the four-year period following our failure to qualify. Even if we qualify as
a REIT for federal income tax purposes, we may still be subject to state and
local taxes on our income and property and to federal income and excise taxes
on our undistributed income.

Summary Risk Factors

Following are the most significant risks relating to your investment:

.     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.

.     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.

9

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

.     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 shareholders.

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

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

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

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

.     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.

.     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.

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

.     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 shareholders.

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

Before you invest in the Wells REIT, you should see the complete
discussion of the "Risk Factors" beginning on page 16 of this prospectus.

Description of Properties

Please refer to the "Description of Properties" section of this
prospectus for a description of the real estate properties we have purchased
to date and the various real estate loans we have outstanding. Wells Capital
is currently evaluating additional potential property acquisitions. When we
either acquire a property or believe that there is a reasonable probability
that we will acquire a particular property, we will provide a supplement to
this prospectus to describe the property. You should not assume that we will
actually acquire any property that we describe in a supplement as a
reasonable probability acquisition because one or more contingencies to the
purchase may prevent the acquisition.

10

Estimated Use of Proceeds of Offering

We anticipate that we will invest at least 84% of the proceeds of this
offering in real estate properties. We will use the remainder of the offering
proceeds to pay selling commissions, fees and expenses relating to the selection
and acquisition of properties and the costs of the offering.

Investment Objectives

Our investment objectives are:

.    to maximize cash dividends paid to you;

.    to preserve, protect and return your capital contribution;

.    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, by selling our properties and distributing the
cash to you.

We may only change these investment objectives upon a majority vote of the
shareholders. See the "Investment Objectives and Criteria" section of this
prospectus for a more complete description of our business and objectives.

Conflicts of Interest

Wells Capital, as our advisor, will experience conflicts of interest in
connection with the management of our business affairs, including the following:

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

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

.    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

.    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.

See the "Conflicts of Interest" section of this prospectus on page 51 for a
detailed discussion of the various conflicts of interest relating to your
investment, as well as the procedures that we have established to resolve a
number of these potential conflicts.

11

The following chart shows the ownership structure of the various Wells
entities that are affiliated with Wells Capital.

-----------------------------
LEO F. WELLS, III
(President)
-----------------------------

100%

--------------------------------------------------------

Wells Real Estate Funds, Inc.

--------------------------------------------------------

100%               100%                          100%

---------------     ----------------------            ----------------
Wells
Management                Wells                      Wells Capital,
Company,               Investment                        Inc.
Inc.              Securities, Inc.                  (Advisor)
(Property           (Dealer Manager)
Manager)
---------------     ----------------------            ----------------

100%                                                   Advisory
Agreement

---------------                                       ----------------
Wells
Development                                            Wells REIT
Corporation
---------------                                       ----------------

Prior Offering Summary

Wells Capital and its affiliates have previously sponsored 13 publicly
offered real estate limited partnerships and the Wells REIT on an unspecified
property or "blind pool" basis. As of September 30, 2000, they have raised
approximately $567,927,422 from approximately 36,868 investors in these 14
public real estate programs. The "Prior Performance Summary" on page 114 of this
prospectus contains a discussion of the Wells programs sponsored to date.
Certain statistical data relating to the Wells programs with investment
objectives similar to ours is also provided in the "Prior Performance Tables"
included at the end of this prospectus.

The Offering

We are offering up to 125,000,000 shares to the public at $10 per share. We
are also offering up to 10,000,000 shares pursuant to our dividend reinvestment
plan at $10 per share, and up to 5,000,000 shares to broker-dealers pursuant to
warrants whereby participating broker-dealers will have the right to purchase
one share for every 25 shares they sell in this offering. The exercise price for
shares purchased pursuant to the warrants is $12 per share.

12

Terms of the Offering

We will begin selling shares in this offering upon the effective date of
this prospectus, and this offering will terminate on or before December 19,
2002. However, we may terminate this offering at any time prior to such
termination date. We will hold your investment proceeds in our account until we
withdraw funds for the acquisition of real estate properties or the payment of
fees and expenses. We generally admit shareholders to the Wells REIT on a daily
basis.

Compensation to Wells Capital

Wells Capital and its affiliates will receive compensation and fees for
services relating to this offering and the investment and management of our
assets. The most significant items of compensation are included in the following
table:

-------------------------------------------------------------------------------------------------
Estimated $$
Amount for
Maximum Offering
(135,000,000
Type of Compensation                 Form of Compensation               shares)
-------------------------------------------------------------------------------------------------

Offering Stage
-------------------------------------------------------------------------------------------------
Sales Commissions                  7.0% of gross offering proceeds         $94,500,000
-------------------------------------------------------------------------------------------------
Dealer Manager Fee                 2.5% of gross offering proceeds         $33,750,000
-------------------------------------------------------------------------------------------------
Offering Expenses                  3.0% of gross offering proceeds         $18,600,000
-------------------------------------------------------------------------------------------------
Acquisition and Development Stage
-------------------------------------------------------------------------------------------------
Acquisition and                    3.0% of gross offering proceeds         $40,500,000
Advisory Fees
-------------------------------------------------------------------------------------------------
Acquisition Expenses               0.5% of gross offering proceeds         $ 6,750,000
-------------------------------------------------------------------------------------------------
Operational Stage
-------------------------------------------------------------------------------------------------
Property Management and            4.5% of gross revenues                  N/A
Leasing Fees
-------------------------------------------------------------------------------------------------
Initial Lease-Up Fee for           Competitive fee for geographic          N/A
Newly Constructed Property         location of property based on a
survey of brokers and agents
(customarily equal to the first
month's rent)
-------------------------------------------------------------------------------------------------
Real Estate Commission             3.0% of contract price for properties   N/A
sold after investors receive a return
of capital plus an 8.0% return on
capital

-------------------------------------------------------------------------------------------------
Subordinated Participation in      10.0% of remaining amounts of net       N/A
Net Sale Proceeds (Payable         sale proceeds after return of capital
Only if the Wells REIT is not      plus payment to investors of an 8.0%
Listed on an exchange)             cumulative non-compounded return on
the capital contributed by investors
-------------------------------------------------------------------------------------------------
Subordinated Incentive Listing     10.0% of the amount by which the        N/A
Fee (Payable only if the Wells     adjusted market value of the Wells
REIT is listed on an exchange)     REIT exceeds the aggregate capital
contributions contributed by
investors
-------------------------------------------------------------------------------------------------

13

There are many additional conditions and restrictions on the amount of
compensation Wells Capital and its affiliates may receive. There are also some
smaller items of compensation and expense reimbursements that Wells Capital may
receive. For a more detailed explanation of these fees and expenses payable to
Wells Capital and its affiliates, please see the "Management Compensation"
section of this prospectus on page 46.

Dividend Policy

In order to remain qualified as a REIT, we are required to distribute
95% of our annual taxable income to our shareholders in all years prior to 2001
and 90% of our annual taxable income for all future years beginning with the
year 2001. We have paid dividends to our shareholders at least quarterly since
the first quarter after we commenced operations on June 5, 1998. We calculate
our quarterly dividends based upon daily record and dividend declaration dates
so investors will be entitled to dividends immediately upon purchasing shares.
We expect to pay dividends to you on a quarterly basis.

Listing

We anticipate listing our shares on a national securities exchange on
or before January 30, 2008. In the event we do not obtain listing prior to that
date, our articles of incorporation require us to begin the sale of our
properties and liquidation of our assets.

Dividend Reinvestment Plan

You may participate in our dividend reinvestment plan pursuant to which
you may have the dividends you receive reinvested in shares of the Wells REIT.
If you participate, you will be taxed on your share of our taxable income even
though you will not receive the cash from your dividends. As a result, you may
have a tax liability without receiving cash dividends to pay such liability. We
may terminate the dividend reinvestment plan in our discretion at any time upon
10 days notice to you. (See "Description of Shares -- Dividend Reinvestment
Plan.")

Share Redemption Program

We may use proceeds received from the sale of shares pursuant to our
dividend reinvestment plan to redeem your shares. After you have held your
shares for a minimum of one year, our share redemption program provides an
opportunity for you to redeem your shares, subject to certain restrictions and
limitations, for the lesser of (1) $10 per share, or (2) the price you actually
paid for your shares. The board of directors reserves the right to reject any
request for redemption of shares or to amend or terminate the share redemption
program at any time. You will have no right to request redemption of your shares
after the shares are listed on a national exchange. (See "Description of Shares
-- Share Redemption Program.")

Wells Operating Partnership, L.P.

We own all of our real estate properties through Wells Operating
Partnership, L.P. (Wells OP), our operating partnership. We are the sole general
partner of Wells OP. Wells Capital is currently the only limited partner based
on its initial contribution of $200,000. Our ownership of properties in Wells OP
is referred to as an "UPREIT." The UPREIT structure allows us to acquire real
estate properties in exchange for limited partnership units in Wells OP. This
structure will also allow sellers of properties to transfer their properties to
Wells OP in exchange for units of Wells OP and defer gain recognition for tax
purposes with respect to such transfers of properties. At present, we have no
plans to acquire any specific

14

properties in exchange for units of Wells OP. The holders of units in Wells OP
may have their units redeemed for cash under certain circumstances. (See "The
Operating Partnership Agreement.")

ERISA Considerations

The section of this prospectus entitled "ERISA Considerations"
describes the effect the purchase of shares will have on individual retirement
accounts (IRAs) and retirement plans subject to the Employee Retirement Income
Security Act of 1974, as amended (ERISA), and/or the Internal Revenue Code.
ERISA is a federal law that regulates the operation of certain tax-advantaged
retirement plans. Any retirement plan trustee or individual considering
purchasing shares for a retirement plan or an IRA should read this section of
the prospectus very carefully.

Description of Shares

General
-------

Your investment will be recorded on our books only. We will not issue
stock certificates. If you wish to transfer your shares, you will be required to
send an executed transfer form to us. We will provide the required form to you
upon request.

Shareholder Voting Rights and Limitations
-----------------------------------------

We hold annual meetings of our shareholders for the purpose of electing
our directors or conducting other business matters that may be presented at such
meetings. We may also call a special meeting of shareholders from time to time
for the purpose of conducting certain matters. You are entitled to one vote for
each share you own at any of these meetings.

Restriction on Share Ownership
------------------------------

Our articles of incorporation contain a restriction on ownership of the
shares that prevents one person from owning more than 9.8% of the outstanding
shares. (See "Description of Shares -- Restriction on Ownership of Shares.")
These restrictions are designed to enable us to comply with share accumulation
restrictions imposed on REITs by the Internal Revenue Code.

For a more complete description of the shares, including restrictions
on the ownership of shares, please see the "Description of Shares" section of
this prospectus on page 142.

15

Risk Factors

Your purchase of shares involves a number of risks. In addition to
other risks discussed in this prospectus, you should specifically consider the
following:

Investment Risks

Marketability Risk

There is no public trading market for your shares.

There is no current public market for the shares and, therefore, it
will be difficult for you to sell your shares promptly. In addition, the price
received for any shares sold is likely to be less than the proportionate value
of the real estate we own. Therefore, you should purchase the shares only as a
long-term investment. See "Description of Shares - Share Redemption Program" for
a description of our share redemption program.

Management Risks

You must rely on Wells Capital for selection of properties.

Our ability to achieve our investment objectives and to pay dividends
is dependent upon the performance of Wells Capital, our advisor, in the
acquisition of real estate properties, the selection of tenants and the
determination of any financing arrangements. Except for the investments
described in this prospectus, you will have no opportunity to evaluate the terms
of transactions or other economic or financial data concerning our investments.
You must rely entirely on the management ability of Wells Capital and the
oversight of the board of directors.

We depend on key personnel.

Our success depends to a significant degree upon the continued
contributions of certain key personnel, including Leo F. Wells, III, Douglas P.
Williams, M. Scott Meadows, Michael C. Berndt and Allen G. Delenick, each of
whom would be difficult to replace. If any of our key personnel were to cease
employment with us, our operating results could suffer. We also believe that our
future success depends, in large part, upon our ability to hire and retain
highly skilled managerial, operational and marketing personnel. Competition for
such personnel is intense, and we cannot assure you that we will be successful
in attracting and retaining such skilled personnel.

Conflicts of Interest Risks

Wells Capital will face conflicts of interest relating to time
management.

Wells Capital and its affiliates are general partners and sponsors of
other real estate programs having investment objectives and legal and financial
obligations similar to the Wells REIT. Because Wells Capital and its affiliates
have interests in other real estate programs and also engage in other business
activities, they may have conflicts of interest in allocating their time between
our business and these other activities. During times of intense activity in
other programs and ventures, they may devote less time and resources to our
business than is necessary or appropriate. (See "Conflicts of Interest.")

16

Wells Capital will face conflicts of interest relating to the purchase
and leasing of properties.

We may be buying properties at the same time as one or more of the
other Wells programs are buying properties. There is a risk that Wells Capital
will choose a property that provides lower returns to us than a property
purchased by another Wells program. We may acquire properties in geographic
areas where other Wells programs own properties. If one of the Wells programs
attracts a tenant that we are competing for, we could suffer a loss of revenue
due to delays in locating another suitable tenant. (See "Conflicts of
Interest.")

Wells Capital will face conflicts of interest relating to joint
ventures with affiliates.

We have entered into joint ventures in the past and are likely to
continue in the future to enter into joint ventures with other Wells programs
for the acquisition, development or improvement of properties, including Wells
Real Estate Fund XII, L.P. (Wells Fund XII) or Wells Real Estate Fund XIII, L.P.
(Wells Fund XIII). We may also purchase and develop properties in joint ventures
or in partnerships, co-tenancies or other co-ownership arrangements with the
sellers of the properties, affiliates of the sellers, developers or other
persons. Such investments may involve risks not otherwise present with an
investment in real estate, including, for example:

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

.     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

.     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.

Actions by such a co-venturer, co-tenant or partner might have the result of
subjecting the property to liabilities in excess of those contemplated and may
have the effect of reducing your returns.

Affiliates of Wells Capital are currently sponsoring a public offering
on behalf of Wells Fund XII and are currently in the process of registering a
public offering on behalf of Wells Fund XIII, both of which are or will be
unspecified property real estate programs. (See "Prior Performance Summary.") In
the event that we enter into a joint venture with Wells Fund XII, Wells Fund
XIII or any other Wells program or joint venture, we may face certain additional
risks and potential conflicts of interest. For example, Wells Fund XII, Wells
Fund XIII and the other Wells public limited partnerships will never have an
active trading market. Therefore, if we become listed on a national exchange, we
may no longer have similar goals and objectives with respect to the resale of
properties in the future. In addition, in the event that the Wells REIT is not
listed on a securities exchange by January 30, 2008, our organizational
documents provide for an orderly liquidation of our assets. In the event of such
liquidation, any joint venture between the Wells REIT and another Wells program
may be required to sell its properties at such time. The Wells program we have
entered into a joint venture with may not desire to sell the properties at that
time. Although the terms of any joint venture agreement between the Wells REIT
and another Wells program would grant the other Wells program a right of first
refusal to buy such properties, it is unlikely that they would have sufficient
funds to exercise the right of first refusal under these circumstances.

Under certain joint venture arrangements, neither co-venturer may have
the power to control the venture, and an impasse could be reached regarding
matters pertaining to the joint venture, which might have a negative influence
on the joint venture and decrease potential returns to you. In the event that a

17

co-venturer has a right of first refusal to buy out the other co-venturer, it
may be unable to finance such buy-out at that time. It may also be difficult for
us to sell our interest in any such joint venture or partnership or as a
co-tenant in property. In addition, to the extent that our co-venturer, partner
or co-tenant is an affiliate of Wells Capital, certain conflicts of interest
will exist. (See "Conflicts of Interest -- Joint Ventures with Affiliates of
Wells Capital.")

General Investment Risks

Maryland Corporation Law may prevent a business combination involving
the Wells REIT.

Provisions of Maryland Corporation Law applicable to us prohibit
business combinations with:

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

.     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
shareholder); or

.     an affiliate of an interested shareholder.

These prohibitions last for five years after the most recent date on
which the interested shareholder became an interested shareholder. Thereafter,
any business combination must be recommended by our board of directors and
approved by the affirmative vote of at least 80% of the votes entitled to be
cast by holders of our outstanding shares and two-thirds of the votes entitled
to be cast by holders of our shares other than shares held by the interested
shareholder. These requirements could have the effect of inhibiting a change in
control even if a change in control were in your best interest. These provisions
of Maryland law do not apply, however, to business combinations that are
approved or exempted by our board of directors prior to the time that someone
becomes an interested shareholder. (See "Description of Shares -- Business
Combinations.")

A limit on the number of shares a person may own may discourage a
takeover.

Our articles of incorporation restrict ownership by one person to no
more than 9.8% of the outstanding shares. This restriction may discourage a
change of control of the Wells REIT and may deter individuals or entities from
making tender offers for shares, which offers might be financially attractive to
shareholders or which may cause a change in the management of the Wells REIT.
(See "Description of Shares -- Restriction on Ownership of Shares.")

You are bound by the majority vote on matters on which you are entitled
to vote.

You may vote on certain matters at any annual or special meeting of
shareholders, including the election of directors. However, you will be bound by
the majority vote on matters requiring approval of a majority of the
shareholders even if you do not vote with the majority on any such matter.

You are limited in your ability to sell your shares pursuant to the
share redemption program.

Even though our share redemption program provides you with the
opportunity to redeem your shares for $10 per share (or the price you paid for
the shares, if lower than $10) after you have held them for a period of one
year, you should be fully aware that our share redemption program contains
certain restrictions and limitations. Shares will be redeemed on a first-come,
first-served basis and will be

18

limited to the lesser of (1) during any calendar year, three percent (3%) of the
weighted average number of shares outstanding during the prior calendar year, or
(2) the proceeds we receive from the sale of shares under our dividend
reinvestment plan such that in no event shall the aggregate amount of
redemptions under our share redemption program exceed aggregate proceeds
received from the sale of shares pursuant to our dividend reinvestment plan. In
addition, the board of directors reserves the right to reject any request for
redemption or to amend or terminate the share redemption program at any time.
Therefore, in making a decision to purchase shares of the Wells REIT, you should
not assume that you will be able to sell any of your shares back to us pursuant
to our share redemption program. (See "Description of Shares - Share Redemption
Program.")

We established the offering price on an arbitrary basis.

Our board of directors has arbitrarily determined the selling price of
the shares and such price bears no relationship to any established criteria for
valuing issued or outstanding shares.

Your interest in the Wells REIT may be diluted if we issue additional
shares.

Existing shareholders and potential investors in this offering do not
have preemptive rights to any shares issued by the Wells REIT in the future.
Therefore, in the event that we (1) sell shares in this offering or sell
additional shares in the future, including those issued pursuant to the dividend
reinvestment plan, (2) sell securities that are convertible into shares, (3)
issue shares in a private offering of securities to institutional investors, (4)
issue shares of common stock upon the exercise of the options granted to our
independent directors or employees of Wells Capital and Wells Management or the
warrants issued and to be issued to participating broker-dealers or our
independent directors, or (5) issue shares to sellers of properties acquired by
us in connection with an exchange of limited partnership units from Wells OP,
existing shareholders and investors purchasing shares in this offering may
experience dilution of their equity investment in the Wells REIT.

Payment of fees to Wells Capital and its affiliates will reduce cash
available for investment and distribution.

Wells Capital and its affiliates will perform services for us in
connection with the offer and sale of the shares, the selection and acquisition
of our properties, and the management and leasing of our properties. They will
be paid substantial fees for these services, which will reduce the amount of
cash available for investment in properties or distribution to shareholders.
(See "Management Compensation.")

The availability and timing of cash dividends is uncertain.

We bear all expenses incurred in our operations, which are deducted
from cash funds generated by operations prior to computing the amount of cash
dividends to be distributed to the shareholders. In addition, our board of
directors, in its discretion, may retain any portion of such funds for working
capital. We cannot assure you that sufficient cash will be available to pay
dividends to you.

We are uncertain of our sources for funding of future capital needs.

Substantially all of the gross proceeds of the offering will be used
for investment in properties and for payment of various fees and expenses. (See
"Estimated Use of Proceeds.") In addition, we do not anticipate that we will
maintain any permanent working capital reserves. Accordingly, in the event that
we develop a need for additional capital in the future for the improvement of
our properties or for any

19

other reason, we have not identified any sources for such funding, and we cannot
assure you that such sources of funding will be available to us for potential
capital needs in the future.

Real Estate Risks

General Real Estate RisksReal Estate Risks

Your investment will be affected by adverse economic and regulatory
changes.

We will be subject to risks generally incident to the ownership of real
estate, including:

.     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; and

.     periods of high interest rates and tight money supply.

For these and other reasons, we cannot assure you that we will be profitable or
that we will realize growth in the value of our real estate properties.

A property that incurs a vacancy could be difficult to sell or
re-lease.

A property may incur a vacancy either by the continued default of a
tenant under its lease or the expiration of one of our leases. Most of our
properties are specifically suited to the particular needs of our tenants.
Therefore, we may have difficulty obtaining a new tenant for any vacant space we
have in our properties. If the vacancy continues for a long period of time, we
may suffer reduced revenues resulting in less cash dividends to be distributed
to shareholders. In addition, the resale value of the property could be
diminished because the market value of a particular property will depend
principally upon the value of the leases of such property.

We are dependent on tenants for our revenue.

Most of our properties are occupied by a single tenant and, therefore,
the success of our investments are materially dependant on the financial
stability of our tenants. Lease payment defaults by tenants could cause us to
reduce the amount of distributions to shareholders. A default of a tenant on its
lease payments to us would cause us to lose the revenue from the property and
cause us to have to find an alternative source of revenue to meet the mortgage
payment and prevent a foreclosure if the property is subject to a mortgage. In
the event of a default, we may experience delays in enforcing our rights as
landlord and may incur substantial costs in protecting our investment and
re-letting our property. If a lease is terminated, we cannot assure you that we
will be able to lease the property for the rent previously received or sell the
property without incurring a loss.

We rely on certain tenants.

Motorola, Inc and Marconi Data Systems, Inc. are two of the major
tenants in properties which we currently own. In the aggregate, rental income
from these two tenants represents approximately 27.9% of our total gross rental
revenues. Rental income from Motorola, Inc. represents approximately

20

18.0% of our gross rental revenues and rental income from Marconi Data Systems,
Inc. represents approximately 9.9% of our gross rental revenues. The revenues
generated by the properties these two tenants occupy are substantially reliant
upon the financial condition of these tenants and, accordingly, any event of
bankruptcy, insolvency or a general downturn in the business of either of these
tenants may result in the failure or delay of such tenant's rental payments
which may have a substantial adverse effect on our financial performance. (See
"Description of Properties" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations.")

We may not have funding for future tenant improvements.

When a tenant at one of our properties does not renew its lease or
otherwise vacates its space in one of our buildings, it is likely that, in order
to attract one or more new tenants, we will be required to expend substantial
funds for tenant improvements and tenant refurbishments to the vacated space.
Substantially all of our net offering proceeds will be invested in real estate
properties, and we do not anticipate that we will maintain permanent working
capital reserves. We also have no identified funding source to provide funds
which may be required in the future for tenant improvements and tenant
refurbishments in order to attract new tenants. We cannot assure you that we
will have any sources of funding available to us for such purposes in the
future.

Uninsured losses relating to real property may adversely affect your
returns.

Wells Capital will attempt to ensure that all of our properties are
adequately insured to cover casualty losses. However, in the event that any of
our properties incurs a casualty loss which is not fully covered by insurance,
the value of our assets will be reduced by any such uninsured loss. In addition,
we have no source of funding to repair or reconstruct the damaged property, and
we cannot assure you that any such sources of funding will be available to us
for such purposes in the future.

Development and construction of properties may result in delays and
increased costs and risks.

We may invest some or all of the proceeds available for investment in
the acquisition and development of properties upon which we will develop and
construct improvements at a fixed contract price. We will be subject to risks
relating to the builder's ability to control construction costs or to build in
conformity with plans, specifications and timetables. The builder's failure to
perform may necessitate legal action by us to rescind the purchase or the
construction contract or to compel performance. Performance may also be affected
or delayed by conditions beyond the builder's control. Delays in completion of
construction could also give tenants the right to terminate preconstruction
leases for space at a newly developed project. We may incur additional risks
when we make periodic progress payments or other advances to such builders prior
to completion of construction. Factors such as those discussed above can result
in increased costs of a project or loss of our investment. In addition, we will
be subject to normal lease-up risks relating to newly constructed projects.
Furthermore, we must rely upon projections of rental income and expenses and
estimates of the fair market value of property upon completion of construction
when agreeing upon a price to be paid for the property at the time of
acquisition of the property. If our projections are inaccurate, we may pay too
much for a property.

If we contract with Wells Development Corporation for newly developed
property, we cannot guarantee that our earnest money deposit made to Wells
Development Corporation will be fully refunded.

We may enter into one or more contracts, either directly or indirectly
through joint ventures with affiliates, to acquire real property from Wells
Development Corporation (Wells Development), an affiliate

21

of Wells Capital. Properties acquired from Wells Development may be either
existing income-producing properties or properties to be developed or under
development. We anticipate that we will be obligated to pay a substantial
earnest money deposit at the time of contracting to acquire such properties. In
the case of properties to be developed by Wells Development, we anticipate we
will be required to close the purchase of the property upon completion of the
development of the property by Wells Development and the tenant taking
possession of the property. At the time of contracting and the payment of the
earnest money deposit by us, Wells Development typically will not have acquired
title to any real property. Wells Development will only have a contract to
acquire land, a development agreement to develop a building on the land and an
agreement with a tenant to lease the property upon its completion. We may enter
into such a contract with Wells Development even if at the time of contracting
we have not yet raised sufficient proceeds in our offering to enable us to close
the purchase of such property. However, we will not be required to close a
purchase from Wells Development, and will be entitled to a refund of our earnest
money, in the following circumstances:

.     Wells Development fails to develop the property;

.     the tenant fails to take possession under its lease for any
reason; or

.     we are unable to raise sufficient proceeds from our offering to
pay the purchase price at closing.

The obligation of Wells Development to refund our earnest money is
unsecured, and it is unlikely that we would be able to obtain a refund of such
earnest money deposit from it under these circumstances since Wells Development
is an entity without substantial assets or operations. Although Wells
Development's obligation to refund the earnest money deposit to us under these
circumstances will be guaranteed by Wells Management Company, Inc., an
affiliated entity (Wells Management), Wells Management has no substantial assets
other than contracts for property management and leasing services pursuant to
which it receives substantial monthly fees. Therefore, we cannot assure you that
Wells Management would be able to refund all of our earnest money deposit in a
lump sum. If we were forced to collect our earnest money deposit by enforcing
the guaranty of Wells Management, we will likely be required to accept
installment payments over time payable out of the revenues of Wells Management's
property management and leasing operations. We cannot assure you that we would
be able to collect the entire amount of our earnest money deposit under such
circumstances. (See "Investment Objectives and Criteria -- Acquisition of
Properties from Wells Development Corporation.")

Competition for investments may increase costs and reduce returns.

We will experience competition for real property investments from
individuals, corporations and bank and insurance company investment accounts, as
well as other real estate investment trusts, real estate limited partnerships,
and other entities engaged in real estate investment activities. Competition for
investments may have the effect of increasing costs and reducing your returns.

Delays in acquisitions of properties may have adverse effects on your
investment.

Delays we encounter in the selection, acquisition and development of
properties could adversely affect your returns. Where properties are acquired
prior to the start of construction or during the early stages of construction,
it will typically take several months to complete construction and rent
available space. Therefore, you could suffer delays in the distribution of cash
dividends attributable to those particular properties.

22

Uncertain market conditions and the broad discretion of Wells Capital
relating to the future disposition of properties could adversely affect the
return on your investment.

We generally will hold the various real properties in which we invest
until such time as Wells Capital determines that a sale or other disposition
appears to be advantageous to achieve our investment objectives or until it
appears that such objectives will not be met. Otherwise, Wells Capital, subject
to approval of the board, may exercise its discretion as to whether and when to
sell a property, and we will have no obligation to sell properties at any
particular time, except upon a liquidation of the Wells REIT if we do not list
the shares by January 30, 2008. We cannot predict with any certainty the various
market conditions affecting real estate investments which will exist at any
particular time in the future. Due to the uncertainty of market conditions which
may affect the future disposition of our properties, we cannot assure you that
we will be able to sell our properties at a profit in the future. Accordingly,
the extent to which you will receive cash distributions and realize potential
appreciation on our real estate investments will be dependent upon fluctuating
market conditions.

Discovery of previously undetected environmentally hazardous conditions
may adversely affect our operating results.

Under various federal, state and local environmental laws, ordinances
and regulations, a current or previous owner or operator of real property may be
liable for the cost of removal or remediation of hazardous or toxic substances
on such property. Such laws often impose liability whether or not the owner or
operator knew of, or was responsible for, the presence of such hazardous or
toxic substances. Environmental laws also may impose restrictions on the manner
in which property may be used or businesses may be operated, and these
restrictions may require expenditures. Environmental laws provide for sanctions
in the event of noncompliance and may be enforced by governmental agencies or,
in certain circumstances, by private parties. In connection with the acquisition
and ownership of our properties, we may be potentially liable for such costs.
The cost of defending against claims of liability, of compliance with
environmental regulatory requirements or of remediating any contaminated
property could materially adversely affect the business, assets or results of
operations of the Wells REIT and, consequently, amounts available for
distribution to you.

Financing Risks

If we fail to make our debt payments, we could lose our investment in a
property.

Loans obtained to fund property acquisitions will generally be secured
by first priority mortgages on some of our properties. If we are unable to make
our debt payments as required, a lender could foreclose on the property or
properties securing its debt. This could cause us to lose part or all of our
investment which in turn could cause the value of the shares and the dividends
payable to shareholders to be reduced. (See "Description of Properties -- Real
Estate Loans.")

Lenders may require us to enter into restrictive covenants relating to
our operations.

In connection with obtaining certain financing, a lender could impose
restrictions on us which affect our ability to incur additional debt and our
distribution and operating policies. Loan documents we enter into may contain
customary negative covenants which may limit our ability to further mortgage the
property, to discontinue insurance coverage, replace Wells Capital as our
advisor or impose other limitations.

23

If we enter into financing arrangements involving balloon payment
obligations, it may adversely affect our ability to pay dividends.

Some of our financing arrangements may require us to make a lump-sum or
"balloon" payment at maturity. We may finance more properties in this manner.
Our ability to make a balloon payment at maturity is uncertain and may depend
upon our ability to obtain additional financing or our ability to sell the
property. At the time the balloon payment is due, we may or may not be able to
refinance the balloon payment on terms as favorable as the original loan or sell
the property at a price sufficient to make the balloon payment. The effect of a
refinancing or sale could affect the rate of return to shareholders and the
projected time of disposition of our assets. In addition, payments of principal
and interest made to service our debts may leave us with insufficient cash to
pay the distributions that we are required to pay to maintain our qualification
as a REIT.

Federal Income Tax Risks

Failure to qualify as a REIT could adversely affect our operations and
our ability to make distributions.

If we fail to qualify as a REIT for any taxable year, we will be
subject to federal income tax on our taxable income at corporate rates. In
addition, we would generally be disqualified from treatment as a REIT for the
four taxable years following the year of losing our REIT status. Losing our REIT
status would reduce our net earnings available for investment or distribution to
shareholders because of the additional tax liability. In addition, distributions
to shareholders would no longer qualify for the distributions paid deduction and
we would no longer be required to make distributions. We might be required to
borrow funds or liquidate some investments in order to pay the applicable tax.

Qualification as a REIT is subject to the satisfaction of tax
requirements and various factual matters and circumstances which are not
entirely within our control. New legislation, regulations, administrative
interpretations or court decisions could change the tax laws with respect to
qualification as a REIT or the federal income tax consequences of being a REIT.

Legislative or regulatory action could adversely affect investors.

In recent years, numerous legislative, judicial and administrative
changes have been made in the provisions of the federal income tax laws
applicable to investments similar to an investment in shares of the Wells REIT.
Additional changes to tax laws are likely to continue to occur in the future,
and we cannot assure you that any such changes will not adversely affect the
taxation of a shareholder. Any such changes could have an adverse effect on an
investment in shares or on the market value or the resale potential of our
properties. You are urged to consult with your own tax advisor with respect to
the impact of recent legislation on your investment in shares and the status of
legislative, regulatory or administrative developments and proposals and their
potential effect on an investment in shares.

Retirement Plan Risks

There are special considerations that apply to pension or profit
sharing trusts or IRAs investing in shares.

If you are investing the assets of a pension, profit sharing, 401(k),
Keogh or other qualified retirement plan or the assets of an IRA in the Wells
REIT, you should satisfy yourself that:

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

24

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

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

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

.     your investment will not produce "unrelated business taxable
income" for the plan or IRA;

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

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

For a more complete discussion of the foregoing issues and other risks
associated with an investment in shares by retirement plans, please see the
"ERISA Considerations" section of this prospectus on page 139.

Suitability Standards

The shares we are offering are suitable only as a long-term investment
for persons of adequate financial means. Initially, we do not expect to have a
public market for the shares, which means that it may be difficult for you to
sell your shares. You should not buy these shares if you need to sell them
immediately or will need to sell them quickly in the future.

In consideration of these factors, we have established suitability
standards for initial shareholders and subsequent transferees. These suitability
standards require that a purchaser of shares have either:

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

.     a gross annual income of at least $45,000 and a net worth,
excluding the value of a purchaser's home, furnishings and
automobiles of at least $45,000.

The minimum purchase is 100 shares ($1,000), except in certain states
as described below. You may not transfer less shares than the minimum purchase
requirement. In addition, you may not transfer, fractionalize or subdivide your
shares so as to retain less than the number of shares required for the minimum
purchase. In order to satisfy the minimum purchase requirements for retirement
plans, unless otherwise prohibited by state law, a husband and wife may jointly
contribute funds from their separate IRAs, provided that each such contribution
is made in increments of $100. You should note that an investment in shares of
the Wells REIT will not, in itself, create a retirement plan and that, in order
to create a retirement plan, you must comply with all applicable provisions of
the Internal Revenue Code.

The minimum purchase for Maine, New York and North Carolina residents
is 250 shares ($2,500), except for IRAs which must purchase a minimum of 100
shares ($1,000). The minimum purchase for Minnesota residents is 250 shares
($2,500), except for IRAs and other qualified retirement plans which must
purchase a minimum of 200 shares ($2,000).

Except in the states of Maine, Minnesota, Nebraska and Washington, if
you have satisfied the minimum purchase requirements and have purchased units in
other Wells programs or units or shares in

25

other public real estate programs, you may purchase less than the minimum number
of shares set forth above, but in no event less than 2.5 shares ($25). After you
have purchased the minimum investment, any additional purchase must be in
increments of at least 2.5 shares ($25), except for (1) purchases made by
residents of Maine and Minnesota, who must still meet the minimum investment
requirements set forth above, and (2) purchases of shares pursuant to the
dividend reinvestment plan of the Wells REIT or reinvestment plans of other
public real estate programs, which may be in lesser amounts.

Several states have established suitability standards different from
those we have established. Shares will be sold only to investors in these states
who meet the special suitability standards set forth below.

Arizona, Iowa, Massachusetts, Missouri, North Carolina and Tennessee -
Investors must have either (1) a net worth of at least $225,000 or (2) gross
annual income of $60,000 and a net worth of at least $60,000.

Maine - Investors must have either (1) a net worth of at least
$200,000, or (2) gross annual income of $50,000 and a net worth of at least
$50,000.

Michigan, Ohio, Oregon and Pennsylvania - In addition to our
suitability requirements, investors must have a net worth of at least ten times
their investment in the Wells REIT.

Missouri - Investors must have either (1) a net worth of at least
$250,000, or (2) gross annual income of $75,000 and a net worth of at least
$75,000.

New Hampshire - Investors must have either (1) a net worth of at least
$250,000, or (2) taxable income of $50,000 and a net worth of at least $125,000.

In the case of sales to fiduciary accounts, these suitability standards
must be met by the fiduciary account, by the person who directly or indirectly
supplied the funds for the purchase of the shares or by the beneficiary of the
account. These suitability standards are intended to help ensure that, given the
long-term nature of an investment in our shares, our investment objectives and
the relative illiquidity of our shares, shares of the Wells REIT are an
appropriate investment for those of you who become investors. Each participating
broker-dealer must make every reasonable effort to determine that the purchase
of shares is a suitable and appropriate investment for each shareholder based on
information provided by the shareholder in the Subscription Agreement. Each
participating broker-dealer is required to maintain for six years records of the
information used to determine that an investment in the shares is suitable and
appropriate for a shareholder.

Estimated Use of Proceeds

The following tables set forth information about how we intend to use
the proceeds raised in this offering assuming that we sell 62,000,000 shares and
135,000,000 shares, respectively, pursuant to this offering. Many of the figures
set forth below represent management's best estimate since they cannot be
precisely calculated at this time. We expect that at least 84.0% of the money
you invest will be used to buy real estate, while the remaining up to 16.0% will
be used for working capital and to pay expenses and fees including the payment
of fees to Wells Capital, our advisor, and Wells Investment Securities, our
Dealer Manager.

26

62,000,000 Shares      135,000,000 Shares
-----------------      ------------------

Amount(1)     Percent     Amount(2)     Percent
---------     -------     ---------     -------

Gross Offering Proceeds                                      $620,000,000      100%  $1,350,000,000    100.0%
Less Public Offering Expenses:
Selling Commissions and Dealer Manager Fee (3)                58,900,000      9.5%     128,250,000      9.5%
Organization and Offering Expenses (4)                        18,600,000      3.0%      18,600,000      1.4%
------------    -----   --------------    ------
Amount Available for Investment (5)                          $542,500,000     87.5%  $1,203,150,000     89.1%
Acquisition and Development:
Acquisition and Advisory Fees (6)                             18,600,000      3.0%      40,500,000      3.0%
Acquisition Expenses (7)                                       3,100,000      0.5%       6,750,000      0.5%
Initial Working Capital Reserve (8)                                   (8)      --               (8)      --
------------    -----   --------------    -----
Amount Invested in Properties (5)(9)                         $520,800,000     84.0%  $1,155,900,000     85.6%
============    =====   ==============    =====

1.   Assumes that an aggregate of $620,000,000 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.

_________________________
(Footnotes to "Estimated Use of Proceeds")

2.       Assumes the maximum offering is sold which includes 125,000,000 shares
offered to the public at $10 per share and 10,000,000 shares offered
pursuant to our dividend reinvestment plan at $10 per share. Excludes
5,000,000 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 the 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 units
sold by them and may reallow out of its dealer manager fee up to 1.5%
of gross offering proceeds in marketing fees and due diligence expenses
to broker-dealers participating in this offering based on such factors
as the volume of units sold by such participating broker-dealers,
marketing support provided by such participating broker-dealers and
bona fide conference fees incurred. 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,
including amounts to reimburse Wells Capital, our advisor, for
marketing, salaries and direct expenses of its employees while engaged
in registering and marketing the shares and other marketing and
organization costs, other than selling commissions and the dealer
manager fee. 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 gross offering proceeds without recourse against or reimbursement by
the Wells REIT. We currently estimate that approximately $18,600,000 of
organization and offering costs will be incurred if the maximum
offering of 135,000,000 shares is sold.

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,

27

may be invested in short-term, highly-liquid investments including
government obligations, bank certificates of deposit, short-term debt
obligations and interest-bearing accounts.

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.

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 approximately 84.0% of the
proceeds received from the sale of shares will be used to acquire
properties.

Management

General

We operate under the direction of our board of directors, the members
of which are accountable to us and our shareholders as fiduciaries. The board is
responsible for the management and control of our affairs. The board has
retained Wells Capital to manage our day-to-day affairs and the acquisition and
disposition of our investments, subject to the board's supervision. The articles
of incorporation of the Wells REIT were reviewed and ratified by the board of
directors, including the independent directors, at their initial meeting. This
ratification by the board of directors was required by the NASAA Guidelines.

Our articles of incorporation and bylaws provide that the number of
directors of the Wells REIT may be established by a majority of the entire board
of directors but may not be fewer than three nor more than 15. We currently have
a total of nine directors. The articles of incorporation also provide that a
majority of the directors must be independent directors. An "independent
director" is a person who is not an officer or employee of the Wells REIT, Wells
Capital or their affiliates and has not otherwise been affiliated with such
entities for the previous two years. Of the nine current directors, seven of our
directors are considered independent directors.

Proposed transactions are often discussed before being brought to a
final board vote. During these discussions, independent directors often offer
ideas for ways in which deals can be changed to make them acceptable and these
suggestions are taken into consideration when structuring transactions. Each
director will serve until the next annual meeting of shareholders or until his
successor has been duly

28

elected and qualified. Although the number of directors may be increased or
decreased, a decrease shall not have the effect of shortening the term of any
incumbent director.

Any director may resign at any time and may be removed with or without
cause by the shareholders upon the affirmative vote of at least a majority of
all the votes entitled to be cast at a meeting called for the purpose of the
proposed removal. The notice of the meeting shall indicate that the purpose, or
one of the purposes, of the meeting is to determine if the director shall be
removed. The term "cause" as used in this context is a term used in the Maryland
Corporation Law. Since the Maryland Corporation Law does not define the term
"cause," shareholders may not know exactly what actions by a director may be
grounds for removal.

Unless filled by a vote of the shareholders as permitted by Maryland
Corporation Law, a vacancy created by an increase in the number of directors or
the death, resignation, removal, adjudicated incompetence or other incapacity of
a director shall be filled by a vote of a majority of the remaining directors
and,

.     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

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

unless there are no remaining affiliated directors or independent directors, as
the case may be. In such case a majority vote of the remaining directors shall
be sufficient. If at any time there are no independent or affiliated directors
in office, successor directors shall be elected by the shareholders. Each
director will be bound by the articles of incorporation and the bylaws.

The directors are not required to devote all of their time to our
business and are only required to devote the time to our affairs as their duties
require. The directors will meet quarterly or more frequently if necessary. We
do not expect that the directors will be required to devote a substantial
portion of their time to discharge their duties as our directors. Consequently,
in the exercise of their fiduciary responsibilities, the directors will be
relying heavily on Wells Capital. The board is empowered to fix the compensation
of all officers that it selects and may pay compensation to directors for
services rendered to us in any other capacity.

Our general investment and borrowing policies are set forth in this
prospectus. The directors may establish further written policies on investments
and borrowings and shall monitor our administrative procedures, investment
operations and performance to ensure that the policies are fulfilled and are in
the best interest of the shareholders. We will follow the policies on
investments and borrowings set forth in this prospectus unless and until they
are modified by the directors.

The board is also responsible for reviewing our fees and expenses on at
least an annual basis and with sufficient frequency to determine that the
expenses incurred are in the best interest of the shareholders. In addition, a
majority of the independent directors and a majority of directors not otherwise
interested in the transaction must approve all transactions with Wells Capital
or its affiliates. The independent directors will also be responsible for
reviewing the performance of Wells Capital and determining that the compensation
to be paid to Wells Capital is reasonable in relation to the nature and quality
of services to be performed and that the provisions of the advisory agreement
are being carried out. Specifically, the independent directors will consider
factors such as:

29

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

.     the success of Wells Capital in generating appropriate investment
opportunities;

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

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

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

.     the quality of our portfolio relative to the investments
generated by Wells Capital for its other clients.

Neither the directors nor their affiliates will vote or consent to the
voting of shares they now own or hereafter acquire on matters submitted to the
shareholders regarding either (1) the removal of Wells Capital, any director or
any affiliate, or (2) any transaction between us and Wells Capital, any director
or any affiliate.

Committees of the Board of Directors

Our entire board of directors considers all major decisions concerning
our business, including any property acquisitions. However, our board has
established an Audit Committee and a Compensation Committee so that these
important areas can be addressed in more depth than may be possible at a full
board meeting.

Audit Committee

The Audit Committee meets on a regular basis at least three times a
year. The Audit Committee members are Messrs. Bell, Carpenter, Carter, Keogler,
Moss, Sessoms and Strickland. The board of directors adopted our Audit Committee
Charter at its quarterly board meeting held September 27, 2000. The Audit
Committee's primary function is to assist the board of directors in fulfilling
its oversight responsibilities by reviewing the financial information to be
provided to the shareholders and others, the system of internal controls which
management has established, and the audit and financial reporting process.

Compensation Committee

Our board of directors has also established a Compensation Committee to
administer the 2000 Employee Stock Option Plan, as described below, which was
approved by the shareholders at our annual shareholders meeting held June 28,
2000. The Compensation Committee is comprised of Messrs. Bell, Carpenter,
Carter, Keogler, Moss, Sessoms and Strickland. The primary function of the
Compensation Committee is to administer the granting of stock options to
selected employees of Wells Capital and Wells Management based upon
recommendations from Wells Capital, and to set the terms and conditions of such
options in accordance with the 2000 Employee Stock Option Plan.

30

Executive Officers and Directors

We have provided below certain information about our executive officers
and directors.

Name                                  Position(s)                                                   Age
----                                  -----------                                                   ---

Leo F. Wells, III                     President and Director                                         56
Douglas P. Williams                   Executive Vice President, Secretary, Treasurer                 50
and Director
John L. Bell                          Director                                                       60
Richard W. Carpenter                  Director                                                       63
Bud Carter                            Director                                                       62
William H. Keogler, Jr.               Director                                                       55
Donald S. Moss                        Director                                                       64
Walter W. Sessoms                     Director                                                       66
Neil H. Strickland                    Director                                                       64

Leo F. Wells, III is the President and a director of the Wells REIT and
the President, Treasurer and sole director of Wells Capital, our advisor. He is
also the sole shareholder and sole director of Wells Real Estate Funds, Inc.,
the parent corporation of Wells Capital. Mr. Wells is President of Wells &
Associates, Inc., a real estate brokerage and investment company formed in 1976
and incorporated in 1978, for which he serves as principal broker. He is also
the President, Treasurer and sole director of:

.     Wells Management Company, Inc., our Property Manager;
.     Wells Investment Securities, Inc., our Dealer Manager;
.     Wells Advisors, Inc., a company he organized in 1991 to act as a
non-bank custodian for IRAs; and
.     Wells Development Corporation, a company he organized in 1997 to
develop real properties.

Mr. Wells was a real estate salesman and property manager from 1970 to
1973 for Roy D. Warren & Company, an Atlanta-based real estate company, and he
was associated from 1973 to 1976 with Sax Gaskin Real Estate Company, during
which time he became a Life Member of the Atlanta Board of Realtors Million
Dollar Club. From 1980 to February 1985 he served as Vice President of
Hill-Johnson, Inc., a Georgia corporation engaged in the construction business.
Mr. Wells holds a Bachelor of Business Administration degree in economics from
the University of Georgia. Mr. Wells is a member of the International
Association for Financial Planning (IAFP) and a registered NASD principal.

Mr. Wells has over 27 years of experience in real estate sales,
management and brokerage services. In addition to being the President and a
director of the Wells REIT, he is currently a co-general partner in a total of
26 real estate limited partnerships formed for the purpose of acquiring,
developing and operating office buildings and other commercial properties. As of
September 30, 2000, these 26 real estate limited partnerships represented
investments totaling approximately $313,562,916 from approximately 27,322
investors.

Douglas P. Williams is the Executive Vice President, Secretary,
Treasurer and a director of the Wells REIT. He is also a Senior Vice President
of Wells Capital, our advisor, and is also a Vice President of:

.     Wells Investment Securities, Inc., our Dealer Manager;
.     Wells Real Estate Funds, Inc.; and
.     Wells Advisors, Inc.

31

Mr. Williams previously served as Vice President, Controller of
OneSource, Inc., a leading supplier of janitorial and landscape services, from
1996 to 1999 where he was responsible for corporate-wide accounting activities
and financial analysis. Mr. Williams was employed by ECC International Inc.
("ECC"), a supplier to the paper industry and to the paint, rubber and plastic
industries, from 1982 to 1995. While at ECC, Mr. Williams served in a number of
key accounting positions, including Corporate Accounting Manager, U.S.
Operations, Division Controller, Americas Region and Corporate Controller,
America/Pacific Division. Prior to joining ECC and for one year after leaving
ECC, Mr. Williams was employed by Lithonia Lighting, a manufacturer of lighting
fixtures, as a Cost and General Accounting Manager and Director of Planning and
Control. Mr. Williams started his professional career as an auditor for KPMG
Peat Marwick LLP.

Mr. Williams is a member of the American Institute of Certified Public
Accountants and the Georgia Society of Certified Public Accountants. Mr.
Williams received a bachelor of arts degree from Dartmouth College and a Masters
of Business Administration degree from the Amos Tuck School of Graduate Business
Administration at Dartmouth College.

John L. Bell was the owner and Chairman of Bell-Mann, Inc., the largest
commercial flooring contractor in the Southeast from February 1971 to February
1996. Mr. Bell also served on the Board of Directors of Realty South Investors,
a REIT traded on the American Stock Exchange, and was the founder and served as
a director of both the Chattahoochee Bank and the Buckhead Bank. In 1997, Mr.
Bell initiated and implemented a "Dealer Acquisition Plan" for Shaw Industries,
Inc., a floor covering manufacturer and distributor, which plan included the
acquisition of Bell-Mann.

Mr. Bell currently serves on the Board of Directors of Electronic
Commerce Systems, Inc. and the Cullasaja Club of Highlands, North Carolina. Mr.
Bell is also extensively involved in buying and selling real estate both
individually and in partnership with others. Mr. Bell graduated from Florida
State University majoring in accounting and marketing.

Richard W. Carpenter served as General Vice President of Real Estate
Finance of The Citizens and Southern National Bank from 1975 to 1979, during
which time his duties included the establishment and supervision of the United
Kingdom Pension Fund, U.K.-American Properties, Inc. which was established
primarily for investment in commercial real estate within the United States.

Mr. Carpenter is currently President and director of Realmark Holdings
Corp., a residential and commercial real estate developer, and has served in
that position since October 1983. Mr. Carpenter is also a managing partner of
Carpenter Properties, L.P., a real estate limited partnership. He is also
President and director of Commonwealth Oil Refining Company, Inc., a position he
has held since 1984.

Mr. Carpenter previously served as Vice Chairman of the Board of
Directors of both First Liberty Financial Corp. and Liberty Savings Bank, F.S.B.
and Chairman of the Audit Committee of First Liberty Financial Corp. He has been
a member of The National Association of Real Estate Investment Trusts and served
as President and Chairman of the Board of Southmark Properties, an Atlanta-based
REIT investing in commercial properties. Mr. Carpenter is a past Chairman of the
American Bankers Association Housing and Real Estate Finance Division Executive
Committee. Mr. Carpenter holds a Bachelor of Science degree from Florida State
University, where he was named the outstanding alumnus of the School of Business
in 1973.

Bud Carter was an award-winning broadcast news director and anchorman
for several radio and television stations in the Midwest for over 20 years. From
1975 to 1980, Mr. Carter served as General Manager of WTAZ-FM, a radio station
in Peoria, Illinois and served as editor and publisher of The Peoria

32

Press, a weekly business and political journal in Peoria, Illinois. From 1981
until 1989, Mr. Carter was also an owner and General Manager of Transitions,
Inc., a corporate outplacement company in Atlanta, Georgia.

Mr. Carter currently serves as Senior Vice President for The Executive
Committee, a 43-year old international organization established to aid
presidents and CEOs to share ideas on ways to improve the management and
profitability of their respective companies. The Executive Committee operates in
numerous large cities throughout the United States, Canada, Australia, France,
Italy, Malaysia, Brazil, the United Kingdom and Japan. The Executive Committee
has more than 7,000 presidents and CEOs who are members. In addition, Mr. Carter
was the first Chairman of the organization recruited in Atlanta and still serves
as Chairman of the first two groups formed in Atlanta, each comprised of 14
noncompeting CEOs and presidents. Mr. Carter is a graduate of the University of
Missouri where he earned degrees in journalism and social psychology.

William H. Keogler, Jr. was employed by Brooke Bond Foods, Inc. as a
Sales Manager from June 1965 to September 1968. From July 1968 to December 1974,
Mr. Keogler was employed by Kidder Peabody & Company, Inc. and Dupont, Glore,
Forgan as a corporate bond salesman responsible for managing the industrial
corporate bond desk and the utility bond area. From December 1974 to July 1982,
Mr. Keogler was employed by Robinson-Humphrey, Inc. as the Director of Fixed
Income Trading Departments responsible for all municipal bond trading and
municipal research, corporate and government bond trading, unit trusts and
SBA/FHA loans, as well as the oversight of the publishing of the Robinson-
Humphrey Southeast Unit Trust, a quarterly newsletter. Mr. Keogler was elected
to the Board of Directors of Robinson-Humphrey, Inc. in 1982. From July 1982 to
October 1984, Mr. Keogler was Executive Vice President, Chief Operating Officer,
Chairman of the Executive Investment Committee and member of the Board of
Directors and Chairman of the MFA Advisory Board for the Financial Service
Corporation. He was responsible for the creation of a full service trading
department specializing in general securities with emphasis on municipal bonds
and municipal trusts. Under his leadership, Financial Service Corporation grew
to over 1,000 registered representatives and over 650 branch offices. In March
1985, Mr. Keogler founded Keogler, Morgan & Company, Inc., a full service
brokerage firm, and Keogler Investment Advisory, Inc., in which he served as
Chairman of the Board of Directors, President and Chief Executive Officer. In
January 1997, both companies were sold to SunAmerica, Inc., a publicly traded
New York Stock Exchange company. Mr. Keogler continued to serve as President and
Chief Executive Officer of these companies until his retirement in January 1998.

Mr. Keogler serves on the Board of Trustees of Senior Citizens Services
of Atlanta. He graduated from Adelphi University in New York where he earned a
degree in psychology.

Donald S. Moss was employed by Avon Products, Inc. from 1957 until his
retirement in 1986. While at Avon, Mr. Moss served in a number of key positions,
including Vice President and Controller from 1973 to 1976, Group Vice President
of Operations-Worldwide from 1976 to 1979, Group Vice President of
Sales-Worldwide from 1979 to 1980, Senior Vice President-International from 1980
to 1983 and Group Vice President-Human Resources and Administration from 1983
until his retirement in 1986. Mr. Moss was also a member of the board of
directors of Avon Canada, Avon Japan, Avon Thailand, and Avon Malaysia from
1980-1983.

Mr. Moss is currently a director of The Atlanta Athletic Club. He
formerly was the National Treasurer and a director of the Girls Clubs of America
from 1973 to 1976. Mr. Moss graduated from the University of Illinois where he
received a degree in business.

Walter W. Sessoms was employed by Southern Bell and its successor
company, BellSouth, from 1956 until his retirement in June 1997. While at
BellSouth, Mr. Sessoms served in a number of key

33

positions, including Vice President-Residence for the State of Georgia from June
1979 to July 1981, Vice President-Transitional Planning Officer from July 1981
to February 1982, Vice President-Georgia from February 1982 to June 1989, Senior
Vice President-Regulatory and External Affairs from June 1989 to November 1991,
and Group President-Services from December 1991 until his retirement on June 30,
1997.

Mr. Sessoms currently serves as a director of the Georgia Chamber of
Commerce for which he is a past Chairman of the Board, the Atlanta Civic
Enterprises and the Salvation Army's Board of Visitors of the Southeast Region.
Mr. Sessoms is also a past executive advisory council member for the University
of Georgia College of Business Administration and past member of the executive
committee of the Atlanta Chamber of Commerce. Mr. Sessoms is a graduate of
Wofford College where he earned a degree in economics and business
administration. He is a member of the Governor's Education Reform Commission.

Neil H. Strickland was employed by Loyalty Group Insurance (which
subsequently merged with America Fore Loyalty Group and is now known as The
Continental Group) as an automobile insurance underwriter. From 1957 to 1961,
Mr. Strickland served as Assistant Supervisor of the Casualty Large Lines
Retrospective Rating Department. From 1961 to 1964, Mr. Strickland served as
Branch Manager of Wolverine Insurance Company, a full service property and
casualty service company, where he had full responsibility for underwriting of
insurance and office administration in the State of Georgia. In 1964, Mr.
Strickland and a non-active partner started Superior Insurance Service, Inc., a
property and casualty wholesale general insurance agency. Mr. Strickland served
as President and was responsible for the underwriting and all other operations
of the agency. In 1967, Mr. Strickland sold his interest in Superior Insurance
Service, Inc. and started Strickland General Agency, Inc., a property and
casualty general insurance agency concentrating on commercial customers. Mr.
Strickland is currently the Senior Operation Executive of Strickland General
Agency, Inc. and devotes most of his time to long-term planning, policy
development and senior administration.

Mr. Strickland is a past President of the Norcross Kiwanis Club and
served as both Vice President and President of the Georgia Surplus Lines
Association. He also served as President and a director of the National
Association of Professional Surplus Lines Offices. Mr. Strickland currently
serves as a director of First Capital Bank, a community bank located in the
State of Georgia. Mr. Strickland attended Georgia State University where he
majored in business administration. He received his L.L.B. degree from Atlanta
Law School.

Compensation of Directors

We pay each of our independent directors $500 per month plus $125 for
each board meeting he attends. In addition, we have reserved 100,000 shares of
common stock for future issuance upon the exercise of stock options granted to
the independent directors pursuant to our Independent Director Stock Option Plan
and 500,000 shares for future issuance upon the exercise of warrants to be
granted to the independent directors pursuant to our Independent Director
Warrant Plan. All directors receive reimbursement of reasonable out-of-pocket
expenses incurred in connection with attendance at meetings of the board of
directors. If a director also is an officer of the Wells REIT, we do not pay
separate compensation for services rendered as a director.

Independent Director Stock Option Plan

Our Independent Director Stock Option Plan (Director Option Plan) was
approved by our shareholders at the annual shareholders meeting held June 16,
1999. We issued non-qualified stock options to purchase 2,500 shares (Initial
Options) to each independent director pursuant to our Director

34

Option Plan. In addition, we issued options to purchase 1,000 shares to each
independent director in connection with the 2000 annual meeting of stockholders
and will continue to issue options to purchase 1,000 shares (Subsequent Options)
to each independent director then in office on the date of each annual
stockholder's meeting. The Initial Options and the Subsequent Options are
collectively referred to as the "Director Options." Director Options may not be
granted at any time when the grant, along with grants to other independent
directors, would exceed 10% of our issued and outstanding shares. As of
September 30, 2000, each independent director had been granted options to
purchase a total of 3,500 shares under the Director Option Plan, of which 1,000
of those shares were exercisable. The exercise price for the Initial Options is
$12.00 per share. The exercise price for the Subsequent Options is the greater
of (1) $12.00 per share or (2) the fair market value of the shares on the date
they are granted. Fair market value is defined generally to mean:

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

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

.     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;

.     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

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

One-fifth of the Initial Options were exercisable beginning on the date
we granted them, one-fifth of the Initial Options became exercisable beginning
in July 2000 and an additional one-fifth of the Initial Options will become
exercisable on each anniversary of the date we granted them for a period of
three years until 100% of the shares become exercisable. The Subsequent Options
granted under the Director Option Plan will become exercisable on the second
anniversary of the date we grant them.

A total of 100,000 shares have been authorized and reserved for
issuance under the Director Option Plan. If the number of outstanding shares is
changed into a different number or kind of shares or securities through a
reorganization or merger in which the Wells REIT is the surviving entity, or
through a combination, recapitalization or otherwise, an appropriate adjustment
will be made in the number and kind of shares that may be issued pursuant to
exercise of the Director Options. A corresponding adjustment to the exercise
price of the Director Options granted prior to any change will also be made. Any
such adjustment, however, will not change the total payment, if any, applicable
to the portion of the Director Options not exercised, but will change only the
exercise price for each share.

Options granted under the Director Option Plan shall lapse on the first
to occur of (1) the tenth anniversary of the date we grant them, (2) the removal
for cause of the independent director as a member of the board of directors, or
(3) three months following the date the independent director ceases to be a
director for any reason other than death or disability, and may be exercised by
payment of cash or through the delivery of common stock. Director Options
granted under the Director Option Plan are generally exercisable in the case of
death or disability for a period of one year after death or the disabling event.
No Director Option issued may be exercised if such exercise would jeopardize our
status as a REIT under the Internal Revenue Code.

35

The independent directors may not sell pledge, assign or transfer their
options other than by will or the laws of descent or distribution.

Upon the dissolution or liquidation of the Wells REIT, upon our
reorganization, merger or consolidation with one or more corporations as a
result of which we are not the surviving corporation or upon sale of all or
substantially all of our properties, the Director Option Plan will terminate,
and any outstanding Director Options will terminate and be forfeited. The board
of directors may provide in writing in connection with any such transaction for
any or all of the following alternatives:

.     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;

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

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

Independent Director Warrant Plan

Our Independent Director Warrant Plan of the Wells REIT (Director
Warrant Plan) was approved by our shareholders at the annual shareholders
meeting held June 28, 2000. Our Director Warrant Plan provides for the issuance
of warrants to purchase shares of our common stock (Warrants) to independent
directors based on the number of shares of common stock that they purchase in
the future. The purpose of the Director Warrant Plan is to encourage our
independent directors to purchase shares of our common stock. Beginning on the
effective date of the Director Warrant Plan and continuing until the earlier to
occur of (1) the termination of the Director Warrant Plan by action of the board
of directors or otherwise, or (2) 5:00 p.m. EST on the date of listing of our
shares on a national securities exchange, each independent director will receive
one Warrant for every 25 shares of common stock he purchases. The exercise price
of the Warrants will be $12.00 per share.

A total of 500,000 Warrants have been authorized and reserved for
issuance under the Director Warrant Plan, each of which will be redeemable for
one share of our common stock. Upon our dissolution or liquidation, or upon a
reorganization, merger or consolidation, where we are not the surviving
corporation, or upon our sale of all or substantially all of our properties, the
Director Warrant Plan shall terminate, and any outstanding Warrants shall
terminate and be forfeited; provided, however, that holders of Warrants may
exercise any Warrants that are otherwise exercisable immediately prior to the
effective date of the dissolution, liquidation, consolidation or merger.
Notwithstanding the above, the board of directors may provide in writing in
connection with any such transaction for any or all of the following
alternatives: (1) for the assumption by the successor corporation of the
Warrants theretofore granted or the substitution by such corporation for such
Warrants of awards covering the stock of the successor corporation, or a parent
or subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and prices; (2) for the continuance of the Director Warrant Plan by such
successor corporation in which event the Director Warrant Plan and the Warrants
shall continue in the manner and under the terms so provided; or (3) for the
payment in cash or shares in lieu of and in complete satisfaction of such
Warrants.

No Warrant may be sold, pledged, assigned or transferred by an
independent director in any manner other than by will or the laws of descent or
distribution. All Warrants exercised during the

36

independent director's lifetime shall be exercised only by the independent
director or his legal representative. Any transfer contrary to the Director
Warrant Plan will nullify and render void the Warrant. Notwithstanding any other
provisions of the Director Warrant Plan, Warrants granted under the Director
Warrant Plan shall continue to be exercisable in the case of death or disability
of the independent director for a period of one year after the death or
disabling event, provided that the death or disabling event occurs while the
person is an independent director. No Warrant issued may be exercised if such
exercise would jeopardize our status as a REIT under the Internal Revenue Code.

2000 Employee Stock Option Plan

Our 2000 Employee Stock Option Plan of the Wells REIT (Employee Option
Plan) was approved by our shareholders at the annual shareholders meeting held
June 28, 2000. Our Employee Option Plan is designed to enable Wells Capital and
Wells Management to obtain or retain the services of employees considered
essential to our long range success and the success of Wells Capital and Wells
Management by offering such employees an opportunity to participate in the
growth of the Wells REIT through ownership of our common stock.

The Employee Option Plan provides for the formation of a Compensation
Committee consisting of two or more of our independent directors. (See
"Committees of the Board of Directors.") The Compensation Committee shall
conduct the general administration of the Employee Option Plan. The Compensation
Committee is authorized to grant "non-qualified" stock options (Employee
Options) to selected employees of Wells Capital and Wells Management based upon
the recommendation of Wells Capital and subject to the absolute discretion of
the Compensation Committee and applicable limitations of the Employee Option
Plan. The exercise price for the Employee Options shall be the greater of (1)
$11.00 per share or (2) the fair market value of the shares on the date the
option is granted. A total of 750,000 shares have been authorized and reserved
for issuance under the Employee Option Plan.

The Compensation Committee shall set the term of the Employee Options
in its discretion, although no Employee Option shall have a term greater than
five years from the later of (i) the date our shares become listed on a national
securities exchange, or (ii) the date the Employee Option is granted. The
employee receiving Employee Options shall agree to remain in employment with his
employer for a period of one year after the Employee Option is granted. The
Compensation Committee shall set the period during which the right to exercise
an option vests in the holder of the option. No Employee Option issued may be
exercised, however, if such exercise would jeopardize our status as a REIT under
the Internal Revenue Code. In addition, no option may be sold, pledged, assigned
or transferred by an employee in any manner other than by will or the laws of
descent or distribution.

In the event that the Compensation Committee determines that any
dividend or other distribution, recapitalization, stock split, reorganization,
merger, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of our assets, or other similar
corporate transaction or event, affects the shares such that an adjustment is
determined by the Compensation Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Employee Option Plan or with respect to an Employee
Option, then the Compensation Committee shall, in such manner as it may deem
equitable, adjust the number and kind of shares or the exercise price with
respect to any option.

Limited Liability and Indemnification of Directors, Officers, Employees and
Other Agents

Our organizational documents limit the personal liability of our
shareholders, directors and officers for monetary damages to the fullest extent
permitted under current Maryland Corporation Law. We also maintain a directors
and officers liability insurance policy. Maryland Corporation Law allows

37

directors and officers to be indemnified against judgments, penalties, fines,
settlements and expenses actually incurred in a proceeding unless the following
can be established:

.     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;

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

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

Any indemnification or any agreement to hold harmless is recoverable only out of
our assets and not from the shareholders. Indemnification could reduce the legal
remedies available to us and the shareholders against the indemnified
individuals, however.

This provision does not reduce the exposure of directors and officers
to liability under federal or state securities laws, nor does it limit the
shareholder's ability to obtain injunctive relief or other equitable remedies
for a violation of a director's or an officer's duties to us or our
shareholders, although the equitable remedies may not be an effective remedy in
some circumstances.

In spite of the above provisions of Maryland Corporation Law, our
articles of incorporation provide that the directors, Wells Capital and its
affiliates will be indemnified by us for losses arising from our operation only
if all of the following conditions are met:

.     the 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;

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

.     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

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

We have agreed to indemnify and hold harmless Wells Capital and its
affiliates performing services for us from specific claims and liabilities
arising out of the performance of its obligations under the advisory agreement.
As a result, we and our shareholders may be entitled to a more limited right of
action than they would otherwise have if these indemnification rights were not
included in the advisory agreement.

The general effect to investors of any arrangement under which any of
our controlling persons, directors or officers are insured or indemnified
against liability is a potential reduction in distributions resulting from our
payment of premiums associated with insurance. In addition, indemnification
could

38

reduce the legal remedies available to the Wells REIT and our shareholders
against the officers and directors.

The Securities and Exchange Commission takes the position that
indemnification against liabilities arising under the Securities Act of 1933 is
against public policy and unenforceable. Indemnification of the directors,
officers, Wells Capital or its affiliates will not be allowed for liabilities
arising from or out of a violation of state or federal securities laws, unless
one or more of the following conditions are met:

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

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

.     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.

Indemnification will be allowed for settlements and related expenses of
lawsuits alleging securities laws violations and for expenses incurred in
successfully defending any lawsuits, provided that a court either:

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

.     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.

The Advisor

The advisor of the Wells REIT is Wells Capital. Some of our officers
and directors are also officers and directors of Wells Capital. Wells Capital
has contractual responsibility to the Wells REIT and its stockholders pursuant
to the advisory agreement.

The directors and executive officers of Wells Capital are as follows:

Name                       Age              Position
----                       ---              --------

Leo F. Wells, III                   56               President, Treasurer and sole director
Douglas P. Williams                 50               Senior Vice President and Assistant Secretary
Stephen G. Franklin                 53               Senior Vice President
Kim R. Comer                        45               Vice President
Linda L. Carson                     57               Vice President
Allen G. Delenick                   44               Vice President

39

The backgrounds of Messrs. Wells and Williams are described in the
"Management -- Executive Officers and Directors" section of this prospectus.
Below is a brief description of the other executive officers of Wells Capital.

Stephen G. Franklin, Ph.D. is a Senior Vice President of Wells Capital.
Mr. Franklin is responsible for marketing, sales and coordination of
broker-dealer relations. Mr. Franklin also serves as Vice President of Wells
Real Estate Funds, Inc. Prior to joining Wells Capital in 1999, Mr. Franklin
served as President of Global Access Learning, an international executive
education and management development firm. From 1997 to 1999, Mr. Franklin
served as President, Chief Academic Officer and Director of EduTrek
International, a publicly traded provider of international post-secondary
education that owns the American InterContinental University, with campuses in
Atlanta, Ft. Lauderdale, Los Angeles, Washington, D.C., London and Dubai. While
at EduTrek, he was instrumental in developing the Masters and Bachelors of
Information Technology, International MBA and Adult Evening BBA programs. Prior
to joining EduTrek, Mr. Franklin was Associate Dean of the Goizueta Business
School at Emory University and a former tenured Associate Professor of Business
Administration. He served on the founding Executive MBA faculty, and has taught
graduate, undergraduate and executive courses in Management and Organizational
Behavior, Human Resources Management and Entrepreneurship. He is also co-founder
and Director of the Center for Healthcare Leadership in the Emory University
School of Medicine. Mr. Franklin was a frequent guest lecturer at universities
throughout North America, Europe and South Africa.

In 1984, Mr. Franklin took a sabbatical from Emory University and
became Executive Vice President and a principal shareholder of Financial Service
Corporation ("FSC"), an independent financial planning broker-dealer. Mr.
Franklin and the other shareholders of FSC later sold their interests in FSC to
Mutual of New York Life Insurance Company.

Kim R. Comer rejoined Wells Capital as National Vice President of
Marketing in April 1997 after working for Wells Capital in similar capacities
from January 1992 through September 1995. Mr. Comer currently serves as Vice
President and Director of Customer Care Services. In prior positions with Wells
Capital, he served as Vice President of Marketing for the southeast and
northeast regions. Mr. Comer has over ten years experience in the securities
industry and is a registered representative and financial principal with the
NASD. Additionally, he has substantial financial experience including experience
as controller and chief financial officer of two regional broker-dealers. In
1976, Mr. Comer graduated with honors from Georgia State University with a BBA
degree in accounting.

Linda L. Carson is a Vice President of Wells Capital. She is primarily
responsible for fund, property and corporate accounting, SEC reporting and
coordination of all audits by the independent public accountants. Ms. Carson
also serves as Secretary of Wells Investment Securities, Inc., our Dealer
Manager. Ms. Carson joined Wells Capital in 1989 as Staff Accountant, became
Controller in 1991 and assumed her current position in 1996. Prior to joining
Wells Capital, Ms. Carson was an accountant with an electrical distributor. She
is a graduate of City College of New York and has completed additional
accounting courses at Kennesaw State. She is also a member of the National
Society of Accountants.

Allen G. Delenick is a Vice President of Wells Capital. He is primarily
responsible for identifying and analyzing properties for acquisition by
conducting due diligence and preparing discounted cash flow analyses on
potential acquisitions. Prior to joining Wells Capital in 1998, Mr. Delenick
worked for Carter & Associates in Atlanta. In this capacity, he was responsible
for project financings, development analysis, acquisitions and dispositions
analysis, and occupancy cost analysis. Mr. Delenick previously worked for
Portman Properties in Atlanta and Rosewood Properties in Dallas. His primary
responsibilities included real estate financial analysis and acquisitions and
development due diligence.

40

He graduated from Lehigh University with a B.S. in business and economics. Mr.
Delenick also received an M.B.A. in finance and an M.S. in real estate from
Southern Methodist University.

Wells Capital employs personnel, in addition to the directors and
executive officers listed above, who have extensive experience in selecting and
managing commercial properties similar to the properties sought to be acquired
by the Wells REIT.

The Advisory Agreement

Many of the services to be performed by Wells Capital in managing our
day-to-day activities are summarized below. This summary is provided to
illustrate the material functions which Wells Capital will perform for us as our
advisor and it is not intended to include all of the services which may be
provided to us by third parties. Under the terms of the advisory agreement,
Wells Capital undertakes to use its best efforts to present to us investment
opportunities consistent with our investment policies and objectives as adopted
by the board of directors. In its performance of this undertaking, Wells
Capital, either directly or indirectly by engaging an affiliate, shall, subject
to the authority of the board:

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

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

.     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.

The term of the current advisory agreement ends on January 30, 2001 and
may be renewed for an unlimited number of successive one-year periods.
Additionally, the advisory agreement may be terminated:

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

.     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

.     immediately with "good reason" by Wells Capital.

"Good reason" is defined in the advisory agreement to mean either:

.     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.

"Cause" is defined in the advisory agreement to mean fraud, criminal
conduct, willful misconduct or willful or negligent breach of fiduciary duty by
Wells Capital or a breach of the advisory agreement by Wells Capital.

41

Wells Capital and its affiliates expect to engage in other business
ventures and, as a result, their resources will not be dedicated exclusively to
our business. However, pursuant to the advisory agreement, Wells Capital must
devote sufficient resources to the administration of the Wells REIT to discharge
its obligations. Wells Capital may assign the advisory agreement to an affiliate
upon approval of a majority of the independent directors. We may assign or
transfer the advisory agreement to a successor entity.

Wells Capital may not make any acquisition of property or financing of
such acquisition on our behalf without the prior approval of a majority of our
independent directors. The actual terms and conditions of transactions involving
investments in properties shall be determined in the sole discretion of Wells
Capital, subject at all times to such board approval.

We will reimburse Wells Capital for all of the costs it incurs in
connection with the services it provides to us, including, but not limited to:

.     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 direct expenses of its
employees while engaged in registering and marketing the shares
and other marketing and organization costs, other than selling
commissions and the dealer manager fee;

.     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;

.     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

.     acquisition expenses, which are defined to include expenses
related to the selection and acquisition of properties, at the
lesser of actual cost or 90% of competitive rates charged by
unaffiliated persons providing similar services.

Wells Capital must reimburse us at least annually for reimbursements
paid to Wells Capital in any year to the extent that such reimbursements to
Wells Capital cause our operating expenses to exceed the greater of (1) 2% of
our average invested assets, which generally consists of the average book value
of our real estate properties before reserves for depreciation or bad debts, or
(2) 25% of our net income, which is defined as our total revenues less total
expenses for any given period excluding reserves for depreciation and bad debt.
Such operating expenses do not include amounts payable out of capital
contributions which are capitalized for tax and accounting purposes such as the
acquisition and advisory fees payable to Wells Capital. To the extent that
operating expenses payable or reimbursable by us exceed this limit and the
independent directors determine that the excess expenses were justified based on
unusual and nonrecurring factors which they deem sufficient, Wells Capital may
be reimbursed in future years for the full amount of the excess expenses, or any
portion thereof, but only to the extent the reimbursement would not cause our
operating expenses to exceed the limitation in any year. Within 60 days after
the end of any of our fiscal quarters for which total operating expenses for the
12 months then ended exceed the limitation, there shall be sent to the
shareholders a written disclosure, together with an explanation of the factors
the independent directors considered in arriving at the conclusion that the
excess expenses were justified.

42

Wells Capital and its affiliates will be paid fees in connection with
services provided to us. (See "Management Compensation.") In the event the
advisory agreement is terminated, Wells Capital will be paid all accrued and
unpaid fees and expense reimbursements, and any subordinated acquisition fees
earned prior to the termination. We will not reimburse Wells Capital or its
affiliates for services for which Wells Capital or its affiliates are entitled
to compensation in the form of a separate fee.

Shareholdings

Wells Capital currently owns 20,000 limited partnership units of Wells
OP, our operating partnership, for which it contributed $200,000 and which
constitutes 100% of the limited partner units outstanding at this time. Wells
Capital may not sell any of these units during the period it serves as our
advisor. Wells Capital, also owns 100 shares of the Wells REIT, which it
acquired upon the initial formation of the Wells REIT. (See "The Operating
Partnership Agreement.") Any resale of the shares that Wells Capital currently
owns and the resale of any shares which may be acquired by our affiliates are
subject to the provisions of Rule 144 promulgated under the Securities Act of
1933, which rule limits the number of shares that may be sold at any one time
and the manner of such resale. Although Wells Capital and its affiliates are not
prohibited from acquiring additional shares, Wells Capital has no options or
warrants to acquire any additional shares and has no current plans to acquire
additional shares. Wells Capital has agreed to abstain from voting any shares it
now owns or hereafter acquires in any vote for the election of directors or any
vote regarding the approval or termination of any contract with Wells Capital or
any of its affiliates.

Affiliated Companies

Property Manager

Our properties will be managed and leased initially by Wells Management
Company, Inc. (Wells Management), our Property Manager. Wells Real Estate Funds,
Inc. is the sole shareholder of Wells Management, and Mr. Wells is the
President, Treasurer and sole director of Wells Management. (See "Conflicts of
Interest.") The other principal officers of Wells Management are as follows:

Name                      Age               Positions
----                      ---               ---------

M. Scott Meadows          36                Senior Vice President and Secretary
Michael C. Berndt         53                Vice President and Chief Investment Officer
Michael L. Watson         55                Vice President

The background of Mr. Wells is described in the "Management --
Executive Officers and Directors" section of this prospectus. Below is a brief
description of the other executive officers of Wells Management.

M. Scott Meadows is a Senior Vice President and Secretary of Wells
Management. He is primarily responsible for the acquisition, operation,
management and disposition of real estate investments. Prior to joining Wells
Management in 1996, Mr. Meadows served as Senior Property Manager for The
Griffin Company, a full-service commercial real estate firm in Atlanta, where he
was responsible for managing a 500,000 square foot office and retail portfolio.
Mr. Meadows previously managed real estate as a Property Manager for Sea Pines
Plantation Company. He graduated from University of Georgia with a B.B.A. in
management. Mr. Meadows is a Georgia real estate broker and holds the Real
Property Administrator (RPA) designation of the Building Owners and Managers
Institute International. He is currently completing the final phase to receive
the Certified Property Manager (CPM) designation from the Institute of Real
Estate Management.

43

Michael C. Berndt is a Vice President and Chief Investment Officer of
Wells Management. He is primarily responsible for performing due diligence on
properties for acquisition, reviewing all major leasing activities and
development and being the primary contact for Wells Management's banks,
attorneys, and outside accountants. Prior to joining Wells Management in 1996,
Mr. Berndt held several positions with financial, investment and real estate
organizations, including Ernst & Young (formerly Ernst & Ernst) and Roe, Martin
& Neiman, Inc., a registered investment advisory firm. He also primarily served
as in-house counsel and Senior Vice President of Acquisitions for Combined
Equities, Inc. and President of Phoenix Financial Corporation, an NASD broker-
dealer. He graduated from Samford University with a B.S. in Accounting. Mr.
Berndt also received a J.D. from Cumberland Law School and an LL.M. in Taxation
from New York University School of Law. Mr. Berndt is a licensed attorney in the
State of Alabama and a Certified Public Accountant.

Michael L. Watson is a Vice President of Wells Management. He is
primarily responsible for overseeing construction and tenant improvement
projects including design, engineering, and progress-monitoring functions. Prior
to joining Wells Management in 1995, Mr. Watson was Senior Project Manager with
Abrams Construction in Atlanta from 1982 to 1995. His primary responsibilities
included supervising a variety of projects consisting of high-rise office
buildings, military bases, state projects, and neighborhood shopping centers. He
graduated from University of Miami with a B.S. in Civil Engineering.

Wells Management is engaged in the business of real estate management.
It was organized and commenced active operations in 1983 to lease and manage
real estate projects which Wells Capital and its affiliates operate or in which
they own an interest. As of September 30, 2000, Wells Management was managing in
excess of 4,293,000 square feet of office buildings and shopping centers. We
will pay Wells Management property management and leasing fees not exceeding the
lesser of: (A) 4.5% of gross revenues, or (B) 0.6% of the net asset value of the
properties (excluding vacant properties) owned by the Wells REIT, calculated on
an annual basis. For purposes of this calculation, net asset value shall be
defined as the excess of (1) the aggregate of the fair market value of all
properties owned by the Wells REIT (excluding vacant properties), over (2) the
aggregate outstanding debt of the Wells REIT (excluding debts having maturities
of one year or less). In addition, we may pay Wells Management a separate fee
for the one-time initial rent-up or leasing-up of newly constructed properties
in an amount not to exceed the fee customarily charged in arm's length
transactions by others rendering similar services in the same geographic area
for similar properties as determined by a survey of brokers and agents in such
area (customarily equal to the first month's rent).

In the event that Wells Management assists a tenant with tenant
improvements, a separate fee may be charged to the tenant and paid by the
tenant. This fee will not exceed 5.0% of the cost of the tenant improvements.

Wells Management derives all of its income from its property management
and leasing operations. For the fiscal year ended December 31, 1999, Wells
Management reported $1,983,066 in gross operating revenues and $400,937 in net
income.

Wells Management will hire, direct and establish policies for employees
who will have direct responsibility for each property's operations, including
resident managers and assistant managers, as well as building and maintenance
personnel. Some or all of the other employees may be employed on a part-time
basis and may also be employed by one or more of the following:

.     Wells Capital;

.     Wells Management;

44

.     partnerships organized by Wells Management and its affiliates;
and

.     other persons or entities owning properties managed by Wells
Management.

Wells Management will also direct the purchase of equipment and supplies and
will supervise all maintenance activity.

The management fees to be paid to Wells Management will cover, without
additional expense to the Wells REIT, the property manager's general overhead
costs such as its expenses for rent and utilities.

The principal office of Wells Management is located at 6200 The Corners
Parkway, Suite 250, Norcross, Georgia 30092.

Dealer Manager

Wells Investment Securities, Inc. (Wells Investment Securities), our
Dealer Manager, is a member firm of the National Association of Securities
Dealers, Inc. (NASD). Wells Investment Securities was organized in May 1984 for
the purpose of participating in and facilitating the distribution of securities
of Wells programs.

Wells Investment Securities will provide certain wholesaling, sales
promotional and marketing assistance services to the Wells REIT in connection
with the distribution of the shares offered pursuant to this prospectus. It may
also sell a limited number of shares at the retail level. (See "Plan of
Distribution" and "Management Compensation.")

Wells Real Estate Funds, Inc. is the sole shareholder of Wells
Investment Securities, and Mr. Wells is the President, Treasurer and sole
director of Wells Investment Securities. (See "Conflicts of Interest.")

IRA Custodian

Wells Advisors, Inc. (Wells Advisors) was organized in 1991 for the
purpose of acting as a non-bank custodian for IRAs investing in the securities
of Wells real estate programs. Wells Advisors currently charges no fees for such
services. Wells Advisors was approved by the Internal Revenue Service to act as
a qualified non-bank custodian for IRAs on March 20, 1992. In circumstances
where Wells Advisors acts as an IRA custodian, the authority of Wells Advisors
is limited to holding limited partnership units or REIT shares on behalf of the
beneficiary of the IRA and making distributions or reinvestments in such units
or shares solely at the direction of the beneficiary of the IRA. Well Advisors
is not authorized to vote any of such units or shares held in any IRA except in
accordance with the written instructions of the beneficiary of the IRA. Mr.
Wells is the President and sole director and owns 50% of the common stock and
all of the preferred stock of Wells Advisors. As of September 30, 2000, Wells
Advisors was acting as the IRA custodian for in excess of $85,843,000 in Wells
real estate program investments.

Management Decisions

The primary responsibility for the management decisions of Wells
Capital and its affiliates, including the selection of investment properties to
be recommended to our board of directors, the negotiation for these investments,
and the property management and leasing of these investment properties will
reside in Leo F. Wells, III, Douglas P. Williams, M. Scott Meadows, Michael C.
Berndt and Allen G. Delenick. Wells Capital seeks to invest in commercial
properties that satisfy our investment objectives, typically office buildings
located in densely populated suburban markets in which the major

45

tenant is a company with a net worth of in excess of $100,000,000. The board of
directors must approve all acquisitions of real estate properties.

Management Compensation

The following table summarizes and discloses all of the compensation
and fees, including reimbursement of expenses, to be paid by the Wells REIT to
Wells Capital and its affiliates.

Form of
Compensation                                                                         Estimated
and Entity                              Determination                                Maximum
Receiving                                 of Amount                                  Dollar Amount(1)
---------                                 ---------                                  ----------------

Organizational and Offering Stage

Selling             Up to 7.0% of gross offering proceeds before reallowance         $94,500,000
Commissions -       of commissions earned by participating broker-dealers.
Wells Investment    Wells Investment Securities, our Dealer Manager, intends
Securities          to reallow 100% of commissions earned to participating
broker-dealers.

Dealer Manager      Up to 2.5% of gross offering proceeds before reallowance         $33,750,000
Fee - Wells         to participating broker-dealers. Wells Investment
Investment          Securities, in its sole discretion, may reallow a portion
Securities          of its dealer manager fee of up to 1.5% of the gross
offering proceeds to be paid to such participating
broker-dealers as a marketing fee and due diligence
expense reimbursement, based on such factors as the volume
of shares sold by such participating broker-dealers,
marketing support and bona fide conference fees incurred.

Reimbursement       Up to 3.0% of gross offering proceeds. All organization          $18,600,000
of Organization     and offering expenses (excluding selling commissions and
and Offering        the dealer manager fee) will be advanced by Wells Capital
Expenses - Wells    or its affiliates and reimbursed by the Wells REIT up to
Capital or its      3.0% of gross offering proceeds. We currently estimate
Affiliates          that approximately $18,600,000 of organization and
offering costs will be incurred if the maximum offering of
135,000,000 shares is sold.

Acquisition and Development Stage

Acquisition and     Up to 3.0% of gross offering proceeds for the review and         $40,500,000
Advisory            evaluation of potential real property acquisitions.
Fees - Wells
Capital or its
Affiliates (2)

Reimbursement       Up to 0.5% of gross offering proceeds for reimbursement          $6,750,000
of Acquisition      of expenses related to real property acquisitions,
Expenses - Wells    such as legal fees, travel expenses, property appraisals,
Capital or its      title insurance premium expenses and other closing costs.
Affiliates (2)

46

Operational Stage

Property            For the management and leasing of our properties, we will             Actual amounts
Management and      pay Wells Management, our Property Manager, property                  are dependent
Leasing Fees -      management and leasing fees equal to 4.5% of gross                    upon results of
Wells               revenues; provided, however, that aggregate property                  operations and
management and leasing fees payable to Wells                          therefore cannot
Management may not exceed the lesser of: (A) 4.5% of                  be determined at
gross revenues, or (B) 0.6% of the net asset value of the             the present time.
properties (excluding vacant properties) owned by the Wells
REIT, calculated on an annual basis.  For purposes of this
calculation, net asset value shall be defined as the excess of
(1) the aggregate of the fair market value of all properties
owned by the Wells REIT (excluding vacant properties), over (2)
the aggregate outstanding debt of the Wells REIT (excluding
debts having maturities of one year or less).  In addition, we
may pay Wells Management a separate fee for the one-time
initial rent-up or leasing-up of newly constructed properties
in an amount not to exceed the fee customarily charged in arm's
length transactions by others rendering
similar services in the same geographic area for similar
properties as determined by a survey of brokers and agents in
such area (customarily equal to the first month's rent).

Real Estate         In connection with the sale of properties, an amount not              Actual amounts
Commissions -       exceeding the lesser of: (A) 50% of the reasonable,                   are dependent
Wells Capital or    customary and competitive real estate brokerage                       upon results of
its Affiliates      commissions customarily paid for the sale of a                        operations and
comparable property in light of the size, type and location           therefore cannot
of the property, or (B) 3.0% of the contract price of each            be determined at
property sold, subordinated to distributions to                       the present time.
investors from sale proceeds of an amount which, together
with prior distributions to the investors, will equal (1)
100% of their capital contributions plus (2) an 8.0%
annual cumulative, noncompounded return on their net
capital contributions.

Subordinated        After investors have received a return of their net capital           Actual amounts
Participation in    contributions and an 8.0% per year cumulative,                        are dependent
Net Sale            noncompounded return, then Wells Capital is entitled to               upon results of
Proceeds - Wells    receive 10.0% of remaining net sale proceeds.                         operations and
Capital (3)                                                                               therefore cannot
be determined at
the present time.

47

Subordinated   Upon listing, a fee equal to 10.0% of the amount by which             Actual amounts
Incentive      (1) the market value of the outstanding stock of the Wells            are dependent
Listing Fee -  REIT plus distributions paid by the Wells REIT prior to               upon results of
Wells Capital  listing, exceeds (2) the sum of the total amount of capital           operations and
(4)(5)         raised from investors and the amount of cash flow                     therefore cannot
necessary to generate an 8.0% per year cumulative,                    be determined at
noncompounded return to investors.                                    the present time.

The Wells REIT may not reimburse any entity for
operating expenses in excess of the greater of 2% of our
average invested assets or 25% of our net income for the
year.

___________________________
(Footnotes to "Management Compensation")

1.      The estimated maximum dollar amounts are based on the sale of a maximum
of 125,000,000 shares to the public at $10 per share and the sale of
10,000,000 shares at $10 per share pursuant to our dividend reinvestment
plan.

2.      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.

3.      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 receipt of the subordinated participation in net sale proceeds,
Wells Capital shall not be entitled to any such participation in net
sale proceeds.

4.      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;

48

.      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.

The board, including a majority of the independent directors, may not
approve a new fee structure that is, in its judgment, more favorable to
Wells Capital than the current fee structure.

5.      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.

We have the option to pay the listing fee in the form of stock, cash, a
promissory note or any combination thereof. In the event the
subordinated incentive listing fee is paid to Wells Capital as a result
of the listing of the shares, we will not be required to pay Wells
Capital any further subordinated participation in net sale proceeds.

In addition, Wells Capital and its affiliates will be reimbursed only
for the actual cost of goods, services and materials used for or by the Wells
REIT. Wells Capital may be reimbursed for the administrative services necessary
to the prudent operation of the Wells REIT provided that the reimbursement shall
be at the lower of the advisor's actual cost or the amount the Wells REIT would
be required to pay to independent parties for comparable administrative services
in the same geographic location. We will not reimburse Wells Capital or its
affiliates for services for which they are entitled to compensation by way of a
separate fee.

Since Wells Capital and its affiliates are entitled to differing levels
of compensation for undertaking different transactions on behalf of the Wells
REIT such as the property management fees for operating the properties and the
subordinated participation in net sale proceeds, the advisor has the ability to
affect the nature of the compensation it receives by undertaking different
transactions. However, Wells Capital is obligated to exercise good faith and
integrity in all its dealings with respect to our affairs pursuant to the
advisory agreement. (See "Management -- The Advisory Agreement.") Because these
fees or expenses are payable only with respect to certain transactions or
services, they may not be recovered by Wells Capital or its affiliates by
reclassifying them under a different category.

Stock Ownership

The following table shows, as of September 30, 2000, the amount of our
common stock beneficially owned (unless otherwise indicated) by (1) any person
who is known by us to be the beneficial owner of more than 5% of the outstanding
shares of common stock, (2) our directors, (3) our executive officers, and (4)
all of our directors and executive officers as a group.

----------------------------------------------------------------------- ------------------------------------------
Shares Beneficially Owned
----------------------------------------------------------------------- ------------------ -----------------------
Shares              Percentage
----------------------------------------------------------------------- ------------------ -----------------------

Name and Address of Beneficial Owner
----------------------------------------------------------------------- ------------------ -----------------------
Leo F. Wells, III (1)                                                                 344                       *
6200 The Corners Parkway, Suite 250
Norcross, GA  30092
----------------------------------------------------------------------- ------------------ -----------------------
Douglas P. Williams (1)                                                               100                       *
6200 The Corners Parkway, Suite 250
Norcross, GA  30092
----------------------------------------------------------------------- ------------------ -----------------------

49

----------------------------------------------------------------------- ------------------------------------------
Shares Beneficially Owned
----------------------------------------------------------------------- ------------------ -----------------------
Shares              Percentage
----------------------------------------------------------------------- ------------------ -----------------------

John L. Bell (2)                                                                    1,000                       *
800 Mt. Vernon Highway, Suite 230
Atlanta, GA 30328
----------------------------------------------------------------------- ------------------ -----------------------
Richard W. Carpenter (2)                                                            1,000                       *
Realmark Holdings Corporation
P.O. Box 421669 (30342)
5570 Glenridge Drive
Atlanta, GA 30342
----------------------------------------------------------------------- ------------------ -----------------------
Bud Carter (2)                                                                      1,000                       *
The Executive Committee
100 Mount Shasta Lane
Alpharetta, GA 30022-5440
----------------------------------------------------------------------- ------------------ -----------------------
William H. Keogler, Jr. (2)                                                         1,000                       *
469 Atlanta Country Club Drive
Marietta, GA 30067
----------------------------------------------------------------------- ------------------ -----------------------
Donald S. Moss (2)                                                                 12,378                       *
114 Summerour Vale
Duluth, GA 30097
----------------------------------------------------------------------- ------------------ -----------------------
Walter W. Sessoms (2)                                                               3,761                       *
5995 River Chase Circle NW
Atlanta, GA 30328
----------------------------------------------------------------------- ------------------ -----------------------
Neil H. Strickland (2)                                                              1,000                       *
Strickland General Agency, Inc.
3109 Crossing Park
P.O. Box 129
Norcross, GA 30091
----------------------------------------------------------------------- ------------------ -----------------------
Northern Trust Co., Custodian for                                               2,230,262                   8.52%
Wayne County Employees'
Retirement System
Attn:  Laura Santiago
P.O. Box 92996
Chicago, IL 60675
----------------------------------------------------------------------- ------------------ -----------------------
Police & Fireman Retirement System                                              2,083,333                   7.96%
City of Detroit
Attn:  Ronald J. Stempin
908 Coleman A. Young Municipal Center
Detroit, MI 48226
----------------------------------------------------------------------- ------------------ -----------------------
All directors and executive officers                                               21,139                       *
as a group /(1)(3)/
----------------------------------------------------------------------- ------------------ -----------------------

*    Less than 1% of the outstanding common stock.

(1)  Includes 100 shares owned by Wells Capital, which is a wholly-owned
subsidiary of Wells Real Estate Funds, Inc. Messrs. Wells and Williams are
both control persons of Wells Capital, and Mr. Wells is a control person of
Wells Real Estate Funds, Inc. Mr. Williams disclaims beneficial ownership
of the shares owned by Wells Capital.

50

(2)    Includes options to purchase up to 1,000 shares of common stock, which
are exercisable within 60 days of September 30, 2000.

(3)    Includes options to purchase an aggregate of up to 7,000 shares of common
stock, which are exercisable within 60 days of September 30, 2000.

Conflicts of Interest

We are subject to various conflicts of interest arising out of our
relationship with Wells Capital, our advisor, and its affiliates, including
conflicts related to the arrangements pursuant to which Wells Capital and its
affiliates will be compensated by the Wells REIT. (See "Management
Compensation.")

The independent directors have an obligation to function on our behalf
in all situations in which a conflict of interest may arise and will have a
fiduciary obligation to act on behalf of the shareholders. These conflicts
include, but are not limited to, the following:

Interests in Other Real Estate Programs

Wells Capital and its affiliates are general partners of other Wells
programs, including partnerships which have investment objectives similar to
those of the Wells REIT, and we expect that they will organize other such
partnerships in the future. Wells Capital and such affiliates have legal and
financial obligations with respect to these partnerships which are similar to
their obligations to the Wells REIT. As general partners, they may have
contingent liability for the obligations of such partnerships as well as those
of the Wells REIT which, if such obligations were enforced against them, could
result in substantial reduction of their net worth.

Wells Capital and its affiliates are currently sponsoring a real
estate program known as Wells Real Estate Fund XII, L.P. (Wells Fund XII). The
registration statement of Wells Fund XII was declared effective by the
Securities and Exchange Commission (SEC) on March 22, 1999 for the offer and
sale to the public of up to 7,000,000 units of limited partnership interest at a
price of $10.00 per unit. In addition, the initial registration statement of
Wells Real Estate Fund XIII, L.P. (Wells Fund XIII) was filed with the SEC on
October 31, 2000 for the registration of up to 4,500,000 units of limited
partnership interest at a price of $10 per unit. It is intended that the
registration of Wells Fund XIII become effective immediately following the
termination of the offering of Wells Fund XII, which will occur on or about
March 21, 2001.

As described in the "Prior Performance Summary," Wells Capital and its
affiliates have sponsored the following 13 other public real estate programs
with substantially identical investment objectives as those of the Wells REIT:

1.      Wells Real Estate Fund I (Wells Fund I),
2.      Wells Real Estate Fund II (Wells Fund II),
3.      Wells Real Estate Fund II-OW (Wells Fund II-OW),
4.      Wells Real Estate Fund III, L.P. (Wells Fund III),
5.      Wells Real Estate Fund IV, L.P. (Wells Fund IV),
6.      Wells Real Estate Fund V, L.P. (Wells Fund V),
7.      Wells Real Estate Fund VI, L.P. (Wells Fund VI),
8.      Wells Real Estate Fund VII, L.P. (Wells Fund VII),
9.      Wells Real Estate Fund VIII, L.P. (Wells Fund VIII),
10.     Wells Real Estate Fund IX, L.P. (Wells Fund IX),
11.     Wells Real Estate Fund X, L.P. (Wells Fund X),
12.     Wells Real Estate Fund XI, L.P. (Wells Fund XI), and
13.     Wells Real Estate Fund XII, L.P. (Wells Fund XII).

In the event that the Wells REIT, or any other Wells program or other
entity formed or managed by Wells Capital or its affiliates is in the market for
similar properties, Wells Capital will review the

51

investment portfolio of each such affiliated entity prior to making a decision
as to which Wells program will purchase such properties. (See "Certain Conflict
Resolution Procedures.")

Wells Capital may acquire, for its own account or for private
placement, properties which it deems not suitable for purchase by the Wells
REIT, whether because of the greater degree of risk, the complexity of
structuring inherent in such transactions, financing considerations or for other
reasons, including properties with potential for attractive investment returns.

Other Activities of Wells Capital and its Affiliates

We rely on Wells Capital for the day-to-day operation of our business.
As a result of its interests in other Wells programs and the fact that it has
also engaged and will continue to engage in other business activities, Wells
Capital and its affiliates will have conflicts of interest in allocating their
time between the Wells REIT and other Wells programs and activities in which
they are involved. (See "Risk Factors -- Investment Risks.") However, Wells
Capital believes that it and its affiliates have sufficient personnel to
discharge fully their responsibilities to all of the Wells programs and ventures
in which they are involved.

In addition to the real estate programs sponsored by Wells Capital and
its affiliates discussed above, they are also sponsoring an index mutual fund
which invests in various REIT stocks known as the Wells S&P REIT Index Fund
(REIT Fund). The REIT Fund is a mutual fund which seeks to provide investment
results corresponding to the performance of the S&P REIT Index by investing in
the REIT stocks included in the S&P REIT Index.

Wells Capital or any of its affiliates may temporarily enter into
contracts relating to investment in properties to be assigned to the Wells REIT
prior to closing or may purchase property in their own name and temporarily hold
title for the Wells REIT provided that such property is purchased by the Wells
REIT at a price no greater than the cost of such property, including acquisition
and carrying costs, to Wells Capital or the affiliate. Further, Wells Capital or
such affiliate may not have held title to any such property on our behalf for
more than 12 months prior to the commencement of this offering; Wells Capital or
its affiliates shall not sell property to the Wells REIT if the cost of the
property exceeds the funds reasonably anticipated to be available for the Wells
REIT to purchase any such property; and all profits and losses during the period
any such property is held by the Wells REIT or its affiliates will accrue to the
Wells REIT. In no event may the Wells REIT:

.       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.

Competition

Conflicts of interest will exist to the extent that we may acquire
properties in the same geographic areas where properties owned by other Wells
programs are located. In such a case, a conflict could arise in the leasing of
properties in the event that the Wells REIT and another Wells program were to
compete for the same tenants in negotiating leases, or a conflict could arise in
connection with the resale of properties in the event that the Wells REIT and
another Wells program were to attempt to sell similar properties at the same
time. (See "Risk Factors -- Investment Risks"). Conflicts of interest may also
exist at such time as the Wells REIT or our affiliates managing property on our
behalf seek to employ developers, contractors or building managers as well as
under other circumstances. Wells Capital will seek to reduce conflicts relating
to the employment of developers, contractors or building managers by making
prospective employees aware of all such properties seeking to employ such
persons. In

52

addition, Wells Capital will seek to reduce conflicts which may arise with
respect to properties available for sale or rent by making prospective
purchasers or tenants aware of all such properties. However, these conflicts
cannot be fully avoided in that Wells Capital may establish differing
compensation arrangements for employees at different properties or differing
terms for resales or leasing of the various properties.

Affiliated Dealer Manager

Since Wells Investment Securities, our Dealer Manager, is an affiliate
of Wells Capital, we will not have the benefit of an independent due diligence
review and investigation of the type normally performed by an unaffiliated,
independent underwriter in connection with the offering of securities. (See
"Plan of Distribution.")

Affiliated Property Manager

Since we anticipate that properties we acquire will be managed and
leased by Wells Management, our Property Manager, we will not have the benefit
of independent property management. (See "Management -- Affiliated Companies.")

Lack of Separate Representation

Holland & Knight LLP is counsel to the Wells REIT, Wells Capital,
Wells Investment Securities and their affiliates in connection with this
offering and may in the future act as counsel to the Wells REIT, Wells Capital,
Wells Investment Securities and their affiliates. There is a possibility that in
the future the interests of the various parties may become adverse. In the event
that a dispute were to arise between the Wells REIT and Wells Capital, Wells
Investment Securities or any of their affiliates, separate counsel for such
matters will be retained as and when appropriate.

Joint Ventures with Affiliates of Wells Capital

We have entered into joint ventures with other Wells programs to
acquire and own properties and are likely to enter into one or more joint
venture agreements with other Wells programs for the acquisition, development or
improvement of properties. (See "Investment Objectives and Criteria -- Joint
Venture Investments.") Wells Capital and its affiliates may have conflicts of
interest in determining which Wells program should enter into any particular
joint venture agreement. The co-venturer may have economic or business interests
or goals which are or which may become inconsistent with our business interests
or goals. In addition, should any such joint venture be consummated, Wells
Capital may face a conflict in structuring the terms of the relationship between
our interests and the interest of the affiliated co-venturer and in managing the
joint venture. Since Wells Capital and its affiliates will control both the
Wells REIT and the affiliated co-venturer, agreements and transactions between
the co-venturers with respect to any such joint venture will not have the
benefit of arm's-length negotiation of the type normally conducted between
unrelated co-venturers. (See "Risk Factors -- Investment Risks.")

Receipt of Fees and Other Compensation by Wells Capital and its Affiliates

A transaction involving the purchase and sale of properties may result
in the receipt of commissions, fees and other compensation by Wells Capital and
its affiliates, including acquisition and advisory fees, the dealer manager fee,
property management and leasing fees, real estate brokerage commissions, and
participation in nonliquidating net sale proceeds. However, the fees and
compensation payable to Wells Capital and its affiliates relating to the sale of
properties are subordinated to the return to the shareholders of their capital
contributions plus cumulative returns on such capital. Subject to oversight by
the board of directors, Wells Capital has considerable discretion with respect
to all decisions

53

relating to the terms and timing of all transactions. Therefore, Wells Capital
may have conflicts of interest concerning certain actions taken on our behalf,
particularly due to the fact that such fees will generally be payable to Wells
Capital and its affiliates regardless of the quality of the properties acquired
or the services provided to the Wells REIT. (See "Management Compensation.")

Every transaction we enter into with Wells Capital or its affiliates
is subject to an inherent conflict of interest. The board may encounter
conflicts of interest in enforcing our rights against any affiliate in the event
of a default by or disagreement with an affiliate or in invoking powers, rights
or options pursuant to any agreement between us and any affiliate. A majority of
the independent directors who are otherwise disinterested in the transaction
must approve each transaction between us and Wells Capital or any of its
affiliates as being fair and reasonable to us and on terms and conditions no
less favorable to us than those available from unaffiliated third parties.

Certain Conflict Resolution Procedures

In order to reduce or eliminate certain potential conflicts of
interest, our articles of incorporation contain a number of restrictions
relating to (1) transactions we enter into with Wells Capital and its
affiliates, (2) certain future offerings, and (3) allocation of properties among
affiliated entities. These restrictions include, among others, the following:

.       We will not accept goods or services from Wells Capital or its
affiliates unless a majority of the 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 the 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 the 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 to our directors for other purposes must be
approved by a majority of the 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.

54

.       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 the 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.

If a subsequent development, such as a delay in the closing of a
property or a delay in the construction of a property, causes any such
investment, in the opinion of our board of directors and Wells Capital, to be
more appropriate for a program other than the program that committed to make the
investment, Wells Capital may determine that another program affiliated with
Wells Capital or its affiliates will make the investment. Our board of directors
has a duty to ensure that the method used by Wells Capital for the allocation of
the acquisition of properties by two or more affiliated programs seeking to
acquire similar types of properties shall be reasonable.

Investment Objectives and Criteria

General

We invest in commercial real estate properties, including properties
which are under development or construction, are newly constructed or have been
constructed and have operating histories. Our investment objectives are:

.       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, by selling our
properties and distributing the net proceeds from such sales
to you.

55

We cannot assure you that we will attain these objectives or that our capital
will not decrease. We may not change our investment objectives, except upon
approval of shareholders holding a majority of the shares.

Decisions relating to the purchase or sale of properties will be made
by Wells Capital, as our advisor, subject to approval by the board of directors.
See "Management" for a description of the background and experience of the
directors and executive officers.

Acquisition and Investment Policies

We will seek to invest substantially all of the offering proceeds
available for investment after the payment of fees and expenses in the
acquisition of high grade commercial office buildings, which are newly
constructed, under construction, or which have been previously constructed and
have operating histories. We are not limited to such investments, however. We
may invest in other commercial properties such as shopping centers, business and
industrial parks, manufacturing facilities and warehouse and distribution
facilities. We will primarily attempt to acquire commercial properties which are
less than five years old, the space in which has been leased or preleased to one
or more large corporate tenants who satisfy our standards of creditworthiness.
(See "Terms of Leases and Tenant Creditworthiness.") The trend of Wells Capital
and its affiliates in the most recently sponsored Wells programs, including the
Wells REIT, has been to invest primarily in office buildings located in densely
populated suburban markets. (See "Description of Properties" and "Prior
Performance Summary.")

We will seek to invest in properties that will satisfy the primary
objective of providing cash dividends to shareholders. However, because a
significant factor in the valuation of income-producing real properties is their
potential for future income, we anticipate that the majority of properties we
acquire will have both the potential for growth in value and providing cash
dividends to shareholders. To the extent feasible, we will strive to invest in a
diversified portfolio of properties, in terms of geography, type of property and
industry group of our tenants, that will satisfy our investment objectives of
maximizing cash available for payment of dividends, preserving our capital and
realizing growth in value upon the ultimate sale of our properties.

We anticipate that a minimum of 84% of the proceeds from the sale of
shares will be used to acquire real estate properties and the balance will be
used to pay various fees and expenses. (See "Estimated Use of Proceeds.")

We will not invest more than 10% of the net offering proceeds
available for investment in properties in unimproved or non-income producing
properties. A property which is expected to produce income within two years of
its acquisition will not be considered a non-income producing property.

Our investment in real estate generally will take the form of holding
fee title or a long-term leasehold estate. We will acquire such interests either
directly in Wells OP (See "The Operating Partnership Agreement") or indirectly
through limited liability companies or through investments in joint ventures,
general partnerships, co-tenancies or other co-ownership arrangements with the
developers of the properties, affiliates of Wells Capital or other persons. (See
"Joint Venture Investments" below.) In addition, we may purchase properties and
lease them back to the sellers of such properties. While we will use our best
efforts to structure any such sale-leaseback transaction such that the lease
will be characterized as a "true lease" so that we will be treated as the owner
of the property for federal income tax purposes, we cannot assure you that the
IRS will not challenge such characterization. In the event that any such
sale-leaseback transaction is recharacterized as a financing transaction for
federal income tax purposes, deductions for depreciation and cost recovery
relating to such property would be disallowed. (See "Federal Income Tax
Considerations -- Sale-Leaseback Transactions.")

56

Although we are not limited as to the geographic area where we may
conduct our operations, we intend to invest in properties located in the United
States.

We are not specifically limited in the number or size of properties we
may acquire or on the percentage of net proceeds of this offering which we may
invest in a single property. The number and mix of properties we acquire will
depend upon real estate and market conditions and other circumstances existing
at the time we are acquiring our properties and the amount of proceeds we raise
in this offering.

In making investment decisions for us, Wells Capital will consider
relevant real estate property and financial factors, including the location of
the property, its suitability for any development contemplated or in progress,
its income-producing capacity, the prospects for long-range appreciation, its
liquidity and income tax considerations. In this regard, Wells Capital will have
substantial discretion with respect to the selection of specific investments.

Our obligation to close the purchase of any investment will generally
be conditioned upon the delivery and verification of certain documents from the
seller or developer, including, where appropriate:

.       plans and specifications;

.       environmental reports;

.       surveys;

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

.       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 and delivered to shareholders; and

.       title and liability insurance policies.

We will not close the purchase of any property unless and until we
obtain an environmental assessment, a minimum of a Phase I review, for each
property purchased and are generally satisfied with the environmental status of
the property.

We may also enter into arrangements with the seller or developer of a
property whereby the seller or developer agrees that if during a stated period
the property does not generate a specified cash flow, the seller or developer
will pay in cash to the Wells REIT a sum necessary to reach the specified cash
flow level, subject in some cases to negotiated dollar limitations.

In determining whether to purchase a particular property, we may, in
accordance with customary practices, obtain an option on such property. The
amount paid for an option, if any, is normally surrendered if the property is
not purchased and is normally credited against the purchase price if the
property is purchased.

In purchasing, leasing and developing real estate properties, we will
be subject to risks generally incident to the ownership of real estate,
including:

.       changes in general economic or local conditions;

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

57

.       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.

Development and Construction of Properties

We may invest substantially all of the proceeds available for
investment in properties on which improvements are to be constructed or
completed although we may not invest in excess of 10% of the offering proceeds
available for investment in properties which are not expected to produce income
within two years of their acquisition. To help ensure performance by the
builders of properties which are under construction, completion of properties
under construction shall be guaranteed at the price contracted either by an
adequate completion bond or performance bond. Wells Capital may rely upon the
substantial net worth of the contractor or developer or a personal guarantee
accompanied by financial statements showing a substantial net worth provided by
an affiliate of the person entering into the construction or development
contract as an alternative to a completion bond or performance bond. Development
of real estate properties is subject to risks relating to a builder's ability to
control construction costs or to build in conformity with plans, specifications
and timetables. (See "Risk Factors -- Real Estate Risks.")

We may directly employ one or more project managers to plan, supervise
and implement the development of any unimproved properties which we may acquire.
Such persons would be compensated directly by the Wells REIT.

Acquisition of Properties from Wells Development Corporation

Although we have rarely done so in the past, we may acquire
properties, directly or through joint ventures with affiliated entities, from
Wells Development Corporation (Wells Development), a corporation formed by Wells
Management as a wholly-owned subsidiary for the purposes of (1) acquiring
existing income-producing commercial real estate properties, and (2) acquiring
land, developing commercial real properties, securing tenants for such
properties, and selling such properties upon completion to the Wells REIT or
other Wells programs. In the case of properties to be developed by Wells
Development and sold to the Wells REIT, we anticipate that Wells Development
will:

.       acquire a parcel of land;

.       enter into contracts for the construction and development of a
commercial building thereon;

.       enter into an agreement with one or more tenants to lease all
or a majority of the property upon its completion; and

.       secure a financing commitment from a commercial bank or other
institutional lender to finance the acquisition and
development of the property.

58

Contracts between Wells Development and the Wells REIT will generally
provide for the Wells REIT to acquire the developed property upon its completion
and upon the tenant taking possession under its lease.

We will be required to pay a substantial sum to Wells Development at
the time of entering into the contract as a refundable earnest money deposit to
be credited against the purchase price at closing, which Wells Development will
apply to the cost of acquiring the land and initial development costs. We expect
that the earnest money deposit will represent approximately twenty to thirty
percent (20-30%) of the purchase price of the developed property set forth in
the purchase contract.

In the case of properties we acquire from Wells Development that have
already been developed, Wells Development will be required to obtain an
appraisal for the property prior to our contracting with them, and the purchase
price we will pay under the purchase contract will not exceed the fair market
value of the property as determined by the appraisal. In the case of properties
we acquire from Wells Development which have not yet been constructed at the
time of contracting, Wells Development will be required to obtain an independent
"as built" appraisal for the property prior to our contracting with them, and
the purchase price we will pay under the purchase contract will not exceed the
anticipated fair market value of the developed property as determined by the
appraisal.

We anticipate that Wells Development will use the earnest money
deposit received from the Wells REIT upon execution of a purchase contract as
partial payment for the cost of the acquisition of the land and construction
expenditures. Wells Development will borrow the remaining funds necessary to
complete the development of the property from an independent commercial bank or
other institutional lender by pledging the real property, development contracts,
leases and all other contract rights relating to the project as security for
such borrowing. Our contract with Wells Development will require it to deliver
to us at closing title to the property, as well as an assignment of leases.
Wells Development will hold the title to the property on a temporary basis only
for the purpose of facilitating the acquisition and development of the property
prior to its resale to the Wells REIT and other affiliates of Wells Capital.

We may enter into a contract to acquire property from Wells
Development notwithstanding the fact that at the time of contracting, we have
not yet raised sufficient proceeds to enable us to pay the full amount of the
purchase price at closing. We anticipate that we will be able to raise
sufficient additional proceeds from the offering during the period between
execution of the contract and the date provided in the contract for closing. In
the case of properties to be developed by Wells Development, the contract will
likely provide that the closing will occur immediately following the completion
of the development by Wells Development. However, the contract may also provide
that we may elect to close the purchase of the property before the development
has been completed, in which case we would obtain an assignment of the
construction and development contracts from Wells Development and would complete
the construction either directly or through a joint venture with an affiliate.
Any contract between the Wells REIT, directly or indirectly through a joint
venture with an affiliate, and Wells Development for the purchase of property to
be developed by Wells Development will provide that we will be obligated to
purchase the property only if:

.       Wells Development completes the development of the
improvements in accordance with the specifications of the
contract, and an approved tenant takes possession of the
building under a lease satisfactory to our advisor; and

.       we have sufficient proceeds available for investment in
properties at closing to pay the balance of the purchase price
remaining after payment of the earnest money deposit.

59

Wells Capital will not cause the Wells REIT to enter into a contract
to acquire property from Wells Development if it does not reasonably anticipate
that funds will be available to purchase the property at the time of closing. If
we enter into a contract to acquire property from Wells Development and, at the
time for closing, are unable to purchase the property because we do not have
sufficient proceeds available for investment, we will not be required to close
the purchase of the property and will be entitled to a refund of our earnest
money deposit from Wells Development. Because Wells Development is an entity
without substantial assets or operations, however, Wells Development's
obligation to refund our earnest money deposit will be guaranteed by Wells
Management. See the "Management -- Affiliated Companies" section of this
prospectus for a description of Wells Management.

If Wells Management is required to make good on its guaranty, we may
not be able to obtain the earnest money deposit from Wells Management in a lump
sum since Wells Management's only significant assets are its contracts for
property management and leasing services, in which case we would more than
likely be required to accept installment payments over some period of time out
of Wells Management's operating revenues. (See "Risk Factors -- Real Estate
Risks.")

Terms of Leases and Tenant Creditworthiness

The terms and conditions of any lease we enter into with our tenants
may vary substantially from those we describe in this prospectus. However, we
expect that a majority of our leases will be what is generally referred to as
"triple net" leases. A "triple net" lease provides that the tenant will be
required to pay or reimburse the Wells REIT for all real estate taxes, sales and
use taxes, special assessments, utilities, insurance and building repairs, and
other building operation and management costs, in addition to making its lease
payments.

Wells Capital has developed specific standards for determining the
creditworthiness of potential tenants of our properties. While authorized to
enter into leases with any type of tenant, we anticipate that a majority of our
tenants will be large corporations or other entities which have a net worth in
excess of $100,000,000 or whose lease obligations are guaranteed by another
corporation or entity with a net worth in excess of $100,000,000. As of
September 30, 2000, approximately 75% of the aggregate gross rental income of
the Wells REIT was derived from tenants which are corporations, each of which at
the time of lease execution had a net worth of at least $100,000,000 or whose
lease obligations were guaranteed by another corporation having a net worth of
at least $100,000,000.

In an attempt to limit or avoid speculative purchases, to the extent
possible, Wells Capital will seek to secure, on our behalf, leases with tenants
at or prior to the closing of our acquisitions of properties.

We anticipate that tenant improvements required to be funded by the
landlord in connection with newly acquired properties will be funded from our
offering proceeds. However, at such time as a tenant at one of our properties
does not renew its lease or otherwise vacates its space in one of our buildings,
it is likely that, in order to attract new tenants, we will be required to
expend substantial funds for tenant improvements and tenant refurbishments to
the vacated space. Since we do not anticipate maintaining permanent working
capital reserves, we may not have access to funds required in the future for
tenant improvements and tenant refurbishments in order to attract new tenants to
lease vacated space. (See "Risk Factors -- Real Estate Risks.")

60

Joint Venture Investments

We have entered into joint ventures in the past, and are likely to enter
into joint ventures in the future with affiliated entities for the acquisition,
development or improvement of properties for the purpose of diversifying our
portfolio of assets. (See "Description of Properties -- Joint Ventures with
Affiliates.") In this connection, we will likely enter into joint ventures with
Wells Fund XII, Wells Fund XIII or other Wells programs. Wells Capital also has
the authority to cause us to enter into joint ventures, general partnerships,
co-tenancies and other participations with real estate developers, owners and
others for the purpose of developing, owning and operating real properties. (See
"Conflicts of Interest.") In determining whether to invest in a particular joint
venture, Wells Capital will evaluate the real property which such joint venture
owns or is being formed to own under the same criteria described elsewhere in
this prospectus for the selection of real estate property investments of the
Wells REIT. (See generally "Investment Objectives and Criteria.")

At such time as Wells Capital believes that a reasonable probability exists
that we will enter into a joint venture with another Wells program for the
acquisition or development of a specific property, this prospectus will be
supplemented to disclose the terms of such proposed investment transaction.
Based upon Wells Capital's experience, in connection with the development of a
property which is currently owned by a Wells program, this would normally occur
upon the signing of legally binding purchase agreement for the acquisition of a
specific property or leases with one or more major tenants for occupancy at a
particular property and the satisfaction of all major contingencies contained in
such purchase agreement, but may occur before or after any such time, depending
upon the particular circumstances surrounding each potential investment. You
should not rely upon such initial disclosure of any proposed transaction as an
assurance that we will ultimately consummate the proposed transaction or that
the information we provide in any supplement to this prospectus concerning any
proposed transaction will not change after the date of the supplement.

We intend to enter into joint ventures with other Wells programs for the
acquisition of properties, but we may only do so provided that:

.    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.

In the event that the co-venturer were to elect to sell property held in any
such joint venture, however, we may not have sufficient funds to exercise our
right of first refusal to buy the other co-venturer's interest in the property
held by the joint venture. In the event that any joint venture with an
affiliated entity holds interests in more than one property, the interest in
each such property may be specially allocated based upon the respective
proportion of funds invested by each co-venturer in each such property. Entering
into joint ventures with other Wells programs will result in certain conflicts
of interest. (See "Conflicts of Interest -- Joint Ventures with Affiliates of
Wells Capital.")

61

Borrowing Policies

While we strive for diversification, the number of different properties we
can acquire will be affected by the amount of funds available to us. See
"Description of Properties -- Real Estate Loans" for a description of our
existing loans and the outstanding loan balances.

Our ability to increase our diversification through borrowing could be
adversely impacted by banks and other lending institutions reducing the amount
of funds available for loans secured by real estate. When interest rates on
mortgage loans are high or financing is otherwise unavailable on a timely basis,
we may purchase certain properties for cash with the intention of obtaining a
mortgage loan for a portion of the purchase price at a later time.

There is no limitation on the amount we may invest in any single improved
property or on the amount we can borrow for the purchase of any property. The
NASAA Guidelines only limit our borrowing to 75% of the value of all properties
unless any excess borrowing is approved by a majority of the independent
directors and is disclosed to shareholders in our next quarterly report.
However, under our articles of incorporation, we have a self-imposed limitation
on borrowing which precludes us from borrowing in the aggregate in excess of 50%
of the value of all of our properties. As of December 10, 2000, we had an
aggregate debt leverage ratio of 10% of the value of our properties.

By operating on a leveraged basis, we will have more funds available for
investment in properties. This will allow us to make more investments than would
otherwise be possible, resulting in a more diversified portfolio. Although our
liability for the repayment of indebtedness is expected to be limited to the
value of the property securing the liability and the rents or profits derived
therefrom, our use of leveraging increases the risk of default on the mortgage
payments and a resulting foreclosure of a particular property. (See "Risk
Factors -- Real Estate Risks.") To the extent that we do not obtain mortgage
loans on our properties, our ability to acquire additional properties will be
restricted. Wells Capital will use its best efforts to obtain financing on the
most favorable terms available to us. Lenders may have recourse to assets not
securing the repayment of the indebtedness.

Wells Capital will refinance properties during the term of a loan only in
limited circumstances, such as when a decline in interest rates makes it
beneficial to prepay an existing mortgage, when an existing mortgage matures or
if an attractive investment becomes available and the proceeds from the
refinancing can be used to purchase such investment. The benefits of the
refinancing may include an increased cash flow resulting from reduced debt
service requirements, an increase in dividend distributions from proceeds of the
refinancing, if any, and/or an increase in property ownership if some
refinancing proceeds are reinvested in real estate.

We may not borrow money from any of our directors or from Wells Capital and
its affiliates for the purpose of acquiring real properties. Any loans by such
parties for other purposes must be approved by a majority of the 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.

Disposition Policies

We intend to hold each property we acquire for an extended period. However,
circumstances might arise which could result in the early sale of some
properties. A property may be sold before the end of the expected holding period
if:

.    the tenant has involuntarily liquidated;

62

.    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 our best interests.

The determination of whether a particular property should be sold or
otherwise disposed of will be made after consideration of relevant factors,
including prevailing economic conditions, with a view to achieving maximum
capital appreciation. We cannot assure you that this objective will be realized.
The selling price of a property which is net leased will be determined in large
part by the amount of rent payable under the lease. If a tenant has a repurchase
option at a formula price, we may be limited in realizing any appreciation. In
connection with our sales of properties we may lend the purchaser all or a
portion of the purchase price. In these instances, our taxable income may exceed
the cash received in the sale. (See "Federal Income Considerations -- Failure to
Qualify as a REIT.") The terms of payment will be affected by custom in the area
in which the property being sold is located and the then-prevailing economic
conditions.

If our shares are not listed for trading on a national securities exchange
or included for quotation on Nasdaq by January 30, 2008, our articles of
incorporation require us to begin the sale of all of our properties and
distribution of the net sale proceeds to you in liquidation of the Wells REIT.
In making the decision to apply for listing of our shares, the directors will
try to determine whether listing our shares or liquidating our assets will
result in greater value for the shareholders. It cannot be determined at this
time the circumstances, if any, under which the directors will agree to list our
shares. Even if our shares are not listed or included for quotation, we are
under no obligation to actually sell our portfolio within this period since the
precise timing will depend on real estate and financial markets, economic
conditions of the areas in which the properties are located and federal income
tax effects on shareholders which may prevail in the future. Furthermore, we
cannot assure you that we will be able to liquidate our assets, and it should be
noted that we will continue in existence until all properties are sold and our
other assets are liquidated.

Investment Limitations

Our articles of incorporation place numerous limitations on us with respect
to the manner in which we may invest our funds in accordance with various NASAA
Guideline provisions. These limitations cannot be changed unless our articles of
incorporation are amended, which requires the approval of the shareholders.
Unless the articles are amended, we will not:

.    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;

63

.    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 the 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 that are subordinate to any mortgage
or equity interest of any of our directors, Wells Capital or its
affiliates;

.    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 because of the presence of other underwriting
criteria;

.    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;

.    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;

.    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;

.    issue "redeemable securities" as defined in Section 2(a)(32) of the
Investment Company Act of 1940;

.    grant warrants or options to purchase shares to officers or affiliated
directors or to Wells Capital or its affiliates 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;

64

.    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 Wells Capital or its affiliates.

Wells Capital will continually review our investment activity to attempt to
ensure that we do not come within the application of the Investment Company Act
of 1940. Among other things, Wells Capital will attempt to monitor the
proportion of our portfolio that is placed in various investments so that we do
not come within the definition of an "investment company" under the act. If at
any time the character of our investments could cause us to be deemed an
investment company for purposes of the Investment Company Act of 1940, we will
take the necessary action to attempt to ensure that we are not deemed to be an
"investment company."

Change in Investment Objectives and Limitations

Our articles of incorporation require that the independent directors review
our investment policies at least annually to determine that the policies we are
following are in the best interest of the shareholders. Each determination and
the basis therefor shall be set forth in our minutes. The methods of
implementing our investment policies also may vary as new investment techniques
are developed. The methods of implementing our investment objectives and
policies, except as otherwise provided in the organizational documents, may be
altered by a majority of the directors, including a majority of the independent
directors, without the approval of the shareholders.

Description of Properties

General

As of December 10, 2000, we had purchased interests in 26 real estate
properties located in 15 states, all of which are leased to tenants on a triple-
net basis. The cost of each of the properties will be depreciated for tax
purposes over a 40 year period on a straight-line basis. We believe all of the
properties are adequately covered by insurance and are suitable for their
intended purposes. The following table provides certain additional information
about these properties.

--------------------------------------------------------------------------------------------------------------------
Property           %       Purchase              Square      Annual          Lease
Tenant              Location         Owned       Price                Feet        Rent         Expiration
--------------------------------------------------------------------------------------------------------------------

Motorola, Inc.          Plainfield, NJ       100%     $33,648,156           236,710     $3,324,428          10/2010
--------------------------------------------------------------------------------------------------------------------
Quest Software, Inc.    Irvine, CA          13.9%     $ 7,193,000            65,006     $1,287,119          12/2003
--------------------------------------------------------------------------------------------------------------------
Delphi Automotive       Troy, MI             100%     $19,800,000           107,152     $1,848,372          04/2007
Systems, LLC
--------------------------------------------------------------------------------------------------------------------
Avnet, Inc.             Tempe, AZ            100%     $13,250,000           132,070     $1,516,164          04/2010
--------------------------------------------------------------------------------------------------------------------
Siemens Automotive      Troy, MI              50%     $14,265,000            77,054     $1,309,918          08/2010
Corp.
--------------------------------------------------------------------------------------------------------------------
Motorola, Inc.          Tempe, AZ            100%     $16,000,000           133,225     $1,843,834          08/2005
--------------------------------------------------------------------------------------------------------------------
ASM Lithography, Inc.   Tempe, AZ            100%     $17,355,000            95,133     $1,927,788          06/2013
--------------------------------------------------------------------------------------------------------------------
Dial Corporation        Scottsdale, AZ       100%     $14,250,000           129,689     $1,387,672          08/2008
--------------------------------------------------------------------------------------------------------------------

65

----------------------------------------------------------------------------------------------------------------------------------
Property           %       Purchase              Square       Annual         Lease
Tenant                            Location         Owned       Price                Feet         Rent        Expiration
----------------------------------------------------------------------------------------------------------------------------------

Metris Direct, Inc.                   Tulsa, OK            100%     $12,700,000           101,100     $1,187,925          01/2010
----------------------------------------------------------------------------------------------------------------------------------
Cinemark USA, Inc./                   Plano, TX            100%     $21,800,000            66,024/    $1,366,491/         12/2009
The Coca Cola Co.                                                                          52,084     $1,302,100          11/2006
----------------------------------------------------------------------------------------------------------------------------------
The Gartner Group, Inc.               Ft. Myers, FL       56.8%     $ 8,320,000            62,400     $  790,642          12/2008
----------------------------------------------------------------------------------------------------------------------------------
Marconi Data Systems, Inc.            Wood Dale, IL        100%     $32,630,940           250,354     $2,838,952          11/2011
----------------------------------------------------------------------------------------------------------------------------------
Johnson Matthey, Inc.                 Tredyffrin            57%     $ 8,000,000           130,000     $ $789,750          06/2007
Township, PA
----------------------------------------------------------------------------------------------------------------------------------
Alstom Power, Inc.(1)                 Richmond, VA         100%     $11,400,000           102,000     $1,183,731          07/2007
----------------------------------------------------------------------------------------------------------------------------------
Sprint Communications Company, L.P.   Leawood, KA         56.8%     $ 9,500,000            68,900     $  999,048          05/2007
----------------------------------------------------------------------------------------------------------------------------------
EYBL Cartex, Inc.                     Greenville, SC      56.8%     $ 5,085,000           169,510     $  508,530          02/2008
----------------------------------------------------------------------------------------------------------------------------------
Matsushita Avionics                   Lake Forest, CA      100%     $18,400,000           150,000     $1,830,000          01/2007
Systems Corporation(1)
----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Cellular                 Harrisburg, PA       100%     $12,291,200            81,859     $1,416,221          11/2007
Telephone Corp.
----------------------------------------------------------------------------------------------------------------------------------
Pricewaterhouse-Coopers, LLP          Tampa, FL            100%     $21,127,854           130,091     $1,915,741          12/2008
----------------------------------------------------------------------------------------------------------------------------------
Fairchild Technologies U.S.A., Inc.   Fremont, CA         77.5%     $ 8,900,000            58,424     $  867,324          11/2004
----------------------------------------------------------------------------------------------------------------------------------
Cort Furniture Rental Corporation     Fountain Valley, CA 43.7%     $ 6,400,000            52,000     $  758,964          10/2003
----------------------------------------------------------------------------------------------------------------------------------
Iomega Corporation                    Ogden City, UT       3.7%     $ 5,025,000           108,000     $  659,868          07/2006
----------------------------------------------------------------------------------------------------------------------------------
ODS Technologies,                     Broomfield, CO       3.7%     $ 8,275,000            51,974     $  913,908          10/2001
L.P. and GAIAM, Inc.
----------------------------------------------------------------------------------------------------------------------------------
Ohmeda, Inc.                          Louisville, CO       3.7%     $10,325,000           106,750     $1,004,520          01/2005
----------------------------------------------------------------------------------------------------------------------------------
Alstom Power, Inc.                    Knoxville, TN        3.7%     $ 7,900,000            87,000     $1,106,520          12/2007
----------------------------------------------------------------------------------------------------------------------------------
Avaya, Inc.                           Oklahoma City, OK    3.7%     $ 5,504,276            55,017     $  508,383          01/2008
----------------------------------------------------------------------------------------------------------------------------------

(1)  Includes the actual costs incurred by Wells OP to develop and construct the
building in addition to the purchase price of the land.

66

Joint Ventures with Affiliates

The Wells Fund VIII-Fund IX-REIT Joint Venture

Wells OP entered into a Joint Venture Agreement with the Fund VIII-IX Joint
Venture known as the Wells Fund VIII-Fund IX-REIT Joint Venture (VIII-IX-REIT
Joint Venture) for the purpose of the ownership, leasing, operation, sale and
management of the Quest Building. The investment objectives of Wells Fund VIII
and Wells Fund IX are substantially identical to our investment objectives.

The Quest Building was originally purchased by the Fund VIII-IX Joint
Venture in January 1997. On June 9, 2000, the Fund VIII-IX Joint Venture entered
into a lease for the Quest Building with Quest Software, Inc. (Quest) and
subsequently contributed the Quest Building to the VIII-IX-REIT Joint Venture as
its capital contribution at an agreed upon value of $7,612,733. Wells OP is
anticipated to contribute a total of approximately $1,250,000 as its capital
contribution to the VIII-IX-REIT Joint Venture to fund the necessary tenant
improvements required under the lease with Quest, leasing commissions and costs
and expenses associated with the transfer of the Quest Building to the VIII-IX-
REIT Joint Venture.

The VIII-IX-REIT Joint Venture Agreement provides that all income, loss,
profit, net cash flow, resale gain and sale proceeds of the VIII-IX-REIT Joint
Venture are to be allocated and distributed between Wells OP, Wells Fund VIII
and Wells Fund IX based upon their respective capital contributions to the joint
venture. As of December 10, 2000, the joint venture partners of the VIII-IX-REIT
Joint Venture had made the following contributions and held the following equity
percentage interests:

-------------------------------------------------------------------
Joint Venture Partner    Capital Contribution     Equity Interest
-------------------------------------------------------------------
Wells OP                      $1,230,826               13.9%
-------------------------------------------------------------------
Wells Fund VIII               $4,171,778               47.2%
-------------------------------------------------------------------
Wells Fund IX                 $3,440,955               38.9%
-------------------------------------------------------------------

The Wells Fund XII-REIT Joint Venture

Wells Fund XII and Wells OP entered into a Joint Venture Partnership
Agreement for the purpose of acquiring, owning, leasing, operating and managing
real properties. The joint venture partnership is known as the Wells Fund XII-
REIT Joint Venture Partnership (XII-REIT Joint Venture). The investment
objectives of Wells Fund XII are substantially identical to our investment
objectives.

The XII-REIT Joint Venture Agreement provides that all income, loss,
profit, net cash flow, resale gain and sale proceeds of the XII-REIT Joint
Venture are to be allocated and distributed between Wells OP and Wells Fund XII
based upon their respective capital contributions to the joint venture. As of
December 10, 2000, the joint venture partners of the XII-REIT Joint Venture had
made the following contributions and held the following equity percentage
interests:

-------------------------------------------------------------------
Joint Venture Partner    Capital Contribution     Equity Interest
-------------------------------------------------------------------
Wells OP                      $7,096,245               50.00%
-------------------------------------------------------------------
Wells Fund XII                $7,096,245               50.00%
-------------------------------------------------------------------

The XII-REIT Joint Venture owns the Siemens Building, which is described
below.

67

The Wells Fund XI-Fund XII-REIT Joint Venture

Wells OP entered into an Amended and Restated Joint Venture Partnership
Agreement with Wells Fund XI and Wells Fund XII for the purpose of the
acquisition, ownership, development, leasing, operation, sale and management of
real properties known as The Wells Fund XI-Fund XII-REIT Joint Venture (XI-XII-
REIT Joint Venture). The XI-XII-REIT Joint Venture was originally formed on May
1, 1999 between Wells OP and Wells Fund XI. On June 21, 1999, Wells Fund XII was
admitted to the XI-XII-REIT Joint Venture as a joint venture partner. The
investment objectives of Wells Fund XI and Wells Fund XII are substantially
identical to our investment objectives.

The XI-XII-REIT Joint Venture Agreement provides that all income, profit,
loss, cash flow, resale gain, resale loss and sale proceeds of the XI-XII-REIT
Joint Venture will be allocated and distributed among Wells OP, Wells Fund XI
and Wells Fund XII based on their respective capital contributions to the joint
venture. As of December 10, 2000, the joint venture partners of the XI-XII-REIT
Joint Venture had made the following contributions and held the following equity
percentage interests:

-------------------------------------------------------------------
Joint Venture Partner     Capital Contribution    Equity Interest
-------------------------------------------------------------------
Wells OP                       $ 17,641,211            56.77%
-------------------------------------------------------------------
Wells Fund XI                  $  8,131,351            26.17%
-------------------------------------------------------------------
Wells Fund XII                 $  5,300,000            17.06%
-------------------------------------------------------------------

The XI-XII-REIT Joint Venture owns the EYBL CarTex Building, the Sprint
Building, the Johnson Matthey Building and the Gartner Building, which are
described below.

The Fund IX, Fund X, Fund XI and REIT Joint Venture

Wells OP entered into an Amended and Restated Joint Venture Agreement with
Wells Fund IX, Wells Fund X and Wells Fund XI, known as The Fund IX, Fund X,
Fund XI and REIT Joint Venture (IX-X-XI-REIT Joint Venture) for the purpose of
the acquisition, ownership, development, leasing, operation, sale and management
of real properties. The IX-X-XI-REIT Joint Venture, formerly known as Fund IX
and X Associates, was originally formed on March 20, 1997 between Wells Fund IX
and Wells Fund X. On June 11, 1998, Wells OP and Wells Fund XI were admitted as
joint venture partners to the IX-X-XI-REIT Joint Venture. The investment
objectives of Wells Fund IX, Wells Fund X and Wells Fund XI are substantially
identical to our investment objectives.

The IX-X-XI-REIT Joint Venture Agreement provides that all income, profit,
loss, cash flow, resale gain, resale loss and sale proceeds of the IX-X-XI-REIT
Joint Venture will be allocated and distributed among Wells OP, Wells Fund IX,
Wells Fund X and Wells Fund XI based on their respective capital contributions
to the IX-X-XI-REIT Joint Venture. As of December 10, 2000, the joint venture
partners of the IX-X-XI-REIT Joint Venture had made the following contributions
and held the following equity percentage interests:

-------------------------------------------------------------------
Joint Venture Partner     Capital Contribution    Equity Interest
-------------------------------------------------------------------
Wells OP                      $ 1,421,466               3.74%
-------------------------------------------------------------------
Wells Fund IX                 $14,833,708              39.00%
-------------------------------------------------------------------
Wells Fund X                  $18,420,162              48.43%
-------------------------------------------------------------------
Wells Fund XI                 $ 3,357,436               8.83%
-------------------------------------------------------------------

68

The IX-X-XI-REIT Joint Venture owns the Avaya Building, the Alstom Power
Knoxville Building, the Ohmeda Building, the Interlocken Building and the Iomega
Building, which are described below.

The Fremont Joint Venture

Wells OP entered into a Joint Venture Agreement known as Wells/Fremont
Associates (Fremont Joint Venture) with Fund X and Fund XI Associates (X-XI
Joint Venture), a joint venture between Wells Fund X and Wells Fund XI. The
purpose of the Fremont Joint Venture is the acquisition, ownership, leasing,
operation, sale and management of real properties, including, but not limited
to, the Fairchild Building.

As of December 10, 2000, Wells OP had made total capital contributions to
the Fremont Joint Venture of $6,983,110 and held an equity percentage interest
in the Fremont Joint Venture of 77.50%, and the Fund X-XI Joint Venture had made
total capital contributions to the Fremont Joint Venture of $2,000,000 and held
an equity percentage interest in the Fremont Joint Venture of 22.50%.

The Cort Joint Venture

Wells OP entered into a Joint Venture Agreement with the X-XI Joint Venture
known as Wells/Orange County Associates (Cort Joint Venture) for the purpose of
the acquisition, ownership, leasing, operation, sale and management of real
properties, including, but not limited to, the Cort Furniture Building.

As of December 10, 2000, Wells OP had made total capital contributions to
the Cort Joint Venture of $2,871,430 and held an equity percentage interest in
the Cort Joint Venture of 43.67%, and the Fund X-XI Joint Venture made total
capital contributions to the Cort Joint Venture of $3,695,000 and held an equity
percentage interest in the Cort Joint Venture of 56.33%.

General Provisions of Joint Venture Agreements

Wells OP is acting as the initial Administrative Venturer of the VIII-IX-
REIT Joint Venture, the XII-REIT Joint Venture, the XI-XII-REIT Joint Venture,
the IX-X-XI-REIT Joint Venture, the Fremont Joint Venture and the Cort Joint
Venture and, as such, is responsible for establishing policies and operating
procedures with respect to the business and affairs of each of these joint
ventures. However, approval of the other joint venture partners will be required
for any major decision or any action which materially affects these joint
ventures or their real property investments.

The XII-REIT Joint Venture Agreement, the XI-XII-REIT Joint Venture
Agreement and the IX-X-XI-REIT Joint Venture Agreement each allow any joint
venture partner to make a buy/sell election upon receipt by any other joint
venture partner of a bona fide third-party offer to purchase all or
substantially all of the properties or the last remaining property of the
respective joint venture. Upon receipt of notice of such third-party offer, each
joint venture partner must elect within 30 days after receipt of the notice to
either (1) purchase the entire interest of each venture partner that wishes to
accept the offer on the same terms and conditions as the third-party offer to
purchase, or (2) consent to the sale of the properties or last remaining
property pursuant to such third-party offer.

The Motorola Plainfield Building

The Motorola Plainfield Building is a three-story office building
containing approximately 236,710 rentable square feet on a 34.5 acre tract of
land. Wells OP purchased the Motorola Plainfield Building on November 1, 2000
for a purchase price of $33,648,156. In consideration for a reduction of the

69

purchase price and immediate occupancy of the Motorola Plainfield Building,
Wells OP agreed to assume a liability in the amount of $424,760 in the form of a
rental guaranty from Motorola, Inc. (Motorola) for the remainder of Motorola's
previous lease. Construction of the Motorola Plainfield Building was completed
in 1976.

The Motorola Plainfield Building is located near Rutgers University in
Middlesex County, partially in the Borough of South Plainfield and partially in
the Township of Edison.

The Motorola Plainfield Building is leased to Motorola. Motorola is a
global leader in providing integrated communications solutions and embedded
electronic solutions, including software-enhanced wireless telephones, two-way
radios and digital and analog systems and set-top terminals for broadband cable
television operators.

The initial term of the Motorola lease is ten years which commenced on
November 1, 2000 and expires on October 31, 2010. Motorola has the right to
extend the Motorola lease for two additional five-year periods of time for a
base rent equal to the greater of (i) the last year's rent, or (ii) 95% of the
then-current "fair market rental rate." The base rent payable for the initial
lease term is as follows:

--------------------------------------------
Lease Years    Annual Rent    Monthly Rent
--------------------------------------------
Years 1-5     $ 3,324,428     $ 277,036
--------------------------------------------
Years 6-10    $ 3,557,819     $ 296,485
--------------------------------------------

The Motorola lease grants Motorola a right of first refusal to purchase the
Motorola Plainfield Building if Wells OP attempts to sell the property during
the term of the lease.

Additionally, upon giving written notice to Wells OP, Motorola has an
expansion right for an additional 143,000 rentable square feet. Upon completion
of the expansion, the term of the Motorola lease shall be extended an additional
ten years after Motorola occupies the expansion space. The base rent for the
expansion space shall be determined by the construction costs and fees for the
expansion. The base rent for the original building for the extended ten-year
period shall be the greater of (i) the then-current base rent, or (ii) 95% of
the then-current "fair market rental rate."

The Quest Building

The Quest Building (formerly the Bake Parkway Building) is a two-story
office building containing approximately 65,006 rentable square feet on a 4.4
acre tract of land in Irvine, California. Construction of the Quest Building was
completed in 1984 and the building was refurbished in 1996. The VIII-IX Joint
Venture purchased the Quest Building on January 10, 1997 for a purchase price of
$7,193,000. On July 1, 2000, the VIII-IX Joint Venture contributed the Quest
Building to the VIII-IX-REIT Joint Venture and was credited with making a
capital contribution to the joint venture in the amount of $7,612,733. (See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources.")

The Quest Building is currently leased to Quest Software, Inc. (Quest).
Quest is a publicly traded corporation that provides software database
management and disaster recovery services for its clients. Quest was established
in April 1987 to develop and market software products to help insure
uninterrupted, high performance access to enterprise and custom computing
applications and databases. Quest has organized their product offerings to
target application development and deployment, performance and availability, and
information delivery needs of the Oracle and other open systems markets. Quest
has grown to more than 1,000 people worldwide and has more than 5,000 installed

70

customer sites.

The initial term of the lease is 42 months which commenced on June 9, 2000
and expires on December 31, 2003. The base rent payable for the initial six
months of the lease was $326,700. The annual base rent payable for the remaining
portion of the initial lease term is $1,287,119. Quest has the right to extend
the lease for two additional one-year periods of time at an annual base rent of
$1,365,126.

The Delphi Building

The Delphi Building is a three-story office building containing
approximately 107,152 rentable square feet on a 5.52 acre tract of land. Wells
OP purchased the Delphi Building on June 29, 2000 for a purchase price of
$19,800,000. Construction of the Delphi Building was completed in May 2000.

The Delphi Building is located in Troy, Oakland County, Michigan, in the
heart of what is generally called "Automation Alley."

The Delphi Building is leased to Delphi Automotive Systems LLC (Delphi
LLC). Delphi LLC is a wholly-owned subsidiary of Delphi Automotive Systems
Corporation (Delphi), formally the Automotive Components Group of General
Motors, which was spun off from General Motors in May 1999. Delphi is the
world's largest automotive components supplier and sells its products to almost
every major manufacturer of light vehicles in the world.

The initial term of the Delphi lease is seven years which commenced on May
1, 2000 and expires on April 30, 2007. Delphi LLC has the right to extend the
Delphi lease for two additional five-year periods of time at 95% of the then-
current fair market rental rate. The base rent payable for the initial lease
term is as follows:

------------------------------------------------------------------------
Lease Year                Annual Rent              Monthly Rent
-------------------------------------------------------------------------
Year 1                    $ 1,848,372              $ 154,031
-------------------------------------------------------------------------
Year 2                    $ 1,901,948              $ 158,496
-------------------------------------------------------------------------
Year 3                    $ 1,955,524              $ 162,960
-------------------------------------------------------------------------
Year 4                    $ 2,009,100              $ 167,425
-------------------------------------------------------------------------
Year 5                    $ 2,062,676              $ 171,890
-------------------------------------------------------------------------
Year 6                    $ 2,116,252              $ 176,354
-------------------------------------------------------------------------
Year 7                    $ 2,169,828              $ 180,819
-------------------------------------------------------------------------

The Avnet Building

The Avnet Building is a two-story office building containing approximately
132,070 rentable square feet on a 9.63 acre tract of land located in Tempe,
Arizona. Wells OP purchased the Avnet Building on June 12, 2000 for a purchase
price of $13,250,000. Construction of the Avnet Building was completed in April
2000.

The Avnet Building is located on a 9.63 acre tract of land within the
Arizona State University Research Park. The land upon which the Avnet Building
is situated is subject to a long-term ground lease with Price-Elliott Research
Park, Inc.

The Avnet Building is subject to a first priority mortgage in favor of
SouthTrust securing a SouthTrust Line of Credit, which is more particularly
described in the "Real Estate Loans" section of this prospectus.

71

The Avnet Building is leased to Avnet, Inc. (Avnet). Avnet is a Fortune 300
company and one of the world's largest industrial distributors of electronic
components and computer products, including microprocessors, semi-conductors and
electromechanical devices, serving customers in 60 countries. Additionally,
Avnet distributes a variety of computer products to consumers and resellers.
Avnet sells products of more than 100 of the world's leading component
manufacturers to customers around the world.

The initial term of the Avnet lease is ten years which commenced on May 1,
2000 and expires on April 30, 2010. Avnet has the right to extend the Avnet
lease for two additional five-year periods of time. The yearly rent payable for
the first three years of each extension period will be at the current fair
market rental rate at the end of the preceding term. The yearly rent payable for
the fourth and fifth years of each extension period will be the current fair
market rental rate at the end of the preceding term multiplied by a factor of
1.093.

The base rent payable for the initial lease term is as follows:

--------------------------------------------------------------------
Lease Years               Annual Rent              Monthly Rent
--------------------------------------------------------------------
Years 1-3                 $ 1,516,164              $ 126,347
--------------------------------------------------------------------
Years 4-6                 $ 1,657,479              $ 138,123
--------------------------------------------------------------------
Years 7-10                $ 1,812,000              $ 151,000
--------------------------------------------------------------------

Avnet has a right of first refusal to purchase the Avnet Building if Wells
OP attempts to sell the Avnet Building during the term of the Avnet lease.

Avnet also has an expansion option which allows Avnet the ability to expand
the Avnet Building during the term of the Avnet lease. Wells OP has the option
to undertake the expansion or allow Avnet to undertake the expansion at its own
expense, subject to certain terms and conditions.

The Avnet ground lease commenced on April 5, 1999 and expires on September
30, 2083. The ground lease payments required pursuant to the Avnet ground lease
are as follows:

--------------------------------------------------------------------
Lease Years      Annual Rent
--------------------------------------------------------------------
Years  1-10      $ 230,777
--------------------------------------------------------------------
Years 11-20      $ 302,108
--------------------------------------------------------------------
Years 21-30      $ 390,223
--------------------------------------------------------------------
Years 31-40      10% of fair market value of land in year 30
--------------------------------------------------------------------
Years 41-50      Rent from year 45 plus 3% per year increase
--------------------------------------------------------------------
Years 51-60      Rent from year 55 plus 3% per year increase
--------------------------------------------------------------------
Years 61-70      10% of fair market value of land in Year 65
--------------------------------------------------------------------
Years 71-85      Rent from year 75 plus 3% per year increase
--------------------------------------------------------------------

Wells OP has the right to terminate the Avnet ground lease prior to the
expiration of the 30/th/ year.

The Siemens Building

The Siemens Building is a three-story office building containing
approximately 77,054 rentable square feet on a 5.3 acre tract of land located in
Troy, Michigan. The XII-REIT Joint Venture purchased the Siemens Building on May
10, 2000 for a purchase price of $14,265,000. The Siemens Building is located at
4685 Investment Drive in Troy Michigan in the heart of "Automation Alley."

72

The Siemens Building is leased to Siemens Automotive Corporation (Siemens).
Siemens is a subsidiary of Siemens Corporation USA, a domestic corporation which
conducts the American operations of Siemens AG, the world's second largest
manufacturer of electronic capital goods. Siemens, part of the worldwide
Automotive Systems Group of Siemens AG, is a supplier of advanced electronic and
electrical products and systems to automobile manufacturers.

The initial term of the Siemens lease is ten years which commenced on March
3, 2000 and expires on August 31, 2010. Siemens has the right to extend the
Siemens lease for two additional five-year periods of time at 95% of the then-
current fair market rental rate. The base rent payable for the initial lease
term is as follows:

------------------------------------------------------------------------
Lease Year                Annual Rent              Monthly Rent
------------------------------------------------------------------------
Year 1                    $ 1,309,918              $ 109,160
------------------------------------------------------------------------
Year 2                    $ 1,342,281              $ 111,857
------------------------------------------------------------------------
Year 3                    $ 1,374,643              $ 114,554
------------------------------------------------------------------------
Year 4                    $ 1,407,006              $ 117,251
------------------------------------------------------------------------
Year 5                    $ 1,439,369              $ 119,947
------------------------------------------------------------------------
Year 6                    $ 1,471,731              $ 122,644
------------------------------------------------------------------------
Year 7                    $ 1,504,094              $ 125,341
------------------------------------------------------------------------
Year 8                    $ 1,536,457              $ 128,038
------------------------------------------------------------------------
Year 9                    $ 1,568,819              $ 130,735
------------------------------------------------------------------------
Year 10 and first 6       $ 1,601,182              $ 133,432
months of Year 11
------------------------------------------------------------------------

Siemens has a one-time right to cancel the Siemens lease effective after
the 90th month of the lease term if Siemens (a) provides written notice of such
cancellation on or before the last day of the 78th month, and (b) pays a
cancellation fee to the XII-REIT Joint Venture currently calculated to be
approximately $1,234,160.

The Motorola Tempe Building

The Motorola Tempe Building is a two-story office building containing
approximately 133,225 rentable square feet in Tempe, Arizona. Wells OP purchased
the Motorola Tempe Building on March 29, 2000 for a purchase price of
$16,000,000. Construction of the Motorola Tempe Building was completed in July
1998.

The Motorola Tempe Building is located on a 12.44 acre tract of land at
8075 South River Parkway within the Arizona State University Research Park. The
land upon which the Motorola Tempe Building is situated is subject to a long-
term ground lease with Price-Elliott Research Park, Inc.

The Motorola Tempe Building is subject to a first priority mortgage in
favor of SouthTrust securing a SouthTrust Line of Credit, which is more
particularly described in the "Real Estate Loans" section of this prospectus.

The Motorola Tempe Building is leased to Motorola, Inc. (Motorola). The
Motorola Tempe Building is occupied by Motorola's Satellite Communications
Division (SATCOM). SATCOM is a worldwide developer and manufacturer of space and
ground communications equipment and systems. SATCOM is the prime contractor for
the Iridium System and is primarily engaged in computer design and development
functions.

The initial term of the Motorola lease is seven years which commenced on
August 17, 1998 and

73

expires on August 31, 2005. Motorola has the right to extend the Motorola lease
for four additional five-year periods of time at the then-prevailing market
rental rate. The rent payable under the Motorola lease, out of which Wells OP
will be required to make the ground lease payments described below, is as
follows:

-------------------------------------------------------------------
Lease Years          Annual Rent         Monthly Rent
-------------------------------------------------------------------
Years 1-4            $  1,843,834        $ 153,653
-------------------------------------------------------------------
Years 5-7            $  2,054,329        $ 171,194
-------------------------------------------------------------------

Motorola has an expansion option which allows Motorola the ability to
expand the building between 21,000 and 40,000 rentable square feet with
additional parking spaces to be constructed by Wells OP. Motorola must exercise
its expansion right before August 17, 2001. In the event that Motorola exercises
its expansion option, the rent on the expansion space will be calculated based
upon a 10.5% return on costs of the expansion, including construction costs, and
Wells OP will be entitled to a development fee in an amount equal to 8% of the
cost of the construction of the expansion building shell.

The Motorola ground lease commenced November 19, 1997 and expires on
December 31, 2082. The ground lease payments required pursuant to the Motorola
ground lease are as follows:

-------------------------------------------------------------------
Lease Years           Annual Rent
-------------------------------------------------------------------
Years 1-15            $ 243,825
-------------------------------------------------------------------
Years 16-25           $ 357,240
-------------------------------------------------------------------
Years 26-35           $ 466,015
-------------------------------------------------------------------
Years 36-45           10% of Fair Market Value of Land in year 35
-------------------------------------------------------------------
Years 46-55           Rent from year 45 plus 3% per year increase
-------------------------------------------------------------------
Years 56-65           Rent from year 55 plus 3% per year increase
-------------------------------------------------------------------
Years 66-75           10% of Fair Market Value in year 65
-------------------------------------------------------------------
Years 76-85           Rent from year 75 plus 3% per year increase
-------------------------------------------------------------------

Wells OP has the right to terminate the Motorola ground lease prior to the
expiration of the 30th year and prior to the expiration of each subsequent ten-
year period thereafter.

The ASML Building

The ASML Building is a two-story office and warehouse building containing
approximately 95,133 rentable square feet located in Tempe, Arizona. Wells OP
purchased the ASML Building on March 29, 2000 for a purchase price of
$17,355,000. Construction on the ASML Building was completed in June 1995.

The ASML Building is located on a 9.51 acre tract of land at 8555 South
River Parkway within the Arizona State University Research Park. The land upon
which the ASML Building is situated is subject to a long-term ground lease with
Price-Elliott Research Park, Inc.

The ASML Building is subject to a first priority mortgage in favor of
SouthTrust securing a SouthTrust Line of Credit, which is more particularly
described in the "Real Estate Loans" section of this prospectus.

The ASML Building is leased to ASM Lithography, Inc. (ASML). ASML is a
wholly-owned subsidiary of ASM Lithography Holdings NV (ASML Holdings), a Dutch
multi-national corporation that supplies lithography systems used for printing
integrated circuit designs onto very thin disks of silicon, commonly referred to
as wafers. These systems are supplied to integrated circuit manufacturers
throughout the United States, Asia and Western Europe. ASML Holdings is 24%
owned by Philips Electronics and has

74

strategic partnerships with a number of major companies including Lucent
Technologies, Applied Materials, Samsung, Hyundai and Motorola.

The initial term of the ASML lease is 15 years which commenced on June 4,
1998 and expires on June 30, 2013. The base rent payable for the ASML Building,
out of which Wells OP will be required to make the ground lease payments
described below, is as follows:

-------------------------------------------------------------
Lease Years         Annual Rent        Monthly Rent
-------------------------------------------------------------
Years 1-5           $  1,927,788       $  160,649
-------------------------------------------------------------
Years 6-10          $  2,130,124       $  177,510
-------------------------------------------------------------
Years 11-15         $  2,354,021       $  196,168
-------------------------------------------------------------

ASML has an expansion option which allows ASML the ability to expand the
building into at least an additional 30,000 rentable square feet, to be
constructed by Wells OP. If the expansion option exercised is for less than
30,000 square feet, Wells OP may reject the exercise at its sole discretion. In
the event that ASML exercises its expansion option after the first five years of
the initial lease term, such lease term will be extended to ten years from the
date of such expansion.

The ASML ground lease commenced on August 22, 1997 and expires on December
31, 2082. The ground lease payments required pursuant to the ASML ground lease
are as follows:

-------------------------------------------------------------
Lease Years     Annual Rent
-------------------------------------------------------------
Years 1-15      $ 186,368
-------------------------------------------------------------
Years 16-25     $ 273,340
-------------------------------------------------------------
Years 26-35     $ 356,170
-------------------------------------------------------------
Years 36-45     10% of Fair Market Value of Land in year 35
-------------------------------------------------------------
Years 46-55     Rent from year 45 plus 3% per year increase
-------------------------------------------------------------
Years 56-65     Rent from year 55 plus 3% per year increase
-------------------------------------------------------------
Years 66-75     10% of Fair Market Value in Year 65
-------------------------------------------------------------
Years 76-85     Rent from year 75 plus 3% per year increase
-------------------------------------------------------------

Wells OP has the right to terminate the ASML ground lease prior to the
expiration of the 30th year, and prior to the expiration of each subsequent
ten-year period thereafter.

The Dial Building

The Dial Building is a two-story office building containing approximately
129,689 rentable square feet located in Scottsdale, Arizona. Wells OP purchased
the Dial Building on March 29, 2000 for a purchase price of $14,250,000.
Construction of the Dial Building was completed in 1997.

The Dial Building is located at 15501 N. Dial Boulevard within the
Scottsdale Airpark Development in the City of Scottsdale which is eight miles
northeast of the center of Phoenix and is an integral part of metropolitan
Phoenix.

The Dial Building is subject to a first priority mortgage in favor of
SouthTrust securing a SouthTrust Line of Credit, which is more particularly
described in the "Real Estate Loans" section of this prospectus.

The Dial Building is leased to Dial Corporation (Dial). Dial currently has
its headquarters in the Dial Building and is one of the leading consumer product
manufacturers in the United States. Dial's brands include Dial soap, Purex
detergents, Renuzit air fresheners, Armour canned meats, and a variety of other
leading consumer products.

75

The initial term of the Dial lease is 11 years which commenced on August
14, 1997 and expires on August 31, 2008. Dial has the right to extend the Dial
lease for two additional five-year periods of time at 95% of the then-current
fair market rental rate. The annual rent payable for the initial term of the
Dial lease is $1,387,672.

The Metris Building

The Metris Building is a three-story office building containing
approximately 101,100 rentable square feet located in Tulsa, Oklahoma. Wells OP
purchased the Metris Building on February 11, 2000 for a purchase price of
$12,740,000. Construction of the Metris Building was completed on January 14,
2000.

The Metris Building is located on a 14.6 acre tract of land located at 4848
South 129th East Avenue in the Silos Corporate Center, a prominent 126 acre
mixed-use park owned by State Farm Insurance Companies. The site is about 11
miles southeast of the Tulsa Commercial Business District and is bordered by the
Broken Arrow Expressway, the primary east-west thoroughfare linking the suburb
of Broken Arrow to downtown Tulsa.

Wells OP borrowed $8,000,000 from an existing revolving credit facility
(Metris Loan) at the time it purchased the Metris Building. The Metris Loan,
which is more particularly described in the "Real Estate Loans" section of this
prospectus, is secured by a first mortgage against the Metris Building.

The Metris Building is leased to Metris Direct, Inc. (Metris). Metris is a
principal subsidiary of Metris Companies Inc. (Metris Companies), a publicly
traded company on the New York Stock Exchange and guarantor of the Metris lease.
Metris Companies is an information-based direct marketer of consumer credit
products and fee-based services primarily to moderate income consumers. Metris
Companies' consumer credit products are primarily unsecured credit cards issued
by its subsidiary, Direct Merchants Credit Card Bank. The company's customers
and prospects include individuals for whom credit bureau information is
available and existing customers of a former affiliate, Fingerhut Corporation.

The initial term of the Metris lease is ten years which commenced on
February 1, 2000 and expires on January 31, 2010. Metris has the right to extend
the Metris lease for two additional five-year periods of time. The base rent
payable for the Metris lease is as follows:

-------------------------------------------------------------
Lease Years        Annual Rent           Monthly Rent
-------------------------------------------------------------
Years 1-5          $1,187,925            $ 98,994
-------------------------------------------------------------
Years 6-10         $1,306,718            $108,893
-------------------------------------------------------------

The monthly base rent payable for the renewal terms of the Metris lease
shall be equal to the then-current market rate based on the then existing rates
for comparable space of equivalent quality in suburban Tulsa, Oklahoma taking
into account location, quality, age of the office building, size of premises and
any other relevant term or condition in making such fair market value rental
rate determination as of 12 months prior to commencement of the renewal term. If
the parties are unable to agree upon the market rate within 11 months prior to
commencement of the renewal term, the market rate shall then be determined by
arbitration.

The Cinemark Building

The Cinemark Building is a five-story office building containing
approximately 118,108 rentable square feet located in Plano, Texas. Wells OP
purchased the Cinemark Building on December 21, 1999 for a purchase price of
$21,800,000. Construction of the Cinemark Building was completed in September
1999.

76

The Cinemark Building is located on a 3.52-acre tract of land located at
3900 Dallas Parkway in Plano, Texas. The site is in a good location with quick
access to and visibility from the toll road. The City of Plano is located
approximately 20 miles north of downtown Dallas and is the largest city in
Collin County with a population of nearly 200,000 people.

The Cinemark Building is subject to a first priority mortgage in favor of
SouthTrust securing a SouthTrust Line of Credit, which is more particularly
described in the "Real Estate Loans" section of this prospectus.

The entire 118,108 rentable square feet of the Cinemark Building is
currently leased to two tenants. Cinemark USA, Inc. (Cinemark) occupies 66,024
rentable square feet of the Cinemark Building, and The Coca-Cola Company (Coca-
Cola) occupies the remaining 52,084 rentable square feet of the Cinemark
Building.

Cinemark, a privately owned company, is one of the largest motion picture
exhibitors in North and South America. Cinemark currently operates in excess of
2,575 screens in 32 states within the United States and internationally in
countries such as Argentina, Brazil, Canada, Chile, Costa Rica, Ecuador, El
Salvador, Honduras, Nicaragua, Mexico and Peru.

The initial term of the Cinemark lease is ten years which commenced on
December 21, 1999 and expires on December 20, 2009. Cinemark has the right to
extend the Cinemark lease for two additional five-year periods of time. The base
rent payable for the Cinemark lease and first renewal term is as follows:

-------------------------------------------------------------
Lease Years           Annual Rent          Monthly Rent
-------------------------------------------------------------
Years 1-7             $1,366,491           $113,874
-------------------------------------------------------------
Years 8-10            $1,481,738           $123,478
-------------------------------------------------------------
Years 11-15           $1,567,349           $130,612
-------------------------------------------------------------

The monthly base rent payable for the second renewal term of the Cinemark
lease shall be equal to 95% of the then-current market rate based on the then
existing rates for comparable space of equivalent quality in Plano, Texas taking
into account location, quality, age of the office building, size of premises and
any other relevant term or condition in making such fair market value rental
rate determination. If the parties are unable to agree upon the market rate
within 15 business days after receipt of the renewal notice, each party shall
appoint a real estate appraiser to determine the market rate. If the two
appraisers cannot agree upon the market rate within 15 days of the commencement
of their deliberation, they shall appoint a third appraiser. The market rate
shall then be determined by the agreement of any two of the appraisers or the
average of the two closest rates if two appraisers cannot agree.

Cinemark shall have a right of first refusal to lease any of the remaining
rentable area of the Cinemark Building which subsequently becomes vacant and in
which Wells OP receives or makes an acceptable offer or proposal to lease such
vacant space to a bona fide third party. Wells OP shall offer to Cinemark in
writing the right to include the vacant space under its lease at the rental rate
set forth in the third party offer. Cinemark shall then have 15 days to exercise
this right of first refusal.

Coca-Cola is the global soft-drink industry leader with world headquarters
in Atlanta, Georgia. Coca-Cola manufactures and sells syrups, concentrates and
beverage bases for Coca-Cola, the company's flagship brand, and over 160 other
soft drink brands in nearly 200 countries around the world.

77

The initial term of the Coca-Cola lease is seven years which commenced on
December 1, 1999 and expires on November 30, 2006. The base rent payable for the
remainder of the Coca-Cola lease term is as follows:

------------------------------------------------------------
Lease Year          Annual Rent          Monthly Rent
------------------------------------------------------------
Year 2              $1,302,100           $108,508
------------------------------------------------------------
Year 3              $1,354,184           $112,848
------------------------------------------------------------
Year 4              $1,406,268           $117,189
------------------------------------------------------------
Year 5              $1,458,352           $121,529
------------------------------------------------------------
Year 6              $1,510,436           $125,870
------------------------------------------------------------
Year 7              $1,562,520           $130,210
------------------------------------------------------------

Coca-Cola has the right to extend the lease for two additional five-year
periods of time upon 240 days advance notice prior to the end of the term.
Within 30 days of the delivery of the renewal notice by Coca-Cola, Wells OP
shall deliver a rental notice to Coca-Cola stating the base rent payable during
the renewal term, which base rent shall be based upon the prevailing rental
rates for space of similar quality, size, utility, location, length of renewal
term and credit standing of the tenant. Coca-Cola must then notify Wells OP of
its intent to renew the lease on such terms within 30 days of delivery of the
rental notice by Wells OP.

The Gartner Building

The Gartner Building is a two-story office building containing
approximately 62,400 rentable square feet located in Fort Myers, Florida. The
XI-XII-REIT Joint Venture purchased the Gartner Building on September 20, 1999
for a purchase price of $8,320,000. Construction of the Gartner Building was
completed in 1998.

The site is a 4.9 acre tract of land within the Gateway development at
12600 Gateway Boulevard. Gateway is a mixed-use development with over 3,000
acres planned for residential purposes and over 800 acres planned for commercial
purposes. Sony Electronics and Ford Motor Credit Company are two of the
commercial tenants in this development.

The Gartner Building is currently leased to The Gartner Group, Inc.
(Gartner). The Gartner Building will be occupied by Gartner's Financial Services
Division. Gartner, which was founded in 1979, is one of the world's leading
independent providers of research and analysis related to information and
technology solutions. Gartner serves as a consultant to business clients for
their information technology purchasing decisions. Gartner has over 80 locations
worldwide and over 12,000 clients.

The initial term of the Gartner lease is ten years which commenced on
February 1, 1998 and expires on January 31, 2008. Gartner has the right to
extend the lease for two additional five-year periods of time. The base rent
payable for the remainder of the lease term is as follows:

-------------------------------------------------------------
Lease Year          Annual Rent             Monthly Rent
-------------------------------------------------------------
Year 3                $790,642                $65,887
-------------------------------------------------------------
Year 4                $810,408                $67,534
-------------------------------------------------------------
Year 5                $830,668                $69,222
-------------------------------------------------------------
Year 6                $851,435                $70,953
-------------------------------------------------------------
Year 7                $872,721                $72,727
-------------------------------------------------------------
Year 8                $894,539                $74,545
-------------------------------------------------------------
Year 9                $916,902                $76,409
-------------------------------------------------------------
Year 10               $939,825                $78,319
-------------------------------------------------------------

78

The monthly base rent payable for each extended term of the lease will be
equal to the lesser of (i) the prior rate increased by 2.5%, or (ii) 95% of the
then-current market rate which is calculated as a full-service rental rate less
anticipated annual operating expenses on a rentable square foot basis charged
for space of comparable location, size and conditions in comparable office
buildings in the Fort Myers area.

Gartner also has two expansion options for additional buildings under the
Gartner lease. The two option plans are described in the lease as the "Small
Option Building" and the "Large Option Building".

The "Small Option Building" and the "Large Option Building" expansion
options allow Gartner the ability to expand into separate, free standing
facilities of 30,000 to 32,000 rentable square feet and 60,000 to 75,000
rentable square feet, respectively. Gartner may exercise its rights for either
expansion option by providing notice in writing to the joint venture on or
before February 15, 2002. In the event that Gartner exercises either expansion
option, the parties shall enter into a separate lease within 30 days of such
notice by Gartner with a guaranteed ten year lease term and yearly base rent to
be determined by mutual agreement of the parties.

The Marconi Building

The Marconi Building (formerly known as the Videojet Building) is a two-
story office, assembly and manufacturing building containing approximately
250,354 rentable square located in Wood Dale, Illinois. Wells OP purchased the
Marconi Building on September 10, 1999 for a purchase price of $32,630,940.
Construction of the Marconi Building was completed in 1991.

The site is a 15.3 acre tract of land located within the Chancellory
Business Park which is adjacent to the western entrance to O'Hare International
Airport. The site is also situated very convenient to most of Chicago's major
interstates, including the Elgin/O'Hare Expressway which, when finished, will
extend along Thorndale Road adjacent to the main entrance to the Chancellory
Business Park. The Chancellory Business Park consists of good quality office,
manufacturing and warehouse buildings mostly occupied by national tenants such
as Sony, Mitsubishi, NEC Minolta and United Airlines.

The Marconi Building is subject to a first priority mortgage in favor of
Bank of America, N.A. securing the BOA Loan, which is more particularly
described in the "Real Estate Loans" section of this prospectus.

The Marconi Building is leased to Marconi Data Systems, Inc. (formerly
known as Videojet Systems International, Inc. until a December 1999 name
change). Marconi Data Systems, Inc. (Marconi) is the world's leading producer of
state-of-the-art industrial ink jet marking and coding products. Marconi
manufactures and distributes industrial ink jet printers, digital imaging
systems, laser coding systems, inks and fluids to customers worldwide. The
Marconi lease is guaranteed by GEC Incorporated, a Delaware corporation which is
a wholly-owned subsidiary of Marconi, p.l.c. (formerly known as General Electric
Company, p.l.c.), a publicly traded United Kingdom corporation that ranks among
the largest electronic system and equipment manufacturers in the world.

The initial term of the Marconi lease is 20 years which commenced in
November 1991 and expires in November 2011. Marconi has the right to extend the
Marconi lease for one additional five-year period of time. The base rent payable
for the remainder of the lease term is as follows:

79

-------------------------------------------------------------
Lease Years              Annual Rent          Monthly Rent
-------------------------------------------------------------
Year 9-10                $2,838,952           $236,579
-------------------------------------------------------------
Years 11-20              $3,376,746           $281,396
-------------------------------------------------------------
Extension Term           $4,667,439           $388,953
-------------------------------------------------------------

The Johnson Matthey Building

The Johnson Matthey Building is a 130,000 square foot research and
development, office and warehouse building. The XI-XII-REIT Joint Venture
purchased the Johnson Matthey Building on August 17, 1999 for a purchase price
of $8,000,000. The Johnson Matthey Building was first constructed in 1973 as a
multi-tenant facility and it was subsequently converted into a single-tenant
facility in 1998.

The site consists of a 10.0 acre tract of land located at 434-436 Devon
Park Drive in Tredyffrin Township, Chester County, Pennsylvania. The site is
located along the Route 202 "high tech" corridor close to King of Prussia and is
considered a suburb of Philadelphia. The site is within five minutes of Route
422, the Pennsylvania Turnpike and Interstate 76.

The Johnson Matthey Building is currently leased to Johnson Matthey, Inc.
(Johnson Matthey). Johnson Matthey is a wholly-owned subsidiary of Johnson
Matthey, PLC of the United Kingdom, a world leader in advanced materials
technology. Johnson Matthey, PLC applies the latest technology to add value to
precious metals and other specialized materials. Johnson Matthey, PLC is a
publicly traded company that is over 175 years old, has operations in 38
countries and employs 12,000 people.

Johnson Matthey is one of the parent company's primary operating companies
in the U.S. and includes the Catalytic Systems Division (CSD). The CSD is the
world's leading supplier of catalytic converters for automotive exhaust emission
and air pollution control. In addition, Johnson Matthey is the largest U.S.
supplier of diesel catalytic converters, which enable customers to meet
constantly tightening regulatory requirements.

The lease term of the Johnson Matthey lease is ten years which commenced in
July 1998 and expires in June 2007. Johnson Matthey has the right to extend the
lease for two additional three-year periods of time. The base rent payable under
the Johnson Matthey lease for the remainder of the lease term is as follows:

-------------------------------------------------------------
Lease Year        Annual Rent        Monthly Rent
-------------------------------------------------------------
Year 3            $789,750           $65,813
-------------------------------------------------------------
Year 4            $809,250           $67,438
-------------------------------------------------------------
Year 5            $828,750           $69,063
-------------------------------------------------------------
Year 6            $854,750           $71,229
-------------------------------------------------------------
Year 7            $874,250           $72,854
-------------------------------------------------------------
Year 8            $897,000           $74,750
-------------------------------------------------------------
Year 9            $916,500           $76,375
-------------------------------------------------------------
Year 10           $939,250           $78,271
-------------------------------------------------------------

The monthly base rent payable for each extension term will be equal to the
fair market rent taking into consideration rental rates for comparable
industrial and research and development properties in the local market area. If
the parties cannot agree upon the fair market rent, the matter shall be
submitted to arbitration.

80

Johnson Matthey has a right of first refusal to purchase the Johnson
Matthey Building in the event that the XI-XII-REIT Joint Venture desires to sell
the building to an unrelated third-party. The XI-XII-REIT Joint Venture must
give Johnson Matthey written notice of its intent to sell the Johnson Matthey
Building, and Johnson Matthey will have ten days from the date of such notice to
provide written notice of its intent to purchase the building. If Johnson
Matthey exercises its right of first refusal, it must purchase the Johnson
Matthey Building on the same terms contained in the offer.

The Alstom Power Richmond Building

The Alstom Power Richmond Building (formerly known as the ABB Richmond
Building) is a four-story brick office building containing 102,000 gross square
feet located in Midlothian, Virginia. Wells REIT, LLC - VA I (Wells LLC - VA), a
limited liability company wholly-owned by Wells OP, purchased a 7.49 acre tract
of land on July 22, 1999 for a purchase price of $936,250. Wells LLC - VA
completed construction of the Alstom Power Richmond Building in July 2000 at an
aggregate cost of approximately $11,400,000, including the cost of the land.

The Alstom Power Richmond Building is part of a 250-acre office park in the
Clover Hill District of Chesterfield County, one of the fastest growing counties
in Virginia. Midlothian is located approximately nine miles southwest of the
Richmond central business district.

Wells OP originally obtained a construction loan from SouthTrust Bank, N.A.
in the maximum principal amount of $9,280,000 to fund the development and
construction of the Alstom Power Richmond Building. This loan, which is more
specifically detailed in the "Real Estate Loans" section of this prospectus, was
recently converted to a line of credit and is secured by a first priority
mortgage against the Alstom Power Richmond Building, an assignment of the
landlord's interest in the Alstom Power Richmond lease and a $4,000,000 letter
of credit issued by Unibank.

The Alstom Power Richmond Building is leased to Alstom Power, Inc. (Alstom
Power). Alstom Power is the result of the December 30, 1999, merger between ABB
Power Generation, Inc. (ABB Power) and ABB Alstom Power, Inc. As of June 22,
2000, ABB Alstom Power, Inc. changed its name to Alstom Power, Inc. ABB Power
was a subsidiary of Asea Brown Boveri, Inc., a large multi-national engineering
and construction company headquartered in Switzerland.

The initial term of the Alstom Power Richmond lease is seven years which
commenced on July 24, 2000 and expires on July 23, 2007. Alstom Power has the
right to extend the lease for two additional five-year periods of time. Each
extension option must be exercised by giving notice to the landlord at least 12
months prior to the expiration of the then-current lease term. The base rent
payable under the Alstom Power lease will be as follows:

-----------------------------------------------------
Lease Year       Annual Rent       Monthly Rent
-----------------------------------------------------
Year 1           $1,183,731          $ 98,644
-----------------------------------------------------
Year 2           $1,213,324          $101,110
-----------------------------------------------------
Year 3           $1,243,657          $103,638
-----------------------------------------------------
Year 4           $1,274,748          $106,229
-----------------------------------------------------
Year 5           $1,306,618          $108,885
-----------------------------------------------------
Year 6           $1,339,283          $111,607
-----------------------------------------------------
Year 7           $1,372,765          $114,397
-----------------------------------------------------

The monthly base rent payable for each extended term of the Alstom
Power lease will be equal to the "Market Rate" for new leases of office space in
that portion of the Richmond, Virginia market that is located south of the James
River and west of I-95 for space similar to the premises. In the event the

81

parties are unable to agree upon the Market Rate, then each party shall appoint
a real estate appraiser. If the appraisers are unable to agree upon the Market
Rate, they shall appoint a third appraiser and each shall make a determination
of the Market Rate. The appraisal that is farthest from the middle appraisal
shall be disregarded and the remaining two appraisals shall be averaged to
establish the Market Rate.

Alstom Power has a one-time option to terminate the Alstom Power Richmond
lease as to a portion of the premises containing between 12,500 and 13,000
rentable square feet as of the third anniversary of the rental commencement
date. If Alstom Power elects to exercise this termination option, Alstom Power
is required to pay a termination fee equal to eight times the sum of the next
due installments of rent plus the unamortized portions of the base improvement
allowance, additional allowance and broker commission, each being amortized in
equal monthly installments of principal and interest over the initial term of
the lease at a rate of ten percent (10%) per annum. Alstom Power must give
notice of its intent to exercise such option to terminate at least seven months
in advance of the third anniversary; provided, however, that Alstom Power may
pay a penalty, as stipulated in the lease, to provide less than seven months
notice.

In the event that Alstom Power exercises its termination option as of the
third anniversary of the rental commencement date, Alstom Power has a one-time
option to terminate the Alstom Power Richmond lease as to a portion of the
premises containing between 12,500 and 13,000 rentable square feet as of the
fifth anniversary of the rental commencement date. If Alstom Power elects to
exercise this termination option, Alstom Power is required to pay a termination
fee equal to six times the sum of the next due installments of rent plus the
unamortized portions of the base improvement allowance, additional allowance and
broker commission, each being amortized in equal monthly installments of
principal and interest over the initial term of the lease at a rate of ten
percent (10%) per annum. Alstom Power must give notice of its intent to exercise
such option to terminate at least seven months in advance of the fifth
anniversary; provided, however, that Alstom Power may pay a penalty, as
stipulated in the lease, to provide less than seven months notice.

In the event that Alstom Power does not exercise its termination option as
of the third anniversary of the rental commencement date, Alstom Power has a
one-time option to terminate the Alstom Power lease as to a portion of the
premises containing between 24,500 and 25,500 rentable square feet as of the
fifth anniversary of the rental commencement date. If Alstom Power elects to
exercise this termination option, Alstom Power is required to pay a termination
fee equal to six times the sum of the next due installments of rent plus the
unamortized portions of the base improvement allowance, additional allowance and
broker commission, each being amortized in equal monthly installments of
principal and interest over the initial term of the lease at a rate of ten
percent (10%) per annum. Alstom Power must give notice of its intent to exercise
such option to terminate at least nine months in advance of the fifth
anniversary; provided, however, that Alstom Power may pay a penalty, as
stipulated in the lease, to provide less than nine months notice.

The Sprint Building

The Sprint Building is a three-story office building with approximately
68,900 rentable square feet. The XI-XII-REIT Joint Venture purchased the Sprint
Building on July 2, 1999 for a purchase price of $9,500,000. Construction of the
Sprint Building was completed in 1992.

The Sprint Building is located on a 7.1 acre tract of land located adjacent
to the Leawood Country Club in Leawood, Kansas near the affluent Overland Park
suburb of Kansas City. The site is within walking distance of Ward Parkway Mall
and is convenient to downtown Kansas City and I-435, the interstate loop around
Kansas City.

82

The Sprint Building is leased to Sprint Communications Company L.P.
(Sprint). Sprint is the nation's third largest long distance phone company,
which operates on an all-digital long distance telecommunications network using
state-of-the-art fiber optic and electronic technology. Sprint provides domestic
and international voice, video and data communications services as well as
integration management and support services for computer networks.

The initial term of the Sprint lease is ten years which commenced on May
19, 1997 and expires in May 2007, subject to Sprint's right to extend the lease
for two additional five year periods of time. The annual base rent payable under
the Sprint lease is $999,048 through May 18, 2002, and $1,102,404 for the
remainder of the lease term. The monthly base rent payable for each extended
term of the Sprint lease will be equal to 95% of the then-current market rate
for comparable office buildings in the suburban south Kansas City, Missouri and
south Johnson County, Kansas areas. If the parties are unable to agree upon the
current market rate within 30 days of the date negotiations begin, the current
market rate shall be determined by three licensed real estate brokers, one of
which will be selected by Sprint, one of which will be selected by the XI-XII-
REIT Joint Venture and the final appraiser will be selected by the two
appraisers previously selected.

The Sprint lease contains a termination option which may be exercised by
Sprint effective as of May 18, 2004 provided that Sprint has not exercised
either expansion option, as described below. Sprint must provide notice to the
XI-XII-REIT Joint Venture of its intent to exercise its termination option on or
before August 21, 2003. If Sprint exercises its termination option, it will be
required to pay the joint venture a termination payment equal to $6.53 per
square foot, or $450,199.

Sprint also has an expansion option for an additional 20,000 square feet of
office space which may be exercised in two expansion phases. Sprint's expansion
rights involve building on unfinished ground level space that is currently used
as covered parking within the existing building footprint and shell. At each
exercise of an expansion option, the remaining lease term will be extended to be
a minimum of an additional five years from the date of the completion of such
expansion space.

Sprint must give written notice to the XI-XII-REIT Joint Venture of its
election to exercise each expansion option at least 270 days prior to the date
Sprint will require delivery of the expansion space.

If Sprint exercises either expansion option, the XI-XII-REIT Joint Venture
will be required to construct the expansion improvements in accordance with the
specific drawings and plans attached as an exhibit to the Sprint lease. The
joint venture will be required to fund the expansion improvements and to fund to
Sprint a tenant finish allowance of $10 per square foot for the expansion space.

The base rental per square foot for the expansion space shall be determined
by the XI-XII-REIT Joint Venture taking into consideration the value of the
joint venture's work related to such expansion space and the base rental rate
increase per square foot applicable at the end of year five of the lease term.
The expansion space base rental rate shall be presented to Sprint no later than
45 days after delivery to the XI-XII-REIT Joint Venture of each expansion
notice. In no event shall such rental rate be greater than the base rental rate
for the Sprint Building as of the date of the expansion space commencement date.

The EYBL CarTex Building

The EYBL CarTex Building is a manufacturing and office building consisting
of a total of 169,510 square feet located in Greenville, South Carolina. The XI-
XII-REIT Joint Venture purchased the EYBL CarTex Building on May 18, 1999 for a
purchase price of $5,085,000. Construction of the EYBL CarTex Building was
originally completed in the early 1980s and an addition was completed in 1989.

83

The EYBL CarTex Building is located on an 11.9 acre tract of land at 111
SouthChase Boulevard in the SouthChase Industrial Park, which is located
adjacent to I-385 in southwest Greenville, South Carolina.

The EYBL CarTex Building is leased to EYBL CarTex, Inc. (EYBL CarTex). EYBL
CarTex produces automotive textiles for BMW, Mercedes, GM Bali, VW Mexico and
Golf A4. EYBL CarTex is a wholly-owned subsidiary of EYBL International, AG,
Krems/Austria. EYBL International is the world's largest producer of circular
knit textile products and loop pile plushes for the automotive industry. It has
plants in Austria, Germany, Hungary, Slovakia, Brazil and the United States.

The initial term of the EYBL CarTex lease is ten years which commenced on
March 1, 1998 and expires in February 2008, subject to EYBL CarTex's right to
extend the lease for two additional five-year periods of time. The base rent
payable under the EYBL CarTex lease for the remainder of the lease term shall be
as follows:

---------------------------------------------------------
Lease Years            Annual Rent       Monthly Rent
---------------------------------------------------------
Years 3-4               $508,530            $42,378
---------------------------------------------------------
Years 5-6               $550,908            $45,909
---------------------------------------------------------
Years 7-8               $593,285            $49,440
---------------------------------------------------------
Years 9-10              $610,236            $50,853
---------------------------------------------------------

The monthly base rent payable for each extended term of the lease will be
equal to the fair market rent as submitted by the landlord. If the tenant does
not agree to the proposed rent by the landlord for the extension term, tenant
may require the fair market rent be determined by three appraisers, one of which
will be selected by the tenant, one by the landlord and the final appraiser
shall be selected by the first two appraisers.

Under the lease, EYBL CarTex has an option to purchase the EYBL CarTex
Building at the expiration of the initial lease term by giving notice to the
landlord by March 1, 2007. Within 30 days after landlord receives notice of
tenant's intent to exercise its purchase option, landlord shall submit a
proposed purchase price for the EYBL CarTex Building based upon its good faith
estimate of the fair market value of the building. If tenant does not agree to
the purchase price, tenant may require that the purchase price be established by
three appraisers, one of which will be selected by the tenant, one of which will
be selected by the landlord and the final appraiser shall be selected by the
first two appraisers. In no event, however, will the purchase price under the
purchase option be less than $5,500,000.

The Matsushita Building

The Matsushita Building is a two-story office building containing 150,000
rentable square feet. Wells OP purchased an 8.8 acre tract of land on March 15,
1999, for a purchase price of $4,450,230. Wells OP completed construction of the
Matsushita Building on January 4, 2000 at an aggregate cost of approximately
$18,400,000, including the cost of the land.

The site is located in the Pacific Commercentre, which is a 33 acre master-
planned business park positioned near the Irvine Spectrum in the heart of
Southern California's Technology Coast. Pacific Commercentre is a nine building
complex featuring office, technology, and light manufacturing uses, and is
located in the city of Lake Forest in southern Orange County.

The Matsushita Building is leased to Matsushita Avionics Systems
Corporation (Matsushita Avionics). Matsushita Avionics is a wholly-owned
subsidiary of Matsushita Electric Corporation of America (Matsushita Electric).
Matsushita Avionics manufactures and sells audio-visual products to the airline
industry for passenger use in airplanes. Matsushita Electric is a wholly-owned
subsidiary of

84

Matsushita Electric Industrial Co., Ltd. (Matsushita Industrial), a Japanese
company which is the world's largest consumer electronics manufacturer.
Matsushita Electric has guaranteed the obligations of Matsushita Avionics under
the Matsushita lease.

The initial term of the Matsushita lease is seven years which commenced on
January 4, 2000 and expires in January 2007. Matsushita Avionics has the option
to extend the initial term of the Matsushita lease for two successive five-year
periods. Each extension option must be exercised not more than 19 months and not
less than 15 months prior to the expiration of the then-current lease term. The
base rent payable under the Matsushita lease shall be as follows:

--------------------------------------------------
Lease Years    Annual Rent        Monthly Rent
--------------------------------------------------
Years 1-2      $1,830,000         $152,500
--------------------------------------------------
Years 3-4      $1,947,120         $162,260
--------------------------------------------------
Years 5-6      $2,064,240         $172,020
--------------------------------------------------
Year 7         $2,181,360         $181,780
--------------------------------------------------

The monthly base rent payable during the option term shall be 95% of the
stated rental rate at which, as of the commencement of the option term, tenants
are leasing non-expansion, non-affiliated, non-sublease, non-encumbered, non-
equity space comparable in size, location and quality to the Matsushita project
for a term of five years in the Lake Forest and Irvine area of Southern
California. The monthly base rent during the option term shall be adjusted
upward during the option term at the beginning of the 24th and 48th month of
each option term by an amount equal to 6% of the monthly base rent payable
immediately preceding such period. Within 30 days of tenant providing written
notice of its intent to exercise a renewal option, Wells OP shall deliver to
Matsushita Avionics notice containing the proposed rent for the option term. If,
after reasonable good faith efforts, landlord and tenant are unable to agree
upon the option rent before the 13th month prior to the expiration of the
appropriate lease term, option rent shall be determined by arbitration.

The AT&T Building

The AT&T Building (formerly known as the Vanguard Cellular Building) is a
four-story office building containing approximately 81,859 rentable square feet
located in Harrisburg, Pennsylvania. Wells OP purchased the AT&T Building on
February 4, 1999 for a purchase price of $12,291,200. Construction of the AT&T
Building was completed in November 1998.

The AT&T Building is located on 10.5 acres of land in Commerce Park, which
is located in the Lower Paxton Township, a planned business park, at the
intersection of Progress Avenue and Interstate Drive just off of the Progress
Avenue exit of Interstate 81.

Wells OP obtained a loan from Bank of America, N.A. (BOA Loan) in
connection with its original purchase of the AT&T Building. The BOA Loan, which
is more particularly described in the "Real Estate Loans" section of this
prospectus, is secured in part by a first priority mortgage against the AT&T
Building.

The AT&T Building is leased to Pennsylvania Cellular Telephone Corp.
(Pennsylvania Telephone), a subsidiary of Vanguard Cellular Systems, Inc.
(Vanguard Cellular), and the obligations of Pennsylvania Telephone under the
Vanguard Cellular lease are guaranteed by Vanguard Cellular. Vanguard Cellular
is an independent operator of cellular telephone systems in the United States
with over 664,000 subscribers located in 26 markets in the Mid-Atlantic, Ohio
Valley and New England regions of the United States. Vanguard Cellular markets
its wireless products and services under the name CellularOne, a nationally
recognized brand name partially owned by Vanguard Cellular. Vanguard

85

Cellular operates primarily in suburban and rural areas that are close in
proximity to major urban areas, which it believes affords several advantages
over its traditional urban competitors, including (1) greater network capacity,
(2) greater roaming revenue opportunities, (3) lower distribution costs, and (4)
higher barriers to entry by competitors.

On May 3, 1999, Vanguard Cellular was merged with and became a wholly-owned
subsidiary of AT&T Corp.

The initial term of the Vanguard Cellular lease is ten years which
commenced on November 16, 1998 and expires in November 2007. Vanguard has the
option to extend the initial term of the Vanguard Cellular lease for three
additional five-year periods and one additional four year and 11-month period.
Each extension option must be exercised by giving written notice to the landlord
at least 12 months prior to the expiration date of the then-current lease term.
The following table summarizes the annual base rent payable during the remainder
of the initial term of the Vanguard Cellular lease:

-------------------------------------------------
Lease Year     Annual Rent       Monthly Rent
-------------------------------------------------
Year 3         $1,416,221          $118,018
-------------------------------------------------
Year 4         $1,442,116          $120,176
-------------------------------------------------
Year 5         $1,468,529          $122,377
-------------------------------------------------
Year 6         $1,374,011          $114,501
-------------------------------------------------
Year 7         $1,401,491          $116,791
-------------------------------------------------
Year 8         $1,429,521          $119,127
-------------------------------------------------
Year 9         $1,458,111          $121,509
-------------------------------------------------
Year 10        $1,487,274          $123,939
-------------------------------------------------

The annual base rent for each extended term under the lease will be equal
to 93% of the "fair market rent" determined either (1) as agreed upon by the
parties, or (2) as determined by appraisal pursuant to the terms and conditions
of the Vanguard Cellular lease. The fair market rent shall be multiplied by the
"fair market escalator" (which represents the yearly rate of increases in the
fair market rent for the entire renewal term), if any. If the fair market rent
is to be determined by appraisal, both the landlord and the tenant shall
designate an independent appraiser, and both appraisers shall mutually designate
a third appraiser. After their appointment, the appraisers shall determine the
fair market rent and the fair market escalator by submitting independent
appraisals. The fair market rent and fair market escalator shall be deemed to be
the middle appraisal of the three submitted.

In addition, the Vanguard Cellular lease contains an option to expand the
premises to create additional office space of not less than 40,000 gross square
feet and not more than 90,000 gross square feet, as well as additional parking
to accommodate such office space. If Pennsylvania Telephone exercises its option
for the expansion improvements, Wells OP will be obligated to expend the funds
necessary to construct the expansion improvements. Pennsylvania Telephone may
exercise its expansion option by delivering written notice to Wells OP at any
time before the last business day of the 96th month of the initial term of the
Vanguard Cellular lease.

Within 60 days after Wells OP's receipt of the expansion notice, Wells OP
shall consult with Pennsylvania Telephone concerning Pennsylvania Telephone's
specific requirements with regard to the expansion improvements and, within such
60 day period, Wells OP shall notify Pennsylvania Telephone in writing of the
total estimated expansion costs to be incurred in planning and constructing the
expansion improvements. Within 60 days after Pennsylvania Telephone receives
Wells OP's written notification of the costs for the expansion improvements,
Pennsylvania Telephone shall notify Wells OP in writing either (1) that
Pennsylvania Telephone authorizes Wells OP to proceed with the construction of
the expansion improvements, (2) that Pennsylvania Telephone intends to submit
revised specifications within 60 days to

86

reduce the estimated costs of the expansion improvements to an amount
satisfactory to Pennsylvania Telephone, or (3) that Pennsylvania Telephone
elects not to expand the premises. If Pennsylvania Telephone fails to deliver
its notice to proceed within the above mentioned 60 day period, then
Pennsylvania Telephone shall be deemed to have elected not to expand.

If Pennsylvania Telephone delivers its notice to proceed with the expansion
improvements, Pennsylvania Telephone shall be deemed to have exercised its
option for such full or partial renewal terms such that, as of the date of
substantial completion of the expansion improvements, the remaining lease term
shall be ten years from such date of substantial completion. Pennsylvania
Telephone shall continue to have the right to exercise its option for any of the
renewal terms discussed above which remain beyond the ten year additional term;
provided that, if the remaining portion of a renewal term after the ten year
extension shall be less than one year, then the ten year term shall be further
extended to include the remaining portion of the renewal term which is less than
one year.

The annual base rent for the expansion improvements for the first 12 months
shall be equal to the product of (a) the expansion costs, multiplied by (b) a
factor of 1.07, multiplied by (c) the greater of (X) 10.50%, or (Y) an annual
interest rate equal to 375 basis points in excess of the ten-year United States
Treasury Note Rate then most recently announced by the United States Treasury as
of the commencement date of the expansion improvements. Thereafter, the annual
base rent for the expansion improvements shall be increased annually by the
lesser of (1) 5%, or (2) 75% of the percentage by which the United States,
Bureau of Labor Statistics, Consumer Price Index for All Items - All Urban Wage
Earners and Clerical Workers for the Philadelphia Area published nearest to the
expiration date of each 12 month period subsequent to the expansion commencement
date is greater than the CPI Index most recently published prior to the
commencement date.

The PwC Building

The PwC Building is a four-story office building containing approximately
130,090 rentable square feet located in Tampa, Florida. Wells OP purchased the
PwC Building on December 31, 1998 for a purchase price of $21,127,854.
Construction of the PwC Building was completed in 1998.

The PwC Building is located on approximately 9.0 acres of land located in
Sunforest Business Park between Eisenhower Boulevard and George Road
approximately 1,250 feet south of West Hillsborough Avenue. The Sunforest
Business Park is located in the Westshore Business District, which is a suburban
business center surrounding Tampa International Airport.

Wells OP purchased the PwC Building subject to a loan from SouthTrust Bank,
N.A. (SouthTrust Loan). The SouthTrust Loan, which is more particularly
described in the "Real Estate Loans" section of this prospectus, is secured by a
first priority mortgage against the PwC Building.

The PwC Building is leased to PricewaterhouseCoopers (PwC). PwC provides a
full range of business advisory services to leading global, national and local
companies and to public institutions. These services include audit, accounting
and tax advice; management, information technology and human resource
consulting; financial advisory services including mergers and acquisitions,
business recovery, project finance and litigation support; business process
outsourcing services; and legal advice through a global network of affiliated
law firms. PwC employs more than 140,000 people in 152 countries.

The initial term of the PwC lease is ten years which commenced on December
28, 1998 and expires in December 2008, subject to PwC's right to extend the
lease for two additional five-year periods of time. The current annual base rent
payable under the PwC lease is $1,973,213 ($15.17 per square foot) payable in
equal monthly installments of $164,434 during 2000. The base rent escalates at
the rate of 3%

87

per year throughout the ten year lease term. In addition, PwC is required to pay
a "reserve" of $13,009 ($.10 per square foot) as additional rent.

The annual base rent for each renewal term under the lease will be equal to
the greater of (a) 90% of the "market rent rate" for such space multiplied by
the rentable area of the leased premises, or (b) 100% of the base rent paid
during the last lease year of the initial term, or the then-current renewal
term, as the case may be. If the base rent for the first lease year under the
renewal term is determined pursuant to clause (a) above, then the base rent for
each lease year of such renewal term after the first lease year shall be 103% of
the base rent for the immediately preceding lease year. If the base rent for the
first lease year of a renewal term is determined pursuant to clause (b) above,
then there shall be no escalation of the base rent until such time that the
total base rent paid during the renewal term is equal to the total base rent
that would have been paid during such renewal term if the base rent had been
determined pursuant to clause (a) above; and thereafter, the base rent for each
subsequent lease year of such renewal term shall be 103% of the base rent for
the immediately preceding lease year.

The "market rent rate" under the PwC lease shall be determined by agreement
of the parties within 30 days after the date on which PwC delivers its notice of
renewal. If Wells OP and PwC are unable to reach agreement on the market rent
rate within said 30 day period, then each party shall simultaneously submit to
the other in a sealed envelope its good faith estimate of the market rent rate
within seven days of expiration of the 30 day period. If the higher of such
estimates is not more than 105% of the lower of such estimates then the market
rent rate shall be the average of the two estimates. Otherwise, within five days
either party may request in writing to resolve the dispute by arbitration. The
"market rate rent" shall be based upon the fair market rent then being charged
by landlords under new leases of office space in the Westshore Business District
for similar space in a building of comparable quality with comparable amenities.

In addition, the PwC lease contains an option to expand the premises to
include a second three or four-story building with an amount of square feet up
to a total of 132,000 square feet which, if exercised by PwC, will require Wells
OP to expend funds necessary to construct the expansion building. PwC may
exercise its expansion option by delivering written notice to Wells OP at any
time between the 60th day after the rental commencement date and the expiration
of the initial term of the lease. If PwC for any reason fails to deliver the
expansion notice on or prior to the last day of the initial term, the expansion
option shall automatically expire. Upon PwC's delivery of the expansion notice
and commencement of construction of the improvements by Wells OP, the term of
the lease shall automatically be extended for an additional period of ten years
from the date of substantial completion of the expansion building, without
further action by either PwC or Wells OP. During the first five lease years of
the initial term, Wells OP shall be obligated to construct the expansion
building if PwC delivers the expansion notice. Wells OP and PwC have agreed that
Wells OP shall not be required to construct the expansion building, however, if
PwC delivers the expansion notice after the end of the fifth lease year and,
following delivery of such expansion notice, Wells OP determines not to
construct the expansion building based upon the base rent it would receive for
the expansion building. If Wells OP notifies PwC in writing of such
determination within 30 days after Wells OP's receipt of the expansion notice,
PwC shall have the right to exercise its option to purchase the PwC building.

If PwC elects to exercise its expansion option, in addition to the
construction of a second building which is of a quality equal to or better than
the PwC building, Wells OP will be required to expand the parking garage such
that a sufficient number of parking spaces, at least equal to four parking
spaces per 1,000 square feet of rentable area, is maintained. Wells OP agrees to
fund the cost of the design, development and construction of the expansion
building up to a maximum of $150.00 per square foot of rentable area, as
increased by increases in the Consumer Price Index between the rental
commencement

88

date and the date of expansion notice. PwC shall be responsible for the payment
of any costs of the expansion building in excess of the maximum expansion cost.

The base rent per square foot of rentable area payable for the expansion
building in the first lease year of such building shall be an amount equal to
the product of (a) the expansion building cost per square foot of rentable area
multiplied by (b) the sum of 300 basis points plus the weekly average yield on
United States Treasury Obligations, amortized on an annual basis over a period
of 20 years. The base rent for each subsequent lease year shall be 103% of the
base rent for the immediately preceding lease year.

In the event that PwC elects to exercise its expansion option and Wells OP
determines not to proceed with the construction of the expansion building as
described above, or if Wells OP is otherwise required to construct the expansion
building and fails to do so in a timely basis pursuant to the PwC lease, PwC may
exercise its purchase option by giving Wells OP written notice of such exercise
within 30 days after either such event. If PwC properly exercises its purchase
option, PwC must simultaneously deliver a deposit in the amount of $50,000. The
purchase price for the PwC Building pursuant to the purchase option shall be
equal to (a) the average of the monthly base rent for each month remaining in
the initial term as of the closing date on the Purchase Option multiplied by 12,
and (b) such average annual base rent shall be multiplied by 11.

The Fairchild Building

The Fairchild Building is a two-story manufacturing and office building
with 58,424 rentable square feet located in Fremont, Alameda County, California.
The Fremont Joint Venture purchased the Fairchild Building on July 21, 1998 for
a purchase price of $8,900,000. Construction of the Fairchild Building was
completed in 1985.

The Fairchild Building is located on approximately 3 acres at 47320 Kato
Road on the corner of Kato Road and Auburn Road in the City of Fremont,
California.

The Fairchild Building is leased to Fairchild Technologies U.S.A., Inc.
(Fairchild). Fairchild is a global leader in the design and manufacture of
production equipment for semiconductor and compact disk manufacturing. The
semiconductor equipment group recently unveiled a new line of semiconductor
wafer processing equipment which will provide alternatives to the traditional
semiconductor chip production methods.

Fairchild is a wholly-owned subsidiary of the Fairchild Corporation
(Fairchild Corp). Fairchild Corp is the largest aerospace fastener and fastening
system manufacturer and is one of the largest independent aerospace parts
distributors in the world. Fairchild Corp is a leading supplier to aircraft
manufacturers such as Boeing, Airbus, Lockheed Martin, British Aerospace and
Bombardier and to airlines such as Delta Airlines and U.S. Airways. The
obligations of Fairchild under the Fairchild lease are guaranteed by Fairchild
Corp.

The initial term of the Fairchild lease is seven years which commenced on
December 1, 1997 and expires in November 2004, subject to Fairchild's right to
extend the Fairchild lease for an additional five year period. The base rent
payable under the remainder of the Fairchild lease is as follows:

----------------------------------------
Year      Annual Rent   Monthly Rent
----------------------------------------
Year 4     $867,324      $72,277
----------------------------------------
Year 5     $893,340      $74,445
----------------------------------------
Year 6     $920,136      $76,678
----------------------------------------
Year 7     $947,736      $78,978
----------------------------------------

89

The base rent during the first year of the extended term of the Fairchild
lease, if exercised by Fairchild, shall be 95% of the then-fair market rental
value of the Fairchild Building subject to the annual 3% increase adjustments.
If Fairchild and the Fremont Joint Venture are unable to agree upon the fair
rental value for the extended lease term, each party shall select an appraiser
and the two appraisers shall establish the rent by agreement.

The Cort Furniture Building

The Cort Furniture Building is a one-story office, showroom and warehouse
building with 52,000 rentable square feet located in Fountain Valley,
California. The Cort Joint Venture purchased the Cort Furniture Building on July
31, 1998 for a purchase price of $6,400,000. Construction of the Cort Furniture
Building was completed in 1975.

The Cort Furniture Building is located on two parcels of land totaling
approximately 3.6 acres at 10700 Spencer Street on the southeast corner of
Spencer Avenue and Mt. Langley Street adjacent on the south side to Interstate
405.

The Cort Furniture Building is leased to Cort Furniture Rental Corporation
(Cort). Cort uses the Cort Furniture Building as its regional corporate
headquarters with an attached clearance showroom and warehouse storage areas.
Cort is a wholly-owned subsidiary of Cort Business Services Corporation, a New
York Stock Exchange Company trading under the symbol CBZ (Cort Business
Services). Cort Business Services is the largest and only national provider of
high-quality office and residential rental furniture and related accessories.
Cort Business Services has operations that cover 32 states and the District of
Columbia and includes 119 rental showrooms. The obligations of Cort under the
Cort Furniture lease are guaranteed by Cort Business Services.

The initial term of the Cort lease is 15 years which commenced on November
1, 1988 and expires in October 2003. Cort has an option to extend the Cort lease
for an additional five-year period of time. The annual base rent payable under
the Cort lease is $758,964 through April 30, 2001 at which time the annual base
rent will be increased 10% to $834,888 for the remainder of the lease term. The
monthly base rent during the first year of the extended term shall be 90% of the
then-fair market rental value of the Cort Furniture Building, but will be no
less than the rent in the 15th year of the Cort lease. If Cort and the Cort
Joint Venture are unable to agree upon a fair rental value for the extended
lease term, each party shall select an appraiser and the two appraisers shall
provide appraisals on the Cort Furniture Building. If the appraisal values
established are within 10% of each other, the average of such appraised value
shall be the fair market rental value. If said appraisals are varied by more
than 10%, the two appraisers shall appoint a third appraiser and the middle
appraisal of the three shall be the fair rental value.

The Iomega Building

The Iomega Building is a warehouse and office building with 108,000
rentable square feet located in Ogden City, Utah. Wells Fund X originally
purchased the Iomega Building on April 1, 1998 for a purchase price of
$5,025,000 and contributed the Iomega Building to the IX-X-XI-REIT Joint Venture
on July 1, 1998.

The Iomega Building is located on an approximately 8.0 acre tract of land
at 2976 South Commerce Way in the Ogden Commercial and Industrial Park, which is
one mile north of Roy City, one mile northwest of Riverdale City and three miles
southwest of the Ogden central business district.

90

The Iomega Building is leased to Iomega Corporation (Iomega). Iomega, a
New York Stock Exchange company, is a manufacturer of computer storage devices
used by individuals, businesses, government and educational institutions,
including "Zip" drives and disks, "Jaz" one gigabyte drives and disks, and tape
backup drives and cartridges.

The initial term of the Iomega lease is ten years which commenced on
August 1, 1996 and expires in July 2006. In March 1999, the IX-X-XI-REIT Joint
Venture acquired an adjacent parcel of land and constructed additional parking
at the site at an aggregate cost of $874,625. As a result, Iomega increased its
monthly base rent and extended the term of its lease until April 30, 2009. The
Iomega lease contains no further extension provisions. Iomega's world
headquarters are located within one mile of the Iomega Building. The annual base
rent payable under the Iomega lease is $659,868. On March 1, 2003 and July 1,
2006, the monthly base rent payable under the Iomega lease will be increased to
reflect an amount equal to 100% of the increase in the Consumer Price Index
during the preceding 40 months; provided however, that in no event shall the
base rent be increased with respect to any one year by more than 6% or by less
than 3% per year, compounded annually, on a cumulative basis from the beginning
of the lease term.

The Interlocken Building

The Interlocken Building is a three-story multi-tenant office building
with 51,974 rentable square feet located in Broomfield, Colorado. The
IX-X-XI-REIT Joint Venture purchased the Interlocken Building on March 20, 1998
for a purchase price of $8,275,000. Construction of the Interlocken Building was
completed in December 1996.

The Interlocken Building is located on a 5.1 acre tract of land in the
Interlocken Business Park on Highway 36, the Boulder-Denver Turnpike, which is
the main thoroughfare between Boulder and Denver. The Interlocken Building is
located approximately eight miles southeast of Boulder and approximately 15
miles northwest of Denver. The Interlocken Building is currently leased as
follows:

---------------------------------------------------------
Floor      Tenant                    Rentable Sq. Ft.
---------------------------------------------------------

1          Multiple                  15,599
---------------------------------------------------------
2          ODS Technologies, L.P.    17,146
---------------------------------------------------------
3          GAIAM, Inc.               19,229
---------------------------------------------------------

The entire third floor of the Interlocken Building containing 19,229
rentable square feet (37% of the total rentable square feet) is currently under
lease to GAIAM, Inc. (GAIAM). GAIAM, formerly known as Transecom, Inc., is a
consumer distributor of environmental friendly products, including on-site video
and audio production of environmental and alternative health videos using
state-of-the-art electronics and sound stage. GAIAM was founded in 1988 and
currently employs approximately 60 people.

The GAIAM lease currently expires in October 2001, subject to GAIAM's
right to extend for one additional term of five years upon 180 days' notice. The
annual base rent payable under the GAIAM lease is approximately $313,800 for the
initial term of the lease. In accordance with the GAIAM lease, Golden Rule,
Inc., an affiliate of GAIAM, occupies 6,621 rentable square feet of the third
floor. GAIAM guarantees the entire payment due under the GAIAM lease. GAIAM also
leases 1,510 rentable square feet on the first floor. The base rent payable for
this space for the remainder of the lease term is as follows:

-----------------------------------------------
Year         Annual Rent       Monthly Rent
-----------------------------------------------

Year 2       $25,800           $2,150
-----------------------------------------------
Year 3       $26,400           $2,200
-----------------------------------------------

91

GAIAM currently subleases 2,910 rentable square feet on the first floor
from TECWorks, Inc./Enterprise Bank. The annual base rent payable for this space
is $48,012.

The entire second floor of the Interlocken Building containing 17,146
rentable square feet (34% of total rentable square feet) is currently under
lease to ODS Technologies, L.P. (ODS). ODS provides in-home financial
transaction services via telephone and television, and it has developed
interactive computer-based applications for such in-home purchasing. Originally
based in Tulsa, Oklahoma, ODS relocated its business to the Interlocken
Building.

The ODS lease expires in September 2003, subject to ODS's right to
extend for one additional term of three years upon 180 days' notice. The base
rent payable for the remainder of the ODS lease is as follows:

-----------------------------------------------
Year         Annual Rent       Monthly Rent
-----------------------------------------------

Year 3       $282,600          $23,550
-----------------------------------------------
Year 4       $288,600          $24,050
-----------------------------------------------
Year 5       $294,600          $24,550
-----------------------------------------------

The rental payments to be made by the tenant under the ODS lease are
also secured by the assignment of a $275,000 letter of credit which may be drawn
upon by the landlord in the event of a tenant default under the lease.

The first floor of the Interlocken Building containing 15,599 rentable
square feet is occupied by several tenants, in addition to GAIAM, whose leases
expire in 2002. The aggregate annual base rent payable under these leases for
2000 is approximately $243,696.

The Ohmeda Building

The Ohmeda Building is a two-story office building with approximately
106,750 rentable square feet located in Louisville, Colorado. The IX-X-XI-REIT
Joint Venture purchased the Ohmeda Building on February 13, 1998 for a purchase
price of $10,325,000. Construction of the Ohmeda Building was completed in
January 1988.

The Ohmeda Building is located on a 15.0 acre tract of land in the
Centennial Valley Business Park approximately five miles southeast of Boulder
and approximately 17 miles northwest of Denver. The Ohmeda Building is situated
near Highway 36, which is the main thoroughfare between Boulder and Denver.

The Ohmeda Building is leased to Ohmeda, Inc. (Ohmeda). Ohmeda is a
medical supply firm based in Boulder, Colorado and is a worldwide leader in
vascular access and hemodynamic monitoring for hospital patients. Ohmeda also
has a special products division, which produces neonatal and other oxygen care
products. Ohmeda recently extended an agreement with Hewlett-Packard to include
co-marketing and promotion of combined Ohmeda/H-P neonatal products.

On April 13, 1998, Instrumentarium Corporation, a Finnish company,
acquired the division of Ohmeda that occupies the Ohmeda Building.
Instrumentarium is an international health care company concentrating on
selected fields of medical technology manufacturing, marketing and distribution.

The Ohmeda lease currently expires in January 2005, subject to Ohmeda's
right to extend the Ohmeda Lease for two additional five-year periods of time.
The base rent payable under the Ohmeda lease is as follows:

92

-------------------------------------------------
Years          Annual Rent       Monthly Rent
-------------------------------------------------

Years 1-5      $1,004,520        $83,710
-------------------------------------------------
Year 6         $1,054,692        $87,891
-------------------------------------------------
Year 7         $1,107,000        $92,250
-------------------------------------------------

The Ohmeda Lease contains an option to expand the premises by an amount
of square feet up to a total of 200,000 square feet which, if exercised by
Ohmeda, will require the IX-X-XI-REIT Joint Venture to expend funds necessary to
acquire additional land, if necessary, and to construct the expansion space.
Ohmeda's option to expand the premises is subject to deliverance of at least
four months' prior written notice to the IX-X-XI-REIT Joint Venture. During the
four months subsequent to the notice of Ohmeda's intention to expand the
premises, Ohmeda and the IX-X-XI-REIT Joint Venture shall negotiate in good
faith and enter into an amendment to the Ohmeda lease for the construction and
rental of the expansion space. If Ohmeda exercises its option to expand the
premises, the right to terminate clause described above will automatically be
canceled, and the primary lease term shall be extended for a period of ten years
from the date on which a certificate of occupancy is issued by the City of
Louisville with respect to the expansion space.

The base rental for the expansion space payable under the Ohmeda lease
shall be calculated to generate a rate of return to the IX-X-XI-REIT Joint
Venture on its project costs and any retrofit expenses with respect to the
existing premises incurred by landlord over the new, ten year extended primary
lease term, equal to the prime lending rate published by Norwest Bank, N.A. on
the first day of such extended primary lease term, plus 3%, plus full
amortization of the tenant finish costs with respect to the expansion space and
the existing premises. This base rental shall be payable through January 31,
2005. The base rental payable under the Ohmeda lease from February 1, 2005
through the remaining balance of the new, extended ten year primary lease term,
shall be based on a combined rental rate equal to the sum of (1) the base rental
payable by Ohmeda during lease year number seven for the existing premises, plus
(2) the base rent payable by Ohmeda during lease year number seven for the
expansion space, plus an amount equal to 2% of the combined rental rate.
Thereafter, the base rent payable for the entire premises shall be the base rent
payable during the previous lease year plus an amount equal to 2% of the base
rent payable during such previous lease year.

The Alstom Power Knoxville Building

The Alstom Power Knoxville Building (formerly known as the ABB
Knoxville Building) is a three-story multi-tenant steel-framed office building
containing approximately 84,404 square feet located in Knoxville, Tennessee.
Wells Fund IX purchased the land and constructed the Alstom Power Knoxville
Building. Wells Fund IX contributed the Alstom Power Knoxville Building to the
IX-X-XI-REIT Joint Venture on March 26, 1997 and was credited with making a
$7,900,000 capital contribution. Construction of the Alstom Power Knoxville
Building was completed in December 1997.

The Alstom Power Knoxville Building is located on approximately 5.6
acres located in an office park known as Center Point Business Park on
Pellissippi Parkway just north of the intersection of Interstates 40 and 75, in
Knox County, Tennessee approximately 10 miles west of the Knoxville central
business district.

The Alstom Power Knoxville Building is currently leased to Alstom
Power, Inc. (Alstom Power). Alstom Power is the result of the December 30, 1999,
merger between ABB Power Generation, Inc. (ABB Power) and ABB Alstom Power, Inc.
As of June 22, 2000, ABB Alstom Power, Inc. changed its name to Alstom Power,
Inc. ABB Power was a subsidiary of Asea Brown Boveri, Inc., a large multi-
national engineering and construction company headquartered in Switzerland.

93

As security for Alstom Power's obligations under its lease, Alstom
Power has provided to the IX-X-XI-REIT Joint Venture an irrevocable standby
letter of credit in accordance with the terms and conditions set forth in the
Alstom Power Knoxville lease. The letter of credit maintained by Alstom Power is
required to be in the amount of $4,000,000 until the seventh anniversary of the
rental commencement date, at which time it will be reduced by $1,000,000 each
year until the end of the lease term.

The initial term of the Alstom Power Knoxville lease is nine years and
11 months which commenced on January 1, 1998 and expires in December 2007. The
annual base rent payable under the Alstom Power Knoxville lease is $1,106,520
payable in equal monthly installments of $92,210 during the first five years of
the initial lease term, $1,233,120 payable in equal monthly installments of
$102,760 during the next two years of the initial lease term, and $1,220,484
payable in equal monthly installments of $101,707 during the last two years and
11 months of the initial lease term.

The IX-X-XI-REIT Joint Venture has agreed to provide Alstom Power on
the fifth anniversary of the rental commencement date a redecoration allowance
of an amount equal to (1) $5.00 per square foot of useable area of the premises
leased which has been leased and occupied by Alstom Power for at least three
consecutive years ending with such fifth anniversary reduced by (2) $177,000.

Alstom Power has a one-time option to terminate the Alstom Power
Knoxville lease as of the seventh anniversary of the rental commencement date
which is exercisable by written notice to the IX-X-XI-REIT Joint Venture at
least 12 months in advance of such seventh anniversary. If Alstom Power elects
to exercise this termination option, Alstom Power is required to pay to the
IX-X-XI-REIT Joint Venture, on or before 90 days prior to the seventh
anniversary of the rental commencement date, a termination payment intended to
compensate the IX-X-XI-REIT Joint Venture for the present value of certain sums
which the joint venture has expended in connection with the Alstom Power
Knoxville lease amortized over and attributable to the remaining lease term and
a rent payment equal to approximately 15 months of monthly base rental payments.
We currently anticipate that the termination payment required to be paid by
Alstom Power in the event it exercises its option to terminate the Alstom Power
Knoxville lease on the seventh anniversary would be approximately $1,800,000
based upon certain assumptions.

The Avaya Building

The Avaya Building (formerly known as the Lucent Technologies Building)
is a one-story office building containing approximately 57,186 rentable square
feet which was developed and constructed on certain real property located in
Oklahoma City, Oklahoma by Wells Development. The Avaya Building was purchased
by the IX-X-XI-REIT Joint Venture on June 24, 1998 for a purchase price of
$5,504,276, which was equal to the aggregate cost to Wells Development of the
acquisition, construction and development of the Avaya Building, including
interest and other carrying costs, and accordingly, Wells Development made no
profit from the sale of the Avaya Building to the IX-X-XI-REIT Joint Venture.
Construction of the Avaya Building was completed in January 1998.

The Avaya Building is located on approximately 5.3 acres located in the
Quail Springs Office Park, 1400 Hertz Quail Springs Parkway, in the northwest
sector of Oklahoma City.

The Avaya Building is leased to Avaya, Inc. (Avaya), the former
Enterprise Networks Group of Lucent Technologies Inc. (Lucent Technologies).
Lucent Technologies, the former tenant, assigned the lease to Avaya on September
30, 2000. Lucent Technologies, who remains liable on the lease, is a
telecommunications company which was spun off by AT&T in April 1996. Lucent
Technologies, which is traded on the New York Stock Exchange, is in the business
of designing, developing and marketing communications systems and technologies
ranging from microchips to whole networks and is one of the

94

world's leading designers, developers and manufacturers of telecommunications
system software and products.

The initial term of the Avaya lease is ten years which commenced on
January 5, 1998 and expires in January 2008. Avaya has the option to extend the
initial term of the Avaya lease for two additional five-year periods. The annual
base rent payable under the Avaya lease will be $508,383 payable in equal
monthly installments of $42,365 during the first five years of the initial lease
term, and $594,152 payable in equal monthly installments of $49,513 during the
second five years of the initial lease term. The annual base rent for each
extended term under the lease will be based upon the fair market rent then being
charged by landlords under new leases of office space in the metropolitan
Oklahoma City market for similar space in a building of comparable quality with
comparable amenities. The Avaya lease provides that if the parties cannot agree
upon the appropriate fair market value rate, the rate will be established by
real estate appraisers.

Under the Avaya lease, Avaya also has a one-time option to terminate
the Avaya lease on the seventh anniversary of the rental commencement date,
which is exercisable by written notice to the landlord at least 12 months in
advance of such seventh anniversary. If Avaya elects to exercise its option to
terminate the Avaya lease, Avaya would be required to pay a termination payment
intended to compensate the landlord for the present value of funds expended as a
construction allowance and leasing commissions relating to the Avaya lease,
amortized over and attributable to the remaining lease term, and a rental
payment equal to approximately 18 months of monthly rental payments. We
currently anticipate that the termination payment required to be paid by Avaya,
in the event it exercises its option to terminate the Avaya lease on the seventh
anniversary, would be approximately $1,339,000 based upon certain assumptions.

Property Management Fees

Wells Management, our Property Manager, has been retained to manage and
lease all of the properties currently owned by the IX-X-XI-REIT Joint Venture
and the VIII-IX-REIT Joint Venture. While Wells Fund XI and the Wells REIT are
authorized to pay aggregate management and leasing fees to Wells Management in
the amount of 4.5% of gross revenues, Wells Fund VIII, Wells Fund IX and Wells
Fund X are authorized to pay aggregate management and leasing fees to Wells
Management in the amount of 6% of gross revenues. Accordingly, a portion of the
gross revenues of these joint ventures will be subject to a 6% management and
leasing fee and a portion of gross revenues will be subject to a 4.5% management
and leasing fee based upon the respective ownership percentages in the joint
ventures.

Wells Management has been retained to manage and lease each of the
remaining buildings for fees not exceeding the lesser of: (A) 4.5% of gross
revenues, or (B) 0.6% of the net asset value of the properties (excluding vacant
properties) owned by the Wells REIT, calculated on an annual basis. For purposes
of this calculation, net asset value shall be defined as the excess of (1) the
aggregate of the fair market value of all properties owned by the Wells REIT
(excluding vacant properties), over (2) the aggregate outstanding debt of the
Wells REIT (excluding debts having maturities of one year or less). In addition,
we may pay Wells Management a separate fee for the one-time initial rent-up or
leasing-up of newly constructed properties in an amount not to exceed the fee
customarily charged in arm's length transactions by others rendering similar
services in the same geographic area for similar properties as determined by a
survey of brokers and agents in such area (customarily equal to the first
month's rent).

Wells Management received a one-time initial lease-up fee equal to the
first month's rent for the leasing of the Alstom Power Knoxville Building, the
Avaya Building, the Matsushita Building and the Alstom Power Richmond Building.

95

Real Estate Loans

The SouthTrust Loans

Wells OP has established various secured lines of credit with
SouthTrust Bank, N.A. (SouthTrust) whereby SouthTrust has agreed to loan in the
aggregate an amount of up to $72,140,000 to Wells OP in connection with its
purchase of real properties. The interest rate on each of these separate lines
of credit is an annual variable rate equal to the London InterBank Offered Rate
(LIBOR) for a 30 day period plus 175 basis points. Wells OP will be charged an
advance fee of 0.125% of the amount of each advance. As of December 15, 2000,
the interest rate was 8.44% per annum.

The $32,393,000 SouthTrust Line of Credit

The $32,393,000 SouthTrust line of credit requires monthly payments of
interest only and matures on June 10, 2002. This SouthTrust line of credit is
secured by first priority mortgages against the Cinemark Building, the Dial
Building and the ASML Building. As of December 15, 2000, the outstanding
principal balance of the $32,393,000 SouthTrust line of credit was $17,028,850.

The $12,844,000 SouthTrust Line of Credit

The $12,844,000 SouthTrust line of credit requires monthly payments of
interest only and matures on June 10, 2002. This SouthTrust line of credit is
secured by a first priority mortgage against the PwC Building. As of December
15, 2000, there was no outstanding principal balance on the $12,844,000
SouthTrust line of credit.

The $19,003,000 SouthTrust Line of Credit

The $19,003,000 SouthTrust line of credit requires monthly payments of
interest only and matures on June 10, 2002. This SouthTrust line of credit is
secured by first priority mortgages against the Avnet Building and the Motorola
Tempe Building. As of December 15, 2000, there was no outstanding principal
balance on the $17,800,000 SouthTrust line of credit.

The $7,900,000 SouthTrust Line of Credit

Wells LLC - VA originally obtained a loan from SouthTrust Bank, N.A. in
connection with the acquisition, development and construction of the Alstom
Power Richmond Building (formerly known as the ABB Richmond Building). After
completion of the construction, SouthTrust converted the construction loan into
a separate line of credit in the maximum principal amount up to $7,900,000. This
SouthTrust line of credit requires payments of interest only and matures on June
10, 2002. The $7,900,000 SouthTrust line of credit is secured by a first
priority mortgage against the Alstom Power Richmond Building, the Alstom Power
Richmond lease and a $4,000,000 letter of credit issued by Unibank. As of
December 15, 2000, there was no outstanding principal balance on the $7,900,000
SouthTrust line of credit.

The BOA Loan

Wells OP originally obtained a loan in the amount of $6,425,000 from
Bank of America, N.A. (BOA Loan), to fund a portion of the purchase price of the
AT&T Building (formerly the Vanguard Cellular Building) located in Harrisburg,
Pennsylvania. On November 23, 1999, the BOA Loan was converted to a revolving
credit loan in the maximum principal amount of $9,825,000 for the acquisition of
real properties by Wells OP. On February 24, 2000, the credit limit of the BOA
Loan was increased

96

further to $26,725,000. The BOA Loan requires monthly payments of interest only
and matures on January 4, 2002. The interest rate on the BOA Loan is a variable
rate per annum equal to the LIBOR for a thirty-day period plus 200 basis points.
As of December 15, 2000, the interest rate on the BOA Loan was 8.69% per annum.
The BOA Loan is secured by first priority mortgages against both the AT&T
Building and the Marconi Building. As of December 15, 2000, the outstanding
principal balance of the BOA Loan was $14,300,149.

The Metris Loan

Wells OP assumed a loan (Metris Loan) with Richter-Schroeder Company,
Inc. in connection with its purchase of the Metris Building. The Metris Loan
requires monthly payments of interest only and matures on February 11, 2003. The
interest rate on the Metris Loan is an annual variable rate equal to the LIBOR
for a thirty-day period plus 175 basis points. As of December 15, 2000, the
interest rate on the Metris Loan was 8.44% per annum. The Metris Loan is
secured by a first mortgage against the Metris Building. As of December 15,
2000, the outstanding principal balance of the Metris Loan was $8,000,000.

Management's Discussion and Analysis of Financial Condition and Results of
Operations

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

This section and other sections of the prospectus contain
forward-looking statements, within the meaning of Section 27A of the Securities
Act of 1933 and 21E of the Securities Exchange Act of 1934, including discussion
and analysis of the financial condition of the Wells REIT, anticipated capital
expenditures required to complete certain projects, amounts of cash
distributions anticipated to be distributed to shareholders in the future and
certain other matters. Readers of this prospectus should be aware that there are
various factors that could cause actual results to differ materially from any
forward-looking statement made in this prospectus, which include changes in
general economic conditions, changes in real estate conditions, construction
costs which may exceed estimates, construction delays, increases in interest
rates, lease-up risks, inability to obtain new tenants upon the expiration of
existing leases, lack of availability of financing and the potential need to
fund tenant improvements or other capital expenditures out of operating cash
flow.

Liquidity and Capital Resources

We began active operations on June 5, 1998, when we received and
accepted subscriptions for 125,000 shares pursuant to our initial public
offering, which commenced on January 30, 1998. We terminated our initial public
offering on December 19, 1999, and on December 20, 1999, we commenced a
follow-on public offering of up to 22,200,000 shares of common stock at $10 per
share. As of December 31, 1999, we had raised an aggregate of $134,710,850 in
offering proceeds through the sale of 13,471,085 shares. As of December 31,
1999, we had paid $4,714,880 in acquisition and advisory fees and acquisition
expenses, $16,838,857 in selling commissions and organizational and offering
expenses, and $112,287,969 in capital contributions to Wells OP for investments
in joint ventures and acquisitions of real properties. As of December 31, 1999,
we were holding net offering proceeds of approximately $869,144 available for
investment in additional properties.

Between December 31, 1999, and September 30, 2000, we raised an
additional $127,695,246 in offering proceeds through the sale of an additional
12,769,524 shares. Accordingly, as of September 30, 2000, we had raised a total
of $262,406,096 in offering proceeds through the sale of 26,240,610 shares of
common stock. As of September 30, 2000, we had paid a total of $9,161,189 in
acquisition and advisory

97

fees and acquisition expenses, had paid a total of $32,718,532 in selling
commissions and organizational and offering expenses, had made capital
contributions of $211,641,497 to Wells OP for investments in joint ventures and
acquisitions of real property, had utilized $657,844 for the redemption of stock
pursuant to our share redemption program, and were holding net offering proceeds
of $8,227,034 available for investment in additional properties.

Cash and cash equivalents at September 30, 2000 and 1999 were
$12,257,161 and $2,850,263, respectively. The increase in cash and cash
equivalents resulted primarily from raising additional capital which was offset
by increased investments in real property acquisitions.

Operating cash flows are expected to increase as additional properties
are added to our investment portfolio. Dividends to be distributed to the
shareholders are determined by the board of directors and are dependent upon a
number of factors relating to the Wells REIT, including funds available for
payment of dividends, financial condition, capital expenditure requirements and
annual distribution requirements in order to maintain our status as a REIT under
the Internal Revenue Code.

As of September 30, 2000, we had acquired interests in 25 real estate
properties. These properties are generating sufficient cash flow to cover our
operating expenses and pay quarterly dividends. Dividends declared for the third
quarter of 2000 and the third quarter of 1999 totaled $0.1875 and $0.1750 per
share, respectively, which were declared on a daily record date basis in the
amount of $0.002038 and $0.001902, respectively, per share payable to the
shareholders of record at the close of business of each day during the quarter.

On February 18, 1999, Wells OP entered into a Rental Income Guaranty
Agreement with the VIII-IX Joint Venture. The Rental Income Guaranty Agreement
provided for a guarantee by Wells OP to the VIII-IX Joint Venture that it would
receive rental income on the Quest Building (formerly known as the Bake Parkway
Building) previously leased to Matsushita Avionics at least equal to the rental
and building expenses that the VIII-IX Joint Venture would have received over
the remaining term of its original lease with Matsushita Avionics. Matsushita
Avionics vacated the Quest Building in December 1999, with the existing lease
term ending in September 2003, in order to occupy the Matsushita Building
developed and constructed by Wells OP. On June 15, 2000, the VIII-IX-REIT Joint
Venture was formed between Wells OP and the VIII-IX Joint Venture for purposes
of owning and operating the Quest Building. On July 1, 2000, the VIII-IX Joint
Venture transferred the Quest Building to the VIII-IX-REIT Joint Venture as its
capital contribution. (See "Description of Properties -- Joint Ventures with
Affiliates.") Under the Rental Income Guaranty Agreement, Wells OP also
guaranteed that, if a joint venture such as the VIII-IX-REIT Joint Venture was
ever formed by the parties for the ownership and operation of the Quest
Building, Wells OP would guaranty to the VIII-IX Joint Venture that it would
receive monthly cash flow distributions from such joint venture at least equal
to the rent and building expenses guaranteed under the Rental Income Guaranty
Agreement. Currently the Quest Building is leased by Quest Software, Inc.
(Quest) pursuant to a 42 month lease that expires on December 31, 2003. (See
"Description of Properties -- The Quest Building.")

Wells OP had paid approximately $542,645 in rental income guaranty
payments to the VIII-IX Joint Venture through September 30, 2000, and will
continue making payments in the amount of $6,656 per month through February 2001
to cover initial rental concessions granted to Quest in order to induce Quest to
rent the Quest Building. Our maximum liability exposure to the VIII-IX Joint
Venture for rental income and building expenses potentially payable under this
Rental Income Guaranty Agreement of approximately $3,000,000 was taken into
account in the economic analysis performed in making the determination to go
forward with the development of the Matsushita Building. Although the lease of
the Quest Building by Quest has substantially reduced our financial exposure
under the Rental Income Guaranty Agreement, we cannot, at this time, determine
the amount of any future liability if Quest

98

defaults or otherwise fails to make the required payments under its lease. Wells
OP continues to guaranty payment under the Rental Income Guaranty Agreement and,
consequently, continues to bear some risk, even though their risk has been
substantially minimized by the lease with Quest. Payments made to the VIII-IX
Joint Venture under the Rental Income Guaranty Agreement are made from capital
proceeds raised and are being capitalized over the term of the lease with
Matsushita Avionics for the Matsushita Building.

Cash Flows From Operating Activities

Net cash provided by operating activities was $4,737,973 for the nine
months ended September 30, 2000 and $2,273,102 for the nine months ended
September 30, 1999. The increase in net cash provided by operating activities
was due primarily to the purchase of additional properties in late 1999 and
2000.

Cash Flows From Investing Activities

The increase in net cash used in investing activities from $75,420,671
for the nine months ended September 30, 1999 to $113,424,119 for the nine months
ended September 30, 2000 was due primarily to the raising of additional capital
and funds that have been invested in real property acquisitions.

Cash Flows From Financing Activities

The increase in net cash provided by financing activities from
$68,018,429 for the nine months ended September 30, 1999 to $118,013,503 for the
nine months ended September 30, 2000 was due primarily to the raising of
additional capital and the corresponding increase in funds borrowed to purchase
additional properties. We raised $127,695,243 in offering proceeds for the nine
months ended September 30, 2000, as compared to $76,927,944 for the nine months
ended September 30, 1999. In addition, we received loan proceeds from financing
secured by properties of $67,883,130 and repaid notes payable in the amount of
$52,903,328 for the nine months ended September 30, 2000.

Results of Operations

As of September 30, 2000, our real estate properties were 100% occupied
by tenants. Gross revenues for the nine months ended September 30, 1999 and for
the nine months ended September 30, 2000 were $3,996,290 and $15,734,638,
respectively. This increase in revenues was due to the purchase of additional
properties during late 1999 and 2000. The purchase of interests in additional
properties also resulted in an increase in operating expenses, management and
leasing fees, and depreciation expense. Our net income increased to $5,737,537
for the first nine months of 2000 as compared to $2,272,432 for the first nine
months of 1999.

Subsequent Events

On November 1, 2000, Wells OP acquired a three-story 236,710 square
foot office building (Motorola Plainfield Building) located at Durham Avenue on
Interstate 287 in South Plainfield, New Jersey for a purchase price of
$33,648,156, plus closing costs of $105,225. The Motorola Plainfield Building is
100% leased to Motorola, Inc. (See "Description of Properties -- The Motorola
Plainfield Building.")

Property Operations

As of September 30, 2000, we have provided the following operational
information relating to our real estate properties:

99

The Alstom Power Knoxville Building (formerly the ABB Knoxville
Building)/ The IX-X-XI-REIT Joint Venture

Three Months Ended          Nine Months Ended
------------------------    -----------------------
Sept. 30,      Sept. 30,    Sept. 30,     Sept. 30,
2000           1999         2000          1999
---------      ---------    ---------     ---------

Revenues:
Rental income                            $ 288,969      $ 261,986    $ 895,551     $ 784,065
Interest income                             19,871         15,024       53,575        46,765
---------      ---------    ---------     ---------
308,840        277,010      949,126       830,830
---------      ---------    ---------     ---------
Expenses:
Depreciation                                98,454        135,499      295,362       403,699
Management and leasing expenses             36,277         32,260      112,232        93,666
Other operating expenses                   (26,544)       (17,097)     (69,178)      (13,390)
---------      ---------    ---------     ---------
108,187        150,662      338,416       483,975
---------      ---------    ---------     ---------
Net income                                  $ 200,653      $ 126,348    $ 610,710     $ 346,855
=========      =========    =========     =========
Occupied percentage                               100%         98.28%         100%        98.28%
=========      =========    =========     =========
Our ownership percentage                         3.71%          3.74%        3.71%         3.74%
=========      =========    =========     =========
Cash distributed to the Wells REIT          $  11,074      $   9,855    $  33,513     $  28,263
=========      =========    =========     =========
Net income allocated to the Wells REIT      $   7,451      $   4,721    $  22,700     $  13,043
=========      =========    =========     =========

Rental income increased in 2000, over 1999, due primarily to the
increased occupancy level of the property. Total expenses decreased due to a
decrease in depreciation expense. This decrease resulted from an accelerated
depreciation on tenant improvements for a short-term lease in 1999 for 23,092
square feet. Other operating expenses are negative due to an offset of tenant
reimbursements in operating costs, as well as management and leasing fee
reimbursements. Tenants are billed an estimated amount for the current year
common area maintenance (CAM) which is then reconciled the following year and
the difference billed to the tenant. Net income and cash distributions increased
in 2000, over 1999, due to a combination of increased rental income and
decreased operating expenses.

Our ownership percentage interest in the IX-X-XI-REIT Joint Venture
decreased slightly due to additional capital contributions made by Wells Fund IX
and Wells Fund X, respectively, to the IX-X-XI-REIT Joint Venture in the first
and second quarters of 2000 for funding of capital improvements.

The Ohmeda Building/The IX-X-XI-REIT Joint Venture

Three Months Ended          Nine Months Ended
------------------------    -----------------------
Sept. 30,      Sept. 30,    Sept. 30,     Sept. 30,
2000           1999         2000          1999
---------      ---------    ---------     ---------

Revenues:
Rental income                            $ 256,829      $ 256,829    $ 770,486     $ 770,486
---------      ---------    ---------     ---------
Expenses:
Depreciation                                81,576         81,576      244,728       244,728
Management and leasing expenses             12,826         11,618       41,656        35,293
Other operating expenses                    (7,585)         3,899       73,410          (188)
---------      ---------    ---------     ---------
86,817         97,093      359,794       279,833
---------      ---------    ---------     ---------
Net income                                  $ 170,012      $ 159,736    $ 410,692     $ 490,653
=========      =========    =========     =========

100

Occupied percentage                               100%           100%         100%          100%
=========      =========    =========     =========
Our ownership percentage                         3.71%          3.74%        3.71%         3.74%
=========      =========    =========     =========
Cash distributed to the Wells REIT          $   9,130      $   8,804    $  23,726     $  26,992
=========      =========    =========     =========
Net income allocated to the Wells REIT      $   6,312      $   5,969    $  15,265     $  18,438
=========      =========    =========     =========

Net income decreased in 2000, as compared to 1999, due to an overall
increase in expenses. Operating expenses increased significantly due, in part,
to a significant rise in real estate taxes, which resulted from the revaluation
of the property by Boulder County authorities in 1999. A later reduction in
taxes resulting from an appeal in 2000 was offset by a CAM credit to the tenant.

Rental income remained stable for the three months ended September 30,
2000, as compared to the same period in 1999. Total expenses decreased for the
three month period ended September 30, 2000, as compared to the same period for
1999, due largely to other operating expenses being negative. This was due to an
offset of tenant reimbursements in operating costs, as well as management and
leasing fee reimbursements. Cash distributions and net income allocated to the
Wells REIT for the three month period ended September 30, 2000 increased
slightly as compared to 1999.

The Interlocken Building/The IX-X-XI-REIT Joint Venture

Three Months Ended          Nine Months Ended
------------------------    -----------------------
Sept. 30,      Sept. 30,    Sept. 30,     Sept. 30,
2000           1999         2000          1999
---------      ---------    ---------     ---------

Revenues:
Rental income                            $ 207,454      $ 207,791    $ 635,898     $ 622,070
---------      ---------    ---------     ---------
Expenses:
Depreciation                                71,670         71,670      215,010       215,010
Management and leasing expenses             27,019         18,899       83,736        54,518
Other operating costs                       (2,165)        (5,291)     (54,699)        5,342
---------      ---------    ---------     ---------
96,524         85,278      244,047       274,870
---------      ---------    ---------     ---------
Net income                                  $ 110,930      $ 122,513    $ 391,851     $ 347,200
=========      =========    =========     =========
Occupied percentage                               100%           100%         100%          100%
=========      =========    =========     =========
Our ownership percentage                         3.71%          3.74%        3.71%         3.74%
=========      =========    =========     =========
Cash distributed to the Wells REIT          $   6,800      $   7,200    $  22,679     $  20,952
=========      =========    =========     =========
Net income allocated to the Wells REIT      $   4,119      $   4,578    $  14,566     $  13,041
=========      =========    =========     =========

Rental income increased due to a tenant occupying additional space
previously leased to another tenant at a lower rate. Other operating expenses
are negative due to an offset of tenant reimbursements in operating costs, as
well as management and leasing fee reimbursements. Tenants are billed an
estimated amount for current year CAM which is then reconciled the following
year and the difference billed to the tenants. Due to these CAM reimbursements,
management and leasing fees increased since these fees are charged based on
actual receipts.

Cash distributions and net income allocated to the Wells REIT for the
quarter ended September 30, 2000 decreased in 2000, as compared to 1999, due to
a decrease in net income.

101

The Avaya Building (formerly the Lucent Technologies Building)/
The IX-X-XI-REIT Joint Venture

Three Months Ended          Nine Months Ended
------------------------    -----------------------
Sept. 30,      Sept. 30,    Sept. 30,     Sept. 30,
2000           1999         2000          1999
---------      ---------    ---------     ---------

Revenues:
Rental income                            $ 145,752      $ 145,752    $ 437,256     $ 437,256
---------      ---------    ---------     ---------
Expenses:
Depreciation                                45,801         45,801      137,403       137,403
Management and leasing expenses              5,369          5,370       16,109        16,109
Other operating expenses                     1,669          1,766        9,688        13,964
---------      ---------    ---------     ---------
52,839         52,937      163,200       167,476
---------      ---------    ---------     ---------
Net income                                  $  92,913      $  92,815    $ 274,056     $ 269,780
=========      =========    =========     =========
Occupied percentage                               100%           100%         100%          100%
=========      =========    =========     =========
Our ownership percentage                         3.71%          3.74%        3.71%         3.74%
=========      =========    =========     =========
Cash distributed to the Wells REIT          $   4,723      $   4,750    $  14,048     $  14,006
=========      =========    =========     =========
Net income allocated to the Wells REIT      $   3,450      $   3,468    $  10,187     $  10,140
=========      =========    =========     =========

Rental income, depreciation, and management and leasing expenses
remained stable in 2000, as compared to 1999, while other operating expenses
were slightly lower, due primarily to a one-time charge for consulting fees in
1999 which did not occur in 2000.

On September 30, 2000, Lucent Technologies, Inc. assigned its interest
in the lease as tenant to Avaya, Inc., the former Enterprise Networks Group of
Lucent Technologies.

The Iomega Building/The IX-X-XI-REIT Joint Venture

Three Months Ended          Nine Months Ended
------------------------    -----------------------
Sept. 30,      Sept. 30,    Sept. 30,     Sept. 30,
2000           1999         2000          1999
---------      ---------    ---------     ---------

Revenues:
Rental income                            $ 168,250      $ 150,009    $ 504,750     $ 397,755
---------      ---------    ---------     ---------
Expenses:
Depreciation                                55,062         48,495      165,186       145,485
Management and leasing expenses              7,319          8,291       21,879        17,629
Other operating expenses                     2,253          1,290       12,620         3,815
---------      ---------    ---------     ---------
64,634         58,076      199,685       166,929
---------      ---------    ---------     ---------
Net income                                  $ 103,616      $  91,933    $ 305,065     $ 230,826
=========      =========    =========     =========
Occupied percentage                               100%           100%         100%          100%
=========      =========    =========     =========
Our ownership percentage                         3.71%          3.74%        3.71%         3.74%
=========      =========    =========     =========
Cash distributed to the Wells REIT          $   5,713      $   5,103    $  16,940     $  13,702
=========      =========    =========     =========
Net income allocated to the Wells REIT      $   3,848      $   3,435    $  11,339     $   8,672
=========      =========    =========     =========

Rental income increased in 2000, as compared to 1999, due to the
completion of the parking lot complex in the second quarter of 1999. Total
expenses increased in 2000, over 1999, due to an increase in depreciation and
real estate tax expenses relating to the new parking lot. Cash distributions
increased in 2000, over 1999, due primarily to the increase in net income.

102

The Cort Furniture Building/The Cort Joint Venture

Three Months Ended          Nine Months Ended
------------------------    -----------------------
Sept. 30,      Sept. 30,    Sept. 30,     Sept. 30,
2000           1999         2000          1999
---------      ---------    ---------     ---------

Revenues:
Rental income                            $ 198,885      $ 198,885    $ 596,656     $ 596,656
---------      ---------    ---------     ---------
Expenses:
Depreciation                                46,641         46,641      139,923       139,923
Management and leasing expenses              8,701          7,590       23,881        22,770
Other operating expenses                     6,445          5,993       10,375        19,446
---------      ---------    ---------     ---------
61,787         60,224      174,179       182,139
---------      ---------    ---------     ---------
Net income                                  $ 137,098      $ 138,661    $ 422,477     $ 414,517
=========      =========    =========     =========
Occupied percentage                               100%           100%         100%          100%
=========      =========    =========     =========
Our ownership percentage                         43.7%          43.7%        43.7%         43.7%
=========      =========    =========     =========
Cash distributed to the Wells REIT          $  76,243      $  76,926    $ 233,613     $ 230,137
=========      =========    =========     =========
Net income allocated to the Wells REIT      $  59,867      $  60,550    $ 184,484     $ 181,008
=========      =========    =========     =========

Rental income, depreciation, and management and leasing expenses
remained stable in 2000, as compared to 1999, while other operating expenses are
lower due to common area maintenance (CAM) reimbursements billed in 2000 to the
tenants. Tenants are billed an estimated amount for CAM which is then reconciled
the following year, and the difference is billed to the tenant. No CAM was
charged to the tenant in 1999.

The Fairchild Building/The Fremont Joint Venture

Three Months Ended          Nine Months Ended
------------------------    -----------------------
Sept. 30,      Sept. 30,    Sept. 30,     Sept. 30,
2000           1999         2000          1999
---------      ---------    ---------     ---------

Revenues:
Rental income                            $ 225,195      $ 225,210    $ 675,585     $ 675,631
---------      ---------    ---------     ---------
Expenses:
Depreciation                                71,382         71,382      214,146       214,146
Management and leasing expenses              9,175          9,303       27,525        27,970
Other operating expenses                     3,244          6,457        9,856        13,772
---------      ---------    ---------     ---------
83,801         87,142      251,527       255,888
---------      ---------    ---------     ---------
Net income                                  $ 141,394      $ 138,068    $ 424,058     $ 419,743
---------      ---------    ---------     ---------
Occupied percentage                               100%           100%         100%          100%
=========      =========    =========     =========
Our ownership percentage                         77.5%          77.5%        77.5%         77.5%
=========      =========    =========     =========
Cash distributed to the Wells REIT          $ 158,817      $ 151,627    $ 476,354     $ 459,174
=========      =========    =========     =========
Net income allocated to the Wells REIT      $ 109,587      $ 107,009    $ 328,663     $ 325,318
=========      =========    =========     =========

Rental income, net income and cash distributions to the Wells REIT
remained stable in 2000, as compared to 1999.

103

The PwC Building

Three Months Ended          Nine Months Ended
------------------------    ------------------------
Sept. 30,      Sept. 30,    Sept. 30,     Sept. 30,
2000           1999         2000          1999
---------      ---------    ----------    ----------

Revenues:
Rental income                            $ 552,298      $ 552,297    $1,656,894    $1,656,637
---------      ---------    ----------    ----------
Expenses:
Depreciation                               206,037        205,236       618,111       616,257
Management and leasing expenses             37,760         37,612       116,142       111,147
Other operating expenses                   (28,672)       (77,618)     (134,352)      103,599
---------      ---------    ----------    ----------
215,125        165,230       599,901       831,003
---------      ---------    ----------    ----------
Net income                                  $ 337,173      $ 387,067    $1,056,993    $  825,634
=========      =========    ==========    ==========
Occupied percentage                               100%           100%          100%          100%
=========      =========    ==========    ==========
Our ownership percentage                          100%           100%          100%          100%
=========      =========    ==========    ==========
Cash distributed to the Wells REIT          $ 488,547      $ 526,399    $1,512,625    $1,244,179
=========      =========    ==========    ==========
Net income allocated to the Wells REIT      $ 337,173      $ 387,067    $1,056,993    $  825,634
=========      =========    ==========    ==========

Rental income has remained stable. Other operating expenses are
negative due to increased CMA billings in 2000. Management and leasing fee
reimbursements are also included in other operating expenses. Tenants are billed
an estimated amount for current year CAM which is then reconciled the following
year, and the difference billed to the tenants.

The AT&T Building (formerly the Vanguard Cellular Building)

Nine          Nine
Three Months Ended        Months        Months
------------------------      Ended         Ended
Sept. 30,      Sept. 30,    Sept. 30,     Sept. 30,
2000           1999         2000          1999
---------      ---------    ----------    ---------

Revenues:
Rental income                            $ 340,832      $ 455,471    $1,022,497    $ 930,145
---------      ---------    ----------    ---------
Expenses:
Depreciation                               120,744        120,750       362,232      321,972
Management and leasing expenses             15,525         20,532        46,201       29,082
Other operating expenses                       831          3,362         6,941       12,931
Interest expense                             2,915         27,470         9,331      206,046
---------      ---------    ----------    ---------
140,015        172,114       424,705      570,031
---------      ---------    ----------    ---------
Net income                                  $ 200,817      $ 283,357    $  597,792    $ 360,114
=========      =========    ==========    =========
Occupied percentage                               100%           100%          100%         100%
=========      =========    ==========    =========
Our ownership percentage                          100%           100%          100%         100%
=========      =========    ==========    =========
Cash distributed to the Wells REIT          $ 314,681      $ 300,004    $  953,280    $ 579,189
=========      =========    ==========    =========
Net income allocated to the Wells REIT      $ 200,817      $ 283,357    $  597,792    $ 360,114
=========      =========    ==========    =========

Rental income decreased for the three months ended September 30, 2000,
as compared to the three months ended September 30, 1999, due to an
understatement of straight line rent in that was adjusted in the third quarter
of 1999. Interest expense has decreased in 2000 due to a substantial decrease in
the note payable related to this property.

104

Since the AT&T Building was purchased in February 1999, comparable
income and expenses figures for the prior period ended September 30, 1999
covered only eight months. Accordingly, the prior period is not comparable to
the nine months ended September 30, 2000.

The EYBL CarTex Building/The XI-XII-REIT Joint Venture

Three         Three         Nine         Five
Months        Months        Months       Months
Ended         Ended         Ended        Ended
Sept. 30,     Sept. 30,     Sept. 30,    Sept. 30,
2000          1999          2000         1999
---------     ---------     ---------    ---------

Revenues:
Rental income                              $ 142,207     $ 140,048     $ 422,385    $ 210,173
---------     ---------     ---------    ---------
Expenses:
Depreciation                                  49,902        49,902       149,702       83,170
Management and leasing expenses               16,197         3,814        27,415       14,663
Other operating expenses                       3,416         5,165        16,163        5,165
---------     ---------     ---------    ---------
69,515        58,881       193,280      102,998
---------     ---------     ---------    ---------
Net income                                    $  72,692     $  81,167     $ 229,105    $ 107,175
=========     =========     =========    =========
Occupied percentage                                 100%          100%          100%         100%
=========     =========     =========    =========
Our ownership percentage                           56.8%         56.8%         56.8%        70.1%
=========     =========     =========    =========
Cash distributed to the Wells REIT            $  67,917     $  68,084     $ 190,825    $ 103,599
=========     =========     =========    =========
Net income allocated to the Wells REIT        $  44,820     $  46,791     $ 130,047    $  65,039
=========     =========     =========    =========

Since the acquisition of the property by the XI-XII-REIT Joint Venture,
the property has remained 100% occupied, and no significant changes have
occurred to its operations.

Rental income increased slightly for the three month period ended
September 30, 2000, as compared to the same period in 1999. Total expenses
increased for the three month period ended September 30, 2000, as compared to
the same period in 1999, due to an annual leasing commission paid to an outside
broker pursuant to the terms of the purchase agreement. Cash distributions and
net income allocated to the Wells REIT decreased for the three month period
ended September 30, 2000 because of the decrease in net income.

Since the EYBL CarTex Building was purchased in May 1999, comparable
income and expense figures for the prior period ended September 30, 1999 covered
only five months. Accordingly, the prior period is not comparable to the nine
month period ended September 30, 2000.

Our ownership interest in the XI-XII-REIT Joint Venture decreased due
to the admittance of Wells Fund XII to the XI-REIT Joint Venture on June 21,
1999. Our ownership interest was 70.1% for May and June of 1999 and 56.8% for
July through September of 1999.

105

The Sprint Building/The XI-XII-REIT Joint Venture

Three         Three         Nine         Three
Months        Months        Months       Months
Ended         Ended         Ended        Ended
Sept. 30,     Sept. 30,     Sept. 30,    Sept. 30,
2000          1999          2000         1999
---------     ---------     ---------    ---------

Revenues:
Rental income                              $ 265,997     $ 264,654     $ 797,991    $ 264,654
---------     ---------     ---------    ---------
Expenses:
Depreciation                                  81,779        81,776       245,336       81,776
Management and leasing expenses               11,239         7,493        33,718        7,493
Other operating expenses                       3,306         1,283        13,964        1,283
---------     ---------     ---------    ---------
96,324        90,552       293,018       90,552
---------     ---------     ---------    ---------
Net income                                    $ 169,673     $ 174,102     $ 504,973    $ 174,102
=========     =========     =========    =========
Occupied percentage                                 100%          100%          100%         100%
=========     =========     =========    =========
Our ownership percentage                           56.8%         56.8%         56.8%        56.8%
=========     =========     =========    =========
Cash distributed to the Wells REIT            $ 133,516     $ 137,150     $ 398,252    $ 137,150
=========     =========     =========    =========
Net income allocated to the Wells REIT        $  96,311     $ 100,192     $ 286,638    $ 100,192
=========     =========     =========    =========

Since the acquisition of the property by the XI-XII-REIT Joint Venture,
the property has remained 100% occupied, and no significant changes have
occurred to its operations.

Rental income increased slightly for the three months ended September
30, 2000, as compared to the same period in 1999. Total expenses increased for
the three months ended September 30, 2000, as compared to the same period in
1999, due largely to the increase in management and leasing fees as well as
other operating expenses. Cash distributions and net income allocated to the
Company decreased for the three months ended September 30, 2000 due to a
decrease in net income.

Since the Sprint Building was purchased in July 1999, comparative
income and expense figures for the prior period ended September 30, 1999 covered
only three months. Accordingly, the prior period is not comparable to the nine
month period ended September 30, 2000.

106

The Johnson Matthey Building/The XI-XII-REIT Joint Venture

Three Months       Two Months        Nine Months
Ended              Ended             Ended
Sept. 30, 2000    Sept. 30, 1999    Sept. 30, 2000

Revenues:
Rental income                              $  219,349         $  123,566        $  648,297
----------         ----------        ----------
Expenses:
Depreciation                                   63,869             42,567           191,606
Management and leasing expenses                 9,230                  0            27,089
Other operating expenses                       (1,535)               470             8,594
----------         ----------        ----------
71,564             43,037           227,289
----------         ----------        ----------
Net income                                    $  147,785         $   80,529        $  421,008
==========         ==========        ==========
Occupied percentage                                  100%               100%              100%
==========         ==========        ==========
Our ownership percentage                            56.8%              56.8%             56.8%
==========         ==========        ==========
Cash distributed to the Wells REIT            $  110,419         $   66,517        $  318,504
==========         ==========        ==========
Net income allocated to the Wells REIT        $   83,836         $   44,409        $  238,977
==========         ==========        ==========

Since the acquisition of the property by the XI-XII-REIT Joint Venture,
the property has remained 100% occupied, and no significant changes have
occurred to its operations.

Since the Johnson Matthey Building was purchased in August 1999,
comparative income and expense figures for the prior period covered only two
months. Accordingly, the prior period cannot be compared to the nine months
ended September 30, 2000.

The Gartner Building/The XI-XII-REIT Joint Venture

Three Months       One Month         Nine Months
Ended             Ended              Ended
Sept. 30, 2000    Sept. 30, 1999    Sept. 30, 2000

Revenues:
Rental income                               $  216,567        $  32,502         $  637,375
----------        ---------         ----------
Expenses:
Depreciation                                    77,623           25,874            232,868
Management and leasing expenses                  9,970                0             29,218
Other operating expenses                        (7,603)               0            (27,396)
----------        ---------         ----------
79,990           25,874            234,690
----------        ---------         ----------
Net income                                     $  136,577        $   6,628         $  402,685
==========        =========         ==========
Occupied percentage                                   100%             100%               100%
==========        =========         ==========
Our ownership percentage                             56.8%            56.8%              56.8%
==========        =========         ==========
Cash distributed to the Wells REIT             $  110,861        $  10,374         $  328,570
==========        =========         ==========
Net income allocated to the Wells REIT         $   77,525        $   3,763         $  228,574
==========        =========         ==========

Other operating expenses are negative due to an offset of tenant
reimbursements in operating costs both for the first quarter of 2000 as well as
the fourth quarter of 1999. Since the building was purchased in September of
1999, we were not able to estimate the amount to be billed for 1999 until the
first quarter of 2000.

107

Since the acquisition of the property by the XI-XII-REIT Joint Venture,
the property has remained 100% occupied, and no significant changes have
occurred to its operations.

Since the Gartner Building was purchased in September 1999, comparative
income and expense figures for the prior period ended September 30, 1999 covered
only one month. Accordingly, the prior period is not comparable to the nine
month period ended September 30, 2000.

The Marconi Building (formerly the Videojet Building)

Three Months       One Month         Nine Months
Ended             Ended              Ended
Sept. 30, 2000    Sept. 30, 1999    Sept. 30, 2000

Revenues:
Rental income                               $ 817,819         $ 219,376        $ 2,453,457
---------         ---------        -----------
Expenses:
Depreciation                                  293,352            97,774            880,056
Management and leasing expenses                35,510            10,679            108,472
Other operating expenses                        4,433               254             16,928
---------         ---------        -----------
333,295           108,707          1,005,456
---------         ---------        -----------
Net income                                     $ 484,524         $ 110,669        $ 1,448,001
=========         =========        ===========
Occupied percentage                                  100%              100%               100%
=========         =========        ===========
Our ownership percentage                             100%              100%               100%
=========         =========        ===========
Cash distributed to the Wells REIT             $ 673,367         $ 157,899        $ 2,016,472
=========         =========        ===========
Net income allocated to the Wells REIT         $ 484,524         $ 110,669        $ 1,448,001
=========         =========        ===========

Since the Marconi Building was purchased in September 1999, comparable
income and expense figures for the prior period ended September 30, 1999 covered
only one month. Accordingly, the prior period is not comparable to the nine
month period ended September 30, 2000.

The Matsushita Building

Three Months       Nine Months
Ended              Ended
Sept. 30, 2000    Sept. 30, 2000
--------------    --------------

Revenues:
Rental income                                            $ 492,420        $ 1,509,449
Expenses:
Depreciation                                               244,909            754,423
Management and leasing expenses                             48,022            138,940
Other operating expenses                                    17,211             51,891
------------       ------------
310,142            945,254
------------       ------------
Net income                                                  $ 182,278        $   564,195
============       ============
Occupied percentage                                               100%               100%
============       ============
Our ownership percentage                                          100%               100%
============       ============
Cash distributed to the Wells REIT                          $ 441,254        $ 1,156,810
============       ============
Net income generated to the Wells REIT                      $ 182,278        $   564,195
============       ============

108

Construction of the Matsushita Building is complete, and the aggregate
of all costs and expenses incurred by Wells OP with respect to the acquisition
and construction of the Matsushita Building was $18,576,701. The monthly base
rent for the Matsushita Building is $154,602.

Since the Matsushita Building opened in January 2000, comparable income
and expense figures for the prior period are not available.

The Cinemark Building

Three Months       Nine Months
Ended              Ended
Sept. 30, 2000    Sept. 30, 2000
--------------    --------------

Revenues:
Rental income                                            $ 701,262        $ 2,104,128
Interest income                                              3,084        $     4,332
---------        -----------
704,346          2,108,460
---------        -----------
Expenses:
Depreciation                                               212,310            636,896
Management and leasing expenses                             38,127            100,167
Other operating expenses                                   144,809            453,912
---------        -----------
395,246          1,190,975
---------        -----------
Net income                                                  $ 309,100        $   917,485
=========        ===========
Occupied percentage                                               100%               100%
=========        ===========
Our ownership percentage                                          100%               100%
=========        ===========
Cash distributed to the Wells REIT                          $ 474,274        $ 1,412,711
=========        ===========
Net income allocated to the Wells REIT                      $ 309,100        $   917,485
=========        ===========

Since the Cinemark Building was purchased in December 1999, comparable
income and expense figures for the prior period are not available.

The Metris Building

Three Months       Nine Months
Ended              Ended
Sept. 30, 2000    Sept. 30, 2000
--------------    --------------

Revenues:
Rental income                                            $ 308,459         $ 790,503
---------         ---------
Expenses:
Depreciation                                               120,792           318,298
Management and leasing expenses                             13,365            34,102
Other operating expenses                                     3,892            10,970
---------         ---------
138,049           363,370
---------         ---------
Net income                                                  $ 170,410         $ 427,133
=========         =========
Occupied percentage                                               100%              100%
=========         =========
Our ownership percentage                                          100%              100%
=========         =========
Cash distributed to the Wells REIT                          $ 281,392         $ 717,190
=========         =========
Net income allocated to the Wells REIT                      $ 170,410         $ 427,133
=========         =========

Since the Metris Building was purchased in February 2000, comparable
income and expense figures for the prior period are not available.

109

The Dial Building

Three Months         Seven Months
Ended                 Ended
Sept. 30, 2000       Sept. 30, 2000
--------------       --------------

Revenues:
Rental income                                $ 346,918            $ 705,027
---------            ---------
Expenses:
Depreciation                                   120,591              251,094
Management and leasing expenses                 15,710               32,122
Other operating expenses                        19,459               32,400
---------            ---------
155,760              315,616
---------            ---------
Net income                                      $ 191,158            $ 389,411
---------            ---------
Occupied percentage                                   100%                 100%
=========            =========
Our ownership percentage                              100%                 100%
=========            =========
Cash distributed to the Wells REIT              $ 325,069            $ 667,145
=========            =========
Net income allocated to the Wells REIT          $ 191,158            $ 389,411
=========            =========

Since the Dial Building was purchased in March 2000, comparable income
and expense figures for the prior period are not available.

The ASML Building

Three Months         Seven Months
Ended                 Ended
Sept. 30, 2000       Sept. 30, 2000
--------------       --------------

Revenues:
Rental income                                $ 586,875           $ 1,189,297
---------           -----------
Expenses:
Depreciation                                   193,620               391,056
Management and leasing expenses                 26,366                54,688
Other operating expenses                        75,823               131,993
---------           -----------
295,809               577,737
---------           -----------
Net income                                      $ 291,066           $   611,560
=========           ===========
Occupied percentage                                   100%                  100%
=========           ===========
Our ownership percentage                              100%                  100%
=========           ===========
Cash distributed to the Wells REIT              $ 401,031           $   835,306
=========           ===========
Net income allocated to the Wells REIT          $ 291,066           $   611,560
=========           ===========

Since the ASML Building was purchased in March 2000, comparable income
and expense figures for the prior period are not available.

110

The Motorola Tempe Building

Three Months         Seven Months
Ended                 Ended
Sept. 30, 2000       Sept. 30, 2000
--------------       --------------

Revenues:
Rental income                                                     $485,835              $986,539
------------         -------------
Expenses:
Depreciation                                                       184,064               366,103
Management and leasing expenses                                     20,654                42,352
Other operating expenses                                            84,162               150,817
------------         -------------
288,880               559,272
------------         -------------
Net income                                                           $196,955              $427,267
============         =============
Occupied percentage                                                       100%                  100%
============         =============
Our ownership percentage                                                  100%                  100%
============         =============
Cash distributed to the Wells REIT                                   $366,882              $764,851
============         =============
Net income allocated to the Wells REIT                               $196,955              $427,267
============         =============

Since the Motorola Tempe Building was purchased in March 2000, comparable
income and expense figures for the prior period are not available.

The Siemens Building/The XII-REIT Joint Venture

Three Months          Five Months
Ended                 Ended
Sept. 30, 2000       Sept. 30, 2000
--------------       --------------

Revenues:
Rental income                                                     $376,103              $598,678
------------         -------------
Expenses:
Depreciation                                                       106,736               176,070
Management and leasing expenses                                     14,736                18,020
Other operating expenses                                             1,805                 2,032
------------         -------------
123,277               196,122
------------         -------------
Net income                                                           $252,826              $402,556
============         =============
Occupied percentage                                                       100%                  100%
============         =============
Our ownership percentage                                                   50%                   50%
============         =============
Cash distributed to the Wells REIT                                   $155,462              $248,781
============         =============
Net income allocated to the Wells REIT                               $126,413              $201,278
============         =============

Since the Siemens Building was purchased in May 2000, comparative income
and expense figures for the prior period are not available.

111

The Avnet Building

Three Months          Four Months
Ended                 Ended
Sept. 30, 2000       Sept. 30, 2000
--------------       --------------

Revenues:
Rental income                                                     $442,449              $533,037
------------         -------------
Expenses:
Depreciation                                                       132,714               176,952
Management and leasing expenses                                     21,008                21,008
Other operating expenses                                            59,576                72,007
------------         -------------
213,298               269,967
------------         -------------
Net income                                                           $229,151              $263,070
============         =============
Occupied percentage                                                       100%                  100%
============         =============
Our ownership percentage                                                  100%                  100%
============         =============
Cash distributed to the Wells REIT                                   $298,703              $366,292
============         =============
Net income allocated to the Wells REIT                               $229,151              $263,070
============         =============

Since the Avnet Building was purchased in June 2000, comparable income and
expense figures for the prior period are not available.

The Delphi Building

Three Months          Four Months
Ended                 Ended
Sept. 30, 2000       Sept. 30, 2000
--------------       --------------

Revenues:
Rental income                                                     $516,205              $532,947
------------         -------------
Expenses:
Depreciation                                                       216,137               219,372
Management and leasing expenses                                     22,167                22,167
Other operating expenses                                             1,650                 8,782
------------         -------------
239,954               250,321
------------         -------------
Net income                                                           $276,251              $282,626
============         =============
Occupied percentage                                                       100%                  100%
============         =============
Our ownership percentage                                                  100%                  100%
============         =============
Cash distributed to the Wells REIT                                   $458,077              $461,653
============         =============
Net income allocated to the Wells REIT                               $276,251              $282,626
============         =============

Since the Delphi Building was purchased in June 2000, comparable income and
expense figures for the prior period are not available.

112

The Alstom Power Richmond Building (formerly the ABB Richmond Building)

Three Months
Ended
Sept. 30, 2000
--------------
Revenues:
Rental income                                                      $228,597
------------
Expenses:
Depreciation                                                        110,097
Management and leasing expenses                                      29,694
Other operating expenses                                            (34,658)
------------
105,133
------------
Net income                                                            $123,634
============
Occupied percentage                                                        100%
============
Our ownership percentage                                                   100%
============
Cash distributed to the Wells REIT                                    $243,186
============
Net income allocated to the Wells REIT                                $123,464
============

On July 24, 2000, Wells OP completed a build-to-suit four-story office
building containing approximately 99,057 rentable square feet on a 7.49 acre
tract of land in Richmond, Virginia (Alstom Power Richmond Building). The
aggregate of all costs and expenses incurred by Wells OP with respect to the
acquisition and construction of the Alstom Power Richmond Building was
$11,654,666.

The building is 100% leased to Alstom Power, Inc. with a lease expiration
of July 31, 2007. The monthly base rent for the Alstom Power Richmond Building
is $98,644. On December 30, 1999, ABB Power Generation, Inc. merged into ABB
Alstom Power, Inc., and on June 22, 2000, ABB Alstom Power, Inc. changed its
name to Alstom Power, Inc.

Since the Alstom Power Richmond Building was completed in July 2000,
comparable income and expense figures for the prior period are not available.

The Quest Building (formerly the Bake Parkway Building)/VIII-IX-REIT Joint
Venture

Three Months
Ended
Sept. 30, 2000
--------------
Revenues:
Rental income                                                       $259,148
-------------
Expenses:
Depreciation                                                          46,368
Management and leasing expenses                                            0
Other operating expenses                                              16,283
62,651
-------------
Net income                                                             $196,497
=============
Occupied percentage                                                         100%
=============
Our ownership percentage                                                      7%
=============
Cash distributed to the Wells REIT                                     $  8,842
=============
Net income allocated to the Wells REIT                                 $ 11,529
=============

113

On June 15, 2000, the VIII-IX-REIT Joint Venture was formed between Wells
OP and Fund VIII and IX Associates, a Georgia joint venture between Wells Fund
VIII and Wells Fund IX. On July 1, 2000, Fund VIII and IX Associates contributed
its interest in the two-story office building containing approximately 65,006
rentable square feet on a 4.4 acre tract of land located in Irvine, California
(Quest Building), formerly known as the Bake Parkway Building, to the VIII-IX-
REIT Joint Venture.

On August 1, 2000, Quest Software, Inc. commenced a 42 month lease for 100%
of the Quest Building.

Construction of tenant improvements to the Quest Building required
under the Quest lease and other costs and expenses related to the Quest Building
are being funded by capital contributions from Wells OP and are anticipated to
cost approximately $1,250,000 in the aggregate.

Inflation

The real estate market has not been affected significantly by inflation in
the past three years due to the relatively low inflation rate. There are
provisions in a majority of our tenant leases to protect us from the impact of
inflation. These leases contain common area maintenance charges, real estate tax
and insurance reimbursements on a per square foot basis, or in some cases,
annual reimbursement of operating expenses above a certain per square foot
allowance. These provisions should reduce our exposure to increases in costs and
operating expenses resulting from inflation.

Prior Performance Summary

The information presented in this section represents the historical
experience of real estate programs managed by Wells Capital and its affiliates.
Investors in the Wells REIT should not assume that they will experience returns,
if any, comparable to those experienced by investors in such prior Wells real
estate programs.

Of the 13 publicly offered real estate limited partnerships in which Leo F.
Wells, III has served as a general partner, 12 of such limited partnerships have
completed their respective offerings. These 12 limited partnerships and the year
in which each of their offerings was completed are:

1.    Wells Real Estate Fund I (1986),
2.    Wells Real Estate Fund II (1988),
3.    Wells Real Estate Fund II-OW (1988),
4.    Wells Real Estate Fund III, L.P. (1990),
5.    Wells Real Estate Fund IV, L.P. (1992),
6.    Wells Real Estate Fund V, L.P. (1993),
7.    Wells Real Estate Fund VI, L.P. (1994),
8.    Wells Real Estate Fund VII, L.P. (1995),
9.    Wells Real Estate Fund VIII, L.P. (1996),
10.    Wells Real Estate Fund IX, L.P. (1996),
11.    Wells Real Estate Fund X, L.P. (1997), and
12.    Wells Real Estate Fund XI, L.P. (1998).

In addition to the foregoing real estate limited partnerships, Wells
Capital and its affiliates sponsored the initial public offering of shares of
common stock of the Wells REIT. The initial public offering began on January 30,
1998 and was terminated on December 19, 1999. We received gross

114

proceeds of approximately $132,181,919 from the sale of approximately 13,218,192
shares from our initial public offering.

Wells Capital and its affiliates sponsored a second public offering of
shares of common stock of the Wells REIT. The second public offering began on
December 20, 1999 and was terminated on December 19, 2000. As of December 10,
2000, we had received gross proceeds of approximately $169,671,659 from the sale
of approximately 16,967,166 shares from our second public offering.

Wells Capital and its affiliates are currently also sponsoring a public
offering of 7,000,000 units on behalf of Wells Real Estate Fund XII, L.P., a
public limited partnership. Wells Fund XII began its offering on March 22, 1999
and, as of September 30, 2000, Wells Fund XII had raised $20,618,517 from 1,082
investors.

The Prior Performance Tables included in the back of this prospectus set
forth information as of the dates indicated regarding certain of these Wells
programs as to (1) experience in raising and investing funds (Table I); (2)
compensation to sponsor (Table II); and (3) annual operating results of prior
programs (Table III). No information is given as to results of completed
programs or sales or disposals of property because, as of December 31, 1999, the
date of the Prior Performance Tables, none of the Wells programs had sold any of
their properties.

In addition to the real estate programs sponsored by Wells Capital and its
affiliates discussed above, they are also sponsoring an index mutual fund which
invests in various REIT stocks known as the Wells S&P REIT Index Fund (REIT
Fund). The REIT Fund is a mutual fund which seeks to provide investment results
corresponding to the performance of the S&P REIT Index by investing in the REIT
stocks included in the S&P REIT Index. The REIT Fund began its offering on
January 12, 1998 and, as of September 30, 2000, the REIT Fund had raised
$48,330,317 from 2,080 investors.

Publicly Offered Unspecified Real Estate Programs

Wells Capital and its affiliates have previously sponsored the above listed
12 publicly offered real estate limited partnerships and are currently
sponsoring Wells Fund XII offered on an unspecified property or "blind pool"
basis. The total amount of funds raised from investors in the offerings of these
13 publicly offered limited partnerships, as of September 30, 2000, was
approximately $284,902,809, and the total number of investors in such programs
was approximately 25,627.

The investment objectives of each of the other Wells programs are
substantially identical to the investment objectives of the Wells REIT.
Substantially all of the proceeds of the offerings of Wells Fund I, Wells Fund
II, Wells Fund II-OW, Wells Fund III, Wells Fund IV, Wells Fund V, Wells Fund
VI, Wells Fund VII, Wells Fund VIII, Wells Fund IX, Wells Fund X and Wells Fund
XI available for investment in real properties have been invested in properties.
As of September 30, 2000, approximately 65% of the aggregate gross rental income
of the 12 publicly offered programs listed above was derived from tenants which
are corporations, each of which at the time of lease execution had a net worth
of at least $100,000,000 or whose lease obligations were guaranteed by another
corporation with a net worth of at least $100,000,000.

Because of the cyclical nature of the real estate market, decreases in net
income of the public partnerships could occur at any time in the future when
economic conditions decline. Wells Fund I recently sold one of its buildings and
is in the process of marketing the remainder of its properties for sale.
However, none of the other Wells programs has liquidated its real estate
portfolio or, except for the one building recently sold by Wells Fund I, sold
any of its real properties to date. Accordingly, no

115

assurance can be made that the Wells programs will ultimately be successful in
meeting their investment objectives. (See "Risk Factors.")

The aggregate dollar amount of the acquisition and development costs of
the properties purchased by the previously sponsored Wells programs, as of
December 31, 1999, was $370,247,877 of which $332,000 (or approximately .09%)
had not yet been expended on the development of certain of the projects which
are still under construction. Of the aggregate amount, approximately 82% was or
will be spent on acquiring or developing office buildings, and approximately 18%
was or will be spent on acquiring or developing shopping centers. Of the
aggregate amount, approximately 9% was or will be spent on new properties, 58%
on existing or used properties and 33% on construction properties. Following is
a table showing a breakdown of the aggregate amount of the acquisition and
development costs of the properties purchased by the Wells REIT, Wells Fund XII
and the 12 Wells programs listed above as of September 30, 2000:

Type of Property           New              Used              Construction
----------------           ---              ----              ------------

Office Buildings         29.0%             38.2%                  19.1%
Shopping Centers            0%              4.5%                   9.2%

Wells Fund I terminated its offering on September 5, 1986, and received
gross proceeds of $35,321,000 representing subscriptions from 4,895 limited
partners. $24,679,000 of the gross proceeds were attributable to sales of Class
A Units, and $10,642,000 of the gross proceeds were attributable to sales of
Class B Units. Limited partners in Wells Fund I have no right to change the
status of their units from Class A to Class B or vice versa. Wells Fund I owns
interests in the following properties:

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

.    a commercial office building in Atlanta, Georgia;

.    a shopping center in DeKalb County, Georgia having Kroger as the
anchor tenant;

.    a shopping center in Knoxville, Tennessee;

.    a shopping center in Cherokee County, Georgia having Kroger as the
anchor tenant; and

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

The prospectus of Wells Fund I provided that the properties purchased by
Wells Fund I would typically be held for a period of eight to 12 years, but that
the general partners may exercise their discretion as to whether and when to
sell the properties owned by Wells Fund I and that the general partners were
under no obligation to sell the properties at any particular time. Wells Fund I
recently sold one of two commercial office buildings known as Peachtree Place
located in a suburb of Atlanta, Georgia. Wells Fund I is in the process of
marketing the remainder of its properties for sale pending the outcome of a
proxy solicitation recommending that the Class A Limited Partners vote in favor
of an amendment to the Partnership Agreement to change the method of
distribution of net sale proceeds.

Wells Fund II and Wells Fund II-OW terminated their offerings on September
7, 1988, and received aggregate gross proceeds of $36,870,250 representing
subscriptions from 4,659 limited partners. $28,829,000 of the gross proceeds
were attributable to sales of Class A Units, and $8,041,250 of the gross
proceeds were attributable to sales of Class B Units. Limited partners in Wells
Fund II and Wells Fund II-OW have no right to change the status of their units
from Class A to Class B or vice versa. Wells Fund

116

II and Wells Fund II-OW own all of their properties through a joint venture,
which owns interests in the following properties:

.    a shopping center in Cherokee County, Georgia having Kroger as the
anchor tenant;

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

.    a two-story office building in Charlotte, North Carolina leased to
First Union Bank;

.    a four-story office building in Houston, Texas leased to The Boeing
Company;

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

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

The prospectus of Wells Fund II and Wells Fund II-OW provided that the
properties purchased by Wells Fund II and Wells Fund II-OW would typically be
held for a period of eight to 12 years, but that the general partners may
exercise their discretion as to whether and when to sell the properties owned by
Wells Fund II and Wells Fund II-OW and that the partnerships were under no
obligation to sell their properties at any particular time. Wells Fund II and
Wells Fund II-OW acquired their properties between 1987 and 1989, and have not
yet liquidated or sold any of their properties.

Wells Fund III terminated its offering on October 23, 1990, and received
gross proceeds of $22,206,310 representing subscriptions from 2,700 limited
partners. $19,661,770 of the gross proceeds were attributable to sales of Class
A Units, and $2,544,540 of the gross proceeds were attributable to sales of
Class B Units. Limited partners in Wells Fund III have no right to change the
status of their units from Class A to Class B or vice versa. Wells Fund III owns
interests in the following properties:

.    a four-story office building in Houston, Texas leased to The Boeing
Company;

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

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

.    a two-story office building in Greenville, North Carolina leased to
International Business Machines Corporation (IBM);

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

.    a two-story office building in Richmond, Virginia leased to General
Electric.

Wells Fund IV terminated its offering on February 29, 1992, and received
gross proceeds of $13,614,655 representing subscriptions from 1,286 limited
partners. $13,229,150 of the gross proceeds were attributable to sales of Class
A Units, and $385,505 of the gross proceeds were attributable to sales of Class
B Units. Limited partners in Wells Fund IV have no right to change the status of
their units from Class A to Class B or vice versa. Wells Fund IV owns interests
in the following properties:

.    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 General
Electric; and

117

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

Wells Fund V terminated its offering on March 3, 1993, and received gross
proceeds of $17,006,020 representing subscriptions from 1,667 limited partners.
$15,209,666 of the gross proceeds were attributable to sales of Class A Units,
and $1,796,354 of the gross proceeds were attributable to sales of Class B
Units. Limited partners in Wells Fund V who purchased Class B Units are entitled
to change the status of their units to Class A, but limited partners who
purchased Class A Units are not entitled to change the status of their units to
Class B. After taking into effect conversion elections made by limited partners
subsequent to their subscription for units, as of December 31, 1999, $15,664,160
of units of Wells Fund V were treated as Class A Units, and $1,341,860 of units
were treated as Class B Units. Wells Fund V owns interests in the following
properties:

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

.    two two-story office buildings in Stockbridge, Georgia;

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

.    two restaurant properties in Stockbridge, Georgia leased to Apple
Restaurants, Inc. and Glenn's Open Pit Bar-B-Que; and

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

Wells Fund VI terminated its offering on April 4, 1994, and received gross
proceeds of $25,000,000 representing subscriptions from 1,793 limited partners.
$19,332,176 of the gross proceeds were attributable to sales of Class A Units,
and $5,667,824 of the gross proceeds were attributable to sales of Class B
Units. Limited partners in Wells Fund VI are entitled to change the status of
their units from Class A to Class B and vice versa. After taking into effect
conversion elections made by limited partners subsequent to their subscription
for units, as of December 31, 1999, $21,959,690 of units of Wells Fund VI were
treated as Class A Units, and $3,040,310 of units were treated as Class B Units.
Wells Fund VI owns interests in the following properties:

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

.    two restaurant properties in Stockbridge, Georgia leased to Apple
Restaurants, Inc. and Glenn's Open Pit Bar-B-Que;

.    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 shopping center in Cherokee County, Georgia having Kroger as the
anchor tenant;

.    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

118

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

Wells Fund VII terminated its offering on January 5, 1995, and received
gross proceeds of $24,180,174 representing subscriptions from 1,910 limited
partners. $16,788,095 of the gross proceeds were attributable to sales of Class
A Units, and $7,392,079 of the gross proceeds were attributable to sales of
Class B Units. Limited partners in Wells Fund VII are entitled to change the
status of their units from Class A to Class B and vice versa. After taking into
effect conversion elections made by limited partners subsequent to their
subscriptions for units, as of December 31, 1999, $20,362,672 of units in Wells
Fund VII were treated as Class A Units, and $3,817,502 of units were treated as
Class B Units. Wells Fund VII owns interests in the following properties:

.    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 shopping center in Cherokee County, Georgia having Kroger as the
anchor tenant;

.    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.

Certain financial information for Wells Fund VII is summarized below:

--------------------------------------------------------------------------------------------------------
1999             1998            1997             1996              1995
--------------------------------------------------------------------------------------------------------

Gross Revenues             $962,630        $846,306         $816,237         $543,291          $925,246
--------------------------------------------------------------------------------------------------------
Net Income                 $895,795        $754,334         $733,149         $452,776          $804,043
--------------------------------------------------------------------------------------------------------

Wells Fund VIII terminated its offering on January 4, 1996, and received
gross proceeds of $32,042,689 representing subscriptions from 2,241 limited
partners. $26,135,339 of the gross proceeds were attributable to sales of Class
A Units, and $5,907,350 were attributable to sales of Class B Units. Limited
partners in Wells Fund VIII are entitled to change the status of their units
from Class A to Class B and vice versa. After taking into effect conversion
elections made by limited partners subsequent to their subscriptions for units
and certain repurchases made by Wells Fund VIII, as of December 31, 1999,
$4,748,439 of units in Wells Fund VIII were treated as Class A Units, and
$27,284,250 of units were treated as Class B Units. Wells Fund VIII owns
interests in the following properties:

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

119

.    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.

Certain financial information for Wells Fund VIII is summarized below:

--------------------------------------------------------------------------------------------------------
1999             1998            1997             1996               1995
--------------------------------------------------------------------------------------------------------

Gross Revenues             $1,360,497      $1,362,513       $1,204,018       $1,057,694         $402,428
--------------------------------------------------------------------------------------------------------
Net Income                 $1,266,946      $1,269,171       $1,102,567       $  936,590         $273,914
--------------------------------------------------------------------------------------------------------

Wells Fund IX terminated its offering on December 30, 1996, and received
gross proceeds of $35,000,000 representing subscriptions from 2,098 limited
partners. $29,359,310 of the gross proceeds were attributable to sales of Class
A Units, and $5,640,690 were attributable to sales of Class B Units. After
taking into effect conversion elections made by limited partners subsequent to
their subscriptions for units, as of December 31, 1999, $30,723,220 of units in
Wells Fund IX were treated as Class A Units, and $4,276,780 of units were
treated as Class B Units. Wells Fund IX owns interests in the following
properties:

.    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 building in Boulder County, Colorado; and

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

120

Certain financial information for Wells Fund IX is summarized below:

---------------------------------------------------------------------------
1999           1998            1997          1996
---------------------------------------------------------------------------
Gross Revenues    $1,593,734     $1,561,456     $1,199,300     $406,891
---------------------------------------------------------------------------
Net Income        $1,490,331     $1,449,955     $1,091,766     $298,756
---------------------------------------------------------------------------

Wells Fund X terminated its offering on December 30, 1997, and received
gross proceeds of $27,128,912 representing subscriptions from 1,806 limited
partners. $21,160,992 of the gross proceeds were contributable to sales of Class
A Units, and $5,967,920 were attributable to sales of Class B Units. After
taking into effect conversion elections made by limited partners subsequent to
their subscriptions for units, as of December 31, 1999, $21,669,662 of units in
Wells Fund X were treated as Class A Units and $5,454,250 of units were treated
as Class B Units. Wells Fund X owns interests in the following properties:

.    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 office building in Boulder County, Colorado;

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

.    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.

Certain financial information for Wells Fund X is summarized below:

----------------------------------------------------------------------
1999            1998              1997
----------------------------------------------------------------------
Gross Revenues     $1,309,281      $1,204,597         $372,507
----------------------------------------------------------------------
Net Income         $1,192,318      $1,050,329         $278,025
----------------------------------------------------------------------

Wells Fund XI terminated its offering on December 30, 1998, and
received gross proceeds of $16,532,802 representing subscriptions from 1,345
limited partners. $13,029,424 of the gross proceeds were attributable to sales
of Class A Units and $3,503,378 were attributable to sales of Class B Units.
After taking into effect conversion elections made by limited partners
subsequent to their subscriptions for units, as of December 31, 1999,
$13,369,062 of units in Wells Fund XI were treated as Class A Units and
$3,163,740 of units were treated as Class B Units. Wells Fund XI owns interests
in the following properties:

.    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 office building in Boulder County, Colorado;

121

.    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.

Certain financial information for Wells Fund XI is summarized below:

-------------------------------------------------------
1999             1998
-------------------------------------------------------
Gross Revenues        $766,586        $262,729
-------------------------------------------------------
Net Income            $630,528        $143,295
-------------------------------------------------------

Wells Fund XII began its offering on March 22, 1999. As of September
30, 2000, Wells Fund XII had received gross proceeds of $20,618,517 representing
subscriptions from 1,082 limited partners. $15,959,857 of the gross proceeds
were attributable to sales of cash preferred units and $4,658,660 were
attributable to sales of tax preferred units. Wells Fund XII owns interests in
the following properties:

.    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.; and

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

The information set forth above should not be considered indicative of
results to be expected from the Wells REIT.

The foregoing properties in which the above 13 limited partnerships have
invested have all been acquired on an all cash basis.

Leo F. Wells, III and Wells Partners, L.P. are the general partners of
Wells Fund IV, Wells Fund V, Wells Fund VI, Wells Fund VII, Wells Fund VIII,
Wells Fund IX, Wells Fund X, Wells Fund XI and

122

Wells Fund XII. Wells Capital, which is the general partner of Wells Partners,
L.P., and Leo F. Wells, III are the general partners of Wells Fund I, Wells Fund
II, Wells Fund II-OW and Wells Fund III.

Potential investors are encouraged to examine the Prior Performance Tables
included in the back of the prospectus for more detailed information regarding
the prior experience of the sponsors. In addition, upon request, prospective
investors may obtain from us without charge copies of offering materials and any
reports prepared in connection with any of the Wells programs, including a copy
of the most recent Annual Report on Form 10-K filed with the Securities and
Exchange Commission. For a reasonable fee, we will also furnish upon request
copies of the exhibits to any such Form 10-K. Any such request should be
directed to our secretary. Additionally, Table VI contained in Part II of the
registration statement, which is not part of this prospectus, gives certain
additional information relating to properties acquired by the Wells programs. We
will furnish, without charge, copies of such table upon request.

Federal Income Tax Considerations

General

The following is a summary of material federal income tax considerations
associated with an investment in the shares. This summary does not address all
possible tax considerations that may be material to an investor and does not
constitute tax advice. Moreover, this summary does not deal with all tax aspects
that might be relevant to you, as a prospective shareholder, in light of your
personal circumstances; nor does it deal with particular types of shareholders
that are subject to special treatment under the Internal Revenue Code, such as
insurance companies, tax-exempt organizations, financial institutions or broker-
dealers, or foreign corporations or persons who are not citizens or residents of
the United States (Non-US Shareholders). The Internal Revenue Code provisions
governing the federal income tax treatment of REITs are highly technical and
complex, and this summary is qualified in its entirety by the express language
of applicable Internal Revenue Code provisions, Treasury Regulations promulgated
thereunder and administrative and judicial interpretations thereof.

We urge you, as a prospective investor, to consult your own tax advisor
regarding the specific tax consequences to you of a purchase of shares,
ownership and sale of the shares and of our election to be taxed as a REIT,
including the federal, state, local, foreign and other tax consequences of such
purchase, ownership, sale and election.

Opinion of Counsel

Holland & Knight LLP has acted as our counsel, has reviewed this summary
and is of the opinion that it fairly summarizes the federal income tax
considerations addressed that are material to shareholders. It is also the
opinion of our counsel that it is more likely than not that we qualified to be
taxed as a REIT under the Internal Revenue Code for our taxable year ended
December 31, 1999, provided that we have operated and will continue to operate
in accordance with various assumptions and the factual representations we made
to counsel concerning our business, properties and operations. It must be
emphasized that Holland & Knight LLP's opinion is based on various assumptions
and is conditioned upon the assumptions and representations we made concerning
our business and properties. Moreover, our qualification for taxation as a REIT
depends on our ability to meet the various qualification tests imposed under the
Internal Revenue Code discussed below, the results of which will not be reviewed
by Holland & Knight LLP. Accordingly, we cannot assure you that the actual
results of our operations for any one taxable year will satisfy these
requirements. (See "Risk Factors -- Failure to Qualify as a REIT.")

123

The statements made in this section of the prospectus and in the opinion of
Holland & Knight LLP are based upon existing law and Treasury Regulations, as
currently applicable, currently published administrative positions of the
Internal Revenue Service and judicial decisions, all of which are subject to
change, either prospectively or retroactively. We cannot assure you that any
changes will not modify the conclusions expressed in counsel's opinion.
Moreover, an opinion of counsel is not binding on the Internal Revenue Service
and we cannot assure you that the Internal Revenue Service will not successfully
challenge our status as a REIT.

Taxation of the Company

If we qualify for taxation as a REIT, we generally will not be subject to
federal corporate income taxes on that portion of our ordinary income or capital
gain that we distribute currently to our shareholders, because the REIT
provisions of the Internal Revenue Code generally allow a REIT to deduct
distributions paid to its shareholders. This substantially eliminates the
federal "double taxation" on earnings (taxation at both the corporate level and
shareholder level) that usually results from an investment in a corporation.

Even if we qualify for taxation as a REIT, however, we will be subject to
federal income taxation as follows:

.    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 (i) 85%
of our REIT ordinary income for the year, (ii) 95% of our REIT capital
gain net income for such year and (iii) 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 ten year period beginning on the date on which 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).

124

Requirements for Qualification as a REIT

We elected to be taxable as a REIT for our taxable year ended December 31,
1998. In order for us to qualify as a REIT, however, we had to meet and we must
continue to meet the requirements discussed below relating to our organization,
sources of income, nature of assets and distributions of income to our
shareholders.

Organizational Requirements

In order to qualify for taxation as a REIT under the Internal Revenue
Code, we must:

.    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 shareholders for at least 335 days of each taxable
year of 12 months; and

.    not be closely held.

As a Maryland corporation, we satisfy the first requirement, and we have
filed an election to be taxed as a REIT with the IRS. In addition, we are
managed by a board of directors, we have transferable shares and we do not
intend to operate as a financial institution or insurance company. We utilize
the calendar year for federal income tax purposes, and we have more than 100
shareholders. We would be treated as closely held only if five or fewer
individuals or certain tax-exempt entities own, directly or indirectly, more
than 50% (by value) of our shares at any time during the last half of our
taxable year. For purposes of the closely-held test, the Internal Revenue Code
generally permits a look-through for pension funds and certain other tax-exempt
entities to the beneficiaries of the entity to determine if the REIT is closely
held. Five or fewer individuals or tax-exempt entities have never owned more
than 50% of our outstanding shares during the last half of any taxable year.

We are authorized to refuse to transfer our shares to any person if the
sale or transfer would jeopardize our ability to satisfy the REIT ownership
requirements. There can be no assurance that a refusal to transfer will be
effective. However, based on the foregoing, we should currently satisfy the
organizational requirements, including the share ownership requirements.
Notwithstanding compliance with the share ownership requirements outlined above,
tax-exempt shareholders may be required to treat all or a portion of their
distributions from us as "unrelated business taxable income" if tax-exempt
shareholders, in the aggregate, exceed certain ownership thresholds set forth in
the Internal Revenue Code. (See "Taxation of Tax-Exempt Shareholders.")

125

Ownership of Interests in Partnerships and Qualified REIT Subsidiaries

In the case of a REIT that is a partner in a partnership, Treasury
Regulations provide that the REIT is deemed to own its proportionate share,
based on its interest in partnership capital, of the assets of the partnership
and is deemed to have earned its allocable share of partnership income. Also, if
a REIT owns a qualified REIT subsidiary, which is defined as a corporation
wholly-owned by a REIT, the REIT will be deemed to own all of the subsidiary's
assets and liabilities and it will be deemed to be entitled to treat the income
of that subsidiary as its own. In addition, the character of the assets and
gross income of the partnership or qualified REIT subsidiary shall retain the
same character in the hands of the REIT for purposes of satisfying the gross
income tests and asset tests set forth in the Internal Revenue Code.

Operational Requirements -- Gross Income Tests

To maintain our qualification as a REIT, we must satisfy annually two gross
income requirements.

.    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 m et:

.    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

.    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

126

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.

If we acquire ownership of property by reason of the default of a borrower
on a loan or possession of property by reason of a tenant default, if the
property qualifies and we elect to treat it as foreclosure property, the income
from the property will qualify under the 75% Income Test and the 95% Income Test
notwithstanding its failure to satisfy these requirements for three years, or if
extended for good cause, up to a total of six years. In that event, we must
satisfy a number of complex rules, one of which is a requirement that we operate
the property through an independent contractor. We will be subject to tax on
that portion of our net income from foreclosure property that does not otherwise
qualify under the 75% Income Test.

Prior to the making of investments in properties, we may satisfy the 75%
Income Test and the 95% Income Test by investing in liquid assets such as
government securities or certificates of deposit, but earnings from those types
of assets are qualifying income under the 75% Income Test only for one year from
the receipt of proceeds. Accordingly, to the extent that offering proceeds have
not been invested in properties prior to the expiration of this one year period,
in order to satisfy the 75% Income Test, we may invest the offering proceeds in
less liquid investments such as mortgage-backed securities, maturing mortgage
loans purchased from mortgage lenders or shares in other REITs. We expect to
receive proceeds from the offering in a series of closings and to trace those
proceeds for purposes of determining the one year period for "new capital
investments." No rulings or regulations have been issued under the provisions of
the Internal Revenue Code governing "new capital investments," however, so that
there can be no assurance that the Internal Revenue Service will agree with this
method of calculation.

Except for amounts received with respect to certain investments of cash
reserves, we anticipate that substantially all of our gross income will be from
sources that will allow us to satisfy the income tests described above; however,
there can be no assurance given in this regard. Notwithstanding our failure to
satisfy one or both of the 75% Income and the 95% Income Tests for any taxable
year, we may still qualify as a REIT for that year if we are eligible for relief
under specific provisions of the Internal Revenue Code. These relief provisions
generally will be available if:

.    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.

It is not possible, however, to state whether, in all circumstances, we would be
entitled to the benefit of these relief provisions. For example, if we fail to
satisfy the gross income tests because nonqualifying income that we
intentionally earn exceeds the limits on this income, the Internal Revenue
Service could conclude that our failure to satisfy the tests was not due to
reasonable cause. As discussed above in "Taxation of the Company," even if these
relief provisions apply, a tax would be imposed with respect to the excess net
income.

127

Operational Requirements -- Asset Tests

At the close of each quarter of our taxable year, we also must satisfy
three tests (Asset Tests) relating to the nature and diversification of our
assets.

.    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 real property,
mortgages on real property, shares in other qualified REITs and a
proportionate share of any real estate assets owned by a partnership
in which we are a partner or of any qualified REIT subsidiary of ours.

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

.    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.

The 5% test must generally be met for any quarter in which we acquire
securities. Further, if we meet the Asset Tests at the close of any quarter, we
will not lose our REIT status for a failure to satisfy the Asset Tests at the
end of a later quarter if such failure occurs solely because of changes in asset
values. If our failure to satisfy the Asset Tests results from an acquisition of
securities or other property during a quarter, we can cure the failure by
disposing of a sufficient amount of nonqualifying assets within 30 days after
the close of that quarter. We maintain, and will continue to maintain, adequate
records of the value of our assets to ensure compliance with the Asset Tests and
will take other action within 30 days after the close of any quarter as may be
required to cure any noncompliance.

Operational Requirements -- Annual Distribution Requirement

In order to be taxed as a REIT, we are required to make dividend
distributions, other than capital gain distributions, to our shareholders each
year in the amount of at least 95% of our REIT taxable income (computed without
regard to the dividends paid deduction and our capital gain and subject to
certain other potential adjustments) for all tax years prior to 2001 and at
least 90% of our REIT taxable income for all future years beginning with the
year 2001.

While we must generally pay dividends in the taxable year to which they
relate, we may also pay dividends in the following taxable year if (1) they are
declared before we timely file our federal income tax return for the taxable
year in question, and if (2) they are paid on or before the first regular
dividend payment date after the declaration.

Even if we satisfy the foregoing dividend distribution requirement and,
accordingly, continue to qualify as a REIT for tax purposes, we will still be
subject to tax on the excess of our net capital gain and our REIT taxable
income, as adjusted, over the amount of dividends distributed to shareholders.

In addition, if we fail to distribute during each calendar year at least
the sum of:

.    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

128

.    any undistributed taxable income from prior periods,

we will be subject to a 4% excise tax on the excess of the amount of such
required distributions over amounts actually distributed during such year.

We intend to make timely distributions sufficient to satisfy this
requirement; however, it is possible that we may experience timing differences
between (1) the actual receipt of income and payment of deductible expenses, and
(2) the inclusion of that income. It is also possible that we may be allocated a
share of net capital gain attributable to the sale of depreciated property that
exceeds our allocable share of cash attributable to that sale.

In such circumstances, we may have less cash than is necessary to meet our
annual distribution requirement or to avoid income or excise taxation on certain
undistributed income. We may find it necessary in such circumstances to arrange
for financing or raise funds through the issuance of additional shares in order
to meet our distribution requirements, or we may pay taxable stock distributions
to meet the distribution requirement.

If we fail to satisfy the distribution requirement for any taxable year by
reason of a later adjustment to our taxable income made by the Internal Revenue
Service, we may be able to pay "deficiency dividends" in a later year and
include such distributions in our deductions for dividends paid for the earlier
year. In such event, we may be able to avoid being taxed on amounts distributed
as deficiency dividends, but we would be required in such circumstances to pay
interest to the Internal Revenue Service based upon the amount of any deduction
taken for deficiency dividends for the earlier year.

As noted above, we may also elect to retain, rather than distribute, our
net long-term capital gains. The effect of such an election would be as follows:

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

.    shareholders, 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 shareholder'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 shareholder's long-term
capital gains.

In computing our REIT taxable income, we will use the accrual method of
accounting and depreciate depreciable property under the alternative
depreciation system. We are required to file an annual federal income tax
return, which, like other corporate returns, is subject to examination by the
Internal Revenue Service. Because the tax law requires us to make many judgments
regarding the proper treatment of a transaction or an item of income or
deduction, it is possible that the Internal Revenue Service will challenge
positions we take in computing our REIT taxable income and our distributions.
Issues could arise, for example, with respect to the allocation of the purchase
price of properties between depreciable or amortizable assets and nondepreciable
or non-amortizable assets such as land and the current deductibility of fees
paid to Wells Capital or its affiliates. Were the Internal Revenue Service to
successfully challenge our characterization of a transaction or determination of
our REIT taxable income, we could be found to have failed to satisfy a
requirement for qualification as a REIT. If, as a result of a challenge, we are
determined to have failed to satisfy the distribution requirements for a taxable
year, we would be disqualified as a REIT, unless we were permitted to pay a
deficiency distribution to our

129

shareholders and pay interest thereon to the Internal Revenue Service, as
provided by the Internal Revenue Code. A deficiency distribution cannot be used
to satisfy the distribution requirement, however, if the failure to meet the
requirement is not due to a later adjustment to our income by the Internal
Revenue Service.

Operational Requirements -- Recordkeeping

In order to continue to qualify as a REIT, we must maintain certain records
as set forth in applicable Treasury Regulations. Further, we must request, on an
annual basis, certain information designed to disclose the ownership of our
outstanding shares. We intend to comply with such requirements.

Failure to Qualify as a REIT

If we fail to qualify as a REIT for any reason in a taxable year and
applicable relief provisions do not apply, we will be subject to tax (including
any applicable alternative minimum tax) on our taxable income at regular
corporate rates. We will not be able to deduct dividends paid to our
shareholders in any year in which we fail to qualify as a REIT. We also will be
disqualified for the four taxable years following the year during which
qualification was lost unless we are entitled to relief under specific statutory
provisions. (See "Risk Factors -- Federal Income Tax Risks")

Sale-Leaseback TransactionsSale-Leaseback Transactions

Some of our investments may be in the form of sale-leaseback transactions.
In most instances, depending on the economic terms of the transaction, we will
be treated for federal income tax purposes as either the owner of the property
or the holder of a debt secured by the property. We do not expect to request an
opinion of counsel concerning the status of any leases of properties as true
leases for federal income tax purposes.

The Internal Revenue Service may take the position that a specific sale-
leaseback transaction which we treat as a true lease is not a true lease for
federal income tax purposes but is, instead, a financing arrangement or loan. We
may also structure some sale-leaseback transactions as loans. In this event, for
purposes of the Asset Tests and the 75% Income Test, each such loan likely would
be viewed as secured by real property to the extent of the fair market value of
the underlying property. We expect that, for this purpose, the fair market value
of the underlying property would be determined without taking into account our
lease. If a sale-leaseback transaction were so recharacterized, we might fail to
satisfy the Asset Tests or the Income Tests and, consequently, lose our REIT
status effective with the year of recharacterization. Alternatively, the amount
of our REIT taxable income could be recalculated which might also cause us to
fail to meet the distribution requirement for a taxable year.

Taxation of U.S. Shareholders

Definition

In this section, the phrase "U.S. shareholder" means a holder of shares
that for federal income tax purposes:

.    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;

130

.     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.

For any taxable year for which we qualify for taxation as a REIT, amounts
distributed to taxable U.S. shareholders will be taxed as described below.

Distributions Generally

Distributions to U.S. shareholders, other than capital gain
distributions discussed below, will constitute dividends up to the amount of our
current or accumulated earnings and profits and will be taxable to the
shareholders as ordinary income. These distributions are not eligible for the
dividends received deduction generally available to corporations. To the extent
that we make a distribution in excess of our current or accumulated earnings and
profits, the distribution will be treated first as a tax-free return of capital,
reducing the tax basis in each U.S. shareholder's shares, and the amount of each
distribution in excess of a U.S. shareholder's tax basis in its shares will be
taxable as gain realized from the sale of its shares. Distributions that we
declare in October, November or December of any year payable to a shareholder of
record on a specified date in any of these months will be treated as both paid
by us and received by the shareholder on December 31 of the year, provided that
we actually pay the distribution during January of the following calendar year.
U.S. shareholders may not include any of our losses on their own federal income
tax returns.

We will be treated as having sufficient earnings and profits to treat
as a dividend any distribution by us up to the amount required to be distributed
in order to avoid imposition of the 4% excise tax discussed above. Moreover, any
"deficiency distribution" will be treated as an ordinary or capital gain
distribution, as the case may be, regardless of our earnings and profits. As a
result, shareholders may be required to treat as taxable some distributions that
would otherwise result in a tax-free return of capital.

Capital Gain Distributions

Distributions to U.S. shareholders that we properly designate as
capital gain distributions will be treated as long-term capital gains, to the
extent they do not exceed our actual net capital gain, for the taxable year
without regard to the period for which the U.S. shareholder has held his stock.

Passive Activity Loss and Investment Interest Limitations

Our distributions and any gain you realize from a disposition of shares
will not be treated as passive activity income, and shareholders may not be able
to utilize any of their "passive losses" to offset this income in their personal
tax returns. Our distributions (to the extent they do not constitute a return of
capital) will generally be treated as investment income for purposes of the
limitations on the deduction of investment interest. Net capital gain from a
disposition of shares and capital gain distributions generally will be included
in investment income for purposes of the investment interest deduction
limitations only if, and to the extent, you so elect, in which case any such
capital gains will be taxed as ordinary income.

131

Certain Dispositions of the Shares

In general, any gain or loss realized upon a taxable disposition of
shares by a U.S. shareholder who is not a dealer in securities will be treated
as long-term capital gain or loss if the shares have been held for more than 12
months and as short-term capital gain or loss if the shares have been held for
12 months or less. If, however, a U.S. shareholder has received any capital
gains distributions with respect to his shares, any loss realized upon a taxable
disposition of shares held for six months or less, to the extent of the capital
gains distributions received with respect to his shares, will be treated as
long-term capital loss. Also, the Internal Revenue Service is authorized to
issue Treasury Regulations that would subject a portion of the capital gain a
U.S. shareholder recognizes from selling his shares or from a capital gain
distribution to a tax at a 25% rate, to the extent the capital gain is
attributable to depreciation previously deducted.

Information Reporting Requirements and Backup Withholding for U.S.
Shareholders

Under some circumstances, U.S. shareholders may be subject to backup
withholding at a rate of 31% on payments made with respect to, or cash proceeds
of a sale or exchange of, our shares. Backup withholding will apply only if the
shareholder:

.     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.

Backup withholding will not apply with respect to payments made to some
shareholders, such as corporations and tax-exempt organizations. Backup
withholding is not an additional tax. Rather, the amount of any backup
withholding with respect to a payment to a U.S. shareholder will be allowed as a
credit against the U.S. shareholder's U.S. federal income tax liability and may
entitle the U.S. shareholder to a refund, provided that the required information
is furnished to the Internal Revenue Service. U.S. shareholders should consult
their own tax advisors regarding their qualifications for exemption from backup
withholding and the procedure for obtaining an exemption.

Treatment of Tax-Exempt Shareholders

Tax-exempt entities such as employee pension benefit trusts, individual
retirement accounts, charitable remainder trusts, etc. generally are exempt from
federal income taxation. Such entities are subject to taxation, however, on any
"unrelated business taxable income" (UBTI), as defined in the Internal Revenue
Code. The payment of dividends to a tax-exempt employee pension benefit trust or
other domestic tax-exempt shareholder generally will not constitute unrelated
business taxable income to such shareholder unless such shareholder has borrowed
to acquire or carry its shares.

132

In the event that we were deemed to be "predominately held" by
qualified employee pension benefit trusts that each hold more than 10% (in
value) of our shares, such trusts would be required to treat a certain
percentage of the dividend distributions paid to them as unrelated business
taxable income. We would be deemed to be "predominately held" by such trusts if
either (1) one employee pension benefit trust owns more than 25% in value of our
shares, or (ii) any group of such trusts, each owning more than 10% in value of
our shares, holds in the aggregate more than 50% in value of our shares. If
either of these ownership thresholds were ever exceeded, any qualified employee
pension benefit trust holding more than 10% in value of our shares would be
subject to tax on that portion of our dividend distributions made to it which is
equal to the percentage of our income which would be UBTI if we were a qualified
trust, rather than a REIT. We will attempt to monitor the concentration of
ownership of employee pension benefit trusts in our shares, and we do not expect
our shares to be deemed to be "predominately held" by qualified employee pension
benefit trusts, as defined in the Internal Revenue Code, to the extent required
to trigger the treatment of our income as to such trusts.

For social clubs, voluntary employee benefit associations, supplemental
unemployment benefit trusts and qualified group legal services plans exempt from
federal income taxation under Sections 501(c)(7), (c)(9), (c)(17) and (c)(20) of
the Internal Revenue Code, respectively, income from an investment in our shares
will constitute UBTI unless the shareholder in question is able to deduct
amounts "set aside" or placed in reserve for certain purposes so as to offset
the unrelated business taxable income generated. Any such organization which is
a prospective shareholder should consult its own tax advisor concerning these
"set aside" and reserve requirements.

Special Tax Considerations for Non-U.S. Shareholders

The rules governing U.S. income taxation of non-resident alien
individuals, foreign corporations, foreign partnerships and foreign trusts and
estates (collectively, "Non-U.S. shareholders") are complex. The following
discussion is intended only as a summary of these rules. Non-U.S. investors
should consult with their own tax advisors to determine the impact of federal,
state and local income tax laws on an investment in our shares, including any
reporting requirements.

Income Effectively Connected With a U.S. Trade or Business

In general, Non-U.S. shareholders will be subject to regular U.S.
federal income taxation with respect to their investment in our shares if the
income derived therefrom is "effectively connected" with the Non-U.S.
shareholder's conduct of a trade or business in the United States. A corporate
Non-U.S. shareholder that receives income that is (or is treated as) effectively
connected with a U.S. trade or business also may be subject to a branch profits
tax under Section 884 of the Internal Revenue Code, which is payable in addition
to the regular U.S. federal corporate income tax.

The following discussion will apply to Non-U.S. shareholders whose
income derived from ownership of our shares is deemed to be not "effectively
connected" with a U.S. trade or business.

Distributions Not Attributable to Gain From the Sale or Exchange of a
United States Real Property Interest

A distribution to a Non-U.S. shareholder that is not attributable to
gain realized by us from the sale or exchange of a United States real property
interest and that we do not designate as a capital gain distribution will be
treated as an ordinary income distribution to the extent that it is made out of
current or accumulated earnings and profits. Generally, any ordinary income
distribution will be subject to a U.S. federal income tax equal to 30% of the
gross amount of the distribution unless this tax is reduced by the provisions of
an applicable tax treaty. Any such distribution in excess of our earnings and
profits will be

133

treated first as a return of capital that will reduce each Non-U.S.
shareholder's basis in its shares (but not below zero) and then as gain from the
disposition of those shares, the tax treatment of which is described under the
rules discussed below with respect to dispositions of shares.

Distributions Attributable to Gain From the Sale or Exchange of a
United States Real Property Interest

Distributions to a Non-U.S. shareholder that are attributable to gain
from the sale or exchange of a United States real property interest will be
taxed to a Non-U.S. shareholder under Internal Revenue Code provisions enacted
by the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA). Under
FIRPTA, such distributions are taxed to a Non-U.S. shareholder as if the
distributions were gains "effectively connected" with a U.S. trade or business.
Accordingly, a Non-U.S. shareholder will be taxed at the normal capital gain
rates applicable to a U.S. shareholder (subject to any applicable alternative
minimum tax and a special alternative minimum tax in the case of non-resident
alien individuals). Distributions subject to FIRPTA also may be subject to a 30%
branch profits tax when made to a corporate Non-U.S. shareholder that is not
entitled to a treaty exemption.

Withholding Obligations With Respect to Distributions to Non-U.S.
Shareholders

Although tax treaties may reduce our withholding obligations, based on
current law, we will generally be required to withhold from distributions to
Non-U.S. shareholders, and remit to the Internal Revenue Service:

.     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., distributions paid
----
out of our earnings and profits).

In addition, if we designate prior distributions as capital gain distributions,
subsequent distributions, up to the amount of the prior distributions, will be
treated as capital gain distributions for purposes of withholding. A
distribution in excess of our earnings and profits will be subject to 30%
withholding if at the time of the distribution it cannot be determined whether
the distribution will be in an amount in excess of our current or accumulated
earnings and profits. If the amount of tax we withhold with respect to a
distribution to a Non-U.S. shareholder exceeds the shareholder's U.S. tax
liability with respect to that distribution, the Non-U.S. shareholder may file a
claim with the Internal Revenue Service for a refund of the excess.

Sale of Our Shares by a Non-U.S. Shareholder

A sale of our shares by a Non-U.S. shareholder will generally not be
subject to U.S. federal income taxation unless our shares constitute a "United
States real property interest" within the meaning of FIRPTA. Our shares will not
constitute a United States real property interest if we are a "domestically
controlled REIT." A "domestically controlled REIT" is a REIT that at all times
during a specified testing period has less than 50% in value of its shares held
directly or indirectly by Non-U.S. shareholders. We currently anticipate that we
will be a domestically controlled REIT. Therefore, sales of our shares should
not be subject to taxation under FIRPTA. However, we cannot assure you that we
will continue to be a domestically controlled REIT. If we were not a
domestically controlled REIT, whether a Non-U.S. shareholder's sale of our
shares would be subject to tax under FIRPTA as a sale of a United States real
property interest would depend on whether our shares were "regularly traded" on
an established securities

134

market and on the size of the selling shareholder's interest in us. Our shares
currently are not "regularly traded" on an established securities market.

If the gain on the sale of shares were subject to taxation under
FIRPTA, a Non-U.S. shareholder would be subject to the same treatment as a U.S.
shareholder with respect to the gain, subject to any applicable alternative
minimum tax and a special alternative minimum tax in the case of non-resident
alien individuals. In addition, distributions that are treated as gain from the
disposition of shares and are subject to tax under FIRPTA also may be subject to
a 30% branch profits tax when made to a corporate Non-U.S. shareholder that is
not entitled to a treaty exemption. Under FIRPTA, the purchaser of our shares
may be required to withhold 10% of the purchase price and remit this amount to
the Internal Revenue Service.

Even if not subject to FIRPTA, capital gains will be taxable to a
Non-U.S. shareholder if the Non-U.S. shareholder is a non-resident alien
individual who is present in the United States for 183 days or more during the
taxable year and some other conditions apply, in which case the non-resident
alien individual will be subject to a 30% tax on his or her U.S. source capital
gains.

Recently promulgated Treasury Regulations may alter the procedures for
claiming the benefits of an income tax treaty. Our Non-U.S. shareholders should
consult their tax advisors concerning the effect, if any, of these Treasury
Regulations on an investment in our shares.

Information Reporting Requirements and Backup Withholding for Non-U.S.
Shareholders

Additional issues may arise for information reporting and backup
withholding for Non-U.S. shareholders. Non-U.S. shareholders should consult
their tax advisors with regard to U.S. information reporting and backup
withholding requirements under the Internal Revenue Code.

Statement of Stock Ownership

We are required to demand annual written statements from the record
holders of designated percentages of our shares disclosing the actual owners of
the shares. Any record shareholder who, upon our request, does not provide us
with required information concerning actual ownership of the shares is required
to include specified information relating to his shares in his federal income
tax return. We also must maintain, within the Internal Revenue District in which
we are required to file our federal income tax return, permanent records showing
the information we have received about the actual ownership of shares and a list
of those persons failing or refusing to comply with our demand.

State and Local Taxation

We and any operating subsidiaries we may form may be subject to state
and local tax in states and localities in which we or they do business or own
property. The tax treatment of the Wells REIT, Wells OP, any operating
subsidiaries we may form and the holders of our shares in local jurisdictions
may differ from the federal income tax treatment described above.

Tax Aspects of Our Operating Partnership

The following discussion summarizes certain federal income tax
considerations applicable to our investment in Wells OP, our operating
partnership. The discussion does not cover state or local tax laws or any
federal tax laws other than income tax laws.

135

Classification as a Partnership

We will be entitled to include in our income a distributive share of
Wells OP's income and to deduct our distributive share of Wells OP's losses only
if Wells OP is classified for federal income tax purposes as a partnership,
rather than as an association taxable as a corporation. Under applicable
Treasury Regulations (the "Check-the-Box-Regulations"), an unincorporated entity
with at least two members may elect to be classified either as an association
taxable as a corporation or as a partnership. If such an entity fails to make an
election, it generally will be treated as a partnership for federal income tax
purposes. Wells OP intends to be classified as a partnership for federal income
tax purposes and will not elect to be treated as an association taxable as a
corporation under the Check-the-Box-Regulations.

Even though Wells OP will elect to be treated as a partnership for
federal income tax purposes, it may be taxed as a corporation if it is deemed to
be a "publicly traded partnership." A publicly traded partnership is a
partnership whose interests are traded on an established securities market or
are readily tradable on a secondary market (or the substantial equivalent
thereof); provided, that even if the foregoing requirements are met, a publicly
traded partnership will not be treated as a corporation for federal income tax
purposes if at least 90% of such partnership's gross income for a taxable year
consists of "qualifying income" under Section 7704(d) of the Internal Revenue
Code. Qualifying income generally includes any income that is qualifying income
for purposes of the 95% Income Test applicable to REITs (90% Passive-Type Income
Exception). (See "Requirements for Qualification as a REIT -- Operational
Requirements - Gross Income Tests").

Under applicable Treasury Regulations (PTP Regulations), limited safe
harbors from the definition of a publicly traded partnership are provided.
Pursuant to one of those safe harbors (Private Placement Exclusion), interests
in a partnership will not be treated as readily tradable on a secondary market
or the substantial equivalent thereof if (i) all interests in the partnership
were issued in a transaction (or transactions) that was not required to be
registered under the Securities Act of 1933, as amended, and (ii) the
partnership does not have more than 100 partners at any time during the
partnership's taxable year. In determining the number of partners in a
partnership, a person owning an interest in a flow-through entity (such as a
partnership, grantor trust or S corporation) that owns an interest in the
partnership is treated as a partner in such partnership only if (a)
substantially all of the value of the owner's interest in the flow-through is
attributable to the flow-through entity's interest (direct or indirect) in the
partnership and (b) a principal purpose of the use of the flow-through entity is
to permit the partnership to satisfy the 100 partner limitation. Wells OP
qualifies for the Private Placement Exclusion. Even if Wells OP is considered a
publicly traded partnership under the PTP Regulations because it is deemed to
have more than 100 partners, however, Wells OP should not be treated as a
corporation because it should be eligible for the 90% Passive-Type Income
Exception described above.

We have not requested, and do not intend to request, a ruling from the
Internal Revenue Service that Wells OP will be classified as a partnership for
federal income tax purposes. Holland & Knight LLP is of the opinion, however,
that based on certain factual assumptions and representations, Wells OP will
more likely than not be treated for federal income tax purposes as a partnership
and not as an association taxable as a corporation, or as a publicly traded
partnership. Unlike a tax ruling, however, an opinion of counsel is not binding
upon the Internal Revenue Service, and no assurance can be given that the
Internal Revenue Service will not challenge the status of Wells OP as a
partnership for federal income tax purposes. If such challenge were sustained by
a court, Wells OP would be treated as a corporation for federal income tax
purposes, as described below. In addition, the opinion of Holland & Knight LLP
is based on existing law, which is to a great extent the result of
administrative and judicial interpretation. No assurance can be given that
administrative or judicial changes would not modify the conclusions expressed in
the opinion.

136

If for any reason Wells OP were taxable as a corporation, rather than a
partnership, for federal income tax purposes, we would not be able to qualify as
a REIT. (See "Federal Income Tax Considerations -- Requirements for
Qualification as a REIT -- Operational Requirements - Gross Income Tests" and
"Requirements for Qualification as a REIT -- Operational Requirements - Asset
Tests.") In addition, any change in Wells OP's status for tax purposes might be
treated as a taxable event, in which case we might incur a tax liability without
any related cash distribution. Further, items of income and deduction of Wells
OP would not pass through to its partners, and its partners would be treated as
shareholders for tax purposes. Consequently, Wells OP would be required to pay
income tax at corporate tax rates on its net income, and distributions to its
partners would constitute dividends that would not be deductible in computing
Wells OP's taxable income.

Income Taxation of the Operating Partnership and its Partners

Partners, Not a Partnership, Subject to Tax. A partnership is not a
taxable entity for federal income tax purposes. As a partner in Wells OP, we
will be required to take into account our allocable share of Wells OP's income,
gains, losses, deductions, and credits for any taxable year of Wells OP ending
within or with our taxable year, without regard to whether we have received or
will receive any distribution from Wells OP.

Partnership Allocations. Although a partnership agreement generally
determines the allocation of income and losses among partners, such allocations
will be disregarded for tax purposes under Section 704(b) of the Internal
Revenue Code if they do not comply with the provisions of Section 704(b) of the
Internal Revenue Code and the Treasury Regulations promulgated thereunder. If an
allocation is not recognized for federal income tax purposes, the item subject
to the allocation will be reallocated in accordance with the partner's interests
in the partnership, which will be determined by taking into account all of the
facts and circumstances relating to the economic arrangement of the partners
with respect to such item. Wells OP's allocations of taxable income and loss are
intended to comply with the requirements of Section 704(b) of the Internal
Revenue Code and the Treasury Regulations promulgated thereunder.

Tax Allocations With Respect to Contributed Properties. Pursuant to
Section 704(c) of the Internal Revenue Code, income, gain, loss, and deduction
attributable to appreciated or depreciated property that is contributed to a
partnership in exchange for an interest in the partnership must be allocated for
federal income tax purposes in a manner such that the contributor is charged
with, or benefits from, the unrealized gain or unrealized loss associated with
the property at the time of the contribution. The amount of such unrealized gain
or unrealized loss is generally equal to the difference between the fair market
value of the contributed property at the time of contribution and the adjusted
tax basis of such property at the time of contribution. Under applicable
Treasury Regulations, partnerships are required to use a "reasonable method" for
allocating items subject to Section 704(c) of the Internal Revenue Code and
several reasonable allocation methods are described therein.

Under the partnership agreement for Wells OP, depreciation or
amortization deductions of Wells OP generally will be allocated among the
partners in accordance with their respective interests in Wells OP, except to
the extent that Wells OP is required under Section 704(c) to use a method for
allocating depreciation deductions attributable to its properties that results
in us receiving a disproportionately large share of such deductions. It is
possible that we may (1) be allocated lower amounts of depreciation deductions
for tax purposes with respect to contributed properties than would be allocated
to us if each such property were to have a tax basis equal to its fair market
value at the time of contribution, and (2) be allocated taxable gain in the
event of a sale of such contributed properties in excess of the economic profit
allocated to us as a result of such sale. These allocations may cause us to
recognize taxable income in excess of cash proceeds received by us, which might
adversely affect our ability to comply with the REIT

137

distribution requirements, although we do not anticipate that this event will
occur. The foregoing principles also will affect the calculation of our earnings
and profits for purposes of determining which portion of our distributions is
taxable as a dividend. The allocations described in this paragraph may result in
a higher portion of our distributions being taxed as a dividend than would have
occurred had we purchased such properties for cash.

Basis in Operating Partnership Interest. The adjusted tax basis of our
partnership interest in Wells OP generally is equal to (1) the amount of cash
and the basis of any other property contributed to Wells OP by us, (2) increased
by (A) our allocable share of Wells OP's income and (B) our allocable share of
indebtedness of Wells OP, and (3) reduced, but not below zero, by (A) our
allocable share of Wells OP's loss and (B) the amount of cash distributed to us,
including constructive cash distributions resulting from a reduction in our
share of indebtedness of Wells OP.

If the allocation of our distributive share of Wells OP's loss would
reduce the adjusted tax basis of our partnership interest in Wells OP below
zero, the recognition of such loss will be deferred until such time as the
recognition of such loss would not reduce our adjusted tax basis below zero. If
a distribution from Wells OP or a reduction in our share of Wells OP's
liabilities (which is treated as a constructive distribution for tax purposes)
would reduce our adjusted tax basis below zero, any such distribution, including
a constructive distribution, would constitute taxable income to us. The gain
realized by us upon the receipt of any such distribution or constructive
distribution would normally be characterized as capital gain, and if our
partnership interest in Wells OP has been held for longer than the long-term
capital gain holding period (currently one year), the distribution would
constitute long-term capital gain.

Depreciation Deductions Available to the Operating Partnership. Wells
OP will use a portion of contributions made by the Wells REIT from offering
proceeds to acquire interests in properties. To the extent that Wells OP
acquires properties for cash, Wells OP's initial basis in such properties for
federal income tax purposes generally will be equal to the purchase price paid
by Wells OP. Wells OP plans to depreciate each such depreciable property for
federal income tax purposes under the alternative depreciation system of
depreciation (ADS). Under ADS, Wells OP generally will depreciate such buildings
and improvements over a 40-year recovery period using a straight-line method and
a mid-month convention and will depreciate furnishings and equipment over a
12-year recovery period. To the extent that Wells OP acquires properties in
exchange for units of Wells OP, Wells OP's initial basis in each such property
for federal income tax purposes should be the same as the transferor's basis in
that property on the date of acquisition by Wells OP. Although the law is not
entirely clear, Wells OP generally intends to depreciate such depreciable
property for federal income tax purposes over the same remaining useful lives
and under the same methods used by the transferors.

Sale of the Operating Partnership's Property

Generally, any gain realized by Wells OP on the sale of property held
for more than one year will be long-term capital gain, except for any portion of
such gain that is treated as depreciation or cost recovery recapture. Any gain
recognized by Wells OP upon the disposition of a property acquired by Wells OP
for cash will be allocated among the partners in accordance with their
respective percentage interests in Wells OP.

Our share of any gain realized by Wells OP on the sale of any property
held by Wells OP as inventory or other property held primarily for sale to
customers in the ordinary course of Wells OP's trade or business will be treated
as income from a prohibited transaction that is subject to a 100% penalty tax.
Such prohibited transaction income also may have an adverse effect upon our
ability to satisfy the Income Tests for maintaining our REIT status. (See
"Federal Income Tax Considerations -- Requirements for Qualification as a REIT
-- Gross Income Tests" above.) We, however, do not presently intend to acquire

138

or hold or allow Wells OP to acquire or hold any property that represents
inventory or other property held primarily for sale to customers in the ordinary
course of our or Wells OP's trade or business.

ERISA Considerations

The following is a summary of some non-tax considerations associated
with an investment in our shares by a qualified employee pension benefit plan or
an IRA. This summary is based on provisions of ERISA and the Internal Revenue
Code, as amended through the date of this prospectus, and relevant regulations
and opinions issued by the Department of Labor and the Internal Revenue Service.
We cannot assure you that adverse tax decisions or legislative, regulatory or
administrative changes which would significantly modify the statements expressed
herein will not occur. Any such changes may or may not apply to transactions
entered into prior to the date of their enactment.

Each fiduciary of an employee pension benefit plan subject to ERISA,
such as a profit sharing, section 401(k) or pension plan, or of any other
retirement plan or account subject to Section 4975 of the Internal Revenue Code,
such as an IRA (Benefit Plans), seeking to invest plan assets in our shares
must, taking into account the facts and circumstances of such Benefit Plan,
consider, among other matters:

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

.     whether, under the facts and circumstances attendant 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
Shareholders"); and

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

Under ERISA, a plan fiduciary's responsibilities include the following
duties:

.     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.

ERISA also requires that the assets of an employee benefit plan be held in trust
and that the trustee, or a duly authorized named fiduciary or investment
manager, have exclusive authority and discretion to manage and control the
assets of the plan.

Section 406 of ERISA and Section 4975 of the Internal Revenue Code
prohibit specified transactions involving the assets of a Benefit Plan which are
between the plan and any "party in interest" or "disqualified person" with
respect to that Benefit Plan. These transactions are prohibited regardless of

139

how beneficial they may be for the Benefit Plan. Prohibited transactions include
the sale, exchange or leasing of property, the lending of money or the extension
of credit between a Benefit Plan and a party in interest or disqualified person,
and the transfer to, or use by, or for the benefit of, a party in interest, or
disqualified person, of any assets of a Benefit Plan. A fiduciary of a Benefit
Plan also is prohibited from engaging in self-dealing, acting for a person who
has an interest adverse to the plan or receiving any consideration for its own
account from a party dealing with the plan in a transaction involving plan
assets. Furthermore, Section 408 of the Internal Revenue Code states that assets
of an IRA trust may not be commingled with other property except in a common
trust fund or common investment fund.

Plan Asset Considerations

In order to determine whether an investment in our shares by Benefit
Plans creates or gives rise to the potential for either prohibited transactions
or the commingling of assets referred to above, a fiduciary must consider
whether an investment in our shares will cause our assets to be treated as
assets of the investing Benefit Plans. Neither ERISA nor the Internal Revenue
Code define the term "plan assets," however, U.S. Department of Labor
Regulations provide guidelines as to whether, and under what circumstances, the
underlying assets of an entity will be deemed to constitute assets of a Benefit
Plan when the plan invests in that entity (the Plan Assets Regulation). Under
the Plan Assets Regulation, the assets of corporations, partnerships or other
entities in which a Benefit Plan makes an equity investment will generally be
deemed to be assets of the Benefit Plan unless the entity satisfies one of the
exceptions to this general rule. As discussed below, we have received an opinion
of counsel that, based on the Plan Assets Regulation, our underlying assets
should not be deemed to be "plan assets" of Benefit Plans investing in shares,
assuming the conditions set forth in the opinion are satisfied, based upon the
fact that at least one of the specific exemptions set forth in the Plan Assets
Regulation is satisfied, as determined below.

Specifically, the Plan Assets Regulation provides that the underlying
assets of REITs will not be treated as assets of a Benefit Plan investing
therein if the interest the Benefit Plan acquires is a "publicly-offered
security." A publicly-offered security must be:

.        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."

Our shares are being sold as part of an offering of securities to the
public pursuant to an effective registration statement under the Securities Act,
and are part of a class registered under the Securities Exchange Act. In
addition, we have over 100 independent shareholders. Thus, both the first and
second criterion of the publicly-offered security exception will be satisfied.

Whether a security is "freely transferable" depends upon the particular
facts and circumstances. Our shares are subject to certain restrictions on
transferability intended to ensure that we continue to qualify for federal
income tax treatment as a REIT. The regulation provides, however, that where the
minimum investment in a public offering of securities is $10,000 or less, the
presence of a restriction on transferability intended to prohibit transfers
which would result in a termination or reclassification of the entity for state
or federal tax purposes will not ordinarily affect a determination that such
securities are freely transferable. The minimum investment in our shares is less
than $10,000; thus, the restrictions

140

imposed in order to maintain our status as a REIT should not cause the shares to
be deemed not freely transferable.

In the event that our underlying assets were treated by the Department
of Labor as the assets of investing Benefit Plans, our management would be
treated as fiduciaries with respect to each Benefit Plan shareholder, and an
investment in our shares might constitute an ineffective delegation of fiduciary
responsibility to Wells Capital, our advisor, and expose the fiduciary of the
Benefit Plan to co-fiduciary liability under ERISA for any breach by Wells
Capital of the fiduciary duties mandated under ERISA. Further, if our assets are
deemed to be "plan assets," an investment by an IRA in our shares might be
deemed to result in an impermissible commingling of IRA assets with other
property.

If our advisor or affiliates of our advisor were treated as fiduciaries
with respect to Benefit Plan shareholders, the prohibited transaction
restrictions of ERISA and the Internal Revenue Code would apply to any
transaction involving our assets. These restrictions could, for example, require
that we avoid transactions with entities that are affiliated with us or our
affiliates or restructure our activities in order to obtain an administrative
exemption from the prohibited transaction restrictions. Alternatively, we might
have to provide Benefit Plan shareholders with the opportunity to sell their
shares to us or we might dissolve or terminate.

If a prohibited transaction were to occur, the Internal Revenue Code
imposes an excise tax equal to 15% of the amount involved and authorizes the IRS
to impose an additional 100% excise tax if the prohibited transaction is not
"corrected." These taxes would be imposed on any disqualified person who
participates in the prohibited transaction. In addition, Wells Capital and
possibly other fiduciaries of Benefit Plan shareholders subject to ERISA who
permitted the prohibited transaction to occur or who otherwise breached their
fiduciary responsibilities, or a non-fiduciary participating in a prohibited
transaction, could be required to restore to the Benefit Plan any profits they
realized as a result of the transaction or breach, and make good to the Benefit
Plan any losses incurred by the Benefit Plan as a result of the transaction or
breach. With respect to an IRA that invests in our shares, the occurrence of a
prohibited transaction involving the individual who established the IRA, or his
or her beneficiary, would cause the IRA to lose its tax-exempt status under
Section 408(e)(2) of the Internal Revenue Code.

We have obtained an opinion from Holland & Knight LLP that our shares
more likely than not constitute "publicly-offered securities" and, accordingly,
it is more likely than not that our underlying assets should not be considered
"plan assets" under the Plan Assets Regulation, assuming the offering takes
place as described in this prospectus. If our underlying assets are not deemed
to be "plan assets," the problems discussed in the immediately preceding three
paragraphs are not expected to arise.

Other Prohibited Transactions

Regardless of whether the shares qualify for the "publicly-offered
security" exception of the Plan Assets Regulation, a prohibited transaction
could occur if the Wells REIT, Wells Capital, any selected dealer or any of
their affiliates is a fiduciary (within the meaning of Section 3(21) of ERISA)
with respect to any Benefit Plan purchasing the shares. Accordingly, unless an
administrative or statutory exemption applies, shares should not be purchased by
a Benefit Plan with respect to which any of the above persons is a fiduciary. A
person is a fiduciary with respect to a Benefit Plan under Section 3(21) of
ERISA if, among other things, the person has discretionary authority or control
with respect to "plan assets" or provides investment advice for a fee with
respect to "plan assets." Under a regulation issued by the Department of Labor,
a person shall be deemed to be providing investment advice if that person
renders advice as to the advisability of investing in our shares and that person
regularly provides investment advice to the Benefit Plan pursuant to a mutual
agreement or understanding (written or otherwise) (1) that

141

the advice will serve as the primary basis for investment decisions, and (2)
that the advice will be individualized for the Benefit Plan based on its
particular needs.

Annual Valuation

A fiduciary of an employee benefit plan subject to ERISA is required
to determine annually the fair market value of each asset of the plan as of the
end of the plan's fiscal year and to file a report reflecting that value with
the Department of Labor. When the fair market value of any particular asset is
not available, the fiduciary is required to make a good faith determination of
that asset's "fair market value" assuming an orderly liquidation at the time the
determination is made. In addition, a trustee or custodian of an IRA must
provide an IRA participant with a statement of the value of the IRA each year.
In discharging its obligation to value assets of a plan, a fiduciary subject to
ERISA must act consistently with the relevant provisions of the plan and the
general fiduciary standards of ERISA.

Unless and until our shares are listed on a national securities
exchange or are included for quotation on Nasdaq, it is not expected that a
public market for the shares will develop. To date, neither the Internal Revenue
Service nor the Department of Labor has promulgated regulations specifying how a
plan fiduciary should determine the "fair market value" of the shares, namely
when the fair market value of the shares is not determined in the marketplace.
Therefore, to assist fiduciaries in fulfilling their valuation and annual
reporting responsibilities with respect to ownership of shares, we intend to
provide reports of our annual determinations of the current value of our net
assets per outstanding share to those fiduciaries (including IRA trustees and
custodians) who identify themselves to us and request the reports. Until
December 31, 2002, we intend to use the offering price of shares as the per
share net asset value. Beginning with the year 2003, the value of the properties
and our other assets will be based on a valuation. Such valuation will be
performed by a person independent of us and of Wells Capital.

We anticipate that we will provide annual reports of our determination
of value (1) to IRA trustees and custodians not later than January 15 of each
year, and (2) to other Benefit Plan fiduciaries within 75 days after the end of
each calendar year. Each determination may be based upon valuation information
available as of October 31 of the preceding year, up-dated, however, for any
material changes occurring between October 31 and December 31.

We intend to revise these valuation procedures to conform with any
relevant guidelines that the Internal Revenue Service or the Department of Labor
may hereafter issue. Meanwhile, we cannot assure you:

.       that the value determined by us could or will actually be
realized by us or by shareholders upon liquidation (in part
because appraisals or 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 shareholders could realize this value if they were to
attempt to sell their shares; or

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

142

Description of Shares

The following description of the shares is not complete but is a
summary of portions of our articles of incorporation and is qualified in its
entirety by reference to the articles of incorporation.

Under our articles of incorporation, we have authority to issue a total
of 500,000,000 shares of capital stock. Of the total shares authorized,
350,000,000 shares are designated as common stock with a par value of $0.01 per
share, 50,000,000 shares are designated as preferred stock with a par value of
$0.01 per share and 100,000,000 shares are designated as shares-in-trust, which
would be issued only in the event we have purchases in excess of the ownership
limits described below.

As of December 10, 2000, approximately 30,185,358 shares of our common
stock were issued and outstanding, and no shares of preferred stock or
shares-in-trust were issued and outstanding.

Common Stock

The holders of common stock are entitled to one vote per share on all
matters voted on by shareholders, including election of our directors. Our
articles of incorporation do not provide for cumulative voting in the election
of directors. Therefore, the holders of a majority of the outstanding common
shares can elect our entire board of directors. Subject to any preferential
rights of any outstanding series of preferred stock, the holders of common stock
are entitled to such dividends as may be declared from time to time by our board
of directors out of legally available funds and, upon liquidation, are entitled
to receive all assets available for distribution to shareholders. All shares
issued in the offering will be fully paid and non-assessable shares of common
stock. Holders of shares of common stock will not have preemptive rights, which
means that you will not have an automatic option to purchase any new shares that
we issue.

We will not issue certificates for our shares. Shares will be held in
"uncertificated" form which will eliminate the physical handling and safekeeping
responsibilities inherent in owning transferable stock certificates and
eliminate the need to return a duly executed stock certificate to effect a
transfer. Wells Capital, our advisor, acts as our registrar and as the transfer
agent for our shares. Transfers can be effected simply by mailing to Wells
Capital a transfer and assignment form, which we will provide to you at no
charge.

Preferred Stock

Our articles of incorporation authorize our board of directors to
designate and issue one or more classes or series of preferred stock without
stockholder approval. The board of directors may determine the relative rights,
preferences and privileges of each class or series of preferred stock so issued,
which may be more beneficial than the rights, preferences and privileges
attributable to the common stock. The issuance of preferred stock could have the
effect of delaying or preventing a change in control of the Wells REIT. Our
board of directors has no present plans to issue preferred stock, but may do so
at any time in the future without shareholder approval.

Meetings and Special Voting Rrquirements

An annual meeting of the shareholders will be held each year, at least
30 days after delivery of our annual report. Special meetings of shareholders
may be called only upon the request of a majority of the directors, a majority
of the independent directors, the chairman, the president or upon the written
request of shareholders holding at least 10% of the shares. The presence of a
majority of the outstanding shares either in person or by proxy shall constitute
a quorum. Generally, the affirmative vote of a

143

majority of all votes entitled to be cast is necessary to take shareholder
action authorized by our articles of incorporation, except that a majority of
the votes represented in person or by proxy at a meeting at which a quorum is
present is sufficient to elect a director.

Under Maryland Corporation Law and our articles of incorporation,
shareholders are entitled to vote at a duly held meeting at which a quorum is
present on (1) amendment of our articles of incorporation, (2) liquidation or
dissolution of the Wells REIT, (3) reorganization of the Wells REIT, (4) merger,
consolidation or sale or other disposition of substantially all of our assets,
and (5) termination of our status as a REIT. Shareholders voting against any
merger or sale of assets are permitted under Maryland Corporation Law to
petition a court for the appraisal and payment of the fair value of their
shares. In an appraisal proceeding, the court appoints appraisers who attempt to
determine the fair value of the stock as of the date of the shareholder vote on
the merger or sale of assets. After considering the appraisers' report, the
court makes the final determination of the fair value to be paid to the
dissenting shareholder and decides whether to award interest from the date of
the merger or sale of assets and costs of the proceeding to the dissenting
shareholders.

Our advisor is selected and approved annually by our directors. While
the shareholders do not have the ability to vote to replace Wells Capital or to
select a new advisor, shareholders do have the ability, by the affirmative vote
of a majority of the shares entitled to vote on such matter, to elect to remove
a director from our board.

Shareholders are entitled to receive a copy of our shareholder list
upon request. The list provided by us will include each shareholder's name,
address and telephone number, if available, and number of shares owned by each
shareholder and will be sent within ten days of the receipt by us of the
request. A shareholder requesting a list will be required to pay reasonable
costs of postage and duplication. We have the right to request that a requesting
shareholder represent to us that the list will not be used to pursue commercial
interests.

In addition to the foregoing, shareholders have rights under Rule 14a-
7 under the Securities Exchange Act, which provides that, upon the request of
investors and the payment of the expenses of the distribution, we are required
to distribute specific materials to shareholders in the context of the
solicitation of proxies for voting on matters presented to shareholders or, at
our option, provide requesting shareholders with a copy of the list of
shareholders so that the requesting shareholders may make the distribution of
proxies themselves.

Restriction on Ownership of Shares

In order for us to qualify as a REIT, not more than 50% of our
outstanding shares may be owned by any five or fewer individuals, including some
tax-exempt entities. In addition, the outstanding shares must be owned by 100 or
more persons independent of us and each other during at least 335 days of a
12-month taxable year or during a proportionate part of a shorter taxable year.
We may prohibit certain acquisitions and transfers of shares so as to ensure our
continued qualification as a REIT under the Internal Revenue Code. However, we
cannot assure you that this prohibition will be effective.

In order to assist us in preserving our status as a REIT, our articles
of incorporation contain a limitation on ownership which prohibits any person or
group of persons from acquiring, directly or indirectly, beneficial ownership of
more than 9.8% of our outstanding shares. Our articles of incorporation provide
that any transfer of shares that would violate our share ownership limitations
is null and void and the intended transferee will acquire no rights in such
shares, unless the transfer is approved by the board of directors based upon
receipt of information that such transfer would not violate the provisions of
the Internal Revenue Code for qualification as a REIT.

144

The shares in excess of the ownership limit which are attempted to be
transferred will be designated as "shares-in-trust" and will be transferred
automatically to a trust effective on the day before the reported transfer of
such shares. The record holder of the shares that are designated as
shares-in-trust will be required to submit such number of shares to the Wells
REIT in the name of the trustee of the trust. We will designate a trustee of the
share trust that will not be affiliated with us. We will also name one or more
charitable organizations as a beneficiary of the share trust. Shares-in-trust
will remain issued and outstanding shares and will be entitled to the same
rights and privileges as all other shares of the same class or series. The
trustee will receive all dividends and distributions on the shares-in-trust and
will hold such dividends or distributions in trust for the benefit of the
beneficiary. The trustee will vote all shares-in-trust during the period they
are held in trust.

At our direction, the trustee will transfer the shares-in-trust to a
person whose ownership will not violate the ownership limits. The transfer shall
be made within 20 days of our receipt of notice that shares have been
transferred to the trust. During this 20-day period, we will have the option of
redeeming such shares. Upon any such transfer or redemption, the purported
transferee or holder shall receive a per share price equal to the lesser of (a)
the price per share in the transaction that created such shares-in-trust, or (b)
the market price per share on the date of the transfer or redemption.

Any person who (1) acquires shares in violation of the foregoing
restriction or who owns shares that were transferred to any such trust is
required to give immediate written notice to the Wells REIT of such event or (2)
transfers or receives shares subject to such limitations is required to give the
Wells REIT 15 days written notice prior to such transaction. In both cases, such
persons shall provide to the Wells REIT such other information as we may request
in order to determine the effect, if any, of such transfer on our status as a
REIT.

The foregoing restrictions will continue to apply until (1) the board
of directors determines it is no longer in the best interest of the Wells REIT
to continue to qualify as a REIT and (2) there is an affirmative vote of the
majority of shares entitled to vote on such matter at a regular or special
meeting of the shareholders of the Wells REIT.

The ownership limit does not apply to an offeror which, in accordance
with applicable federal and state securities laws, makes a cash tender offer,
where at least 85% of the outstanding shares are duly tendered and accepted
pursuant to the cash tender offer. The ownership limit also does not apply to
the underwriter in a public offering of shares. In addition, the ownership limit
does not apply to a person or persons which the directors so exempt from the
ownership limit upon appropriate assurances that our qualification as a REIT is
not jeopardized.

Any person who owns 5% or more of the outstanding shares during any
taxable year will be asked to deliver a statement or affidavit setting forth the
number of shares beneficially owned, directly or indirectly.

Dividends

Dividends  will be paid on a quarterly basis regardless of the
frequency with which such distributions are declared. Dividends will be paid to
investors who are shareholders as of the record dates selected by the directors.
We currently calculate our quarterly dividends based upon daily record and
dividend declaration dates so our investors will be entitled to be paid
dividends immediately upon their purchase of shares. We then make quarterly
dividend payments following the end of each calendar quarter.

145

We are required to make distributions sufficient to satisfy the
requirements for qualification as a REIT for tax purposes. Generally, income
distributed as dividends will not be taxable to us under the Internal Revenue
Code if we distribute at least 95% (90% beginning in year 2001) of our taxable
income. (See "Federal Income Tax Considerations -- Requirements for
Qualification as a REIT.")

Dividends will be declared at the discretion of the board of directors,
in accordance with our earnings, cash flow and general financial condition. The
board's discretion will be directed, in substantial part, by its obligation to
cause us to comply with the REIT requirements. Because we may receive income
from interest or rents at various times during our fiscal year, dividends may
not reflect our income earned in that particular distribution period but may be
made in anticipation of cash flow which we expect to receive during a later
quarter and may be made in advance of actual receipt of funds in an attempt to
make dividends relatively uniform. We may borrow money, issue new securities or
sell assets in order to make dividend distributions.

We are not prohibited from distributing our own securities in lieu of
making cash dividends to shareholders, provided that the securities distributed
to shareholders are readily marketable. Shareholders who receive marketable
securities in lieu of cash dividends may incur transaction expenses in
liquidating the securities.

Dividend Reinvestment Plan

We currently have a dividend reinvestment plan available that allows
you to have your dividends otherwise distributable to you invested in additional
shares of the Wells REIT.

You may purchase shares under the dividend reinvestment plan for $10
per share, less any discounts authorized in the "Plan of Distribution" section
of this prospectus, until all of the shares registered as part of this offering
have been sold. After this time, we may purchase shares either through purchases
on the open market, if a market then exists, or through an additional issuance
of shares. In any case, the price per share will be equal to the then-prevailing
market price, which shall equal the price on the securities exchange or
over-the-counter market on which such shares are listed at the date of purchase
if such shares are then listed. A copy of our Amended and Restated Dividend
Reinvestment Plan as currently in effect is included as Exhibit B to this
prospectus.

You may elect to participate in the dividend reinvestment plan by
completing the Subscription Agreement, the enrollment form or by other written
notice to the plan administrator. Participation in the plan will begin with the
next distribution made after receipt of your written notice. We may terminate
the dividend reinvestment plan for any reason at any time upon 10 days' prior
written notice to participants. Your participation in the plan will also be
terminated to the extent that a reinvestment of your distributions in our shares
would cause the percentage ownership limitation contained in our articles of
incorporation to be exceeded.

If you elect to participate in the dividend reinvestment plan and are
subject to federal income taxation, you will incur a tax liability for dividends
allocated to you even though you have elected not to receive the dividends in
cash but rather to have the dividends held pursuant to the dividend reinvestment
plan. Specifically, you will be treated as if you have received the dividend
from us in cash and then applied such dividend to the purchase of additional
shares. You will be taxed on the amount of such dividend as ordinary income to
the extent such dividend is from current or accumulated earnings and profits,
unless we have designated all or a portion of the dividend as a capital gain
dividend.

146

Share Redemption Program

Prior to the time that our shares are listed on a national securities
exchange, shareholders of the Wells REIT who have held their shares for at least
one year may receive the benefit of limited interim liquidity by presenting for
redemption all or any portion of their shares to us at any time in accordance
with the procedures outlined herein. At that time, we may, subject to the
conditions and limitations described below, redeem the shares presented for
redemption for cash to the extent that we have sufficient funds available to us
to fund such redemption.

If you have held your shares for the required one-year period, you may
redeem your shares for a purchase price equal to the lesser of (1) $10 per
share, or (2) the purchase price per share that you actually paid for your
shares of the Wells REIT. In the event that you are redeeming all of your
shares, shares purchased pursuant to our dividend reinvestment plan may be
excluded from the foregoing one-year holding period requirement, in the
discretion of the board of directors. In addition, for purposes of the one-year
holding period, limited partners of Wells OP who exchange their limited
partnership units for shares in the Wells REIT shall be deemed to have owned
their shares as of the date they were issued their limited partnership units in
Wells OP. The board of directors reserves the right in its sole discretion at
any time and from time to time to (1) waive the one-year holding period in the
event of the death or bankruptcy of a shareholder or other exigent
circumstances, (2) reject any request for redemption, (3) change the purchase
price for redemptions, or (4) otherwise amend the terms of our share redemption
program.

Redemption of shares, when requested, will be made quarterly on a
first-come, first-served basis. Subject to funds being available, we will limit
the number of shares redeemed pursuant to our share redemption program as
follows: (1) during any calendar year, we will not redeem in excess of three
percent (3.0%) of the weighted average number of shares outstanding during the
prior calendar year; and (2) funding for the redemption of shares will come
exclusively from the proceeds we receive from the sale of shares under our
dividend reinvestment plan such that in no event shall the aggregate amount of
redemptions under our share redemption program exceed aggregate proceeds
received from the sale of shares pursuant to our dividend reinvestment plan. The
board of directors, in its sole discretion, may choose to terminate the share
redemption program or to reduce the number of shares purchased under the share
redemption program if it determines the funds otherwise available to fund our
share redemption program are needed for other purposes. (See "Risk Factors -
Investment Risks.")

We cannot guarantee that the funds set aside for the share redemption
program will be sufficient to accommodate all requests made in any year. If we
do not have such funds available, at the time when redemption is requested, you
can (1) withdraw your request for redemption, or (2) ask that we honor your
request at such time, if any, when sufficient funds become available. Such
pending requests will be honored on a first-come, first-served basis.

The share redemption program is only intended to provide interim
liquidity for shareholders until a secondary market develops for the shares. No
such market presently exists, and we cannot assure you that any market for your
shares will ever develop.

The shares we purchase under the share redemption program will be
cancelled, and will have the status of authorized, but unissued shares. We will
not reissue such shares unless they are first registered with the Securities and
Exchange Commission (Commission) under the Securities Act of 1933 and under
appropriate state securities laws or otherwise issued in compliance with such
laws.

If we terminate, reduce the scope of or otherwise change the share
redemption program, we will disclose the changes in reports filed with the
Commission.

147

Restrictions on Roll-Up Transactions

In connection with any proposed transaction considered a "Roll-up
Transaction" involving the Wells REIT and the issuance of securities of an
entity (a Roll-up Entity) that would be created or would survive after the
successful completion of the Roll-up Transaction, an appraisal of all properties
shall be obtained from a competent independent appraiser. The properties shall
be appraised on a consistent basis, and the appraisal shall be based on the
evaluation of all relevant information and shall indicate the value of the
properties as of a date immediately prior to the announcement of the proposed
Roll-up Transaction. The appraisal shall assume an orderly liquidation of
properties over a 12-month period. The terms of the engagement of the
independent appraiser shall clearly state that the engagement is for our benefit
and the shareholders. A summary of the appraisal, indicating all material
assumptions underlying the appraisal, shall be included in a report to
shareholders in connection with any proposed Roll-up Transaction.

A "Roll-up Transaction" is a transaction involving the acquisition,
merger, conversion or consolidation, directly or indirectly, of the Wells REIT
and the issuance of securities of a Roll-up Entity. This term does not include:

.        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: shareholder voting rights; the
term of our existence; compensation to Wells Capital; or our
investment objectives.

On connection with a proposed Roll-up Transaction, the person
sponsoring the Roll-up Transaction must offer to shareholders who vote "no" on
the proposal the choice of:

(1)      accepting the securities of a Roll-up Entity offered in the
proposed Roll-up Transaction; or

(2)      one of the following:

(A)     remaining as shareholders of the Wells REIT and
preserving their interests therein on the same terms
and conditions as existed previously, or

(B)     receiving cash in an amount equal to the
shareholder's pro rata share of the appraised value
of our net assets.

We are prohibited from participating in any proposed Roll-up
Transaction:

.       which would result in the shareholders 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;

.       which 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

148

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
shareholders.

Business Combinations

Under Maryland Corporation Law, business combinations between a
Maryland corporation and an interested shareholder or the interested
shareholder's affiliate are prohibited for five years after the most recent date
on which the shareholder becomes an interested shareholder. For this purpose,
the term "business combinations" includes mergers, consolidations, share
exchanges, asset transfers and issuances or reclassifications of equity
securities. An "interested shareholder" is defined for this purpose as:

(1)    any person who beneficially owns ten percent or more of the
voting power of the corporation's shares; or

(2)    an affiliate or associate of the corporation who, at any time
within the two-year period prior to the date in question, was the beneficial
owner of ten percent or more of the voting power of the then outstanding voting
shares of the corporation.

After the five-year prohibition, any business combination between the
corporation and an interested shareholder generally must be recommended by the
board of directors of the corporation and approved by the affirmative vote of at
least:

(1)    80% of the votes entitled to be cast by holders of outstanding
voting shares of the corporation; and

(2)    two-thirds of the votes entitled to be cast by holders of
voting shares of the corporation other than shares held by the interested
shareholder or its affiliate with whom the business combination is to be
effected, or held by an affiliate or associate of the interested shareholder
voting together as a single voting group.

These super-majority vote requirements do not apply if the
corporation's common shareholders receive a minimum price, as defined under
Maryland Corporation Law, for their shares in the form of cash or other
consideration in the same form as previously paid by the interested shareholder
for its shares. None of these provisions of the Maryland Corporation Law will
apply, however, to business combinations that are approved or exempted by the
board of directors of the corporation prior to the time that the interested
shareholder becomes an interested shareholder.

The business combination statute may discourage others from trying to
acquire control of the Wells REIT and increase the difficulty of consummating
any offer.

149

Control Share Acquisitions

Maryland Corporation Law provides that control shares of a Maryland
corporation acquired in a control share acquisition have no voting rights except
to the extent approved by a vote of two-thirds of the votes entitled to be cast
on the matter. Shares owned by the Acquisitions, or by officers or directors who
are employees of the corporation are not entitled to vote on the matter. As
permitted by Maryland Corporation Law, we have provided in our bylaws that the
control share provisions of Maryland Corporation Law will not apply to
transactions involving the Wells REIT, but the board of directors retains the
discretion to change this provision in the future.

"Control shares" are voting shares which, if aggregated with all other
shares owned by the acquiror or with respect to which the acquiror has the right
to vote or to direct the voting of, other than solely by virtue of revocable
proxy, would entitle the acquiror to exercise voting power in electing directors
within one of the following ranges of voting powers:

.        one-fifth or more but less than one-third;

.        one-third or more but less than a majority; or

.        a majority or more of all voting power.

Control shares do not include shares the acquiring person is then
entitled to vote as a result of having previously obtained shareholder approval.

Except as otherwise specified in the statute, a "control share
acquisition" means the acquisition of control shares.

Once a person who has made or proposes to make a control share
acquisition has undertaken to pay expenses and has satisfied other required
conditions, the person may compel the board of directors to call a special
meeting of shareholders to be held within 50 days of demand to consider the
voting rights of the shares. If no request for a meeting is made, the
corporation may itself present the question at any shareholders meeting.

If voting rights are not approved for the control shares at the
meeting or if the acquiring person does not deliver an "acquiring person
statement" for the control shares as required by the statute, the corporation
may redeem any or all of the control shares for their fair value, except for
control shares for which voting rights have previously been approved. Fair value
is to be determined for this purpose without regard to the absence of voting
rights for the control shares, and is to be determined as of the date of the
last control share acquisition or of any meeting of shareholders at which the
voting rights for control shares are considered and not approved.

If voting rights for control shares are approved at a shareholders
meeting and the acquiror becomes entitled to vote a majority of the shares
entitled to vote, all other shareholders may exercise appraisal rights. The fair
value of the shares as determined for purposes of these appraisal rights may not
be less than the highest price per share paid in the control share acquisition.
Some of the limitations and restrictions otherwise applicable to the exercise of
dissenters' rights do not apply in the context of a control share acquisition.

The control share acquisition statute does not apply to shares
acquired in a merger, consolidation or share exchange if the corporation is a
party to the transaction or to acquisitions approved or exempted by the articles
of incorporation or bylaws of the corporation.

150

The Operating Partnership Agreement

General

Wells Operating Partnership, L.P. (Wells OP) was formed in January 1998 to
acquire, own and operate properties on our behalf. It is considered to be an
Umbrella Partnership Real Estate Investment Trust (UPREIT), which structure is
utilized generally to provide for the acquisition of real property from owners
who desire to defer taxable gain otherwise to be recognized by them upon the
disposition of their property. Such owners may also desire to achieve diversity
in their investment and other benefits afforded to owners of stock in a REIT.
For purposes of satisfying the Asset and Income Tests for qualification as a
REIT for tax purposes, the REIT's proportionate share of the assets and income
of an UPREIT, such as Wells OP, will be deemed to be assets and income of the
REIT.

The property owner's goals are accomplished because a property owner may
contribute property to an UPREIT in exchange for limited partnership units on a
tax-free basis. Further, Wells OP is structured to make distributions with
respect to limited partnership units which are equivalent to the dividend
distributions made to shareholders of the Wells REIT. Finally, a limited partner
in Wells OP may later exchange his limited partnership units in Wells OP for
shares of the Wells REIT (in a taxable transaction) and, if our shares are then
listed, achieve liquidity for his investment.

Substantially all of our assets are held by Wells OP, and we intend to make
future acquisitions of real properties using the UPREIT structure. The Wells
REIT is the sole general partner of Wells OP and, as of September 30, 2000,
owned an approximately 99% equity percentage interest in Wells OP. Wells
Capital, our advisor, has contributed $200,000 to Wells OP and is currently the
only limited partner owning the other approximately 1% equity percentage
interest in Wells OP. As the sole general partner of Wells OP, we have the
exclusive power to manage and conduct the business of Wells OP.

The following is a summary of certain provisions of the partnership
agreement of Wells OP. This summary is not complete and is qualified by the
specific language in the partnership agreement. You should refer to the
partnership agreement, itself, which we have filed as an exhibit to the
registration statement, for more detail.

Capital Contributions

As we accept subscriptions for shares, we will transfer substantially all
of the net proceeds of the offering to Wells OP as a capital contribution;
however, we will be deemed to have made capital contributions in the amount of
the gross offering proceeds received from investors. Wells OP will be deemed to
have simultaneously paid the selling commissions and other costs associated with
the offering. If Wells OP requires additional funds at any time in excess of
capital contributions made by us and Wells Capital or from borrowing, we may
borrow funds from a financial institution or other lender and lend such funds to
Wells OP on the same terms and conditions as are applicable to our borrowing of
such funds. In addition, we are authorized to cause Wells OP to issue
partnership interests for less than fair market value if we conclude in good
faith that such issuance is in the best interest of Wells OP and the Wells REIT.

Operations

The partnership agreement requires that Wells OP be operated in a manner
that will enable the Wells REIT to (1) satisfy the requirements for being
classified as a REIT for tax purposes, (2) avoid any federal income or excise
tax liability, and (3) ensure that Wells OP will not be classified as a
"publicly traded partnership" for purposes of Section 7704 of the Internal
Revenue Code, which classification could

151

result in Wells OP being taxed as a corporation, rather than as a partnership.
(See "Federal Income Tax Considerations - Tax Aspects of the Operating
Partnership - Classification as a Partnership.")

The partnership agreement provides that Wells OP will distribute cash flow
from operations to the limited partners of Wells OP in accordance with their
relative percentage interests on at least a quarterly basis in amounts
determined by the Wells REIT as general partner such that a holder of one unit
of limited partnership interest in Wells OP will receive the same amount of
annual cash flow distributions from Wells OP as the amount of annual dividends
paid to the holder of one of our shares. Remaining cash from operations will be
distributed to the Wells REIT as the general partner to enable us to make
dividend distributions to our shareholders.

Similarly, the partnership agreement of Wells OP provides that taxable
income is allocated to the limited partners of Wells OP in accordance with their
relative percentage interests such that a holder of one unit of limited
partnership interest in Wells OP will be allocated taxable income for each
taxable year in an amount equal to the amount of taxable income to be recognized
by a holder of one of our shares, subject to compliance with the provisions of
Sections 704(b) and 704(c) of the Internal Revenue Code and corresponding
Treasury Regulations. Losses, if any, will generally be allocated among the
partners in accordance with their respective percentage interests in Wells OP.

Upon the liquidation of Wells OP, after payment of debts and obligations,
any remaining assets of Wells OP will be distributed to partners with positive
capital accounts in accordance with their respective positive capital account
balances. If the Wells REIT were to have a negative balance in its capital
account following a liquidation, it would be obligated to contribute cash to
Wells OP equal to such negative balance for distribution to other partners, if
any, having positive balances in their capital accounts.

In addition to the administrative and operating costs and expenses incurred
by Wells OP in acquiring and operating real properties, Wells OP will pay all
administrative costs and expenses of the Wells REIT and such expenses will be
treated as expenses of Wells OP. Such expenses will include:

.    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.

Exchange Rights

The limited partners of Wells OP, including Wells Capital, have the
right to cause Wells OP to redeem their limited partnership units for cash equal
to the value of an equivalent number of our shares, or, at our option, we may
purchase their limited partnership units by issuing one share of the Wells REIT
for each limited partnership unit redeemed. These exchange rights may not be
exercised, however, if and to the extent that the delivery of shares upon such
exercise would (1) result in any person owning shares in excess of our ownership
limits, (2) result in shares being owned by fewer than 100 persons, (3) result
in

152

the Wells REIT being "closely held" within the meaning of Section 856(h) of
the Internal Revenue Code, (4) cause the Wells REIT to own 10% or more of the
ownership interests in a tenant within the meaning of Section 856(d)(2)(B) of
the Internal Revenue Code, or (5) cause the acquisition of shares by a redeemed
limited partner to be "integrated" with any other distribution of our shares for
purposes of complying with the Securities Act.

Subject to the foregoing, limited partners may exercise their exchange
rights at any time after one year following the date of issuance of their
limited partnership units; provided, however, that a limited partner may not
deliver more than two exchange notices each calendar year and may not exercise
an exchange right for less than 1,000 limited partnership units, unless such
limited partner holds less than 1,000 units, in which case, he must exercise his
exchange right for all of his units.

Transferability of Interests

The Wells REIT may not (1) voluntarily withdraw as the general partner of
Wells OP, (2) engage in any merger, consolidation or other business combination,
or (3) transfer its general partnership interest in Wells OP (except to a wholly
-owned subsidiary), unless the transaction in which such withdrawal, business
combination or transfer occurs results in the limited partners receiving or
having the right to receive an amount of cash, securities or other property
equal in value to the amount they would have received if they had exercised
their exchange rights immediately prior to such transaction or unless, in the
case of a merger or other business combination, the successor entity contributes
substantially all of its assets to Wells OP in return for an interest in Wells
OP and agrees to assume all obligations of the general partner of Wells OP. The
Wells REIT may also enter into a business combination or we may transfer our
general partnership interest upon the receipt of the consent of a majority-in-
interest of the limited partners of Wells OP, other than Wells Capital. With
certain exceptions, the limited partners may not transfer their interests in
Wells OP, in whole or in part, without the written consent of the Wells REIT as
general partner. In addition, Wells Capital may not transfer its interest in
Wells OP as long as it is acting as the advisor to the Wells REIT, except
pursuant to the exercise of its right to exchange limited partnership units for
Wells REIT shares, in which case similar restrictions on transfer will apply to
the REIT shares received by Wells Capital.

Plan of Distribution

We are offering a maximum of 125,000,000 shares to the public through Wells
Investment Securities, Inc., the Dealer Manager, a registered broker-dealer
affiliated with the advisor. (See "Conflicts of Interest.") The shares are being
offered at a price of $10.00 per share on a "best efforts" basis, which means
generally that the Dealer Manager will be required to use only its best efforts
to sell the shares and it has no firm commitment or obligation to purchase any
of the shares. We are also offering 10,000,000 shares for sale pursuant to our
dividend reinvestment plan at a price of $10.00 per share. An additional
5,000,000 shares are reserved for issuance upon exercise of soliciting dealer
warrants, which are granted to participating broker-dealers based upon the
number of shares they sell. Therefore, a total of 140,000,000 shares are being
registered in this offering.

Except as provided below, the Dealer Manager will receive selling
commissions of 7.0% of the gross offering proceeds. The Dealer Manager will also
receive 2.5% of the gross offering proceeds in the form of a dealer manager fee
as compensation for acting as the Dealer Manager and for expenses incurred in
connection with coordinating sales efforts, training of personnel and generally
performing "wholesaling" functions. We will not pay referral or similar fees to
any accountants, attorneys or other persons in connection with the distribution
of the shares. Shareholders who elect to participate in the dividend
reinvestment plan will be charged selling commissions and dealer manager fees on
shares

153

purchased pursuant to the dividend reinvestment plan on the same basis as
shareholders purchasing shares other than pursuant to the dividend reinvestment
plan.

We will also award to the Dealer Manager one soliciting dealer warrant
for every 25 shares they sell during the offering period. The Dealer Manager may
retain or reallow these warrants to broker-dealers participating in the
offering, unless such issuance of soliciting dealer warrants is prohibited by
either federal or state securities laws. The holder of a soliciting dealer
warrant will be entitled to purchase one share from the Wells REIT at a price of
$12 per share during the period beginning on the first anniversary of the
effective date of this offering and ending five years after the effective date
of this offering. Subject to certain exceptions, a soliciting dealer warrant may
not be transferred, assigned, pledged or hypothecated for a period of one year
following the effective date of this offering. The shares issuable upon exercise
of the soliciting dealer warrants are being registered as part of this offering.
For the life of the soliciting dealer warrants, participating broker-dealers are
given the opportunity to profit from a rise in the market price for the common
stock without assuming the risk of ownership, with a resulting dilution in the
interest of other shareholders upon exercise of such warrants. In addition,
holders of the soliciting dealer warrants would be expected to exercise such
warrants at a time when we could obtain needed capital by offering new
securities on terms more favorable than those provided by the soliciting dealer
warrants. Exercise of the soliciting dealer warrants is governed by the terms
and conditions detailed in this prospectus and in the Warrant Purchase
Agreement, which is an exhibit to the Registration Statement.

The Dealer Manager may authorize certain other broker-dealers who are
members of the NASD to sell shares. In the event of the sale of shares by such
other broker-dealers, the Dealer Manager may reallow its commissions in the
amount of up to 7.0% of the gross offering proceeds to such participating
broker-dealers. In addition, the Dealer Manager, in its sole discretion, may
reallow to broker-dealers participating in the offering a portion of its dealer
manager fee in the aggregate amount of up to 1.5% of gross offering proceeds to
be paid to such participating broker-dealers as marketing fees and as
reimbursement of due diligence expenses, based on such factors as the number of
shares sold by such participating broker-dealers, the assistance of such
participating broker-dealers in marketing the offering and bona fide conference
fees incurred.

We anticipate that the total underwriting compensation, including sales
commissions, the dealer manager fee and underwriting expense reimbursements,
will not exceed 9.5% of gross offering proceeds, except for the soliciting
dealer warrants described above.

We have agreed to indemnify the participating broker-dealers, including
the Dealer Manager, against certain liabilities arising under the Securities Act
of 1933, as amended.

The broker-dealers participating in the offering of our shares are not
obligated to obtain any subscriptions on our behalf, and we cannot assure you
that any shares will be sold.

Our executive officers and directors, as well as officers and employees
of Wells Capital or other affiliates, may purchase shares offered in this
offering at a discount. The purchase price for such shares shall be $8.90 per
share reflecting the fact that the acquisition and advisory fees relating to
such shares will be reduced by $0.15 per share and selling commissions in the
amount of $0.70 per share and dealer manager fees in the amount of $0.25 per
share will not be payable in connection with such sales. The net offering
proceeds we receive will not be affected by such sales of shares at a discount.
Wells Capital and its affiliates shall be expected to hold their shares
purchased as shareholders for investment and not with a view towards
distribution. In addition, shares purchased by Wells Capital or its affiliates
shall not be entitled to vote on any matter presented to the shareholders for a
vote.

154

You should pay for your shares by check payable to "Wells Real Estate
Investment Trust, Inc." Subscriptions will be effective only upon our
acceptance, and we reserve the right to reject any subscription in whole or in
part. We may not accept a subscription for shares until at least five business
days after the date you receive this prospectus. You will receive a confirmation
of your purchase. Except for purchases pursuant to our dividend reinvestment
plan or reinvestment plans of other public real estate programs, all accepted
subscriptions will be for whole shares and for not less than 100 shares
($1,000). (See "Suitability Standards.") Except in Maine, Minnesota, Nebraska
and Washington, investors who have satisfied the minimum purchase requirement
and have purchased units or shares in Wells programs or units or shares in other
public real estate programs may purchase less than the minimum number of shares
discussed above, provided that such investors purchase a minimum of 2.5 shares
($25). After investors have satisfied the minimum purchase requirement, minimum
additional purchases must be in increments of at least 2.5 shares ($25), except
for purchases made pursuant to our dividend reinvestment plan or reinvestment
plans of other public real estate programs.

We will place the subscription proceeds in an interest-bearing account
with Bank of America, N.A., Atlanta, Georgia. Subscription proceeds held in the
account may be invested in securities backed by the United States government or
bank money-market accounts or certificates of deposit of national or state banks
that have deposits insured by the Federal Deposit Insurance Corporation,
including certificates of deposit of any bank acting as depository or custodian
for any such funds, as directed by our advisor. Subscribers may not withdraw
funds from the account. We will withdraw funds from the account periodically for
the acquisition of real estate properties or the payment of fees and expenses.
We generally admit shareholders to the Wells REIT on a daily basis.

Investors who desire to establish an IRA for purposes of investing in
shares may do so by having Wells Advisors, Inc., a qualified non-bank IRA
custodian affiliated with the advisor, act as their IRA custodian. In the event
that an IRA is established having Wells Advisors, Inc. as the IRA custodian, the
authority of Wells Advisors, Inc. will be limited to holding the shares on
behalf of the beneficiary of the IRA and making distributions or reinvestments
in shares solely at the discretion of the beneficiary of the IRA. Wells
Advisors, Inc. will not have the authority to vote any of the shares held in an
IRA except strictly in accordance with the written instructions of the
beneficiary of the IRA.

The offering of shares will terminate on or before December 19, 2002.
However, we reserve the right to terminate this offering at any time prior to
such termination date.

The proceeds of this offering will be received and held in trust for
the benefit of purchasers of shares to be used only for the purposes set forth
in the "Estimated Use of Proceeds" section. Subscriptions will be accepted or
rejected within 30 days of receipt by the Wells REIT, and if rejected, all funds
shall be returned to the rejected subscribers within ten business days.

We may sell shares to retirement plans of broker-dealers participating
in the offering, to broker-dealers in their individual capacities, to IRAs and
qualified plans of their registered representatives or to any one of their
registered representatives in their individual capacities for 93% of the public
offering price in consideration of the services rendered by such broker-dealers
and registered representatives in the offering. The net proceeds to the Wells
REIT from such sales will be identical to net proceeds we receive from other
sales of shares.

In connection with sales of 50,000 or more shares ($500,000) to a
"purchaser" as defined below, a participating broker-dealer may agree in his
sole discretion to reduce the amount of his selling commissions. Such reduction
will be credited to the purchaser by reducing the total purchase price payable
by such purchaser. The following table illustrates the various discount levels
available:

155

Dealer
Purchase         Manager    Net
Dollar Volume            Sales Commissions        Price            Fee Per    Proceeds
------------------------
Shares Purchased     Percent          Per Share   Per Share        Share      Per Share
----------------     -------          ---------   ---------        -----      ---------

Under $500,000       7.0%              $0.7000    $10.0000         $0.25      $9.05
$500,000-$999,999    5.0%              $0.4895    $ 9.7895         $0.25      $9.05
$1,000,000 and Over  3.0%              $0.2876    $ 9.5876         $0.25      $9.05

For example, if an investor purchases 100,000 shares, he could pay as
little as $958,760 rather than $1,000,000 for the shares, in which event the
commission on the sale of such shares would be $28,760 ($0.2876 per share), and,
after payment of the dealer manager fee, we would receive net proceeds of
$905,000 ($9.05 per share). The net proceeds to the Wells REIT will not be
affected by volume discounts.

Because all investors will be deemed to have contributed the same
amount per share to the Wells REIT for purposes of declaring and paying
dividends, an investor qualifying for a volume discount will receive a higher
return on his investment than investors who do not qualify for such discount.

Subscriptions may be combined for the purpose of determining the
volume discounts in the case of subscriptions made by any "purchaser," as that
term is defined below, provided all such shares are purchased through the same
broker-dealer. The volume discount shall be prorated among the separate
subscribers considered to be a single "purchaser." Any request to combine more
than one subscription must be made in writing, and must set forth the basis for
such request. Any such request will be subject to verification by the advisor
that all of such subscriptions were made by a single "purchaser."

For the purposes of such volume discounts, the term "purchaser"
includes:

.    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.

Notwithstanding the above, in connection with volume sales made to investors in
the Wells REIT, the advisor may, in its sole discretion, waive the "purchaser"
requirements and aggregate subscriptions, including subscriptions to public real
estate programs previously sponsored by the advisor, or its affiliates, as part
of a combined order for purposes of determining the number of shares purchased,
provided that any aggregate group of subscriptions must be received from the
same broker-dealer, including the Dealer Manager. Any such reduction in selling
commission will be prorated among the separate subscribers except that, in the
case of purchases through the Dealer Manager, the Dealer Manager may allocate
such reduction among separate subscribers considered to be a single "purchaser"
as it deems appropriate. An investor may reduce the amount of his purchase price
to the net amount shown in the foregoing table, if applicable. If such investor
does not reduce the purchase price, the excess amount submitted over the
discounted purchase price shall be returned to the actual separate subscribers

156

for shares. Except as provided in this paragraph, separate subscriptions will
not be cumulated, combined or aggregated.

In addition, in order to encourage purchases in amounts of 500,000 or
more shares, a potential purchaser who proposes to purchase at least 500,000
shares may agree with Wells Capital and the Dealer Manager to have the
acquisition and advisory fees payable to Wells Capital with respect to the sale
of such shares reduced to 0.5%, to have the dealer manager fee payable to the
Dealer Manager with respect to the sale of such shares reduced to 0.5%, and to
have the selling commissions payable with respect to the sale of such shares
reduced to 0.5%, in which event the aggregate fees payable with respect to the
sale of such shares would be reduced by $1.10 per share, and the purchaser of
such shares would be required to pay a total of $8.90 per share purchased,
rather than $10.00 per share. The net proceeds to the Wells REIT would not be
affected by such fee reductions. Of the $8.90 paid per share, we anticipate that
approximately $8.40 per share or approximately 94.4% will be used to acquire
properties and pay required acquisition expenses relating to the acquisition of
properties. All such sales must be made through registered broker-dealers.

California residents should be aware that volume discounts will not be
available in connection with the sale of shares made to California residents to
the extent such discounts do not comply with the provisions of Rule 260.140.51
adopted pursuant to the California Corporate Securities Law of 1968. Pursuant to
this Rule, volume discounts can be made available to California residents only
in accordance with the following conditions:

.     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.

Accordingly, volume discounts for California residents will be available in
accordance with the foregoing table of uniform discount levels based on dollar
volume of shares purchased, but no discounts are allowed to any group of
purchasers, and no subscriptions may be aggregated as part of a combined order
for purposes of determining the number of shares purchased.

Investors who, in connection with their purchase of shares, have
engaged the services of a registered investment advisor with whom the investor
has agreed to pay a fee for investment advisory services in lieu of normal
commissions based on the volume of securities sold may agree with the
participating broker-dealer selling such shares and the Dealer Manager to reduce
the amount of selling commissions payable with respect to such sale to zero. The
net proceeds to the Wells REIT will not be affected by eliminating the
commissions payable in connection with sales to investors purchasing through
such investment advisors. All such sales must be made through registered
broker-dealers.

157

Neither the Dealer Manager nor its affiliates will directly or
indirectly compensate any person engaged as an investment advisor by a potential
investor as an inducement for such investment advisor to advise favorably for
investment in the Wells REIT.

In addition, subscribers for shares may agree with their participating
broker-dealers and the Dealer Manager to have selling commissions due with
respect to the purchase of their shares paid over a six year period pursuant to
a deferred commission arrangement. Shareholders electing the deferred commission
option will be required to pay a total of $9.40 per share purchased upon
subscription, rather than $10.00 per share, with respect to which $0.10 per
share will be payable as commissions due upon subscription. For the period of
six years following subscription, $0.10 per share will be deducted on an annual
basis from dividends or other cash distributions otherwise payable to the
shareholders and used by the Wells REIT to pay deferred commission obligations.
The net proceeds to the Wells REIT will not be affected by the election of the
deferred commission option. Under this arrangement, a shareholder electing the
deferred commission option will pay a 1% commission upon subscription, rather
than a 7% commission, and an amount equal to a 1% commission per year thereafter
for the next six years, or longer if required to satisfy outstanding deferred
commission obligations, will be deducted from dividends or other cash
distributions otherwise payable to such shareholder and used by the Wells REIT
to satisfy commission obligations. The foregoing commission amounts may be
adjusted with approval of the Dealer Manager by application of the volume
discount provisions described previously.

Shareholders electing the deferred commission option who are subject to
federal income taxation will incur tax liability for dividends or other cash
distributions otherwise payable to them with respect to their shares even though
such dividends or other cash distributions will be withheld from such
shareholders and will instead be paid to third parties to satisfy commission
obligations.

Investors who wish to elect the deferred commission option should make
the election on their Subscription Agreement Signature Page. Election of the
deferred commission option shall authorize the Wells REIT to withhold dividends
or other cash distributions otherwise payable to such shareholder for the
purpose of paying commissions due under the deferred commission option;
provided, however, that in no event may the Wells REIT withhold in excess of
$0.60 per share in the aggregate under the deferred commission option. Such
dividends or cash distributions otherwise payable to shareholders may be pledged
by the Wells REIT, the Dealer Manager, the advisor or their affiliates to secure
one or more loans, the proceeds of which would be used to satisfy sales
commission obligations.

In the event that, at any time prior to the satisfaction of our
remaining deferred commission obligations, listing of the shares occurs or is
reasonably anticipated to occur, or we begin a liquidation of our properties,
the remaining commissions due under the deferred commission option may be
accelerated by the Wells REIT. In either such event, we shall provide notice of
any such acceleration to shareholders who have elected the deferred commission
option. In the event of listing, the amount of the remaining commissions due
shall be deducted and paid by the Wells REIT out of dividends or other cash
distributions otherwise payable to such shareholders during the time period
prior to listing. To the extent that the distributions during such time period
are insufficient to satisfy the remaining commissions due, the obligation of
Wells REIT and our shareholders to make any further payments of deferred
commissions under the deferred commission option shall terminate, and
participating broker-dealers will not be entitled to receive any further portion
of their deferred commissions following listing of our shares. In the event of a
liquidation of our properties, the amount of remaining commissions due shall be
deducted and paid by the Wells REIT out of dividends or net sale proceeds
otherwise payable to shareholders who are subject to any such acceleration of
their deferred commission obligations. In no event may Wells REIT withhold in
excess of $0.60 per share in the aggregate for the payment of deferred
commissions.

158

Supplemental Sales Material

In addition to this prospectus, we may utilize certain sales material
in connection with the offering of the shares, although only when accompanied by
or preceded by the delivery of this prospectus. In certain jurisdictions, some
or all of such sales material may not be available. This material may include
information relating to this offering, the past performance of the advisor and
its affiliates, property brochures and articles and publications concerning real
estate. In addition, the sales material may contain certain quotes from various
publications without obtaining the consent of the author or the publication for
use of the quoted material in the sales material.

The offering of shares is made only by means of this prospectus.
Although the information contained in such sales material will not conflict with
any of the information contained in this prospectus, such material does not
purport to be complete, and should not be considered a part of this prospectus
or the registration statement of which this prospectus is a part, or as
incorporated by reference in this prospectus or said registration statement or
as forming the basis of the offering of the shares.

Legal Opinions

The legality of the shares being offered hereby has been passed upon
for the Wells REIT by Holland & Knight LLP (Counsel). The statements under the
caption "Federal Income Tax Consequences" as they relate to federal income tax
matters have been reviewed by such Counsel, and Counsel has opined as to certain
income tax matters relating to an investment in shares of the Wells REIT.
Counsel has represented Wells Capital, our advisor, as well as affiliates of
Wells Capital, in other matters and may continue to do so in the future. (See
"Conflicts of Interest.")

Experts

Audited Financial Statements

The audited financial statements of the Wells REIT as of December 31,
1999 and 1998, and for each of the years in the two-year period ended December
31, 1999, included in this prospectus and elsewhere in the registration
statement, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are included
in this prospectus in reliance upon the authority of said firm as experts in
giving said report.

The Statements of Revenues over Certain Operating Expenses of the Dial
Building, the ASML Building, the Motorola Tempe Building and the Motorola
Plainfield Building for the year ended December 31, 1999, included in this
prospectus and elsewhere in the registration statement, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included in this prospectus in reliance
upon the authority of said firm as experts in giving said reports.

Unaudited Financial Statements

The unaudited interim financial statements of the Wells REIT as of
September 30, 2000, and for the three and nine-month periods ended September 30,
2000 and 1999, which are included in this prospectus, have not been audited.

The Statements of Revenues over Certain Operating Expenses of the
Motorola Plainfield Building for the nine months ended September 30, 2000, which
are included in this prospectus, have not been audited.

159

The unaudited pro forma financial statements of the Wells REIT for the
year ended December 31, 1999, and for the nine-month period ended September 30,
2000, which are included in this prospectus, have not been audited.

Additional Information

We have filed with the Securities and Exchange Commission (Commission),
Washington, D.C., a registration statement under the Securities Act of 1933, as
amended, with respect to the shares offered pursuant to this prospectus. This
prospectus does not contain all the information set forth in the registration
statement and the exhibits related thereto filed with the Commission, reference
to which is hereby made. Copies of the registration statement and exhibits
related thereto, as well as periodic reports and information filed by the Wells
REIT, may be obtained upon payment of the fees prescribed by the Commission, or
may be examined at the offices of the Commission without charge, at:

.     the public reference facilities in Washington, D.C. at Judiciary
Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549;

.     the Northeast Regional Office in New York at 7 World Trade
Center, Suite 1300, New York, New York 10048; and

.     the Midwest Regional Office in Chicago, Illinois at 500 West
Madison Street, Suite 1400, Chicago, Illinois 66661-2511.

The Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. The address of the Commission's website is
http://www.sec.gov.

Glossary

The following are definitions of certain terms used in this prospectus
and not otherwise defined in this prospectus:

"Dealer Manager" means Wells Investment Securities, Inc.

"IRA" means an individual retirement account established pursuant to
Section 408 or Section 408A of the Internal Revenue Code.

"NASAA Guidelines" means the Statement of Policy Regarding Real Estate
Investment Trusts of the North American Securities Administrators Association,
Inc., as revised and adopted on September 29, 1993.

"Property Manager" means Wells Management Company, Inc.

"UBTI" means unrelated business taxable income, as that term is defined
in Sections 511 through 514 of the Internal Revenue Code.

160

Index to Financial Statements and Prior Performance Tables

Page
----

Wells Real Estate Investment Trust, Inc. and Subsidiary
Audited Financial Statements
----------------------------

Report of Independent Public Accountants                              163
Consolidated Balance Sheets as of December 31, 1999 and
December 31, 1998                                                    164
Consolidated Statements of Income for the years ended
December 31, 1999 and December 31, 1998                              165
Consolidated Statements of Shareholders' Equity for the
years ended December 31, 1999 and December 31,1998                   166
Consolidated Statements of Cash Flows for the years ended
December 31, 1999 and December 31, 1998                              167
Notes to Consolidated Financial Statements                            168

Interim (Unaudited) Financial Statements
----------------------------------------

Balance Sheets as of September 30, 2000 and December 31, 1999         189
Statements of Income for the three and nine months ended
September 30, 2000 and 1999                                          190
Statements of Shareholders' Equity for the nine months ended
September 30, 2000 and the year ended December 31,1999               191
Statements of Cash Flows for the nine months ended
September 30, 2000 and 1999                                          192
Condensed Notes to Financial Statements                               193

Dial Building
Audited Financial Statements
----------------------------

Report of Independent Public Accountants                              197
Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1999                                 198
Notes to Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1999                        199

ASML Building
Audited Financial Statements
----------------------------
Report of Independent Public Accountants                              200
Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1999                                 201
Notes to Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1999                        202

161

Motorola Tempe Building
Audited Financial Statements
----------------------------

Report of Independent Public Accountants                              203
Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1999                                 204
Notes to Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1999                        205

Motorola Plainfield Building
Financial Statements
--------------------

Report of Independent Public Accountants                              206
Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1999 (audited), and the nine-
month period ended September 30, 2000 (unaudited)                    207
Notes to Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1999 (audited),
and the nine-month period ended September 30, 2000 (unaudited)       208

Wells Real Estate Investment Trust, Inc.
Unaudited Pro Forma Financial Statements
----------------------------------------

Summary of Unaudited Pro Forma Financial Statements                   210
Pro Forma Balance Sheet as of September 30, 2000                      211
Pro Forma Statement of Income for the year ended
December 31, 1999                                                    213
Pro Forma Statement of Income for the nine-month period
ended September 30, 2000                                             214

Prior Performance Tables                                                        215

162

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying consolidated balance sheets of WELLS REAL
ESTATE INVESTMENT TRUST, INC. (a Maryland corporation) AND SUBSIDIARY as of
December 31, 1999 and 1998 and the related consolidated statements of income,
shareholders' equity, and cash flows for each of the two years in the period
ended December 31, 1999. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Wells Real Estate
Investment Trust, Inc. and subsidiary as of December 31, 1999 and 1998 and the
results of their operations and their cash flows for each of the two years in
the period ended December 31, 1999 in conformity with accounting principles
generally accepted in the United States.

/s/ ARTHUR ANDERSEN LLP

Atlanta, Georgia
January 20, 2000

163

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 1999 AND 1998

ASSETS

1999               1998
----               ----

REAL ESTATE ASSETS, at cost:
Land                                                                                             $ 14,500,822        $ 1,520,834
Building, less accumulated depreciation of $1,726,103 and $0 at December 31, 1999 and
1998, respectively                                                                                81,507,040         20,076,845
Construction in progress                                                                           12,561,459                  0
------------        -----------
Total real estate assets                                                                     108,569,321         21,597,679

INVESTMENT IN JOINT VENTURES                                                                        29,431,176         11,568,677

CASH AND CASH EQUIVALENTS                                                                            2,929,804          7,979,403

DEFERRED OFFERING COSTS                                                                                964,941            548,729

DEFERRED PROJECT COSTS                                                                                  28,093            335,421

DUE FROM AFFILIATES                                                                                    648,354            262,345

PREPAID EXPENSES AND OTHER ASSETS                                                                    1,280,601            540,319
------------        -----------
Total assets                                                                                $143,852,290        $42,832,573
============        ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES:
Accounts payable and accrued expenses                                                            $    461,300        $   187,827
Notes payable                                                                                      23,929,228         14,059,930

Dividends payable                                                                                   2,166,701            408,176
Due to affiliate                                                                                    1,079,466            554,953
------------        -----------
Total liabilities                                                                             27,636,695         15,210,886
------------        -----------
COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST OF UNIT HOLDER IN OPERATING PARTNERSHIP
SHAREHOLDERS' EQUITY:                                                                                  200,000            200,000
------------        -----------

Common shares, $.01 par value; 40,000,000 shares authorized, 13,471,085 shares issued
and outstanding at December 31, 1999 and 3,154,136 shares issued and outstanding at
December 31, 1998                                                                                    134,710             31,541
Additional paid-in capital                                                                        115,880,885         27,056,112
Retained earnings                                                                                           0            334,034
------------        -----------
Total shareholders' equity                                                                   116,015,595         27,421,687
------------        -----------
Total liabilities and shareholders' equity                                                  $143,852,290        $42,832,573
============        ===========

The accompanying notes are an integral part of these consolidated balance
sheets.

164

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

1999              1998
--------------     -------------
REVENUES:

Rental income                                                                  $4,735,184          $ 20,994
Equity in income of joint ventures                                              1,243,969           263,315
Interest income                                                                   502,993           110,869
Other income                                                                       13,249                 0
--------------      ------------
6,495,395           395,178
--------------      ------------

EXPENSES:
Depreciation                                                                    1,726,103                 0
Interest expense                                                                  442,029            11,033
Operating costs, net of reimbursements                                            (74,666)                0
Management and leasing fees                                                       257,744                 0
General and administrative                                                        123,776            29,943
Legal and accounting                                                              115,471            19,552
Computer costs                                                                     11,368               616
Amortization of organizational costs                                                8,921                 0
-------------      ------------
2,610,746            61,144
-------------      ------------
NET INCOME                                                                        $3,884,649          $334,034
=============      ============

EARNINGS PER SHARE:
Basic and diluted                                                              $     0.50          $   0.40
=============      ============

The accompanying notes are an integral part of these consolidated statements.

165

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

Common Stock       Additional                     Total
--------------------    Paid-In      Retained      Shareholders'
Shares     Amount     Capital      Earnings         Equity
----------  --------  -----------   -----------   ---------------

BALANCE, December 31, 1997                        100  $      1  $        999  $         0   $      1,000

Issuance of common stock                   3,154,036    31,540    31,508,820            0      31,540,360
Net income                                         0         0             0      334,034         334,034
Dividends ($.31 per share)                         0         0      (511,163)           0        (511,163)
Sales commissions                                  0         0    (2,996,334)           0      (2,996,334)
Other offering expenses                            0         0      (946,210)           0        (946,210)
----------  -------- -------------  -----------   -------------
BALANCE, December 31, 1998                  3,154,136    31,541    27,056,112      334,034      27,421,687

Issuance of common stock                  10,316,949   103,169   103,066,321            0     103,169,490
Net income                                         0         0             0    3,884,649       3,884,649
Dividends ($.70 per share)                         0         0    (1,346,240)  (4,218,683)     (5,564,923)
Sales commissions                                  0         0    (9,801,197)           0      (9,801,197)
Other offering expenses                            0         0    (3,094,111)           0      (3,094,111)
----------  --------  ------------  -----------    ------------
BALANCE, December 31, 1999                 13,471,085  $134,710  $115,880,885  $         0    $116,015,595
==========  ========  ============  ===========    ============

The accompanying notes are an integral part of these consolidated statements.

166

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

1999           1998
-------------   ------------
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income                                                                                $   3,884,649   $    334,034
-------------   ------------
Adjustments to reconcile net income to net cash provided by (used in) operating
activities:
Equity in income of joint ventures                                                        (1,243,969)      (263,315)
Depreciation                                                                               1,726,103              0
Amortization of organizational costs                                                           8,921              0
Changes in assets and liabilities:
Prepaid expenses and other assets                                                         (749,203)      (540,319)
Accounts payable and accrued expenses                                                      273,473        187,827
Due to affiliates                                                                          108,301          6,224
-------------   ------------
Total adjustments                                                                        123,626       (609,583)
-------------   ------------
Net cash provided by (used in) operating activities                                    4,008,275       (275,549)
-------------   ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate                                                                   (85,514,506)   (21,299,071)
Investment in joint ventures                                                                (17,641,211)   (11,276,007)
Deferred project costs paid                                                                  (3,610,967)    (1,103,913)
Distributions received from joint ventures                                                    1,371,728        178,184
-------------   ------------
Net cash used in investing activities                                               (105,394,956)   (33,500,807)
-------------   ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable                                                                  40,594,463     14,059,930
Repayments of notes payable                                                                 (30,725,165)             0
Dividends paid to shareholders                                                               (3,806,398)      (102,987)
Issuance of common stock                                                                    103,169,490     31,540,360
Sales commissions paid                                                                       (9,801,197)    (2,996,334)
Other offering costs paid                                                                    (3,094,111)      (946,210)
-------------   ------------
Net cash provided by financing activities                                             96,337,082     41,554,759
-------------   ------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                          (5,049,599)     7,778,403

CASH AND CASH EQUIVALENTS, beginning of year                                                   7,979,403        201,000
-------------   ------------
CASH AND CASH EQUIVALENTS, end of year                                                     $   2,929,804   $  7,979,403
=============   ============

SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES:
Deferred project costs applied to real estate assets                                      $   3,183,239   $    298,608
=============   ============

Deferred project costs contributed to joint ventures                                      $     735,056   $    469,884
=============   ============

Deferred offering costs due to affiliate                                                  $     416,212   $          0
=============   ============

The accompanying notes are an integral part of these consolidated statements.

167

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1999 AND 1998

1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Wells Real Estate Investment Trust, Inc. (the "Company") is a Maryland
corporation that qualifies as a real estate investment trust ("REIT"). The
Company is conducting an offering for the sale of a maximum of 40,000,000
(exclusive of 2,200,000 shares available pursuant to the Company's dividend
reinvestment plan) shares of common stock, $.01 par value per share, at a price
of $10 per share. The Company will seek to acquire and operate commercial
properties, including, but not limited to, office buildings, shopping centers,
business and industrial parks, and other commercial and industrial properties,
including properties which are under construction, are newly constructed, or
have been constructed and have operating histories. All such properties may be
acquired, developed, and operated by the Company alone or jointly with another
party. The Company is likely to enter into one or more joint ventures with
affiliated entities for the acquisition of properties. In connection with this,
the Company may enter into joint ventures for the acquisition of properties with
prior or future real estate limited partnership programs sponsored by Wells
Capital, Inc. (the "Advisor") or its affiliates.

Substantially all of the Company's business is conducted through Wells Operating
Partnership, L.P. (the "Operating Partnership"), a Delaware limited partnership.
During 1997, the Operating Partnership issued 20,000 limited partner units to
the Advisor in exchange for $200,000. The Company is the sole general partner in
the Operating Partnership and possesses full legal control and authority over
the operations of the Operating Partnership; consequently, the accompanying
consolidated financial statements of the Company include the amounts of the
Operating Partnership.

The Operating Partnership owns the following properties directly: (i) the
PriceWaterhouseCoopers property (the "PwC Building"), a four-story office
building located in Tampa, Florida; (ii) the AT&T Building, a four-story office
building located in Harrisburg, Pennsylvania; (iii) the Marconi Data Systems
property (the "Marconi Building"), a two-story office building located in Wood
Dale, Illinois; and (iv) the Cinemark Building, a five-story office building
located in Plano, Texas.

The Company also owns interests in several properties through a joint venture
among the Operating Partnership, Wells Real Estate Fund IX, L.P. ("Wells Fund
IX"), Wells Real Estate Fund X, L.P. ("Wells Fund X"), and Wells Real Estate
Fund XI, L.P. ("Wells Fund XI"). This joint venture is referred to as the Fund
IX, Fund X, Fund XI, and REIT Joint Venture ("Fund IX, X, XI, and REIT Joint
Venture"). In addition, the Company owns an interest in several properties
through a joint venture between Wells Fund XI, Wells Real Estate Fund XII, L.P.
("Wells Fund XII"), and the Operating Partnership, which is referred to as Wells
Fund XI, XII and REIT Joint Venture. The Company owns two properties through a
joint venture between the Operating Partnership and Fund X and XI Associates, a
joint venture between Wells Fund X and Wells Fund XI.

Through its investment in the Fund IX, X, XI, and REIT Joint Venture, the
Company owns interests in the following properties: (i) a three-story office
building in Knoxville, Tennessee (the "ABB Building"), (ii) a two-story office
building in Louisville, Colorado (the "Ohmeda Building"), (iii) a three-story
office building in Broomfield, Colorado (the "360 Interlocken Building"), (iv) a
one-story warehouse facility in Ogden, Utah (the "Iomega Building"), and (v) a
one-story office building in Oklahoma City, Oklahoma (the "Lucent Technologies
Building").

The following properties are owned by the Company through its investment in a
joint venture with Fund X and XI Associates: (i) a one-story office and
warehouse building in Fountain Valley, California (the "Cort Furniture

168

Building") owned by Wells/Orange County Associates and (ii) a warehouse and
office building in Fremont, California (the "Fairchild Building") owned by
Wells/Fremont Associates.

Through its investment in the Wells Fund XI, XII, and REIT Joint Venture, the
Company owns interests in the following properties: (i) a two-story
manufacturing and office building in Greenville County, South Carolina (the
"EYBL CarTex Building"), (ii) a three-story office building Leawood, Kansas (the
"Sprint Building"), (iii) an office and warehouse building in Chester County,
Pennsylvania (the "Johnson Matthey Building"), and (iv) a two-story office
building in Ft. Myers, Florida (the "Gartner Building").

Use of Estimates and Factors Affecting the Company

The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

The carrying values of real estate are based on management's current intent to
hold the real estate assets as long-term investments. The success of the
Company's future operations and the ability to realize the investment in its
assets will be dependent on the Company's ability to maintain rental rates,
occupancy, and an appropriate level of operating expenses in future years.
Management believes that the steps it is taking will enable the Company to
realize its investment in its assets.

Income Taxes

The Company has elected to be taxed as a REIT under the Internal Revenue Code of
1986, as amended (the "Code"), commencing with the taxable year ended December
31, 1998. As a result, the Company generally will not be subject to federal
income taxation at the corporate level to the extent it distributes annually at
least 95% of its REIT taxable income, as defined in the Code, to its
shareholders and satisfies certain other requirements. Additionally, the
Operating Partnership is not subject to federal or state income taxes.
Accordingly, no provision has been made for federal or state income taxes in the
accompanying consolidated financial statements for the years ended December 31,
1999 and 1998.

Real Estate Assets

Real estate assets held by the Company and joint ventures are stated at cost
less accumulated depreciation. Major improvements and betterments are
capitalized when they extend the useful life of the related asset. All repair
and maintenance are expensed as incurred.

Management continually monitors events and changes in circumstances which could
indicate that carrying amounts of real estate assets may not be recoverable.
When events or changes in circumstances are present which indicate that the
carrying amounts of real estate assets may not be recoverable, management
assesses the recoverability of real estate assets by determining whether the
carrying value of such real estate assets will be recovered through the future
cash flows expected from the use of the asset and its eventual disposition.
Management has determined that there has been no impairment in the carrying
value of real estate assets held by the Company or the joint ventures as of
December 31, 1999.

Depreciation of building and improvements is calculated using the straight-line
method over 25 years. Tenant improvements are amortized over the life of the
related lease or the life of the asset, whichever is shorter.

Investment in Joint Ventures

Basis of Presentation. The Operating Partnership does not have control over the
operations of the joint ventures; however, it does exercise significant
influence. Accordingly, the Operating Partnership's investment in the joint
ventures is recorded using the equity method of accounting.

169

Partners' Distributions and Allocations of Profit and Loss. Cash available for
distribution and allocations of profit and loss to the Operating Partnership by
the joint ventures are made in accordance with the terms of the individual joint
venture agreements. Generally, these items are allocated in proportion to the
partners' respective ownership interests. Cash is paid from the joint ventures
to the Operating Partnership on a quarterly basis.

Deferred Lease Acquisition Costs. Costs incurred to procure operating leases are
capitalized and amortized on a straight-line basis over the terms of the related
leases.

Revenue Recognition

All leases on real estate assets held by the Company or the joint ventures are
classified as operating leases, and the related rental income is recognized on a
straight-line basis over the terms of the respective leases.

Cash and Cash Equivalents

For the purposes of the statements of cash flows, the Company considers all
highly liquid investments purchased with an original maturity of three months or
less to be cash equivalents. Cash equivalents include cash and short-term
investments. Short-term investments are stated at cost, which approximates fair
value, and consist of investments in money market accounts.

Earnings Per Share

Earnings per share is calculated based on the weighted average number of common
shares outstanding during each period. The weighted average number of common
shares outstanding is identical for basic and fully diluted earnings per share,
as there is no dilutive impact created from the Company's stock option plan
(Note 10) using the treasury stock method.

2.   DEFERRED PROJECT COSTS

The Company paid a percentage of shareholder contributions to the Advisor for
acquisition and advisory services. These payments, as stipulated in the
prospectus, can be up to 3.5% of shareholder contributions, subject to certain
overall limitations contained in the prospectus. Aggregate fees paid through
December 31, 1999 were $4,714,880 and amounted to 3.5% of shareholders'
contributions received. These fees are allocated to specific properties as they
are purchased or developed and are included in capitalized assets of the joint
ventures or real estate assets. Deferred project costs at December 31, 1999 and
1998 represent fees not yet applied to properties.

3.   DEFERRED OFFERING COSTS

Organization and offering expenses, to the extent they exceed 3% of gross
offering proceeds, will be paid by the Advisor and not by the Company.
Organization and offering expenses do not include sales or underwriting
commissions but do include such costs as legal and accounting fees, printing
costs, and other offering expenses.

As of December 31, 1999, the Advisor paid organization and offering expenses on
behalf of the Company in the aggregate amount of $5,005,262, of which the
Advisor was reimbursed $4,040,321, which did not exceed the 5% limitation. The
unpaid portion of deferred offering costs is $964,941 and is included in due to
affiliate in the accompanying balance sheet.

170

4.  RELATED-PARTY TRANSACTIONS

Due from affiliates at December 31, 1999 represents the Operating Partnership's
share of the cash to be distributed from its joint venture investments for the
fourth quarter of 1999 and 1998 as follows:

1999        1998
--------    --------

Fund IX, X, XI, and REIT Joint Venture            $ 32,079    $ 38,360
Wells/Orange County Associates                      75,953      77,123
Wells/Fremont Associates                           152,681     146,862
Fund XI, XII, and REIT                             387,641           0
--------    --------
$648,354    $262,345
========    ========

The Company entered into a property management agreement with Wells Management
Company, Inc. ("Wells Management"), an affiliate of the Advisor. In
consideration for supervising the management and leasing of the Operating
Partnership's properties, the Operating Partnership will pay Wells Management
management and leasing fees equal to the lesser of (a) fees that would be paid
to a comparable outside firm, or (b) 4.5% of the gross revenues generally paid
over the life of the lease plus a separate competitive fee for the one-time
initial lease-up of newly constructed properties generally paid in conjunction
with the receipt of the first month's rent. In the case of commercial properties
which are leased on a long-term (ten or more years) net lease basis, the maximum
property management fee from such leases shall be 1% of the gross revenues
generally paid over the life of the leases except for a one-time initial leasing
fee of 3% of the gross revenues on each lease payable over the first five full
years of the original lease term.

The Operating Partnership's portion of the management and leasing fees and lease
acquisition costs paid to Wells Management by the joint ventures was $336,517
for the year ended December 31, 1999.

The Advisor performs certain administrative services for the Operating
Partnership, such as accounting and other partnership administration, and incurs
the related expenses. Such expenses are allocated among the Operating
Partnership and the various Wells Real Estate Funds based on time spent on each
fund by individual administrative personnel. In the opinion of management, such
allocation is a reasonable basis for allocating such expenses.

The Advisor is a general partner in various Wells Real Estate Funds. As such,
there may exist conflicts of interest where the Advisor, while serving in the
capacity as general partner for Wells Real Estate Funds, may be in competition
with the Operating Partnership for tenants in similar geographic markets.

5.  INVESTMENT IN JOINT VENTURES

The Operating Partnership's investment and percentage ownership in joint
ventures at December 31, 1999 and 1998 are summarized as follows:

1999                       1998
-----------------------    -----------------------
Amount      Percent        Amount      Percent
-----------   ---------    -----------   ---------

Fund IX, X, XI, and REIT Joint Venture                     $ 1,388,884       4%       $ 1,443,378       4%
Wells/Orange County Associates                               2,893,112      44          2,958,617      44
Wells/Fremont Associates                                     6,988,210      78          7,166,682      78
Fund XI, XII, and REIT Joint Venture                        18,160,970      57                  0       0
-----------                -----------
$29,431,176                $11,568,677
===========                ===========

171

The following is a rollforward of the Operating Partnership's investment in
joint ventures for the years ended December 31, 1999 and 1998:

1999           1998
-----------    -----------

Investment in joint ventures, beginning of year            $11,568,677    $         0
Equity in income of joint ventures                           1,243,969        263,315
Contributions to joint ventures                             18,376,267     11,745,890
Distributions from joint ventures                           (1,757,737)      (440,528)
-----------    -----------
Investment in joint ventures, end of year                  $29,431,176    $11,568,677
===========    ===========

Fund IX, X, XI, and REIT Joint Venture

On March 20, 1997, Wells Fund IX and Wells Fund X entered into a joint venture
agreement. The joint venture, Fund IX and X Associates, was formed to acquire,
develop, operate, and sell real properties. On March 20, 1997, Wells Fund IX
contributed a 5.62-acre tract of real property in Knoxville, Tennessee, and
improvements thereon, known as the ABB Building, to the Fund IX and X Associates
joint venture. A 83,885-square-foot, three-story building was constructed and
commenced operations at the end of 1997.

On February 13, 1998, the joint venture purchased a two-story office building,
known as the Ohmeda Building, in Louisville, Colorado. On March 20, 1998, the
joint venture purchased a three-story office building, known as the 360
Interlocken Building, in Broomfield, Colorado. On June 11, 1998, Fund IX and X
Associates was amended and restated to admit Wells Fund XI and the Operating
Partnership. The joint venture was renamed the Fund IX, X, XI, and REIT Joint
Venture. On June 24, 1998, the new joint venture purchased a one-story office
building, known as the Lucent Technologies Building, in Oklahoma City, Oklahoma.
On April 1, 1998, Wells Fund X purchased a one-story warehouse facility, known
as the Iomega Building, in Ogden, Utah. On July 1, 1998, Wells Fund X
contributed the Iomega Building to the Fund IX, X, XI, and REIT Joint Venture.

172

Following are the financial statements for the Fund IX, X, XI, and REIT Joint
Venture:

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Balance Sheets
December 31, 1999 and 1998

ASSETS

1999            1998
-----------     -----------

Real estate assets, at cost:
Land                                                                            $ 6,698,020     $ 6,454,213
Building and improvements, less accumulated depreciation of
$2,792,068 in 1999 and $1,253,156 in 1998                                     29,878,541      30,686,845
Construction in progress                                                                  0             990
-----------     -----------
Total real estate assets                                               36,576,561      37,142,048
Cash and cash equivalents                                                             1,146,874       1,329,457
Accounts receivable                                                                     554,965         133,257
Prepaid expenses and other assets                                                       526,409         441,128
-----------     -----------
Total assets                                                          $38,804,809     $39,045,890
===========     ===========

LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
Accounts payable                                                                $   704,914     $   409,737
Due to affiliates                                                                     6,379           4,406
Partnership distributions payable                                                   804,734       1,000,127
-----------     -----------
Total liabilities                                                       1,516,027       1,414,270
-----------     -----------
Partners' capital:
Wells Real Estate Fund IX                                                        14,590,626      14,960,100
Wells Real Estate Fund X                                                         18,000,869      18,707,139
Wells Real Estate Fund XI                                                         3,308,403       2,521,003
Wells Operating Partnership, L.P.                                                 1,388,884       1,443,378
-----------     -----------
Total partners' capital                                                37,288,782      37,631,620
-----------     -----------
Total liabilities and partners' capital                               $38,804,809     $39,045,890
===========     ===========

173

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Income (Loss)
for the Years Ended December 31, 1999, 1998, and 1997

1999          1998         1997
----------    ----------    --------

Revenues:
Rental income                                                      $3,932,962    $2,945,980    $ 28,512
Interest income                                                       120,080        20,438           0
----------    ----------    --------
4,053,042     2,966,418      28,512
----------    ----------    --------
Expenses:
Depreciation                                                        1,538,912     1,216,293      36,863
Management and leasing fees                                           286,139       226,643       1,711
Operating costs, net of reimbursements                                (43,501)     (140,506)     10,118
Property administration expense                                        63,311        34,821           0
Legal and accounting                                                   35,937        15,351           0
----------    ----------    --------
1,880,798     1,352,602      48,692
----------    ----------    --------
Net income (loss)                                                      $2,172,244    $1,613,816    $(20,180)
==========    ==========    ========

Net income (loss) allocated to Wells Real Estate Fund IX               $  850,072    $  692,116    $(10,145)
==========    ==========    ========

Net income (loss) allocated to Wells Real Estate Fund X                $1,056,316    $  787,481    $(10,035)
==========    ==========    ========
Net income (loss) allocated to Wells Real Estate Fund XI               $  184,335    $   85,352    $      0
==========    ==========    ========
Net income allocated to Wells Operating Partnership, L.P.              $   81,501    $   48,867    $      0
==========    ==========    ========

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Years Ended December 31, 1999, 1998, and 1997

Wells Real      Wells Real    Wells Real         Wells            Total
Estate          Estate        Estate         Operating        Partners'
Fund IX         Fund X       Fund XI     Partnership, L.P.     Capital
-----------     ----------    ----------   -----------------    ---------

Balance, December 31, 1996                 $         0    $         0    $        0      $        0       $         0
Net loss                                    (10,145)       (10,035)            0               0           (20,180)
Partnership contributions                 3,712,938      3,672,838             0               0         7,385,776
-----------    -----------    ----------      ----------       -----------
Balance, December 31, 1997                   3,702,793      3,662,803             0               0         7,365,596
Net income                                  692,116        787,481        85,352          48,867         1,613,816
Partnership contributions                11,771,312     15,613,477     2,586,262       1,480,741        31,451,792
Partnership distributions                (1,206,121)    (1,356,622)     (150,611)        (86,230)       (2,799,584)
-----------    -----------    ----------      ----------       -----------
Balance, December 31, 1998                  14,960,100     18,707,139     2,521,003       1,443,378        37,631,620
Net income                                  850,072      1,056,316       184,355          81,501         2,172,244
Partnership contributions                   198,989              0       911,027               0         1,110,016
Partnership distributions                (1,418,535)    (1,762,586)     (307,982)       (135,995)       (3,625,098)
-----------    -----------    ----------      ----------       -----------
Balance, December 31, 1999                 $14,590,626    $18,000,869    $3,308,403      $1,388,884       $37,288,782
===========    ===========    ==========      ==========       ===========

174

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Cash Flows
for the Years Ended December 31, 1999, 1998, and 1997

1999              1998             1997
------------      ------------     ------------

Cash flows from operating activities:
Net income (loss)                                           $  2,172,244      $  1,613,816     $    (20,180)
Adjustments to reconcile net income to net cash             ------------      ------------     ------------
provided by operating activities:
Depreciation                                            1,538,912         1,216,293           36,863
Changes in assets and liabilities:
Accounts receivable                                   (421,708)          (92,745)         (40,512)
Prepaid expenses and other assets                      (85,281)         (111,818)        (329,310)
Accounts payable                                       295,177            29,967          379,770
Due to affiliates                                        1,973             1,927            2,479
------------      ------------     ------------
Total adjustments                                 1,329,073         1,043,624           49,290
------------      ------------     ------------
Net cash provided by operating
activities                                    3,501,317         2,657,440           29,110
------------      ------------     ------------
Cash flows from investing activities:
Investment in real estate                                       (930,401)      (24,788,070)      (5,715,847)
------------      ------------     ------------
Cash flows from financing activities:
Distributions to joint venture partners                       (3,820,491)       (1,799,457)               0
Contributions received from partners                           1,066,992        24,970,373        5,975,908
------------      ------------     ------------
Net cash (used in) provided by
financing activities                         (2,753,499)       23,170,916        5,975,908
------------      ------------     ------------
Net (decrease) increase in cash and cash equivalents                (182,583)        1,040,286          289,171
Cash and cash equivalents, beginning of year                       1,329,457           289,171                0
------------      ------------     ------------
Cash and cash equivalents, end of year                          $  1,146,874      $  1,329,457     $    289,171
============      ============     ============

Supplemental disclosure of noncash activities:
Deferred project costs contributed to joint venture         $     43,024      $  1,470,780     $    318,981
============      ============     ============

Contribution of real estate assets to joint venture         $          0      $  5,010,639     $  1,090,887
============      ============     ============

Wells/Orange County Associates

On July 27, 1998, the Operating Partnership entered into a joint venture
agreement with Wells Development Corporation, referred to as Wells/Orange County
Associates. On July 31, 1998, Wells/Orange County Associates acquired a
52,000-square-foot warehouse and office building located in Fountain Valley,
California, known as the Cort Furniture Building.

On September 1, 1998, Fund X and XI Associates acquired Wells Development
Corporation's interest in Wells/Orange County Associates which resulted in Fund
X and XI Associates becoming a joint venture partner with the Operating
Partnership in the ownership of the Cort Furniture Building.

Following are the financial statements for Wells/Orange County Associates:

175

Wells/Orange County Associates
(A Georgia Joint Venture)
Balance Sheets
December 31, 1999 and 1998

ASSETS

1999           1998
----------     ----------

Real estate assets, at cost:
Land                                                                              $2,187,501     $2,187,501
Building, less accumulated depreciation of $278,652 in 1999 and
$92,087 in 1998                                                                 4,385,463      4,572,028
----------     ----------
Total real estate assets                                                 6,572,964      6,759,529
Cash and cash equivalents                                                                176,666        180,895
Accounts receivable                                                                       49,679         13,123
----------     ----------
Total assets                                                            $6,799,309     $6,953,547
==========     ==========

LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
Accounts payable                                                                  $        0     $    1,550
Partnership distributions payable                                                    173,935        176,614
----------     ----------
Total liabilities                                                          173,935        178,164
----------     ----------
Partners' capital:
Wells Operating Partnership, L.P.                                                  2,893,112      2,958,617
Fund X and XI Associates                                                           3,732,262      3,816,766
----------     ----------
Total partners' capital                                                  6,625,374      6,775,383
----------     ----------
Total liabilities and partners' capital                                 $6,799,309     $6,953,547
==========     ==========

Wells/Orange County Associates
(A Georgia Joint Venture)
Statements of Income
for the Years Ended December 31, 1999 and 1998

1999           1998
----------     ----------

Revenues:
Rental income                                                                       $795,545       $331,477
Interest income                                                                            0            448
----------     ----------
795,545        331,925
----------     ----------
Expenses:
Depreciation                                                                         186,565         92,087
Management and leasing fees                                                           30,360         12,734
Operating costs, net of reimbursements                                                22,229          2,288
Interest                                                                                   0         29,472
Legal and accounting                                                                   5,439          3,930
244,593        140,511
----------     ----------
Net income                                                                              $550,952       $191,414
==========     ==========

Net income allocated to Wells Operating Partnership, L.P.                               $240,585       $ 91,978
==========     ==========

176

Net income allocated to Fund X and XI Associates                                        $310,367       $ 99,436
==========     ==========

Wells/Orange County Associates
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Years Ended December 31, 1999 and 1998

Wells
Operating        Fund X         Total
Partnership,      and XI        Partners'
L.P.        Associates       Capital
------------   ------------    -----------

Balance, December 31, 1997                                        $        0     $        0      $        0
Net income                                                        91,978         99,436         191,414
Partnership contributions                                      2,991,074      3,863,272       6,854,346
Partnership distributions                                       (124,435)      (145,942)       (270,377)
------------   ------------    ------------
Balance, December 31, 1998                                         2,958,617      3,816,766       6,775,383
Net income                                                       240,585        310,367         550,952
Partnership distributions                                       (306,090)      (394,871)       (700,961)
------------   ------------    ------------
Balance, December 31, 1999                                        $2,893,112     $3,732,262      $6,625,374
============   ============    ============

177

Wells/Orange County Associates
(A Georgia Joint Venture)
Statements of Cash Flows
for the Years Ended December 31, 1999 and 1998

1999           1998
---------     -----------

Cash flows from operating activities:
Net income                                                                           $ 550,952     $   191,414
Adjustments to reconcile net income to net cash provided by operating                ---------     -----------
activities:
Depreciation                                                                    186,565          92,087
Changes in assets and liabilities:
Accounts receivable                                                          (36,556)        (13,123)
Accounts payable                                                              (1,550)          1,550
---------     -----------
Total adjustments                                                         148,459          80,514
---------     -----------
Net cash provided by operating activities                                 699,411         271,928
---------     -----------
Cash flows from investing activities:
Investment in real estate                                                                    0      (6,563,700)
---------     -----------
Cash flows from financing activities:
Issuance of note payable                                                                     0       4,875,000
Payment of note payable                                                                      0      (4,875,000)
Distributions to partners                                                             (703,640)        (93,763)
Contributions received from partners                                                         0       6,566,430
---------     -----------
Net cash (used in) provided by financing activities                      (703,640)      6,472,667
---------     -----------
Net (decrease) increase in cash and cash equivalents                                        (4,229)        180,895
Cash and cash equivalents, beginning of year                                               180,895               0
---------     -----------
Cash and cash equivalents, end of year                                                   $ 176,666     $   180,895
=========     ===========
Supplemental disclosure of noncash activities:
Deferred project costs contributed to joint venture                                  $       0     $   287,916
=========     ===========

Wells/Fremont Associates

On July 15, 1998, the Operating Partnership entered into a joint venture
agreement with Wells Development Corporation, referred to as Wells/Fremont
Associates. On July 21, 1998, Wells/Fremont Associates acquired a
58,424-square-foot warehouse and office building located in Fremont, California,
known as the Fairchild Building.

On October 8, 1998, Fund X and XI Associates acquired Wells Development
Corporation's interest in Wells/Fremont Associates which resulted in Fund X and
XI Associates becoming a joint venture partner with the Operating Partnership in
the ownership of the Fairchild Building.

178

Following are the financial statements for Wells/Fremont Associates:

Wells/Fremont Associates
(A Georgia Joint Venture)
Balance Sheets
December 31, 1999 and 1998

ASSETS

1999              1998
----------        ----------

Real estate assets, at cost:
Land                                                                       $2,219,251        $2,219,251
Building, less accumulated depreciation of $428,246 in 1999 and
$142,720 in 1998                                                         6,709,912         6,995,439
----------        ----------
Total real estate assets                                          8,929,163         9,214,690
Cash and cash equivalents                                                         189,012           192,512
Accounts receivable                                                                92,979            34,742
----------        ----------
Total assets                                                     $9,211,154        $9,441,944
==========        ==========

LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
Accounts payable                                                           $    2,015        $    3,565
Due to affiliate                                                                5,579             2,052
Partnership distributions payable                                             186,997           189,490
----------        ----------
Total liabilities                                                   194,591           195,107
----------        ----------
Partners' capital:
Wells Operating Partnership, L.P.                                           6,988,210         7,166,682
Fund X and XI Associates                                                    2,028,353         2,080,155
----------        ----------
Total partners' capital                                           9,016,563         9,246,837
----------        ----------
Total liabilities and partners' capital                          $9,211,154        $9,441,944
==========        ==========

179

Wells/Fremont Associates
(A Georgia Joint Venture)
Statements of Income
for the Years Ended December 31, 1999 and 1998

1999         1998
--------     --------

Revenues:
Rental income                                                                $902,946     $401,058
Interest income                                                                     0        3,896
--------     --------
902,946      404,954
--------     --------
Expenses:
Depreciation                                                                  285,526      142,720
Management and leasing fees                                                    37,355       16,726
Operating costs, net of reimbursements                                         16,006        3,364
Interest                                                                            0       73,919
Legal and accounting                                                            4,885        6,306
--------     --------
343,772      243,035
--------     --------
Net income                                                                       $559,174     $161,919
========     ========

Net income allocated to Wells Operating Partnership, L.P.                        $433,383     $122,470
========     ========

Net income allocated to Fund X and XI Associates                                 $125,791     $ 39,449
========     ========

Wells/Fremont Associates
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Years Ended December 31, 1999 and 1998

Wells
Operating       Fund X         Total
Partnership,      and XI       Partners'
L.P.        Associates      Capital
------------   ------------   ------------

Balance, December 31, 1997                                    $        0     $        0     $        0
Net income                                                    122,470         39,449        161,919
Partner contributions                                       7,274,075      2,083,334      9,357,409
Partnership distributions                                    (229,863)       (42,628)      (272,491)
------------   ------------   ------------
Balance, December 31, 1998                                     7,166,682      2,080,155      9,246,837
Net income                                                    433,383        125,791        559,174
Partnership distributions                                    (611,855)      (177,593)      (789,448)
------------   ------------   ------------
Balance, December 31, 1999                                    $6,988,210     $2,028,353     $9,016,563
============   ============   ============

180

Wells/Fremont Associates
(A Georgia Joint Venture)
Statements of Cash Flows
for the Years Ended December 31, 1999 and 1998

1999           1998
---------    -----------

Cash flows from operating activities:
Net income                                                                          $ 559,174    $   161,919
---------    -----------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation                                                                    285,526        142,720
Changes in assets and liabilities:
Accounts receivable                                                          (58,237)       (34,742)
Accounts payable                                                              (1,550)         3,565
Due to affiliate                                                               3,527          2,052
---------    -----------
Total adjustments                                                         229,266        113,595
---------    -----------
Net cash provided by operating activities                                 788,440        275,514
---------    -----------
Cash flows from investing activities:
Investment in real estate                                                                   0     (8,983,111)
---------    -----------
Cash flows from financing activities:
Issuance of note payable                                                                    0      5,960,000
Payment of note payable                                                                     0     (5,960,000)
Distributions to partners                                                            (791,940)       (83,001)
Contributions received from partners                                                        0      8,983,110
---------    -----------
Net cash (used in) provided by financing activities                      (791,940)     8,900,109
---------    -----------
Net (decrease) increase in cash and cash equivalents                                      (3,500)       192,512
Cash and cash equivalents, beginning of year                                             192,512              0
---------    -----------
Cash and cash equivalents, end of year                                                 $ 189,012    $   192,512
=========    ===========
Supplemental disclosure of noncash activities:

Deferred project costs contributed to joint venture                                 $       0    $   374,299
=========    ===========

181

Fund XI, XII, and REIT Joint Venture

On May 1, 1999, the Operating Partnership entered into a joint venture with
Wells Fund XII and Wells Fund XI. On May 18, 1999, the joint venture purchased a
169,510-square-foot, two-story manufacturing and office building, known as EYBL
CarTex, in Fountain Inn, South Carolina. On July 21, 1999, the joint venture
purchased a 68,900 square-foot, three-story-office building, known as the Sprint
Building, in Leawood, Kansas. On August 17, 1999, the joint venture purchased a
130,000 square-foot office and warehouse building, known as the Johnson Matthey
Building, in Chester County, Pennsylvania. On September 20, 1999, the joint
venture purchased a 62,400 square-foot, two-story office building, known as the
Gartner Building, in Fort Myers, Florida.

Following are the financial statements for the Fund XI, XII, and REIT Joint
Venture:

The Fund XI, XII, and REIT Joint Venture
(A Georgia Joint Venture)
Balance Sheet
December 31, 1999

ASSETS

Real estate assets, at cost:
Land                                                                                      $ 5,048,797
Building and improvements, less accumulated depreciation of $506,582                       26,811,869
-----------
Total real estate assets                                                         31,860,666
Cash and cash equivalents                                                                         766,278
Accounts receivable                                                                               133,777
Prepaid assets and other expenses                                                                  26,486
-----------
Total assets                                                                    $32,787,207
===========

LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
Accounts payable                                                                          $   112,457
Partnership distributions payable                                                             680,294
-----------
Total liabilities                                                                   792,751
-----------
Partners' capital:
Wells Real Estate Fund XI                                                                   8,365,852
Wells Real Estate Fund XII                                                                  5,467,634
Wells Operating Partnership, L.P.                                                          18,160,970
-----------
Total partners' capital                                                          31,994,456
-----------
Total liabilities and partners' capital                                         $32,787,207
===========

182

The Fund XI, XII, and REIT Joint Venture
(A Georgia Joint Venture)
Statement of Income
for the Year Ended December 31, 1999

Revenues:
Rental income                                                                               $1,443,446
Other income                                                                                        57
----------
1,443,503
----------
Expenses:
Depreciation                                                                                   506,582
Management and leasing fees                                                                     59,230
Operating costs, net of reimbursements                                                           6,433
Property administration                                                                         14,185
Legal and accounting                                                                             4,000
----------
590,430
----------
Net income                                                                                      $  853,073
==========

Net income allocated to Wells Real Estate Fund XI                                               $  240,031
==========

Net income allocated to Wells Real Estate Fund XII                                              $  124,542
==========

Net income allocated to Wells Operating Partnership, L.P.                                       $  488,500
==========

The Fund XI, XII, and REIT Joint Venture
(A Georgia Joint Venture)
Statement of Partners' Capital
for the Year Ended December 31, 1999

Wells
Wells Real      Wells Real      Operating          Total
Estate          Estate       Partnership,       Partners'
Fund XI        Fund XII          L.P.            Capital
-----------    ------------    -------------    ------------

Balance, December 31, 1998                     $        0      $        0      $         0     $         0
Net income                                    240,031         124,542          488,500         853,073
Partnership contributions                   8,470,160       5,520,835       18,376,267      32,367,262
Partnership distributions                    (344,339)       (177,743)        (703,797)     (1,225,879)
-----------    ------------    -------------    ------------
Balance, December 31, 1999                     $8,365,852      $5,467,634      $18,160,970     $31,994,456
===========    ============    =============    ============

183

The Fund XI, XII, and REIT Joint Venture
(A Georgia Joint Venture)
Statement of Cash Flows
for the Year Ended December 31, 1999

Cash flows from operating activities:
Net income                                                                                         $   853,073
-----------
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation                                                                                    506,582
Changes in assets and liabilities:
Accounts receivable                                                                         (133,777)
Prepaid expenses and other assets                                                            (26,486)
Accounts payable                                                                             112,457
-----------
Total adjustments                                                                         458,776
-----------
Net cash provided by operating activities                                               1,311,849
-----------
Cash flows from financing activities:
Distributions to joint venture partners                                                               (545,571)
-----------
Net increase in cash and cash equivalents                                                                  766,278
Cash and cash equivalents, beginning of year                                                                     0
-----------
Cash and cash equivalents, end of year                                                                 $   766,278
===========

Supplemental disclosure of noncash activities:
Deferred project costs contributed to joint venture                                                $ 1,294,686
===========
Contribution of real estate assets to joint venture                                                $31,072,562
===========

6.  INCOME TAX BASIS NET INCOME AND PARTNERS' CAPITAL

The Operating Partnership's income tax basis net income for the years ended
December 31, 1999 and 1998 are calculated as follows:

1999             1998
----------        ---------

Financial statement net income                                                         $3,884,649        $ 334,034
Increase (decrease) in net income resulting from:
Depreciation expense for financial reporting purposes in excess of
amounts for income tax purposes                                                    949,631           82,618
Rental income accrued for financial reporting purposes in excess of
amounts for income tax purposes                                                   (789,599)         (35,427)
Expenses deductible when paid for income tax purposes, accrued for
financial reporting purposes                                                        49,906            1,634
----------        ---------
Income tax basis net income                                              $4,094,587        $ 382,859
==========        =========

184

The Operating Partnership's income tax basis partners' capital at December 31,
1999 and 1998 is computed as follows:

1999                1998
------------         -----------

Financial statement partners' capital                                             $116,015,595         $27,421,687
Increase (decrease) in partners' capital resulting from:
Depreciation expense for financial reporting purposes in excess of
amounts for income tax purposes                                               1,032,249              82,618
Capitalization of syndication costs for income tax purposes, which
are accounted for as cost of capital for financial reporting
purposes                                                                     12,896,312           3,942,545
Accumulated rental income accrued for financial reporting purposes
in excess of amounts for income tax purposes                                   (825,026)            (35,427)
Accumulated expenses deductible when paid for income tax purposes,
accrued for financial reporting purposes                                         51,540               1,634
Dividends payable                                                                2,166,701             408,176
------------         -----------
Income tax basis partners' capital                                                $131,337,371         $31,821,233
============         ===========

7.  RENTAL INCOME

The future minimum rental income due from the Operating Partnership's direct
investment in real estate or its respective ownership interest in the joint
ventures under noncancelable operating leases at December 31, 1999 is as
follows:

Year ended December 31:
2000                                $ 11,737,408
2001                                  11,976,253
2002                                  12,714,291
2003                                  12,856,557
2004                                  12,581,882
Thereafter                               54,304,092
------------
$116,170,483
============

Three tenants contributed 32%, 16%, and 15% of rental income for the year ended
December 31, 1999. In addition, four tenants will contribute 34%, 20%, 17%, and
11% of future minimum rental income.

The future minimum rental income due the Fund IX, X, XI, and REIT Joint Venture
under noncancelable operating leases at December 31, 1999 is as follows:

Year ended December 31:
2000                                 $ 3,666,570
2001                                   3,595,686
2002                                   3,179,827
2003                                   3,239,080
2004                                   3,048,152
Thereafter                                5,181,003
-----------
$21,910,318
===========

Four tenants contributed 25%, 18%, 13%, and 12% of rental income for the year
ended December 31, 1999. In addition, four tenants will contribute 28%, 22%,
15%, and 10% of future minimum rental income.

185

The future minimum rental income due Wells/Orange County Associates under
noncancelable operating leases at December 31, 1999 is as follows:

Year ended December 31:
2000                              $  758,964
2001                                 809,580
2002                                 834,888
2003                                 695,740
----------
$3,099,172
==========

One tenant contributed 100% of rental income for the year ended December 31,
1999 and will contribute 100% of future minimum rental income.

The future minimum rental income due Wells/Fremont Associates under
noncancelable operating leases at December 31, 1999 is as follows:

Year ended December 31:
2000                              $  869,492
2001                                 895,577
2002                                 922,444
2003                                 950,118
2004                                 894,833
----------
$4,532,464
==========

One tenant contributed 100% of rental income for the year ended December 31,
1999 and will contribute 100% of future minimum rental income.

The future minimum rental income due from XI, XII and REIT under noncancelable
operating leases at December 31, 1999 is a follows:

Year ended December 31:
2000                             $ 3,085,362
2001                               3,135,490
2002                               3,273,814
2003                               3,367,231
2004                               3,440,259
Thereafter                            9,708,895
-----------
$26,011,051
===========

Four tenants contributed approximately 34%, 22%, 22%, and 12% of rental income
for the year ended December 31, 1999. In addition, four tenants will contribute
approximately 30%, 27%, 22%, and 18% of future minimum rental income.

8.  NOTES PAYABLE

At December 31, 1999, the Operating Partnership had outstanding debt of
$23,929,228. Of this amount, $11,430,696 was borrowed under a construction loan
with Bank of America in order to finance the construction of a new building for
Matsushita Avionics (the "Matsushita Project") and improvements for the AT&T
Building. This loan is secured by the Matsushita Project and matures on May 10,
2001. The remaining $12,498,532 was borrowed against the revolving line of
credit from SouthTrust Bank, which is collateralized by the PwC Building and
matures on December 31, 2000. Interest is paid monthly and accrued at a variable
rate based on LIBOR plus 200 basis points for both of these debt instruments.
During 1999, the Company paid and capitalized interest costs of $847,451 and
$463,873, respectively. The estimated fair value of these notes approximates
their carrying value.

186

The Operating Partnership also has a $9,825,000 line of credit from Bank of
America, which bears interest at a variable rate based on LIBOR plus 200 basis
points. No balance was outstanding at December 31, 1999 under this line of
credit.

9.  COMMITMENTS AND CONTINGENCIES

On February 18, 1999, the Operating Partnership entered into a rental income
guaranty agreement with Fund VIII and IX Associates (the "joint venture"),
whereby the Operating Partnership guaranteed that the joint venture would
receive rental income on the existing Matsushita Building, equal to at least the
rent and building expenses that the joint venture would have received from
Matsushita Avionics over the remaining term of the existing lease. Matsushita
Avionics vacated the building on January 3, 2000, while the existing lease term
extends through September 2003. The Company paid approximately $61,000 to the
joint venture related to the rental income and building expenses due from
Matsushita Avionics for the remainder of January 2000. Such payments are made
from the Company's operating cash flow and reduce cash available for dividends.

On July 22, 1999, the Operating Partnership purchased a 7.49 acre tract of land
located in Midlothian, Chesterfield County, Virginia for the purpose of
constructing a four-story, 100,000 rentable square foot office building (the
"ABB Project"). The Operating Partnership entered into an office lease with ABB
Power Generation, Inc. ("ABB"), pursuant to which ABB has agreed to lease the
ABB Project upon its completion.

Management, after consultation with legal counsel, is not aware of any
significant litigation or claims against the Company, the Operating Partnership,
or the Advisor. In the normal course of business, the Company, the Operating
Partnership, or the Advisor may become subject to such litigation or claims.

10.  COMMON STOCK OPTION PLAN

The Wells Real Estate Investment Trust, Inc. Independent Director Stock Option
Plan ("the Plan") provides for grants of stock to be made to independent
nonemployee directors of the Company. Options to purchase 2,500 shares of common
stock at $12 per share are granted upon initially becoming an independent
director of the Company. Of these shares, 20% are exercisable immediately on the
date of grant. An additional 20% of these shares become exercisable on each
anniversary following the date of grant for a period of four years. Effective on
the date of each annual meeting of shareholders of the Company, beginning in
2000, each independent director will be granted an option to purchase 1,000
additional shares of common stock. These options vest at the rate of 500 shares
per full year of service thereafter. All options granted under the Plan expire
no later than the date immediately following the tenth anniversary of the date
of grant and may expire sooner in the event of the disability or death of the
optionee or if the optionee ceases to serve as a director.

The Company has adopted the disclosure provisions in SFAS No. 123, "Accounting
for Stock-Based Compensation." As permitted by the provisions of SFAS No. 123,
the Company applies Accounting Principles Board ("APB") Opinion No. 25 and the
related interpretations in accounting for its stock option plans and,
accordingly, does not recognize compensation cost.

187

A summary of the Company's stock option activity during 1999 is as follows:

Exercise
Number         Price
--------      --------

Outstanding at December 31, 1998                                     0           $ 0
Granted                                                     27,500            12
--------      --------
Outstanding at December 31, 1999                                27,500           $12
========      ========
Outstanding options exercisable as of December 31, 1999          5,500           $12
========      ========

The weighted average remaining contractual life of options outstanding at
December 31, 1999 is approximately 9.5 years. Based on the terms of the options,
the fair value of the options granted during 1999 is $0.

11.  QUARTERLY RESULTS (UNAUDITED)

Presented below is a summary of the unaudited quarterly financial information
for the years ended December 31, 1999 and 1998:

1999 Quarters Ended
--------------------------------------------------------------
March 31         June 30       September 30      December 31
----------      ------------   -------------     -------------

Revenues                                             $988,000        $1,204,938      $1,803,352       $2,499,105
Net income                                            393,438           601,975       1,277,019        1,612,217
Basic and diluted earnings per share                 $   0.10        $     0.09      $     0.18       $     0.13
Dividends per share                                      0.17              0.17            0.18             0.18

1998 Quarters Ended
--------------------------------------------------------------
March 31         June 30       September 30      December 31
----------      ------------   -------------     -------------

Revenues                                                $   0           $10,917         $73,292         $310,969
Net income                                                  0            10,899          62,128          261,007
Basic and diluted earnings per share                    $0.00           $  0.16         $  0.06         $   0.18
Dividends per share                                      0.00              0.00            0.15             0.16

188

WELLS REAL ESTATE INVESTMENT TRUST, INC.
AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

ASSETS

September 30,        December 31,
2000                1999
--------------      -------------

REAL ESTATE, at cost:
Land                                                                            $ 21,695,304       $ 14,500,822
Building and improvements, less accumulated depreciation of
$6,810,792 in 2000 and $1,726,103 in 1999                                     188,671,038         81,507,040
Construction in progress                                                             295,517         12,561,459
--------------      -------------
Total real estate                                                   210,661,859        108,569,321
--------------      -------------
INVESTMENT IN JOINT VENTURES (NOTE 2)                                                 36,708,242         29,431,176

DUE FROM AFFILIATES                                                                      859,515            648,354

CASH AND CASH EQUIVALENTS                                                             12,257,161          2,929,804

DEFERRED PROJECT COSTS (Note 1)                                                          471,005             28,093

DEFERRED OFFERING COSTS (Note 1)                                                       1,108,206            964,941

PREPAID EXPENSES AND OTHER ASSETS                                                      6,344,905          1,280,601
--------------      -------------
Total assets                                                       $268,410,893       $143,852,290
==============      =============

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES:
Accounts payable and accrued expenses                                           $    975,821       $    461,300
Notes payable (Note 3)                                                            38,909,030         23,929,228
Due to affiliates (Note 4)                                                         1,372,508          1,079,466
Dividends payable                                                                  4,475,982          2,166,701
--------------      -------------
Total liabilities                                                    45,733,341         27,636,695
--------------      -------------

COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST OF UNIT HOLDER IN OPERATING PARTNERSHIP                                200,000            200,000
--------------      -------------
SHAREHOLDERS' EQUITY:
Common shares, $.01 par value; 40,000,000 shares authorized, 26,174,825
shares issued and outstanding at September 30, 2000 and
13,471,085 shares issued and outstanding at December 31, 1999                     261,748            134,710
Additional paid-in capital                                                       222,215,804        115,880,885
Retained earnings                                                                          0                  0
--------------      -------------
Total shareholders' equity                                          222,477,552        116,015,595
--------------      -------------
Total liabilities and shareholders' equity                         $268,410,893       $143,852,290
==============      =============

See accompanying condensed notes to financial statements.

189

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended                  Nine Months Ended
-------------------------------     ------------------------------
September 30,     September 30,     September 30,    September 30,
2000              1999              2000              1999
-------------     -------------     -------------    -------------

REVENUES:
Rental income                                 $5,819,968        $1,227,144       $13,712,371       $2,806,158
Equity in income of joint ventures               635,065           384,887         1,684,247          783,065
Interest income                                  131,578           191,321           338,020          407,067
-------------     -------------     -------------    -------------
6,586,611         1,803,352        15,734,638        3,996,290
-------------     -------------     -------------    -------------
EXPENSES:
Operating costs, net of
reimbursements                                 289,140           (75,997)          631,407          (46,381)
Management and leasing fees                      381,766            68,823           919,630          150,908
Depreciation                                   2,155,366           423,760         5,084,689        1,036,003
Administrative costs                              41,626            21,076           273,484           91,016
Legal and accounting                              32,883            22,187           130,603           78,637
Computer costs                                     2,353             2,119             8,846            8,182
Amortization of loan costs                        64,016             2,433           150,143            6,488
Interest expense                               1,094,233            61,932         2,798,299          399,005
-------------     -------------     -------------    -------------
4,061,383           526,333         9,997,101        1,723,858
-------------     -------------     -------------    -------------
NET INCOME                                        $2,525,228        $1,277,019        $5,737,537       $2,272,432
=============     =============     =============    =============
BASIC AND DILUTED EARNINGS PER SHARE              $     0.11        $     0.18        $     0.30        $    0.37
=============     =============     =============    =============

See accompanying condensed notes to financial statements.

190

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE YEAR ENDED DECEMBER 31, 1999

AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000

Additional                        Total
Common Stock             Paid-In         Retained     Shareholders'
------------------------
Shares         Amount        Capital         Earnings        Equity
-----------    ---------    -------------    -----------    -------------

BALANCE, December 31, 1998                3,154,136    $  31,541    $  27,056,112    $   334,034    $  27,421,687

Issuance of common stock              10,316,949      103,169      103,066,321              0      103,169,490
Net income                                     0            0                0      3,884,649        3,884,649
Dividends ($.70 per share)                     0            0       (1,346,240)    (4,218,683)      (5,564,923)
Sales commission                               0            0       (9,801,197)             0       (9,801,197)
Other offering expenses                        0            0       (3,094,111)             0       (3,094,111)
-----------    ---------    -------------    -----------    -------------
BALANCE, December 31, 1999               13,471,085      134,710      115,880,885              0      116,015,595

Issuance of common stock              12,769,524      127,695      127,567,548              0      127,695,243
Net income                                     0            0                0      5,737,537        5,737,537
Dividends ($.544 per share)                    0            0       (4,695,767)    (5,737,537)     (10,433,304)
Sales commission                               0            0      (12,068,553)             0      (12,068,553)
Other offering expenses                        0            0       (3,811,122)             0       (3,811,122)
Common stock retired                     (65,784)        (657)        (657,187)             0         (657,844)
-----------    ---------    -------------    -----------    -------------
BALANCE, September 30, 2000              26,174,825    $ 261,748    $ 222,215,804    $         0    $ 222,477,552
===========    =========    =============    ===========    =============

See accompanying condensed notes to financial statements.

191

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended
------------------------------------
September 30,      September 30,
----------------   -----------------
2000              1999

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                     $    5,737,537      $  2,272,432
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation                                                                  5,084,689         1,036,003
Amortization of loan costs                                                      150,143             6,488
Equity in income of joint ventures                                           (1,684,247)         (783,065)
Changes in assets and liabilities:
Accounts payable                                                             514,521           326,166
Increase in prepaid expenses and other assets                             (5,214,447)         (667,823)
Increase due to affiliates                                                   149,777            82,901
--------------      ------------
Net cash provided by operating activities                               4,737,973         2,273,102
--------------      ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in real estate                                                       (103,469,511)      (55,913,594)
Investment in joint ventures                                                       (7,612,005)      (17,641,421)
Deferred project costs                                                             (4,446,307)       (2,692,478)
Distributions received from joint ventures                                          2,103,704           826,822
--------------      ------------
Net cash used in  investing activities                               (113,424,119)      (75,420,671)
--------------      ------------
Cash flows from financing activities:
Proceeds from note payable                                                         67,883,130        25,598,666
Repayment of note payable                                                         (52,903,328)      (22,732,539)
Dividends paid                                                                     (8,124,023)       (2,159,649)
Issuance of common stock                                                          127,695,243        76,927,944
Sales commissions paid                                                            (12,068,553)       (7,308,155)
Offering costs paid                                                                (3,811,122)       (2,307,838)
Common stock retired                                                                 (657,844)                0
--------------      ------------
Net cash provided by financing activities                             118,013,503        68,018,429
--------------      ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                              9,327,357        (5,129,140)

CASH AND CASH EQUIVALENTS, beginning of year                                           2,929,804         7,979,403
--------------      ------------
CASH AND CASH EQUIVALENTS, end of period                                           $  12,257,161      $  2,850,263
==============      ============

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES:
Deferred project costs applied to joint ventures                            $      295,680      $    735,056
==============      ============

Deferred project costs applied to real estate                               $    3,707,715      $  2,273,411
==============      ============

Decrease in deferred offering cost accrual                                  $     (143,265)     $   (200,640)
==============      ============

See accompanying condensed notes to financial statements.

192

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2000

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) General

Wells Real Estate Investment Trust, Inc. (the "Company" or "Registrant") is a
Maryland corporation formed on July 3, 1997. The Company is the sole general
partner of Wells Operating Partnership, L.P. ("Wells OP"), a Delaware limited
partnership organized for the purpose of acquiring, developing, owning,
operating, improving, leasing, and otherwise managing for investment purposes
income-producing commercial properties.

On January 30, 1998, the Company commenced a public offering of up to 16,500,000
shares of common stock at $10 per share pursuant to a Registration Statement on
Form S-11 under the Securities Act of 1933. The Company commenced active
operations on June 5, 1998, when it received and accepted subscriptions for
125,000 shares. The Company terminated its initial public offering on December
19, 1999, and on December 20, 1999, the Company commenced a second follow-on
public offering of up to 22,200,000 shares of common stock at $10 per share. As
of September 30, 2000, the Company had sold 26,240,610 shares for total capital
contributions of $262,406,096. After payment of $9,161,189 in acquisition and
advisory fees and acquisition expenses, payment of $32,718,532 in selling
commissions and organization and offering expenses, capital contributions and
acquisition expenditures by Wells OP of $211,641,497 in property acquisitions
and common stock redemptions of $657,844 pursuant to the Company's share
redemption program, the Company was holding net offering proceeds of $8,227,034
available for investment in properties. An additional $38,909,030 was spent for
acquisition expenditures and was funded by loans from various lending
institutes.

Wells OP owns interest in properties both directly and through equity ownership
in the following joint ventures: (i) the Fund IX-X-XI-REIT Joint Venture, a
joint venture among Wells OP and Wells Real Estate Fund IX, L.P., Wells Real
Estate Fund X, L.P. and Wells Real Estate Fund XI, L.P. (the "Fund IX-X-XI-REIT
Joint Venture"), (ii) Wells/Fremont Associates (the "Fremont Joint Venture"), a
joint venture between Wells OP and Fund X and Fund XI Associates, which is a
joint venture between Wells Real Estate Fund X, L.P. and Wells Real Estate Fund
XI, L.P. (the "Fund X-XI Joint Venture"), (iii) Wells/Orange County Associates
(the "Cort Joint Venture") a joint venture between Wells OP and the Fund X-XI
Joint Venture, (iv) the Fund XI-XII-REIT Joint Venture, a joint venture among
Wells OP, Wells Real Estate Fund XI, L.P., and Wells Real Estate Fund XII, L.P.
(the "Fund XI-XIII-REIT Joint Venture"), (v) the Fund XII-REIT Joint Venture, a
joint venture between Wells OP and Wells Real Estate Fund XII, L.P. (the "Fund
XII-REIT Joint Venture"), and (vi) the Fund VIII-IX-REIT Joint Venture, a joint
venture between Wells OP and the Fund VIII-IX Joint Venture.

As of September 30, 2000, Wells OP owned interest in the following properties
either directly or through its interests in joint ventures: (i) a three-story
office building in Knoxville, Tennessee (the "ABB-Knoxville Building"); (ii) a
two-story office building in Louisville, Colorado (the "Ohmeda Building"); (iii)
a three-story office building in Broomfield, Colorado (the "360 Interlocken
Building"); (iv) a one-story office building in Oklahoma City, Oklahoma (the
"AVAYA Building"); (v) a one-story warehouse and office building in Ogden, Utah
(the "Iomega Building"), all five of which are owned by the Fund IX-X-XI-REIT
Joint Venture; (vi) a two-story warehouse office building in Fremont, California
(the "Fremont Building"), which is owned by the Fremont Joint Venture; (vii) a
one-story warehouse and office building in Fountain Valley, California (the
"Cort Building"), which is owned by the Cort Joint Venture; (viii) a four-story
office building in Tampa, Florida (the "PWC Building"); (ix) a four-story office
building in Harrisburg, Pennsylvania (the "AT&T Building"), which are owned
directly by Wells OP; (x) a two-story manufacturing and office building located
in Fountain Inn, South Carolina (the "EYBL

193

CarTex Building"); (xi) a three-story office building located in Leawood, Kansas
(the "Sprint Building"); (xii) a one story office building and warehouse in
Tredyffrin Township, Pennsylvania (the "Johnson Matthey Building"); (xiii) a
two-story office building in Ft. Meyers, Florida (the "Gartner Building"), all
four of which are owned by Fund XI-XII-REIT Joint Venture; (xiv) a two-story
office building located in Lake Forest, California (the "Matsushita Project");
(xv) a four-story office building in Richmond, Virginia (the "Alstom Power-
Richmond Building"); (xvi) a two-story office building and warehouse in Wood
Dale, Illinois (the "Marconi Building"); (xvii) a five-story office building in
Plano, Texas (the "Cinemark Building"); (xviii) a three-story office building in
Tulsa, Oklahoma (the "Metris Building"); (xix) a two-story office building in
Scottsdale, Arizona (the "Dial Building"); (xx) a two-story office building in
Tempe, Arizona (the "ASML Building"); (xxi) a two-story office building in
Tempe, Arizona (the "Motorola Building"); (xxii) a two-story office building in
Tempe, Arizona (the "Avnet Building"); (xxiii) a three-story office building in
Troy, Michigan (the "Delphi Building"); all ten of which are owned directly by
Wells OP; (xxiv) a three-story office building in Troy, Michigan (the "Siemens
Building"), which is owned by the Fund XII-REIT Joint Venture; and (xxv) a two-
story office building in Orange County, California (the "Quest Building"),
formerly the Bake Parkway Building, previously owned by Fund VIII-IX Joint
Venture, which is now owned by the Fund VIII-IX-REIT Joint Venture.

(b) Deferred Project Costs

The Company pays Acquisition and Advisory Fees and Acquisition Expenses to Wells
Capital, Inc., the Advisor, for acquisition and advisory services and as
reimbursement for acquisition expenses. These payments may not exceed 3 1/2% of
shareholders' capital contributions. Acquisition and Advisory Fees and
Acquisition Expenses paid as of September 30, 2000, amounted to $9,161,189 and
represented approximately 3 1/2% of shareholders' capital contributions
received. These fees are allocated to specific properties as they are purchased.

(c) Deferred Offering Costs

The Advisor pays all the offering expenses for the Company. The Advisor may be
reimbursed by the Company to the extent that such offering expenses do not
exceed 3% of shareholders' capital contributions.

(d) Employees

The Company has no direct employees. The employees of Wells Capital, Inc., the
Company's Advisor, perform a full range of real estate services including
leasing and property management, accounting, asset management and investor
relations for the Company.

(e) Insurance

Wells Management Company, Inc., an affiliate of the Company and the Advisor,
carries comprehensive liability and extended coverage with respect to all the
properties owned directly and indirectly by the Company. In the opinion of
management of the registrant, the properties are adequately insured.

(f) Competition

The Company will experience competition for tenants from owners and managers of
competing projects which may include its affiliates. As a result, the Company
may be required to provide free rent; reduced charges for tenant improvements
and other inducements, all of which may have an adverse impact on results of
operations. At the time the Company elects to dispose of its properties, the
Company will also be in competition with sellers of similar properties to locate
suitable purchasers for its properties.

(g) Basis of Presentation

Substantially all of the Company's business is conducted through Wells OP. At
December 31, 1997, the Wells OP had issued 20,000 limited partner units to Wells
Capital, Inc., the Advisor, in exchange for a capital contribution of $200,000.
The Company is the sole general partner in Wells OP; consequently, the
accompanying consolidated financial statements of the Company include the
amounts of both the Company and Wells OP.

194

The consolidated financial statements of the Company have been prepared in
accordance with instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. These quarterly statements have not been
examined by independent accountants, but in the opinion of the Board of
Directors, the statements for the unaudited interim periods presented include
all adjustments, which are of a normal and recurring nature, necessary to
present a fair presentation of the results for such periods. For further
information, refer to the financial statements and footnotes included in the
Company's Form 10-K for the year ended December 31, 1999.

(h) Distribution Policy

The Company will make distributions (not including a return of capital for
federal income tax purposes) equal to at least 95% of its real estate investment
trusts taxable income through the taxable year 2000. It is the Company's policy
to make regular quarterly distributions to holders of the shares. Distributions
will be made to those shareholders who are shareholders as of the record date
selected by the Directors. Distributions will be declared on a daily basis and
paid on a quarterly basis during the Offering period and declared and paid
quarterly thereafter.

(i) Income Taxes

The Company has made an election under Section 856 (C) of the Internal Revenue
Code 1986, as amended (the "Code"), to be taxed as a Real Estate Investment
Trust ("REIT") under the Code beginning with its taxable year ended December 31,
1998. As a REIT for federal income tax purposes, the Company generally will not
be subject to federal income tax on income that it distributes to its
shareholders. If the Company fails to qualify as a REIT in any taxable year, it
will then be subject to federal income tax on its taxable income at regular
corporate rates and will not be permitted to qualify for treatment as a REIT for
federal income tax purposes for four years following the year during which
qualification is lost. Such an event could materially adversely affect the
Company's net income and net cash available to distribute to shareholders.
However, the Company believes that it is organized and operates in such a manner
as to qualify for treatment as a REIT and intends to continue to operate in the
foreseeable future in such a manner so that the Company will remain qualified as
a REIT for federal income tax purposes.

(j) Statement of Cash Flows

For the purpose of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with an original maturity of three months or
less to be cash equivalents. Cash equivalents include cash and short-term
investments.

2.   INVESTMENTS IN JOINT VENTURES

The Company owned interests in 25 office buildings through its ownership in
Wells OP, which owns interest in six joint ventures. The Company does not have
control over the operations of these joint ventures; however, it does exercise
significant influence. Accordingly, investment in joint venture is recorded
using the equity method.

The following describes additional information about certain of the properties
in which the Company owns an interest as of September 30, 2000.

Fund VIII-IX-REIT Joint Venture

On June 15, 2000, the Fund VIII-IX-REIT Joint Venture was formed between Wells
OP and Fund VIII and Fund IX Associates, a Georgia joint venture partnership
between Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P.
(the "Fund VIII-IX Joint Venture"). On July 1, 2000, the Fund VIII-IX Joint
Venture contributed its interest in the Bake Parkway Building to the Fund
VIII-IX-REIT Joint Venture. The Bake Parkway Building is a two-story office
building containing approximately 65,006 rentable square feet on a 4.4-acre
tract of land in Irvine, California.

195

A 42-month lease for the entire Bake Parkway Building has been signed by Quest
Software, Inc. Occupancy occurred on August 1, 2000. Quest is a publicly traded
corporation that provides software database management and disaster recovery
services for its clients.

Construction of tenant improvements required under the Quest lease is
anticipated to cost approximately $1,250,000 and will be funded by Wells OP.

The Alstom Power-Richmond Building

On July 24, 2000, the Company completed a build-to-suit project of a 99,057
square-foot, four-story, office building. The Class "A" property is located at
5309 Commonwealth Centre Drive in Richmond, Virginia.

The $11.4 million acquisition is 100% owned by the Company and is leased to
Alstom Power, Inc. The tenant has signed a seven-year lease, which commenced on
July 24, 2000. Alstom Power is the world's largest power generation group.
Formerly ABB Power Generation and Alstom, the two companies merged in December
1999 to form ABB Alstom Power, Inc. and in June 2000 changed its name to Alstom
Power, Inc. The group employs 58,000 people in more than 100 countries.

The building is located on 7.49 acres within the Waterford Business Park. The
Waterford Park is a 20-acre office park in Chesterfield County.

3.   NOTES PAYABLE

Notes payable, as of September 30, 2000, consists of loans of (i) $9,181,877 due
to Bank of America secured by a first priority mortgage against the Matsushita
Property; (ii) $21,627,153 due to Bank of America secured by first mortgages on
the AT&T and Marconi buildings; (iii) $8,000,000 due to Richter-Schroeder
Company, Inc. secured by a first mortgage against the Metris Building; and (iv)
$100,000 due to Ryan Companies US, Inc. secured by a first mortgage on the Avnet
Building.

4.   DUE TO AFFILIATES

Due to affiliates consists of Acquisitions and Advisory Fees and Acquisition
Expenses, deferred offering costs, and other operating expenses paid by the
Advisor on behalf of the Company. Also included in Due to Affiliates is the
Matsushita lease guarantee which is explained in detail in the Company's Form
10-K for the year ended December 31, 1999. Payments of $542,645 have been made
as of September 30, 2000 toward fulfilling the Matsushita agreement.

196

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the DIAL BUILDING for the year ended December 31, 1999. This
financial statement is the responsibility of management. Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. These standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit also
includes assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Dial
Building after acquisition by the Wells Operating Partnership, L.P. (on behalf
of Wells Real Estate Investment Trust, Inc.). The accompanying statement of
revenues over certain operating expenses was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the Dial
Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Dial Building for the year ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.

/s/ ARTHUR ANDERSEN LLP

Atlanta, Georgia
April 10, 2000

197

DIAL BUILDING

STATEMENT OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1999

RENTAL REVENUES                                               $ 1,388,868

OPERATING EXPENSES, net of reimbursements                               0
-----------
REVENUES OVER CERTAIN OPERATING EXPENSES                      $ 1,388,868
-----------

The accompanying notes are an integral part of this statement.

198

DIAL BUILDING

NOTES TO STATEMENT OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1999

1.   ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On March 29, 2000, the Wells Operating Partnership L.P. ("Wells OP"), a Delaware
Limited Partnership formed to acquire, own, lease, operate and manage real
properties on behalf of the Wells Real Estate Investment Trust, Inc., acquired
the Dial Building from Ryan Companies US, Inc. ("Ryan"). Ryan is not an
affiliate of Wells OP. The purchase price of the Dial Building was $14,250,000.
Wells OP incurred additional acquisition expenses in connection with the
purchase of the Dial Building, including attorney's fees, recording fees, loan
fees, and other closing costs, of approximately $35,712. The funds used to
purchase the Dial Building consisted of cash and proceeds from Wells OP's lines
of credit with SouthTrust Bank, N.A. and Bank of America, N.A.

The entire 129,689 rentable square feet of the Dial Building is currently under
a net lease agreement (the "Lease") with Dial Corporation ("Dial"). The Lease
was assigned to Wells OP at closing. The Lease commenced on August 14, 1997 and
expires on August 31, 2008. Dial has the right to extend the Lease for two
additional five-year periods at 95% of the then-current fair market rental rate.
Under the Lease, Dial is required to pay as additional rent all real estate
taxes, special assessments, utilities, insurance, and other operating costs
associated with the Dial Building during the term of the Lease. In addition,
Dial is responsible for repair and maintenance of the roof, walls, structure,
and foundation, landscaping, and heating, ventilating, air conditioning,
mechanical, electrical, plumbing, and other systems.

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over the
life of the lease.

2.   BASIS OF ACCOUNTING

The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis. This statement has been prepared in accordance
with the applicable rules and regulations of the Securities and Exchange
Commission for real estate properties acquired. Accordingly, the statement
excludes certain historical expenses, such as depreciation, interest, and
management fees, not comparable to the operations of the Dial Building after
acquisition by Wells OP.

199

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the ASML BUILDING for the year ended December 31, 1999. This
financial statement is the responsibility of management. Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. These standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit also
includes assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the ASML
Building after acquisition by the Wells Operating Partnership, L.P. (on behalf
of Wells Real Estate Investment Trust, Inc.). The accompanying statement of
revenues over certain operating expenses was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the ASML
Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the ASML Building for the year ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.

/s/ ARTHUR ANDERSEN LLP

Atlanta, Georgia
April 10, 2000

200

ASML BUILDING

STATEMENT OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1999

REVENUES:

Rental income                                           $1,849,908
Tenant reimbursements                                      242,143
------------
Total revenues                                 2,092,051
------------

OPERATING EXPENSES:
Ground lease                                               206,625
Insurance                                                    9,628
------------
Total operating expenses                         216,253
------------

REVENUES OVER CERTAIN OPERATING EXPENSES                    $1,875,798
============

The accompanying notes are an integral part of this statement.

201

ASML BUILDING

NOTES TO STATEMENT OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1999

1.   ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On March 29, 2000, the Wells Operating Partnership L.P. ("Wells OP"), a Delaware
Limited Partnership formed to acquire, own, lease, operate, and manage real
properties on behalf of the Wells Real Estate Investment Trust, Inc., acquired
the ASML Building from Ryan Companies U.S., Inc. ("Ryan"). Ryan is not an
affiliate of Wells OP. The purchase price of the ASML Building was $17,355,000.
Wells OP incurred additional acquisition expenses in connection with the
purchase of the ASML Building, including attorney's fees, recording fees, loan
fees, and other closing costs, of approximately $48,875. The funds used to
purchase the ASML Building consisted of cash and proceeds obtained from Wells
OP's lines of credit with SouthTrust Bank, N.A. and Bank of America, N.A. Wells
OP also assumed a ground lease with Research Park on 9.51 acres. The ground
lease commenced August 22, 1997 and expires on December 31, 2082.

The entire 95,133 rentable square feet of the ASML Building is currently under a
net lease agreement (the "Lease") with ASML Lithography, Inc. ("ASML"). The
Lease was assigned to Wells OP at closing. The Lease commenced on June 4, 1998
and expires on June 30, 2013. ASML has the right to extend the Lease for two
additional five-year periods at the prevailing market rental rate, but in no
event less than the rate in force at the end of the preceding lease term. Under
the Lease, ASML is required to pay as additional rent the rent associated with
the ground lease described above and all real estate taxes, special assessments,
utilities, insurance, and other operating costs associated with the ASML
Building during the term of the Lease. In addition, ASML is responsible for
repair and maintenance of the roof, walls, structure, and foundation,
landscaping, and the heating, ventilating, air conditioning, mechanical,
electrical, plumbing, and other systems.

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over the
life of the lease.

2.   BASIS OF ACCOUNTING

The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis. This statement has been prepared in accordance
with the applicable rules and regulations of the Securities and Exchange
Commission for real estate properties acquired. Accordingly, the statement
excludes certain historical expenses, such as depreciation, interest, and
management fees, not comparable to the operations of the ASML Building after
acquisition by Wells OP.

202

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the MOTOROLA BUILDING for the year ended December 31, 1999. This
financial statement is the responsibility of management. Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. These standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit also
includes assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Motorola
Building after acquisition by the Wells Operating Partnership, L.P. (on behalf
of Wells Real Estate Investment Trust, Inc.). The accompanying statement of
revenues over certain operating expenses was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the Motorola
Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Motorola Building for the year ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.

/s/ ARTHUR ANDERSEN LLP

Atlanta, Georgia
April 10, 2000

203

MOTOROLA BUILDING

STATEMENT OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1999

REVENUES:
Rental income                                                    $1,817,366
Tenant reimbursements                                               290,287
----------
Total revenues                                          2,107,653
----------

OPERATING EXPENSES:
Ground lease                                                        243,826
Insurance                                                            11,951
----------
Total operating expenses                                  255,777
----------

REVENUES OVER CERTAIN OPERATING EXPENSES                             $1,851,876
==========

The accompanying notes are an integral part of this statement.

204

MOTOROLA BUILDING

NOTES TO STATEMENT OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1999

1.   ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On March 29, 2000, the Wells Operating Partnership L.P. ("Wells OP"), a Delaware
Limited Partnership formed to acquire, own, lease, operate and manage real
properties on behalf of the Wells Real Estate Investment Trust, Inc., acquired
the Motorola Building from Ryan Companies US, Inc. ("Ryan"). Ryan is not an
affiliate of Wells OP. The purchase price of the Motorola Building was
$16,000,000. Wells OP incurred additional acquisition expenses in connection
with the purchase of the Motorola Building, including attorney's fees, recording
fees, loan fees, and other closing costs, of approximately $36,622. The funds
used to purchase the Motorola Building consisted of cash and proceeds obtained
from Wells OP's lines of credit with SouthTrust Bank, N.A. and Bank of America,
N.A. In addition, $5,000,000 in loan proceeds were provided by Ryan as seller
financing. Wells OP also assumed a ground lease with Research Park on 12.44
gross acres. The ground lease commenced November 19, 1997 and expires on
December 31, 2082.

The entire 133,225 rentable square feet of the Motorola Building is currently
under a net lease agreement (the "Lease") with Motorola, Inc. ("Motorola"). The
Lease was assigned to Wells OP at closing. The initial term of the Lease is
seven years, which commenced on August 17, 1998 and expires on August 31, 2005.
Motorola has the right to extend the Lease for four additional five-year periods
at the prevailing market rental rate. Under the lease, Motorola is required to
pay as additional rent the rent associated with the ground lease described above
and all real estate taxes, special assessments, utilities, insurance, and other
operating costs associated with the Motorola Building during the term of the
Lease. In addition, Motorola's responsible for repair and maintenance of the
roof, walls, structure, and foundation, landscaping, and the heating,
ventilating, air conditioning, mechanical, electrical, plumbing, and other
systems.

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over the
life of the lease.

2.   BASIS OF ACCOUNTING

The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis. This statement has been prepared in accordance
with the applicable rules and regulations of the Securities and Exchange
Commission for real estate properties acquired. Accordingly, the statement
excludes certain historical expenses, such as depreciation, interest, and
management fees, not comparable to the operations of the Motorola Building after
acquisition by Wells OP.

205

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the MOTOROLA PLAINFIELD BUILDING for the year ended December 31,
1999. This financial statement is the responsibility of management. Our
responsibility is to express an opinion on this financial statement based on our
audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. These standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit also
includes assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Motorola
Plainfield Building after acquisition by the Wells Operating Partnership, L.P.
(on behalf of Wells Real Estate Investment Trust, Inc.). The accompanying
statement of revenues over certain operating expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission and is not intended to be a complete presentation of the
Motorola Plainfield Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Motorola Plainfield Building for the year ended December 31,
1999, in conformity with accounting principles generally accepted in the United
States.

/s/ Arthur Andersen LLP

Atlanta, Georgia
November 30, 2000

206

MOTOROLA PLAINFIELD BUILDING

STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31,1999

AND THE NINE MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED)

September 30,    December 31,
2000            1999
------------     ------------
(unaudited)

RENTAL REVENUES                                     $770,000        $2,310,000

OPERATING EXPENSES, net of reimbursements             73,739            10,916
--------        ----------
REVENUES OVER CERTAIN OPERATING EXPENSES            $696,261        $2,299,084
========        ==========

The accompanying notes are an integral part of these statements.

207

MOTOROLA PLAINFIELD BUILDING

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1999

AND THE NINE MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED)

1.   ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On November 1, 2000, the Wells Operating Partnership L.P. ("Wells OP"), a
Delaware Limited Partnership formed to acquire, own, lease, operate and manage
real properties on behalf of the Wells Real Estate Investment Trust, Inc.,
acquired the Motorola Plainfield Building from WHMAB Real Estate Limited
Partnership ("WHMAB"). WHMAB is not an affiliate of Wells OP. The total purchase
price of the Motorola Plainfield Building was $34,072,916, which includes an
obligation of WHMAB assumed by Wells OP at closing to reimburse the tenant,
Motorola, Inc. ("Motorola"), a maximum of $424,760 for certain rent payments
required of it under its prior lease. Wells OP incurred additional acquisition
expenses in connection with the purchase of the Motorola Plainfield Building,
including attorney's fees, recording fees, loan fees, and other closing costs,
of approximately $105,225. The funds used to purchase the Motorola Plainfield
Building consisted of cash and proceeds from Wells OP's line of credit with
SouthTrust Bank, N.A.

The entire 236,710 rentable square feet of the Motorola Plainfield Building is
currently under a net lease agreement (the "Lease") with Motorola. The Lease was
assigned to Wells OP at closing. The Lease commenced on November 1, 2000 and
expires on October 31, 2010. Motorola has the right to extend the Lease for two
additional five-year periods of time for a base rent equal to the greater of (i)
the last year's rent, or (ii) 95% of the then-current fair market rental rate.
Under the Lease, Motorola is required to pay as additional rent all real estate
taxes, special assessments, utilities, insurance, and other operating costs
associated with the Motorola Plainfield Building during the term of the Lease.
In addition, Motorola is responsible for repair and maintenance of the roof,
walls, structure, and foundation, landscaping, and heating, ventilating, air
conditioning, mechanical, electrical, plumbing, and other systems.

Prior to commencement of the Lease with Motorola, 220,000 rentable square feet
of the Motorola Plainfield Building was under a net lease agreement (the
"Previous Lease") with a tenant. The Previous Lease commenced on May 14, 1997
and expired on April 30, 2000. Under the Previous Lease, the tenant was required
to pay as additional rent all real estate taxes, special assessments, utilities,
insurance, and other operating costs associated with the Motorola Plainfield
Building during the term of the Previous Lease. In addition, the tenant was
responsible for repair and maintenance of the roof, walls, structure, and
foundation, landscaping, and heating, ventilating, air conditioning, mechanical,
electrical, plumbing, and other systems.

The Motorola Plainfield Building did not have any tenants for the period from
May 1, 2000 to October 31, 2000.

Rental Revenues

Rental income from leases is recognized on a straight-line basis over the life
of the lease.

208

2.   BASIS OF ACCOUNTING

The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis. This statement has been prepared in accordance
with the applicable rules and regulations of the Securities and Exchange
Commission for real estate properties acquired. Accordingly, the statement
excludes certain historical expenses, such as depreciation, interest, and
management fees, not comparable to the operations of the Motorola Plainfield
Building after acquisition by Wells OP.

209

WELLS REAL ESTATE INVESTMENT TRUST, INC.

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The following unaudited pro forma balance sheet as of September 30, 2000 has
been prepared to give effect to the acquisition of the Motorola Plainfield
Building by the Wells Operating Partnership, L.P. ("Wells OP"), as if the
acquisition occurred as of September 30, 2000. The following unaudited pro forma
statements of income for the year ended December 31, 1999 and the nine months
ended September 30, 2000 have been prepared to give effect to the acquisition of
the Dial Building, the ASML Building, and the Motorola Tempe Building (together,
the "Prior Acquisitions") and the Motorola Plainfield Building by the Wells OP
as if each acquisition occurred on January 1, 1999.

Wells OP is a Delaware limited partnership that was organized to own and operate
properties on behalf of the Wells Real Estate Investment Trust, Inc. Wells Real
Estate Investment Trust, Inc. is the general partner of the Wells OP.

These unaudited pro forma financial statements are prepared for informational
purposes only and are not necessarily indicative of future results or of actual
results that would have been achieved had the acquisitions been consummated at
the beginning of the period presented.

210

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA BALANCE SHEET

SEPTEMBER 30, 2000

(Unaudited)

ASSETS

Wells Real
Estate
Investment        Pro Forma          Pro Forma
Trust, Inc.      Adjustments           Total
-------------   --------------      -------------

REAL ESTATE ASSETS, AT COST:
Land                                                       $  21,695,304   $ 9,652,500(a)      $  31,750,313
402,509(b)
Buildings less accumulated depreciation of $6,810,792        188,671,038    24,525,641(a)        214,219,398
1,022,719(b)
Construction in progress                                         295,517             0               295,517
-------------   -----------         -------------
Total real estate assets                            210,661,859    35,603,369           246,265,228

INVESTMENT IN JOINT VENTURES                                     36,708,242             0            36,708,242

CASH AND CASH EQUIVALENTS                                        12,257,161   (10,753,381)(a)           466,584
(954,223)(b)
(82,973)(c)

DEFERRED OFFERING COSTS                                           1,108,206             0             1,108,206

DEFERRED PROJECT COSTS                                              471,005      (471,005)(b)                 0

DUE FROM AFFILIATES                                                 859,515             0               859,515

PREPAID EXPENSES AND OTHER ASSETS                                 6,344,905        82,973(c)          6,427,878
-------------   -----------         -------------
Total assets                                      $ 268,410,893   $23,424,760         $ 291,835,653
=============   ===========         =============

211

LIABILITIES AND SHAREHOLDERS' EQUITY

Wells Real
Estate
Investment        Pro Forma             Pro Forma
Trust, Inc.      Adjustments              Total
--------------   --------------        --------------

LIABILITIES:
Accounts payable and accrued expenses                     $      975,821   $   424,760(a), (d)   $    1,400,581
Notes payable                                                 38,909,030    23,000,000(a)            61,909,030
Dividends payable                                              4,475,982             0                4,475,982
Due to affiliate                                               1,372,508             0                1,372,508
--------------  ------------           --------------
Total liabilities                                    45,733,341    23,424,760               69,158,101
--------------  ------------           --------------
COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST OF UNIT HOLDER IN OPERATING PARTNERSHIP           200,000             0                  200,000
--------------  ------------           --------------
SHAREHOLDERS' EQUITY:
Common shares, $.01 par value; 40,000,000 shares
authorized, 13,471,085 shares issued and outstanding          261,748             0                  261,748
Additional paid-in capital                                   222,215,804             0              222,215,804
Retained earnings                                                      0             0                        0
--------------  ------------           --------------
Total shareholders' equity                          222,477,552             0              222,477,552
--------------  ------------           --------------
Total liabilities and shareholders' equity       $  268,410,893  $ 23,424,760           $  291,835,653
==============  ============           ==============

(a)  Reflects Wells Real Estate Investment Trust Inc.'s purchase
price for the building.

(b)  Reflects deferred project costs allocated to the land and
building at approximately 4.17% of the purchase price.

(c)  Reflects loan fees incurred in connection with the receipt
of loan proceeds from the SouthTrust Bank, N.A., line of
credit.

(d)  Reflects assumption of obligation of Wells OP to reimburse
the tenant of certain rent payments required of it under its
prior lease.

212

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 1999

(Unaudited)

Wells Real
Estate         Pro Forma Adjustments
---------------------
Investment       Prior         Motorola       Pro Forma
Trust, Inc.   Acquisitions    Plainfield        Total
-----------   ------------    ----------        -----

REVENUES:
Rental income                                           $4,735,184   $5,056,142(a)  $2,310,000(a)  $12,101,326
Equity in income of joint ventures                       1,243,969            0              0       1,243,969
Interest income                                            502,993            0              0         502,993
Other income                                                13,249            0              0          13,249
----------   ----------     ----------     -----------
6,495,395    5,056,142      2,310,000      13,861,537
----------   ----------     ----------     -----------
EXPENSES:
Depreciation and amortization                            1,726,103    1,842,818(b)   1,021,934(b)    4,614,561
23,706(c)

Interest                                                   442,029    2,758,350(d)   1,787,100(f)    5,437,479
450,000(e)

Operating costs, net of reimbursements                     (74,666)     (60,400)(g)     10,916(h)     (124,150)
Management and leasing fees                                257,744      282,116(i)     138,600(i)      678,460
General and administrative                                 123,776            0              0         123,776
Legal and accounting                                       115,471            0              0         115,471
Computer costs                                              11,368            0              0          11,368
Amortization of organizational costs                         8,921            0              0           8,921
----------   ----------     ----------     -----------
2,610,746    5,272,884      2,982,256      10,865,886
----------   ----------     ----------     -----------
NET INCOME                                                 $3,884,649   $ (216,742)    $ (672,256)    $ 2,995,651
==========   ==========     ==========     ===========

HISTORICAL EARNINGS PER SHARE (BASIC AND DILUTED)          $     0.50
==========

PRO FORMA EARNINGS PER SHARE (BASIC AND DILUTED)                                                      $      0.11(j)
===========

(a)  Rental income recognized on a straight-line basis.

(b)  Depreciation expense on the building using the straight-line
method and a 25-year life.

(c)  Amortization of loan costs over term of SouthTrust Bank, N.A.
line of credit.

(d)  Interest expense on the $9,000,000 line of credit with SouthTrust
Bank, N.A. and the $26,500,000 line of credit with Bank of
America, N.A., which bear interest at 7.77% for the year ended
December 31, 1999.

(e)  Interest expense on the $5,000,000 note payable with Ryan
Companies U.S., Inc., the seller, which bears interest at 9%.

(f)  Interest expense on the $23,000,000 line-of-credit with
SouthTrust Bank, N.A., which bears interest at 7.77% for the year
ended December 31, 1999.

(g)  Consists of ground lease and insurance expense for the ASML
Building and the Motorola Tempe Building, net of tenant
reimbursements.

(h)  Consists of non-reimbursable operating expenses.

(i)  Management and leasing fees equal approximately 6% of rental
income.

(j)  As of the property acquisition date of November 1, 2000, Wells
Real Estate Investment Trust, Inc. had 27,970,106 shares of
common stock outstanding; pro forma earnings per share is
calculated as if these shares were outstanding for the entire
year ended December 31, 1999.

213

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000

(Unaudited)

Wells Real
Estate         Pro Forma Adjustments
---------------------
Investment       Prior         Motorola       Pro Forma
Trust, Inc.   Acquisitions    Plainfield        Total
-----------   ------------    ----------        -----

REVENUES:
Rental income                                         $13,712,371   $1,440,432(a)   $   770,000(a)  $15,922,803
Equity in income of joint ventures                      1,684,247            0                0       1,684,247
Interest income                                           338,020            0                0         338,020
------------   ----------      -----------     -----------
15,734,638    1,440,432          770,000      17,945,070
------------   ----------      -----------     -----------
EXPENSES:
Depreciation and amortization                           5,084,689      460,704(b)       766,451(b)    6,329,624
17,780(c)

Interest                                                2,798,299      777,450(d)     1,546,620(f)    5,234,869
112,500(e)

Operating costs, net of reimbursements                    631,407      (15,099)(g)       73,739(h)      690,047
Management and leasing fees                               919,630       86,426(i)        46,200(i)    1,052,256
General and administrative                                273,484            0                0         273,484
Legal and accounting                                      130,603            0                0         130,603
Computer costs                                              8,846            0                0           8,846
Amortization of organizational costs                      150,143            0                0         150,143
------------   ----------      -----------     -----------
9,997,101    1,421,981        2,450,790      13,869,872
------------   ----------      -----------     -----------
NET INCOME                                              $  5,737,537   $   18,451      $(1,680,790)    $ 4,075,198
============   ==========      ===========     ===========

HISTORICAL EARNINGS PER SHARE (BASIC AND DILUTED)       $       0.30
============

PRO FORMA EARNINGS PER SHARE (BASIC AND DILUTED)                                                       $      0.15(j)
===========
REVENUES:

(a)  Rental income recognized on a straight-line basis.

(b)  Depreciation expense on the building using the straight-line
method and a 25-year life.

(c)  Amortization of loan costs over term of SouthTrust Bank, N.A.
line of credit.

(d)  Interest expense on the $9,000,000 line of credit with SouthTrust
Bank, N.A. and the $26,500,000 line of credit with Bank of
America, N.A., which bear interest at 8.76% for the nine months
ended September 30, 2000.

(e)  Interest expense on the $5,000,000 note payable with Ryan
Companies U.S., Inc., the seller, which bears interest at 9%.

(f)  Interest expense on the $23,000,000 line-of-credit with
SouthTrust Bank, N.A., which bears interest at 8.97% for the nine
months ended September 30, 2000.

(g)  Consists of ground lease and insurance expense for the ASML
Building and the Motorola Tempe Building, net of tenant
reimbursements.

(h)  Consists of non-reimbursable operating expenses.

(i)  Management and leasing fees equal approximately 6% of rental
income.

(j)  As of the property acquisition date of November 1, 2000, Wells
Real Estate Investment Trust, Inc. had 27,970,106 shares of
common stock outstanding; pro forma earnings per share is
calculated as if these shares were outstanding for the entire
nine months ended September 30, 2000.

214

PRIOR PERFORMANCE TABLES

The following Prior Performance Tables (Tables) provide information
relating to real estate investment programs sponsored by the advisor and its
affiliates (Wells Public Programs) which have investment objectives similar to
Wells Real Estate Investment Trust, Inc. (Wells REIT). (See "Investment
Objectives and Criteria.") All of the Wells Public Programs, except for the
Wells REIT, have used substantial amounts of capital, and no acquisition
indebtedness, to acquire their properties.

Prospective investors should read these Tables carefully together with
the summary information concerning the Wells Public Programs as set forth in
"Prior Performance Summary" section of this prospectus.

Investors in the Wells REIT will not own any interest in other Wells
Public Programs and should not assume that they will experience returns, if any,
comparable to those experienced by investors in the Wells Public Programs.

The advisor is responsible for the acquisition, operation, maintenance
and resale of the real estate properties. The financial results of the Wells
Public Programs thus provide an indication of the advisor's performance of its
obligations during the periods covered. However, general economic conditions
affecting the real estate industry and other factors contribute significantly to
financial results.

The following tables are included herein:

Table I - Experience in Raising and Investing Funds (As a Percentage of
Investment)

Table II - Compensation to Sponsor (in Dollars)

Table III - Annual Operating Results of Wells Public Programs

Table IV (Results of completed programs) and Table V (sales or
disposals of property) have been omitted since none of the Wells Public Programs
have sold any of their properties to date.

Additional information relating to the acquisition of properties by the
Wells Public Programs is contained in Table VI, which is included in Part II of
the registration statement which the Wells REIT has filed with the Securities
and Exchange Commission. As described above, no Wells Public Program has sold or
disposed of any property held by it. Copies of any or all information will be
provided to prospective investors at no charge upon request.

The following are definitions of certain terms used in the Tables:

"Acquisition Fees" shall mean fees and commissions paid by a Wells
Public Program in connection with its purchase or development of a property,
except development fees paid to a person not affiliated with the Wells Public
Program or with a general partner or advisor of the Wells Public Program in
connection with the actual development of a project after acquisition of the
land by the Wells Public Program.

215

"Organization Expenses" shall include legal fees, accounting fees,
securities filing fees, printing and reproduction expenses and fees paid to the
sponsor in connection with the planning and formation of the Wells Public
Program.

"Underwriting Fees" shall include selling commissions and wholesaling
fees paid to broker-dealers for services provided by the broker-dealers during
the offering.

216

TABLE I
(UNAUDITED)

EXPERIENCE IN RAISING AND INVESTING FUNDS

This Table provides a summary of the experience of the sponsors of
Wells Public Programs for which offerings have been completed since December 31,
1996. Information is provided with regard to the manner in which the proceeds of
the offerings have been applied. Also set forth is information pertaining to the
timing and length of these offerings and the time period over which the proceeds
have been invested in the properties. All figures are as of December 31, 1999.

Wells Real         Wells Real         Wells Real      Wells Real Estate
Estate Fund        Estate Fund        Estate Fund        Investment
IX, L.P.            X, L.P.           XI, L.P.          Trust, Inc.
--------            -------           --------          -----------

Dollar Amount Raised                              $35,000,000/(3)/  $ 27,128,912/(4)/   $ 16,532,802/(5)/  $ 132,181,919/(6)/
===========         ==========          ==========         ===========

Percentage Amount Raised                                100.0%/(3)/          100%/(4)/           100%/(5)/           100%/(6)/

Less Offering Expenses
Underwriting Fees                                      10.0%              10.0%                9.5%                9.5%
Organizational Expenses                                 5.0%               5.0%                3.0%                3.0%
Reserves/(1)/                                             0.0%               0.0%                0.0%                0.0%
----               ----                ----                ----
Percent Available for Investment                       85.0%              85.0%               87.5%               87.5%

Acquisition and Development Costs
Prepaid Items and Fees related to

Purchase of Property                                 2.0%               5.4%                0.0%                1.1%
Cash Down Payment                                      67.1%              60.5%               84.0%               82.0%
Acquisition Fees/(2)/                                   4.0%               4.0%                3.5%                3.5%
Development and Construction Costs                     11.9%              14.1%                0.0%                0.3%

Reserve for Payment of Indebtedness                       0.0%               0.0%                0.0%                0.0%
----               ----                ----                ----

Total Acquisition and Development Cost                   85.0%              84.0%               87.5%               86.9%

Percent Leveraged                                         0.0%               0.0%                0.0%               17.6%
====               ====                ====                ====

Date Offering Began                                  01/05/96           12/31/96             2/31/97            01/30/98

Length of Offering                                     12 mo.             12 mo.              12 mo.              23 mo.

Months to Invest 90% of Amount Available
for Investment (Measured from Beginning of             14 mo.             19 mo.              20 mo.              21 mo.
Offering)

Number of Investors as of 12/31/99                      2,120              1,812               1,345               3,839

(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 IX, L.P. closed its offering on December 30, 1996,
and the total dollar amount raised was $35,000,000.

217

(4)  Total dollar amount registered and available to be offered was $35,000,000.
Wells Real Estate Fund X, L.P. closed its offering on December 30, 1997,
and the total dollar amount raised was $27,128,912.
(5)  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.
(6)  Total dollar amount registered and available to be offered was
$165,000,000. Wells Real Estate Investment Trust, Inc. closed its initial
offering on December 20, 1999, and the total dollar amount raised in its
initial offering was $132,181,919.

218

TABLE II
(UNAUDITED)
COMPENSATION TO SPONSOR

The following sets forth the compensation received by Wells Capital and
its affiliates, including compensation paid out of offering proceeds and
compensation paid in connection with the ongoing operations of Wells Public
Programs having similar or identical investment objectives the offerings of
which have been completed since December 31, 1996. These partnerships have not
sold or refinanced any of their properties to date. All figures are as of
December 31, 1999.

Wells Real
Wells Real     Wells Real     Wells Real      Estate           Other
Estate Fund    Estate Fund    Estate Fund   Investment        Public
IX, L.P.        X, L.P.       XI, L.P.     Trust, Inc.    Programs/(1)/
--------        -------       --------     ----------     -------------

Date Offering Commenced                               01/05/96       12/31/96       12/31/97        01/30/98             --

Dollar Amount Raised                                $35,000,000    $ 27,128,912   $ 16,532,802  $132,181,919   $206,241,095
to Sponsor from Proceeds of Offering:
Underwriting Fees/(2)/                            $   309,556    $    260,748   $    151,911  $  1,530,882   $    924,156
Acquisition Fees
Real Estate Commissions                                   --              --            --             --             --
Acquisition and Advisory Fees/(3)/               $ 1,400,000    $  1,085,157   $    578,648  $  4,626,367   $ 10,159,399

Dollar Amount of Cash Generated from Operations
Before Deducting Payments to Sponsor/(4)/          $  7,064,631   $  4,262,319   $  2,133,705  $  8,002,132   $ 38,076,886

Amount Paid to Sponsor from Operations:             $    169,661   $    105,410   $     22,200  $    129,208   $  1,434,957
Property Management Fee/(1)/                                 --             --             --            --             --
Partnership Management Fee                         $    133,784   $    105,132   $     61,058  $    101,605   $  1,613,725
Reimbursements                                     $    260,082   $    176,108   $     33,492  $    129,208   $  1,580,482
Leasing Commissions                                          --             --             --            --             --
General Partner Distributions                                --             --             --            --             --
Other

Dollar Amount of Property Sales and Refinancing
Payments to Sponsors:                                        --             --             --            --             --
Cash                                                        --             --             --            --             --
Notes

Amount Paid to Sponsor from Property Sales
and Refinancing:
Real Estate Commissions                                     --             --             --            --             --
Incentive Fees                                              --             --             --            --             --
Other                                                       --             --             --            --             --

(1)      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., and Wells Real Estate Fund VIII, 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. At December 31, 1999, the
amount of such deferred fees due the general partners totaled
$2,397,266.
(2)      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.
(3)      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.

219

(4)      Includes $487,134 in net cash provided by operating activities,
$6,013,970 in distributions to limited partners and $563,527 in
payments to sponsor for Wells Real Estate Fund IX, L.P.; $400,825 in
net cash provided by operating activities, $3,474,844 in distributions
to limited partners and $386,650 in payments to sponsor for Wells Real
Estate Fund X, L.P.; $(150,720) in net cash used by operating
activities, $2,167,675 in distributions to limited partners and
$116,750 in payments to sponsor for Wells Real Estate Fund XI, L.P.;
$3,732,726 in net cash provided by operating activities, $3,909,385 in
dividends and $360,021 in payments to sponsor for Wells Real Estate
Investment Trust, Inc.; and $2,167,163 in net cash provided by
operating activities, $31,280,559 in distributions to limited partners
and $4,629,164 in payments to sponsor for other public programs.

220

TABLE III
(UNAUDITED)

The following six tables set forth operating results of Wells Public
Programs the offerings of which have been completed since December 31, 1994. The
information relates only to public programs with investment objectives similar
to those of the Wells REIT. All figures are as of December 31 of the year
indicated.

221

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND VII, L.P.

1999          1998           1997          1996         1995
----          ----           ----          ----         ----

Gross Revenues/(1)/                                  $    982,630  $   846,306    $   816,237   $  543,291   $    925,246
Profit on Sale of Properties                                   --           --             --          --              --
Less: Operating Expenses/(2)/                              85,273       85,722         76,838       84,265        114,953
Depreciation and Amortization/(3)/                    1,562        6,250          6,250        6,250          6,250
------------  ------------   -----------   ----------   ------------
Net Income GAAP Basis/(4)/                           $    895,795  $   754,334    $   733,149   $  452,776   $    804,043
============  ===========    ===========   ==========   ============
Taxable Income: Operations                           $  1,255,666  $ 1,109,096    $ 1,008,368   $  657,443   $    812,402
============  ===========    ===========   ==========   ============
Cash Generated (Used By):
Operations                                              (82,763)     (72,194)       (43,250)      20,883        431,728
Joint Ventures                                        1,777,010    1,770,742      1,420,126      760,628        424,304
------------  ------------   -----------   ----------   ------------
$  1,694,247  $ 1,698,548    $ 1,376,876   $  781,511   $    856,032
Less Cash Distributions to Investors:
Operating Cash Flow                                   1,688,290    1,636,158      1,376,876      781,511        856,032
Return of Capital                                            --           --          2,709       10,805         22,064
Undistributed Cash Flow from Prior Year
Operations                                                 --           --             --           --          9,643
------------  ------------   -----------   ----------   ------------
Cash Generated (Deficiency) after Cash
Distributions                                        $      5,957  $     62,390   $    (2,709)  $  (10,805)  $    (31,707)

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                               --            --            --           --             --
Increase in Limited Partner Contributions         $         --  $         --   $        --   $       --   $    805,212
------------  ------------   -----------   ----------   ------------
$      5,957  $     62,390   $    (2,709)  $  (10,805)  $    773,505
Use of Funds:
Sales Commissions and Offering Expenses                      --            --            --           --   $    244,207
Return of Original Limited Partner's Investment              --            --            --           --            100
Property Acquisitions and Deferred Project Costs              0       181,070       169,172      736,960     14,971,002
------------  ------------   -----------   ----------   ------------
Cash Generated (Deficiency) after Cash
Distributions and Special Items                    $      5,957  $   (118,680)  $  (171,881)  $ (747,765)  $(14,441,804)
============  ============   ===========   ==========   ============

Net Income and Distributions Data per $1,000
Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)                                      93            85            86           62             57
- Operations Class A Units                                (248)         (224)         (168)         (98)           (20)
- Operations Class B Units                                  --            --            --           --             --
Capital Gain (Loss)
Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                  89            82            78           55             55
- Operations Class B Units                                (144)         (134)         (111)         (58)           (16)
Capital Gain (Loss)                                         --            --            --           --             --
Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                            83            81            70           43             52
- Return of Capital Class A Units                            --            --            --           --             --
- Return of Capital Class B Units                            --            --            --           --             --
Source (on Cash Basis)
- Operations Class A Units                                   83            81            70           42             51
- Return of Capital Class A Units                            --            --            --            1              1
- Operations Class B Units                                   --            --            --           --             --
Source (on a Priority Distribution Basis)/(5)/
- Investment income Class A Units                             67            65            54           29             30
- Return of Capital Class A Units                             16            16            16           14             22
- Return of Capital Class B Units                             --            --            --           --             --

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year                100%
Reported in the Table

222

(1)  Includes $403,325 in equity in earnings of joint ventures and $521,921 from
investment of reserve funds in 1995, $457,144 in equity in earnings of
joint ventures and $86,147 from investment of reserve funds in 1996,
$785,398 in equity in earnings of joint ventures and $30,839 from
investment of reserve funds in 1997, $839,037 in equity in earnings of
joint ventures and $7,269 from investment of reserve funds in 1998, and
$981,104 in equity in earnings of joint ventures and $1,526 from investment
of reserve funds in 1999. At December 31, 1999, the leasing status was 97%
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 $25,468 for 1994, $140,533 for 1995, $605,247 for 1996,
$877,869 for 1997, $955,245 for 1998, and $982,052 for 1999.
(4)  In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $950,826 to Class A Limited
Partners, $(146,503) to Class B Limited Partners and $(280) to the General
Partners for 1995; $1,062,605 to Class A Limited Partners, $(609,829) to
Class B Limited Partners and $0 to the General Partners for 1996;
$1,615,965 to class A Limited Partners, $(882,816) to Class B Limited
Partners and $0 to the General Partners for 1997; $1,704,213 to Class A
Limited Partners, $(949,879) to Class B Limited Partners and $0 to the
General Partners for 1998; and $1,879,410 to Class A Limited Partners,
$(983,615) to Class B Limited Partners and $0 to the General Partners for
1999.
(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, 1999, the aggregate amount of
such priority distributions payable to Class B Limited Partners totaled
$1,680,730.

223

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND VIII, L.P.

1999          1998          1997         1996          1995
----          ----          ----         ----          ----

Gross Revenues/(1)/                                            $   1,360,497 $   1,362,513 $   1,204,018 $   1,057,694 $    402,428
Profit on Sale of Properties                                              --            --            --            --           --
Less: Operating Expenses/(2)/                                         87,301        87,092        95,201       114,854      122,264
Depreciation and Amortization/(3)/                               6,250         6,250         6,250         6,250        6,250
------------- ------------- ------------- ------------- ------------
Net Income GAAP Basis/(4)/                                     $   1,266,946 $   1,269,171 $   1,102,567 $     936,590      273,914
============= ============= ============= ============= ============
Taxable Income: Operations                                     $   1,672,844 $   1,683,192 $   1,213,524 $   1,001,974      404,348
============= ============= ============= ============= ============
Cash Generated (Used By):
Operations                                                         (87,298)      (63,946)        7,909       623,268      204,790
Joint Ventures                                                   2,558,623     2,293,504     1,229,282       279,984       20,287
------------- ------------- ------------- ------------- ------------
$   2,471,325 $   2,229,558 $   1,237,191 $     903,252 $    225,077
Less Cash Distributions to Investors:
Operating Cash Flow                                              2,379,215     2,218,400     1,237,191       903,252           --
Return of Capital                                                       --            --       183,315         2,443           --
Undistributed Cash Flow from Prior Year Operations                      --            --            --       225,077           --
------------- ------------- ------------- ------------- ------------
Cash Generated (Deficiency) after Cash Distributions           $      92,110 $      11,158 $    (183,315)$    (227,520)$    225,077

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                          --            --            --            --           --
Increase in Limited Partner Contributions/(5)/                         --            --            --     1,898,147   30,144,542
------------- ------------- ------------- ------------- ------------
$      92,110 $      11,158 $    (183,315)$   1,670,627 $ 30,369,619
Use of Funds:
Sales Commissions and Offering Expenses                                 --            --            --       464,760    4,310,028
Return of Limited Partner's Investment                                  --            --         8,600            --           --
Property Acquisitions and Deferred Project Costs                         0     1,850,859    10,675,811     7,931,566    6,618,273
------------- ------------- ------------- ------------- ------------
Cash Generated (Deficiency) after Cash
Distributions and Special Items                                $      92,110 $  (1,839,701)$ (10,867,726)$  (6,725,699)$ 19,441,318
============= ============= ============= ============= ============

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                            91            91            73            46           28
- Operations Class B Units                                          (247)         (212)         (150)          (47)          (3)
Capital Gain (Loss)                                                    --            --            --            --           --

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                            88            89            65            46           17
- Operations Class B Units                                           154          (131)          (95)          (33)          (3)
Capital Gain (Loss)                                                    --            --            --            --           --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                       87            83            54            43           --
- Return of Capital Class A Units                                       --            --            --            --           --
- Return of Capital Class B Units                                       --            --            --            --           --
Source (on Cash Basis)
- Operations Class A Units                                              87            83            47            43           --
- Return of Capital Class A Units                                       --            --             7             0           --
- Operations Class B Units                                              --            --            --            --           --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                                        70            69            42            33           --
- Return of Capital Class A Units                                        17            16            12            10           --
- Return of Capital Class B Units                                        --            --            --            --           --

Amount (in Percentage Terms) Remaining Invested
in Program Properties at the end of the Last Year Reported in
the Table                                                                100%

224

(1)  Includes $28,377 in equity in earnings of joint ventures and $374,051 from
investment of reserve funds in 1995, $241,819 in equity in earnings of
joint ventures and $815,875 from investment of reserve funds in 1996,
$1,034,907 in equity in earnings of joint ventures and $169,111 from
investment of reserve funds in 1997, $1,346,367 in equity in earnings of
joint ventures and $16,146 from investment of reserve funds in 1998, and
$1,360,494 in equity in earnings of joint ventures and $3 from investment
of reserve funds in 1999. At December 31, 1999, the leasing status was 98%
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 $14,058 for 1995, $265,259 for 1996, $841,666 for 1997,
$1,157,355 for 1998, and $1,209,171 for 1999.
(4)  In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $294,221 to Class A Limited
Partners, $(20,104) to Class B Limited Partners and $(203) to the General
Partners for 1995; $1,207,540 to Class A Limited Partners, $(270,653) to
Class B Limited Partners and $(297) to the General Partners for 1996;
$1,947,536 to Class A Limited Partners, $(844,969) to Class B Limited
Partners and $0 to the General Partners for 1997; $2,431,246 to Class A
Limited Partners, $(1,162,075) to Class B Limited Partners and $0 to the
General Partners for 1998; and $2,481,559 to Class A Limited Partners,
$(1,214,613) to Class B Limited Partners and $0 to the General Partners for
1999.
(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, 1999, the aggregate amount of
such priority distributions payable to Class B Limited Partners totaled
$1,464,810.

225

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND IX, L.P.

1999          1998           1997         1996       1995
----          ----           ----         ----       ----

Gross Revenues/(1)/                                                    $ 1,593,734  $  1,561,456   $  1,199,300  $   406,891    N/A
Profit on Sale of Properties                                                    --            --             --           --
Less: Operating Expenses/(2)/                                               90,903       105,251        101,284      101,885
Depreciation and Amortization/(3)/                                    12,500         6,250          6,250        6,250
-----------  ------------   ------------  -----------
Net Income GAAP Basis/(4)/                                             $ 1,490,331  $  1,449,955   $  1,091,766  $   298,756
===========  ============   ============  ===========
Taxable Income: Operations                                             $ 1,924,542  $  1,906,011   $  1,083,824  $   304,552
===========  ============   ============  ===========
Cash Generated (Used By):
Operations                                                           $   (94,403) $     80,147   $    501,390  $   151,150
Joint Ventures                                                         2,814,870     2,125,489        527,390           --
-----------  ------------   ------------  -----------
$ 2,720,467  $  2,205,636   $  1,028,780  $   151,150
Less Cash Distributions to Investors:
Operating Cash Flow                                                    2,720,467     2,188,189      1,028,780      149,425
Return of Capital                                                         15,528            --         41,834           --
Undistributed Cash Flow From Prior Year Operations                        17,447            --          1,725           --
-----------  ------------   ------------  -----------
Cash Generated (Deficiency) after Cash Distributions                   $   (32,975) $     17,447   $    (43,559) $     1,725

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                                --            --             --           --
Increase in Limited Partner Contributions                                    --            --             --   35,000,000
-----------  ------------   ------------  -----------
$   (32,975) $     17,447   $    (43,559) $35,001,725

Use of Funds:
Sales Commissions and Offering Expenses                                       --       323,039      4,900,321
Return of Original Limited Partner's Investment                               --            --            100           --
Property Acquisitions and Deferred Project Costs                         190,853     9,455,554     13,427,158    6,544,019
-----------  ------------   ------------  -----------
Cash Generated (Deficiency) after Cash Distributions and
Special Items                                                        $  (223,828) $ (9,438,107)  $(13,793,856) $23,557,385
===========  ============   ============  ===========

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)                                                       89            88             53           28
- Operations Class A Units                                                (272)         (218)           (77)         (11)
- Operations Class B Units                                                  --            --             --           --
Capital Gain (Loss)

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                                  86            85             46           26
- Operations Class B Units                                                (164)         (123)           (47)         (48)
Capital Gain (Loss)                                                          --            --             --           --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                             88            73             36           13
- Return of Capital Class A Units                                              2            --             --           --
- Return of Capital Class B Units                                             --            --             --           --
Source (on Cash Basis)
- Operations Class A Units                                                    89            73             35           13
- Return of Capital Class A Units                                              1            --              1           --
- Operations Class B Units                                                    --            --             --           --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                                              77            61             29           10
- Return of Capital Class A Units                                              13            12              7            3
- Return of Capital Class B Units                                              --            --             --           --

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year Reported in the Table           100%

226

(1)  Includes $23,077 in equity in earnings of joint ventures and $383,884 from
investment of reserve funds in 1996, and $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, and $1,593,734 in equity in earnings
of joint ventures and $0 from investment of reserve funds in 1999. At
December 31, 1999, 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 $25,286 for 1996, $469,126 for 1997, $1,143,407 for 1998,
and $1,210,939 for 1999.
(4)  In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $330,270 to Class A Limited
Partners, $(31,220) to Class B Limited Partners and $(294) to the General
Partners for 1996; $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; and $2,713,636 to Class A
Limited Partners, $(1,223,305) to Class B Limited Partners and $0 to the
General Partners for 1999.
(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, 1999, the aggregate amount of
such priority distributions payable to Class B Limited Partners totaled
$993,010.

227

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND X, L.P.

1999         1998         1997        1996    1995
----         ----         ----        ----    ----

Gross Revenues/(1)/                                                   $ 1,309,281  $  1,204,597   $   372,507     N/A     N/A
Profit on Sale of Properties                                                   --            --            --
Less: Operating Expenses/(2)/                                              98,213        99,034        88,232
Depreciation and Amortization/(3)/                                   18,750        55,234         6,250
-----------  ------------   -----------
Net Income GAAP Basis/(4)/                                            $ 1,192,318  $  1,050,329   $   278,025
===========  ============   ===========
Taxable Income: Operations                                            $ 1,449,771  $  1,277,016   $   382,543
===========  ============   ===========
Cash Generated (Used By):
Operations                                                             (99,862)       300,019       200,668
Joint Ventures                                                        2,175,915       886,846            --
-----------  ------------   -----------
$ 2,076,053  $  1,186,865   $   200,668
Less Cash Distributions to Investors:
Operating Cash Flow                                                   2,067,801     1,186,865            --
Return of Capital                                                            --        19,510            --
Undistributed Cash Flow From Prior Year Operations                           --       200,668            --
-----------  ------------   -----------
Cash Generated (Deficiency) after Cash Distributions                  $     8,252  $   (220,178)  $   200,668

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                               --            --            --
Increase in Limited Partner Contributions                                   --            --    27,128,912
-----------  ------------   -----------
$     8,252  $   (220,178)  $27,329,580
Use of Funds:
Sales Commissions and Offering Expenses                                      --       300,725     3,737,363
Return of Original Limited Partner's Investment                              --            --           100
Property Acquisitions and Deferred Project Costs                              0    17,613,067     5,188,485
-----------  ------------   -----------
Cash Generated (Deficiency) after Cash Distributions and
Special Items                                                       $     8,252  $(18,133,970)  $18,403,632
===========  ============   ===========

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)                                                      97            85            28
- Operations Class A Units                                               (160)         (123)           (9)
- Operations Class B Units                                                 --            --            --
Capital Gain (Loss)

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                                 92            78            35
- Operations Class B Units                                               (100)          (64)            0
Capital Gain (Loss)                                                         --            --            --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                            95            66            --
- Return of Capital Class A Units                                            --            --            --
- Return of Capital Class B Units                                            --            --            --
Source (on Cash Basis)
- Operations Class A Units                                                   95            56            --
- Return of Capital Class A Units                                            --            10            --
- Operations Class B Units                                                   --            --            --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                                             71            48            --
- Return of Capital Class A Units                                             24            18            --
- Return of Capital Class B Units                                             --            --            --

Amount (in Percentage Terms) Remaining Invested in Program
Properties at the end of the Last Year Reported in the Table                  100%

228

(1)  Includes $(10,035) in equity in earnings of joint ventures and $382,542
from investment of reserve funds in 1997, and $869,555 in equity in
earnings of joint ventures and $215,042 from investment of reserve funds in
1998, and $1,309,281 in equity in earnings of joint ventures and $0 from
investment of reserve funds in 1999. At December 31, 1999, 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, and $891,911 for 1999.
(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; and
$2,084,229 to Class A Limited Partners, $(891,911) to Class B Limited
Partners and $0 to the General Partners for 1999.
(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, 1999, the aggregate amount of
such priority distributions payable to Class B Limited Partners totaled
$909,527.

229

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND XI, L.P.

1999            1998        1997    1996    1995
----            ----        ----    ----    ----

Gross Revenues/(1)/                                                         766,586         262,729     N/A     N/A     N/A
Profit on Sale of Properties                                                     --              --
Less:  Operating Expenses/(2)/                                              111,058         113,184
Depreciation and Amortization/(3)/                                    25,000           6,250
-----------     -----------
Net Income GAAP Basis/(4)/                                              $   630,528     $   143,295
===========     ===========
Taxable Income: Operations                                              $   704,108     $   177,692
===========     ===========
Cash Generated (Used By):
Operations                                                                 40,906         (50,858)
Joint Ventures                                                            705,394         102,662
-----------     -----------
$   746,300     $    51,804
Less Cash Distributions to Investors:
Operating Cash Flow                                                       746,300          51,804
Return of Capital                                                          49,761          48,070
Undistributed Cash Flow From Prior Year Operations                             --              --
-----------     -----------
Cash Generated (Deficiency) after Cash Distributions                    $   (49,761)    $   (48,070)

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                                 --              --
Increase in Limited Partner Contributions                                     --      16,532,801
-----------     -----------
$   (49,761)    $16,484,731
Use of Funds:
Sales Commissions and Offering Expenses                                   214,609       1,779,661
Return of Original Limited Partner's Investment                               100              --
Property Acquisitions and Deferred Project Costs                        9,005,979       5,412,870
-----------     -----------
Cash Generated (Deficiency) after Cash Distributions and
Special Items                                                         $(9,270,449)    $ 9,292,200
===========     ===========

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                                   77              20
- Operations Class B Units                                                 (112)            (32)
Capital Gain (Loss)                                                           --              --

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                                   71              18
- Operations Class B Units                                                  (73)            (17)
Capital Gain (Loss)                                                           --              --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                              60               8
- Return of Capital Class A Units                                              --              --
- Return of Capital Class B Units                                              --              --
Source (on Cash Basis)
- Operations Class A Units                                                     56               4
- Return of Capital Class A Units                                               4               4
- Operations Class B Units                                                     --              --
Source (on a Priority Distribution Basis)(5)
- Investment Income Class A Units                                               46               6
- Return of Capital Class A Units                                               14               2
- Return of Capital Class B Units                                               --              --

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year Reported in the Table            100%

230

(1)  Includes $142,163 in equity in earnings of joint ventures and $120,566 from
investment of reserve funds in 1998, and $607,579 in equity in earnings of
joint ventures and $159,007 from investment of reserve funds in 1999. At
December 31, 1999, 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, and $353,840 for 1999.
(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; and $1,009,368 to Class A Limited Partners, $(378,840)
to Class B Limited Partners and $0 to the General Partners for 1999.
(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, 1999, the aggregate amount of
such priority distributions payable to Class B Limited Partners totaled
$213,006.

231

EXHIBIT A

SUBSCRIPTION AGREEMENT

To:  Wells Real Estate Investment Trust, Inc.
Suite 250
6200 The Corners Parkway
Norcross, Georgia 30092

Ladies and Gentlemen:

The undersigned, by signing and delivering a copy of the attached
Subscription Agreement Signature Page, hereby tenders this subscription and
applies for the purchase of the number of shares of common stock ("Shares") of
Wells Real Estate Investment Trust, Inc., a Maryland corporation (the
"Company"), set forth on such Subscription Agreement Signature Page. Payment for
the Shares is hereby made by check payable to "Wells Real Estate Investment
Trust, Inc."

I hereby acknowledge receipt of the Prospectus of the Company dated
December 20, 2000 (the "Prospectus").

I agree that if this subscription is accepted, it will be held, together
with the accompanying payment, on the terms described in the Prospectus.
Subscriptions may be rejected in whole or in part by the Company in its sole and
absolute discretion.

Prospective investors are hereby advised of the following:

(a)  The assignability and transferability of the Shares is restricted and
will be governed by the Company's Articles of Incorporation and Bylaws and all
applicable laws as described in the Prospectus.

(b)  Prospective investors should not invest in Shares unless they have an
adequate means of providing for their current needs and personal contingencies
and have no need for liquidity in this investment.

(c)  There is no public market for the Shares and, accordingly, it may not
be possible to readily liquidate an investment in the Company.

A-1

SPECIAL NOTICE FOR CALIFORNIA RESIDENTS ONLY
CONDITIONS RESTRICTING TRANSFER OF SHARES

260.141.11 Restrictions on Transfer.
------------------------

(a)  The issuer of any security upon which a restriction on transfer has
been imposed pursuant to Sections 260.102.6, 260.141.10 or 260.534 of the Rules
(the "Rules") adopted under the California Corporate Securities Law (the "Code")
shall cause a copy of this section to be delivered to each issuee or transferee
of such security at the time the certificate evidencing the security is
delivered to the issuee or transferee.

(b)  It is unlawful for the holder of any such security to consummate a
sale or transfer of such security, or any interest therein, without the prior
written consent of the Commissioner (until this condition is removed pursuant to
Section 260.141.12 of the Rules), except:

(1)  to the issuer;

(2)  pursuant to the order or process of any court;

(3)  to any person described in subdivision (i) of Section 25102 of
the Code or Section 260.105.14 of the Rules;

(4)  to the transferor's ancestors, descendants or spouse, or any
custodian or trustee for the account of the transferor or the transferor's
ancestors, descendants or spouse; or to a transferee by a trustee or custodian
for the account of the transferee or the transferee's ancestors, descendants or
spouse;

(5)  to holders of securities of the same class of the same issuer;

(6)  by way of gift or donation inter vivos or on death;

(7)  by or through a broker-dealer licensed under the Code (either
acting as such or as a finder) to a resident of a foreign state, territory or
country who is neither domiciled in this state to the knowledge of the
broker-dealer, nor actually present in this state if the sale of such securities
is not in violation of any securities laws of the foreign state, territory or
country concerned;

(8)  to a  broker-dealer licensed under the Code in a principal
transaction, or as an underwriter or member of an underwriting syndicate or
selling group;

(9)  if the interest sold or transferred is a pledge or other lien
given by the purchaser to the seller upon a sale of the security for which the
Commissioner's written consent is obtained or under this rule not required;

(10) by way of a sale qualified under Sections 25111, 25112,
25113 or 25121 of the Code, of the securities to be transferred, provided that
no order under Section 25140 or subdivision (a) of Section 25143 is in effect
with respect to such qualification;

(11) by a corporation to a wholly owned subsidiary of such
corporation, or by a wholly owned subsidiary of a corporation to such
corporation;

A-2

(12) by way of an exchange qualified under Section 25111, 25112 or
25113 of the Code provided that no order under Section 25140 or subdivision (a)
of Section 25143 is in effect with respect to such qualification;

(13) between residents of foreign states, territories or countries who
are neither domiciled or actually present in this state;

(14) to the State Controller pursuant to the Unclaimed Property Law or
to the administrator of the unclaimed property law of another state;

(15) by the State Controller pursuant to the Unclaimed Property Law or
by the administrator of the unclaimed property law of another state if, in
either such case, such person (i) discloses to potential purchasers at the sale
that transfer of the securities is restricted under this rule, (ii) delivers to
each purchaser a copy of this rule, and (iii) advises the Commissioner of the
name of each purchaser;

(16) by a trustee to a successor trustee when such transfer does not
involve a change in the beneficial ownership of the securities;

(17) by way of an offer and sale of outstanding securities in an
issuer transaction that is subject to the qualification requirement of Section
25110 of the Code but exempt from that qualification requirement by subdivision
(f) of Section 25102; provided that any such transfer is on the condition that
any certificate evidencing the security issued to such transferee shall contain
the legend required by this section.

(c)  The certificates representing all such securities subject to such a
restriction on transfer, whether upon initial issuance or upon any transfer
thereof, shall bear on their face a legend, prominently stamped or printed
thereon in capital letters of not less than 10-point size, reading as follows:

"IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE
PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES."

[Last amended effective January 21, 1988.]

SPECIAL NOTICE FOR MAINE, MASSACHUSETTS, MINNESOTA, MISSOURI
AND NEBRASKA RESIDENTS ONLY

In no event may a subscription for Shares be accepted until at least five
business days after the date the subscriber receives the Prospectus. Residents
of the States of Maine, Massachusetts, Minnesota, Missouri and Nebraska who
first received the Prospectus only at the time of subscription may receive a
refund of the subscription amount upon request to the Company within five days
of the date of subscription.

A-3

STANDARD REGISTRATION REQUIREMENTS

The following requirements have been established for the various forms of
registration. Accordingly, complete Subscription Agreements and such supporting
material as may be necessary must be provided.

TYPE OF OWNERSHIP AND SIGNATURE(S) REQUIRED

1.   INDIVIDUAL: One signature required.

2.   JOINT TENANTS WITH RIGHT OF SURVIVORSHIP: All parties must sign.

3.   TENANTS IN COMMON: All parties must sign.

4.   COMMUNITY PROPERTY: Only one investor signature required.

5.   PENSION OR PROFIT SHARING PLANS: The trustee signs the Signature Page.

6.   TRUST: The trustee signs the Signature Page. Provide the name of the trust,
the name of the trustee and the name of the beneficiary.

7.   Company: Identify whether the entity is a general or limited partnership.
The general partners must be identified and their signatures obtained on
the Signature Page. In the case of an investment by a general partnership,
all partners must sign (unless a "managing partner" has been designated for
the partnership, in which case he may sign on behalf of the partnership if
a certified copy of the document granting him authority to invest on behalf
of the partnership is submitted).

8.   CORPORATION: The Subscription Agreement must be accompanied by (1) a
certified copy of the resolution of the Board of Directors designating the
officer(s) of the corporation authorized to sign on behalf of the
corporation and (2) a certified copy of the Board's resolution authorizing
the investment.

9.   IRA AND IRA ROLLOVERS: Requires signature of authorized signer (e.g., an
officer) of the bank, trust company, or other fiduciary. The address of the
trustee must be provided in order for the trustee to receive checks and
other pertinent information regarding the investment.

10.  KEOGH (HR 10): Same rules as those applicable to IRAs.

11.  UNIFORM GIFT TO MINORS ACT (UGMA) or UNIFORM TRANSFERS TO MINORS ACT
(UTMA): The required signature is that of the custodian, not of the parent
(unless the parent has been designated as the custodian). Only one child is
permitted in each investment under UGMA or UTMA. In addition, designate the
state under which the gift is being made.

A-4

INSTRUCTIONS TO SUBSCRIPTION AGREEMENT SIGNATURE PAGE
TO WELLS REAL ESTATE INVESTMENT TRUST, INC. SUBSCRIPTION AGREEMENT

--------------------------------------------------------------------------------
INVESTOR            Please follow these instructions carefully. Failure to do so
INSTRUCTIONS        may result in the rejection of your subscription. All
information on the Subscription Agreement Signature Page
should be completed as follows:
------- ------------------------------------------------------------------------
1. INVESTMENT       a.   GENERAL: A minimum investment of $1,000 (100 Shares) is
required, except for certain states which require a
higher minimum investment. A CHECK FOR THE FULL
PURCHASE PRICE OF THE SHARES SUBSCRIBED FOR SHOULD BE
MADE PAYABLE TO THE ORDER OF "WELLS REAL ESTATE
INVESTMENT TRUST, INC." Investors who have satisfied
the minimum purchase requirements in 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., Wells Real
Estate Fund X, L.P., Wells Real Estate Fund XI, L.P. or
Wells Real Estate Fund XII, L.P. or in any other public
real estate program may invest as little as $25 (2.5
Shares) except for residents of Maine, Minnesota,
Nebraska or Washington. Shares may be purchased only by
persons meeting the standards set forth under the
Section of the Prospectus entitled "Investor
Suitability Standards." Please indicate the state in
which the sale was made.

b.   DEFERRED COMMISSION OPTION: Please check the box if you
have agreed with your Broker-Dealer to elect the
Deferred Commission Option, as described in the
Prospectus, as supplemented to date. By electing the
Deferred Commission Option, you are required to pay
only $9.40 per Share purchased upon subscription. For
the next six years following the year of subscription,
or lower if required to satisfy outstanding deferred
commission obligations, you will have a 1% sales
commission ($.10 per Share) per year deducted from and
paid out of dividends or other cash distributions
otherwise distributable to you. Election of the
Deferred Commission Option shall authorize the Company
to withhold such amounts from dividends or other cash
distributions otherwise payable to you as is set forth
in the "Plan of Distribution" section of the
Prospectus.
--------------------------------------------------------------------------------

A-5

--------------------------------------------------------------------------------
2. ADDITIONAL      Please check if you plan to make one or more additional
INVESTMENTS     investments in the Company. All additional investments must
be in increments of at least $25. Additional investments by
residents of Maine must be for the minimum amounts stated
under "Suitability Standards" in the Prospectus, and
residents of Maine must execute a new Subscription Agreement
Signature Page to make additional investments in the Company.
If additional investments in the Company are made, the
investor agrees to notify the Company and the Broker-Dealer
named on the Subscription Agreement Signature Page in writing
if at any time he fails to meet the applicable suitability
standards or he is unable to make any other representations
or warranties set forth in the Prospectus or the Subscription
Agreement. The investor acknowledges that the Broker-Dealer
named in the Subscription Agreement Signature Page may
receive commissions on such additional investments as
described in the Prospectus.
--------------------------------------------------------------------------------
3. TYPE OF         Please check the appropriate box to indicate the type of
OWNERSHIP       entity or type of individuals subscribing.
--------------------------------------------------------------------------------
4. REGISTRATION    Please enter the exact name in which the Shares are to be
NAME AND        held. For joint tenants with right of survivorship or tenants
ADDRESS         in common, include the names of both investors. In the case
of partnerships or corporations, include the name of an
individual to whom correspondence will be addressed. Trusts
should include the name of the trustee. All investors must
complete the space provided for taxpayer identification
number or social security number. By signing in Section 6,
the investor is certifying that this number is correct. Enter
the mailing address and telephone numbers of the registered
owner of this investment. In the case of a Qualified Plan or
trust, this will be the address of the trustee. Indicate the
birthdate and occupation of the registered owner unless the
registered owner is a partnership, corporation or trust.
--------------------------------------------------------------------------------
5. INVESTOR NAME   Complete this Section only if the investor's name and address
AND ADDRESS     is different from the registration name and address provided
in Section 4. If the Shares are registered in the name of a
trust, enter the name, address, telephone number, social
security number, birthdate and occupation of the beneficial
owner of the trust.
--------------------------------------------------------------------------------
6. SUBSCRIBER      Please separately initial each representation made by the
SIGNATURES      investor where indicated. Except in the case of fiduciary
accounts, the investor may not grant any person a power of
attorney to make such representations on his or her behalf.
Each investor must sign and date this Section. If title is to
be held jointly, all parties must sign. If the registered
owner is a partnership, corporation or trust, a general
partner, officer or trustee of the entity must sign. PLEASE
NOTE THAT THESE SIGNATURES DO NOT HAVE TO BE NOTARIZED.
--------------------------------------------------------------------------------

A-6

--------------------------------------------------------------------------------
7. DIVIDENDS       a. DIVIDEND REINVESTMENT PLAN: By electing the Dividend
Reinvestment Plan, the investor elects to reinvest the
stated percentage of dividends otherwise payable to such
investor in Shares of the Company. The investor agrees to
notify the Company and the Broker-Dealer named on the
Subscription Agreement Signature Page in writing if at any
time he fails to meet the applicable suitability standards
or he is unable to make any other representations and
warranties as set forth in the Prospectus or Subscription
Agreement or in the prospectus and subscription agreement
of any future limited partnerships sponsored by the
Advisor or its affiliates. The investor acknowledges that
the Broker-Dealer named in the Subscription Agreement
Signature Page may receive commissions not to exceed 7% of
reinvested dividends, less any discounts authorized by the
Prospectus.

b. DIVIDEND ADDRESS: If cash dividends are to be sent to an
address Oher than that provided in Section 4 (i.e., a
bank, brokerage firm or savings and loan, etc.), please
provide the name, account number and address.
--------------------------------------------------------------------------------
8. BROKER-DEALER   This Section is to be completed by the Registered
Representative. Please complete all BROKER-DEALER information
contained in Section 8 including suitability certification.
SIGNATURE PAGE MUST BE SIGNED BY AN AUTHORIZED
REPRESENTATIVE.
--------------------------------------------------------------------------------

The Subscription Agreement Signature Page, which has been delivered with
this Prospectus, together with a check for the full purchase price, should be
delivered or mailed to your Broker-Dealer. Only original, completed copies of
Subscription Agreements can be accepted. Photocopied or otherwise duplicated
Subscription Agreements cannot be accepted by the Company.

IF YOU NEED FURTHER ASSISTANCE IN COMPLETING THIS
SUBSCRIPTION AGREEMENT SIGNATURE PAGE,
PLEASE CALL 1-800-448-1010

A-7

-------------------------
SEE PRECEDING PAGE                                     Special Instructions:
FOR INSTRUCTIONS
-------------------------

WELLS REAL ESTATE INVESTMENT TRUST, INC.
SUBSCRIPTION AGREEMENT SIGNATURE PAGE

1. ===== INVESTMENT ============================================================

-------------------------------------
Make Investment Check Payable to:
Wells Real Estate Investment Trust, Inc.
_____________        ________________
# of Shares         Total $ Invested
-------------------------------------------------------
(# Shares x $10 = $ Invested)                                       [_]  Initial Investment (Minimum $1,000)
[_]  Additional Investments (Minimum $25)
Minimum purchase $1,000 or 100 Shares                                        State in which sale was made _____________________
---------------------------------------                                 -------------------------------------------------------

Check the following box to elect the Deferred Commission Option:     [_]
(This election must be agreed to by the Broker-Dealer listed below)

2. ===== ADDITIONAL INVESTMENTS  ===============================================
Please check if you plan to make additional investments in the Company: [_]
[If additional investments are made, please include social security number
or other taxpayer identification number on your check.]
[All additional investments must be made in increments of at least $25.]

3. ===== TYPE OF OWNERSHIP =====================================================

[_]   IRA (06)                                      [_]   Individual (01)
[_]   Keogh (10)                                    [_]   Joint Tenants With Right of Survivorship (02)
[_]   Qualified Pension Plan (11)                   [_]   Community Property (03)
[_]   Qualified Profit Sharing Plan (12)            [_]   Tenants in Common (04)
[_]   Other Trust _____________________________     [_]   Custodian:  A Custodian for ________________ under the Uniform
For the Benefit of ______________________           Gift to Minors Act or the Uniform Transfers to Minors Act of the
[_]   Company (15)                                        State of ______________ (08)
[_]   Other __________________________________________________________

4. ===== REGISTRATION NAME AND ADDRESS =========================================
Please print name(s) in which Shares are to be registered. Include trust
name if applicable.
[_] Mr  [_] Mrs  [_] Ms  [_] MD  [_] PhD  [_] DDS  [_] Other ______________

______________________________________
Taxpayer Identification Number
[_][_]-[_][_][_][_][_][_][_]
______________________________________
Social Security Number
[_][_][_]-[_][_]-[_][_][_][_]
______________________________________

__________________________________________________________
Street Address
or P.O. Box
__________________________________________________________

City             ------------ State  -------------   Zip Code -------------
------------               -------------------------------
Home                          Business
Telephone No.      (   )      Telephone No.   (   )
------------               ------------------------------

------------               ------------------------------
Birthdate                     Occupation
------------               ------------------------------

5. ===== INVESTOR NAME AND ADDRESS =============================================
(COMPLETE ONLY IF DIFFERENT FROM REGISTRATION NAME AND ADDRESS)
[_] Mr  [_] Mrs  [_] Ms  [_] MD  [_] PhD  [_] DDS  [_] Other
______________

Name                                       Social Security Number
---------------------------------------
[_][_][_]-[_][_]-[_][_][_][_]
---------------------------------------

---------------------------------------------------------
Street Address
or P.O. Box
---------------------------------------------------------
City                          State                   Zip Code
------------               ---------          -----------

------------               ------------------------------
Home                          Business
Telephone No.      (   )      Telephone No.   (   )
------------               ------------------------------

------------               ------------------------------
Birthdate                     Occupation
------------               ------------------------------

===============================================================================
(REVERSE SIDE MUST BE COMPLETED)

6. ===== SUBSCRIBER SIGNATURES ================================================

Please separately initial each of the representations below. Except in the
case of fiduciary accounts, you may not grant any person a power of
attorney to make such representations on your behalf. In order to induce
the Company to accept this subscription, I hereby represent and warrant to
you as follows:

(a)  I have received the Prospectus.                                        ------------     ------------
Initials         Initials

(b)  I accept and agree to be bound by the terms and conditions
of the Articles of Incorporation.                                      ------------     ------------
Initials         Initials

(c)  I have (i) a net worth (exclusive of home, home furnishings and
automobiles) of $150,000 or more; or (ii) a net worth (as described
above) of at least $45,000 and had during the last tax year or
estimate that I will have during the current tax year a minimum of
$45,000 annual gross income, or that I meet the higher suitability
requirements imposed by my state of primary residence as set forth
in the Prospectus under "Suitability Standards."                       ------------     ------------
Initials         Initials

(d)  If I am a California resident or if the Person to whom I
subsequently propose to assign or transfer any Shares is a
California resident, I may not consummate a sale or transfer of my
Shares, or any interest therein, or receive any consideration
therefor, without the prior written consent of the Commissioner of
the Department of Corporations of the State of California, except as
permitted in the Commissioner's Rules, and I understand that my
Shares, or any document evidencing my Shares, will bear a legend
reflecting the substance of the foregoing understanding.               ------------     ------------
Initials         Initials

(e)  ARKANSAS, NEW MEXICO AND TEXAS RESIDENTS ONLY: I am purchasing the
Shares for my own account and acknowledge that the investment is not
liquid.                                                                ------------     ------------
Initials         Initials

I declare that the information supplied above is true and correct and may
be relied upon by the Company in connection with my investment in the
Company. Under penalties of perjury, by signing this Signature Page, I
hereby certify that (a) I have provided herein my correct Taxpayer
Identification Number, and (b) I am not subject to back-up withholding as a
result of a failure to report all interest or dividends, or the Internal
Revenue Service has notified me that I am no longer subject to back-up
withholding.

----------------------------------    -----------------------------------------      -----------------

----------------------------------    -----------------------------------------      -----------------
Signature of Investor or Trustee      Signature of Joint Owner, if applicable             Date
(MUST BE SIGNED BY TRUSTEE(S) IF IRA, KEOGH OR QUALIFIED PLAN.)

7. ===== DISTRIBUTIONS ========================================================
7a.  Check the applicable box to participate in the Dividend Reinvestment
Plan: Percentage of participation:  100% [_]       Other [_] ___%

7b.  Complete the following section only to direct dividends to a party
other than registered owner:

--------------------------------------------
Name
--------------------------------------------
Account Number
--------------------------------------------
Street Address or P.O. Box
---------------------------------- ---------
City                                     State           Zip Code
-----------       ---------          -------

8. ===== BROKER-DEALER ========================================================
(TO BE COMPLETED BY REGISTERED REPRESENTATIVE)

The Broker-Dealer or authorized representative must sign below to complete
order. Broker-Dealer warrants that it is a duly licensed Broker-Dealer and
may lawfully offer Shares in the state designated as the investor's address
or the state in which the sale was made, if different. The Broker-Dealer or
authorized representative warrants that he has reasonable grounds to
believe this investment is suitable for the subscriber as defined in
Section 3(b) of the Rules of Fair Practice of the NASD Manual and that he
has informed subscriber of all aspects of liquidity and marketability of
this investment as required by Section 4 of such Rules of Fair Practice.

-------------------------               -----------
Broker-Dealer Name                             Telephone No.   (  )
---------------------------------------------------
Broker-Dealer Street
Address or P.O. Box
---------------------------------------------------
City                              State             Zip Code
-----------        ------               -----------

-------------------------               -----------
Registered
Representative Name                            Telephone No.   (  )
---------------------------------------------------
Reg. Rep. Street
Address or P.O. Box
---------------------------------------------------
City                              State             Zip Code
----------------------------------        --------------------------------

------------------------------------       -------------------------------
Broker-Dealer Signature, if              Registered Representative
required                                Signature

Please mail completed Subscription Agreement (with all signatures) and
check(s) made payable to:
Wells Real Estate Investment Trust, Inc.
6200 The Corners Parkway, Suite 250
Norcross, Georgia 30092
800-448-1010 or 770-449-7800

Overnight address:                                                                       Mailing address:
6200 The Corners Parkway, Suite 250                                                       P.O. Box 926040
Norcross, Georgia 30092                                                      Norcross, Georgia 30092-9209
FOR COMPANY USE ONLY:
---------------------------------------------------------------------------------------------------------
ACCEPTANCE BY COMPANY  Amount   ___________________________  Date ______________________________________

Received and Subscription Accepted:    Check No. _________________  Certificate No. ____________________
By: _______________________________    Wells Real Estate Investment Trust, Inc.

_______________________________    ___________________________________________    ______________________
Broker-Dealer #                      Registered Representative #                 Account #
--------------------------------------------------------------------------------------------------------

EXHIBIT B

AMENDED AND RESTATED
DIVIDEND REINVESTMENT PLAN
As of December 20, 1999

Wells Real Estate Investment Trust, Inc., a Maryland corporation (the
"Company"), pursuant to its Amended and Restated Articles of Incorporation,
adopted a Dividend Reinvestment Plan (the "DRP"), which is hereby amended and
restated in its entirety as set forth below. Capitalized terms shall have the
same meaning as set forth in the Articles unless otherwise defined herein.

1.  Dividend Reinvestment.  As agent for the shareholders ("Shareholders")
---------------------
of the Company who (a) purchased shares of the Company's common stock (the
"Shares") pursuant to the Company's initial public offering (the "Initial
Offering"), which commenced on January 30, 1998 and will terminate on or before
January 30, 2000, (b) purchase Shares pursuant to the Company's second public
offering (the "Second Offering"), which will commence immediately upon the
termination of the Initial Offering, or (c) purchase Shares pursuant to any
future offering of the Company ("Future Offering"), and who elect to participate
in the DRP (the "Participants"), the Company will apply all dividends and other
distributions declared and paid in respect of the Shares held by each
Participant (the "Dividends"), including Dividends paid with respect to any full
or fractional Shares acquired under the DRP, to the purchase of the Shares for
such Participants directly, if permitted under state securities laws and, if
not, through the Dealer Manager or Soliciting Dealers registered in the
Participant's state of residence.

2.  Effective Date.  The effective date of this Amended and Restated
--------------
Dividend Reinvestment Plan (the "DRP") shall be the date that the Second
Offering becomes effective with the Securities and Exchange Commission (the
"Commission").

3.  Procedure for Participation.  Any Shareholder who purchased Shares
---------------------------
pursuant to the Initial Offering, the Second Offering or any Future Offering and
who has received a prospectus, as contained in the Company's registration
statement filed with the Commission, may elect to become a Participant by
completing and executing the Subscription Agreement, an enrollment form or any
other appropriate authorization form as may be available from the Company, the
Dealer Manager or Soliciting Dealer. Participation in the DRP will begin with
the next Dividend payable after receipt of a Participant's subscription,
enrollment or authorization. Shares will be purchased under the DRP on the date
that Dividends are paid by the Company. Dividends of the Company are currently
paid quarterly. Each Participant agrees that if, at any time prior to the
listing of the Shares on a national stock exchange or inclusion of the Shares
for quotation on the National Association of Securities Dealers, Inc. Automated
Quotation System ("Nasdaq"), he or she fails to meet the suitability
requirements for making an investment in the Company or cannot make the other
representations or warranties set forth in the Subscription Agreement, he or she
will promptly so notify the Company in writing.

4.  Purchase of Shares.  Participants will acquire DRP Shares from the
------------------
Company at a fixed price of $10 per Share until (i) all 2,200,000 of the DRP
Shares registered in the Second Offering are issued or (ii) the Second Offering
terminates and the Company elects to deregister with the Commission the unsold
DRP Shares. Participants in the DRP may also purchase fractional Shares so that
100% of the Dividends will be used to acquire Shares. However, a Participant
will not be able to acquire DRP Shares to the extent that any such purchase
would cause such Participant to exceed the Ownership Limit as set forth in the
Articles.

B-1

Shares to be distributed by the Company in connection with the DRP may (but
are not required to) be supplied from: (a) the DRP Shares which will be
registered with the Commission in connection with the Company's Second Offering,
(b) Shares to be registered with the Commission in a Future Offering for use in
the DRP (a "Future Registration"), or (c) Shares of the Company's common stock
purchased by the Company for the DRP in a secondary market (if available) or on
a stock exchange or Nasdaq (if listed) (collectively, the "Secondary Market").

Shares purchased on the Secondary Market as set forth in (c) above will be
purchased at the then-prevailing market price, which price will be utilized for
purposes of purchases of Shares in the DRP. Shares acquired by the Company on
the Secondary Market or registered in a Future Registration for use in the DRP
may be at prices lower or higher than the $10 per Share price which will be paid
for the DRP Shares pursuant to the Initial Offering and the Second Offering.

If the Company acquires Shares in the Secondary Market for use in the DRP,
the Company shall use reasonable efforts to acquire Shares for use in the DRP at
the lowest price then reasonably available.  However, the Company does not in
any respect guarantee or warrant that the Shares so acquired and purchased by
the Participant in the DRP will be at the lowest possible price.  Further,
irrespective of the Company's ability to acquire Shares in the Secondary Market
or to complete a Future Registration for shares to be used in the DRP, the
Company is in no way obligated to do either, in its sole discretion.

It is understood that reinvestment of Dividends does not relieve a
Participant of any income tax liability which may be payable on the Dividends.

5.  Share Certificates.  The ownership of the Shares purchased through the
------------------
DRP will be in book-entry form only until the Company begins to issue
certificates for its outstanding common stock.

6.  Reports.  Within 90 days after the end of the Company's fiscal year,
-------
the Company shall provide each Shareholder with an individualized report on his
or her investment, including the purchase date(s), purchase price and number of
Shares owned, as well as the dates of Dividend distributions and amounts of
Dividends paid during the prior fiscal year.  In addition, the Company shall
provide to each Participant an individualized quarterly report at the time of
each Dividend payment showing the number of Shares owned prior to the current
Dividend, the amount of the current Dividend and the number of Shares owned
after the current Dividend.

7.  Commissions and Other Charges.  In connection with Shares sold pursuant
-----------------------------
to the DRP, the Company will pay selling commissions of 7%; a dealer manager fee
of 2.5%; and, in the event that proceeds from the sale of DRP Shares are used to
acquire properties, acquisition and advisory fees and expenses of 3.5%, of the
purchase price of the DRP Shares.

8.  Termination by Participant.  A Participant may terminate participation
--------------------------
in the DRP at any time, without penalty by delivering to the Company a written
notice.  Prior to listing of the Shares on a national stock exchange or Nasdaq,
any transfer of Shares by a Participant to a non-Participant will terminate
participation in the DRP with respect to the transferred Shares.  If a
Participant terminates DRP participation, the Company will ensure that the
terminating Participant's account will reflect the whole number of shares in his
or her account and provide a check for the cash value of any fractional share in
such account.  Upon termination of DRP participation, Dividends will be
distributed to the Shareholder in cash.

B-2

9.  Amendment or Termination of DRP by the Company.  The Board of Directors
----------------------------------------------
of the Company may by majority vote (including a majority of the Independent
Directors) amend or terminate the DRP for any reason upon 10 days' written
notice to the Participants.

10. Liability of the Company.  The Company shall not be liable for any act
------------------------
done in good faith, or for any good faith omission to act, including, without
limitation, any claims or liability; (a) arising out of failure to terminate a
Participant's account upon such Participant's death prior to receipt of notice
in writing of such death; and (b) with respect to the time and the prices at
which Shares are purchased or sold for a Participant's account. To the extent
that indemnification may apply to liabilities arising under the Securities Act
of 1933, as amended, or the securities act of a sate, the Company has been
advised that, in the opinion of the Commission and certain state securities
commissioners, such indemnification is contrary to public policy and, therefore,
unenforceable.

B-3

ALPHABETICAL INDEX                              Page
----

Additional Information..............................................   160
Conflicts of Interest...............................................    51
Description of Properties...........................................    65
Description of Shares...............................................   142
ERISA Considerations................................................   139
Estimated Use of Proceeds...........................................    26
Experts.............................................................   159
Federal Income Tax Considerations...................................   123
Financial Statements................................................   161
Glossary............................................................   160
Investment Objectives and Criteria..................................    56
Legal Opinions......................................................   159
Management..........................................................    28
Management Compensation.............................................    46
Management's Discussion and Analysis of Financial Condition
And Results of Operations.........................................    97
Plan of Distribution................................................   153
Prior Performance Summary...........................................   114
Prior Performance Tables............................................   215
Summary.............................................................     9
Questions and Answers About This Offering...........................     1
Risk Factors........................................................    16
Suitability Standards...............................................    25
Supplemental Sales Material.........................................   158
The Operating Partnership Agreement.................................   150

Until March 20, 2001 (90 days after the date of this prospectus), all
dealers that affect transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is
in addition to the obligation of dealers to deliver a prospectus when acting as
soliciting dealers.

We have not authorized any dealer, salesperson or other individual to give
any information or to make any representations that are not contained in this
prospectus. If any such information or statements are given or made, you should
not rely upon such information or representation. This prospectus does not
constitute an offer to sell any securities other than those to which this
prospectus relates, or an offer to sell, or a solicitation of an offer to buy,
to any person in any jurisdiction where such an offer or solicitation would be
unlawful. This prospectus speaks as of the date set forth below. You should not
assume that the delivery of this prospectus or that any sale made pursuant to
this prospectus implies that the information contained in this prospectus will
remain fully accurate and correct as of any time subsequent to the date of this
prospectus.

________________

WELLS REAL ESTATE
INVESTMENT TRUST, INC.

Up to 125,000,000 Shares
of Common Stock
Offered to the Public

________________

PROSPECTUS

________________

WELLS INVESTMENT
SECURITIES, INC.

December 20, 2000

WELLS REAL ESTATE INVESTMENT TRUST, INC.
SUPPLEMENT NO. 1 DATED FEBRUARY 5, 2001 TO THE PROSPECTUS
DATED DECEMBER 20, 2000

This document supplements, and should be read in conjunction with, the
prospectus of Wells Real Estate Investment Trust, Inc. dated December 20, 2000.
When we refer to the "prospectus" in this supplement, we are also referring to
any and all supplements to the prospectus.  Unless otherwise defined in this
supplement, capitalized terms used in this supplement shall have the same
meanings as set forth in the prospectus.

The purpose of this supplement is to describe the following:

(1)  The status of the offering of shares in Wells Real Estate Investment
Trust, Inc. (Wells REIT);

(2)  The acquisition by Wells Operating Partnership, L.P. (Wells OP) of a
six-story office building in Houston, Texas leased to Stone & Webster,
Inc. and SYSCO Corporation (Stone & Webster Building);

(3)  The acquisition by Wells OP of an eight-story office building in
Minnetonka, Minnesota leased to Metris Direct, Inc. (Metris Minnetonka
Building);

(4)  The acquisition by the Fund XII-REIT Joint Venture Partnership of 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. (AT&T Call Center Buildings);

(5)  Revisions to the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" section of the prospectus;

(6)  Statements of revenue over operating expenses for the Stone & Webster
Building and the AT&T Call Center Buildings; and

(7)  Unaudited Pro Forma Financial Statements for the Wells REIT.

Status of the Offering

We commenced our initial public offering of common stock on January 30,
1998. Our initial public offering was terminated on December 19, 1999. We
received approximately $132,181,919 in gross offering proceeds from the sale of
13,218,192 shares in our initial public offering. We commenced a second offering
of common stock on December 20, 1999. Our second public offering was terminated
on December 19, 2000. We received approximately $175,229,193 in gross offering
proceeds from the sale of 17,522,919 shares in our second public offering.

Pursuant to the prospectus, we commenced our third offering of common stock
on December 20, 2000. As of January 31, 2001, we had received an additional
$25,133,848 in gross offering proceeds from the sale of 2,513,385 shares in the
third offering. Accordingly, as of January 31, 2001, we had received in the
aggregate approximately $332,544,960 in gross offering proceeds from the sale of
33,254,496 shares of our common stock.

1

Stone & Webster Building

Purchase of the Stone & Webster Building.  On December 21, 2000, Wells OP, the
----------------------------------------
operating partnership for the Wells REIT, purchased a six-story office building
with approximately 312,564 rentable square feet located at 1430 Enclave Parkway,
Houston, Harris County, Texas.  Wells OP purchased this building from Cardinal
Paragon, Inc. (Cardinal) pursuant to that certain Agreement of Purchase and Sale
of Property between Cardinal and Wells OP.  Cardinal purchased the Stone &
Webster Building in a sale-leaseback transaction from Enclave Parkway Realty,
Inc., an affiliate of Stone & Webster, Inc. (Stone & Webster), on December 21,
2000.  Cardinal is not in any way affiliated with the Wells REIT or our Advisor,
Wells Capital, Inc.

The purchase price for the Stone & Webster Building was $44,970,000.  Wells
OP also incurred additional acquisition expenses in connection with the purchase
of the Stone & Webster Building, including attorneys' fees, recording fees,
structural report and environmental report fees, and other closing costs, of
approximately $45,000.  In order to finance part of the acquisition of the Stone
& Webster Building, Wells OP obtained an acquisition loan of $35,900,000 from
Guaranty Federal Bank, F.S.B. (Guaranty Federal Loan) and $3,000,000 in seller
financing from Cardinal (Seller Financing).

An independent appraisal of the Stone & Webster Building was prepared by
Abbot & Associates, Inc., real estate appraisers, as of November 20, 2000,
pursuant to which the market value of the 9.96 acre parcel of land containing
the leased fee interest subject to the leases described below was estimated to
be $46,500,000 and the additional 4.34 acre parcel of land (described below) was
estimated to be $1,890,000, in cash or terms equivalent to cash.  This value
estimate was based upon a number of assumptions, including that the Stone &
Webster Building will continue operating at a stabilized level with the tenants
described below occupying 100% of the rentable area, and is not necessarily an
accurate reflection of the fair market value of the property or the net proceeds
which would result from an immediate sale of this property.  Wells OP also
obtained an environmental report and an engineering inspection report prior to
the closing evidencing that the condition of the land and the Stone & Webster
Building were satisfactory.

Description of the Loans.  The Guaranty Federal Loan in the amount of
------------------------
$35,900,000 requires monthly payments of interest only and matures on December
20, 2001.  In the event that the principal balance of the loan is not repaid in
full by March 31, 2001, Wells OP is required to make a principal payment of
$6,000,000 on such date.  The interest rate on the Guaranty Federal Loan is a
variable rate equal to the London InterBank Offered Rate (LIBOR) for a 30-day
period plus 250 basis points if the principal balance of the loan is in excess
of $25,900,000; 200 basis points if the principal balance of the loan is between
$24,195,001 and $25,900,000; and 180 basis points if the principal balance of
the loan is less or equal to $24,195,000.  As of January 31, 2001, the principal
balance of the Guaranty Federal Loan was $24,100,000.  Wells OP has secured
separate interest rates for two portions of the Guaranty Federal Loan, each
having an interest rate of LIBOR plus 180 basis points on the date the rate for
such portion was secured.  As of January 31, 2001, the interest rate on the
Guaranty Federal Loan was 7.61% per annum on the first $21,900,000 of the
principal loan balance and 7.66% per annum on the remaining $2,200,000 of the
principal balance.  The Guaranty Federal Loan is secured by a first priority
mortgage against the Stone & Webster Building.

The Seller Financing consists of a $3,000,000 loan to Wells OP from
Cardinal.  The Seller Financing requires the payment of the full principal
balance plus accrued interest on the earlier of: (i) December 20, 2001, or (ii)
the date that the Guaranty Federal Loan is repaid in full. The interest rate on
the Seller Financing is 6% per annum. The Seller Financing is secured by a
second priority mortgage against the Stone & Webster Building.

2

Description of the Stone & Webster Building and Site.  The Stone & Webster
----------------------------------------------------
Building, which was completed in 1994, is a six-story office building containing
approximately 312,564 rentable square feet located on a 9.96 acre tract of land.
In addition, this site includes 4.34 acres of unencumbered land available for
expansion.  The first four floors of the Stone & Webster Building are occupied
by Stone & Webster, and the fifth and sixth floors are occupied by SYSCO
Corporation (SYSCO).

Location of the Stone & Webster Building.  The Stone & Webster Building is
----------------------------------------
located in a growing area with nearby access to the Houston freeway system,
employment centers and shopping centers.  The site is within two miles of
Interstate 10 near the intersection of Briar Forest Drive and Dairy Ashford
Road.  There is a planned development to the southeast of the site known as
Westchase which comprises 1,347 acres of land developed for a variety of uses
such as high-rise office buildings, office/warehouse buildings, apartment
complexes, condominium projects, retail shopping centers and hotels.

The Stone & Webster Lease.  Stone & Webster occupies 206,048 rentable square
-------------------------
feet (floors 1 through 4) of the Stone & Webster Building under an Office
Building Lease between Wells OP and Stone & Webster entered into at closing.
The current term of the Stone & Webster lease is ten years, which commenced on
December 21, 2000, and expires on December 20, 2010. Stone & Webster has the
right to extend the Stone & Webster lease for two additional five-year periods
of time for a base rent equal to the greater of (i) the last year's rent, or
(ii) the then-current fair market rental value.  In the event that the parties
cannot agree upon the fair market rental value, such value shall be determined
in accordance with the appraisal procedure contained in the Stone & Webster
lease.

Stone & Webster is a full-service engineering and construction company
offering managerial and technical resources for solving complex  energy,
environmental, infrastructure and industrial challenges.  Stone & Webster, which
was founded in 1889 as an electrical testing laboratory and consulting firm, has
evolved into a global organization employing more than 5,000 people worldwide.

The Stone & Webster lease is guaranteed by The Shaw Group, Inc., the parent
company of Stone & Webster.  Shaw Group is the largest supplier of fabricated
piping systems and services in the world.  Shaw Group distinguishes itself by
offering comprehensive solutions consisting of integrated engineering and
design, pipe fabrication, construction and maintenance services and the
manufacture of specialty pipe fittings and supports to the power generation,
crude oil refining, chemical and petrochemical processing and oil and gas
exploration and production industries.  Shaw Group has approximately 13,000
employees with offices in the United States, Australia, Canada, the United
Kingdom, Venezuela and Bahrain.  Shaw Group reported net income of approximately
$18.1 million on revenues of approximately $494 million for the fiscal year
1999, and reported a net worth, as of December 31, 1999, of over $174 million.

The annual base rent payable under the Stone & Webster lease is $4,533,056
($22 per square foot) payable in monthly installments of $377,754.67 for the
first five years of the lease term and $5,213,014 ($25.30 per square foot)
payable in monthly installments of $434,417.83 for the remainder of the lease
term.

Pursuant to the Stone & Webster lease, Stone & Webster is required to pay
its proportionate share of taxes relating to the Stone & Webster Building and
all operating costs incurred by the landlord in maintaining and operating the
Stone & Webster Building, including garbage and waste disposal, janitorial
service and window cleaning, security, insurance, water and sewer charges,
wages, salaries and employee benefits of all employees engaged in the operation,
maintenance and management of the building, indoor and outdoor landscaping,
utilities and repairs, replacements and general maintenance.  Wells OP, as the
landlord, will be responsible for maintaining the common areas of the building,
the roof, foundation, exterior walls and windows, load bearing items and the
central heating, ventilation and air conditioning, electrical, mechanical and
plumbing systems of the building.

3

The SYSCO Lease.  SYSCO currently occupies 106,516 rentable square feet (floors
---------------
5 and 6) of the Stone & Webster Building under a Lease Agreement.  The
landlord's interest in the SYSCO lease was assigned to Wells OP at the closing.
The initial term of the SYSCO lease is ten years, which commenced on October 1,
1998, and expires on September 30, 2008.

SYSCO is the largest marketer and distributor of foodservice products in
North America. SYSCO operates from 101 distribution facilities and provides its
products and services to about 356,000 restaurants and other users across the
United States and portions of Canada.  SYSCO distributes a wide variety of fresh
and frozen meats, seafood, poultry, fruits and vegetables, plus bakery products,
canned and dry foods, paper and disposable products, sanitation items, dairy
foods, beverages, kitchen and tabletop equipment, as well as medical and
surgical supplies. SYSCO reported net income of approximately $362 million on
revenues of approximately $17 billion for the fiscal year ending July 2000, and
reported a net worth, as of June 30, 2000, of over $1.4 billion.

The annual base rent payable under the SYSCO lease is $2,130,320 ($20 per
square foot) payable in monthly installments of $177,526.67 for the first five
years of the lease term and $2,236,836 ($21 per square foot) payable in monthly
installments of $186,403 for the remainder of the lease term.

Pursuant to the SYSCO lease, SYSCO is required to pay its proportionate
share of taxes and operating costs incurred by the landlord in maintaining and
operating the Stone & Webster Building, including supplies and materials,
utilities, insurance and repairs, replacements, general maintenance and wages
and salaries (including management fees not to exceed 3% of gross revenues
attributable to the building) of all employees engaged in maintaining and
operating the Stone & Webster Building.  Wells OP, as the landlord, will be
responsible for maintaining the common areas of the building, the roof,
foundation, exterior walls and windows, load bearing items and the central
heating, ventilation and air conditioning, electrical, mechanical and plumbing
systems of the building.

Metris Minnetonka Building

Purchase of the Metris Minnetonka Building. On December 21, 2000, Wells OP
------------------------------------------
purchased a nine-story office building with approximately 300,633 rentable
square feet located at 10900 Wayzata Boulevard, Minnetonka, Minnesota. Wells OP
purchased the Metris Minnetonka Building from Opus Northwest, L.L.C. (Opus),
pursuant to that certain Purchase Agreement dated October 31, 2000 (Metris
Agreement) between Opus and the Advisor. Opus is not in any way affiliated with
the Wells REIT or the Advisor.

The rights under the Metris Agreement were assigned by the Advisor, the
original purchaser under the Metris Agreement, to Wells OP at closing.  The
purchase price for the Metris Minnetonka Building was $52,800,000.  Wells OP
also incurred additional acquisition expenses in connection with the purchase of
the Metris Minnetonka Building, including attorneys' fees, recording fees, loan
fees, and other closing costs, of approximately $100,000.  In order to finance
the acquisition of the Metris Minnetonka Building, Wells OP obtained $52,800,000
in loan proceeds by drawing down on an existing line of credit with SouthTrust
Bank, N.A.

An independent appraisal of the Metris Minnetonka Building was prepared by
CB Richard Ellis, Inc., real estate appraisers, as of October 26, 2000, pursuant
to which the market value of the land and the leased fee interest subject to the
lease described below was estimated to be $52,800,000, in cash or terms
equivalent to cash.  This value estimate was based upon a number of assumptions,
including that the Metris Minnetonka Building will continue operating at a
stabilized level with Metris Direct, Inc. (Metris) occupying 100% of the
rentable area, and is not necessarily an accurate reflection of the fair market
value of the property or the net proceeds which would result from an immediate
sale of this property.  Wells OP also obtained an environmental report and an
engineering inspection report prior to the closing evidencing

4

that the condition of the land and the Metris Minnetonka Building were
satisfactory.

Description of the Metris Minnetonka Building and Site.  As set forth above, the
------------------------------------------------------
Metris Minnetonka Building is a nine-story office building containing
approximately 300,633 rentable square feet.  The Metris Minnetonka Building was
completed in August 2000.  The Metris Minnetonka Building is leased to Metris as
its corporate headquarters.  The Metris Minnetonka Building is Phase II of a two
phase office complex known as Crescent Ridge Corporate Center.  Phase I of
Crescent Ridge Corporate Center is an eight-story multi-tenant building which is
connected to the Metris Minnetonka Building by a single-story restaurant link
building.  Neither Phase I of Crescent Ridge Corporate Center nor the connecting
restaurant are owned by Wells OP.

The Metris Minnetonka Building is constructed of steel frames with
reinforced concrete masonry floors and roofs.  The exterior is earth tone cast
stone and reflective glass with marble medallion accents.  The building features
state of the art technology capabilities, including fiber optic cabling,
individual heating and cooling controls for every 1,200 square feet of tenant
space, a combination of fluorescent and parabolic lighting, a wet sprinkler
system, and four computer-controlled traction passenger elevators with 2,500
pound maximum capacity.  Each floor contains approximately 34,000 square feet.
The office areas and hallways are carpeted, the flooring in the restrooms is
ceramic tile and the flooring in the lobby is natural stone.  Drop acoustical
ceilings are installed in the office areas at the nine foot level.  Other
amenities at the Metris Minnetonka Building include a conference center, a full
service cafeteria, two-story vaulted lobbies, a fitness area and locker
facilities and a card access system.  The Metris Minnetonka Building is located
on an irregularly shaped 13.58 acre site which overlooks a large adjoining
wetland area.

Location of the Metris Minnetonka Building. The Metris Minnetonka Building is
-------------------------------------------
located in Minnetonka, Minnesota, which is a western suburb of Minneapolis. The
site is located within the Interstate 394 corridor at the northeast corner of
Interstate 394 and County Road 73 (Hopkins Crossroads). The Interstate 394
corridor contains approximately 6,500,000 square feet in office space and is an
attractive location for, among other reasons, its proximity to Minneapolis/St.
Paul, its proximity to executive housing around Lake Minnetonka and the
Minneapolis lakes area and its proximity and accessibility to labor markets.
Among other corporate headquarter locations located within the Interstate 394
corridor are Cargill, Carlson Companies, General Mills, Life USA and Travelers
Express. There are significant limitations on new developments within the
Interstate 394 corridor which is anticipated to result in a supply constrained
situation and projected low vacancy rates.

Description of Metris Lease.    Metris occupies all 300,633 rentable square feet
---------------------------
of the Metris Minnetonka Building pursuant to that certain Multitenant Office
Lease Agreement dated March 29, 1999.  The Metris lease commenced on September
1, 2000 and has an expiration date of December 31, 2011.  Metris has the right
to renew the Metris lease for an additional five-year term with not less than 18
months notice prior to the expiration of the initial term at fair market rent,
but in no event less than the basic rent payable in the immediate preceding
period.  In the event that the parties cannot agree upon the fair market rent
for the renewal term, the fair market rent will be determined in accordance with
the appraisal provisions of the Metris lease.

Metris is a principal subsidiary of Metris Companies, Inc. (Metris
Companies), a publicly traded company listed on the New York Stock Exchange
(symbol MXT) which has guaranteed the Metris lease.  Metris Companies is an
information-based direct marketer of consumer credit products and fee based
services primarily to moderate income consumers.  Metris Companies consumer
credit products are primarily unsecured credit cards issued by its subsidiary,
Direct Merchants Credit Card Bank.  Metris Companies customers and prospects
include individuals for whom credit bureau information is available and existing
customers of a former affiliate, Fingerhut Corporation.  Metris Companies
markets its fee

5

based services, including debt waiver programs (credit insurance for death or
disability), membership clubs, extended service plans and third party insurance,
to its credit card customers. For calendar year 1999, Metris Companies had net
income of approximately $115 million on revenues of approximately $1.369
billion, and reported a net worth, as of December 31, 1999, of approximately
$623 million. Metris Companies employs approximately 3,400 people. Metris
Companies carries a B+ rating by S & P for its senior debt, with a stable
outlook.

Rental income for the initial 136-month term is summarized as follows:

Dates              Annual Net Rent         PSF
----------------------------------------------------------
Sept. '00 - Dec. '06         $4,960,445           $16.50
----------------------------------------------------------
Jan. '07 - Dec. '09          $5,576,742           $18.55
----------------------------------------------------------
Jan. '10 - Dec. '10          $6,178,008           $20.55
----------------------------------------------------------
Jan. '11 - Dec. '11          $6,478.641           $21.55
----------------------------------------------------------

While Metris was granted certain rental concessions under the Metris lease,
Opus, the seller, has agreed to cover the free rent, so as to yield the above
net effective rates to Wells OP.  In addition, Metris is required to pay annual
parking and storage fees of $132,384 through December 2006 and $164,052 payable
on a monthly basis for the remainder of the lease term.

Pursuant to the Metris lease, Metris is required to pay 100% of operating
costs incurred by the landlord in maintaining and operating the Metris
Minnetonka Building, including all property taxes, insurance premiums,
maintenance and repair costs, steam, electricity, water, sewer, gas and other
utility charges, fuel, lighting, window washing, janitorial services and
reasonable management fees (not to exceed 1.75% of gross revenues from the
Metris Minnetonka Building). Wells OP, as the landlord, will be responsible for
repair and maintenance of the foundations, exterior walls and roof of the Metris
Minnetonka Building and the electrical, mechanical, plumbing, heating and air
conditioning systems.

The Metris lease also contains a construction warranty pursuant to which
the landlord has warranted to Metris that the tenant improvements and related
materials, equipment and installation shall be free from defects in workmanship
and shall conform to the plans and specifications.  The landlord is obligated to
repair, correct or replace, as necessary, any defective item occasioned by a
breach of such warranty if notified by Metris within one year from the
commencement date of the Metris lease.  Pursuant to the Metris Agreement,
however, Opus has assumed the obligation for any such repairs so long as Wells
OP notifies Opus of any claims by Metris under the construction warranty no
later than January 20, 2002.

AT&T Call Center Buildings

Purchase of the AT&T Call Center Buildings.  On December 28, 2000, the Wells
------------------------------------------
Fund XII - REIT Joint Venture Partnership (Fund XII-REIT Joint Venture), a joint
venture between Wells OP and Wells Real Estate Fund XII, L.P. (Wells Fund XII),
acquired a one-story office building and a two-story office building containing
an aggregate of approximately 128,500 rentable square feet located at 3201 Quail
Springs Parkway, Oklahoma City, Oklahoma.  The Fund XII-REIT Joint Venture
purchased the AT&T Call Center Buildings from OKC Real Estate Investments, Inc.
(OKC) pursuant to that certain Agreement for the Purchase and Sale of Property
between OKC, as seller, and the Advisor, as purchaser.  OKC is not in any way
affiliated with the Registrant or the Advisor.

The Advisor, the original purchaser under the agreement, assigned its
rights under the agreement to the Fund XII-REIT Joint Venture at closing.  The
Fund XII-REIT Joint Venture paid a purchase price of $15,300,000 for the AT&T
Call Center Buildings and incurred additional acquisition expenses in

6

connection with the purchase of the AT&T Call Center Buildings, including
attorneys' fees, recording fees and other closing costs, of approximately
$27,554.

Wells OP made a capital contribution of $6,736,554 and Wells Fund XII made
a capital contribution of $8,591,000 to the Fund XII-REIT Joint Venture to fund
their respective shares of the acquisition costs for the AT&T Call Center
Buildings.

Description of the AT&T Call Center Buildings and the Site.  As set forth above,
----------------------------------------------------------
the AT&T Call Center Buildings consist of a one-story office building and a two-
story office building containing approximately 50,000 and 78,500 rentable square
feet, respectively, on a 11.34 acre tract of land.  Construction on the
buildings was completed in April 1998 and December 2000, respectively.  The two
adjacent buildings are connected by a mutual hallway.  Both buildings are
constructed using a steel frame with steel beams on a concrete slab with
concrete footings.  The exterior walls are made of tilt-up concrete panels with
punched openings around the perimeter.  The windows consist of tempered glass in
aluminum frames.  The interior walls consist of gypsum board covered with semi-
gloss enamel paint.  In addition, the two-story office building contains a fully
equipped cafeteria and an elevator.  There are approximately 775 paved surface
parking spaces at the site.

The AT&T Call Center Buildings are located in the Quail Springs Office Park
North in Oklahoma City, Oklahoma.  Quail Springs Office Park North is located in
the northwest sector of Oklahoma City, approximately eight to 11 miles northwest
of the central business district.  Oklahoma City is known for its competitive
real estate prices, available space for business, supportive governmental
services, good labor quality and diversified economic base. The city's largest
employers include the State of Oklahoma, Avaya, Inc., Southwestern Bell
Telephone and General Motors Corporation.

An independent appraisal of the AT&T Call Center Buildings was prepared by
Isaacs & Associates, real estate appraisers and consultants, as of July 14,
2000, pursuant to which the market value of the land and the leased fee interest
subject to the AT&T lease and the Jordan lease (described below) was estimated
to be $15,400,000, in cash or terms equivalent to cash.  This value estimate was
based upon a number of assumptions, including that the AT&T Call Center
Buildings will continue operating at a stabilized level with tenants occupying
100% of the rentable area, and is not necessarily an accurate reflection of the
fair market value of the property or the net proceeds which would result from an
immediate sale of this property.  The Fund XII-REIT Joint Venture also obtained
an environmental report and an engineering inspection report prior to the
closing evidencing that the condition of the land and the AT&T Call Center
Buildings were satisfactory.

The AT&T Lease.  The entire 78,500 rentable square feet of the two-story office
--------------
building and 25,000 rentable square feet of the one-story office building are
currently under a net lease agreement with AT&T Corp. (AT&T).  The landlord's
interest in the AT&T lease was assigned to the Fund XII-REIT Joint Venture at
the closing.  The AT&T lease commenced on April 1, 2000, and the initial term
expires on November 30, 2010.  AT&T has the right to extend the AT&T lease for
two additional five-year periods of time at the then-current fair market rental
rate upon delivering written notice within 240 days prior to lease expiration.

AT&T is among the world's leading voice and data communications companies,
serving consumers, businesses and governments worldwide. AT&T has one of the
largest digital wireless networks in North America and is one of the leading
suppliers of data and internet services for businesses. In addition, AT&T offers
outsourcing, consulting and networking-integration to large businesses and is
one of the largest direct internet access service providers for consumers in the
United States. During fiscal year 1999, AT&T had net income of approximately
$3.43 billion on revenues of over $62.39 billion.

7

The base rent payable for the initial lease term of the AT&T lease is as
follows:

-----------------------------------------------------------------------
Lease Months            Annual Rent        Rentable Square Feet/Year
-----------------------------------------------------------------------

Months 1 to 8*          $  300,000         $12.00
-----------------------------------------------------------------------
Months 9 to 35          $1,242,000         $12.00
-----------------------------------------------------------------------
Months 36 to 65         $1,293,750         $12.50
-----------------------------------------------------------------------
Months 66 to 95         $1,345,500         $13.00
-----------------------------------------------------------------------
Months 96 to 125        $1,397,250         $13.50
-----------------------------------------------------------------------

___________________
*For occupancy of 25,000 square feet of the one-story office building only.

Under the AT&T lease, AT&T is required to pay, as additional monthly rent,
its gas, water and electricity costs and all operating expenses, including but
not limited to, garbage and waste disposal, telephone, sprinkler service,
janitorial service, security, insurance premiums, all taxes, assessments and
other governmental levies and such other operating expenses with respect to its
portion of the AT&T Call Center Buildings.  In addition, AT&T is responsible for
all routine maintenance and repairs to its portion of the AT&T Call Center
Buildings.  The Fund XII-REIT Joint Venture, as landlord, will be responsible
for the repair and replacement of the roof, foundation, load bearing items,
exterior surface walls, plumbing, pipes, conduits and electrical, mechanical and
plumbing systems of the AT&T Call Center Buildings.  AT&T must obtain written
consent from the Fund XII-REIT Joint Venture before making any alterations to
the premises in excess of $10,000.

AT&T has a right of first offer to lease the remainder of the space in the
one-story office building currently occupied by Jordan Associates, Inc.
(Jordan), as described below, if Jordan vacates the premises.

The Jordan Lease.  Jordan currently occupies the remaining 25,000 rentable
----------------
square feet contained in the one-story office building under a net lease
agreement.  The landlord's interest in the Jordan lease was also assigned to the
Fund XII-REIT Joint Venture at the closing.  The Jordan lease commenced on April
1, 1998, and the initial term expires on March 31, 2008.  Jordan has the right
to extend the Jordan lease for one additional five-year period of time at the
then-current fair market rental rate upon delivering written notice within 240
days prior to expiration of the initial lease term.

Jordan provides businesses with advertising and related services including
public relations, research, direct marketing and sales promotion.  Through this
corporate office and other offices in Tulsa, St. Louis, Indianapolis and Wausau,
Wisconsin, Jordan provides services to major clients such as Bank One, Oklahoma,
N.A., BlueCross & BlueShield of Oklahoma, Kraft Food Services, Inc., Logix
Communications and the American Dental Association.  Jordan employs
approximately 100 employees and has been in business for over 35 years.

The base rent payable for the initial lease term of the Jordan lease is as
follows:

-------------------------------------------------------------------------
Lease Months            Annual Rent         Rentable Square Feet/Year
-------------------------------------------------------------------------

Months 1 to 60          $294,500             $11.78
-------------------------------------------------------------------------
Months 61 to 120        $332,000             $13.28
-------------------------------------------------------------------------

Under the Jordan lease, Jordan is required to pay as additional monthly
rent its gas, water and electricity costs and all operating expenses, including,
but not limited to, garbage and waste disposal, telephone, sprinkler service,
janitorial service, security, insurance premiums, all taxes, assessments and

8

other governmental levies and such other operating expenses with respect to its
portion of the one-story building.  In addition, Jordan is responsible for all
routine maintenance and repairs to its portion of the one-story building.  The
Fund XII-REIT Joint Venture, as landlord, will be responsible for the repair and
replacement of the roof, foundation, load bearing items, exterior surface walls,
plumbing, pipes, conduits and electrical, mechanical and plumbing systems of the
AT&T Call Center Buildings.

Property Fees

Wells Management Company, Inc. (Wells Management), an affiliate of the
Advisor to Wells REIT, has been retained to manage and lease both the Stone &
Webster Building and the Metris Minnetonka Building.  The Wells REIT shall pay
management and leasing fees to Wells Management in the amount of 4.5% of gross
revenues from the Stone & Webster Building and the Metris Minnetonka Building,
subject to certain limitations.

Wells Management has also been retained to manage and lease the AT&T Call
Center Buildings.  The Fund XII-REIT Joint Venture will pay management and
leasing fees to Wells Management in the amount of 4.5% of gross revenues from
the AT&T Call Center Buildings, subject to certain limitations.

Management's Discussion and Analysis of Financial Condition and Results of
Operation

The information contained on page 98 in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources" section of the prospectus is revised as of the date of this
supplement by the deletion of the first two paragraphs of that section and the
insertion of the following paragraphs in lieu thereof:

We began active operations on June 5, 1998, when we received and
accepted subscriptions for 125,000 shares pursuant to our initial public
offering, which commenced on January 30, 1998.  We terminated our initial
public offering on December 19, 1999.  Of the $132,181,919 raised in the
initial offering, we invested a total of $111,032,812 in properties.  On
December 20, 1999, we commenced a follow-on public offering of up to
22,200,000 shares of common stock at $10 per share.  We terminated our
follow-on public offering on December 19, 2000.  Of the $175,229,193 raised
in the follow-on offering, we invested a total of $147,192,522 in
properties.

Pursuant to the prospectus, we commenced this third offering of shares
of our common stock on December 20, 2000.  As of January 31, 2001, we had
received an additional $25,133,848 in gross offering proceeds from the sale
of 2,513,385 shares in the third offering.  As of January 31, 2001, we had
raised in the aggregate a total of $332,544,960 in offering proceeds
through the sale of 33,254,496 shares of common stock.  As of January 31,
2001, we had paid a total of $11,586,654 in acquisition and advisory fees
and acquisition expenses, had paid a total of $41,380,909 in selling
commissions and organizational and offering expenses, had made capital
contributions of $272,237,045 to Wells OP for investments in joint ventures
and acquisitions of real property, had utilized $1,497,691 for the
redemption of stock pursuant to our share redemption program, and were
holding net offering proceeds of $5,842,661 available for investment in
additional properties.
9

Financial Statements

The statements of revenues over certain operating expenses of the Stone &
Webster Building and the AT&T Call Center Buildings for the year ended December
31, 1999, included in this supplement and elsewhere in the registration
statement, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included in this supplement in reliance upon the authority of said firm as
experts in giving said reports.

The statements of revenues over certain operating expenses of the Stone &
Webster Building and the AT&T Call Center Buildings for the nine months ended
September 30, 2000, included in this supplement and elsewhere in the
registration statement have not been audited.

The Pro Forma Statements of Income and Pro Forma Balance Sheet of the Wells
REIT as of December 31, 1999 and September 30, 2000, which are included in this
supplement, have not been audited.

10

INDEX TO FINANCIAL STATEMENTS

Page
----

Stone & Webster Building

Financial Statements
--------------------

Report of Independent Public Accountants                         12

Statements of Revenues Over Certain Operating Expenses
for the year ended December 31, 1999 (audited) and for the
nine months ended September 30, 2000 (unaudited)                 13

Notes to Statements of Revenues Over Certain Operating
Expenses for the year ended December 31, 1999 (audited) and
for the nine months ended September 30, 2000 (unaudited)         14

AT&T Call Center Buildings

Financial Statements
--------------------

Report of Independent Public Accountants                         16

Statements of Revenues Over Certain Operating Expenses
for the year ended December 31, 1999 (audited) and for the
nine months ended September 30, 2000 (unaudited)                 17

Notes to Statements of Revenues Over Certain Operating
Expenses for the year ended December 31, 1999 (audited) and
for the nine months ended September 30, 2000 (unaudited)         18

Wells Real Estate Investment Trust, Inc.

Unaudited Pro Forma Financial Statements
----------------------------------------

Summary of Unaudited Pro Forma Financial Statements              20

Pro Forma Balance Sheet as of September 30, 2000                 21

Pro Forma Statements of Income for the year ended
December 31, 1999 and for the nine months ended
September 30, 2000                                               23

11

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the STONE & WEBSTER BUILDING for the year ended December 31, 1999.
This financial statement is the responsibility of management.  Our
responsibility is to express an opinion on this financial statement based on our
audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States.  These standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statement is
free of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement.  An
audit also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall financial
statement presentation.  We believe that our audit provides a reasonable basis
for our opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Stone &
Webster Building after acquisition by the Wells Operating Partnership, L.P. (on
behalf of Wells Real Estate Investment Trust, Inc.). The accompanying statement
of revenues over certain operating expenses was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the Stone &
Webster Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Stone & Webster Building for the year ended December 31, 1999,
in conformity with accounting principles generally accepted in the United
States.

/s/ Arthur Andersen LLP

Atlanta, Georgia
January 19, 2001

12

STONE & WEBSTER BUILDING

STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1999

AND THE NINE MONTHS ENDED SEPTEMBER 30, 2000

2000              1999
----------        ----------
Unaudited)

RENTAL REVENUES                                         $1,637,685        $2,183,580

OPERATING EXPENSES, net of reimbursements                1,250,097         1,666,796
----------        ----------
REVENUES OVER CERTAIN OPERATING EXPENSES                $  387,588        $  516,784
==========        ==========

The accompanying notes are an integral part of these statements.

13

STONE & WEBSTER BUILDING

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1999

AND THE NINE MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED)

1.   ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On December 21, 2000, the Wells Operating Partnership L.P. ("Wells OP"), a
Delaware Limited Partnership formed to acquire, own, lease, operate, and
manage real properties on behalf of the Wells Real Estate Investment Trust,
Inc., acquired the Stone & Webster Building from Cardinal Paragon, Inc.
("Cardinal"). Cardinal is not an affiliate of Wells OP. The total purchase
price of the Stone & Webster Building was $44,970,000. Wells OP incurred
additional acquisition expenses in connection with the purchase of the
Stone & Webster Building, including attorney's fees, recording fees, loan
fees, and other closing costs, of approximately $45,000. The funds used to
purchase the Stone & Webster Building consisted of cash and proceeds from
notes payable to Guarantee Federal Bank, F.S.B. and Cardinal.

Stone & Webster, Inc. ("Stone & Webster") occupies 206,048 of the entire
312,564 rentable square feet of the Stone & Webster Building under an
office building lease between Wells OP and Stone & Webster (the "Stone &
Webster Lease") entered into at closing. The current term of the Stone &
Webster Lease is ten years, which commenced on December 28, 2000 and
expires on December 31, 2010. Stone & Webster has the right to extend the
Stone & Webster Lease for two additional five-year periods for a base rent
equal to the greater of (i) the last year's rent, or (ii) the then-current
"fair market rental value." In the event that the parties cannot agree upon
the fair market rental value, such value shall be determined in accordance
with the appraisal procedure contained in the Stone & Webster Lease. The
Stone & Webster Lease is guaranteed by The Shaw Group, Inc., the parent
company of Stone & Webster. Pursuant to the Stone & Webster Lease, Stone &
Webster is required to pay its proportionate share of property taxes
relating to the Stone & Webster Building and all operating costs incurred
by the landlord in maintaining and operating the Stone & Webster Building,
including garbage and waste disposal, janitorial service and window
cleaning, security, insurance, water and sewer charges, wages, salaries,
and employee benefits of all employees engaged in the operation,
maintenance and management of the building, indoor and outdoor landscaping,
utilities and repairs, replacements and general maintenance.

SYSCO occupies the remaining 106,516 rentable square feet of the Stone &
Webster Building under a Lease Agreement (the "SYSCO Lease"). The
landlord's interest in the SYSCO Lease was assigned to Wells OP at the
closing. The initial term of the SYSCO Lease is ten years, which commenced
on October 1, 1998, and expires on September 20, 2008. Pursuant to the
SYSCO Lease, SYSCO is required to pay its proportionate share of property
taxes and operating costs incurred by the landlord in maintaining and
operating the Stone & Webster Building, including supplies and materials,
utilities, insurance and repairs, replacements, general maintenance and
wages and salaries (including management fees not to exceed 3% of gross
revenues attributable to the building) of all employees engaged in such
operation.

Rental Revenues

14

Rental income from leases is recognized on a straight-line basis over the
life of the lease.

2.   BASIS OF ACCOUNTING

The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis. This statement has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired. Accordingly, the
statement excludes certain historical expenses, such as depreciation,
interest, and management fees, not comparable to the operations of the
Stone & Webster Building after acquisition by Wells OP.

15

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Fund XII, L.P. and
Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the AT&T CALL CENTER BUILDINGS for the year ended December 31,
1999. This financial statement is the responsibility of management. Our
responsibility is to express an opinion on this financial statement based on our
audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. These standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit also
includes assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the AT&T
Call Center Buildings after acquisition by the Wells Fund XII--REIT Joint
Venture. The accompanying statement of revenues over certain operating expenses
was prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission and is not intended to be a complete
presentation of the AT&T Call Center Buildings' revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the AT&T Call Center Buildings for the year ended December 31, 1999,
in conformity with accounting principles generally accepted in the United
States.

/s/ Arthur Andersen LLP

Atlanta, Georgia
January 19, 2001

16

AT&T CALL CENTER BUILDINGS

STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31,1999

AND THE NINE MONTHS ENDED SEPTEMBER 30, 2000

2000             1999
--------         ---------
(Unaudited)

RENTAL REVENUES                                                                              $867,914         $313,250

OPERATING EXPENSES, net of reimbursements                                                       6,273           20,155
--------         --------
REVENUES OVER CERTAIN OPERATING EXPENSES                                                     $861,641         $293,095
========         ========

The accompanying notes are an integral part of these statements.

17

AT&T CALL CENTER BUILDINGs

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1999

AND THE NINE MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED)

1.   ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On December 28, 2000, the Wells Fund XII-REIT Joint Venture (the "Joint
Venture") acquired the AT&T Call Center Buildings from OKC Real Estate
Investments, Inc. ("OKC"). The Joint Venture is a joint venture partnership
between Wells Real Estate Fund XII, L.P. ("Wells Fund XII") and Wells
Operating Partnership, L.P. ("Wells OP"), a Delaware Limited Partnership
formed to acquire, own, lease, operate, and manage real properties on
behalf of Wells Real Estate Investment Trust, Inc. OKC is not an affiliate
of Wells Fund XII or Wells OP. The total purchase price of the AT&T Call
Center Buildings was $15,300,000. Additional acquisition expenses incurred
in connection with the purchase of the AT&T Call Center Buildings, included
attorney's fees, recording fees, loan fees, and other closing costs, of
approximately $28,000. Wells Fund XII contributed $8,591,000, and Wells OP
contributed $6,737,000 to the Joint Venture for their respective shares of
the purchase of the AT&T Call Center Buildings.

AT&T Corp. ("AT&T") occupies the entire 78,500 rentable square feet of the
two-story office building and 25,000 rentable square feet of the one-story
office building under a net lease agreement (the "AT&T Lease"). The
landlord's interest in the AT&T Lease was assigned to the Joint Venture at
the closing. The initial term of the AT&T Lease commenced on April 1, 2000
and expires on November 30, 2010. AT&T has the right to extend the AT&T
Lease for two additional five-year periods at the then-current fair market
rental rate upon delivering written notice within 240 days prior to
expiration of the lease. Under the AT&T lease, AT&T is required to pay, as
additional monthly rent, its gas, water, and electricity costs and all
operating expenses, including, but not limited to, garbage and waste
disposal, telephone, sprinkler service, janitorial service, security,
insurance premiums, all taxes, assessments and other governmental levies,
and such other operating expenses with respect to its portion of the AT&T
Call Center Buildings. In addition, AT&T is responsible for all routine
maintenance and repairs to its portion of the AT&T Call Center Buildings.

Jordan Associates, Inc. ("Jordan") currently occupies the remaining 25,000
rentable square feet contained in the one-story building under a net lease
agreement (the "Jordan Lease"). The landlord's interest in the Jordan lease
was also assigned to the Fund XII-REIT Joint Venture at the closing. The
initial term of the Jordan Lease commenced on April 1, 1998 and expires on
March 31, 2008. Jordan has the right to extend the Jordan lease for one
additional five-year period at the then-current fair market rental rate
upon delivering written notice within 240 days prior to expiration of the
initial lease term. Under the Jordan Lease, Jordan is required to pay as
additional monthly rent, its gas, water, and electricity costs, and all
operating expenses, including, but not limited to, garbage and waste
disposal, telephone, sprinkler service, janitorial service, security,
insurance premiums, all taxes, assessments and other governmental levies,
and such other operating expenses with respect to its portion of the AT&T
Call Center Buildings. In addition, Jordan is responsible for all routine
maintenance and repairs to its portion of the AT&T Call Center Buildings.

18

Rental Revenues

Rental income from leases is recognized on a straight-line basis over the
life of the lease.

2.   BASIS OF ACCOUNTING

The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis. This statement has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired. Accordingly, the
statement excludes certain historical expenses, such as depreciation,
interest, and management fees, not comparable to the operations of the AT&T
Call Center Buildings after acquisition by the Joint Venture.

19

WELLS REAL ESTATE INVESTMENT TRUST, INC.

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The following unaudited pro forma balance sheet as of September 30, 2000
has been prepared to give effect to the acquisition of the Motorola
Plainfield Building ("Prior Acquisition"), the Stone & Webster Building,
and the Metris Minnetonka Building by the Wells Operating Partnership, L.P.
("Wells OP"), and the AT&T Call Center Buildings by the Wells XII-REIT
Joint Venture (a joint venture between the Wells OP and Wells Real Estate
Fund XII, L.P.), as if the acquisitions occurred on September 30, 2000. The
following unaudited pro forma statements of income (loss) for the year
ended December 31, 1999 for and the nine months ended September 30, 2000
have been prepared to give effect to the acquisition of the Dial Building,
the ASML Building, the Motorola Tempe Building, the Motorola Plainfield
Building (together, the "Prior Acquisitions"), the Stone & Webster
Building, the Metris Minnetonka Building and the AT&T Call Center Buildings
as if each acquisition occurred on January 1, 1999.

Wells OP is a Delaware limited partnership that was organized to own and
operate properties on behalf of the Wells Real Estate Investment Trust,
Inc. Wells Real Estate Investment Trust, Inc. is the general partner of the
Wells OP.

These unaudited pro forma financial statements are prepared for
informational purposes only and are not necessarily indicative of future
results or of actual results that would have been achieved had the
acquisitions been consummated at the beginning of the period presented.

As of September 30, 2000, the date of the accompanying pro forma balance
sheet, Wells OP held cash of $12,257,161. The additional cash used to
purchase the Stone & Webster Building, the Metris Minnetonka Building, and
the AT&T Call Center Buildings including deferred project costs paid to
Wells Capital, Inc. (an affiliate of Wells OP), was raised through the
issuance of additional shares subsequent to September 30, 2000, but prior
to the acquisition dates of December 21, 2000, December 21, 2000, and
December 28, 2000, respectively. This balance is reflected in due to
affiliates in the accompanying pro forma balance sheet.

20

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA BALANCE SHEET

SEPTEMBER 30, 2000

(Unaudited)

ASSETS

Pro Forma Adjustments
Wells Real       ------------------------------------------------------------
Estate                                                             AT&T
Investment          Prior           Stone &         Metris        Call Center      Pro Forma
Trust, Inc.      Acquisition        Webster       Minnetonka       Buildings         Total
------------      -----------      -----------     -----------     -----------     ------------

REAL ESTATE ASSETS,
at cost:
Land                       $  21,695,304       $9,652,500(a)    $7,100,000(a) $  7,700,000(a)            0    $  47,167,473
402,509(b)       296,070(b)      321,090(b)
Buildings less
accumulated
depreciation of
$6,810,792                188,671,038       24,525,641(a)    37,914,954(a)   45,151,969(a)            0      300,750,212
1,022,719(b)     1,581,054(b)    1,882,837(b)
Construction in
progress                      295,517                0                0               0               0          295,517
------------      -----------      -----------     -----------      ----------     ------------
Total real estate
assets                 210,661,859       35,603,369       46,892,078      55,055,896               0      348,213,202

INVESTMENT IN JOINT
VENTURES                      36,708,242                0                0               0       7,017,244(e)    43,725,486

CASH AND CASH EQUIVALENTS        12,257,161      (10,753,381)(a)     (466,584)(a)           0               0                0
(954,223)(b)
(82,973)(c)

DEFERRED OFFERING COSTS           1,108,206                0                0               0               0        1,108,206

DEFERRED PROJECT COSTS              471,005         (471,005)(b)            0               0               0                0

DUE FROM AFFILIATES                 859,515                0                0               0               0          859,515

PREPAID EXPENSES AND
OTHER ASSETS                   6,344,905           82,973(c)             0               0               0        6,427,878
------------      -----------      -----------     -----------      ----------     ------------
Total assets       $268,410,893      $23,424,760      $46,425,494     $55,055,896      $7,017,244     $400,334,287
============      ===========      ===========     ===========      ==========     ============

21

LIABILITIES AND SHAREHOLDERS' EQUITY

Pro Forma Adjustments
Wells Real      -------------------------------------------------------
Estate                                                       AT&T
Investment      Prior           Stone &        Metris       Call Center     Pro Forma
Trust, Inc.  Acquisitions        Webster      Minnetonka      Buildings        Total
------------  ------------      -----------    -----------     ----------    ------------

LIABILITIES:
Accounts payable and accrued expenses   $    975,821  $   424,760(a)(d) $         0    $         0     $        0    $  1,400,581
Notes payable                             38,909,030   23,000,000(a)     38,900,000(a)  52,850,000(a)           0     153,659,030

Dividends payable                          4,475,982            0                 0              0              0       4,475,982
Due to affiliate                           1,372,508            0         5,648,370(a)       1,969(a)   6,736,554(a)   18,121,142
1,877,124(b)   2,203,927(b)     280,690(b)
------------  -----------       -----------    -----------     ----------    ------------
Total liabilities                       45,733,341   23,424,760        46,425,494     55,055,896      7,017,244     177,656,735
------------  -----------       -----------    -----------     ----------    ------------
COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST OF UNIT
HOLDER IN OPERATING
PARTNERSHIP                                   200,000            0                 0              0              0         200,000
------------  -----------       -----------    -----------     ----------    ------------
SHAREHOLDERS' EQUITY:
Common shares, $.01 par value;
40,000,000 shares authorized,
13,471,085 shares issued and
outstanding                                  261,748            0                 0              0              0         261,748
Additional paid-in capital               222,215,804            0                 0              0              0     222,215,804
Retained earnings                                  0            0                 0              0              0               0
------------  -----------       -----------    -----------     ----------    ------------
Total shareholders' equity             222,477,552            0                 0              0              0     222,477,552
------------  -----------       -----------    -----------     ----------    ------------
Total liabilities and
shareholders' equity                 $268,410,893  $23,424,760       $46,425,494    $55,055,896     $7,017,244    $400,334,287
============  ===========       ===========    ===========     ==========    ============

(a)  Reflects Wells Real Estate Investment Trust, Inc.'s purchase price for
the building.

(b)  Reflects deferred project costs allocated to the land and building at
approximately 4.17% of the purchase price.

(c)  Reflects loan fees incurred in connection with the receipt of loan
proceeds from the SouthTrust Bank, N.A., line of credit.

(d)  Reflects assumption of obligation of Wells OP to reimburse the tenant
of certain rent payments required of it under its prior lease.

(e)  Reflects Wells Real Estate Investment Trust, Inc.'s contribution to
the Wells Fund XII-REIT Joint Venture

22

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF INCOME (LOSS)

FOR THE YEAR ENDED DECEMBER 31, 1999

(Unaudited)

Pro Forma Adjustments
Wells Real    -----------------------------------------------------------------
Estate                                                              AT&T
Investment       Prior           Stone &           Metris          Call Center        Pro Forma
Trust, Inc.   Acquisitions       Webster         Minnetonka         Buildings           Total
-----------   ------------     -----------       -----------       ----------        ------------

REVENUES:
Rental income               $4,735,184    $7,366,142(a)   $ 2,183,580(a)    $         0       $        0         $14,284,906
Equity in income (loss) of
joint ventures            1,243,969             0                0                 0         (121,813)(l)       1,122,156
Interest income                502,993             0                0                 0                0             502,993
Other income                    13,249             0                0                 0                0              13,249
----------    ----------      -----------       -----------       ----------         -----------
6,495,395     7,366,142        2,183,580                 0         (121,813)         15,923,304
----------    ----------      -----------       -----------       ----------         -----------
EXPENSES:
Depreciation and
amortization              1,726,103     2,864,752(b)     1,579,840(b)      1,881,392(b)             0           8,075,793
23,706(c)
Interest                       442,029     2,758,350(d)     3,279,080(j)      3,762,920(k)             0          12,479,479
450,000(e)
1,787,100(f)
Operating costs, net of
reimbursements              (74,666)      (60,400)(g)    1,666,796(h)         34,092(h)             0           1,576,738
10,916 (h)
Management and leasing fees    257,744       315,537 (i)       98,261(i)              0                0             671,542
General and administrative     123,776             0                0                 0                0             123,776
Legal and accounting           115,471             0                0                 0                0             115,471
Computer costs                  11,368             0                0                 0                0              11,368
Amortization of
organizational costs          8,921             0                0                 0                0               8,921
----------    ----------      -----------       -----------       ----------         -----------
2,610,746     8,149,961        6,623,977         5,678,404                0          23,063,088
----------    ----------      -----------       -----------       ----------         -----------
NET INCOME (LOSS)               $3,884,649    $ (783,819)     $(4,440,397)      $(5,678,404)      $ (121,813)        $(7,139,784)
==========    ==========      ===========       ===========       ==========         ===========

HISTORICAL EARNINGS
PER SHARE (BASIC
AND DILUTED)                $     0.50
==========

PRO FORMA LOSS PER SHARE
(BASIC AND DILUTED)(m)                                                                                           $     (0.24)(m)
===========
PRO FORMA LOSS PER SHARE
(BASIC AND DILUTED)(n)                                                                                           $     (0.23)(n)
===========

(a) Rental income is recognized on a straight-line basis.

(b) Depreciation expense on the building is recognized using the
straight-line method and a 25 year life.

(c) Amortization of loan costs over term of SouthTrust Bank, N.A. line of
credit.

(d) Interest expense on the $9,000,000 line of credit with SouthTrust Bank,
N.A. and the $26,500,000 line of credit with Bank of America, N.A., which
bear interest at 7.77% for the year ended December 31, 1999.

(e) Interest expense on the $5,000,000 note payable with Ryan Companies
U.S., Inc., the seller, which bears interest at 9% for the year ended
December 31, 1999.

(f) Interest expense on the $23,000,000 line-of-credit with SouthTrust
Bank, N.A., which bears interest at 7.77% for the year ended December 31,
1999.

(g) Consists of ground lease and insurance expense for the ASML Building
and the Motorola Tempe Building, net of tenant reimbursements.

(h) Consists of non-reimbursable operating expenses.

23

(i) Management and leasing fees equal approximately 4.5% of rental income.

(j) Interest expense on the $3,000,000 note payable to Cardinal Paragon,
Inc. and $35,900,000 note payable to Guaranteed Federal Bank, F.S.B., which
bear interest at 6% and 8.63%, respectively, for the year ended December
31, 1999.

(k) Interest expense on the $52,850,000 line of credit with SouthTrust
Bank, N.A., which bears interest at 7.12% for the year ended December 31,
1999.

(l) Reflects Wells Real Estate Investment Trust, Inc.'s equity in loss of
the Wells XII-REIT Joint Venture.

(m) As of the acquisition date of December 21, 2000, for the Stone &
Webster Building and the Metris Minnetonka Building, Wells Real Estate
Investment Trust, Inc. had 30,665,147 shares of common stock outstanding;
pro forma earnings per share is calculated as if these shares were
outstanding for the entire year ended December 31, 1999.

(n) As of the acquisition date of December 28, 2000 for the AT&T Call
Center Buildings, Wells Real Estate Investment Trust, Inc. had 31,244,246
shares of common stock outstanding; pro forma earnings per share is
calculated as if these shares were outstanding for the entire year ended
December 31, 1999.

24

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF INCOME (LOSS)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000

(Unaudited)

Pro Forma Adjustments
Wells Real     ---------------------------------------------------------------
Estate                                                               AT&T
Investment        Prior           Stone &           Metris         Call Center        Pro Forma
Trust, Inc.    Acquisitions       Webster         Minnetonka        Buildings           Total
------------    ------------     -----------       -----------      -----------       ------------

REVENUES:
Rental income             $13,712,371     $ 2,210,432(a)   $ 1,637,685(a)    $    586,435(a)  $         0        $18,146,923
Equity in income of
joint ventures           1,684,247               0                0                  0         193,604(n)       1,877,851
Interest income               338,020               0                0                  0               0            338,020
-----------     -----------      -----------       ------------        --------       ------------
15,734,638       2,210,432        1,637,685            586,435         193,604         20,362,794
-----------     -----------      -----------       ------------        --------       ------------
EXPENSES:
Depreciation and
amortization             5,084,689       1,227,155(b)     1,184,880(b)       1,411,044(b)            0          8,925,548
17,780(c)
Interest                    2,798,299         777,450(d)     2,555,910(j)       3,186,855(k)            0         10,977,634
112,500(e)
1,546,620(f)
Operating costs, net
of reimbursements          631,407         (15,099)(g)    1,250,097(h)          22,728(h)            0          1,962,872
73,739(h)
Management and
leasing fees               919,630          99,470(i)        73,696(i)          26,390(i)            0          1,119,186
General and
administrative             273,484               0                0                  0               0            273,484
Legal and accounting          130,603               0                0                  0               0            130,603
Computer costs                  8,846               0                0                  0               0              8,846
Amortization of
organizational
costs                      150,143               0                0                  0               0            150,143
-----------     -----------      -----------       ------------        --------       ------------
9,997,101       3,839,615        5,064,583          4,647,017               0         23,548,316
-----------     -----------      -----------       ------------        --------       ------------
NET INCOME (LOSS)             $ 5,737,537     $(1,629,183)     $(3,426,898)      $ (4,060,582)       $193,604       $ (3,185,522)
===========     ===========      ===========       ============        ========       ============

HISTORICAL EARNINGS
PER SHARE (BASIC)
AND DILUTED)              $      0.30
===========

PRO FORMA LOSS PER SHARE
(BASIC AND
DILUTED)(l)                                                                                                     $      (0.11)(l)
============

PRO FORMA LOSS PER SHARE
(BASIC AND
DILUTED)(m)                                                                                                     $      (0.10)(m)
============

(a) Rental income is recognized on a straight-line basis.

(b) Depreciation expense on the building is recognized using the
straight-line method and a 25 year life.

(c) Amortization of loan costs over term of SouthTrust Bank, N.A. line of
credit.

(d) Interest expense on the $9,000,000 line of credit with SouthTrust Bank,
N.A. and the $26,500,000 line of credit with Bank of America, N.A., which
bear interest at 8.76% for the nine months ended September 30, 2000.

(e) Interest expense on the $5,000,000 note payable with Ryan Companies
U.S., Inc., the seller, which bears interest at 9% for the nine months
ended September 30, 2000.

(f) Interest expense on the $23,000,000 line-of-credit with SouthTrust
Bank, N.A., which bears interest at 8.97% for the nine months ended
September 30, 2000.

(g) Consists of ground lease and insurance expense for the ASML Building
and the Motorola Tempe Building, net of tenant reimbursements.

(h) Consists of non-reimbursable operating expenses.

(i) Management and leasing fees equal approximately 4.5% of rental income.

25

(j) Interest expense on the $3,000,000 note payable to Cardinal Paragon,
Inc. and the $35,900,000 note payable to Guaranteed Federal Bank, F.S.B,
which bear interest at 6% and 8.99%, respectively, for the nine months
ended September 30, 2000.

(k) Interest expense on the $52,850,000 line of credit with South Trust
Bank, N.A., which bears interest at 8.04% for the nine months ended
September 30, 2000.

(l) As of the acquisition date of December 21, 2000 for the Stone & Webster
Building and the Metris Minnetonka Building, Wells Real Estate Investment
Trust, Inc. had 30,665,147 shares of common stock outstanding; pro forma
earnings per share is calculated as if these shares were outstanding for
the entire nine months ended September 30, 2000.

(m) As of the acquisition date of December 28, 2000 for the AT&T Call
Center Buildings, Wells Real Estate Investment Trust, Inc. had 31,244,246
shares of common stock outstanding; pro forma earnings per share is
calculated as if these shares were outstanding for the entire nine months
ended September 30, 2000.

(n) Reflect Wells Real Estate Investment Trust, Inc.'s equity in income of
the Wells XII--REIT Joint Venture.

26

WELLS REAL ESTATE INVESTMENT TRUST, INC.
SUPPLEMENT NO. 2 DATED APRIL 25, 2001 TO THE PROSPECTUS
DATED DECEMBER 20, 2000

This document supplements, and should be read in conjunction with, the
prospectus of Wells Real Estate Investment Trust, Inc. dated December 20, 2000,
as supplemented and amended by Supplement No. 1 dated February 5, 2001. When we
refer to the "prospectus" in this supplement, we are also referring to any and
all supplements to the prospectus. Unless otherwise defined in this supplement,
capitalized terms used in this supplement shall have the same meanings as set
forth in the prospectus.

The purpose of this supplement is to describe the following:

(1)     The status of the offering of shares in Wells Real Estate
Investment Trust, Inc. (Wells REIT);

(2)     Revisions to the "Investment Objectives and Criteria," "Risk
Factors" and "Federal Income Tax Risks" sections of the
prospectus to include a description of the Wells REIT's
participation in the Section 1031 Exchange Program sponsored
by affiliates of Wells Capital, Inc., our Advisor, and risks
associated therewith;

(3)     Revisions to the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section of the
prospectus;

(4)     Revisions to the "Description of Shares - Share Redemption
Program" section of the prospectus;

(5)     Updated audited financial statements of the Wells REIT; and

(6)     Updated prior performance tables.

Status of the Offering

We commenced our initial public offering of common stock on January 30,
1998. Our initial public offering was terminated on December 19, 1999. We
received approximately $132,181,919 in gross offering proceeds from the sale of
13,218,192 shares in our initial public offering. We commenced a second offering
of common stock on December 20, 1999. Our second public offering was terminated
on December 19, 2000. We received approximately $175,229,193 in gross offering
proceeds from the sale of 17,522,919 shares in our second public offering.

Pursuant to the prospectus, we commenced our third offering of common
stock on December 20, 2000. As of April 15, 2001, we had received an additional
$83,074,813 in gross offering proceeds from the sale of 8,307,482 shares in the
third offering. Accordingly, as of April 15, 2001, we had received in the
aggregate approximately $390,485,925 in gross offering proceeds from the sale of
39,048,593 shares of our common stock.

1

Investment Objectives and Criteria - Section 1031 Exchange Program

The following paragraphs are hereby inserted into the "Investment
Objectives and Criteria" section of the prospectus at the top of page 64:

Section 1031 Exchange Program

Wells Development Corporation (Wells Development), an
affiliate of Wells Capital, our Advisor, is forming a series of single
member limited liability companies (each of which is referred to in
this prospectus as Wells Exchange) for the purpose of facilitating the
acquisition of real estate properties to be owned in co-tenancy
arrangements with persons (1031 Participants) who are looking to invest
the proceeds from a sale of real estate held for investment in another
real estate investment for purposes of qualifying for like-kind
exchange treatment under Section 1031 of the Internal Revenue Code. It
is anticipated that Wells Development will sponsor a series of private
placement offerings of co-tenancy interests in various properties to
1031 Participants.

Wells Development anticipates that properties acquired in
connection with the Section 1031 Exchange Program will be financed by
obtaining a new first mortgage secured by the property acquired. In
order to finance the remainder of the purchase price for properties to
be acquired by Wells Exchange, it is anticipated that Wells Exchange
will obtain a short-term loan from an institutional lender for each
property. Following its acquisition of a property, Wells Exchange will
attempt to sell co-tenancy interests to 1031 Participants, the proceeds
of which will be used to pay off the short-term loan. At the closing of
each property to be acquired by Wells Exchange, Wells OP will enter
into a Take Out Purchase and Escrow Agreement or similar contract,
providing that, in the event that Wells Exchange is unable to sell all
of the co-tenancy interests in that particular property to 1031
Participants, Wells OP will purchase, at Wells Exchange's cost, any
co-tenancy interests remaining unsold. (See "Risk Factors - Section
1031 Exchange Program.") In consideration for such obligation, Wells
Exchange will pay Wells OP a fee (Take Out Fee) in an amount currently
anticipated to range between 1.0% and 1.5% of the amount of the
short-term loan being obtained by Wells Exchange. (See "Risk Factors -
Federal Income Tax Risks.")

Our board of directors, including a majority of our
independent directors, will approve each Take Out Purchase and Escrow
Agreement we enter into with Wells Exchange. Accordingly, Wells
Exchange intends to purchase only real estate properties which
otherwise meet the investment objectives of the Wells REIT. Wells OP
may execute a Take Out Purchase and Escrow Agreement providing for the
potential purchase of the unsold co-tenancy interests from Wells
Exchange only after a majority of the directors of the Wells REIT,
including a majority of our independent directors, not otherwise
interested in the transaction approve of the transaction as being fair,
competitive and commercially reasonable to Wells OP and at a price to
Wells OP no greater than the cost of the co-tenancy interests to Wells
Exchange. If the price to Wells OP is in excess of such cost, the
directors of the Wells REIT must find substantial justification for
such excess and that such excess is reasonable. In addition, a fair
market value appraisal for each property must be obtained from an
independent expert selected by our independent directors, and in no
event may Wells OP purchase co-tenancy interests at a price that
exceeds the current appraised value for the property interests.

As set forth above, pursuant to the terms of Take Out Purchase
and Escrow Agreements, Wells OP will be obligated to purchase
co-tenancy interests in certain properties offered to 1031 Participants
to the extent co-tenancy interests remain unsold at the end of the
offering. All purchasers of co-tenancy interests, including Wells OP in
the event that it is required to purchase co-tenancy interests pursuant
to a Take Out Purchase and Escrow Agreement, will be required to
execute a Tenants in Common Agreement with the other purchasers of
co-tenancy interests in that

2

particular property and a Property Management Agreement providing for
the property management and leasing of the property by Wells Management
and the payment of property management and leasing fees to Wells
Management equal to 4.5% of gross revenues. Accordingly, in the event
that Wells OP is required to purchase co-tenancy interests pursuant to
one or more of the Take Out Purchase and Escrow Agreements, we will be
subject to various risks associated with co-tenancy arrangements which
are not otherwise present in real estate investments such as the risk
that the interests of the 1031 Participants will become adverse to our
interests. (See "Risk Factors - Section 1031 Exchange Program.")

Risk Factors - Section 1031 Exchange Program

The following paragraphs are hereby inserted into the "Risk Factors"
section of the prospectus as the first full paragraph at the top of page 20:

Section 1031 Exchange Program Risks

We may have increased exposure to liabilities from litigation
as a result of our participation in the Section 1031 Exchange Program.

There will be significant tax and securities disclosure risks
associated with the private placement offerings of co-tenancy interests
by Wells Exchange to 1031 Participants. For example, in the event that
the Internal Revenue Service conducts an audit of the purchasers of
co-tenancy interests and is able to successfully challenge the
qualification of the transaction as a like-kind exchange under Section
1031 of the Internal Revenue Code, even though it is anticipated that
this tax risk will be fully disclosed to investors, purchasers of
co-tenancy interests may file a lawsuit against Wells Exchange and its
sponsors. In such event, even though Wells OP is not acting as a
sponsor of the offering and is not recommending that 1031 Participants
buy co-tenancy interests from Wells Exchange, as a result of our
participation in the Section 1031 Exchange Program, and since Wells OP
will be receiving Take Out Fees in connection with the Section 1031
Exchange Program, we may be named in or otherwise required to defend
against lawsuits brought by 1031 Participants. Any amounts we are
required to expend for any such litigation claims may reduce the amount
of funds available for distribution to shareholders of the Wells REIT.
In addition, disclosure of any such litigation may adversely affect our
ability to raise additional capital in the future through the sale of
stock. (See "Investment Objectives and Criteria - Section 1031 Exchange
Program.")

We will be subject to risks associated with co-tenancy
arrangements that are not otherwise present in a real estate
investment.

At the closing of each property to be acquired by Wells
Exchange pursuant to the Section 1031 Exchange Program, Wells OP will
enter into a Take Out Purchase and Escrow Agreement providing that, in
the event that Wells Exchange is unable to sell all of the co-tenancy
interests in that particular property by the completion of its private
placement offering, Wells OP will purchase, at Wells Exchange's cost,
any co-tenancy interests remaining unsold. Accordingly, in the event
that Wells Exchange is unable to sell all co-tenancy interests in one
or more of its properties, Wells OP will be required to purchase the
unsold co-tenancy interests in such property or properties and, thus,
will be subject to the risks of ownership of properties in a co-tenancy
arrangement with unrelated third parties. (See "Investment Objectives
and Criteria - Section 1031 Exchange Program.")

3

Ownership of co-tenancy interests involves risks not otherwise
present with an investment in real estate such as the following:

.    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;

.    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

.    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.

Actions by a co-tenant might have the result of subjecting the property
to liabilities in excess of those contemplated and may have the effect
of reducing your returns.

In the event that our interests become adverse to those of the
other co-tenants, we will not have the contractual right to purchase
the co-tenancy interests from the other co-tenants. Even if we are
given the opportunity to purchase such co-tenancy interests in the
future, we cannot guarantee that we will have sufficient funds
available at the time to purchase co-tenancy interests from the 1031
Participants.

We might want to sell our co-tenancy interests in a given
property at a time when the other co-tenants in such property do not
desire to sell their interests. Therefore, we may not be able to sell
our interest in a property at the time we would like to sell. In
addition, it is anticipated that it will be much more difficult to find
a willing buyer for our co-tenancy interests in a property than it
would be to find a buyer for a property we owned outright.

Our participation in the Section 1031 Exchange Program may limit
our ability to borrow funds in the future.

Institutional lenders may view our obligations under Take Out
Purchase and Escrow Agreements to acquire unsold co-tenancy interests
in properties as a contingent liability against our cash or other
assets, which may limit our ability to borrow funds in the future.
Further, such obligations may be viewed by our lenders in such a matter
as to limit our ability to borrow funds based on regulatory
restrictions on lenders limiting the amount of loans they can make to
any one borrower. (See "Investment Objectives and Criteria - Section
1031 Exchange Program.")

Federal Income Tax Risks

The information contained on page 24 in the "Federal Income Tax Risks"
section of the prospectus is revised as of the date of this supplement by the
deletion of the first two paragraphs of that section and the insertion of the
following paragraphs in lieu thereof:

Failure to qualify as a REIT could adversely affect our
operations and our ability to make distributions.

If we fail to qualify as a REIT for any taxable year, we will be
subject to federal income tax on our taxable income at corporate rates
with no offsetting deductions for distributions for shareholders.
Further, in such event, we would generally be disqualified from
treatment as a REIT for the four taxable years following the year in
which we lose our REIT status. Accordingly, the loss of our REIT status
would reduce our net earnings available for investment or distribution
to shareholders because of the substantial tax liabilities which would
be imposed

4

on us. We might also be required to borrow funds or liquidate some
investments in order to pay the applicable tax.

Qualification as a REIT is subject to the satisfaction of
requirements set forth in the Code and Treasury Regulations and various
factual matters and circumstances which are not entirely within our
control. We have and will continue to structure our activities in a
manner designed to satisfy all of these requirements, however, if
certain of our operations were to be recharacterized by the Internal
Revenue Service, such recharacterization could jeopardize our ability
to satisfy all of the requirements for qualification as a REIT. In
addition, new legislation, regulations, administrative interpretations
or court decisions could change the tax laws relating to our
qualification as a REIT or the federal income tax consequences of our
being a REIT.

In this regard, Wells Development, an affiliate of our advisor,
is sponsoring a program involving the offering and sale of co-tenancy
interests by Wells Exchange in real properties to investors seeking to
complete Section 1031 like-kind exchanges. In connection with this
program, we have agreed to enter into a series of transactions whereby
Wells OP will enter into a number of Take Out Purchase and Escrow
Agreements with Wells Exchange which will, in effect, guarantee the
sale of the co-tenancy interests being offered by Wells Exchange. In
consideration for entering into these Take Out Purchase and Escrow
Agreements, Wells OP will be paid fees which could be characterized as
gross revenue not constituting income "qualifying" for purposes of
satisfying the "income tests" required for REIT qualification. (See
"Federal Income Tax Consequences - Operational Requirements - Gross
Income Tests.") If this fee income were, in fact, treated as non-
qualifying, and if the aggregate of all such income and any other non-
qualifying income in any taxable year ever exceeded 5.0% of our gross
revenues for such year, we could lose our REIT status for that taxable
year and the four ensuing taxable years. As set forth above, we will
use all reasonable efforts to structure our activities in a manner
intended to satisfy the requirements for our continued qualification as
a REIT. (See "Investment Objectives and Criteria -Section 1031 Exchange
Program.")

Recharacterization of the Section 1031 Exchange Program may
result in taxation of income from a prohibited transaction.

In the event that the Internal Revenue Service were to
recharacterize the Section 1031 Exchange Program such that Wells OP,
rather than Wells Exchange, is treated as the bona fide owner, for tax
purposes, of properties acquired and resold by Wells Exchange in
connection with the Section 1031 Exchange Program, such
characterization could result in the Take Out Fees paid to Wells OP as
being deemed income from a prohibited transaction, in which event all
such fee income paid to us in connection with the Section 1031 Exchange
Program would be subject to a 100% tax. (See "Investment Objectives and
Criteria - Section 1031 Exchange Program.")

Management's Discussion and Analysis of Financial Condition and Results of
Operation

The information contained on page 98 in the "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources" section of the prospectus is revised as of the date of this
supplement by the deletion of the first two paragraphs of that section and the
insertion of the following paragraphs in lieu thereof:

We began active operations on June 5, 1998, when we received and
accepted subscriptions for 125,000 shares pursuant to our initial
public offering, which commenced on January 30, 1998. We terminated our
initial public offering on December 19, 1999. Of the $132,181,919
raised in the initial offering, we invested a total of $111,032,812 in
properties. On December 20, 1999, we commenced a follow-on public
offering of up to 22,200,000 shares of common stock at $10 per share.
We terminated our follow-on public

5

offering on December 19, 2000. Of the $175,229,193 raised in the
follow-on offering, we invested a total of $147,192,522 in properties.

Pursuant to the prospectus, we commenced this third offering of
shares of our common stock on December 20, 2000. As of April 15, 2001,
we had received an additional $83,074,813 in gross offering proceeds
from the sale of 8,307,482 shares in the third offering. As of April
15, 2001, we had raised in the aggregate a total of $390,485,925 in
offering proceeds through the sale of 39,048,593 shares of common
stock. As of April 15, 2001, we had paid a total of $13,584,221 in
acquisition and advisory fees and acquisition expenses, had paid a
total of $48,515,076 in selling commissions and organizational and
offering expenses, had made capital contributions of $323,477,000 to
Wells OP for investments in joint ventures and acquisitions of real
property, had utilized $2,365,315 for the redemption of stock pursuant
to our share redemption program, and were holding net offering proceeds
of $2,544,313 available for investment in additional properties.

Description of Shares - Share Redemption Program

The information contained on page 147 in the "Description of Shares -
Share Redemption Program" section of the prospectus is revised as of the date of
this supplement by the deletion of the first full paragraph on page 147 and the
insertion of the following paragraph in lieu thereof:

If you have held your shares for the required one-year period,
you may redeem your shares for a purchase price equal to the lesser of
(1) $10 per share, or (2) the purchase price per share that you
actually paid for your shares of the Wells REIT. In the event that you
are redeeming all of your shares, shares purchased pursuant to our
dividend reinvestment plan may be excluded from the foregoing one-year
holding period requirement, in the discretion of the board of
directors. In addition, for purposes of the one-year holding period,
limited partners of Wells OP who exchange their limited partnership
units for shares in the Wells REIT shall be deemed to have owned their
shares as of the date they were issued their limited partnership units
in Wells OP. The board of directors reserves the right in its sole
discretion at any time and from time to time to (1) change the purchase
price for redemptions, or (2) otherwise amend the terms of our share
redemption program. In addition, our board of directors has delegated
to our officers the right to (1) waive the one-year holding period in
the event of the death or bankruptcy of a shareholder or other exigent
circumstances, or (2) reject any request for redemption at any time and
for any reason.

Financial Statements

The consolidated balance sheets of the Wells REIT as of December 31,
2000 and 1999, and the financial statements of the Wells REIT for each of the
years in the three year period ended December 31, 2000, included in this
supplement and elsewhere in the registration statement, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included in this supplement in reliance
upon the authority of said firm as experts in giving said report.

Prior Performance Tables

The prior performance tables dated as of December 31, 2000, which are
included in this supplement, have not been audited.

6

INDEX TO FINANCIAL STATEMENTS AND PRIOR PERFORMANCE TABLES

Page
----

Wells Real Estate Investment Trust, Inc. and Subsidiary
Audited Financial Statements
----------------------------
Report of Independent Public Accountants                                        8

Consolidated Balance Sheets as of December 31, 2000 and

December 31, 1999                                                               9

Consolidated Statements of Income for the years ended
December 31, 2000, December 31, 1999, and December 31, 1998                    10

Consolidated Statements of Shareholders' Equity for the years ended
December 31, 2000, December 31, 1999, and December 31, 1998                    11

Consolidated Statements of Cash Flows for the years ended
December 31, 2000, December 31, 1999, and December 31, 1998                    12

Notes to Consolidated Financial Statements
December 31, 2000, December 31, 1999, and December 31, 1998                    13

Prior Performance Tables (Unaudited)                                                   39

7

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying consolidated balance sheets of WELLS REAL
ESTATE INVESTMENT TRUST, INC. (a Maryland corporation) AND SUBSIDIARY as of
December 31, 2000 and 1999 and the related consolidated statements of income,
shareholders' equity, and cash flows for each of the three years in the period
ended December 31, 2000. These financial statements and the schedule referred to
below are the responsibility of the Company's management. Our responsibility is
to express an opinion on these consolidated financial statements and schedule
based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
schedule are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Wells Real Estate
Investment Trust, Inc. and subsidiary as of December 31, 2000 and 1999 and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2000 in conformity with accounting principles
generally accepted in the United States.

ARTHUR ANDERSEN LLP

/s/ ARTHUR ANDERSEN LLP

Atlanta, Georgia
January 30, 2001

8

Wells Real Estate Investment Trust, Inc.

and subsidiary

consolidated Balance Sheets

December 31, 2000 and 1999

ASSETS
------

2000            1999
----            ----

REAL ESTATE ASSETs, at cost:
Land                                                                              $  46,237,812   $  14,500,822
Building, less accumulated depreciation of $9,469,653 and $1,726,102 at
December 31, 2000 and 1999, respectively                                         287,862,655      81,507,040
Construction in progress                                                              3,357,720      12,561,459
-------------   -------------
Total real estate assets                                                   337,458,187     108,569,321

INVESTMENT IN JOINT VENTURES                                                            44,236,597      29,431,176

CASH AND CASH EQUIVALENTS                                                                4,298,301       2,929,804

ACCOUNTS RECEIVABLE                                                                      3,356,428         898,704

DEFERRED LEASE ACQUISITION COSTS                                                         1,890,332               0

DEFERRED OFFERING COSTS                                                                  1,291,376         964,941

DEFERRED PROJECT COSTS                                                                     550,256          28,093

DUE FROM AFFILIATES                                                                        734,286         648,354

PREPAID EXPENSES AND OTHER ASSETS, net                                                   4,734,583         381,897
-------------   -------------
Total assets                                                             $ 398,550,346   $ 143,852,290
=============   =============

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES:

Notes payable                                                                     $ 127,663,187   $  23,929,228

Accounts payable and accrued expenses                                                 2,166,387         224,721
Deferred rental income                                                                  381,194         236,579
Dividends payable                                                                     1,025,010       2,166,701
Due to affiliate                                                                      1,772,956       1,079,466
-------------   -------------
Total liabilities                                                          133,008,734      27,636,695
-------------   -------------
COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST OF UNIT HOLDER IN OPERATING PARTNERSHIP                                  200,000         200,000
-------------   -------------
SHAREHOLDERS' EQUITY:
Common shares, $.01 par value; 125,000,000 shares authorized, 31,509,807
shares issued and 31,368,510 shares outstanding at December 31, 2000,
and 13,471,085 shares issued and outstanding at December 31, 1999                    315,097         134,710
Additional paid-in capital                                                          266,439,484     115,880,885
Treasury stock, at cost, 141,297 shares at December 31, 2000 and 0 shares
at December 31, 1999                                                              (1,412,969)              0
-------------   -------------
Total shareholders' equity                                                 265,341,612     116,015,595
-------------   -------------
Total liabilities and shareholders' equity                                           $ 398,550,346   $ 143,852,290
=============   =============

The accompanying notes are an integral part of these consolidated balance
sheets.

9

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998

2000             1999            1998
----             ----            ----
REVENUES:

Rental income                                                        $ 20,505,000      $ 4,735,184     $  20,994
Equity in income of joint ventures                                      2,293,873        1,243,969       263,315
Interest income                                                           520,924          502,993       110,869
Other income                                                               53,409           13,249             0
------------      -----------     ---------
23,373,206        6,495,395       395,178
------------      -----------     ---------
EXPENSES:
Depreciation                                                            7,743,551        1,726,103             0
Interest expense                                                        3,966,902          442,029        11,033
Amortization of deferred financing costs                                  232,559            8,921             0
Operating costs, net of reimbursements                                    888,091          (74,666)            0
Management and leasing fees                                             1,309,974          257,744             0
General and administrative                                                426,680          123,776        29,943
Legal and accounting                                                      240,209          115,471        19,552
Computer costs                                                             12,273           11,368           616
------------      -----------     ---------
14,820,239        2,610,746        61,144
------------      -----------     ---------
NET INCOME                                                               $  8,552,967      $ 3,884,649     $ 334,034
============      ===========     =========
EARNINGS PER SHARE:
Basic and diluted                                                    $       0.40      $      0.50     $    0.40
============      ===========     =========

The accompanying notes are an integral part of these consolidated statements.

10

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998

Additional                                                  Total
Common Stock            Paid-In          Retained        Treasury Stock        Shareholders'
---------------------                                   ------------------------
Shares     Amount         Capital          Earnings     Shares       Amount         Equity
----------  ---------    -------------    ------------  ---------   ------------   -------------

BALANCE,
December 31, 1997                      100  $       1    $         999    $          0          0    $         0   $       1,000

Issuance of common
stock                       3,154,036     31,540       31,508,820               0          0              0      31,540,360
Net income                             0          0                0         334,034          0              0         334,034
Dividends ($.31 per
share)                              0          0         (511,163)              0          0              0        (511,163)
Sales commissions                      0          0       (2,996,334)              0          0              0      (2,996,334)
Other offering
expenses                            0          0         (946,210)              0          0              0        (946,210)
----------  ---------    -------------    ------------  ---------   ------------   -------------
BALANCE,
December 31, 1998                3,154,136     31,541       27,056,112         334,034          0              0      27,421,687

Issuance of common
stock                      10,316,949    103,169      103,066,321               0          0              0     103,169,490
Net income                             0          0                0       3,884,649          0              0       3,884,649
Dividends ($.70 per
share)                              0          0       (1,346,240)     (4,218,683)         0              0      (5,564,923)
Sales commissions                      0          0       (9,801,197)              0          0              0      (9,801,197)
Other offering
expenses                            0          0       (3,094,111)              0          0              0      (3,094,111)
----------  ---------    -------------    ------------  ---------   ------------   -------------
BALANCE,
December 31, 1999               13,471,085    134,710      115,880,885               0          0              0     116,015,595

Issuance of common
stock                      18,038,722    180,387      180,206,833               0          0              0     180,387,220
Treasury stock
purchased                           0          0                0               0   (141,297)    (1,412,969)     (1,412,969)
Net income                             0          0                0       8,552,967          0              0       8,552,967
Dividends ($.73 per
share)                              0          0       (7,276,452)     (8,552,967)         0              0     (15,829,419)
Sales commissions                      0          0      (17,002,554)              0          0              0     (17,002,554)
Other offering
expenses                            0          0       (5,369,228)              0          0              0      (5,369,228)
BALANCE,
----------  ---------    -------------    ------------  ---------   ------------   -------------
December 31, 2000               31,509,807  $ 315,097    $ 266,439,484    $          0   (141,297)  $ (1,412,969)  $ 265,341,612
==========  =========    =============    ============  =========   ============   =============

The accompanying notes are an integral part of these consolidated statements.

11

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998

2000              1999              1998
--------------    --------------     ------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                   $    8,552,967    $    3,884,649     $    334,034
--------------    --------------     ------------
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Equity in income of joint ventures                         (2,293,873)       (1,243,969)        (263,315)
Depreciation                                                7,743,551         1,735,024                0
Amortization of deferred financing costs                      232,559                 0                0
Changes in assets and liabilities:
Accounts receivable                                     (2,457,724)         (898,704)               0
Due from affiliates                                       (435,600)                0                0
Prepaid expenses and other assets, net                  (6,475,577)          149,501         (540,319)
Accounts payable and accrued expenses                    1,941,666            36,894          187,827
Deferred rental income                                     144,615           236,579                0
Due to affiliates                                          367,055           108,301            6,224
--------------    --------------     ------------
Total adjustments                                    (1,233,328)          123,626         (609,583)
--------------    --------------     ------------
Net cash provided by (used in) operating
activities                                          7,319,639         4,008,275         (275,549)
--------------    --------------     ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate                                      (231,518,138)      (85,514,506)     (21,299,071)
Investment in joint ventures                                    (15,063,625)      (17,641,211)     (11,276,007)
Deferred project costs paid                                      (6,264,098)       (3,610,967)      (1,103,913)
Distributions received from joint ventures                        3,529,401         1,371,728          178,184
--------------    --------------     ------------
Net cash used in investing activities              (249,316,460)     (105,394,956)     (33,500,807)
--------------    --------------     ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable                                     187,633,130        40,594,463       14,059,930
Repayments of notes payable                                     (83,899,171)      (30,725,165)               0
Dividends paid to shareholders                                  (16,971,110)       (3,806,398)        (102,987)
Issuance of common stock                                        180,387,220       103,169,490       31,540,360
Treasury stock purchased                                         (1,412,969)                0                0
Sales commissions paid                                          (17,002,554)       (9,801,197)      (2,996,334)
Other offering costs paid                                        (5,369,228)       (3,094,111)        (946,210)
--------------    --------------     ------------
Net cash provided by financing activities           243,365,318        96,337,082       41,554,759
--------------    --------------     ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                 1,368,497        (5,049,599)       7,778,403

CASH AND CASH EQUIVALENTS, beginning of year                         2,929,804         7,979,403          201,000
--------------    --------------     ------------
CASH AND CASH EQUIVALENTS, end of year                          $    4,298,301    $    2,929,804     $  7,979,403
==============    ==============     ============
SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES:
Deferred project costs applied to real estate assets      $    5,114,279    $    3,183,239     $    298,608
==============    ==============     ============

Deferred project costs contributed to joint ventures      $      627,656    $      735,056     $    469,884
==============    ==============     ============

Deferred offering costs due to affiliate                  $      326,435    $      416,212     $          0
==============    ==============     ============

The accompanying notes are an integral part of these consolidated statements.

12

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2000, 1999, AND 1998

1.     ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Wells Real Estate Investment Trust, Inc. (the "Company") is a Maryland
corporation that qualifies as a real estate investment trust ("REIT"). The
Company is conducting an offering for the sale of a maximum of 125,000,000
(exclusive of 10,000,000 shares available pursuant to the Company's dividend
reinvestment plan) shares of common stock, $.01 par value per share, at a price
of $10 per share. The Company will seek to acquire and operate commercial
properties, including, but not limited to, office buildings, shopping centers,
business and industrial parks, and other commercial and industrial properties,
including properties which are under construction, are newly constructed, or
have been constructed and have operating histories. All such properties may be
acquired, developed, and operated by the Company alone or jointly with another
party. The Company is likely to enter into one or more joint ventures with
affiliated entities for the acquisition of properties. In connection with this,
the Company may enter into joint ventures for the acquisition of properties with
prior or future real estate limited partnership programs sponsored by Wells
Capital, Inc. (the "Advisor") or its affiliates.

Substantially all of the Company's business is conducted through Wells Operating
Partnership, L.P. (the "Operating Partnership"), a Delaware limited partnership.
During 1997, the Operating Partnership issued 20,000 limited partner units to
the Advisor in exchange for $200,000. The Company is the sole general partner in
the Operating Partnership and possesses full legal control and authority over
the operations of the Operating Partnership; consequently, the accompanying
consolidated financial statements of the Company include the amounts of the
Operating Partnership.

The Operating Partnership owns the following properties directly: (i) the
PricewaterhouseCoopers property (the "PwC Building"), a four-story office
building located in Tampa, Florida; (ii) the AT&T Building, a four-story office
building located in Harrisburg, Pennsylvania; (iii) the Marconi Data Systems
property (the "Marconi Building"), a two-story office building located in Wood
Dale, Illinois; (iv) the Cinemark Building, a five-story office building located
in Plano, Texas; (v) the Matsushita Building, a two-story office building
located in Lake Forest, California; (vi) the ASML Building, a two-story office
building located in Tempe, Arizona; (vii) the Motorola Tempe Building, a
two-story office building located in Tempe, Arizona; (viii) the Dial Building, a
two-story office building located in Scottsdale, Arizona; (ix) the Delphi
Building, a three-story office building located in Troy, Michigan; (x) the Avnet
Building, a two-story office building located in Tempe, Arizona; (xi) the Metris
Oklahoma Building, a three-story office building located in Tulsa, Oklahoma;
(xii) the Alstom Power-Richmond Building, a four-story office building located
in Richmond, Virginia; (xiii) the Motorola Plainfield Building, a three-story
office building located in South Plainfield, New Jersey; (xiv) the Stone &
Webster Building, a six-story office building located in Houston, Texas; and
(xv) the Metris Minnetonka Building, a nine-story office building located in
Minnetonka, Minnesota.

The Company owns an interest in one property through a joint venture between the
Operating Partnership, Wells Real Estate Fund VIII, L.P. ("Wells Fund VIII"),
and Wells Real Estate Fund IX, L.P. ("Wells Fund IX"), which is referred to as
the Fund VIII, IX, and REIT Joint Venture. The Company also owns interests in
several properties through a joint venture between the Operating Partnership,
Wells Fund IX, Wells Real Estate Fund X, L.P. ("Wells Fund X"), and Wells Real
Estate Fund XI, L.P. ("Wells Fund XI"). This joint venture is referred to as the
Fund IX, Fund X, Fund XI, and REIT Joint Venture ("Fund IX, X, XI, and REIT
Joint Venture"). The Company owns two properties through joint venture between
the Operating Partnership and Fund X and XI Associates, a joint venture between
Wells Fund X and Wells Fund XI. In addition, the Company owns an interest in
several properties through a joint venture between Wells Fund XI, Wells Real
Estate Fund XII, L.P. ("Wells Fund XII"), and the Operating Partnership, which
is referred to as the Fund XI, XII, and REIT Joint Venture. The Company also
owns two properties through a joint venture between Wells Fund XII and the
Operating Partnership, which is referred to as the Fund XII and REIT Joint
Venture.

13

Through its investment in the Fund VIII, IX, and REIT Joint Venture, the Company
owns an interest in a two-story office building in Orange County, California
(the "Quest Building").

The following properties are owned by the Company through its investment in the
Fund IX, X, XI, and REIT Joint Venture: (i) a three-story office building in
Knoxville, Tennessee (the "Alstom Power Building," formerly the ABB Building),
(ii) a two-story office building in Louisville, Colorado (the "Ohmeda
Building"), (iii) a three-story office building in Broomfield, Colorado (the
"360 Interlocken Building"), (iv) a one-story warehouse facility in Ogden, Utah
(the "Iomega Building"), and (v) a one-story office building in Oklahoma City,
Oklahoma (the "Avaya Building," formerly the Lucent Technologies Building).

Through its investment in joint ventures with Fund X and XI Associates, the
Company owns interests in the following properties: (i) a one-story office and
warehouse building in Fountain Valley, California (the "Cort Furniture
Building") owned by Wells/Orange County Associates and (ii) a warehouse and
office building in Fremont, California (the "Fairchild Building") owned by
Wells/Fremont Associates.

The following properties are owned by the Company through its investment in the
Fund XI, XII, and REIT Joint Venture: (i) a two-story manufacturing and office
building in Greenville County, South Carolina (the "EYBL CarTex Building"), (ii)
a three-story office building Leawood, Kansas (the "Sprint Building"), (iii) an
office and warehouse building in Chester County, Pennsylvania (the "Johnson
Matthey Building"), and (iv) a two-story office building in Ft. Myers, Florida
(the "Gartner Building").

Through its investment in the Fund XII and REIT Joint Venture, the Company owns
interests in the following properties: (i) a three-story office building in
Troy, Michigan (the "Siemens Building"), and (ii) a one-story office building
and a two-story office building in Oklahoma City, Oklahoma (collectively
referred to as the "AT&T Call Center Buildings").

Use of Estimates and Factors Affecting the Company

The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

The carrying values of real estate are based on management's current intent to
hold the real estate assets as long-term investments. The success of the
Company's future operations and the ability to realize the investment in its
assets will be dependent on the Company's ability to maintain rental rates,
occupancy, and an appropriate level of operating expenses in future years.
Management believes that the steps it is taking will enable the Company to
realize its investment in its assets.

Income Taxes

The Company has elected to be taxed as a REIT under the Internal Revenue Code of
1986, as amended (the "Code"), commencing with the taxable year ended December
31, 1998. As a result, the Company generally will not be subject to federal
income taxation at the corporate level to the extent it distributes annually at
least 95% (90% beginning in 2001) of its REIT taxable income, as defined in the
Code, to its shareholders and satisfies certain other requirements.
Additionally, the Operating Partnership is not subject to federal or state
income taxes. Accordingly, no provision has been made for federal or state
income taxes in the accompanying consolidated financial statements for the years
ended December 31, 2000 and 1999.

Real Estate Assets

Real estate assets held by the Company and joint ventures are stated at cost
less accumulated depreciation. Major improvements and betterments are
capitalized when they extend the useful life of the related asset. All repair
and maintenance are expensed as incurred.

Management continually monitors events and changes in circumstances which could
indicate that carrying amounts of real estate assets may not be recoverable.
When events or changes in circumstances are present which indicate that the
carrying amounts of real estate assets may not be recoverable, management
assesses the recoverability of real estate assets by determining whether the
carrying value of such real estate assets will be recovered through the

14

future cash flows expected from the use of the asset and its eventual
disposition. Management has determined that there has been no impairment in the
carrying value of real estate assets held by the Company or the joint ventures
as of December 31, 2000.

Depreciation of building and improvements is calculated using the straight-line
method over 25 years. Tenant improvements are amortized over the life of the
related lease or the life of the asset, whichever is shorter.

Revenue Recognition

All leases on real estate assets held by the Company or the joint ventures are
classified as operating leases, and the related rental income is recognized on a
straight-line basis over the terms of the respective leases.

Cash and Cash Equivalents

For the purposes of the statements of cash flows, the Company considers all
highly liquid investments purchased with an original maturity of three months or
less to be cash equivalents. Cash equivalents include cash and short-term
investments. Short-term investments are stated at cost, which approximates fair
value, and consist of investments in money market accounts.

Deferred Lease Acquisition Costs

Costs incurred to procure operating leases are capitalized and amortized on a
straight-line basis over the terms of the related leases.

Earnings Per Share

Earnings per share is calculated based on the weighted average number of common
shares outstanding during each period. The weighted average number of common
shares outstanding is identical for basic and fully diluted earnings per share,
as there is no dilutive impact created from the Company's stock option plan
(Note 10) using the treasury stock method.

Reclassifications

Certain prior year amounts have been reclassified to conform with the current
year financial statement presentation.

Investment in Joint Ventures

Basis of Presentation

The Operating Partnership does not have control over the operations of
the joint ventures; however, it does exercise significant influence.
Accordingly, the Operating Partnership's investment in the joint
ventures is recorded using the equity method of accounting.

Partners' Distributions and Allocations of Profit and Loss

Cash available for distribution and allocations of profit and loss to
the Operating Partnership by the joint ventures are made in accordance
with the terms of the individual joint venture agreements. Generally,
these items are allocated in proportion to the partners' respective
ownership interests. Cash is paid from the joint ventures to the
Operating Partnership on a quarterly basis.

Deferred Lease Acquisition Costs

Costs incurred to procure operating leases are capitalized and
amortized on a straight-line basis over the terms of the related
leases.

15

2.      DEFERRED PROJECT COSTS

The Company paid a percentage of shareholder contributions to the Advisor for
acquisition and advisory services. These payments, as stipulated in the
prospectus, can be up to 3.5% of shareholder contributions, subject to certain
overall limitations contained in the prospectus. Aggregate fees paid through
December 31, 2000 were $10,978,981 and amounted to 3.5% of shareholders'
contributions received. These fees are allocated to specific properties as they
are purchased or developed and are included in capitalized assets of the joint
ventures or real estate assets. Deferred project costs at December 31, 2000 and
1999 represent fees not yet applied to properties.

3.      DEFERRED OFFERING COSTS

Offering expenses, to the extent they exceed 3% of gross offering proceeds, will
be paid by the Advisor and not by the Company. Offering expenses do not include
sales or underwriting commissions but do include such costs as legal and
accounting fees, printing costs, and other offering expenses.

As of December 31, 2000, the Advisor paid offering expenses on behalf of the
Company in the aggregate amount of $10,700,925, of which the Advisor was
reimbursed $9,409,549, which did not exceed the 3% limitation. The unpaid
portion of deferred offering costs is $1,291,376 and is included in due to
affiliate in the accompanying balance sheet.

4.      RELATED-PARTY TRANSACTIONS

Due from affiliates at December 31, 2000 represents the Operating Partnership's
share of the cash to be distributed from its joint venture investments for the
fourth quarter of 2000 and 1999 as follows:

2000          1999
---------     ---------

Fund VIII, IX, and REIT Joint Venture            $  21,605     $       0
Fund IX, X, XI, and REIT Joint Venture              12,781        32,079
Wells/Orange County Associates                      24,583        75,953
Wells/Fremont Associates                            53,974       152,681
Fund XI, XII, and REIT Joint Venture               136,648       387,641
Fund XII and REIT Joint Venture                     49,094             0
The Advisor                                         10,995             0
Cinemark Building                                  424,606             0
---------     ---------
$ 734,286     $ 648,354
=========     =========

The Company entered into a property management agreement with Wells Management
Company, Inc. ("Wells Management"), an affiliate of the Advisor. In
consideration for supervising the management and leasing of the Operating
Partnership's properties, the Operating Partnership will pay Wells Management
management and leasing fees equal to the lesser of (a) 4.5% of the gross
revenues generally paid over the life of the lease, or (b) 0.6% of the net asset
value of the properties (excluding vacant properties) owned by the Company,
calculated on an annual basis plus a separate competitive fee for the one-time
initial lease-up of newly constructed properties generally paid in conjunction
with the receipt of the first month's rent.

The Operating Partnership's portion of the management and leasing fees and lease
acquisition costs paid to Wells Management, both directly and at the joint
venture level, were $1,111,748, $336,517, and $0 for the years ended December
31, 2000, 1999, and 1998, respectively.

The Advisor performs certain administrative services for the Operating
Partnership, such as accounting and other partnership administration, and incurs
the related expenses. Such expenses are allocated among the Operating
Partnership and the various Wells Real Estate Funds based on time spent on each
fund by individual administrative personnel. In the opinion of management, such
allocation is a reasonable basis for allocating such expenses.

The Advisor is a general partner in various Wells Real Estate Funds. As such,
there may exist conflicts of interest where the Advisor, while serving in the
capacity as general partner for Wells Real Estate Funds, may be in competition
with the Operating Partnership for tenants in similar geographic markets.

16

5.       INVESTMENT IN JOINT VENTURES

The Operating Partnership's investment and percentage ownership in joint
ventures at December 31, 2000 and 1999 are summarized as follows:

2000                       1999
-------------------------  -------------------------
Amount        Percent     Amount        Percent
------------   ----------  ------------   ----------

Fund VIII, IX, and REIT Joint Venture            $  1,276,551   16%         $          0   0%
Fund IX, X, XI, and REIT Joint Venture              1,339,636   4              1,388,884   4
Wells/Orange County Associates                      2,827,607   44             2,893,112   44
Wells/Fremont Associates                            6,791,287   78             6,988,210   78
Fund XI, XII, and REIT Joint Venture               17,688,615   57            18,160,970   57
Fund XII and REIT Joint Venture                    14,312,901   47                     0   0
------------               ------------
$ 44,236,597               $ 29,431,176
============               ============

The following is a rollforward of the Operating Partnership's investment in
joint ventures for the years ended December 31, 2000 and 1999:

2000            1999
------------    ------------

Investment in joint ventures, beginning of year    $ 29,431,176    $ 11,568,677
Equity in income of joint ventures                2,293,873       1,243,969
Contributions to joint ventures                  15,691,281      18,376,267
Distributions from joint ventures                (3,179,733)     (1,757,737)
------------    ------------
Investment in joint ventures, end of year          $ 44,236,597    $ 29,431,176
============    ============

Fund VIII, IX, and REIT Joint Venture

On June 15, 2000, Fund VIII and IX Associated entered into a joint venture with
Wells Operating Partnership, L.P. (the "Operating Partnership"), a Delaware
limited partnership having Wells Real Estate Investment Trust, Inc. ("Wells
REIT"), a Maryland corporation, as its general partner. The joint venture, Fund
VIII, IX, and REIT Joint Venture, was formed to acquire, develop, operate, and
sell real properties.

On July 1, 2000, Fund VIII and IX contributed the Quest Building to the joint
venture. The Quest Building is a two-story office building containing
approximately 65,006 rentable square feet on a 4.4 acre trace of land in Irvine,
California.

17

Following are the financial statements for Fund VIII, IX, and REIT Joint
Venture:

Fund VIII, IX, and REIT Joint Venture
(A Georgia Joint Venture)
Balance Sheet
December 31, 2000

Assets

Real estate assets, at cost:
Land                                                                                               $ 2,220,993
Building and improvements, less accumulated depreciation of $187,891                                 5,408,892
-----------
Total real estate assets                                                                   7,629,885
Cash and cash equivalents                                                                                  170,664
Accounts receivable                                                                                        197,802
Prepaid expenses and other assets                                                                          283,864
-----------
Total assets                                                                             $ 8,282,215
===========

Liabilities and Partners' Capital

Liabilities:
Partnership distributions payable                                                                  $   170,664
-----------
Partners' capital:
Fund VIII and IX Associates                                                                          6,835,000
Wells Operating Partnership, L.P.                                                                    1,276,551
-----------
Total partners' capital                                                                    8,111,551
-----------
Total liabilities and partners' capital                                                  $ 8,282,215
===========

18

Fund VIII, IX, and REIT Joint Venture
(A Georgia Joint Venture)
Statement of Income
for the Six Months Ended December 31, 2000

Revenues:
Rental income                                                                   $ 563,049
---------
Expenses:
Depreciation                                                                      187,891
Management and leasing fees                                                        54,395
Property administration expenses                                                    5,692
Operating costs, net of reimbursements                                              5,178
---------
253,156
---------
Net income                                                                          $ 309,893
=========

Net income allocated to Fund VIII and IX Associates                                 $ 285,006
=========

Net income allocated to Wells Operating Partnership, L.P.                           $  24,887
=========

Fund VIII, IX, and REIT Joint Venture
(A Georgia Joint Venture)
Statement of Partners' Capital
for the Six Months Ended December 31, 2000

Fund VIII          Wells             Total
and IX          Operating         Partners'
Associates    Partnership, L.P.      Capital
------------   -----------------   -----------

Balance, July 1, 2000                            $         0       $         0      $         0
Net income                                       285,006            24,887          309,893
Partnership contributions                      6,857,889         1,282,111        8,140,000
Partnership distributions                       (307,895)          (30,447)        (338,342)
-----------       -----------      -----------
Balance, December 31, 2000                       $ 6,835,000       $ 1,276,551      $ 8,111,551
===========       ===========      ===========

19

Fund VIII, IX, and REIT Joint Venture
(A Georgia Joint Venture)
Statement of Cash Flows
for the Six Months Ended December 31, 2000

Cash flows from operating activities:

Net income                                                                                          $   309,893
-----------
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation                                                                                       187,891
Changes in assets and liabilities:
Accounts receivable                                                                          (197,802)
Prepaid expenses and other assets                                                            (283,864)
-----------
Total adjustments                                                                         (293,775)
-----------
Net cash provided by operating activities                                                   16,118
-----------
Cash flows from investing activities:
Investment in real estate                                                                              (959,887)
-----------
Cash flows from financing activities:
Contributions from joint venture partners                                                             1,282,111
Distributions to joint venture partners                                                                (167,678)
-----------
Net cash provided by financing activities                                                1,114,433
-----------
Net increase in cash and cash equivalents                                                                   170,664
Cash and cash equivalents, beginning of period                                                                    0
-----------
Cash and cash equivalents, end of year                                                                  $   170,664
===========
Supplemental disclosure of noncash activities:
Real estate contribution received from joint venture partner                                        $ 6,857,889
===========

Fund IX, X, XI, and REIT Joint Venture

On March 20, 1997, Wells Fund IX and Wells Fund X entered into a joint venture
agreement. The joint venture, Fund IX and X Associates, was formed to acquire,
develop, operate, and sell real properties. On March 20, 1997, Wells Fund IX
contributed a 5.62-acre tract of real property in Knoxville, Tennessee, and
improvements thereon, known as the Alstom Power Building, to the Fund IX and X
Associates joint venture. A 84,404-square-foot, three-story building was
constructed and commenced operations at the end of 1997.

On February 13, 1998, the joint venture purchased a two-story office building,
known as the Ohmeda Building, in Louisville, Colorado. On March 20, 1998, the
joint venture purchased a three-story office building, known as the 360
Interlocken Building, in Broomfield, Colorado. On June 11, 1998, Fund IX and X
Associates was amended and restated to admit Wells Fund XI and the Operating
Partnership. The joint venture was renamed the Fund IX, X, XI, and REIT Joint
Venture. On June 24, 1998, the new joint venture purchased a one-story office
building, known as the Avaya Building, in Oklahoma City, Oklahoma. On April 1,
1998, Wells Fund X purchased a one-story warehouse facility, known as the Iomega
Building, in Ogden, Utah. On July 1, 1998, Wells Fund X contributed the Iomega
Building to the Fund IX, X, XI, and REIT Joint Venture.

Following are the financial statements for the Fund IX, X, XI, and REIT Joint
Venture:

20

Following are the financial statements for the Fund IX, X, XI, and REIT Joint
Venture:

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Balance Sheets
December 31, 2000 and 1999

Assets

2000              1999
------------      ------------

Real estate assets, at cost:
Land                                                                             $ 6,698,020      $  6,698,020
Building and improvements, less accumulated depreciation of $4,203,502
in 2000 and $2,792,068 in 1999                                                 28,594,768        29,878,541
-----------      -----------
Total real estate assets                                               35,292,788       36,576,561
Cash and cash equivalents                                                             1,500,044        1,146,874
Accounts receivable                                                                     422,243          554,965
Prepaid expenses and other assets                                                       487,276          526,409
-----------      -----------
Total assets                                                          $37,702,351      $38,804,809
===========      ===========

Liabilities and Partners' Capital

Liabilities:
Accounts payable and accrued liabilities                                        $   568,517      $   613,574
Refundable security deposits                                                         99,279           91,340
Due to affiliates                                                                     9,595            6,379
Partnership distributions payable                                                   931,151          804,734
-----------      -----------
Total liabilities                                                       1,608,542        1,516,027
-----------      -----------
Partners' capital:
Wells Real Estate Fund IX                                                        14,117,803       14,590,626
Wells Real Estate Fund X                                                         17,445,277       18,000,869
Wells Real Estate Fund XI                                                         3,191,093        3,308,403
Wells Operating Partnership, L.P.                                                 1,339,636        1,388,884
-----------      -----------
Total partners' capital                                                36,093,809       37,288,782
-----------      -----------
Total liabilities and partners' capital                               $37,702,351      $38,804,809
===========      ===========

21

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Income
for the Years Ended December 31, 2000, 1999, and 1998

2000             1999            1998
----------       ----------      ----------

Revenues:
Rental income                                                        $4,198,388       $3,932,962      $2,945,980
Other income                                                            116,129           61,312               0
Interest income                                                          73,676           58,768          20,438
----------       ----------      ----------
4,388,193        4,053,042       2,966,418
----------       ----------      ----------
Expenses:
Depreciation                                                          1,411,434        1,538,912       1,216,293
Management and leasing fees                                             362,774          286,139         226,643
Operating costs, net of reimbursements                                 (154,001)         (43,501)       (140,506)
Property administration expense                                          78,420           63,311          34,821
Legal and accounting                                                     20,423           35,937          15,351
----------       ----------      ----------
1,719,050        1,880,798       1,352,602
----------       ----------      ----------
Net income                                                               $2,669,143       $2,172,244      $1,613,816
==========       ==========      ==========

Net income allocated to Wells Real Estate Fund IX                        $1,045,094       $  850,072      $  692,116
==========       ==========      ==========

Net income allocated to Wells Real Estate Fund X                         $1,288,629       $1,056,316      $  787,481
==========       ==========      ==========

Net income allocated to Wells Real Estate Fund XI                        $  236,243       $  184,355      $   85,352
==========       ==========      ==========

Net income allocated to Wells Operating Partnership, L.P.                $   99,177       $   81,501      $   48,867
==========       ==========      ==========

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Years Ended December 31, 2000, 1999, and 1998

Wells
Wells Real     Wells Real     Wells Real    Operating         Total
Estate         Estate         Estate     Partnership,     Partners'
Fund IX         Fund X         Fund XI        L.P.          Capital
------------   ------------   -----------   -----------    ------------

Balance, December 31, 1997                 $  3,702,793   $  3,662,803   $         0   $         0    $  7,365,596
Net income                                   692,116        787,481        85,352        48,867       1,613,816
Partnership contributions                 11,771,312     15,613,477     2,586,262     1,480,741      31,451,792
Partnership distributions                 (1,206,121)    (1,356,622)     (150,611)      (86,230)     (2,799,584)
------------   ------------   -----------   -----------    ------------
Balance, December 31, 1998                   14,960,100     18,707,139     2,521,003     1,443,378      37,631,620
Net income                                   850,072      1,056,316       184,355        81,501       2,172,244
Partnership contributions                    198,989              0       911,027             0       1,110,016
Partnership distributions                 (1,418,535)    (1,762,586)     (307,982)     (135,995)     (3,625,098)
------------   ------------   -----------   -----------    ------------
Balance, December 31, 1999                   14,590,626     18,000,869     3,308,403     1,388,884      37,288,782
Net income                                 1,045,094      1,288,629       236,243        99,177       2,669,143
Partnership contributions                     46,122         84,317             0             0         130,439
Partnership distributions                 (1,564,039)    (1,928,538)     (353,553)     (148,425)     (3,994,555)
------------   ------------   -----------   -----------    ------------
Balance, December 31, 2000                 $ 14,117,803   $ 17,445,277   $ 3,191,093   $ 1,339,636    $ 36,093,809
============   ============   ===========   ===========    ============

22

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Cash Flows
for the Years Ended December 31, 2000, and 1999, and 1998

2000           1999             1998
----------      ----------      ------------

Cash flows from operating activities:

Net income                                                        $2,669,143      $2,172,244      $  1,613,816
----------      ----------      ------------
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation                                                1,411,434       1,538,912         1,216,293
Changes in assets and liabilities:
Accounts receivable                                        132,722        (421,708)          (92,745)
Prepaid expenses and other assets                           39,133         (85,281)         (111,818)
Accounts payable, accrued liabilities and
refundable security deposits                            (37,118)        295,177            29,967
Due to affiliates                                            3,216           1,973             1,927
----------      ----------      ------------
Total adjustments                                     1,549,387       1,329,073         1,043,624
----------      ----------      ------------
Net cash provided by operating activities             4,218,530       3,501,317         2,657,440
----------      ----------      ------------
Cash flows from investing activities:

Investment in real estate                                           (127,661)       (930,401)      (24,788,070)
----------      ----------      ------------
Cash flows from financing activities:
Distributions to joint venture partners                           (3,868,138)     (3,820,491)       (1,799,457)
Contributions received from partners                                 130,439       1,066,992        24,970,373
----------      ----------      ------------
Net cash (used in) provided by financing
activities                                       (3,737,699)     (2,753,499)       23,170,916
----------      ----------      ------------
Net increase (decrease) in cash and cash equivalents                     353,170        (182,583)        1,040,286
Cash and cash equivalents, beginning of year                           1,146,874       1,329,457           289,171
----------      ----------      ------------
Cash and cash equivalents, end of year                                $1,500,044      $1,146,874      $  1,329,457
==========      ==========      ============
Supplemental disclosure of noncash activities:

Deferred project costs contributed to joint venture               $        0      $   43,024      $  1,470,780
==========      ==========      ============

Contribution of real estate assets to joint venture               $        0      $        0      $  5,010,639
==========      ==========      ============

Wells/Orange County Associates

On July 27, 1998, the Operating Partnership entered into a joint venture
agreement with Wells Development Corporation, referred to as Wells/Orange County
Associates. On July 31, 1998, Wells/Orange County Associates acquired a 52,000-
square-foot warehouse and office building located in Fountain Valley,
California, known as the Cort Furniture Building.

On September 1, 1998, Fund X and XI Associates acquired Wells Development
Corporation's interest in Wells/Orange County Associates which resulted in Fund
X and XI Associates becoming a joint venture partner with the Operating
Partnership in the ownership of the Cort Furniture Building.

23

Following are the financial statements for Wells/Orange County Associates:

Wells/Orange County Associates
(A Georgia Joint Venture)
Balance Sheets
December 31, 2000 and 1999

Assets
2000            1999
----------      ----------

Real estate assets, at cost:
Land                                                                                $2,187,501      $2,187,501
Building, less accumulated depreciation of $465,216 in 2000 and $278,652
in 1999                                                                           4,198,899       4,385,463
----------      ----------
Total real estate assets                                                   6,386,400       6,572,964
Cash and cash equivalents                                                                  119,038         176,666
Accounts receivable                                                                         99,154          49,679
----------      ----------
Total assets                                                              $6,604,592      $6,799,309
==========      ==========

Liabilities and Partners' Capital

Liabilities:
Accounts payable                                                                    $    1,000      $        0
Partnership distributions payable                                                      128,227         173,935
----------      ----------
Total liabilities                                                            129,227         173,935
----------      ----------
Partners' capital:
Wells Operating Partnership, L.P.                                                    2,827,607       2,893,112
Fund X and XI Associates                                                             3,647,758       3,732,262
----------      ----------
Total partners' capital                                                    6,475,365       6,625,374
----------      ----------
Total liabilities and partners' capital                                   $6,604,592      $6,799,309
==========      ==========

Wells/Orange County Associates
(A Georgia Joint Venture)
Statements of Income
for the Years Ended December 31, 2000, 1999, and 1998

2000          1999           1998
--------      --------      --------

Revenues:
Rental income                                                            $795,545      $795,545      $331,477
Interest income                                                                 0             0           448
--------      --------      --------
795,545       795,545       331,925
--------      --------      --------
Expenses:
Depreciation                                                              186,564       186,565        92,087
Management and leasing fees                                                30,915        30,360        12,734
Operating costs, net of reimbursements                                      5,005        22,229         2,288
Interest                                                                        0             0        29,472
Legal and accounting                                                        4,100         5,439         3,930
--------      --------      --------
226,584       244,593       140,511
--------      --------      --------
Net income                                                                   $568,961      $550,952      $191,414
========      ========      ========

Net income allocated to Wells Operating Partnership, L.P.                    $248,449      $240,585      $ 91,978
========      ========      ========

Net income allocated to Fund X and XI Associates                             $320,512      $310,367      $ 99,436
========      ========      ========

24

Wells/Orange County Associates
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Years Ended December 31, 2000, 1999, and 1998

Wells
Operating          Fund X          Total
Partnership,        and XI        Partners'
L.P.          Associates       Capital
--------------   -------------   ------------

Balance, December 31, 1997                                         $            0   $           0   $          0
Net income                                                             91,978          99,436        191,414
Partnership contributions                                           2,991,074       3,863,272      6,854,346
Partnership distributions                                            (124,435)       (145,942)      (270,377)
--------------   -------------   ------------
Balance, December 31, 1998                                              2,958,617       3,816,766      6,775,383
Net income                                                            240,585         310,367        550,952
Partnership distributions                                            (306,090)       (394,871)      (700,961)
--------------   -------------   ------------
Balance, December 31, 1999                                              2,893,112       3,732,262      6,625,374
Net income                                                            248,449         320,512        568,961
Partnership distributions                                            (313,954)       (405,016)      (718,970)
--------------   -------------   ------------
Balance, December 31, 2000                                         $    2,827,607   $   3,647,758   $  6,475,365
==============   =============   ============

Wells/Orange County Associates
(A Georgia Joint Venture)
Statements of Cash Flows
for the Years Ended December 31, 2000, 1999, and 1998

2000          1999          1998
----------    ----------    -----------

Cash flows from operating activities:
Net income                                                           $  568,961    $  550,952    $   191,414
----------    ----------    -----------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation                                                     186,564       186,565         92,087
Changes in assets and liabilities:
Accounts receivable                                           (49,475)      (36,556)       (13,123)
Accounts payable                                                1,000        (1,550)         1,550
----------    ----------    -----------
Total adjustments                                          138,089       148,459         80,514
----------    ----------    -----------
Net cash provided by operating activities                  707,050       699,411        271,928
----------    ----------    -----------
Cash flows from investing activities:

Investment in real estate                                                     0             0     (6,563,700)
----------    ----------    -----------
Cash flows from financing activities:
Issuance of note payable                                                      0             0      4,875,000
Payment of note payable                                                       0             0     (4,875,000)
Distributions to partners                                              (764,678)     (703,640)       (93,763)
Contributions received from partners                                          0             0      6,566,430
----------    ----------    -----------
Net cash (used in) provided by financing
activities                                            (764,678)     (703,640)     6,472,667
----------    ----------    -----------
Net (decrease) increase in cash and cash equivalents                        (57,628)       (4,229)       180,895
Cash and cash equivalents, beginning of year                                176,666       180,895              0
----------    ----------    -----------
Cash and cash equivalents, end of year                                   $  119,038    $  176,666    $   180,895
==========    ==========    ===========

Supplemental disclosure of noncash activities:

Deferred project costs contributed to joint venture                  $        0    $        0    $   287,916
==========    ==========    ===========

Wells/Fremont Associates

25

On July 15, 1998, the Operating Partnership entered into a joint venture
agreement with Wells Development Corporation, referred to as Wells/Fremont
Associates. On July 21, 1998, Wells/Fremont Associates acquired a 58,424-square-
foot warehouse and office building located in Fremont, California, known as the
Fairchild Building.

On October 8, 1998, Fund X and XI Associates acquired Wells Development
Corporation's interest in Wells/Fremont Associates which resulted in Fund X and
XI Associates becoming a joint venture partner with the Operating Partnership in
the ownership of the Fairchild Building.

Following are the financial statements for Wells/Fremont Associates:

Wells/Fremont Associates
(A Georgia Joint Venture)
Balance Sheets
December 31, 2000 and 1999

Assets
2000            1999
-----------      ----------

Real estate assets, at cost:
Land                                                                                $2,219,251      $2,219,251
Building, less accumulated depreciation of $713,773 in 2000 and $428,246
in 1999                                                                           6,424,385       6,709,912
-----------      ----------
Total real estate assets                                                   8,643,636       8,929,163
Cash and cash equivalents                                                                   92,564         189,012
Accounts receivable                                                                        126,433          92,979
-----------      ----------
Total assets                                                              $8,862,633      $9,211,154
===========      ==========
Liabilities and Partners' Capital

Liabilities:
Accounts payable                                                                    $    3,016      $    2,015
Due to affiliate                                                                         7,586           5,579
Partnership distributions payable                                                       89,549         186,997
-----------      ----------
Total liabilities                                                            100,151         194,591
-----------      ----------
Partners' capital:
Wells Operating Partnership, L.P.                                                    6,791,287       6,988,210
Fund X and XI Associates                                                             1,971,195       2,028,353
-----------      ----------
Total partners' capital                                                    8,762,482       9,016,563
-----------      ----------
Total liabilities and partners' capital                                   $8,862,633      $9,211,154
===========      ==========

26

Wells/Fremont Associates
(A Georgia Joint Venture)
Statements of Income
for the Years Ended December 31, 2000, 1999, and 1998

2000           1999          1998
--------       --------      --------

Revenues:
Rental income                                                            $902,946       $902,946      $401,058
Interest income                                                                 0              0         3,896
--------       --------      --------
902,946        902,946       404,954
--------       --------      --------
Expenses:
Depreciation                                                              285,527        285,526       142,720
Management and leasing fees                                                36,787         37,355        16,726
Operating costs, net of reimbursements                                     13,199         16,006         3,364
Interest                                                                        0              0        73,919
Legal and accounting                                                        4,300          4,885         6,306
--------       --------      --------
339,813        343,772       243,035
--------       --------      --------
Net income                                                                   $563,133       $559,174      $161,919
========       ========      ========
Net income allocated to Wells Operating Partnership, L.P.                    $436,452       $433,383      $122,470
========       ========      ========
Net income allocated to Fund X and XI Associates                             $126,681       $125,791      $ 39,449
========       ========      ========

Wells/Fremont Associates
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Years Ended December 31, 2000, 1999, and 1998

Wells
Operating           Fund X           Total
Partnership,         and XI         Partners'
L.P.           Associates        Capital
-------------     -------------    -------------

Balance, December 31, 1997                                         $           0     $           0    $           0
Net income                                                           122,470            39,449          161,919
Partner contributions                                              7,274,075         2,083,334        9,357,409
Partnership distributions                                           (229,863)          (42,628)        (272,491)
--------------     -------------    -------------
Balance, December 31, 1998                                             7,166,682         2,080,155        9,246,837
Net income                                                           433,383           125,791          559,174
Partnership distributions                                           (611,855)         (177,593)        (789,448)
--------------     -------------    -------------
Balance, December 31, 1999                                             6,988,210         2,028,353        9,016,563
Net income                                                           436,452           126,681          563,133
Partnership distributions                                           (633,375)         (183,839)        (817,214)
--------------     -------------    -------------
Balance, December 31, 2000                                        $    6,791,287     $   1,971,195    $   8,762,482
==============     =============    =============

27

Wells/Fremont Associates
(A Georgia Joint Venture)
Statements of Cash Flows
for the Years Ended December 31, 2000, 1999, and 1998

2000          1999            1998
---------     ---------      -----------

Cash flows from operating activities:
Net income                                                             $ 563,133     $ 559,174      $   161,919
---------     ---------      -----------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation                                                      285,527       285,526          142,720
Changes in assets and liabilities:
Accounts receivable                                            (33,454)      (58,237)         (34,742)
Accounts payable                                                 1,001        (1,550)           3,565
Due to affiliate                                                 2,007         3,527            2,052
Total adjustments                                           255,081       229,266          113,595
---------     ---------      -----------
Net cash provided by operating activities                   818,214       788,440          275,514
---------     ---------      -----------
Cash flows from investing activities:
Investment in real estate                                                      0             0       (8,983,111)
---------     ---------      -----------
Cash flows from financing activities:
Issuance of note payable                                                       0             0        5,960,000
Payment of note payable                                                        0             0       (5,960,000)
Distributions to partners                                               (914,662)     (791,940)         (83,001)
Contributions received from partners                                           0             0        8,983,110
---------     ---------      -----------
Net cash (used in) provided by financing
activities                                             (914,662)     (791,940)       8,900,109
---------     ---------      -----------
Net (decrease) increase in cash and cash equivalents                         (96,448)       (3,500)         192,512
Cash and cash equivalents, beginning of year                                 189,012       192,512                0
---------     ---------      -----------
Cash and cash equivalents, end of year                                     $  92,564     $ 189,012      $   192,512
=========     =========      ===========
Supplemental disclosure of noncash activities:
Deferred project costs contributed to joint venture                    $       0     $       0      $   374,299
=========     =========      ===========

Fund XI, XII, and REIT Joint Venture

On May 1, 1999, the Operating Partnership entered into a joint venture with
Wells Fund XII and Wells Fund XI. On May 18, 1999, the joint venture purchased a
169,510-square-foot, two-story manufacturing and office building, known as EYBL
CarTex, in Fountain Inn, South Carolina. On July 21, 1999, the joint venture
purchased a 68,900 square-foot, three-story-office building, known as the Sprint
Building, in Leawood, Kansas. On August 17, 1999, the joint venture purchased a
130,000 square-foot office and warehouse building, known as the Johnson Matthey
Building, in Chester County, Pennsylvania. On September 20, 1999, the joint
venture purchased a 62,400 square-foot, two-story office building, known as the
Gartner Building, in Fort Myers, Florida.

28

Following are the financial statements for the Fund XI, XII, and REIT Joint
Venture:

The Fund XI, XII, and REIT Joint Venture
(A Georgia Joint Venture)
Balance Sheets
December 31, 2000 and 1999

Assets

2000            1999
-----------      -----------

Real estate assets, at cost:
Land                                                                             $ 5,048,797      $ 5,048,797
Building and improvements, less accumulated depreciation of
$1,599,262 in 2000 and $506,582 in 1999                                        25,719,189       26,811,869
-----------      -----------
Total real estate assets                                                30,767,986       31,860,666
Cash and cash equivalents                                                                541,089          766,278
Accounts receivable                                                                      394,314          133,777
Prepaid assets and other expenses                                                         26,486           26,486
-----------      -----------
Total assets                                                           $31,729,875      $32,787,207
===========      ===========

Liabilities and Partners' Capital

Liabilities:
Accounts payable                                                                 $   114,180      $   112,457
Partnership distributions payable                                                    453,395          680,294
-----------      -----------
Total liabilities                                                          567,575          792,751
-----------      -----------
Partners' capital:
Wells Real Estate Fund XI                                                          8,148,261        8,365,852
Wells Real Estate Fund XII                                                         5,325,424        5,467,634
Wells Operating Partnership, L.P.                                                 17,688,615       18,160,970
-----------      -----------
Total partners' capital                                                 31,162,300       31,994,456
-----------      -----------
Total liabilities and partners' capital                                $31,729,875      $32,787,207
===========      ===========

29

The Fund XI, XII, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Income
for the Years Ended December 31, 2000 and 1999

2000            1999
----------      ----------

Revenues:
Rental income                                                                       $3,345,932      $1,443,446
Interest income                                                                          2,814               0
Other income                                                                               440              57
----------      ----------
3,349,186       1,443,503
----------      ----------
Expenses:
Depreciation                                                                         1,092,680         506,582
Management and leasing fees                                                            157,236          59,230
Operating costs, net of reimbursements                                                 (24,798)          6,433
Property administration                                                                 30,787          14,185
Legal and accounting                                                                    14,725           4,000
----------      ----------
1,270,630         590,430
----------      ----------
Net income                                                                              $2,078,556      $  853,073
==========      ==========

Net income allocated to Wells Real Estate Fund XI                                       $  543,497      $  240,031
==========      ==========

Net income allocated to Wells Real Estate Fund XII                                      $  355,211      $  124,542
==========      ==========

Net income allocated to Wells Operating Partnership, L.P.                               $1,179,848      $  488,500
==========      ==========

The Fund XI, XII, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Years Ended December 31, 2000 and 1999

Wells
Wells Real      Wells Real        Operating           Total
Estate          Estate        Partnership,        Partners'
Fund XI         Fund XII           L.P.             Capital
----------      ----------      ------------       -----------

Balance, December 31, 1998                         $        0      $        0       $         0       $         0
Net income                                        240,031         124,542           488,500           853,073
Partnership contributions                       8,470,160       5,520,835        18,376,267        32,367,262
Partnership distributions                        (344,339)       (177,743)         (703,797)       (1,225,879)
----------      ----------      ------------       -----------
Balance, December 31, 1999                          8,365,852       5,467,634        18,160,970        31,994,456
Net income                                        543,497         355,211         1,179,848         2,078,556
Partnership distributions                        (761,088)       (497,421)       (1,652,203)       (2,910,712)
----------      ----------      ------------       -----------
Balance, December 31, 2000                         $8,148,261      $5,325,424       $17,688,615       $31,162,300
==========      ==========      ============       ===========

30

The Fund XI, XII, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Cash Flows
for the Years Ended December 31, 2000 and 1999

2000             1999
-----------       -----------

Cash flows from operating activities:
Net income                                                                       $ 2,078,556       $   853,073
-----------       -----------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation                                                                1,092,680           506,582
Changes in assets and liabilities:
Accounts receivable                                                       (260,537)         (133,777)
Prepaid expenses and other assets                                                0           (26,486)
Accounts payable                                                             1,723           112,457
-----------       -----------
Total adjustments                                                       833,866           458,776
-----------       -----------
Net cash provided by operating activities                             2,912,422         1,311,849
-----------       -----------
Cash flows from financing activities:
Distributions to joint venture partners                                           (3,137,611)         (545,571)
-----------       -----------
Net (decrease) increase in cash and cash equivalents                                    (225,189)          766,278
Cash and cash equivalents, beginning of year                                             766,278                 0
-----------       -----------
Cash and cash equivalents, end of year                                               $   541,089       $   766,278
===========       ===========
Supplemental disclosure of noncash activities:
Deferred project costs contributed to joint venture                              $         0       $ 1,294,686
===========       ===========

Contribution of real estate assets to joint venture                              $         0       $31,072,562
===========       ===========

Fund XII and REIT Joint Venture

On May 10, 2000, the Operating Partnership entered into a joint venture with
Wells Fund XII. The joint venture, Fund XII and REIT Joint Venture, was formed
to acquire, develop, operate, and sell real property. On May 20, 2000, the joint
venture purchased a 77,054 square-foot, three-story office building, known as
the Siemens Building in Troy, Oakland County, Michigan. On December 28, 2000,
the joint venture purchased a 50,000 square-foot one-story office building and a
78,500 square-foot two-story office building, collectively known as the AT&T
Call Center Buildings in Oklahoma City, Oklahoma County, Oklahoma.

31

Following are the financial statements for Fund XII and REIT Joint Venture:

Fund XII and REIT Joint Venture
(A Georgia Joint Venture)
Balance Sheet
December 31, 2000

Assets

Real estate assets, at cost:
Land                                                                                   $ 4,420,405
Building and improvements, less accumulated depreciation of $324,732                    26,004,918
-----------
Total real estate assets                                                      30,425,323
Cash and cash equivalents                                                                      207,475
Accounts receivable                                                                            130,490
-----------
Total assets                                                                 $30,763,288
===========

Liabilities and Partners' Capital

Liabilities:
Partnership distributions payable                                                      $   208,261
-----------
Partners' capital:
Wells Real Estate Fund XII                                                              16,242,127
Wells Operating Partnership, L.P.                                                       14,312,900
-----------
Total partners' capital                                                       30,555,027
-----------
Total liabilities and partners' capital                                      $30,763,288
===========

Fund XII and REIT Joint Venture
(A Georgia Joint Venture)
Statement of Income
for the Period From Inception (May 10, 2000)
Through December 31, 2000

Revenues:
Rental income                                                                             $974,796
Interest income                                                                              2,069
--------
976,865
--------
Expenses:
Depreciation                                                                               324,732
Management and leasing fees                                                                 32,756
Partnership administration                                                                   3,917
Operating costs, net of reimbursements                                                       1,210
--------
362,615
--------
Net income                                                                                    $614,250
========

Net income allocated to Wells Real Estate Fund XII                                            $309,190
========

Net income allocated to Wells Operating Partnership, L.P.                                     $305,060
========

32

Fund XII and REIT Joint Venture
(A Georgia Joint Venture)
Statement of Partners' Capital
for the Period From Inception (May 10, 2000)
Through December 31, 2000

Wells Real           Wells                Total
Estate           Operating            Partners'
Fund XII      Partnership, L.P.         Capital
------------    -----------------       ------------

Balance, May 10, 2000                                          $         0         $         0        $          0
Net income                                                     309,190             305,060             614,250
Partnership contributions                                   16,340,885          14,409,170          30,750,055
Partnership distributions                                     (407,948)           (401,330)           (809,278)
------------    ----------------        ------------
Balance, December 31, 2000                                     $16,242,127         $14,312,900        $ 30,555,027
============    ================        ============

Fund XII and REIT Joint Venture
(A Georgia Joint Venture)
Statement of Cash Flows
for the Period From Inception (May 10, 2000)
Through December 31, 2000

Cash flows from operating activities:
Net income                                                                                        $    614,250
------------
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation                                                                                        324,732
Changes in assets and liabilities:
Accounts receivable                                                                            (130,490)
------------
Total adjustments                                                                            194,242
------------
Net cash provided by operating activities                                                    808,492
------------
Cash flows from investing activities:

Investment in real estate                                                                          (29,520,043)
------------
Cash flows from financing activities:
Distributions to joint venture partners                                                               (601,017)
Contributions received from partners                                                                29,520,043
------------
Net cash provided by financing activities                                                 28,919,026
------------
Net increase in cash and cash equivalents                                                                  207,475
Cash and cash equivalents, beginning of year                                                                     0
------------
Cash and cash equivalents, end of year                                                                $    207,475
============
Supplemental disclosure of non cash activities:
Deferred project costs contributed to joint venture                                               $  1,230,012
============

33

6.     INCOME TAX BASIS NET INCOME AND PARTNERS' CAPITAL

The Operating Partnership's income tax basis net income for the years ended
December 31, 2000 and 1999 are calculated as follows:

2000             1999
-----------       ----------

Financial statement net income                                                        $ 8,552,967       $3,884,649
Increase (decrease) in net income resulting from:
Depreciation expense for financial reporting purposes in excess of
amounts for income tax purposes                                                  3,511,353          739,963
Rental income accrued for financial reporting purposes in excess of
amounts for income tax purposes                                                 (1,822,220)        (802,309)
Expenses deductible when paid for income tax purposes, accrued for
financial reporting purposes                                                        37,675           49,906
-----------       ----------
Income tax basis net income                                                           $10,279,775       $3,872,209
===========       ==========

The Operating Partnership's income tax basis partners' capital at December 31,
2000 and 1999 is computed as follows:

2000               1999
------------       ------------

Financial statement partners' capital                                            $265,341,612       $116,015,595
Increase (decrease) in partners' capital resulting from:
Depreciation expense for financial reporting purposes in excess of
amounts for income tax purposes                                              4,543,602            822,581
Capitalization of syndication costs for income tax purposes, which
are accounted for as cost of capital for financial reporting
purposes                                                                    12,896,312         12,896,312
Accumulated rental income accrued for financial reporting purposes
in excess of amounts for income tax purposes                                (2,647,246)          (837,736)
Accumulated expenses deductible when paid for income tax purposes,
accrued for financial reporting purposes                                        89,215             51,540
Dividends payable                                                               1,025,010          2,166,701
1999 True-up adjustment                                                          (222,378)                 0
------------       ------------
Income tax basis partners' capital                                               $281,026,127       $131,114,993
============       ============

7.     RENTAL INCOME

The future minimum rental income due from the Operating Partnership's direct
investment in real estate or its respective ownership interest in the joint
ventures under noncancelable operating leases at December 31, 2000 is as
follows:

Year ended December 31:
2001                                 $ 42,753,778
2002                                   43,073,142
2003                                   43,776,297
2004                                   44,836,991
2005                                   42,926,909
Thereafter                                176,795,438
------------
$394,162,555
============

One tenant contributed 13% of rental income for the year ended December 31,
2000. In addition, two tenants will contribute 13%, 16%, and 12% of future
minimum rental income.

Future minimum rental income due from Fund VIII, IX, and REIT Joint Venture
under noncancelable operating leases at December 31, 2000 is as follows:

34

Year ended December 31:
2001                                      $1,234,309
2002                                       1,287,119
2003                                       1,287,119
2004                                         107,260
----------
$3,915,807
==========

Two tenants contributed 52% and 48% of rental income for the year ended December
31, 2000. In addition, one tenant will contribute 100% of future minimum rental
income.

The future minimum rental income due from Fund IX, X, XI, and REIT Joint Venture
under noncancelable operating leases at December 31, 2000 is as follows:

Year ended December 31:
2001                                    $  4,413,780
2002                                       3,724,218
2003                                       3,617,437
2004                                       3,498,478
2005                                       2,482,821
Thereafter                                     5,436,524
------------
$ 23,173,258
============

Four tenants contributed 25%, 24%, 13%, and 13% of rental income for the year
ended December 31, 2000. In addition, four tenants will contribute 38%, 21%,
20%, and 19% of future minimum rental income.

The future minimum rental income due Wells/Orange County Associates under
noncancelable operating leases at December 31, 2000 is as follows:

Year ended December 31:
2001                                     $   809,580
2002                                         834,888
2003                                         695,740
-----------
$ 2,340,208
===========

One tenant contributed 100% of rental income for the year ended December 31,
2000 and will contribute 100% of future minimum rental income.

The future minimum rental income due Wells/Fremont Associates under
noncancelable operating leases at December 31, 2000 is as follows:

Year ended December 31:
2001                                     $   869,492
2002                                         922,444
2003                                         950,118
2004                                         894,832
-----------
$ 3,636,886
===========

35

One tenant contributed 100% of rental income for the year ended December 31,
2000 and will contribute 100% of future minimum rental income.

The future minimum rental income due from Fund XI, XII, and REIT under
noncancelable operating leases at December 31, 2000 is as follows:

Year ended December 31:
2001                                    $  3,135,340
2002                                       2,598,606
2003                                       2,946,701
2004                                       3,445,193
2005                                       3,495,155
Thereafter                                     6,169,579
------------
$ 21,790,574
============

Four tenants contributed approximately 30%, 24%, 23%, and 15% of rental income
for the year ended December 31, 2000. In addition, four tenants will contribute
approximately 28%, 27%, 26%, and 19% of future minimum rental income.

The future minimum rental income due Fund XII and REIT under noncancelable
operating leases at December 31, 2000 is as follows:

Year ended December 31:
2001                                    $  2,888,084
2002                                       2,920,446
2003                                       2,952,809
2004                                       2,985,172
2005                                       3,017,534
Thereafter                                    13,650,288
------------
$ 28,414,333
============

One tenant contributed approximately 86% of rental income for the year ended
December 31, 2000. In addition, two tenants will contribute approximately 49%
and 45% of future minimum rental income.

8.      NOTES PAYABLE

As of December 31, 2000, the Operating Partnership's notes payable included the
following:

Note payable to Bank of America; interest at LIBOR plus 200 basis points,
principal and interest payable monthly; due March 31, 2001;
collateralized by the Operating Partnership's interests in the AT&T
Building, the AT&T Call Center Buildings, the Matsushita Building, the
Motorola South Plainfield Building, and the Marconi Building                     $   14,300,150

Note payable to Bank of America; interest at LIBOR plus 200 basis points;
principal and interest payable monthly; due January 4, 2002                             112,937

Note payable to Guaranty Federal Bank; interest at LIBOR plus 180 basis
points; principal and interest payable monthly; due December 20, 2001;
collateralized by the Operating Partnership's interest in the Stone &

Webster Building                                                                     32,400,000

Note payable to Cardinal Capital, Inc.; interest at 6%; principal and
interest payable monthly; due March 31, 2001; collateralized by the
Operating Partnership's interest in the Stone & Webster Building                 $    3,000,000

36

Note payable to Richter-Schroeder Company, Inc.; interest at LIBOR plus
175 basis points; principal and interest payable monthly; due January 31,
3003; collateralized by the Operating Partnership's interest in the
Metris Oklahoma Building                                                              8,000,000

Note payable to SouthTrust Bank; interest at LIBOR plus 175 basis points;
principal and interest payable monthly; due June 10, 2002; collateralized
by the Operating Partnership's interests in the Cinemark Building, the
Dial Building, the ASML Building, the Alstom Power Richmond Building, the
Avaya Building, the Motorola Tempe Building, and the
PricewaterhouseCoopers Building                                                      69,850,100
------------
Total                                                                $127,663,187
============

The contractual maturities of the Operating Partnerhip's notes payable are as
follows as of December 31, 2000:

2001                                               $101,472,657
2002                                                 25,856,779
2003                                                    333,751
------------
Total                                $127,663,187
============

9.       COMMITMENTS AND CONTINGENCIES

Management, after consultation with legal counsel, is not aware of any
significant litigation or claims against the Company, the Operating Partnership,
or the Advisor. In the normal course of business, the Company, the Operating
Partnership, or the Advisor may become subject to such litigation or claims.

10.      SHAREHOLDERS' EQUITY

Common Stock Option Plan

The Wells Real Estate Investment Trust, Inc. Independent Director Stock Option
Plan ("the Plan") provides for grants of stock to be made to independent
nonemployee directors of the Company. Options to purchase 2,500 shares of common
stock at $12 per share are granted upon initially becoming an independent
director of the Company. Of these shares, 20% are exercisable immediately on the
date of grant. An additional 20% of these shares become exercisable on each
anniversary following the date of grant for a period of four years. Effective on
the date of each annual meeting of shareholders of the Company, beginning in
2000, each independent director will be granted an option to purchase 1,000
additional shares of common stock. These options vest at the rate of 500 shares
per full year of service thereafter. All options granted under the Plan expire
no later than the date immediately following the tenth anniversary of the date
of grant and may expire sooner in the event of the disability or death of the
optionee or if the optionee ceases to serve as a director.

The Company has adopted the disclosure provisions in SFAS No. 123, "Accounting
for Stock-Based Compensation." As permitted by the provisions of SFAS No. 123,
the Company applies Accounting Principles Board Opinion No. 25 and the related
interpretations in accounting for its stock option plans and, accordingly, does
not recognize compensation cost.

37

A summary of the Company's stock option activity during 2000 and 1999 is as
follows:

Exercise
Number         Price
------       ---------

Outstanding at December 31, 1998                                                0         $  0
Granted                                                                17,500           12
------         ----
Outstanding at December 31, 1999                                           17,500           12
Granted                                                                 7,000           12
------         ----
Outstanding at December 31, 2000                                           24,000         $ 12
======         ====

Outstanding options exercisable as of December 31, 2000                     7,000         $ 12
======         ====

For SFAS No. 123 purposes, the fair value of each stock option for 2000 and 1999
has been estimated as of the date of the grant using the minimum value method.
The weighted average risk-free interest rates assumed for 2000 and 1999 were
6.45% and 5.97%, respectively. Dividend yields of 7.3% were assumed for both
years. The expected life of an option was assumed to be 4 years and 5 years for
2000 and 1999, respectively. Based on these assumptions, the fair value of the
options granted during 2000 and 1999 is $0.

Treasury Stock

During 1999, the Company's Board of Directors authorized a dividend reinvestment
program (the "DRP"), through which common shareholders may elect to reinvest an
amount equal to the dividends declared on their common shares into additional
shares of the Company's common stock in lieu of receiving cash dividends. During
2000, the Company's Board of Directors authorized a common stock repurchase plan
subject to the amount reinvested in the Company's common shares through the DRP
and 3% of the average common shares outstanding during the preceding year (the
"limitations"). During 2000, the Company's Board of Directors authorized
$2,436,495 in common stock repurchases. Accordingly, the Company repurchased
142,297 of its own common shares at an aggregate cost of $1,412,969. These
transactions were funded with cash on hand and did not exceed either of the
limitations.

11.      QUARTERLY RESULTS (UNAUDITED)

Presented below is a summary of the unaudited quarterly financial information
for the years ended December 31, 2000 and 1999:

2000 Quarters Ended
----------------------------------------------------------------
March 31         June 30         September 30        December 31
--------         -------         ------------        -----------

Revenues                                          $3,710,409       $5,537,618        $6,586,611         $7,638,568
Net income                                         1,691,288        1,521,021         2,525,228          2,815,430
Basic and diluted earnings per share              $     0.11       $     0.08        $     0.11         $     0.10
Dividends per share                                     0.18             0.18              0.18               0.19

1999 Quarters Ended
----------------------------------------------------------------
March 31         June 30         September 30        December 31
--------         -------         ------------        -----------

Revenues                                         $   988,000      $1,204,938         $1,803,352         $2,499,105
Net income                                           393,438         601,975          1,277,019          1,612,217
Basic and diluted earnings per share             $      0.10      $     0.09         $     0.18         $     0.13
Dividends per share                                     0.17            0.17               0.18               0.18

38

PRIOR PERFORMANCE TABLES

The following Prior Performance Tables (Tables) provide information
relating to real estate investment programs sponsored by Wells Capital, Inc.,
our Advisor, and its affiliates (Wells Public Programs) which have investment
objectives similar to Wells Real Estate Investment Trust, Inc. (Wells REIT).
(See "Investment Objectives and Criteria.") All of the Wells Public Programs,
except for the Wells REIT, have used substantial amounts of capital, and no
acquisition indebtedness, to acquire their properties.

Prospective investors should read these Tables carefully together with
the summary information concerning the Wells Public Programs as set forth in
"Prior Performance Summary" section of this prospectus.

Investors in the Wells REIT will not own any interest in other Wells
Public Programs and should not assume that they will experience returns, if any,
comparable to those experienced by investors in other Wells Public Programs.

The advisor is responsible for the acquisition, operation, maintenance
and resale of the real estate properties. The financial results of the Wells
Public Programs, thus, may provide some indication of the advisor's performance
of its obligations during the periods covered. However, general economic
conditions affecting the real estate industry and other factors contribute
significantly to financial results.

The following tables are included herein:

Table I - Experience in Raising and Investing Funds (As a Percentage of
Investment)

Table II - Compensation to Sponsor (in Dollars)

Table III - Annual Operating Results of Wells Public Programs

Table IV (Results of completed programs) has been omitted since none of
the Wells Public Programs have been liquidated.

Table V - Sales or Disposals of Property

Additional information relating to the acquisition of properties by the
Wells Public Programs is contained in Table VI, which is included in Part II of
the registration statement which the Wells REIT has filed with the Securities
and Exchange Commission. As described above, no Wells Public Program has sold or
disposed of any property held by it. Copies of any or all information will be
provided to prospective investors at no charge upon request.

The following are definitions of certain terms used in the Tables:

"Acquisition Fees" shall mean fees and commissions paid by a Wells
Public Program in connection with its purchase or development of a property,
except development fees paid to a person not affiliated with the Wells Public
Program or with a general partner or advisor of the Wells Public Program in
connection with the actual development of a project after acquisition of the
land by the Wells Public Program.

"Organization Expenses" shall include legal fees, accounting fees,
securities filing fees, printing and reproduction expenses and fees paid to the
sponsor in connection with the planning and formation of the Wells Public
Program.

"Underwriting Fees" shall include selling commissions and wholesaling
fees paid to broker-dealers for services provided by the broker-dealers during
the offering.

39

TABLE I
(UNAUDITED)

EXPERIENCE IN RAISING AND INVESTING FUNDS

This Table provides a summary of the experience of the sponsors of
Wells Public Programs for which offerings have been completed since December 31,
1997. Information is provided with regard to the manner in which the proceeds of
the offerings have been applied. Also set forth is information pertaining to the
timing and length of these offerings and the time period over which the proceeds
have been invested in the properties. All figures are as of December 31, 2000.

Wells Real          Wells Real      Wells Real Estate
Estate Fund         Estate Fund        Investment
X, L.P.            XI, L.P.          Trust, Inc.
-------            --------          -----------

Dollar Amount Raised                           $  27,128,912/(4)/  $ 16,532,802/(5)/ $ 307,411,112/(5)/
=============       ============      =============

Percentage Amount Raised                               100%/(4)/          100%/(5)/          100%/(5)/

Less Offering Expenses
Underwriting Fees                                   10.0%               9.5%               9.5%
Organizational Expenses                              5.0%               3.0%               3.0%
Reserves/(1)/                                          0.0%               0.0%               0.0%
----               ----               ----
Percent Available for Investment                    85.0%              87.5%              87.5%

Acquisition and Development Costs
Prepaid Items and Fees related to
Purchase of Property                              5.4%               0.0%               0.5%
Cash Down Payment                                   60.5%              84.0%              73.8%
Acquisition Fees/(2)/                                4.0%               3.5%               3.5%
Development and Construction Costs                  14.1%               0.0%               9.7%

Reserve for Payment of Indebtedness                    0.0%               0.0%               0.0%
----               ----               ----
Total Acquisition and Development Cost                84.0%              87.5%              87.5%

Percent Leveraged                                      0.0%               0.0%              30.9%
====               ====               ====

Date Offering Began                                12/31/96             12/31/97           01/30/98

Length of Offering                                    12 mo.              12 mo.               35mo.

Months to Invest 90% of Amount Available
for Investment (Measured from Beginning of            19 mo.              20 mo.               21mo.
Offering)

Number of Investors as of 12/31/00                    1,812                1,341              7,422

(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 X, L.P. closed its offering on
December 30, 1997, and the total dollar amount raised was $27,128,912.
(4)    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.
(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.

40

TABLE II
(UNAUDITED)
COMPENSATION TO SPONSOR

The following sets forth the compensation received by Wells Capital and
its affiliates, including compensation paid out of offering proceeds and
compensation paid in connection with the ongoing operations of Wells Public
Programs having similar or identical investment objectives the offerings of
which have been completed since December 31, 1997. All figures are as of
December 31, 2000.

Wells Real
Wells Real     Wells Real     Estate         Other
Estate Fund    Estate Fund  Investment       Public
X, L.P.       XI, L.P.    Trust, Inc./(1)/ Programs/(2)/
-------       --------    ---------------- -------------

Date Offering Commenced                           12/31/96      12/31/97          01/30/98               --

Dollar Amount Raised                           $  27,128,912  $  16,532,802    $ 307,411,112  $ 241,241,095
To Sponsor from Proceeds of Offering:
Underwriting Fees/(3)/                       $     260,748  $     151,911    $   3,076,844  $   1,233,722
Acquisition Fees
Real Estate Commissions                                --             --               --             --
Acquisition and Advisory Fees/(4)/          $   1,085,157  $     578,648    $  10,759,389  $  11,559,399

Dollar Amount of Cash Generated from
Operations
Before Deducting Payments to Sponsor/(5)/     $   6,317,750  $   2,258,811    $  20,419,727  $  50,226,112

Amount Paid to Sponsor from Operations:
Property Management Fee/(2)/                  $     186,223  $      59,759    $     664,993  $   1,869,215
Partnership Management Fee                               --             --               --             --
Reimbursements                                $     155,940  $     109,640    $     321,593  $   1,871,038
Leasing Commissions                           $     256,922  $      71,051    $     664,993  $   2,099,939
General Partner Distributions                            --             --               --             --
Other                                                    --             --               --             --

Dollar Amount of Property Sales and
Refinancing
Payments to Sponsors:
Cash                                                    --             --               --             --
Notes                                                   --             --               --             --

Amount Paid to Sponsor from Property Sales
and Refinancing:
Real Estate Commissions                                 --             --               --             --
Incentive Fees                                          --             --               --             --
Other                                                   --             --               --             --

(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. and Wells Real Estate
Fund IX, 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, 2000, the amount of such
deferred fees due the general partners totaled $2,520,040.
(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.
(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 $140,562 in net cash provided by operating activities, $5,578,104
in distributions to limited partners and $599,084 in payments to sponsor
for Wells Real Estate Fund X, L.P.; $(82,877) in net cash used by
operating activities, $2,11,238 in distributions to limited partners and
$240,450 in payments to

41

sponsor for Wells Real Estate Fund XI, L.P.; $11,052,365 in net cash
provided by operating activities, $20,880,495 in dividends and $1,651,579
in payments to sponsor for Wells Real Estate Investment Trust, Inc.; and
$1,903,465 in net cash provided by operating activities, $42,482,455 in
distributions to limited partners and $5,840,192 in payments to sponsor
for other public programs.

42

TABLE III
(UNAUDITED)

The following six tables set forth operating results of Wells Public
Programs the offerings of which have been completed since December 31, 1995. The
information relates only to public programs with investment objectives similar
to those of Wells Fund XIII. All figures are as of December 31 of the year
indicated.

43

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND VII, L.P.

2000          1999           1998          1997          1996
----          ----           ----          ----          ----

Gross Revenues/(1)/                                             $  961,858  $    982,630   $   846,306   $   816,237   $  543,291
Profit on Sale of Properties                                            --            --            --            --           --
Less: Operating Expenses/(2)/                                       78,876        85,273        85,722        76,838       84,265
Depreciation and Amortization/(3)/                                --         1,562         6,250         6,250        6,250
----------     ---------     ----------    ---------    ---------
Net Income GAAP Basis/(4)/                                      $  882,982  $    895,795   $   754,334   $   733,149   $  452,776
=========     =========     =========    =========
Taxable Income: Operations                                      $1,173,394  $  1,255,666   $ 1,109,096   $ 1,008,368   $  657,443
=========     =========     =========    =========
Cash Generated (Used By):
Operations                                                        (60,735)      (82,763)      (72,194)      (43,250)      20,883
Joint Ventures                                                  1,921,437     1,777,010     1,770,742     1,420,126      760,628
---------     ---------     ---------     ---------    ---------
1,860,702  $  1,694,247   $ 1,698,548   $ 1,376,876   $  781,511
Less Cash Distributions to Investors:
Operating Cash Flow                                             1,860,702     1,688,290     1,636,158     1,376,876      781,511
Return of Capital                                                      --            --            --         2,709       10,805
Undistributed Cash Flow from Prior Year Operations                 26,481            --            --           --            --
----------     ---------     ---------     ---------    ---------
Cash Generated (Deficiency) after Cash Distributions               (26,481) $      5,957        62,390   $    (2,709)  $  (10,805)

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                         --            --            --            --           --
Increase in Limited Partner Contributions                             --  $         --   $        --   $        --   $       --
----------     ---------     ---------     ---------    ---------
(26,481) $      5,957   $    62,390   $    (2,709)  $  (10,805)
Use of Funds:
Sales Commissions and Offering Expenses                                --            --            --            --           --
Return of Original Limited Partner's Investment                        --            --            --            --           --
Property Acquisitions and Deferred Project Costs                        0             0       181,070       169,172      736,960
----------     ---------   -----------     ---------    ---------
Cash Generated (Deficiency) after Cash
Distributions and Special Items                                $  (26,481) $      5,957   $  (118,680)  $  (171,881)  $ (747,765)
==========     =========   ===========     =========    =========

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                             63            93             85           86           62
- Operations Class B Units                                           (107)         (248)          (224)        (168)         (98)
Capital Gain (Loss)                                                    --            --             --           --           --
Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                            90            89             82           78           55
- Operations Class B Units                                          (178)         (144)          (134)        (111)         (58)
Capital Gain (Loss)                                                   --            --             --           --           --
Cash Distributions to Investors:                                                    (144)
Source (on GAAP Basis)                                                                --
- Investment Income Class A Units                                       63                           81           70           43
- Return of Capital Class A Units                                       29                           --           --           --
- Return of Capital Class B Units                                       --            83             --           --           --
Source (on Cash Basis)                                                                --
- Operations Class A Units                                              91            --             81           70           42
- Return of Capital Class A Units                                        1                           --           --            1
- Operations Class B Units                                              --                           --           --           --
Source (on a Priority Distribution Basis)/(5)/                                        83
- Investment income Class A Units                                       74            --             65           54           29
- Return of Capital Class A Units                                       18            --             16           16           14
- Return of Capital Class B Units                                       --                           --           --           --

__________

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year Reported
in the Table                                                    100%

44

(1)  Includes $457,144 in equity in earnings of joint ventures and $86,147
from investment of reserve funds in 1996, $785,398 in equity in earnings
of joint ventures and $30,839 from investment of reserve funds in 1997,
$839,037 in equity in earnings of joint ventures and $7,269 from
investment of reserve funds in 1998, $981,104 in equity in earnings of
joint ventures and $1,526 from investment of reserve funds in 1999 and
$944,165 in equity in earnings of joint ventures and $17,693 from
investment of reserve funds in 2000. As of December 31, 2000, the leasing
status was 98.7% 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 $140,533 for 1995, $605,247 for 1996, $877,869 for 1997,
$955,245 for 1998, $982,052 for 1999, and $957,862 for 2000.
(4)  In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $1,062,605 to Class A Limited
Partners, $(609,829) to Class B Limited Partners and $0 to the General
Partners for 1996; $1,615,965 to class A Limited Partners, $(882,816) to
Class B Limited Partners and $0 to the General Partners for 1997;
$1,704,213 to Class A Limited Partners, $(949,879) to Class B Limited
Partners and $0 to the General Partners for 1998; $1,879,410 to Class A
Limited Partners, $(983,615) to Class B Limited Partners and $0 to the
General Partners for 1999, and $1,286,161 to Class A Limited Partners,
$(403,179) to Class B Limited Partners and $0 to the General Partners for
2000.
(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, 2000, the aggregate
amount of such priority distributions payable to Class B Limited Partners
totaled $2,053,320.

45

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND VIII, L.P.

2000            1999            1998          1997            1996
----            ----            ----          ----            ----

Gross Revenues/(1)/                                 $ 1,373,795    $  1,360,497    $  1,362,513   $  1,204,018   $  1,057,694
Profit on Sale of Properties                                 --              --              --             --             --
Less: Operating Expenses/(2)/                            85,732          87,301          87,092         95,201        114,854
Depreciation and Amortization/(3)/                      0           6,250           6,250          6,250          6,250
-----------    ------------    ------------   ------------   ------------
Net Income GAAP Basis/(4)/                            1,288,063    $  1,266,946    $  1,269,171   $  1,102,567    $   936,590
===========    ============    ============   ============   ============
Taxable Income: Operations                            1,707,431    $  1,672,844    $  1,683,192   $  1,213,524    $ 1,001,974
===========    ============    ============   ============   ============
Cash Generated (Used By):
Operations                                             (68,968)        (87,298)        (63,946)         7,909        623,268
Joint Ventures                                       2,474,151       2,558,623       2,293,504      1,229,282        279,984
-----------    ------------    ------------   ------------   ------------
$ 2,405,183    $  2,471,325    $  2,229,558   $  1,237,191    $   903,252
Less Cash Distributions to Investors:
Operating Cash Flow                                  2,405,183       2,379,215       2,218,400      1,237,191        903,252
Return of Capital                                           --              --              --        183,315          2,443
Undistributed Cash Flow from Prior Year
Operations                                             82,180              --              --             --        225,077
-----------    ------------    ------------   ------------   ------------
Cash Generated (Deficiency) after Cash
Distributions                                      $   (82,180)   $     92,110    $     11,158   $   (183,315)   $  (227,520)

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                              --              --              --             --             --
Increase in Limited Partner Contributions/(5)/             --              --              --             --      1,898,147
-----------    ------------    ------------   ------------   ------------
$   (82,180)   $     92,110    $     11,158   $   (183,315)  $  1,670,627

Use of Funds:
Sales Commissions and Offering Expenses                     --              --              --             --        464,760
Return of Limited Partner's Investment                      --              --              --          8,600             --
Property Acquisitions and Deferred Project Costs             0               0       1,850,859     10,675,811      7,931,566
-----------    ------------    ------------   ------------   ------------
Cash Generated (Deficiency) after Cash
Distributions and Special Items                    $   (82,180)   $     92,110    $ (1,839,701)  $(10,867,726)  $ (6,725,699)
===========    ============    ============   ============   ============
Net Income and Distributions Data per $1,000
Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                 84              91              91             73             46
- Operations Class B Units                               (219)           (247)           (212)          (150)           (47)
Capital Gain (Loss)                                        --              --              --             --             --

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                 89              88              89             65             46
- Operations Class B Units                               (169)            154            (131)           (95)           (33)
Capital Gain (Loss)                                        --              --              --             --             --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                          83              87              83             54             43
- Return of Capital Class A Units                           7              --              --             --             --
- Return of Capital Class B Units                          --              --              --             --             --
Source (on Cash Basis)
- Operations Class A Units                                 87              87              83             47             43
- Return of Capital Class A Units                           3              --              --              7              0
- Operations Class B Units                                 --              --              --             --             --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                          73              70              69             42             33
- Return of Capital Class A Units                          17              17              16             12             10
- Return of Capital Class B Units                          --              --              --             --             --

Amount (in Percentage Terms) Remaining Invested
in Program Properties at the end of the Last Year
Reported in the Table                                       100%

46

(1)  Includes $241,819 in equity in earnings of joint ventures and $815,875 from
investment of reserve funds in 1996, $1,034,907 in equity in earnings of
joint ventures and $169,111 from investment of reserve funds in 1997,
$1,346,367 in equity in earnings of joint ventures and $16,146 from
investment of reserve funds in 1998, $1,360,494 in equity in earnings of
joint ventures and $3 from investment of reserve funds in 1999 and
$1,363,174 in equity in earnings of joint ventures and $10,621 from
investment of reserve funds in 2000. As of December 31, 2000, 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 $265,259 for 1996, $841,666 for 1997, $1,157,355 for 1998,
$1,209,171 for 1999 and $1,173,630 for 2000.
(4)  In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $1,207,540 to Class A Limited
Partners, $(270,653) to Class B Limited Partners and $(297) to the General
Partners for 1996; $1,947,536 to Class A Limited Partners, $(844,969) to
Class B Limited Partners and $0 to the General Partners for 1997;
$2,431,246 to Class A Limited Partners, $(1,162,075) to Class B Limited
Partners and $0 to the General Partners for 1998; $2,481,559 to Class A
Limited Partners, $(1,214,613) to Class B Limited Partners and $0 to the
General Partners for 1999, and $2,294,288 to Class A Limited Partners,
$(1,006,225) to Class B Limited Partners and $0 to the General Partners for
2000.
(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, 2000, the aggregate amount of
such priority distributions payable to Class B Limited Partners totaled
$1,940,951.

47

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS

WELLS REAL ESTATE FUND IX, L.P.

2000            1999           1998          1997           1996
----            ----           ----          ----           ----

Gross Revenues/(1)/                                    $1,836.768    $1,593,734     $ 1,561,456   $  1,199,300  $   406,891
Profit on Sale of Properties                                   --            --              --             --           --
Less:    Operating Expenses/(2)/                           78,092        90,903         105,251        101,284      101,885
Depreciation and Amortization/(3)/                         0        12,500           6,250          6,250        6,250
----------    ----------     -----------   ------------  -----------
Net Income GAAP Basis/(4)/                             $1,758,676    $1,490,331     $ 1,449,955   $  1,091,766  $   298,756
==========    ==========     ===========   ============  ===========
Taxable Income: Operations                             $2,147,094    $1,924,542     $ 1,906,011   $  1,083,824  $   304,552
==========    ==========     ===========   ============  ===========
Cash Generated (Used By):
Operations                                           $  (66,145)   $  (94,403)    $    80,147   $    501,390  $   151,150
Joint Ventures                                        2,831,329     2,814,870       2,125,489        527,390           --
----------    ----------     -----------   ------------  -----------
$2,765,184    $2,720,467     $ 2,205,636   $  1,028,780  $   151,150
Less Cash Distributions to Investors:
Operating Cash Flow                                   2,707,684     2,720,467       2,188,189      1,028,780      149,425
Return of Capital                                            --        15,528              --         41,834           --
Undistributed Cash Flow From Prior Year Operations           --        17,447              --          1,725           --
----------    ----------     -----------   ------------  -----------
Cash Generated (Deficiency) after Cash Distributions   $   57,500    $  (32,975)    $    17,447   $    (43,559) $     1,725

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                               --            --              --             --           --
Increase in Limited Partner Contributions                   --            --              --             --   35,000,000
----------    ----------     -----------   ------------  -----------
$   57,500    $  (32,975)    $    17,447   $    (43,559) $35,001,725
Use of Funds:
Sales Commissions and Offering Expenses                      --            --              --        323,039    4,900,321
Return of Original Limited Partner's Investment              --            --              --            100           --
Property Acquisitions and Deferred Project Costs         44,357       190,853       9,455,554     13,427,158    6,544,019
----------    ----------      ----------   ------------  -----------
Cash Generated (Deficiency) after Cash Distributions
and Special Items                                      $   13,143    $ (223,828)    $(9,438,107)  $(13,793,856) $23,557,385
==========    ==========     ===========   ============  ===========

Net Income and Distributions Data per $1,000
Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                  93            89              88             53           28
- Operations Class B Units                                (267)         (272)           (218)           (77)         (11)
Capital Gain (Loss)                                         --            --              --             --           --

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                  91            86              85             46           26
- Operations Class B Units                                (175)         (164)           (123)           (47)         (48)
Capital Gain (Loss)                                         --            --              --             --           --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                             87            88              73             36           13
- Return of Capital Class A Units                             --             2              --             --           --
- Return of Capital Class B Units                             --            --              --             --           --
Source (on Cash Basis)
- Operations Class A Units                                    87            89              73             35           13
- Return of Capital Class A Units                             --             1              --              1           --
- Operations Class B Units                                    --            --              --             --           --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                             76            77              61             29           10
- Return of Capital Class A Units                             11            13              12              7            3
- Return of Capital Class B Units                             --            --              --             --           --

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year                100%
Reported in the Table

(1)  Includes $23,077 in equity in earnings of joint ventures and $383,884 from
investment of reserve funds in 1996, and $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

48

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. As of December 31, 2000, 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 $25,286 for 1996, $469,126 for 1997, $1,143,407 for 1998,
$1,210,939 for 1999, and $1,100,915 for 2000.
(4)  In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $330,270 to Class A Limited
Partners, $(31,220) to Class B Limited Partners and $(294) to the General
Partners for 1996; $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, and $2,858,806 to the Class A Limited Partners,
$(1,100,130) to Class B Limited Partners and $0 to the General Partners for
2000.
(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, 2000, the aggregate amount of such priority
distributions payable to Class B Limited Partners totaled $1,332,403.

49

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS

WELLS REAL ESTATE FUND X, L.P.

2000               1999             1998          1997             1996
----               ----             ----          ----             ----

Gross Revenues/(1)/                                    $1,557,518       $ 1,309,281      $  1,204,597    $   372,507          N/A
Profit on Sale of Properties                                   --                --                --             --
Less:    Operating Expenses/(2)/                           81,338            98,213            99,034         88,232
Depreciation and Amortization/(3)/                         0            18,750            55,234          6,250
----------       -----------      ------------    -----------
Net Income GAAP Basis/(4)/                             $1,476,180       $ 1,192,318      $  1,050,329    $   278,025
==========       ===========      ============    ===========
Taxable Income: Operations                             $1,692,792       $ 1,449,771      $  1,277,016    $   382,543
==========       ===========      ============    ===========
Cash Generated (Used By):
Operations                                              (59,595)          (99,862           300,019        200,668
Joint Ventures                                        2,192,397         2,175,915           886,846             --
----------       -----------      ------------    -----------
$2,132,802       $ 2,076,053      $  1,186,865    $   200,668
Less Cash Distributions to Investors:

Operating Cash Flow                                   2,103,260         2,067,801         1,186,865             --
Return of Capital                                            --                --            19,510             --
Undistributed Cash Flow From Prior Year Operations           --                --           200,668             --
----------       -----------      ------------    -----------
Cash Generated (Deficiency) after Cash Distributions   $   29,542       $     8,252      $   (220,178)   $   200,668

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                               --               --                 --             --
Increase in Limited Partner Contributions                                    --                 --     27,128,912
----------       ----------       ------------    -----------
$   29,542       $    8,252       $   (220,178)   $27,329,580
Use of Funds:
Sales Commissions and Offering Expenses                      --               --            300,725      3,737,363
Return of Original Limited Partner's Investment              --               --                 --            100
Property Acquisitions and Deferred Project Costs         81,022                0         17,613,067      5,188,485
----------       ----------       ------------    -----------
Cash Generated (Deficiency) after Cash Distributions
and Special Items                                      $  (51,480)      $    8,252       $(18,133,970)   $18,403,632
==========       ==========       ============    ===========

Net Income and Distributions Data per $1,000
Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)                                     104               97                 85             28
- Operations Class A Units                                (159)            (160)              (123)            (9)
- Operations Class B Units                                  --               --                 --             --
Capital Gain (Loss)

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                  98               92                 78             35
- Operations Class B Units                                (107)            (100)               (64)             0
Capital Gain (Loss)                                         --               --                 --             --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                             94               95                 66             --
- Return of Capital Class A Units                             --               --                 --             --
- Return of Capital Class B Units                             --               --                 --             --
Source (on Cash Basis)
- Operations Class A Units                                    94               95                 56             --
- Return of Capital Class A Units                             --               --                 10             --
- Operations Class B Units                                    --               --                 --             --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                             74               71                 48             --
- Return of Capital Class A Units                             20               24                 18             --
- Return of Capital Class B Units                             --               --                 --             --

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year                100%
Reported in the Table

50

(1)  Includes $(10,035) in equity in earnings of joint ventures and $382,542
from investment of reserve funds in 1997, and $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, and 1,547,664 in equity in earnings of
joint ventures and $9,854 from investment of reserve funds in 2000. As of
December 31, 2000, 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, and
$816,544 for 2000.
(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, and $2,292,724 to Class A
Limited Partners, $(816,544) to Class B Limited Partners and $0 to the
General Partners for 2000.
(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, 2000, the aggregate amount of
such priority distributions payable to Class B Limited Partners totaled
$1,354,118.

51

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND XI, L.P.

2000            1999           1998          1997    1996
----            ----           ----          ----    ----

Gross Revenues/(1)/                                                 $   975,850    $    766,586   $    262,729          N/A     N/A
Profit on Sale of Properties                                                 --              --             --
Less: Operating Expenses/(2)/                                            79,861         111,058        113,184
Depreciation and Amortization/(3)/                                     --          25,000          6,250
----------    ----------
Net Income GAAP Basis/(4)/                                          $   895,989    $    630,528   $    143,295
-----------    ============   ============
Taxable Income: Operations                                          $   944,775    $    704,108   $    177,692
===========    ============   ============
Cash Generated (Used By):
Operations                                                            (72,925)         40,906        (50,858)
Joint Ventures                                                      1,333,337         705,394        102,662
------------   ------------
$ 1,260,412    $    746,300   $     51,804
Less Cash Distributions to Investors:
Operating Cash Flow                                                  1,205,303         746,300         51,804
Return of Capital                                                           --          49,761         48,070
Undistributed Cash Flow From Prior Year Operations                          --              --             --
-----------    ------------   -------------
Cash Generated (Deficiency) after Cash Distributions                $    55,109    $    (49,761)  $    (48,070)

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                               --              --             --
Increase in Limited Partner Contributions                                   --              --     16,532,801
-----------    ------------   ------------
$    55,109    $    (49,761)  $ 16,484,731
Use of Funds:
Sales Commissions and Offering Expenses                                     --         214,609      1,779,661
Return of Original Limited Partner's Investment                             --             100             --
Property Acquisitions and Deferred Project Costs                                     9,005,979      5,412,870
-----------    ------------   ------------
Cash Generated (Deficiency) after Cash Distributions and
Special Items                                                      $    55,109    $ (9,270,449)  $  9,292,200
===========    =============  ============

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                                 103              77             50
- Operations Class B Units                                                (155)           (112)           (77)
Capital Gain (Loss)                                                         --              --             --

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                                  97              71             18
- Operations Class B Units                                                (112)            (73)           (17)
Capital Gain (Loss)                                                         --              --             --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                            90              60              8
- Return of Capital Class A Units                                            --              --             --
- Return of Capital Class B Units                                            --              --             --
Source (on Cash Basis)
- Operations Class A Units                                                   90              56              4
- Return of Capital Class A Units                                            --               4              4
- Operations Class B Units                                                   --              --             --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                                            69              46              6
- Return of Capital Class A Units                                            21              14              2
- Return of Capital Class B Units                                            --              --             --

Amount (in Percentage Terms) Remaining Invested in

Program Properties at the end of the Last Year Reported                     100%
in the Table

52

(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
and $967,900 in equity in earnings of joint ventures and $7,950 from
investment of reserve funds in 2000. As of December 31, 2000, 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, and $485,558 for
2000.
(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, and
$1,381,547 to Class A Limited Partners, $(485,558) to Class B Limited
Partners and $0 to General Partners for 2000.
(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, 2000, the aggregate
amount of such priority distributions payable to Class B Limited Partners
totaled $493,292.

53

TABLE V (UNAUDITED)
SALES OR DISPOSAL OF PROPERTIES

The following Table sets forth sales or other disposals of properties by
Wells Public Programs within the most recent three years. The information
relates to only public programs with investment objectives similar to those of
Wells Real Estate Investment Trust, Inc. All figures are as of December 31,
2000.

Excess
(Deficiency)
Of Property
Operating
Cost Of         Cash
Properties     Receipts
Date      Date                                                                            Including        Over
Acquired     Of               Selling Price, Net Of                                        Closing And       Cash
Property                   Sale        Closing Costs And GAAP Adjustments                                  Soft Costs   Expenditures
====================================================================================================================================

Total
Cash                           Adjustments                           Acquisition
Received   Mortgage   Purchase    Resulting                               Cost,
Net Of     Balance     Money       From                    Original     Capital
Closing     At Time   Mortgage   Application                Mortgage  Improvement,
Costs      Of Sale     Taken      Of GAAP     Total/1/    Financing   Closing And    Total
Back By                                         Soft Costs/2/
Program
====================================================================================================================================

3875           12/1/85    08/31/00  $704,496     -0-        -0-         -0-         $704,496     -0-         $647,648   $647,648
Peachtree
Place,
Atlanta,
Georgia

_____________________________________
/1/  Includes Wells Real Estate Fund I's share of taxable gain from this sale in
the amount of $184,161, of which $184,161 is allocated to capital gain and
$0 is allocated to ordinary gain.
/2/  Amount shown does not include pro rata share of original offering costs.

54

WELLS REAL ESTATE INVESTMENT TRUST, INC.
SUPPLEMENT NO. 3 DATED JULY 20, 2001 TO THE PROSPECTUS
DATED DECEMBER 20, 2000

This document supplements, and should be read in conjunction with, the
prospectus of Wells Real Estate Investment Trust, Inc. dated December 20, 2000,
as supplemented and amended by Supplement No. 1 dated February 5, 2001 and
Supplement No. 2 dated April 25, 2001.  When we refer to the "prospectus" in
this supplement, we are also referring to any and all supplements to the
prospectus.  Unless otherwise defined in this supplement, capitalized terms used
in this supplement shall have the same meanings as set forth in the prospectus.

The purpose of this supplement is to describe the following:

(1)  The status of the offering of shares in Wells Real Estate Investment
Trust, Inc. (Wells REIT);

(2)  The acquisition of an interest in an office building in Nashville,
Tennessee (Comdata Building);

(3)  The acquisition of an interest in an office building in Jacksonville,
Florida (AmeriCredit Building);

(4)  The Joint Venture Partnership Agreement entered into between Wells
Real Estate Fund XIII, L.P. (Wells Fund XIII) and Wells Operating
Partnership, L.P. (Wells OP);

(5)  Revisions to the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" section of the prospectus;

(6)  Revisions to the "Plan of Distribution" section of the prospectus
relating to the issuance of soliciting dealer warrants; and

(7)  Financial statements relating to the Comdata Building and the
AmeriCredit Building.

Status of the Offering

We commenced our initial public offering of common stock on January 30,
1998. Our initial public offering was terminated on December 19, 1999. We
received approximately $132,181,919 in gross offering proceeds from the sale of
13,218,192 shares in our initial public offering. We commenced a second offering
of common stock on December 20, 1999. Our second public offering was terminated
on December 19, 2000. We received approximately $175,229,193 in gross offering
proceeds from the sale of 17,522,919 shares in our second public offering.

Pursuant to the prospectus, we commenced our third offering of common stock
on December 20, 2000. As of June 30, 2001, we had received an additional
$170,293,567 in gross offering proceeds from the sale of 17,029,357 shares in
the third offering. Accordingly, as of June 30, 2001, we had received in the
aggregate approximately $477,704,679 in gross offering proceeds from the sale of
47,770,468 shares of our common stock.

The Comdata Building

Purchase of the Comdata Building.  On May 15, 2001, the Wells Fund XII - REIT
--------------------------------
Joint Venture Partnership (Fund XII - REIT Joint Venture), a joint venture
between Wells Real Estate Fund XII, L.P. (Wells Fund XII) and Wells Operating
Partnership, L.P. (Wells OP), the operating partnership for Wells REIT, acquired
a three-story office building containing approximately 201,237 rentable square
feet located at 5301 Maryland Way, Williamson County, Brentwood, Tennessee
(Comdata Building). The Fund XII -

1

REIT Joint Venture purchased the Comdata Building from The Northwestern Mutual
Life Insurance Company (Northwestern) pursuant to that certain Agreement for the
Purchase and Sale of Property between Northwestern and Wells Capital, Inc.
(Wells Capital), the Advisor to Wells REIT. Northwestern is not in any way
affiliated with Wells REIT or its Advisor.

Wells Capital, the original purchaser under the agreement, assigned its
rights under the agreement to the Fund XII - REIT Joint Venture at closing. The
Fund XII - REIT Joint Venture paid a purchase price of $24,950,000 for the
Comdata Building and incurred additional acquisition expenses in connection with
the purchase of the Comdata Building, including attorneys' fees, recording fees
and other closing costs, of approximately $52,019.

Wells Fund XII made a capital contribution of $8,926,156 and Wells OP made
a capital contribution of $16,075,863 to the Fund XII - REIT Joint Venture to
fund their respective shares of the acquisition costs for the Comdata Building.
As of June 30, 2001, Wells OP had made total capital contributions to the Fund
XII- REIT Joint Venture of $29,928,078 and held an equity percentage interest in
the joint venture of approximately 55%, and Wells Fund XII had made total
capital contributions to the Fund XII - REIT Joint Venture of $24,613,401 and
held an equity percentage interest in the joint venture of approximately 45%.

Description of the Comdata Building and the Site.  As set forth above, the
------------------------------------------------
Comdata Building is a three-story office building containing approximately
201,237 rentable square feet situated on a 12.3 acre tract of land. Construction
of the Comdata Building was originally completed in 1989, and the building was
subsequently expanded in 1997. The Comdata Building is constructed using a steel
frame with steel beams on a concrete slab with concrete footings. The exterior
walls are made of a brick shell with an insulated ribbon window system on
aluminum mullions. The interior walls consist of textured and painted gypsum
board. In addition, the building contains five passenger elevators and a freight
elevator. There are approximately 750 paved surface parking spaces at the site.

The Comdata Building is located in the Maryland Farms Office Park in
Brentwood, Tennessee. Maryland Farms Office Park is located eight miles south of
downtown Nashville, Tennessee. The Nashville area is known for its competitive
real estate prices, available space for business, and diversified economic base.
Nashville's business areas of strength include manufacturing, publishing,
finance and insurance, healthcare management, music, transportation and tourism.
The Brentwood submarket is one of Nashville's most desired locations.

An independent appraisal of the Comdata Building was prepared by CB Richard
Ellis, Inc., real estate appraisers and consultants, as of April 9, 2001,
pursuant to which the market value of the land and the leased fee interest
subject to the Comdata lease (described below) was estimated to be $25,000,000,
in cash or terms equivalent to cash. This value estimate was based upon a number
of assumptions, including that the Comdata Building will continue operating at a
stabilized level with Comdata Network, Inc. ("Comdata") occupying 100% of the
rentable area, and is not necessarily an accurate reflection of the fair market
value of the property or the net proceeds which would result from an immediate
sale of this property. The Fund XII - REIT Joint Venture also obtained an
environmental report and an engineering inspection report prior to the closing
evidencing that the condition of the land and the Comdata Building were
satisfactory.

The Comdata Lease.  The entire 201,237 rentable square feet of the three-story
-----------------
office building is currently under a triple-net lease agreement with Comdata, a
wholly owned subsidiary of Ceridian Corporation, the guarantor of the lease. The
landlord's interest in the Comdata lease was assigned to the Fund XII - REIT
Joint Venture at the closing. The Comdata lease commenced on April 1, 1997, and
the current term expires on May 31, 2016. Comdata has the right to extend the
Comdata lease for one additional five-year period of time at a rate equal to the
greater of the base rent of the final year of the initial term or 90% of the
then-current fair market rental rate.

2

Comdata is a leading provider of transaction processing and information
services to the transportation and other industries. Comdata provides trucking
companies with fuel cards, electronic cash access, permit and licensing
services, routing software, driver relationship services and vehicle escorts,
among other services. Comdata provides these services to over 400,000 drivers,
7,000 truck stop service centers and 500 terminal fueling locations.

Ceridian Corporation, the lease guarantor, is one of North America's
leading information services companies that serves the human resources and
transportation markets. Ceridian and its subsidiaries generate, process and
distribute data for customers and help customers develop systems plans and
software to perform these functions internally. For the fiscal year ended
December 31, 2000, Ceridian reported net income of approximately $100.2 million
on revenues of over $1.175 billion.

The base rent payable for the current term of the Comdata lease is as
follows:

Lease Years         Annual Rent        Annual Rent Per Square Foot
-------------------------------------------------------------------
Year 1               $2,398,672                   $11.92
-------------------------------------------------------------------
Years 2-6            $2,458,638                   $12.22
-------------------------------------------------------------------
Years 7-11           $2,518,605                   $12.52
-------------------------------------------------------------------
Years 12-15          $2,578,572                   $12.81
-------------------------------------------------------------------

Under the Comdata lease, Comdata is required to pay all operating expenses,
including but not limited to, gas, water and electricity costs, garbage and
waste disposal, telephone, janitorial service, security, insurance premiums, all
taxes, assessments and other governmental levies and such other operating
expenses with respect to the Comdata Building. In addition, Comdata is
responsible for all routine maintenance and repairs to the Comdata Building. The
Fund XII - REIT Joint Venture, as landlord, will be responsible for the repair
and maintenance of the roof and structural systems of the Comdata Building.
Comdata must obtain written consent from the Fund XII - REIT Joint Venture
before making any alterations to the premises excluding alterations that (i) are
made to the interior tenant space of the Comdata Building, (ii) do not adversely
affect the structural integrity or the exterior of the Comdata Building, (iii)
do not affect common areas of the Comdata Building including but not limited to
the elevators and lobby, and (iv) do not adversely affect the electrical,
heating or plumbing systems of the Comdata Building.

Property Management Fees.  Wells Management Company, Inc. (Wells Management), an
------------------------
affiliate of the Wells REIT, has been retained to manage and lease the Comdata
Building. The Fund XII - REIT Joint Venture will pay management and leasing fees
to Wells Management in the amount of 4.5% of gross revenues from the Comdata
Building, subject to certain limitations.

The Wells Fund XIII - REIT Joint Venture

On June 27,  2001, Wells OP and Wells Real Estate Fund XIII, L.P. (Wells
Fund XIII) entered into a Joint Venture Partnership Agreement for the purpose of
acquiring, owning, leasing, operating and managing real properties. The joint
venture partnership is known as the Wells Fund XIII - REIT Joint Venture (XIII-
REIT Joint Venture). All income, loss, profit, net cash flow, resale gain and
sale proceeds of the XIII-REIT Joint Venture are allocated and distributed
between Wells OP and Wells Fund XIII based upon their respective capital
contributions to the joint venture.

Wells OP is acting as the initial Administrative Venturer of the XIII-REIT
Joint Venture and, as such, is responsible for establishing policies and
operating procedures with respect to the business and affairs of the joint
venture. However, approval of Wells Fund XIII will be required for any major
decision or any action which materially affects such joint venture or its real
properties.

3

The AmeriCredit Building

Purchase of the AmeriCredit Building.  On July 16, 2001, the XIII-REIT Joint
-------------------------------------
Venture acquired a two-story office building containing approximately 85,000
rentable square feet located in Fleming Island Plantation at 2310 Village Square
Parkway, Orange Park, Clay County, Florida (AmeriCredit Building) from Adevco
Contact Centers Jacksonville, L.L.C. (Adevco) pursuant to that certain Agreement
for the Purchase and Sale of Property between Adevco and Wells Capital, the
Advisor. Adveco is not affiliated with the Wells REIT or its Advisor.

The rights under the agreement were assigned by Wells Capital, the original
purchaser under the agreement, to the XIII-REIT Joint Venture at closing. The
purchase price paid for the AmeriCredit Building was $12,500,000. The joint
venture also incurred additional acquisition expenses in connection with the
purchase of the AmeriCredit Building, including attorneys' fees, recording fees
and other closing costs, of approximately $40,700.

Wells OP contributed $10,890,040 and Wells Fund XIII contributed $1,651,426
to the XIII-REIT Joint Venture for their respective shares of the acquisition
costs for the AmeriCredit Building. As of July 16, 2001, Wells OP held an equity
percentage interest in the XIII-REIT Joint Venture of approximately 87%, and
Wells Fund XIII held an equity percentage interest in the XIII-REIT Joint
Venture of approximately 13%.

Description of the Building and the Site.  The AmeriCredit Building is a two-
----------------------------------------
story office building containing approximately 85,000 rentable square feet. The
AmeriCredit Building, which was completed in June 2001, is constructed using a
steel frame with steel beams on a concrete slab with concrete footings. The
exterior walls are made with steel beams with tilt-up concrete panels and a
glass panel exterior. The office entrances and windows are made of plate glass
set in aluminum frames. The interior walls consist of textured and painted
gypsum board. In addition, the building contains two elevators, one of which can
be used as a freight elevator. There are approximately 680 asphalt paved surface
parking spaces at the site.

An independent appraisal of the AmeriCredit Building was prepared by CB
Richard Ellis, Inc., real estate appraisers, as of June 28, 2001, pursuant to
which the market value of the land and the leased fee interest subject to the
AmeriCredit lease (described below) was estimated to be $12,500,000, in cash or
terms equivalent to cash. This value estimate was based upon a number of
assumptions, including that the AmeriCredit Building will continue operating at
a stabilized level with AmeriCredit Financial Services Corporation (AmeriCredit)
occupying 100% of the rentable area, and is not necessarily an accurate
reflection of the fair market value of the property. The XIII-REIT Joint Venture
also obtained an environmental report prior to closing evidencing that the
environmental condition of the land and the AmeriCredit Building were
satisfactory.

Location of the AmeriCredit Building.  The AmeriCredit Building is located on a
------------------------------------
12.33 acre tract of land approximately 20 miles south of downtown Jacksonville
within Fleming Island Plantation on the west side of U.S. Highway 17 in northern
Clay County, Florida. Fleming Island Plantation is a 2,300-acre mixed use
development of Centex Homes. When fully developed, Fleming Island Plantation
will contain 12 villages of homes, a YMCA Wellness Center, an 18-hole golf
course, several schools and 140 acres of parks. BellSouth has a 300,000 square
foot technical service center in the area.

The Lease.  The entire 85,000  rentable square feet of the AmeriCredit Building
---------
is currently under a triple-net lease agreement with AmeriCredit dated November
20, 2000. The landlord's interest in the AmeriCredit lease was assigned to the
XIII-REIT Joint Venture at the closing.

The initial term of the AmeriCredit lease is ten years which commenced June
2001 and expires in May 2011. AmeriCredit has the right to extend the
AmeriCredit lease for two additional five year periods of

4

time. Each extension option must be exercised by giving written notice to the
landlord at least 12 months prior to the expiration date of the then current
lease term.

AmeriCredit is wholly-owned by and serves as the primary operating
subsidiary for AmeriCredit Corp., a Texas corporation whose common stock is
publicly traded on the New York Stock Exchange. AmeriCredit Corp. is the
guarantor of the lease. AmeriCredit is the world's largest independent middle-
market automobile finance company. AmeriCredit purchases loans made by
franchised and select independent dealers to consumers buying late model used
and, to a lesser extent, new automobiles. AmeriCredit targets consumers who are
typically unable to obtain financing from traditional sources either because of
prior credit difficulties or limited credit histories. Funding for AmeriCredit's
auto lending activities is obtained primarily through the sale of loans in
securitization transactions. AmeriCredit services its automobile lending
portfolio at regional centers using automated loan servicing and collection
systems.

For the nine months ended March 31, 2001, AmeriCredit Corp. reported net
income of $151 million on revenues of $575 million and a net worth, as of March
31, 2001, of approximately $929 million.

The base rent payable under the AmeriCredit lease will be as follows:

Lease Year       Rental Rate       Annual Rent         Monthly Rent
------------------------------------------------------------------------
Year 1              $14.33          $1,201,050          $100,087.50
------------------------------------------------------------------------
Year 2              $14.69          $1,231,501          $102,625.08
------------------------------------------------------------------------
Year 3              $15.06          $1,262,714          $105,226.17
------------------------------------------------------------------------
Year 4              $15.43          $1,294,707          $107,892.25
------------------------------------------------------------------------
Year 5              $15.82          $1,327,499          $110,624.92
------------------------------------------------------------------------
Year 6              $16.21          $1,361,112          $113,426.00
------------------------------------------------------------------------
Year 7              $16.62          $1,395,565          $116,297.08
------------------------------------------------------------------------
Year 8              $17.03          $1,430,879          $119,239.92
------------------------------------------------------------------------
Year 9              $17.46          $1,467,076          $122,256.33
------------------------------------------------------------------------
Year 10             $17.90          $1,504,178          $125,348.17
------------------------------------------------------------------------

The monthly base rent payable for each extended term of the AmeriCredit
lease will be equal to 95% of the then current market rate.

Under the AmeriCredit lease, AmeriCredit is required to pay as additional
rent all real estate taxes, special assessments, utilities, taxes, insurance and
other operating costs with respect to the AmeriCredit Building during the term
of the lease. In addition, AmeriCredit is responsible for all routine
maintenance and repairs including the interior mechanical and electrical
systems, the HVAC system and common area maintenance to the AmeriCredit
Building. The XIII-REIT Joint Venture, as landlord, is responsible for repair
and replacement of the roof, foundation, structural, exterior windows, parking
lot, driveways and light poles, as well as payment of a monthly 7% sales tax on
rental income. AmeriCredit will reimburse the XIII-REIT Joint Venture for the
sales tax through increased rental income. The rental figures above are net of
the sales tax and maintenance reserve.

The AmeriCredit lease contains a termination option which may be exercised
by AmeriCredit effective as of the end of the seventh lease year by providing 12
months prior notice to the XIII-REIT Joint Venture. If AmeriCredit exercises its
termination option, it will be required to pay the joint venture a termination
payment equal to the sum of (i) an amount equal to two months base rent
calculated at the annual rate of $17.18 per square foot, plus (ii) an amount
equal to the aggregate of the unamortized balances of the construction
allowance, design allowance, sign allowance, and brokerage commissions. It is
estimated that if AmeriCredit were to exercise its early termination option, the
termination payment would be approximately $1.9 million which would equate to
nearly 16 months of rent.

AmeriCredit also has an expansion option for an additional 15,000 square
feet of office space and 120 parking spaces. AmeriCredit may exercise this
expansion option at any time during the first seven

5

lease years. The rights and obligations of each party under the expansion option
are subject to the parties reaching agreement relating to the expansion space
and additional parking and the leasing of such space by AmeriCredit within 45
days of receipt by the XIII-REIT Joint Venture of written notice of the
expansion option.

Property Management Fees.  Wells Management has been retained to manage and
------------------------
lease the AmeriCredit Building. The XIII-REIT Joint Venture shall pay management
and leasing fees to Wells Management in the amount of 4.5% of gross revenues
from the AmeriCredit Building, subject to certain limitations.

Management's Discussion and Analysis of Financial Condition and Results of
Operation

The information contained on page 98 in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources" section of the prospectus is revised as of the date of this
supplement by the deletion of the first two paragraphs of that section and the
insertion of the following paragraphs in lieu thereof:

We began active operations on June 5, 1998, when we received and
accepted subscriptions for 125,000 shares pursuant to our initial public
offering, which commenced on January 30, 1998. We terminated our initial
public offering on December 19, 1999. Of the $132,181,919 raised in the
initial offering, we invested a total of $111,032,812 in properties. On
December 20, 1999, we commenced a second public offering of up to
22,200,000 shares of common stock at $10 per share. We terminated our
second offering on December 19, 2000. Of the $175,229,193 raised in the
second offering, we invested a total of $147,192,522 in properties.

Pursuant to the prospectus, we commenced this third offering of shares
of our common stock on December 20, 2000. As of June 30, 2001, we had
received an additional $170,293,567 in gross offering proceeds from the
sale of 17,029,357 shares in the third offering. As of June 30, 2001, we
had raised in the aggregate a total of $477,704,679 in offering proceeds
through the sale of 47,770,468 shares of common stock. As of June 30, 2001,
we had paid a total of $16,621,295 in acquisition and advisory fees and
acquisition expenses, had paid a total of $59,361,769 in selling
commissions and organizational and offering expenses, had made capital
contributions of $395,004,216 to Wells OP for investments in joint ventures
and acquisitions of real property, had utilized $2,810,530 for the
redemption of stock pursuant to our share redemption program, and were
holding net offering proceeds of $3,906,869 available for investment in
additional properties.

Plan of Distribution

The information contained on page 153 in the "Plan of Distribution" section
of the prospectus is revised as of the date of this supplement by the deletion
of the third full paragraph of this section and the insertion of the following
paragraph in lieu thereof:

We will also award to the Dealer Manager one soliciting dealer warrant
for every 25 shares sold to the public or issued to shareholders pursuant
to our dividend reinvestment plan during the offering period. The Dealer
Manager may retain or reallow these warrants to broker-dealers
participating in the offering, unless such issuance of soliciting dealer
warrants is prohibited by either federal or state securities laws. The
holder of a soliciting dealer warrant will be entitled to purchase one
share from the Wells REIT at a price of $12 per share during the period
beginning on the first anniversary of the effective date of this offering
and ending five years after the effective date of this offering. Subject to
certain exceptions, a soliciting dealer warrant may not be transferred,
assigned, pledged or hypothecated for a period of one year following the
effective date of this offering. The shares issuable upon exercise of the
soliciting

6

dealer warrants are being registered as part of this offering. For the
life of the soliciting dealer warrants, participating broker-dealers
are given the opportunity to profit from a rise in the market price
for the common stock without assuming the risk of ownership, with a
resulting dilution in the interest of other shareholders upon exercise
of such warrants. In addition, holders of the soliciting dealer
warrants would be expected to exercise such warrants at a time when we
could obtain needed capital by offering new securities on terms more
favorable than those provided by the soliciting dealer warrants.
Exercise of the soliciting dealer warrants is governed by the terms
and conditions detailed in this prospectus and in the Warrant Purchase
Agreement, which is an exhibit to the Registration Statement.

Financial Statements

The statements of revenues over certain operating expenses of the
Comdata Building for the year ended December 31, 2000, included in this
supplement and elsewhere in the registration statement, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included in this supplement in reliance
upon the authority of said firm as experts in giving said reports.

The statements of revenues over certain operating expenses of the
Comdata Building for the three months ended March 31, 2001, included in this
supplement and elsewhere in the registration statement, have not been audited.

The Pro Forma Balance Sheet of the Wells REIT as of March 31, 2001,
which is included in this supplement, has not been audited.

The Pro Forma Statement of Income of the Wells REIT for the three
months ended March 31, 2001 and for the year ended December 31, 2000, which are
included in this supplement, have not been audited.

7

INDEX TO FINANCIAL STATEMENTS

The Comdata Building                                                     Page
----

Report of Independent Accountants                                   9

Statements of Revenues Over Certain Operating Expenses              10
for the year ended December 31, 2000 (audited) and for the
three months ended March 31, 2001 (unaudited)

Notes to Statements of Revenues Over Certain Operating              11
Expenses for the year ended December 31, 2000 (audited) and
for the three months ended March 31, 2001 (unaudited)

Wells Real Estate Investment Trust, Inc.

Unaudited Pro Forma Financial Statements
----------------------------------------

Summary of Unaudited Pro Forma Financial Statements                 12

Pro Forma Balance Sheet as of March 31, 2001                        13

Pro Forma Statement of Income for the three months
ended March 31, 2001                                                15

Pro Forma Statement of Income for the year ended
December 31, 2000                                                   16

8

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Fund XII, L.P. and
Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the COMDATA BUILDING for the year ended December 31, 2000. This
financial statement is the responsibility of management. Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. These standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit also
includes assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Comdata
Building after acquisition by the Wells Fund XII - REIT Joint Venture. The
accompanying statement of revenues over certain operating expenses was prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission and is not intended to be a complete presentation of the
Comdata Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Comdata Building for the year ended December 31, 2000, in
conformity with accounting principles generally accepted in the United States.

/s/ Arthur Andersen LLP

Atlanta, Georgia
May 18, 2001

9

COMDATA BUILDING

STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2000

AND THE THREE MONTHS ENDED MARCH 31, 2001

2001           2000
------------     ----------
(Unaudited)

RENTAL REVENUES                                        $614,660      $2,458,638

OPERATING EXPENSES, net of reimbursements                20,404           5,468
--------      ----------
REVENUES OVER CERTAIN OPERATING EXPENSES               $594,256      $2,453,170
========      ==========

The accompanying notes are an integral part of these statements.

10

COMDATA BUILDING

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2000

AND THE THREE MONTHS ENDED MARCH 31, 2001 (UNAUDITED)

1.   Organization and Significant Accounting Policies

Description of Real Estate Property Acquired
--------------------------------------------

On May 15, 2001, the Wells Fund XII-REIT Joint Venture (the "Joint Venture")
acquired the Comdata Building from The Northwestern Mutual Life Insurance
Company ("Northwestern"). The Joint Venture is a joint venture partnership
between Wells Real Estate Fund XII, L.P. ("Wells Fund XII") and Wells Operating
Partnership, L.P. ("Wells OP"), a Delaware Limited Partnership formed to
acquire, own, lease, operate, and manage real properties on behalf of Wells Real
Estate Investment Trust, Inc., a Maryland corporation. Northwestern is not an
affiliate of Wells Fund XII or Wells OP. The total purchase price of the Comdata
Building was $24,950,000. Additional acquisition expenses were incurred in
connection with the purchase of the Comdata Building, included attorney's fees,
recording fees, loan fees, and other closing costs, of $52,019. Wells Fund XII
contributed $8,926,156, and Wells OP contributed $16,075,863 to the Joint
Venture for their respective shares of the purchase of the Comdata Building.

Comdata Network, Inc. ("Comdata") occupies the entire 201,237 rentable square
feet of the three-story office building under a net lease agreement (the
"Comdata Lease"). Comdata is a wholly owned subsidiary of Ceridian Corporation,
a public entity traded on the New York Stock Exchange and guarantor of Comdata's
obligations under the Comdata Lease. Northwestern's interest in the Comdata
Lease was assigned to the Joint Venture at the closing. The initial term of the
Comdata Lease commenced on April 1, 1997 and expires on May 31, 2016. Comdata
has the right to extend the Comdata Lease for two additional five-year periods
at a rate equal to the greater of the base rent for the final year of the
initial term or 90% of the then-current fair market rental rate. Under the
Comdata Lease, Comdata is required to pay, as additional monthly rent, all
operating costs, including but not limited to, gas, water, electricity, garbage
and waste disposal, telephone, janitorial service, security, insurance premiums,
all taxes, assessments and other governmental levies, and other such operating
expenses with respect to the Comdata Building. In addition, Comdata is
responsible for all routine maintenance and repairs to the Comdata Building. The
Joint Venture will be responsible for the repair and replacement of the exterior
surface walls, foundation, roof, and plumbing, electrical and mechanical systems
of the Comdata Building.

Rental Revenues
---------------

Rental income is recognized on a straight-line basis over the life of the
Comdata Lease.

2.   Basis of Accounting

The accompanying statements of revenues over certain operating expenses are
presented on the accrual basis. These statements have been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired. Accordingly, these
statements exclude certain historical expenses, such as depreciation, interest,
and management fees. Therefore, these statements are not comparable to the
operations of the Comdata Building after acquisition by the Joint Venture.

11

WELLS REAL ESTATE INVESTMENT TRUST, INC.

UNAUDITED PRO FORMA BALANCE SHEET

The following unaudited pro forma balance sheet as of March 31, 2001 has been
prepared to give effect to the acquisition of the AmeriCredit Building by the
Wells XIII-REIT Joint Venture, a joint venture partnership between Wells Real
Estate Fund XIII, L.P. and Wells Operating Partnership, L.P. ("Wells OP"), and
the acquisition of the Comdata Building ("Prior Acquisition") by the Wells XII-
REIT Joint Venture, a joint venture partnership between Wells Real Estate Fund
XII, L.P. and Wells OP, as if the acquisitions occurred on March 31, 2001. The
following unaudited pro forma statements of income for the year ended December
31, 2000 and for the three months ended March 31, 2001 have been prepared to
give effect to the acquisition of the Comdata Building as if the acquisition
occurred on January 1, 2000.

Wells OP is a Delaware limited partnership that was organized to own and operate
properties on behalf of the Wells Real Estate Investment Trust, Inc., a Maryland
corporation. Wells Real Estate Investment Trust, Inc. is the general partner of
the Wells OP.

This unaudited pro forma balance sheet is prepared for informational purposes
only and is not necessarily indicative of future results or of actual results
that would have been achieved had the acquisition of the AmeriCredit Building
been consummated at the beginning of the period presented.

12

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA BALANCE SHEET

MARCH 31, 2001

(Unaudited)

ASSETS

Wells Real
Estate            Pro Forma Adjustments
Investment   ----------------------------------        Pro Forma
Trust, Inc.      Comdata            AmeriCredit            Total
------------  ------------        --------------        ------------

REAL ESTATE ASSETS, at cost:
Land                                                      $ 46,640,032    $         0          $         0        $ 46,640,032

Buildings, less accumulated depreciation                   285,461,251                                   0         285,461,251
of $12,656,832                                                                  0

Construction in progress                                     6,303,454              0                    0           6,303,454
------------  -------------       --------------        ------------
Total real estate assets                              338,404,737              0                    0         338,404,737
------------  -------------       --------------        ------------

CASH AND CASH EQUIVALENTS                                     8,156,316       (500,000) (a)        (150,000) (a)      7,506,316

INVESTMENT IN JOINT VENTURES                                 43,901,986     16,745,691  (b)      11,343,750  (d)     71,991,427

ACCOUNTS RECEIVABLE                                           3,620,844              0                    0           3,620,844

DEFERRED LEASE ACQUISITION COSTS                              1,599,976              0                    0           1,599,976

DEFERRED PROJECT COSTS                                        1,409,081       (669,828) (c)        (453,750) (e)        285,503

DEFERRED OFFERING COSTS                                         581,690              0                    0             581,690

DUE FROM AFFILIATES                                           1,050,313              0                    0           1,050,313

PREPAID EXPENSES AND OTHER ASSETS                             2,252,702              0                    0           2,252,702
------------  -------------       --------------        ------------
Total assets                                         $400,977,645    $15,575,863          $10,740,000        $427,293,508
============  =============       ==============        ============

13

LIABILITIES AND SHAREHOLDERS' EQUITY

Wells Real
Estate          Pro Forma Adjustments
Investment   ------------------------------     Pro Forma
Trust, Inc.      Comdata       AmeriCredit        Total
------------  --------------   -------------    ------------

LIABILITIES:
Accounts payable and accrued expenses                             $  2,263,215  $         0      $         0      $  2,263,215
Notes payable                                                       76,540,000   15,575,863 (a)   10,740,000 (a)   102,855,863
Dividends payable                                                    1,069,579            0                0         1,069,579
Due to affiliate                                                     1,084,012            0                0         1,084,012
Deferred rental income                                                 238,306            0                0           238,306
------------  -----------       ----------      ------------
Total liabilities                                              81,195,112   15,575,863       10,740,000       107,510,975
------------  -----------       ----------      ------------
COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST OF UNIT HOLDER IN OPERATING PARTNERSHIP               200,000            0                0           200,000
------------  -----------       ----------      ------------
SHAREHOLDERS' EQUITY:
Common shares, $.01 par value; 125,000,000 shares authorized,
38,127,278 shares issued and 37,908,326 shares outstanding            381,273            0                0           381,273
Additional paid-in capital                                         321,390,784            0                0       321,390,784
Treasury stock, at cost, 218,952 shares                             (2,189,524)           0                0        (2,189,524)
------------  -----------       ----------      ------------
Total shareholders' equity                                    319,582,533            0                0       319,582,533
------------  -----------       ----------      ------------
Total liabilities and shareholders' equity                   $400,977,645  $15,575,863      $10,740,000      $427,293,508
============  ===========       ==========      ============

(a)  Reflects Wells Real Estate Investment Trust, Inc.'s portion of the
purchase price.

(b)  Reflects Wells Real Estate Investment Trust, Inc.'s contribution to
the Wells Fund XII-REIT Joint Venture.

(c)  Reflects deferred project costs contributed to the Wells Fund XII-REIT
Joint Venture at approximately 4.17% of the purchase price.

(d)  Reflects Wells Real Estate Investment Trust, Inc.'s contribution to
the Wells Fund XIII-REIT Joint Venture.

(e)  Reflects deferred project costs contributed to the Wells Fund XIII-
REIT Joint Venture at approximately 4.17% of the purchase price.

14

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2001

(Unaudited)

Wells Real
Estate
Investment              Pro Forma           Pro Forma
Trust, Inc.             Adjustments            Total
-------------         ---------------      -------------

REVENUES:
Rental income                                            $  9,860,085           $        0           $ 9,860,085
Equity in income of joint ventures                            709,713              395,215(a)          1,104,928
Interest income                                                99,915                    0                99,915
------------           ----------           -----------
10,669,713              395,215           $11,064,928
------------           ----------           -----------
EXPENSES:
Depreciation and amortization                               3,187,179                    0             3,187,179
Interest                                                    2,375,183              275,919(b)          2,651,102
Operating costs, net of reimbursements                      1,091,185                    0             1,091,185
Management and leasing fees                                   565,714                    0               565,714
General and administrative                                    106,540                    0               106,540
Legal and accounting                                           67,767                    0                67,767
Computer costs                                                    800                    0                   800
------------           ----------           -----------
7,394,368              275,919             7,670,287
------------           ----------           -----------
NET INCOME                                                 $  3,275,345           $  119,296           $ 3,394,641
============           ==========           ===========
HISTORICAL EARNINGS PER SHARE
(BASIC AND DILUTED)                                      $       0.10
============
PRO FORMA EARNINGS  PER SHARE
(BASIC AND DILUTED) (c)                                                                              $      0.08 (c)
===========

(a)  Reflects Wells Real Estate Investment Trust, Inc.'s equity in income of
the Wells Fund XII-REIT Joint Venture related to the Comdata Building.
The pro forma adjustment results from rental revenues less operating
expenses, management fees, and depreciation.

(b)  Reflects interest expense incurred on the $15,575,863 drawn on Wells Real
Estate Investment Trust, Inc.'s revolving credit agreement with Bank of
America, N.A., which bears interest at 7.1% for the three months ended
March 31, 2001.

(c)  As of May 15, 2001, the acquisition date, Wells Real Estate Investment
Trust, Inc. had 41,588,143 shares of common stock outstanding; pro forma
earnings per share is calculated as if these shares were outstanding for
the entire three months ended March 31, 2001.

15

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 2000

(Unaudited)

Wells Real
Estate
Investment           Pro Forma              Pro Forma
Trust, Inc.          Adjustments               Total
-----------         -------------            ----------

REVENUES:
Rental income                                              $20,505,000          $        0             $20,505,000
Equity in income of joint ventures                           2,293,873             930,181(a)            3,224,054
Interest income                                                520,924                   0                 520,924
Other income                                                    53,409                   0                  53,409
-----------          ----------             -----------
23,373,206             930,181              24,303,387
-----------          ----------             -----------

EXPENSES:
Depreciation and amortization                                7,743,551                   0               7,743,551
Interest                                                     4,199,461           1,284,495(b)            5,483,956
Operating costs, net of reimbursements                         888,091                   0                 888,091
Management and leasing fees                                  1,309,974                   0               1,309,974
General and administrative                                     426,680                   0                 426,680
Legal and accounting                                           240,209                   0                 240,209
Computer costs                                                  12,273                   0                  12,273
-----------          ----------             -----------
14,820,239           1,284,495              16,104,734
-----------          ----------             -----------
NET INCOME (LOSS)                                            $ 8,552,967          $ (354,314)            $ 8,198,653
===========          ==========             ===========
HISTORICAL EARNINGS PER SHARE
(BASIC AND DILUTED)                                      $      0.40
===========
PRO FORMA EARNINGS PER SHARE
(BASIC AND DILUTED) (c)                                                                              $      0.20 (c)
===========

(a)  Reflects Wells Real Estate Investment Trust, Inc.'s equity in income of
the Wells Fund XII-REIT Joint Venture related to the Comdata Building.
The pro forma adjustment results from rental revenues less operating
expenses, management fees, and depreciation.

(b)  Reflects interest expense incurred on the $15,575,863 drawn on Wells Real
Estate Investment Trust, Inc.'s revolving credit agreement with Bank of
America, N.A., which bears interest at 8.2% for the year ended December
31, 2000.

(c)  As of May 15, 2001, the acquisition date, Wells Real Estate Investment
Trust, Inc. had 41,588,143 shares of common stock outstanding; pro forma
earnings per share is calculated as if these shares were outstanding for
the entire year ended December 31, 2000.

16

WELLS REAL ESTATE INVESTMENT TRUST, INC.
SUPPLEMENT NO. 4 DATED AUGUST 10, 2001 TO THE PROSPECTUS
DATED DECEMBER 20, 2000

This document supplements, and should be read in conjunction with, the
prospectus of Wells Real Estate Investment Trust, Inc. dated December 20, 2000,
as supplemented and amended by Supplement No. 1 dated February 5, 2001,
Supplement No. 2 dated April 25, 2001, and Supplement No. 3 dated July 20, 2001.
When we refer to the "prospectus" in this supplement, we are also referring to
any and all supplements to the prospectus.  Unless otherwise defined in this
supplement, capitalized terms used in this supplement shall have the same
meanings as set forth in the prospectus.

The purpose of this supplement is to describe the following:

(1)  The status of the offering of shares in Wells Real Estate Investment
Trust, Inc. (Wells REIT);

(2)  The acquisition of an office building in Quincy, Massachusetts (State
Street Building);

(3)  The initial transaction under the Section 1031 Exchange Program;

(4)  Revisions to the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" section of the prospectus; and

(5)  Financial statements relating to the State Street Building.

Status of the Offering

We commenced our initial public offering of common stock on January 30,
1998. Our initial public offering was terminated on December 19, 1999. We
received approximately $132,181,919 in gross offering proceeds from the sale of
13,218,192 shares in our initial public offering. We commenced a second offering
of common stock on December 20, 1999. Our second public offering was terminated
on December 19, 2000. We received approximately $175,229,193 in gross offering
proceeds from the sale of 17,522,919 shares in our second public offering.

Pursuant to the prospectus, we commenced our third offering of common stock
on December 20, 2000. As of July 31, 2001, we had received an additional
$212,110,390 in gross offering proceeds from the sale of 21,211,039 shares in
the third offering. Accordingly, as of July 31, 2001, we had received in the
aggregate approximately $519,521,502 in gross offering proceeds from the sale of
51,952,150 shares of our common stock.

The State Street Building

Purchase of the State Street Building.  On July 30, 2001, Wells Operating
-------------------------------------
Partnership, L.P. (Wells OP), a Delaware limited partnership formed to acquire,
own, lease and operate real properties on behalf of Wells REIT, purchased a
seven-story office building with approximately 234,668 rentable square feet
located at 1200 Crown Colony Drive, Norfolk County, Quincy, Massachusetts (State
Street Building).  Wells OP purchased this building from Crownview, LLC
(Crownview) pursuant to that certain Agreement of Purchase and Sale of Property
between Crownview and Wells OP.  Crownview is not in any way affiliated with
Wells REIT or Wells Capital, Inc., our Advisor.

The purchase price for the State Street Building was $49,563,000.  Wells OP
incurred acquisition expenses in connection with the purchase of the State
Street Building, including attorneys' fees, recording fees, structural report
and environmental report fees, and other closing costs, of approximately
$69,500.  Wells OP also paid approximately $126,600 to reimburse the seller for
its prorated share of real estate taxes and other operating expenses.

An independent appraisal of the State Street Building was prepared by
Insignia/ESG, Inc., real estate appraisers, as of July 10, 2001, pursuant to
which the market value of the real property containing the leased fee interest
subject to the leases described below was estimated to be $52,000,000, in cash
or terms equivalent to cash.  This value estimate was based upon a number of
assumptions, including that the State Street Building will continue operating at
a stabilized level with SSB Realty LLC, a Delaware limited liability company
(SSB Realty), occupying 100% of the rentable area, and is not necessarily an
accurate reflection of the fair market value of the property or the net proceeds
which would result from an immediate sale of this property.  Wells OP also
obtained an environmental report and an engineering inspection report prior to
the closing evidencing that the condition of the land and the State Street
Building were satisfactory.

Description of the State Street Building and Site.  The State Street Building,
-------------------------------------------------
which was completed in 1990, is a seven-story office building containing
approximately 234,668 rentable square feet located on an 11.22 acre tract of
land.  The building is constructed using a steel frame with a reinforced
concrete foundation.  The exterior walls are made of primarily precast concrete
with insulated glass windows in aluminum frames.  The interior walls consist of
painted gypsum board.  In addition, there are four elevators and approximately
854 parking spaces.

The State Street Building is located at 1200 Crown Colony Drive in Crown
Colony Office Park in Quincy, Massachusetts, approximately 10 miles southwest of
downtown Boston.  Crown Colony Office Park contains high quality office
buildings and is one of the most desirable parks in the south Boston market.
The strength of the office market in this area is evidenced by the extensive
office development near other interchanges along Route 128 in the
Quincy/Braintree area.  The property is well located in terms of proximity to
Boston, and accessability to all of the other major highway systems that serve
the city and the surrounding area because of its immediate access to a highway
interchange and to public transportation.  The State Street Building is leased
entirely to SSB Realty.

The SSB Realty Lease.  The entire 234,668 rentable square feet of the State
--------------------
Street Building is currently under a lease agreement with SSB Realty.  The
landlord's interest in the SSB Realty lease was assigned to Wells OP at the
closing.  The current term of the lease is 10 years, which commenced on February
1, 2001, and expires on March 31, 2011.  SSB has the right to extend the term of
this lease for one additional five year period at the then-current fair market
rental rate.  In addition, the base operating costs and the base taxes will be
adjusted for the extended term to reflect the actual operating costs and taxes
for the preceding calendar year.

SSB Realty is a wholly owned subsidiary of State Street Corporation, a
Massachusetts corporation (State Street).  State Street, a guarantor of the SSB
Realty lease, is a world leader in providing financial services to investment
managers, corporations, public pension funds, unions, not-for-profit
organizations and individuals.  State Street's capabilities range from
investment research and professional investment management to trading and
brokerage services to fund accounting and administration.  With over 17,000
employees, offices in 23 countries, and serving clients in 55 different
countries, State Street has over $6 trillion in assets under custody and $711
billion in assets under management.  For the fiscal year ended December 31,
2000, State Street reported net income of approximately $595 million on revenues
of approximately $3.6 billion, and a net worth, as of December 31, 2000, of
approximately $3.26 billion.

The base rent payable for the remainder of the SSB Realty lease is as follows:

Lease Year                                  Annual Rent        Monthly Rent
---------------------------------------------------------------------------
April 1, 2001 - January 30, 2004             $6,922,706          $576,892
---------------------------------------------------------------------------
February 1, 2004 - January 30, 2007          $7,274,708          $606,226
---------------------------------------------------------------------------
February 1, 2007 - March 31, 2011            $7,861,378          $655,115
---------------------------------------------------------------------------

2

Pursuant to the SSB Realty lease, Wells OP is obligated to provide SSB
Realty an allowance of up to approximately $2,112,000 for tenant, building and
architectural improvements. Under the SSB Realty lease, SSB Realty is required
to pay its proportionate share of taxes relating to the State Street Building
and all operating costs incurred by the landlord in maintaining and operating
the State Street Building, including, but not limited to, garbage and waste
disposal, janitorial service and window cleaning, snow removal, security,
insurance, water and sewer charges, wages, salaries and employee benefits of all
employees engaged in the operation, maintenance and management of the building,
indoor and outdoor landscaping, utilities and repairs, replacements and general
maintenance. Wells OP, as the landlord, will be responsible, at tenant's
expense, for maintaining the common areas of the building, the roof, foundation,
exterior walls and windows, load bearing items and the central heating,
ventilation and air conditioning, electrical, mechanical and plumbing systems of
the building.

Property Management Fees.  Wells Management Company, Inc. (Wells Management), an
------------------------
affiliate of Wells REIT and our Advisor, has been retained to manage and lease
the State Street Building.  Wells REIT shall pay management and leasing fees to
Wells Management in the amount of 4.5% of gross revenues from the State Street
Building, subject to certain limitations.

Initial Transaction under the Section 1031 Exchange Program

As described in Supplement No. 2 dated April 25, 2001 to the prospectus
dated December 20, 2000, Wells Development Corporation, an affiliate of our
Advisor, has developed a program (Section 1031 Exchange Program) involving the
acquisition of income-producing commercial properties and the formation of a
series of single member limited liabilities companies (Wells Exchange) for the
purpose of facilitating the resale of co-tenancy interests in such real estate
properties to persons (1031 Participants) who are looking to invest the proceeds
from a sale of real estate held for investment into another real estate
investment for purposes of qualifying for like-kind exchange treatment under
Section 1031 of the Internal Revenue Code.

The initial transaction in the Section 1031 Exchange Program involves the
acquisition by Wells Exchange and resale of co-tenancy interests in the Ford
Motor Credit Complex.  The Ford Motor Credit Complex consists of two connecting
office buildings containing 167,434 rentable square feet located in Colorado
Springs, Colorado currently under a triple-net lease with Ford Motor Credit
Company, a wholly-owned subsidiary of Ford Motor Company, which is the world's
largest automobile finance company with more than 10 million customers in 40
countries.  Wells Exchange is currently engaged in the offer and sale of co-
tenancy interests in the Ford Motor Credit Complex to 1031 Participants.

As a part of the initial transaction in the Section 1031 Exchange Program,
in consideration for the payment of a Take Out Fee in the amount of $137,500,
and following approval of the potential property acquisition by our board of
directors, Wells OP entered into a Take Out Purchase and Escrow Agreement
relating to the Ford Motor Credit Complex. Pursuant to the terms of the Take Out
Purchase and Escrow Agreement, Wells OP is obligated to acquire, at Wells
Exchange's cost ($839,694 in cash plus $832,060 of assumed debt for each
7.63358% co-tenancy interest), any co-tenancy interests in the Ford Motor Credit
Complex which remain unsold on October 16, 2001.

The obligations of Wells OP under the Take Out Purchase and Escrow
Agreement are secured by reserving against Wells OP's existing line of credit
with Bank of America, N.A. (Interim Lender). If, for any reason, Wells OP fails
to acquire any of the co-tenancy interests in the Ford Motor Credit Complex
which remain unsold as of October 16, 2001, or if there is otherwise an uncured
default under the interim loan between Wells Exchange and the Interim Lender or
Well OP's line of credit documents, the Interim Lender is authorized to draw
down on Wells OP's line of credit in the amount necessary to pay the outstanding
balance of the Interim Loan in full, in which event the appropriate amount of
unsold co-tenancy interests in the Ford Motor Credit Complex would be deeded to
Wells OP. Wells OP's maximum economic exposure in the transaction is
$11,000,000, in which event Wells OP would acquire the Ford Motor Credit Complex
for $11,000,000 in cash plus assumption of the first mortgage financing in the
amount of $10,900,000. If Wells Exchange successfully sells 100% of the co-
tenancy interests to

3

1031 Particpants, Wells OP will not acquire any interest in the Ford Motor
Credit Complex. If some, but not all, of the co-tenancy interests are sold by
Wells Exchange, Wells OP's exposure would be less, and it would end up owning an
interest in the property in co-tenancy with 1031 Participants who had previously
acquired co-tenancy interests in the Ford Motor Credit Complex from Wells
Exchange. (See "Risk Factors - Section 1031 Exchange Program" contained in
Supplement No. 2 dated April 25, 2001 to the prospectus dated December 20,
2000.)

Management's Discussion and Analysis of Financial Condition and Results of
Operation

The information contained on page 98 in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources" section of the prospectus is revised as of the date of this
supplement by the deletion of the first two paragraphs of that section and the
insertion of the following paragraphs in lieu thereof:

We began active operations on June 5, 1998, when we received and
accepted subscriptions for 125,000 shares pursuant to our initial public
offering, which commenced on January 30, 1998. We terminated our initial
public offering on December 19, 1999. Of the $132,181,919 raised in the
initial offering, we invested a total of $111,032,812 in properties. On
December 20, 1999, we commenced a second public offering of up to
22,200,000 shares of common stock at $10 per share. We terminated our
second offering on December 19, 2000. Of the $175,229,193 raised in the
second offering, we invested a total of $147,192,522 in properties.

Pursuant to the prospectus, we commenced this third offering of shares
of our common stock on December 20, 2000. As of July 31, 2001, we had
received an additional $212,110,390 in gross offering proceeds from the
sale of 21,211,039 shares in the third offering. As of July 31, 2001, we
had raised in the aggregate a total of $519,521,502 in offering proceeds
through the sale of 51,952,150 shares of common stock. As of July 31, 2001,
we had paid a total of $18,078,430 in acquisition and advisory fees and
acquisition expenses, had paid a total of $64,565,823 in selling
commissions and organizational and offering expenses, had made capital
contributions of $427,043,387 to Wells OP for investments in joint ventures
and acquisitions of real property, had utilized $2,994,917 for the
redemption of stock pursuant to our share redemption program, and were
holding net offering proceeds of $6,838,945 available for investment in
additional properties.

Financial Statements

The statement of revenues over certain operating expenses of the State
Street Building for the year ended December 31, 2000, included in this
supplement and elsewhere in the registration statement, has been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and is included in this supplement in reliance
upon the authority of said firm as experts in giving said reports.

The statement of revenues over certain operating expenses of the State
Street Building for the six months ended June 30, 2001, included in this
supplement and elsewhere in the registration statement, has not been audited.

The Pro Forma Balance Sheet of Wells REIT as of June 30, 2001, which is
included in this supplement, has not been audited.

4

INDEX TO FINANCIAL STATEMENTS

The State Street Building                                              Page
----
Report of Independent Accountants                                   6

Statements of Revenues Over Certain Operating Expenses
for the year ended December 31, 2000 (audited) and for the
six months ended June 30, 2001 (unaudited)                          7

Notes to Statements of Revenues Over Certain Operating
Expenses for the year ended December 31, 2000 (audited) and
for the six months ended June 30, 2001 (unaudited)                  8

Wells Real Estate Investment Trust, Inc.

Unaudited Pro Forma Financial Statements
----------------------------------------

Summary of Unaudited Pro Forma Financial Statements                 9

Pro Forma Balance Sheet as of June 30, 2001                        10

Pro Forma Statement of Income for the six months
ended June 30, 2001                                                12

Pro Forma Statement of Income for the year ended
December 31, 2000                                                  13

5

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the State street bank BUILDING for the year ended December 31,
2000.  This financial statement is the responsibility of management.  Our
responsibility is to express an opinion on this financial statement based on our
audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States.  These standards require that we plan and perform the
audit to obtain reasonable assurance about whether the statement of revenues
over certain operating expenses is free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the statement of revenues over certain operating expenses.  An
audit also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall financial
statement presentation.  We believe that our audit provides a reasonable basis
for our opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the State
Street Bank Building after acquisition by the Wells Operating Partnership, L.P.,
a subsidiary of Wells Real Estate Investment Trust, Inc. The accompanying
statement of revenues over certain operating expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission and is not intended to be a complete presentation of the
State Street Bank Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the State Street Bank Building for the year ended December 31, 2000
in conformity with accounting principles generally accepted in the United
States.

/s/ ARTHUR ANDERSEN LLP

Atlanta, Georgia
August 1, 2001

6

STATE STREET BANK BUILDING

STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2000

AND THE SIX MONTHS ENDED JUNE 30, 2001

2001             2000
----------       ----------
(Unaudited)

RENTAL REVENUES                                $3,617,688       $2,941,354

OPERATING EXPENSES, net of reimbursements         666,818          438,071
----------       ----------
REVENUES OVER CERTAIN OPERATING EXPENSES       $2,950,870       $2,503,283
==========       ==========

The accompanying notes are an integral part of these statements.

7

STATE STREET BANK BUILDING

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2000

AND THE SIX MONTHS ENDED JUNE 30, 2001

1.   ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On July 30, 2001, the Wells Operating Partnership, L.P. ("Wells OP")
acquired the State Street Bank Building from Crownview LLC ("Crownview").
Wells OP is a Delaware limited partnership formed to acquire, own, lease,
operate, and manage real properties on behalf of Wells Real Estate
Investment Trust, Inc., a Maryland corporation.  Crownview is not an
affiliate of Wells OP.

Harvard Pilgrim Health Care ("HPHC") occupied the entire 234,668 rentable
square feet of the seven-story office building under a net lease agreement
(the "HPHC Lease") with Crownview.  The HPHC Lease commenced on October 8,
1999 and expired on July 31, 2000.  SSB Realty, LLC ("SSB") currently
occupies the entire 234,668 rentable square feet of the seven-story office
building under a net lease agreement (the "SSB Lease").  SSB is a wholly
owned subsidiary of State Street Corporation, which is the guarantor of the
SSB Lease.  State Street Corporation is a public entity traded on the New
York Stock Exchange.  Crownview's interest in the SSB Lease was assigned to
Wells OP at the closing.  The initial term of the SSB Lease commenced on
February 1, 2001 and expires on March 31, 2011.  SSB has the right to
extend the SSB Lease for one additional period of five years at a rate
equal to the then current fair market rental rate.  Under the SSB Lease,
SSB is required to pay, as additional monthly rent, insurance costs,
utility charges, personal property taxes, its pro rata share of increases
in real estate taxes, and all operating costs with respect to the State
Street Bank Building that exceed the base operating costs of $1,773,340 in
any calendar year.  In addition, SSB is responsible for all routine
maintenance and repairs to the State Street Bank Building.  Wells OP will
be responsible, at SSB's expense, for the repair and replacement of the
exterior surface walls, foundation, roof, plumbing, electrical, and
mechanical systems of the State Street Bank Building.

Rental Revenues

Rental income is recognized on a straight-line basis over the terms of the
respective leases.

2.   Basis of Accounting

The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis.  This statement has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired.  Accordingly, this
statement excludes certain historical expenses, such as depreciation,
interest, and management fees.  Therefore, this statement is not comparable
to the operations of the State Street Bank Building after acquisition by
Wells OP.

8

WELLS REAL ESTATE INVESTMENT TRUST, INC.

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

JUNE 30, 2001

The following unaudited pro forma balance sheet as of June 30, 2001 has been
prepared to give effect to the acquisition of the AmeriCredit Building by the
Wells XIII-REIT Joint Venture (a joint venture partnership between Wells Real
Estate Fund XIII, L.P. and Wells Operating Partnership, LP ["Wells OP"]) and the
acquisition of the State Street Bank Building by the Wells OP as if each
acquisition occurred on June 30, 2001.  The Comdata Building was acquired by
Wells XII-REIT Joint Venture (a joint venture partnership between Wells Real
Estate Fund XII, L.P. and Wells OP) on May 15, 2001.

The following unaudited pro forma statement of income for the six months ended
June 30, 2001 has been prepared to give effect to the acquisitions of the
Comdata Building, the AmeriCredit Building, and the State Street Bank Building
as if the acquisitions occurred on January 1, 2000. The following unaudited pro
forma statement of income for the year ended December 31, 2000 has been prepared
to give effect to the acquisitions of the Comdata Building and the State Street
Bank Building as if the acquisitions occurred on January 1, 2000.  The
AmeriCredit Building had no operations during 2000.

Wells OP is a Delaware limited partnership that was organized to own and operate
properties on behalf of Wells Real Estate Investment Trust, Inc., a Maryland
corporation.  Wells Real Estate Investment Trust, Inc. is the general partner of
Wells OP.

These unaudited pro forma financial statements are prepared for informational
purposes only and are not necessarily indicative of future results or of actual
results that would have been achieved had the acquisitions of the Comdata
Building, the AmeriCredit Building, and the State Street Bank Building been
consummated at the beginning of the periods presented.

As of June 30, 2001, the date of the accompanying pro forma balance sheet, Wells
OP held cash of $6,074,926.  The additional cash used to purchase the State
Street Bank Building, including deferred project costs paid to Wells Capital,
Inc. (an affiliate of Wells OP), was raised through the issuance of additional
shares subsequent to June 30, 2001.  This balance is reflected as purchase
consideration payable in the accompanying pro forma balance sheet.

9

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA BALANCE SHEET

JUNE 30, 2001

(Unaudited)

ASSETS

Wells            Pro Forma Adjustments
Real Estate     -----------------------------
Investment     AmeriCredit     State Street         Pro Forma
Trust, Inc.      Building       Bank Building          Total
------------    ------------    --------------      ------------

REAL ESTATE ASSETS, at cost:
Land                                                $ 47,256,748    $         0     $10,600,000 (d)     $ 58,298,415
441,667 (e)
Buildings, less accumulated depreciation of                                          39,159,098 (d)
$15,863,470                                         285,964,597              0                          326,755,324
1,631,629 (e)
Construction in progress                               7,143,876              0               0            7,143,876
------------    -----------     -----------         ------------
Total real estate assets                       340,365,221              0      51,832,394          392,197,615

CASH AND CASH EQUIVALENTS                               6,074,926       (150,000)(a)  (5,924,926)(d)                0

INVESTMENT IN JOINT VENTURES                           60,261,895     11,343,750 (b)           0           71,605,645

ACCOUNTS RECEIVABLE                                     4,661,279              0               0            4,661,279

DEFERRED LEASE ACQUISITION COSTS                        1,738,658              0               0            1,738,658

DEFERRED PROJECT COSTS                                      3,849         (3,849)(c)           0                    0

DEFERRED OFFERING COSTS                                   731,574              0               0              731,574

DUE FROM AFFILIATES                                     1,242,469              0               0            1,242,469

PREPAID EXPENSES AND OTHER ASSETS                       1,558,395              0               0            1,558,395
------------    -----------     -----------         ------------
TOTAL ASSETS                                  $416,638,266    $11,189,901     $45,907,468         $473,735,635
============    ===========     ===========         ============

10

LIABILITIES AND SHAREHOLDERS' EQUITY

Wells           Pro Forma Adjustments
Real Estate  -------------------------------
Investment    AmeriCredit       State Street     Pro Forma
Trust, Inc.     Building       Bank Building      Total
-----------  -------------     -------------   ------------

LIABILITIES:
Accounts payable and accrued expenses          $  2,592,211  $         0       $         0    $  2,592,211
Notes payable                                    10,298,850   10,740,000(a)     38,700,000(d)   59,738,850
Dividends payable                                 1,071,657            0                 0       1,071,657
Due to affiliate                                  1,508,539      449,901(c)      2,073,296(e)    4,031,736
Purchase consideration payable                            0            0         5,134,172(d)    5,134,172
Deferred rental income                               95,418            0                 0          95,418
------------  -----------       -----------    ------------
Total liabilities                          15,566,675   11,189,901        45,907,468      72,664,044
------------  -----------       -----------    ------------
COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST OF UNIT HOLDER IN OPERATING
PARTNERSHIP                                         200,000            0                 0         200,000
------------  -----------       -----------    ------------
SHAREHOLDERS' EQUITY:
Common shares, $.01 par value; 125,000,000
shares authorized, 47,770,468 shares issued
and 47,489,415 shares outstanding                  477,705            0                 0         477,705
Additional paid-in capital                      403,204,416            0                 0     403,204,416
Treasury stock, at cost, 281,053 shares          (2,810,530)           0                 0      (2,810,530)
------------  -----------       -----------    ------------
Total shareholders' equity                400,871,591            0                 0     400,871,591
------------  -----------       -----------    ------------
Total liabilities and shareholders'
equity                                  $416,638,266  $11,189,901       $45,907,468    $473,735,635
============  ===========       ===========    ============

(a)  Reflects Wells Real Estate Investment Trust, Inc.'s portion of the purchase
price.

(b)  Reflects Wells Real Estate Investment Trust, Inc.'s contribution to the
Wells Fund XIII-REIT Joint Venture.

(c)  Reflects deferred project costs contributed to the Wells Fund XIII-REIT
Joint Venture at approximately 4.17% of the purchase price.

(d)  Reflects Wells Real Estate Investment Trust, Inc.'s purchase price for the
land and the building.

(e)  Reflects deferred project costs applied to the land and building at
approximately 4.17% of the purchase price.

11

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF INCOME (LOSS)

FOR THE SIX MONTHS ENDED JUNE 30, 2001

(Unaudited)

Wells                   Pro Forma Adjustments
Real Estate      ----------------------------------------------
Investment       Comdata        AmeriCredit       State Street        Pro Forma
Trust, Inc.      Building        Building         Bank Building         Total
-----------     ----------      -----------       -------------      -----------

REVENUES:
Rental income                            $19,711,252     $      0        $       0          $3,617,688 (f)    $23,328,940
Equity in income of joint ventures         1,519,194      513,944 (a)      (98,624)(d)               0          1,934,514
Interest income                              193,007       (6,781)(b)       (8,135)(b)        (178,091)(b)              0
-----------     --------        ---------          ----------        -----------
21,423,453      507,163         (106,759)          3,439,597         25,263,454
-----------     --------        ---------          ----------        -----------
EXPENSES:
Depreciation and amortization              6,685,716            0                0             815,815 (g)      7,501,531
Interest                                   2,809,373      379,761 (c)      349,157 (e)       1,258,137 (h)      4,796,428
Operating costs, net of reimbursements     1,736,928            0                0             666,818 (i)      2,403,746
Management and leasing fees                1,117,902            0                0             162,796 (j)      1,280,698
General and administrative                   635,632            0                0                   0            635,632
Legal and accounting                         117,331            0                0                   0            117,331
Computer costs                                 6,328            0                0                   0              6,328
-----------     --------        ---------          ----------        -----------
13,109,210      379,761          349,157           2,903,566         16,741,694
-----------     --------        ---------          ----------        -----------
NET INCOME (LOSS)                         $ 8,314,243     $127,402        $(455,916)         $  536,031        $ 8,521,760
===========     ========        =========          ==========        ===========
EARNINGS PER SHARE, basic and
diluted                                  $      0.22                                                          $      0.23
===========                                                          ===========
WEIGHTED AVERAGE SHARES, basic and
diluted                                   37,792,014                                                           37,792,014
===========                                                          ===========

(a)  Reflects Wells Real Estate Investment Trust, Inc.'s equity in the income of
the Wells Fund XII-REIT Joint Venture related to the Comdata Building from
January 1, 2001 through May 14, 2001.  The pro forma adjustment results
from rental revenues less operating expenses, management fees, and
depreciation.

(b)  Represents forgone interest income related to cash utilized to purchase the
Comdata Building, the AmeriCredit Building, and the State Street Bank
Building.

(c)  Represents interest expense on the $15,575,863 drawn on Wells Real Estate
Investment Trust, Inc.'s revolving credit agreement with Bank of America,
N.A., which bears interest at approximately 6.5% from January 1, 2001
through May 14, 2001.

(d)  Reflects Wells Real Estate Investment Trust, Inc.'s equity in the loss of
the Wells Fund XIII-REIT Joint Venture related to the AmeriCredit Building.
The pro forma adjustment results from rental revenues less operating
expenses, management fees and deprecation.

(e)  Represents interest expense on the $10,740,000 note payable to Bank of
America, which bears interest at approximately 6.5% for the six months
ended June 30, 2001.

(f)  Rental income is recognized on a straight-line basis.

(g)  Depreciation expense on the building is recognized using the straight-line
method and a 25-year life.

(h)  Represents interest expense on the $38,700,000 note payable to Bank of
America, which bears interest at approximately 6.5% for the six months
ended June 30, 2001.

(i)  Consists of nonreimbursable operating expenses.

(j)  Management and leasing fees are calculated at 4.5% of rental income.

12

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF INCOME (LOSS)

FOR THE YEAR ENDED DECEMBER 31, 2000

(UNAUDITED)

Wells           Pro Forma Adjustments
Real Estate     ----------------------------
Investment      Comdata        State Street         Pro Forma
Trust, Inc.     Building       Bank Building          Total
-----------     --------       -------------      -----------

REVENUES:
Rental income                                             $20,505,000  $        0       $ 2,941,354 (d)      $23,446,354
Equity in income of joint ventures                          2,293,873     930,181 (a)             0            3,224,054
Interest income                                               520,924     (19,106)(b)      (501,818)(b)                0
Other income                                                   53,409           0                 0               53,409
-----------  ----------       -----------         ------------
23,373,206     911,075         2,439,536           26,723,817
-----------  ----------       -----------         ------------
EXPENSES:
Depreciation and amortization                               7,743,551           0         1,631,629 (e)        9,375,180
Interest                                                    4,199,461   1,284,495 (c)     3,191,473 (f)        8,675,429
Operating costs, net of reimbursements                        888,091           0           438,071 (g)        1,326,162
Management and leasing fees                                 1,309,974           0           132,361 (h)        1,442,335
General and administrative                                    426,680           0                 0              426,680
Legal and accounting                                          240,209           0                 0              240,209
Computer costs                                                 12,273           0                 0               12,273
-----------  ----------       -----------         ------------
14,820,239   1,284,495         5,393,534           21,498,268
-----------  ----------       -----------         ------------
NET INCOME (LOSS)                                          $ 8,552,967  $ (373,420)      $(2,953,998)         $ 5,225,549
===========  ==========       ===========          ===========

EARNINGS PER SHARE, basic and diluted                      $      0.40                                        $      0.24
===========                                        ===========

WEIGHTED AVERAGE SHARES, basic and diluted                  21,382,418                                         21,382,418
===========                                        ===========

(a)  Reflects Wells Real Estate Investment Trust, Inc.'s equity in income of the
Wells Fund XII-REIT Joint Venture related to the Comdata Building.  The pro
forma adjustment results from rental revenues less operating expenses,
management fees, and depreciation.

(b)  Represents forgone interest income related to cash utilized to purchase the
Comdata Building and the State Street Bank Building.

(c)  Represents interest expense incurred on the $15,575,863 drawn on Wells Real
Estate Investment Trust, Inc.'s revolving credit agreement with Bank of
America, N.A., which bears interest at approximately 8.2% for the year
ended December 31, 2000.

(d)  Rental income is recognized on a straight-line basis.

(e)  Depreciation expense on the building is recognized using the straight-line
method and a 25-year life.

(f)  Interest expense on the $38,700,000 note payable to Bank of America, N.A.,
which bears interest at approximately 8.2% for the year ended December 31,
2000.

(g)  Consists of nonreimbursable operating expenses.

(h)  Management and leasing fees are calculated at 4.5% of rental income.

13

WELLS REAL ESTATE INVESTMENT TRUST, INC.
SUPPLEMENT NO. 5 DATED OCTOBER 15, 2001 TO THE PROSPECTUS
DATED DECEMBER 20, 2000

This document supplements, and should be read in conjunction with, the
prospectus of Wells Real Estate Investment Trust, Inc. dated December 20, 2000,
as supplemented and amended by Supplement No. 1 dated February 5, 2001,
Supplement No. 2 dated April 25, 2001, Supplement No. 3 dated July 20, 2001, and
Supplement No. 4 dated August 10, 2001. When we refer to the "prospectus" in
this supplement, we are also referring to any and all supplements to the
prospectus. Unless otherwise defined in this supplement, capitalized terms used
in this supplement shall have the same meanings as set forth in the prospectus.

The purpose of this supplement is to describe the following:

(1)     The status of the offering of shares in Wells Real Estate
Investment Trust, Inc. (Wells REIT);

(2)     The declaration of dividends for the fourth quarter of 2001;

(3)     The acquisition of two one-story office buildings in Houston,
Texas (IKON Buildings);

(4)     The acquisition of a 14.87 acre tract of land in Irving, Texas
and the development and construction of an office building
thereon (Nissan Property);

(5)     The acquisition of a ground leasehold interest in a one
one-story office and distribution facility in Millington,
Tennessee (Ingram Micro Distribution Facility);

(6)     The acquisition of a four-story office building in Cary, North
Carolina (Lucent Building);

(7)     Revisions to the "Description of Properties" section of the
prospectus relating to an amendment to the Matsushita lease;

(8)     Revisions to the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section of the
prospectus;

(9)     Revisions to the "Plan of Distribution" section of the
prospectus; and

(10)    Financial statements relating to the IKON Buildings, Ingram
Micro Distribution Facility and Lucent Building.

Status of the Offering

We commenced our initial public offering of common stock on January 30,
1998. Our initial public offering was terminated on December 19, 1999. We
received approximately $132,181,919 in gross offering proceeds from the sale of
13,218,192 shares in our initial public offering. We commenced a second offering
of common stock on December 20, 1999. Our second public offering was terminated
on December 19, 2000. We received approximately $175,229,193 in gross offering
proceeds from the sale of 17,522,919 shares in our second public offering.

Pursuant to the prospectus, we commenced our third offering of common
stock on December 20, 2000. As of October 10, 2001, we had received an
additional $330,794,345 in gross offering proceeds

1

from the sale of 33,079,435 shares in the third offering. Accordingly, as of
October 10, 2001, we had received in the aggregate approximately $638,205,457 in
gross offering proceeds from the sale of 63,820,546 shares of our common stock.

Declaration of Fourth Quarter Dividend

On September 12, 2001, our board of directors declared a dividend for
the fourth quarter of 2001 in an amount equal to a 7.75% annualized percentage
return on an investment of $10 per share to be paid in December 2001. The fourth
quarter dividend will be calculated on a daily record basis of $0.00213 (.213
cents) per day per share on the outstanding shares of common stock payable to
shareholders of record of such shares as shown on the books of the Wells REIT at
the close of business on each day during the period, commencing on September 16,
2001, and continuing each day thereafter during the fourth quarter of 2001
through and including December 15, 2001.

The IKON Buildings

Purchase of the IKON Buildings. On September 7, 2001, Wells Operating
------------------------------
Partnership, L.P. (Wells OP), a Delaware limited partnership formed to acquire,
own, lease and operate real properties on behalf of the Wells REIT, purchased
two one-story office buildings aggregating approximately 157,790 rentable square
feet located at 810 and 820 Gears Road, Harris County, Houston, Texas (IKON
Buildings) from SV Reserve, L.P. SV Reserve, L.P. is not in any way affiliated
with the Wells REIT or Wells Capital, Inc., our Advisor.

The purchase price for the IKON Buildings was $20,650,000. Wells OP
incurred acquisition expenses in connection with the purchase of the IKON
Buildings, including commissions, attorneys' fees, recording fees, structural
report and environmental report fees, and other closing costs, of approximately
$132,500.

An independent appraisal of the IKON Buildings was prepared by Gary
Brown & Associates, Inc., real estate appraisers, as of August 30, 2001,
pursuant to which the market value of the real property containing the leased
fee interest subject to the leases described below was estimated to be
$20,750,000, in cash or terms equivalent to cash. This value estimate was based
upon a number of assumptions, including that the IKON Buildings will continue
operating at a stabilized level with IKON Office Solutions, Inc, an Ohio
corporation (IKON), occupying 100% of the rentable area, and is not necessarily
an accurate reflection of the fair market value of the property or the net
proceeds which would result from an immediate sale of this property. Wells OP
also obtained an environmental report and an engineering inspection report prior
to the closing evidencing that the condition of the land and the IKON Buildings
was satisfactory.

Description of the IKON Buildings and Site. The IKON Buildings, which were
------------------------------------------
completed in September 2000, consist of two one-story office buildings
containing approximately 157,790 rentable square feet (78,895 square feet for
each building) located on a 15.69 acre tract of land. The buildings are
constructed using a steel frame with steel trusses and a reinforced concrete
foundation. The exterior walls are made of primarily concrete masonry with
concrete tilt wall panels with slightly recessed reflective blue-tinted windows.
The interior walls consist of floated and painted gypsum board. In addition, the
lighted parking lot contains approximately 785 parking spaces.

2

The IKON Buildings are located at 810 and 820 Gears Road in Houston,
Texas, in the northern portion of Harris County approximately 12 to 16 miles
north of Houston's central business district in the Greens Crossing development.
The property is near North Freeway, which runs in a north-south direction to
Dallas, and North Sam Houston Parkway. In addition, the IKON Buildings are
located approximately five miles from the Houston Intercontinental Airport.
North Harris County contains headquarters for several U.S. and international
companies and offices for several other multinational companies, including
Federal Express, Continental Airlines and Paine Webber.

The IKON Lease. The entire 157,790 rentable square feet of the IKON Buildings is
--------------
currently under a lease agreement with IKON. The landlord's interest in the IKON
lease was assigned to Wells OP at the closing. The current term of the lease is
10 years, which commenced on May 1, 2000, and expires on April 30, 2010. IKON
has the right to extend the term of this lease for two additional five-year
periods at the then-current fair market rental rate, upon 12 months prior
written notice.

IKON's world headquarters is located in Malvern, Pennsylvania. IKON
provides business communication products such as copiers and printers, as well
as services such as distributed printing, facilities management, network design,
e-business development, and technology training. IKON's customers include
various sized businesses, professional firms and government agencies. IKON
distributes products manufactured by companies such as Microsoft, IBM, Canon,
Novell and Hewlett-Packard. IKON has approximately 39,000 employees and
approximately 900 locations worldwide. For the fiscal year ended September 30,
2000, IKON reported net income of approximately $29 million on revenues of
approximately $5.4 billion and a net worth, as of September 30, 2000, of
approximately $1.44 billion.

The base rent payable for the remainder of the IKON lease is as
follows:

---------------------------------------------------
Lease Year         Annual Rent      Monthly Rent
---------------------------------------------------
2-5                $2,015,767       $167,981
---------------------------------------------------
6-10               $2,228,784       $185,732
---------------------------------------------------

Pursuant to the IKON lease, IKON is required to pay all taxes relating
to the IKON Buildings and all operating costs incurred by the landlord in
maintaining and operating the IKON Buildings, including, but not limited to,
garbage and waste disposal, janitorial service and window cleaning, security,
insurance, water and sewer charges, wages, salaries and employee benefits of all
employees engaged in the operation, maintenance and management of the building,
indoor and outdoor landscaping, utilities, repairs, replacements and general
maintenance. Wells OP, as the landlord, will be responsible, for repairs related
to insurable casualty and for maintaining the roof, foundation, exterior walls
and windows, load bearing items and the electrical, mechanical and plumbing
systems of the building, except for the HVAC system. IKON, as the tenant, is
responsible for maintaining, repairing, and replacing the HVAC system. All
tenant improvements or alterations costing in excess of $50,000 must receive
prior written approval from Wells OP.

The Nissan Property

Purchase of the Nissan Property. On September 19, 2001, Wells OP purchased a
-------------------------------
14.873 acre tract of land located in Irving, Dallas County, Texas (Nissan
Property). Wells OP purchased the Nissan Property from The Ruth Ray and H.L.
Hunt Foundation and The Ruth Foundation, each a Texas non-profit corporation and
50% owner in the Nissan Property (Foundations). Neither of the Foundations are
in any way affiliated with the Wells REIT or our Advisor.

3

The purchase price for the Nissan Property was approximately
$5,545,700. Wells OP incurred acquisition expenses in connection with the
purchase of the Nissan Property, including attorneys' fees, recording fees and
environmental report fees, and other closing costs, of approximately $25,000.

Description of the Nissan Property and Site. Wells OP has entered into a
-------------------------------------------
development agreement, an architect agreement and a design and build agreement
(all described below) to construct a three-story office building containing
268,290 rentable square feet (Nissan Project) on the Nissan Property. The Nissan
Project will be constructed of concrete tilt-up, high performance glass with
parking for approximately 1,050 vehicles. The site consists of a 14.873 acre
tract of land located in the Freeport Business Park, which is an office and
industrial park strategically positioned near the Dallas-Ft. Worth International
Airport. Wells OP obtained an environmental report prior to the closing
evidencing that the condition of the land was satisfactory. The Nissan Property
is located in the city of Irving, Texas, approximately 18 miles northwest of
downtown Dallas. More than 400 multinational companies have offices in Irving
including Exxon, GTE and TransAmerica, which have their headquarters in Irving.
The Freeport Business Park itself contains tenants such as Xerox, Federal
Express and Allstate Insurance. The city of Irving is accessible from six major
highways.

Development Agreement. On September 19, 2001, Wells OP entered into a
---------------------
Development Agreement (Development Agreement) with Champion Partners, Ltd. a
Texas limited partnership (Developer), as the exclusive development manager to
supervise, manage and coordinate the planning, design, construction and
completion of the Nissan Project.

The Developer is a Dallas-based commercial real estate development firm
with expertise in acquisition and disposition, debt and equity, financing, land
and building development and project leasing and management. The Developer is a
privately owned Texas limited partnership and the principals have an average
experience level of approximately 20 years. The Developer has been involved with
approximately 18 million square feet of office and industrial facilities valued
at more than $900 million throughout the United States, including several
million square feet of ongoing project developments in Dallas/Ft. Worth,
Memphis, Atlanta and Houston. The Developer is not affiliated with Wells OP or
our Advisor.

The primary responsibilities of the Developer under the Development
Agreement include:

.       the supervision, coordination, administration and management of
the work, activities and performance of the architect under the
Architect's Agreement (as described below) and the contractor
under the Construction Agreement (as described below);

.       the implementation of a development budget setting forth an
estimate of all expenses and costs to be incurred with respect
to the planning, design, development and construction of the
Nissan Project;

.       the review of all applications for disbursement made by or on
behalf of Wells OP under the Architect's Agreement and the
Construction Agreement;

.       the supervision and management of tenant build-out at the
Nissan Project; and

.       the negotiation of contracts with, supervision of the
performance of, and review and verification of applications for
payment of the fees, charges and expenses of such design and
engineering professionals, consultants and suppliers as the
Developer deems necessary for the design and construction of
the Nissan Project in accordance with the development budget.

4

The Developer will also perform other services typical of development
managers including, but not limited to, arranging for preliminary site plans,
surveys and engineering plans and drawings, overseeing the selection by the
contractor of major subcontractors and reviewing all applicable building codes,
environmental, zoning and land use laws and other applicable local, state and
federal laws, regulations and ordinances concerning the development, use and
operation of the Nissan Project or any portion thereof. The Developer is
required to advise Wells OP on a weekly basis as to the status of the Nissan
Project and submit to Wells OP monthly reports with respect to the progress of
construction, including a breakdown of all costs and expenses under the
development budget. The Developer is required to obtain prior written approval
from Wells OP before incurring and paying any costs which will result in
aggregate expenditures under any one category or line item in the development
budget exceeding the amount budgeted therefor. If the Developer determines at
any time that the development budget is not compatible with the then-prevailing
status of the Nissan Project and will not adequately provide for the completion
of the Nissan Project, the Developer will prepare and submit to Wells OP for
approval an appropriate revision of the development budget.

In discharging its duties and responsibilities under the Development
Agreement, the Developer has full and complete authority and discretion to act
for and on behalf of Wells OP. The Developer has agreed to indemnify Wells OP
from any and all claims, demands, losses, liabilities, actions, lawsuits, and
other proceedings, judgments and awards, and any costs and expenses arising out
of the gross negligence, fraud or any willful act or omission by the Developer.
Wells OP has agreed to indemnify the Developer from and against any and all
claims, demands, losses, liabilities, actions, lawsuits and other proceedings,
judgments and awards, and any costs and expenses arising out of (1) any actions
taken by the Developer within the scope of its duties or authority, excluding
negligence, fraud or willful acts of the Developer, and (2) the gross
negligence, fraud or any willful act or omission on the part of Wells OP and its
partners and their respective officers, directors and employees.

Wells OP may elect to provide funds to the Developer so that the
Developer can pay Wells OP's obligations with respect to the construction and
development of the Nissan Project directly. All such funds of Wells OP which may
be received by the Developer with respect to the development or construction of
the Nissan Project will be deposited in a bank account approved by Wells OP. If
at any time the funds contained in the bank account of Wells OP temporarily
exceeds the immediate cash needs of the Nissan Project, the Developer may invest
such excess funds in savings accounts, certificates of deposit, United States
Treasury obligations and commercial paper as the Developer deems appropriate or
as Wells OP may direct, provided that the form of any such investment is
consistent with the Developer's need to be able to liquidate any such investment
to meet the cash needs of the Nissan Project. The Developer shall be reimbursed
for all advances, costs and expenses paid for and on behalf of Wells OP. The
Developer will not be reimbursed, however, for its own administrative costs or
for costs relating to travel and lodging incurred by its employees and agents.
The Developer may be required to advance its own funds for the payment of any
costs or expenses incurred by or on behalf of Wells OP in connection with the
development of the Nissan Project if there are cost overruns in excess of the
contingency contained in the development budget.

As compensation for the services to be rendered by the Developer under
the Development Agreement, Wells OP will pay a development fee of $1,250,000.
The fee will be due and payable ratably (on the basis of the percentage of
construction completed) as the construction and development of the Nissan
Project is completed.

It is anticipated that the aggregate of all costs and expenses to be
incurred by Wells OP with respect to the acquisition of the Nissan Property, the
planning, design, development, construction and completion of the Nissan Project
will total approximately $42,259,000. Under the terms of the Development
Agreement, the Developer has agreed that in the event that the total of all such
costs and

5

expenses exceeds $42,258,600, subject to certain adjustments, the amount of fees
payable to the Developer shall be reduced by the amount of any such excess.

In the event the Developer should for any reason cease to manage the
development of the Nissan Project, Wells OP would have to locate a suitable
successor development manager. No assurances can be given as to whether a
suitable successor development manager could be found, or what the contractual
terms or arrangement with any such successor would be.

Architect's Agreement. HKS, Inc., a Texas corporation (Architect), is the
---------------------
architect for the Nissan Project pursuant to an Architect's Agreement
(Architect's Agreement) dated September 19, 2001 entered into with Wells OP. The
Architect, which was founded in 1939, has a staff of over 500 employees, and
specializes in architecture, planning, structural engineering, interior
architecture and graphic design. The Architect has its principal office in
Dallas and additional offices in Atlanta, Los Angeles, Orlando, Richmond, Salt
Lake City and Tampa. The Architect has designed a wide variety of projects, with
total values in excess of $26 billion, including facilities for corporate office
space, sports facilities, healthcare facilities and hotels and resorts. The
Architect is not affiliated with Wells OP or our Advisor.

The Architect's basic services under the Architect's Agreement include
the schematic design phase, the design development phase, the construction
documents phase, the construction procurement phase and the construction phase.
During the schematic design phase, the Architect will prepare schematic design
documents consisting of drawings and other documents illustrating the scale and
relationship of the Nissan Project components. During the design development
phase, the Architect will prepare design development documents consisting of
drawings and other documents to fix and describe the size and character of the
entire Nissan Project as to architectural, structural, civil mechanical, and
electrical systems, materials and such other elements as may be appropriate.
During the construction documents phase, the Architect will prepare construction
documents consisting of drawings and specifications setting forth in detail the
requirements for the construction of the Nissan Project along with necessary
bidding information. During the construction procurement phase, the Architect
will assist Wells OP in obtaining bids or negotiated proposals and assist in
awarding and preparing contracts for construction. During the construction
phase, the Architect is to provide administration of the Construction Agreement
(as described below) and advise and consult with the contractor and Wells OP
concerning various matters relating to the construction of the Nissan Project.
The Architect is required to visit the Nissan Project site at intervals
appropriate to the stage of construction and to become generally familiar with
the progress and quality of the work and to determine if, in general, the work
is proceeding in accordance with the contract schedule. The Architect is
required to keep Wells OP informed of the progress and quality of the work. The
Architect is also required to determine the amounts owing to the contractor
based on observations of the site and evaluations of the contractor's
application for payment and shall issue certificates for payment in amounts
determined in accordance with the Construction Agreement. The Architect will
also conduct inspections to determine the date of completion of the Nissan
Project and shall issue a final certificate for payment.

Payments will be paid to the Architect under the Architect Agreement on
a monthly basis in proportion to the services performed within each phase of
service. Monthly invoices will be based on the work done by designers, writers,
and draftsmen at various hourly rates.

Design and Build Construction Agreement. Wells OP entered into a Design and
---------------------------------------
Build Construction Agreement (Construction Agreement) on September 19, 2001 with
Thos. S. Byrne, Inc. (Contractor) for the construction of the Nissan Project.
The Contractor is based in Ft. Worth, Texas and specializes in commercial,
industrial and high-end residential buildings. The Contractor commenced
operations in 1923 and has completed over 200 projects for a total of
approximately 60 clients. The Contractor is presently

6

engaged in the construction of over 20 projects with a total construction value
of in excess of $235 million. The Contractor is not affiliated with Wells OP or
our Advisor.

The Contractor will begin construction of the Nissan Project in January
2002. The Nissan Project will consist of the construction of a three-story
concrete tilt-up, high performance glass office building containing
approximately 268,290 rentable square feet (Nissan Building). The land is
currently zoned to permit the intended development and operation of the Nissan
Project as a commercial office building and has access to all utilities
necessary for the development and operation of the Nissan Project, including
water, electricity, sanitary sewer and telephone.

The Construction Agreement provides that Wells OP will pay the
Contractor a maximum of $25,326,017 for the construction of the Nissan Project
which includes all estimated fees and costs including the architect fees. The
Contractor will be responsible for all costs of labor, materials, construction
equipment and machinery necessary for completion of the Nissan Project. In
addition, the Contractor will be required to secure and pay for any additional
business licenses, tap fees and building permits which may be necessary for
construction of the Nissan Project.

Wells OP will make monthly progress payments to the Contractor in an
amount of 90% of the portion of the contract price properly allocable to labor,
materials and equipment, less the aggregate of any previous payments made by
Wells OP. When construction is substantially complete and the space is available
for occupancy, Wells OP will make a semi-final payment in the amount of all of
the unpaid balance, except that Wells OP may retain an amount in accordance with
the terms of the Construction Contract which is necessary to protect its
remaining interest until final completion of the Nissan Project. Wells OP will
pay the entire unpaid balance when the Nissan Project has been fully completed
in accordance with the terms and conditions of the Construction Contract. As a
condition of final payment, the Contractor will be required to execute and
deliver a release of all claims and liens against Wells OP.

The Contractor will be responsible to Wells OP for the acts or
omissions of its subcontractors and suppliers of materials and of persons either
directly or indirectly employed by them. The Contractor has agreed to indemnify
Wells OP from and against all liability, claims, damages, losses, expenses and
costs of any kind or description arising out of or in connection with the
performance of the Construction Contract, provided that such liability, claim,
damage, loss or expense is caused in whole or in part by any act or omission of
the Contractor, any subcontractor or materialmen, anyone directly or indirectly
employed by any of them or anyone for whose acts any of them may be liable. The
Construction Contract also requires the Contractor to obtain and maintain, until
completion of the Nissan Project, adequate insurance coverage relating to the
Nissan Project, including insurance for workers' compensation, personal injury
and property damage.

The Contractor is required to work expeditiously and diligently to
maintain progress in accordance with the construction schedule and to achieve
substantial completion of the Nissan Project within the contract time. The
Contractor is required to employ all such additional labor, services and
supervision, including such extra shifts and overtime, as may be necessary to
maintain progress in accordance with the construction schedule. It is
anticipated that the Nissan Project will be substantially completed by February
2003. Wells OP shall obtain a completion and performance bond in an amount
sufficient to complete construction and development of the Nissan Project to
reduce the risk of non-performance and to assure compliance with approved plans
and specifications.

The Nissan Lease. The entire 268,290 rentable square feet of the Nissan Building
----------------
is currently under a lease agreement with Nissan Motor Acceptance Corporation
(Nissan). The term of the lease began on September 19, 2001 and will extend 10
years beyond the rent commencement date. Construction on the building is
scheduled to begin on or before February 1, 2002 and to be completed within 20
months from

7

its commencement. The rent commencement date will occur shortly after
completion. Nissan has the right to extend the initial 10-year term of this
lease for an additional two years, upon written notice. Nissan also has the
right to extend the lease for two additional five-year periods at 95% of the
then-current market rental rate, upon written notice.

Nissan is a California corporation with its corporate headquarters in
Torrance, California. Nissan is a wholly owned subsidiary of Nissan North
America, Inc. (NNA), a guarantor of Nissan's lease. NNA is a California
corporation, with headquarters in Gardenia, California. NNA handles the North
American business sector of its Japanese parent, Nissan Motor Company, Ltd.
NNA's business activities include design, development, manufacturing and
marketing of Nissan vehicles in North America. NNA employs approximately 2,400
people. As a subsidiary of NNA, Nissan purchases retail and lease contracts
from, and provides wholesale inventory and mortgage loan financing to, Nissan
and Infiniti retailers. Nissan Motor Company, Ltd., the parent company of NNA,
reported fiscal year 2000 net income of $2.6 billion on revenues of $49.1
billion, and a net worth, as of March 31, 2001, of $7.7 billion.

The base rent payable for the Nissan lease beginning on the rent
commencement date is as follows:

------------------------------------------------------
Lease Year      Annual Rent        Monthly Rent
------------------------------------------------------
1      $4,225,860         $352,155
------------------------------------------------------
2      $4,325,168         $360,431
------------------------------------------------------
3      $4,426,809         $368,901
------------------------------------------------------
4      $4,530,839         $377,570
------------------------------------------------------
5      $4,637,314         $386,443
------------------------------------------------------
6      $4,746,291         $395,524
------------------------------------------------------
7      $4,857,829         $404,819
------------------------------------------------------
8      $4,971,988         $414,332
------------------------------------------------------
9      $5,088,829         $424,069
------------------------------------------------------
10     $5,208,417         $434,035
------------------------------------------------------
11*     $5,330,815         $444,235
------------------------------------------------------
12*     $5,456,089         $454,674
------------------------------------------------------
* If 2-year extension option is exercised.

Pursuant to the Nissan lease, Nissan is required to pay all taxes
relating to the Nissan Building and all operating costs including, but not
limited to, those associated with water, sewer, gas, electricity, light, heat,
telephone, television cable, rubbish removal, power and other utilities and
services used by Nissan. Nissan will also pay for repairs to the HVAC,
mechanical, electrical, elevator, and plumbing systems, as well as repairs to
the structural roof walls, foundations, paving, curbs, landscaping and fixtures.
Wells OP, as the landlord, will be responsible for repairs resulting from
defects in the initial construction of the building, as well as repairs to
structural portions of the foundation, exterior walls, structural frame and
roof. Nissan has an option to purchase the property if certain construction
related milestones are not met by Wells OP in the construction of the building.
In addition, if Wells OP ever decides to sell or transfer the property, Nissan
has a right of first refusal to purchase the property pursuant to the same
proposed sale terms. In order to exercise this right, Nissan must inform Wells
OP of its intent to purchase the property within 30 days of receiving notice
that Wells OP intends to sell or transfer the property.

8

The Ingram Micro Distribution Facility

Purchase of a Ground Leasehold Interest in the Ingram Micro Distribution
------------------------------------------------------------------------
Facility. On September 27, 2001, Wells OP acquired a ground leasehold interest
--------
in a 701,819 square foot distribution facility located on a 39.223 acre tract of
land at 3820 Micro Drive in the City of Millington, Shelby County, Tennessee
(Ingram Micro Distribution Facility), pursuant to a Bond Real Property Lease
dated as of December 20, 1995 (Bond Lease). The ground leasehold interest under
the Bond Lease, along with the Bond and the Bond Deed of Trust described below,
were purchased from Ingram Micro L.P. (Ingram) in a sale-lease back transaction
for a purchase price of $21,050,000. Wells OP incurred acquisition expenses in
connection with the purchase of the Ingram Micro Distribution Facility,
including attorneys' fees, recording fees, property condition report fees,
environmental report fees and other closing costs, of approximately $54,600. The
Bond Lease expires on December 31, 2026.

Fee simple title to the land upon which the Ingram Micro Distribution
Facility is located is held by the Industrial Development Board of the City of
Millington, Tennessee (Industrial Development Board) which originally entered
into the Bond Lease with Lease Plan North America, Inc. (Lease Plan). The
Industrial Development Board issued an Industrial Development Revenue Note
Ingram Micro L.P. Series 1995 (Bond) in a principal amount of $22,000,000 to
Lease Plan in order to finance the construction of the Ingram Micro Distribution
Facility. The Bond is secured by a Fee Construction Mortgage Deed of Trust and
Assignment of Rents and Leases dated as of December 20, 1995 (Bond Deed of
Trust) executed by the Industrial Development Board for the benefit of Lease
Plan.

On December 20, 2000, Lease Plan assigned to Ingram its ground
leasehold interest in the Ingram Micro Distribution Facility under the Bond
Lease. On the same date, Lease Plan also assigned all of its rights and interest
in the Bond and the Bond Deed of Trust of Ingram.

In addition to purchasing the Bond Lease, as set forth above, Wells OP
also acquired the Bond and the Bond Deed of Trust from Ingram at closing.
Beginning in 2006, Wells OP has the option under the Bond Lease to purchase the
land underlying the Ingram Micro Distribution Facility from the Industrial
Development Board for $100 plus satisfying the indebtedness evidenced by the
Bond, which is currently held by Wells OP.

An independent appraisal of the ground leasehold interest in the Ingram
Micro Distribution Facility was prepared by Douglas B. Hall & Associates, Inc.,
real estate appraisers, as of September 4, 2001, pursuant to which the market
value of the real property containing the leased fee interest subject to the
lease described below was estimated to be $21,400,000, in cash or terms
equivalent to cash. This value estimate was based upon a number of assumptions,
including that the Ingram Micro Distribution Facility will continue operating at
a stabilized level with Ingram occupying 100% of the rentable area, and is not
necessarily an accurate reflection of the fair market value of the property or
the net proceeds which would result from an immediate sale of this property.
Wells OP also obtained an environmental report and an engineering inspection
report prior to the closing evidencing that the condition of the land and the
Ingram Micro Distribution Facility were satisfactory.

Description of the Ingram Micro Distribution Facility and Site. The Ingram Micro
--------------------------------------------------------------
Distribution Facility, which was completed in 1997, is a one-story office and
warehouse building containing approximately 701,819 rentable square feet located
on a 39.22 acre tract of land.

The site is located in the northern part of Shelby County, Tennessee
approximately 16 miles north of the Memphis central business district. The site
is on the west side of U.S. Highway 51 and the east side of Old Millington Road,
less than one mile from the Millington Municipal Airport. The major development
in Millington is the former Memphis Naval Air Station, which was one of the
world's largest inland naval bases until the 1993 Base Realignment and Closure
Commission approved a new mission for the base. Approximately 1,900 acres of
land on the base is now known as the West

9

Tennessee Regional Business Center and is planned for development as a major
employment center in the area.

The Ingram Lease. On September 27, 2001, Wells OP entered into a new lease with
----------------
Ingram pursuant to which Ingram agreed to lease the entire Ingram Micro
Distribution Facility from Wells OP. The Ingram lease has a term of 10 years
with two successive options to extend for 10 years each at an annual rate equal
to the greater of (i) 95% of the then-current fair market rental rate, or (ii)
the annual rental payment effective for the final year of the term immediately
prior to such extension. Annual rent, as determined for each extended term, is
also increased by 15% beginning in the 61st month of each extended term.

Ingram Micro, Inc. (Micro) is the general partner of Ingram and a
guarantor on the Ingram lease. Micro is traded on the New York Stock Exchange
and has its corporate headquarters in Santa Ana, California. Micro provides
technology products and supply chain management services through wholesale
distribution. It targets three different market segments, including corporate
resellers, direct and consumer marketers, and value-added resellers. Micro's
worldwide business consists of approximately 14,000 associates and operations in
36 countries. In addition, Micro serves approximately 175,000 customers and
partners with approximately 1,700 manufacturers. For fiscal year-ended December
31, 2000, Micro reported a net income of over $226 million on revenues of
approximately $30.7 billion and a net worth, as of December 31, 2000, of
approximately $1.8 billion.

The annual base rent for the Ingram Micro Distribution Facility is
$2,035,275 for years one through five of the lease term and $2,340,566 for years
six through 10 of the lease term. Ingram has also agreed to pay as additional
rent all other amounts, liabilities and obligations relating to the Ingram Micro
Distribution Facility, including all taxes, assessments, water rents, sewer
rents and charges, duties, impositions, license and permit fees, charges for
public utilities of any kind, payments and all other charges incurred as a
result of the use and occupation of the premises by Ingram. Ingram is also
responsible for maintenance of the premises, including without limitation the
adjoining sidewalks and curbs, roof, generators and all operational building
systems.

The Lucent Building

Purchase of the Lucent Building. On September 28, 2001, Wells OP purchased a
-------------------------------
four-story office building with approximately 120,000 rentable square feet
located at 200 Lucent Lane, Cary, North Carolina (Lucent Building) from Lucent
Technologies, Inc. (Lucent) in a sale-lease back transaction. Lucent is not in
any way affiliated with the Wells REIT or our Advisor.

The purchase price for the Lucent Building was $17,650,000. Wells OP
incurred acquisition expenses in connection with the purchase of the Lucent
Building, including commissions, attorneys' fees, recording fees, structural
report and environmental report fees, and other closing costs, of approximately
$372,800.

An independent appraisal of the Lucent Building was prepared by CB
Richard Ellis, Inc., real estate appraisers, as of October 1, 2001, pursuant to
which the market value of the real property containing the leased fee interest
subject to the lease described below was estimated to be $18,400,000, in cash or
terms equivalent to cash. This value estimate was based upon a number of
assumptions, including that the Lucent Building will continue operating at a
stabilized level with Lucent occupying 100% of the rentable area, and is not
necessarily an accurate reflection of the fair market value of the property or
the net proceeds which would result from an immediate sale of this property.
Wells OP also obtained an environmental report and an engineering inspection
report prior to the closing evidencing that the condition of the land and the
Lucent Building were satisfactory.

10

Description of the Lucent Building and Site. The Lucent Building, which was
-------------------------------------------
completed in 1999, is a four-story office building containing approximately
120,000 rentable square feet located on a 29.19 acre tract of land, which
includes a 11.84 acre improved tract of land and a 17.34 acre undeveloped tract
of land. The building is constructed using a steel frame with steel beams and a
reinforced concrete foundation. The exterior walls are made of primarily glass
and steel. The common area interior walls consist of textured and painted
sheetrock with wood accent and trim. In addition, the building has multiple
elevators and approximately 500 paved parking spaces.

The Lucent Building is located at 200 Lucent Lane in Regency Park
office park in the "Research Triangle" in Cary, North Carolina. The site is
approximately 10 miles west of downtown Raleigh and 15 miles south of
Raleigh-Durham International Airport. Cary is a growing commercial and
residential suburb of Raleigh. Some of Cary's major industries include computer
software and technology, pharmaceuticals and communications. Regency Park
contains tenants such as Hewlett-Packard, Nextel and Alltel and is located
approximately three miles from Interstate 40, one of the major east-west
highways in the United States.

The Lucent Lease. The entire 120,000 rentable square feet of the Lucent Building
----------------
is currently under a lease agreement with Lucent, which does not include the
17.34 acre undeveloped tract of land described above. The current term of the
lease is 10 years, which commenced on September 28, 2001, and expires on
September 30, 2011. Lucent has the right to extend the term of this lease for
three additional five-year periods at the then-current fair market rental rate,
upon 12 months prior written notice.

Lucent is traded on the New York Stock Exchange and has its corporate
headquarters in Murray Hill, New Jersey. Lucent designs, develops and
manufactures communications systems, software and other products. As of June 30,
2001, Lucent employed approximately 87,000 people and had offices or
distributors in over 65 countries. For fiscal year-ended September 30, 2000,
Lucent reported a net income of over $1.2 billion on total revenues of
approximately $34 billion and a net worth, as of September 30, 2000, of over $26
billion.

The base rent payable under the Lucent lease is as follows:

-----------------------------------------------------------
Lease Year        Anuual Rent       Monthly Rent
-----------------------------------------------------------
1                $1,800,000          $150,000
-----------------------------------------------------------
2                $1,854,000          $154,500
-----------------------------------------------------------
3                $1,909,620          $159,135
-----------------------------------------------------------
4                $1,966,908          $163,909
-----------------------------------------------------------
5                $2,025,915          $168,826
-----------------------------------------------------------
6                $2,086,693          $173,891
-----------------------------------------------------------
7                $2,149,294          $179,108
-----------------------------------------------------------
8                $2,213,773          $184,481
-----------------------------------------------------------
9                $2,280,186          $190,016
-----------------------------------------------------------
10               $2,348,592          $195,716
-----------------------------------------------------------

Pursuant to the Lucent lease, Lucent is required to pay all taxes
relating to the Lucent Building and all operating costs, including, but not
limited to, those associated with water, sewerage, gas, steam, electricity, air
conditioning, telephone, garbage removal, power and other utilities and services
used by Lucent. Lucent is also required to pay for all repair and maintenance
costs, including but not limited to, window cleaning, security personnel,
elevator maintenance, HVAC maintenance, janitorial service, waste recycling
service, and landscaping maintenance. Wells OP, as the landlord, will be
responsible for building repairs caused by fire or other insurable casualties.

11

Property Management Fees

Wells Management Company, Inc. (Wells Management), an affiliate of the
Wells REIT and our Advisor, has been retained to manage and lease the IKON
Buildings, the Nissan Building, the Ingram Micro Distribution Facility and the
Lucent Building. The Wells REIT shall pay management and leasing fees to Wells
Management in the amount of 4.5% of gross revenues from the IKON Buildings, the
Nissan Building, the Ingram Micro Distribution Facility and the Lucent Building,
subject to certain limitations.

Description of Properties - The Matsushita Building

The information contained on page 85 in the "Description of Properties
- The Matsushita Building" section of the prospectus is revised as of the date
of this supplement by the deletion of the first and fourth full paragraphs on
that page and the insertion of the following paragraphs in lieu thereof:

Wells OP and Matsushita Avionics Systems Corporation
(Matsushita Avionics) entered into a Second Amendment to Office Lease
(Amendment) relating to the two-story office building (Matsushita
Building) located in the City of Lake Forest, Orange County,
California. The Amendment confirms that the lease commencement date for
the Matsushita lease is January 4, 2000, and that the amount of
rentable square feet of the building is 144,906 square feet.

The Matsushita lease terminates on January 31, 2007.
Matsushita Avionics has the option to extend the lease for two
additional five-year periods of time at an annual rate equal to 95% of
the then-current fair market rental rate,. Wells OP and Matsushita
Avionics agreed that the total project cost for the construction of the
Matsushita Building upon which the base rent was calculated was
$18,431,206. The base rent payable for the remainder of the Matsushita
lease is as follows:

-----------------------------------------------------------
Lease Year           Annual Rent        Monthly Rent
-----------------------------------------------------------
2/1/01-1/31/02       $1,888,834.60      $157,361.97
-----------------------------------------------------------
2/1/02-1/31/04       $2,005,463.60      $167,121.97
-----------------------------------------------------------
2/1/04-1/31/06       $2,122,583.60      $176,881.97
-----------------------------------------------------------
2/1/06-1/31/07       $2,239,703.60      $186,641.97
-----------------------------------------------------------

Management's Discussion and Analysis of Financial Condition and Results of
Operation

The information contained on page 98 in the "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources" section of the prospectus is revised as of the date of this
supplement by the deletion of the first two paragraphs of that section and the
insertion of the following paragraphs in lieu thereof:

We began active operations on June 5, 1998, when we received
and accepted subscriptions for 125,000 shares pursuant to our initial
public offering, which commenced on January 30, 1998. We terminated our
initial public offering on December 19, 1999. Of the $132,181,919
raised in the initial offering, we invested a total of $111,032,812 in
properties. On December 20, 1999, we commenced a second public offering
of up to 22,200,000 shares of common stock. We terminated our second
offering on December 19, 2000. Of the $175,229,193 raised in the second
offering, we invested a total of $147,192,522 in properties.

12

Pursuant to the prospectus, we commenced this third offering
of shares of our common stock on December 20, 2000. As of October 10,
2001, we had received an additional $330,794,345 in gross offering
proceeds from the sale of 33,079,435 shares in the third offering. As
of October 10, 2001, we had raised in the aggregate a total of
$638,205,457 in offering proceeds through the sale of 63,820,546 shares
of common stock. As of October 10, 2001, we had paid a total of
$22,194,260 in acquisition and advisory fees and acquisition expenses,
had paid a total of $77,857,869 in selling commissions and
organizational and offering expenses, had made capital contributions of
$523,731,851 to Wells OP for investments in joint ventures and
acquisitions of real property, had utilized $4,083,734 for the
redemption of stock pursuant to our share redemption program, and were
holding net offering proceeds of $10,337,743 available for investment
in additional properties.

Plan of Distribution

The information contained on page 155 in the "Plan of Distribution"
section of the prospectus is revised as of the date of this supplement by the
deletion of the sixth and seventh full paragraphs on that page and the insertion
of the following paragraphs in lieu thereof:

In connection with sales of certain minimum numbers of shares
to a "purchaser," as defined below, the registered representative and
the investor may agree to reduce the amount of selling commissions
payable with respect to such sales. Such reduction will be credited to
the investor by reducing the purchase price per share payable by the
investor. The following table illustrates the various discount levels
available:

Commissions on Sales
Purchase Price per        per Incremental Share
Number of      Incremental Share in    in Volume Discount Range
Shares Purchased   Volume Discount Range       Percent      Amount
----------------   ---------------------       -------      ------
1 to   50,000            $10.00                7.0%        $0.70
50,001 to 100,000            $ 9.80                5.0%        $0.50
100,001 and Over             $ 9.60                3.0%        $0.30

For example, if an investor purchases 200,000 shares, he could
pay as little as $1,950,000 ($9.75 per share) rather than $2,000,000
for the shares, in which event the commission on the sale of such
shares would be $90,000 ($0.45 per share) and, after payment of the
dealer manager fee of $50,000 ($0.25 per share), we would receive net
proceeds of $1,810,000 ($9.05 per share). The net proceeds to the Wells
REIT will not be affected by volume discounts.

The information contained on page 157 in the "Plan of Distribution"
section of the prospectus is revised as of the date of this supplement by the
deletion of the second and third full paragraphs on that page and the insertion
of the following paragraphs in lieu thereof:

Investors may agree with the participating broker-dealer
selling them shares or with the Dealer Manager if no participating
broker-dealer is involved in the transaction to reduce the amount of
selling commissions payable to zero (i) in the event the investor has
engaged the services of a registered investment advisor with whom the
investor has agreed to pay a fee for investment advisory services, or
(ii) in the event the investor is investing in a bank trust account
with respect to which the investor has delegated the decision-making
authority for investments made in the account to a bank trust
department. The net proceeds to the Wells REIT will

13

not be affected by eliminating commissions payable in connection with
sales to investors purchasing through such registered investment
advisors or bank trust departments. All such sales must be made through
registered broker-dealers.

Neither the Dealer Manager nor its affiliates will directly or
indirectly compensate any person engaged as an investment advisor or a
bank trust department by a potential investor as an inducement for such
investment advisor or bank trust department to advise favorably for an
investment in the Wells REIT.

Financial Statements

The Statements of Revenues Over Certain Operating Expenses of the IKON
Buildings for the year ended December 31, 2000 and the Statements of Certain
Operating Expenses in Excess of Revenues of the Ingram Micro Distribution
Facility and Lucent Building for the year ended December 31, 2000, included in
this supplement and elsewhere in the registration statement, have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included in this supplement in reliance
upon the authority of said firm as experts in giving said reports.

The Statements of Revenues Over Certain Operating Expenses of the IKON
Buildings for the six months ended June 30, 2001 and the Statements of Certain
Operating Expenses in Excess of Revenues of the Ingram Micro Distribution
Facility and Lucent Building for the six months ended June 30, 2001, included in
this supplement and elsewhere in the registration statement, have not been
audited.

The Pro Forma Balance Sheet of the Wells REIT, as of June 30, 2001, the
Pro Forma Statement of Income for the six months ended June 30, 2001, and the
Pro Forma Statement of Income (loss) for the year ended December 31, 2000, which
are included in this supplement, have not been audited.

14

INDEX TO FINANCIAL STATEMENTS

IKON Buildings                                                                                   Page
----

Report of Independent Accountants                                                         16

Statements of Revenues Over Certain Operating Expenses                                    17
for the year ended December 31, 2000 (audited) and for the
six months ended June 30, 2001 (unaudited)

Notes to Statements of Revenues Over Certain Operating                                    18
Expenses for the year ended December 31, 2000 (audited) and
for the six months ended June 30, 2001 (unaudited)

Ingram Micro Distribution Facility

Report of Independent Accountants                                                         19

Statements of Certain Operating Expenses in Excess of Revenues                            20
for the year ended December 31, 2000 (audited) and for the
six months ended June 30, 2001 (unaudited)

Notes to Statements of Certain Operating Expenses in Excess of Revenues                   21
for the year ended December 31, 2000 (audited) and
for the six months ended June 30, 2001 (unaudited)

Lucent Building

Report of Independent Accountants                                                         22

Statements of Certain Operating Expenses in Excess of Revenues                            23
for the year ended December 31, 2000 (audited) and for the
six months ended June 30, 2001 (unaudited)

Notes to Statements of Certain Operating Expenses in Excess of                            24
Revenues for the year ended December 31, 2000 (audited) and
for the six months ended June 30, 2001 (unaudited)

Wells Real Estate Investment Trust, Inc.

Unaudited Pro Forma Financial Statements
----------------------------------------

Summary of Unaudited Pro Forma Financial Statements                                       25

Pro Forma Balance Sheet as of June 30, 2001                                               26

Pro Forma Statement of Income for the six months
ended June 30, 2001                                                                       28

Pro Forma Statement of Income (loss) for the year ended
December 31, 2000                                                                         29

15

[LOGO
ANDERSEN]

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the IKON BUILDINGS for the six months ended June 30, 2001 and the
year ended December 31, 2000. This financial statement is the responsibility of
management. Our responsibility is to express an opinion on this financial
statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. These standards require that we plan and perform the audit
to obtain reasonable assurance about whether the statement of revenues over
certain operating expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statement of revenues over certain operating expenses. An audit also
includes assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the IKON
Buildings after acquisition by the Wells Operating Partnership, L.P., a
subsidiary of Wells Real Estate Investment Trust, Inc. The accompanying
statement of revenues over certain operating expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission and is not intended to be a complete presentation of the
IKON Buildings' revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the IKON Buildings for the six months ended June 30, 2001 and the
year ended December 31, 2000 in conformity with accounting principles generally
accepted in the United States.

/s/ Arthur Andersen LLP

Atlanta, Georgia
September 12, 2001

16

IKON BUILDINGS

STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE SIX MONTHS ENDED JUNE 30, 2001

AND THE YEAR ENDED DECEMBER 31, 2000

2001         2000
----------   ----------
(Unaudited)

RENTAL REVENUES                                         $1,034,675   $1,379,567

OPERATING EXPENSES, net of reimbursements                        0      115,276
----------   ----------
REVENUES OVER CERTAIN OPERATING EXPENSES                $1,034,675   $1,264,291
==========   ==========

The accompanying notes are an integral part of these statements.

17

IKON BUILDINGS

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE SIX MONTHS ENDED JUNE 30, 2001

AND THE YEAR ENDED DECEMBER 31, 2000

1.       ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On September 7, 2001, the Wells Operating Partnership, L.P. ("Wells
OP") acquired the IKON Buildings from SV Reserve, L.P. ("SV Reserve").
Wells OP is a Delaware limited partnership that was organized to own
and operate properties on behalf of Wells Real Estate Investment Trust,
Inc., a Maryland corporation. As the sole general partner of Wells OP,
Wells Real Estate Investment Trust, Inc. possesses full legal control
and authority over the operations of Wells OP.

IKON Office Solutions, Inc. ("IKON") currently occupies the entire
157,790 rentable square feet of the two single-story office buildings
comprising the IKON Buildings under a net lease agreement (the "IKON
Lease"). IKON is a public entity traded on the New York Stock Exchange.
SV Reserve's interest in the IKON Lease was assigned to Wells OP at the
closing. The initial term of the IKON Lease commenced on May 1, 2000
and expires on April 30, 2010. IKON has the right to extend the IKON
Lease for two additional periods of five years at a rate equal to the
then-current fair market rental rate. Under the IKON Lease, IKON is
required to pay, as additional monthly rent, all operating costs,
including but not limited to, water, power, heating, lighting, air
conditioning and ventilation, security fees, landscaping, window
cleaning, pest control, property management fees, taxes, assessments
and governmental levies, insurance, amortization (together with
reasonable financing charges) of capital items installed for the
purpose of reducing operating expenses, as well as the cost of all
supplies, wages and salaries incurred by the landlord in connection
with the operations and maintenance of the premises. Wells OP will be
responsible for all building repairs caused by fire, windstorm, or
other insurable casualty.

Rental Revenues

Rental income is recognized on a straight-line basis over the term of
the IKON Lease.

2.       Basis of Accounting

The accompanying statements of revenues over certain operating expenses
are presented on the accrual basis. These statements have been prepared
in accordance with the applicable rules and regulations of the
Securities and Exchange Commission for real estate properties acquired.
Accordingly, these statements exclude certain historical expenses, such
as depreciation, interest, and management fees. Therefore, these
statements are not comparable to the operations of the IKON Buildings
after acquisition by Wells OP.

18

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of certain operating expenses in
excess of revenues for the Ingram MICRO DISTRIBUTION FACILITY for the year ended
December 31, 2000. This financial statement is the responsibility of management.
Our responsibility is to express an opinion on this financial statement based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the statement of certain operating
expenses in excess of revenues is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the statement of certain operating expenses in excess of
revenues. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

As described in Note 2, this financial statement excludes certain expenses that
would be comparable with those resulting from the operations of the Ingram Micro
Distribution Facility after acquisition by Wells Operating Partnership, L.P., a
subsidiary of Wells Real Estate Investment Trust, Inc. The accompanying
statement of certain operating expenses in excess of revenues was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission and is not intended to be a complete presentation of the
Ingram Micro Distribution Facility's revenues and expenses.

In our opinion, the statement of certain operating expenses in excess of
revenues presents fairly, in all material respects, certain operating expenses
in excess of revenues for the Ingram Micro Distribution Facility for the year
ended December 31, 2000 in conformity with accounting principles generally
accepted in the United States.

/s/ Arthur Andersen LLP

Atlanta, Georgia
October 5, 2001

19

INGRAM MICRO DISTRIBUTION FACILITY

STATEMENTS OF

CERTAIN OPERATING EXPENSES IN EXCESS OF REVENUES

FOR THE SIX MONTHS ENDED JUNE 30, 2001 (UNAUDITED)

AND THE YEAR ENDED DECEMBER 31, 2000

(Unaudited)
2001            2000
---------      -----------
RENTAL REVENUES                                    $       0      $         0

OPERATING EXPENSES                                   945,910        2,083,598
---------      -----------
CERTAIN OPERATING EXPENSES IN EXCESS OF
REVENUES                                        $(945,910)     $(2,083,598)
=========      ===========

The accompanying notes are an integral part of these statements.

20

INGRAM MICRO DISTRIBUTION FACILITY

NOTES TO STATEMENTS OF

CERTAIN OPERATING EXPENSES IN EXCESS OF REVENUES

FOR THE SIX MONTHS ENDED JUNE 30, 2001 (UNAUDITED)

AND THE YEAR ENDED DECEMBER 31, 2000

1.   Organization and significant accounting policies

Description of Real Estate Property Acquired

On September 27, 2001, Wells Operating Partnership, L.P. ("Wells OP")
acquired the Ingram Micro Distribution Facility from Ingram Micro, L.P.
("Ingram"). Wells OP is a Delaware limited partnership organized to own and
operate properties on behalf of Wells Real Estate Investment Trust, Inc., a
Maryland corporation. As the sole general partner of Wells OP, Wells Real
Estate Investment Trust, Inc. possesses full legal control and authority
over the operations of Wells OP.

Ingram currently occupies 100% of the Ingram Micro Distribution Facility
under a net lease agreement (the "Ingram Lease") with Wells OP. The Ingram
Micro Distribution Facility is a one-story industrial building comprised of
701,819 rentable square feet. Ingram Micro, Inc. is the guarantor of the
Ingram Lease and is a public entity traded on the New York Stock Exchange.
Prior to September 27, 2001, Ingram owned and occupied the entire Ingram
Micro Distribution Facility; therefore, no rental revenues were recognized
for the year ended December 31, 2000 or for the six months ended June 30,
2001. The initial term of the Ingram Lease commenced on September 27, 2001
and expires on September 30, 2011. Ingram has the right to extend the
Ingram Lease for two additional periods of ten years at an annual rate
equal to the greater of (i) 95% of the then-current fair market rental
rate, or (ii) the annual rental payment effective for the final year of the
term immediately prior to such extension. Annual rent, as determined for
each extended term, shall also be increased by 15% beginning in the 61st
month of each extended term. Under the Ingram Lease, Ingram is required to
pay, as additional monthly rent, all operating costs, including but not
limited to insurance costs, utilities, taxes, assessments, water and sewer
charges, license and permit fees. Ingram is also responsible for
maintenance of the premises, including without limitation the adjoining
sidewalks and curbs, roof, generators and all operational building systems.

2.   Basis of Accounting

The accompanying statements of certain operating expenses in excess of
revenues are presented on the accrual basis. These statements have been
prepared in accordance with the applicable rules and regulations of the
Securities and Exchange Commission for real estate properties acquired.
Accordingly, these statements exclude certain historical expenses such as
depreciation, interest, and management fees. Therefore, these statements
are not comparable to the operations of the Ingram Micro Distribution
Facility after acquisition by Wells OP.

21

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of certain operating expenses in
excess of revenues of the Lucent BUILDING for the year ended December 31, 2000.
This financial statement is the responsibility of management. Our responsibility
is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the statement of certain operating
expenses in excess of revenues is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the statement of certain operating expenses in excess of
revenues. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

As described in Note 2, this financial statement excludes certain expenses that
would be comparable with those resulting from the operations of the Lucent
Building after acquisition by Wells Operating Partnership, L.P., a subsidiary of
Wells Real Estate Investment Trust, Inc. The accompanying statement of certain
operating expenses in excess of revenues was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the Lucent
Building's revenues and expenses.

In our opinion, the statement of certain operating expenses in excess of
revenues presents fairly, in all material respects, certain operating expenses
in excess of revenues for the Lucent Building for the year ended December 31,
2000 in conformity with accounting principles generally accepted in the United
States.

/s/ Arthur Andersen LLP

Atlanta, Georgia
October 5, 2001

22

LUCENT BUILDING

STATEMENTS OF

CERTAIN OPERATING EXPENSES IN EXCESS OF REVENUES

FOR THE SIX MONTHS ENDED JUNE 30, 2001 (UNAUDITED)

AND THE YEAR ENDED DECEMBER 31, 2000

(Unaudited)
2001        2000
-----------  ---------

RENTAL REVENUES                                          $       0   $       0

OPERATING EXPENSES                                         246,503     465,726
----------   ---------
CERTAIN OPERATING EXPENSES IN EXCESS OF REVENUES         $(246,503)  $(465,726)
==========   =========

The accompanying notes are an integral part of these statements.

23

LUCENT BUILDING

NOTES TO STATEMENTS OF

CERTAIN OPERATING EXPENSES IN EXCESS OF REVENUES

FOR THE SIX MONTHS ENDED JUNE 30, 2001 (UNAUDITED)

AND THE YEAR ENDED DECEMBER 31, 2000

1.   Organization and Significant Accounting Policies

Description of Real Estate Property Acquired

On September 28, 2001, Wells Operating Partnership, L.P. ("Wells OP")
acquired the Lucent Building from Lucent Technologies, Inc. ("Lucent").
Wells OP is a Delaware limited partnership organized to own and operate
properties on behalf of Wells Real Estate Investment Trust, Inc., a
Maryland corporation. As the sole general partner of Wells OP, Wells Real
Estate Investment Trust, Inc. possesses full legal control and authority
over the operations of Wells OP.

Lucent currently occupies 100% of the Lucent Building under a net lease
agreement (the "Lucent Lease") with Wells OP. The Lucent Building is a
four-story office building comprised of 120,000 rentable square feet.
Lucent is a public entity traded on the New York Stock Exchange. Prior to
September 28, 2001, Lucent owned and occupied the entire rentable square
feet of the Lucent Building; therefore, no rental revenues were recognized
for the year ended December 31, 2000 or for the six months ended June 30,
2001. The initial term of the Lucent Lease commenced on September 28, 2001
and expires on September 30, 2011. Lucent has the right to extend the
Lucent Lease for three additional periods of five years at a rate equal to
the then-current fair market rental rate. Under the Lucent Lease, Lucent is
required to pay, as additional monthly rent, all operating costs including
but not limited to electricity, gas, steam, water, sanitation, air
conditioning, as well as other fuel and utilities for the property. Lucent
is also responsible for maintaining all service and maintenance agreements
for the building and equipment contained therein, including but not limited
to window cleaning, security, elevator and HVAC maintenance, and janitorial
and landscaping services. Wells OP will be responsible for all building
repairs caused by fire or other insurable casualties.

2.   Basis of Accounting

The accompanying statements of certain operating expenses in excess of
revenues are presented on the accrual basis. These statements have been
prepared in accordance with the applicable rules and regulations of the
Securities and Exchange Commission for real estate properties acquired.
Accordingly, these statements exclude certain historical expenses such as
depreciation, interest, and management fees. Therefore, these statements
are not comparable to the operations of the Lucent Building after
acquisition by Wells OP.

24

WELLS REAL ESTATE INVESTMENT TRUST, INC.

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

JUNE 30, 2001

The following unaudited pro forma balance sheet as of June 30, 2001 has been
prepared to give effect to the acquisition of the AmeriCredit Building by Wells
XIII-REIT Joint Venture (a joint venture partnership between Wells Real Estate
Fund XIII, L.P. and Wells Operating Partnership, L.P. ["Wells OP"]), the
acquisitions of the State Street Bank Building, and the IKON Buildings by Wells
OP (collectively, the "Prior Acquisitions"), and the Ingram Micro Distribution
Facility, the Lucent Building and the Nissan Property acquired by Wells OP as if
each acquisition occurred on June 30, 2001. The Comdata Building was acquired by
Wells XII-REIT Joint Venture (a joint venture partnership between Wells Real
Estate Fund XII, L.P. and Wells OP) on May 15, 2001.

The following unaudited pro forma statement of income for the six months ended
June 30, 2001 has been prepared to give effect to the acquisitions of the
Comdata Building, the AmeriCredit Building, the State Street Bank Building, the
IKON Buildings, the Ingram Micro Distribution Facility, the Lucent Building, and
the Nissan Property as if the acquisitions occurred on January 1, 2001. The
following unaudited pro forma statement of income (loss) for the year ended
December 31, 2000 has been prepared to give effect to the acquisitions of the
Comdata Building, the State Street Bank Building, the IKON Buildings, the Ingram
Micro Distribution Facility, and the Lucent Building as if the acquisitions
occurred on January 1, 2000. The AmeriCredit Building had no operations during
2000. The Nissan Property had no operations during 2001 or 2000.

Wells OP is a Delaware limited partnership organized to own and operate
properties on behalf of Wells Real Estate Investment Trust, Inc., a Maryland
corporation. As the sole general partner of Wells OP, Wells Real Estate
Investment Trust, Inc. possesses full legal control and authority over the
operations of Wells OP. Accordingly, the accounts of Wells OP are consolidated
with the accompanying pro forma financial statements of Wells Real Estate
Investment Trust, Inc.

These unaudited pro forma financial statements are prepared for informational
purposes only and are not necessarily indicative of future results or of actual
results that would have been achieved had the acquisitions of the Comdata
Building, the AmeriCredit Building, the State Street Bank Building, the IKON
Buildings, the Ingram Micro Distribution Facility, the Lucent Building and the
Nissan Property been consummated at the beginning of the periods presented.

As of June 30, 2001, the date of the accompanying pro forma balance sheet, Wells
OP held cash of $6,074,926. The additional cash used to purchase the State
Street Bank Building, the IKON Buildings, the Ingram Micro Distribution
Facility, the Lucent Building and the Nissan Property, including deferred
project costs paid to Wells Capital, Inc. (an affiliate of Wells OP), was raised
through the issuance of additional shares by Wells Real Estate Investment Trust,
Inc. subsequent to June 30, 2001. This balance is reflected as purchase
consideration payable in the accompanying pro forma balance sheet.

25

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA BALANCE SHEET

JUNE 30, 2001
(Unaudited)

ASSETS

Pro Forma Adjustments
-----------------------------------------------------------------------------
Wells
Real Estate                     Ingram Micro
Investment          Prior       Distribution       Lucent          Nissan        Pro Forma
Trust, Inc.     Acquisitions      Facility        Building        Property         Total
-------------   --------------  --------------  --------------  --------------  -------------

REAL ESTATE ASSETS, at cost:
Land                            $  47,256,748   $13,335,000(a)      320,000(a)  $ 2,850,000(a)  $ 5,498,162(a)  $  70,176,708
555,625(b)       13,333(b)      118,750(b)      229,090(b)
Buildings, less accumulated
depreciation of $15,863,470     285,964,597    57,206,623(a)   20,785,184(a)   14,850,282(a)            0       382,675,107
2,383,609(b)      866,050(b)      618,762(b)            0
Construction in progress            7,143,876             0               0               0               0         7,143,876
-------------   --------------  --------------  --------------  --------------  -------------
Total real estate
assets                340,365,221    73,480,857      21,984,567      18,437,794       5,727,252       459,995,691

CASH AND CASH EQUIVALENTS             6,074,926    (5,924,926)(a)           0               0               0                 0
(150,000)(c)

INVESTMENT IN BONDS                           0             0      22,000,000(f)            0               0        22,000,000

INVESTMENT IN JOINT VENTURES         60,261,895    11,343,750(d)            0               0               0        71,605,645

ACCOUNTS RECEIVABLE                   4,661,279             0               0               0               0         4,661,279

DEFERRED LEASE ACQUISITION
COSTS                               1,738,658             0               0               0               0         1,738,658

DEFERRED PROJECT COSTS                    3,849        (3,849)(e)           0               0               0                 0

DEFERRED OFFERING COSTS                 731,574             0               0               0               0           731,574

DUE FROM AFFILIATES                   1,242,469             0               0               0               0         1,242,469

PREPAID EXPENSES AND OTHER
ASSETS                              1,558,395             0               0               0               0         1,558,395
-------------   --------------  --------------  --------------  --------------  -------------
Total assets            $ 416,638,266   $78,745,832     $43,984,567     $18,437,794     $ 5,727,252     $ 563,533,711
=============   ==============  ==============  ==============  ==============  =============

26

LIABILITIES AND SHAREHOLDERS' EQUITY

Pro Forma Adjustments
-----------------------------------------------------------------------------
Wells
Real Estate                     Ingram Micro
Investment          Prior       Distribution       Lucent          Nissan        Pro Forma
Trust, Inc.     Acquisitions      Facility        Building        Property         Total
-------------   --------------  --------------  --------------  --------------  -------------

LIABILITIES:
Accounts payable and accrued
expenses                      $   2,592,211   $         0     $         0     $         0     $         0     $   2,592,211
Notes payable                      10,298,850    48,300,000(a)    8,850,000(a)   12,800,000(a)    5,498,162(a)    118,487,012
10,740,000(c)   22,000,000(g)
Dividends payable                   1,071,657             0               0               0               0         1,071,657
Due to affiliate                    1,508,539     2,939,234(b)      879,383(b)      737,512(b)      229,090(b)      6,743,659
449,901(e)
Purchase consideration payable              0    16,316,697(a)   12,255,184(a)    4,900,282(a)            0        33,472,163
Deferred rental income                 95,418             0               0               0               0            95,418
-------------   --------------  --------------  --------------  --------------  -------------
Total liabilities          15,566,675    78,745,832      43,984,567      18,437,794       5,727,252       162,462,120
-------------   --------------  --------------  --------------  --------------  -------------
COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST OF UNIT HOLDER
IN OPERATING PARTNERSHIP              200,000             0               0               0               0           200,000
-------------   --------------  --------------  --------------  --------------  -------------
SHAREHOLDERS' EQUITY:
Common shares, $.01 par
value; 125,000,000 shares
authorized, 47,770,468 shares
issued and 47,489,415 shares
outstanding                         477,705             0               0               0               0           477,705
Additional paid-in capital        403,204,416             0               0               0               0       403,204,416
Treasury stock, at cost,
281,053 shares                   (2,810,530)            0               0               0               0        (2,810,530)
-------------   --------------  --------------  --------------  --------------  -------------
Total shareholders'
equity                400,871,591             0               0               0               0       400,871,591
-------------   --------------  --------------  --------------  --------------  -------------
Total liabilities and
shareholders'
equity              $ 416,638,266   $78,745,832     $43,984,567     $18,437,794     $ 5,727,252     $ 563,533,711
=============   ==============  ==============  ==============  ==============  =============

(a)  Reflects Wells Real Estate Investment Trust, Inc.'s purchase price for
the land and the building.

(b)  Reflects deferred project costs applied to the land and building at
approximately 4.17% of the purchase price.

(c)  Reflects Wells Real Estate Investment Trust, Inc.'s portion of the
purchase price.

(d)  Reflects Wells Real Estate Investment Trust, Inc.'s contribution to
the Wells XIII-REIT Joint Venture.

(e)  Reflects deferred project costs contributed to the Wells XIII-REIT
Joint Venture at approximately 4.17% of the purchase price.

(f)  Represents investments in bonds for which 100% of the principal
balance becomes payable on December 31, 2026.

(g)  Represents mortgage note secured by the Deed of Trust to the Ingram
Micro Distribution Facility for which 100% of the principal balance
becomes payable on December 31, 2026.

27

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 2001

(Unaudited)

Wells
Real Estate                     Ingram Micro
Investment          Prior       Distribution       Lucent        Pro Forma
Trust, Inc.     Acquisitions      Facility        Building         Total
-------------   --------------  --------------  --------------  ------------

REVENUES:
Rental income                           $  19,711,252   $ 4,652,363(a)  $ 1,094,230(a)  $ 1,031,749(a)   $26,489,594
Equity in income (loss) of joint
ventures                                   1,519,194       513,944(b)            0               0        1,934,514
(98,624)(c)
Interest income                               193,007      (193,007)(d)     880,000(j)            0          880,000
-------------   --------------  --------------  --------------  ------------
21,423,453     4,874,676       1,974,230       1,031,749       29,304,108
-------------   --------------  --------------  --------------  ------------
EXPENSES:
Depreciation and amortization               6,685,716     1,191,805(e)      433,025(e)      309,381(e)     8,619,927
Interest                                    2,809,373       379,761(f)      287,714(k)      416,128(m)     6,692,366
1,919,390(g)      880,000(l)
Operating costs, net of
reimbursements                             1,736,928       666,818(h)            0(h)            0(h)     2,403,746
Management and leasing fees                 1,117,902       209,356(i)       49,240(i)       46,429(i)     1,422,927
General and administrative                    635,632             0               0               0          635,632
Legal and accounting                          117,331             0               0               0          117,331
Computer costs                                  6,328             0               0               0            6,328
-------------   --------------  --------------  --------------  ------------
13,109,210     4,367,130       1,659,979         771,938       19,898,257
-------------   --------------  --------------  --------------  ------------
NET INCOME                                $   8,314,243   $   507,546     $   324,251     $   259,811      $ 9,405,851
=============   ==============  ==============  ==============  ============

EARNINGS PER SHARE, basic and diluted     $        0.22                                                    $      0.25
=============                                                   ============

WEIGHTED AVERAGE SHARES, basic and
diluted                                    37,792,014                                                     37,792,014
=============                                                   ============

(a)    Rental income is recognized on a straight-line basis.

(b)    Reflects Wells Real Estate Investment Trust, Inc.'s equity in the income
of Wells XII-REIT Joint Venture related to the Comdata Building from
January 1, 2001 through May 14, 2001. The pro forma adjustment results
from rental revenues less operating expenses, management fees, and
depreciation.

(c)    Reflects Wells Real Estate Investment Trust, Inc.'s equity in the loss of
Wells XIII-REIT Joint Venture related to the AmeriCredit Building. The
pro forma adjustment results from rental revenues less operating
expenses, management fees, and depreciation.

(d)    Represents forgone interest income related to cash utilized to purchase
the Comdata Building, the AmeriCredit Building, and the State Street Bank
Building.

(e)    Depreciation expense on the buildings is recognized using the straight-
line method and a 25-year life.

(f)    Represents interest expense on the $15,575,863 drawn on Wells Real Estate
Investment Trust, Inc.'s revolving credit agreement with Bank of America,
N.A., which bears interest at approximately 6.5% per annum from
January 1, 2001 through May 14, 2001.

(g)    Represents interest expense on the $59,040,000 of notes payable to Bank
of America, N.A., which bear interest at approximately 6.5% per annum for
the six months ended June 30, 2001.

(h)    Consists of nonreimbursable operating expenses.

(i)    Management and leasing fees are calculated at 4.5% of rental income.

(j)    Represents interest income on the $22,000,000 investment in bonds due
from the Industrial Development Authority, which earns interest at 8% per
annum.

(k)    Represents interest expense on the $8,850,000 drawn on Wells Real Estate
Investment Trust, Inc.'s revolving credit agreement with Bank of America,
N.A., which bears interest at approximately 6.5% per annum for the six
months ended June 30, 2001.

(l)    Represents interest expense on the $22,000,000 mortgage note payable to
the Industrial Development Authority, which bears interest at 8% per
annum.

(m)    Represents interest expense on the $12,800,000 drawn on Wells Real Estate
Investment Trust, Inc.'s revolving credit agreement Bank of America,
N.A., which bears interest at approximately 6.5% per annum for the six
months ended June 30, 2001.

28

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF INCOME (LOSS)

FOR THE YEAR ENDED DECEMBER 31, 2000

(Unaudited)

Wells
Real Estate                     Ingram Micro
Investment          Prior       Distribution       Lucent        Pro Forma
Trust, Inc.     Acquisitions      Facility        Building         Total
-------------   --------------  --------------  --------------  ------------

REVENUES:
Rental income                           $  20,505,000   $ 4,320,921(a)  $ 2,188,461(a)  $ 2,063,498(a)   $29,077,880
Equity in income of joint
ventures                                  2,293,873       930,181(b)            0               0        3,224,054
Interest income                               520,924      (520,924)(c)   1,760,000(i)            0        1,760,000
Other income                                   53,409             0               0               0           53,409
-------------   --------------  --------------  --------------  ------------
23,373,206     4,730,178       3,948,461       2,063,498       34,115,343
-------------   --------------  --------------  --------------  ------------
EXPENSES:
Depreciation and amortization               7,743,551     2,383,609(d)      866,049(d)      618,762(d)    11,611,971
Interest                                    4,199,461     1,284,495(e)      729,833(j)    1,055,578(l)    13,012,523
3,983,156(f)    1,760,000(k)
Operating costs, net of
reimbursements                              888,091       553,347(g)            0(g)            0(g)     1,441,438
Management and leasing fees                 1,309,974       194,442(h)       98,481(h)       92,857(h)     1,695,754
General and administrative                    426,680             0               0               0          426,680
Legal and accounting                          240,209             0               0               0          240,209
Computer costs                                 12,273             0               0               0           12,273
-------------   --------------  --------------  --------------  ------------
14,820,239     8,399,049       3,454,363       1,767,197       28,440,848
-------------   --------------  --------------  --------------  ------------
NET INCOME (LOSS)                         $   8,552,967   $(3,668,871)    $   494,098     $   296,301      $ 5,674,495
=============   ==============  ==============  ==============  ============

EARNINGS PER SHARE, basic and diluted     $        0.40                                                    $      0.27
=============                                                   ============

WEIGHTED AVERAGE SHARES, basic
and diluted                                21,382,418                                                     21,382,418
=============                                                   ============

(a)  Rental income is recognized on a straight-line basis.

(b)  Reflects Wells Real Estate Investment Trust, Inc.'s equity in income of
Wells XII-REIT Joint Venture related to the Comdata Building. The pro forma
adjustment results from rental revenues less operating expenses, management
fees, and depreciation.

(c)  Represents forgone interest income related to cash utilized to purchase the
Comdata Building and the State Street Bank Building.

(d)  Depreciation expense on the buildings is recognized using the straight-line
method and a 25-year life.

(e)  Represents interest expense incurred on the $15,575,863 drawn on Wells Real
Estate Investment Trust, Inc.'s revolving credit agreement with Bank of
America, N.A., which bears interest at approximately 8.3% for the year
ended December 31, 2000.

(f)  Represents interest expense on the $48,300,000 of notes payable to Bank of
America, N.A., which bear interest at approximately 8.3% for the year ended
December 31, 2000.

(g)  Consists of nonreimbursable operating expenses.

(h)  Management and leasing fees are calculated at 4.5% of rental income.

(i)  Represents interest income on the $22,000,000 investment in bonds due from
the Industrial Development Authority, which earns interest at 8%.

(j)  Represents interest expense on the $8,850,000 drawn on Wells Real Estate
Investment Trust, Inc.'s revolving credit agreement with Bank of America,
N.A., which bears interest at approximately 8.3% for the six months ended
June 30, 2001.

(k)  Represents interest expense on the $22,000,000 mortgage note payable to the
Industrial Development Authority, which bears interest at 8%.

(l)  Represents interest expense on the $12,800,000 drawn on Wells Real Estate
Investment Trust, Inc.'s revolving credit agreement with Bank of America,
N.A., which bears interest at approximately 8.3% for the year ended
December 31, 2000.

29

WELLS REAL ESTATE INVESTMENT TRUST, INC.
SUPPLEMENT NO. 6 DATED JANUARY 20, 2002 TO THE PROSPECTUS
DATED DECEMBER 20, 2000

This document supplements, and should be read in conjunction with, the
prospectus of Wells Real Estate Investment Trust, Inc. dated December 20, 2000,
as supplemented and amended by Supplement No. 1 dated February 5, 2001,
Supplement No. 2 dated April 25, 2001, Supplement No. 3 dated July 20, 2001,
Supplement No. 4 dated August 10, 2001 and Supplement No. 5 dated October 15,
2001. When we refer to the "prospectus" in this supplement, we are also
referring to any and all supplements to the prospectus. Unless otherwise defined
in this supplement, capitalized terms used in this supplement shall have the
same meanings as set forth in the prospectus.

The purpose of this supplement is to describe the following:

(1)   Status of the offering of shares in Wells Real Estate Investment
Trust, Inc. (Wells REIT);

(2)   Declaration of dividends for the first quarter of 2002;

(3)   Revisions to the "Suitability Standards" section of the
prospectus;

(4)   Acquisition of a two-story office building in Tamarac, Florida
(Convergys Building);

(5)   Acquisition of an interest in two connected one-story office and
assembly buildings in Parker, Colorado (ADIC Buildings);

(6)   Acquisition of a seven-story office building and an eleven-story
office building in Schaumburg, Illinois (Windy Point Buildings);

(7)   Acquisition of a three-story office building in Sarasota, Florida
(Arthur Andersen Building);

(8)   Revisions to the "Plan of Distribution" section of the
prospectus;

(9)   Revisions to the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section of the
prospectus;

(10)  Unaudited financial statements of Wells REIT as of September 30,
2001;

(11)  Unaudited pro forma financial statements of Wells REIT reflecting
the acquisition of the Convergys Building, ADIC Buildings, Windy
Point Buildings and Arthur Andersen Building; and

(12)  Audited financial statements relating to the Windy Point
Buildings and Arthur Andersen Building.

Status of the Offering

We commenced our initial public offering of common stock on January 30,
1998. Our initial public offering was terminated on December 19, 1999. We
received approximately $132,181,919 in gross offering proceeds from the sale of
13,218,192 shares in our initial public offering. We commenced a second offering
of common stock on December 20, 1999. Our second public offering was terminated
on December 19, 2000. We received approximately $175,229,193 in gross offering
proceeds from the sale of 17,522,919 shares in our second public offering.

1

Pursuant to the prospectus, we commenced our third offering of common
stock on December 20, 2000. As of January 15, 2002, we had received an
additional $564,207,445 in gross offering proceeds from the sale of 56,420,745
shares in the third offering. Accordingly, as of January 15, 2002, we had
received in the aggregate approximately $871,618,557 in gross offering proceeds
from the sale of 87,161,856 shares of our common stock.

Dividends

On December 6, 2001, our board of directors declared dividends for the
first quarter of 2002 in an amount equal to a 7.75% annualized percentage rate
return on an investment of $10 per share to be paid in April 2002. Our first
quarter dividends are calculated on a daily record basis of $0.002153 (.2153
cents) per day per share on the outstanding shares of common stock payable to
stockholders of record of such shares as shown on the books of the Wells REIT at
the close of business on each day during the period, commencing on December 16,
2001, and continuing on each day thereafter through and including March 15,
2002. Below is a table reflecting the level of dividends declared and paid to
date:

Annualized
Percentage Return
on an Investment
Quarter            Approximate Amount (Rounded)      of $10 per Share
-------            ----------------------------      -----------------

3/rd/ Qtr. 1998           $0.150 per share                6.00%
4/th/ Qtr. 1998           $0.163 per share                6.50%

1/st/ Qtr. 1999           $0.175 per share                7.00%
2/nd/ Qtr. 1999           $0.175 per share                7.00%
3/rd/ Qtr. 1999           $0.175 per share                7.00%
4/th/ Qtr. 1999           $0.175 per share                7.00%

1/st/ Qtr. 2000           $0.175 per share                7.00%
2/nd/ Qtr. 2000           $0.181 per share                7.25%
3/rd/ Qtr. 2000           $0.188 per share                7.50%
4/th/ Qtr. 2000           $0.188 per share                7.50%

1/st/ Qtr. 2001           $0.188 per share                7.50%
2/nd/ Qtr. 2001           $0.188 per share                7.50%
3/rd/ Qtr. 2001           $0.188 per share                7.50%
4/th/ Qtr. 2001           $0.194 per share                7.75%

1/st/ Qtr. 2002           $0.194 per share                7.75%

Suitability Standards

The information contained on page 26 in the "Suitability Standards"
section of the prospectus is revised by the deletion of the special suitability
standards relating to the States of Arizona, Michigan, Missouri, New Hampshire,
North Carolina and Oregon on that page and the insertion of the following
paragraphs relating to the suitability requirements for residents of those
states:

2

Arizona, New Hampshire, North Carolina and Oregon - Investors
must have either (1) a net worth of at least $150,000, or (2) gross
annual income of $45,000 and a net worth of at least $45,000.

Michigan and Missouri - Investors must have either (1) a net
worth of at least $225,000, or (2) gross annual income of $60,000 and a
net worth of at least $60,000.

The Convergys Building

Purchase of the Convergys Building. On December 21, 2001, Wells Operating
----------------------------------
Partnership, L.P. (Wells OP), a Delaware limited partnership formed to acquire,
own, lease and operate real properties on behalf of the Wells REIT, purchased a
two-story office building on a 12.55 acre tract of land located at 5601 Hiatus
Road in Tamarac, Broward County, Florida (Convergys Building). Wells OP
purchased the Convergys Building from Westpoint Building No. 1, L.L.C., which is
not in any way affiliated with the Wells REIT or Wells Capital, Inc., our
Advisor.

The purchase price for the Convergys Building was $13,255,000. In
addition, Wells OP incurred acquisition expenses in connection with the purchase
of the Convergys Building, including commissions, attorneys' fees, recording
fees, structural report and environmental report fees and other closing costs,
of approximately $242,400.

An independent appraisal of the Convergys Building was prepared by CB
Richard Ellis, Inc., real estate appraisers, as of October 19, 2001, pursuant to
which the market value of the real property containing the leased fee interest
subject to the lease described below was estimated to be $13,500,000, in cash or
terms equivalent to cash. This value estimate was based upon a number of
assumptions, including that the Convergys Building will continue operating at a
stabilized level with Convergys Customer Management Group, Inc. (Convergys)
occupying 100% of the rentable area, and is not necessarily an accurate
reflection of the fair market value of the property or the net proceeds which
would result from an immediate sale of this property. Wells OP also obtained an
environmental report and an engineering inspection report prior to the closing
evidencing that the condition of the land and the Convergys Building were
satisfactory.

Description of the Convergys Building and Site. The Convergys Building, which
----------------------------------------------
was completed in September 2001, is a two-story office building containing
approximately 100,000 rentable square feet located on a 12.55 acre tract of
land. The building is constructed using a concrete frame with pre-stressed
concrete beams and a reinforced concrete foundation. The exterior walls are made
of eight inch tilt-up concrete panels with a smooth stucco finish and tinted
windows set in aluminum frames. The common area interior walls and ceiling
consist of textured and painted sheetrock. In addition, the building has two
elevators located in the main lobby area and approximately 965 paved parking
spaces.

The Convergys Building is located at 5601 Hiatus Road within the
Westpoint Business Center in southern Broward County, Florida, approximately 15
miles northwest of downtown Fort Lauderdale. The Convergys Building has direct
access to the Sawgrass Expressway which leads to the I-75 and I-595 Expressways.
The Broward County office market, which is comprised of approximately 24 million
square feet, is located between Palm Beach County and Miami-Dade County on
Florida's Gold Coast and serves many multi-national companies looking to service
the tri-county area and overseas locations.

The Convergys Lease. The entire 100,000 rentable square feet of the Convergys
-------------------
Building is currently under a net lease agreement with Convergys. The current
term of the lease is 10 years, which commenced on September 10, 2001 and expires
on September 30, 2011. Convergys has the right to extend the initial 10-year
term of this lease for three additional five-year periods at 95% of the
then-current market rental rate.

3

The Convergys lease is guaranteed by Convergys' parent company,
Convergys Corporation, which is an Ohio corporation traded on the New York Stock
Exchange having its corporate headquarters in Cincinnati, Ohio. Convergys
Corporation provides outsourced billing and customer care services in the United
States, Canada, Latin America, Israel and Europe. Some of the major customers of
Convergys Corporation include AT&T, Compaq, Palm Computing, Pfizer
Pharmaceuticals, Sprint, Toys `R' Us and Deutsche Telekom. As of December 31,
2000, Convergys Corporation employed approximately 145,000 workers. For the
fiscal year ended December 31, 2000, Convergys Corporation reported net income
of approximately $194 million on total revenues of approximately $2.16 billion
and a net worth, as of December 31, 2000, of approximately $1.11 billion.

The base rent payable under the Convergys lease is as follows:

-----------------------------------------------------------
Lease Year         Annual Rent            Monthly Rent
-----------------------------------------------------------
1              $1,248,192               $104,016
-----------------------------------------------------------
2              $1,279,397               $106,616
-----------------------------------------------------------
3              $1,311,382               $109,282
-----------------------------------------------------------
4              $1,344,166               $112,014
-----------------------------------------------------------
5              $1,377,770               $114,814
-----------------------------------------------------------
6              $1,412,215               $117,685
-----------------------------------------------------------
7              $1,447,520               $120,627
-----------------------------------------------------------
8              $1,483,708               $123,642
-----------------------------------------------------------
9              $1,520,801               $126,733
-----------------------------------------------------------
10              $1,558,821               $129,902
-----------------------------------------------------------

Pursuant to the Convergys lease, Convergys is required to pay all taxes
relating to the Convergys Building and all operating costs, including, but not
limited to, those associated with water, gas, steam, electricity, air
conditioning, telephone, garbage removal, snow removal, common area maintenance,
landscaping, power and other utilities and services used by Convergys. Convergys
is also required to pay for all repair and maintenance costs, including but not
limited to, window cleaning, security personnel, elevator maintenance, HVAC
maintenance, janitorial service, waste recycling service and landscaping
maintenance. Convergys may not make alterations to the Convergys Building in
excess of $100,000 without Wells OP's prior written consent. Wells OP, as the
landlord, will be responsible for building repairs to the structural elements,
the building systems, exterior walls, windows and the roof of the Convergys
Building.

Convergys may terminate the Convergys lease at the end of the seventh
lease year (September 30, 2008) by providing 12 months prior written notice and
paying Wells OP a termination fee of approximately $1,341,000. Convergys also
has the option to purchase the Convergys Building for a purchase price of
$13,290,935 by providing written notice to Wells OP of such exercise on or
before March 10, 2002. In addition, in the event Convergys elects to purchase
the Convergys Building, Wells OP will have the right to receive an additional
$240,000, which was escrowed at closing and would be returned to Wells OP upon
the exercise of such option.

The ADIC Buildings

Purchase of the ADIC Buildings. On December 21, 2001, Wells Fund XIII - REIT
------------------------------
Joint Venture, a joint venture partnership between Wells Real Estate Fund XIII,
L.P. (Wells Fund XIII) and Wells OP, purchased two connected one-story office
and assembly buildings on an 8.35 acre tract of land located at 8560 Upland
Drive in Parker, Douglas County, Colorado (ADIC Buildings). Additionally, Wells
Fund XIII - REIT Joint Venture purchased an undeveloped 3.43 acre tract of land
adjacent to the ADIC Buildings

4

(ADIC Land). Wells Fund XIII - REIT Joint Venture purchased the ADIC Buildings
and the ADIC Land from Opus Northwest, L.L.C., which is not in any way
affiliated with the Wells REIT or our Advisor.

The purchase price for the ADIC Buildings was $12,954,213. In addition,
the Wells Fund XIII - REIT Joint Venture incurred acquisition expenses in
connection with the purchase of the ADIC Buildings, including commissions,
attorneys' fees, recording fees, structural report and environmental report fees
and other closing costs, of approximately $216,862.

Wells OP contributed $6,671,075 and Wells Fund XIII contributed
$6,500,000 to the Wells Fund XIII - REIT Joint Venture for their respective
shares of the acquisition costs for the ADIC Buildings. As of January 1, 2002,
Wells OP held an equity percentage interest in the Wells Fund XIII - REIT Joint
Venture of approximately 68%, and Wells Fund XIII held an equity percentage
interest in the Wells Fund XIII - REIT Joint Venture of approximately 32%.

An independent appraisal of the ADIC Buildings and ADIC Land was
prepared by Integra Realty Resources, real estate appraisers, as of December 21,
2001, pursuant to which the market value of the real property containing the
ADIC Buildings subject to the lease described below and the ADIC Land was
estimated to be $13,150,000, in cash or terms equivalent to cash. This value
estimate was based upon a number of assumptions, including that the ADIC
Buildings will continue operating at a stabilized level with ADIC occupying 100%
of the rentable area, and is not necessarily an accurate reflection of the fair
market value of the property or the net proceeds which would result from an
immediate sale of this property. Wells Fund XIII - REIT Joint Venture also
obtained an environmental report and an engineering inspection report prior to
the closing evidencing that the condition of the land and the ADIC Buildings
were satisfactory.

Description of the ADIC Buildings and Site. The ADIC Buildings, which were
------------------------------------------
completed in December 2001, consist of two connected one-story office and
assembly buildings, containing approximately 148,200 rentable square feet
located on an 11.78 acre tract of land, which includes an 8.35 acre improved
tract of land and a 3.43 acre undeveloped tract of land. The buildings are
constructed using a steel frame and a reinforced concrete foundation. The
exterior walls are made of pre-cast concrete panels. The interior walls consist
of painted gypsum board. The interior floors are carpeted, and the buildings
contain suspended and recessed fluorescent and incandescent lighting. The
buildings also contain an audio-visual presentation room, lunch room and several
conference rooms. In addition, the site contains approximately 300 paved parking
spaces with the potential to add up to an additional 400 parking spaces.

The ADIC Buildings are located in the Concord Business Center, a
100-acre mixed-use business park in the southeast portion of the greater Denver
metropolitan area in Douglas County near the Centennial Airport. The site is
within a couple of miles of I-25 and E-470 and within ten minutes of the Denver
Technology Center. The ADIC Buildings are 12 miles from the Denver Central
Business District and approximately 30 minutes from the Denver International
Airport. Douglas County is one of the most affluent and fastest growing counties
in the country.

The ADIC Lease. The entire 148,200 rentable square feet of the ADIC Buildings
--------------
are currently under a net lease agreement with Advanced Digital Information
Corporation (ADIC), which does not include the 3.43 acre undeveloped tract of
land described above. The current term of the lease is 10 years, which commenced
on December 15, 2001, and expires on December 31, 2011. ADIC has the right to
extend the term of its lease for two additional five-year periods at the
then-current fair market rental rate for the first year of each five-year
extension. The annual base rent will increase 2.5% for each subsequent year of
each five-year extension.

5

ADIC is a Washington corporation traded on NASDAQ having its corporate
headquarters in Redmond, Washington and regional management centers in
Englewood, Colorado; Bohmenkirch, Germany; and Paris, France. ADIC manufactures
data storage systems and specialized storage management software and distributes
these products through its relationships with original equipment manufacturers
such as IBM, Sony, Fujitsu, Siemens and Hewlett-Packard. For the fiscal year
ending October 31, 2000, ADIC reported net income of approximately $88 million
on net revenues of approximately $270 million and a net worth, as of October 31,
2000, of approximately $314 million.

The base rent payable under the ADIC lease is as follows:

---------------------------------------------------------
Lease Year         Annual Rent        Monthly Rent
---------------------------------------------------------
1               $1,222,683           $101,890
---------------------------------------------------------
2               $1,247,136           $103,928
---------------------------------------------------------
3               $1,272,079           $106,007
---------------------------------------------------------
4               $1,297,520           $108,127
---------------------------------------------------------
5               $1,323,471           $110,289
---------------------------------------------------------
6               $1,349,940           $112,495
---------------------------------------------------------
7               $1,376,939           $114,745
---------------------------------------------------------
8               $1,404,478           $117,040
---------------------------------------------------------
9               $1,432,568           $119,381
---------------------------------------------------------
10               $1,461,219           $121,768
---------------------------------------------------------

Pursuant to the ADIC lease, ADIC is required to pay all taxes relating
to the ADIC Buildings and all operating costs, including, but not limited to,
those associated with water, sewage, heat, gas, steam, electricity, cable, air
conditioning, telephone, garbage and rubbish removal, power and other utilities
and services used by ADIC. ADIC is also required to pay for all repair and
maintenance costs, including but not limited to, window cleaning, elevator
maintenance, HVAC maintenance, plumbing, janitorial service, waste recycling
service, landscaping maintenance and parking area maintenance. Wells Fund XIII -
REIT Joint Venture, as the landlord, will be responsible for building repairs to
the structural elements of the ADIC Buildings including the foundations and
structural columns and beams. ADIC may not make alterations to the ADIC
Buildings in excess of $25,000 without the landlord's prior written consent.

The Windy Point Buildings

Purchase of the Windy Point Buildings. On December 31, 2001, Wells OP purchased
-------------------------------------
a seven-story office building with approximately 186,900 rentable square feet
(Windy Point I) and an eleven-story office building with approximately 300,000
rentable square feet (Windy Point II) on an 18.73 acre tract of land located at
1500 and 1600 McConnor Parkway, Schaumburg, Cook County, Illinois (collectively,
Windy Point Buildings). Wells OP purchased the Windy Point Buildings from Windy
Point of Schaumburg, LLC, which is not in any way affiliated with the Wells REIT
or our Advisor.

The purchase price for the Windy Point Buildings was $89,275,000. In
addition, Wells OP incurred acquisition expenses in connection with the purchase
of the Windy Point Buildings, including attorneys' fees, recording fees,
structural report and environmental report fees, and other closing costs, of
approximately $123,500.

An independent appraisal of the Windy Point Buildings was prepared by
Real Estate Counselors International, Inc., real estate appraisers, as of
December 31, 2001, pursuant to which the market value of the real property
containing the leased fee interests subject to the leases described below was
estimated to be $90,200,000, in cash or terms equivalent to cash. This value
estimate was based upon a number of

6

assumptions, including that the Windy Point Buildings will continue operating at
a stabilized level with current tenants occupying 100% of the rentable area, and
is not necessarily an accurate reflection of the fair market value of the
property or the net proceeds which would result from an immediate sale of this
property. Wells OP also obtained an environmental report and an engineering
inspection report prior to the closing evidencing that the condition of the land
and the Windy Point Buildings were satisfactory.

The Windy Point Buildings are subject to a 20-year annexation agreement
with the Village of Schaumburg, Illinois originally executed on December 12,
1995 (Annexation Agreement). The Annexation Agreement covers a 235-acre tract of
land which includes a portion of the site of the Windy Point Buildings' parking
facilities. The purpose of this agreement was to allow for a potential
construction of a new eastbound on-ramp interchange for I-90 at Meacham Road.
Although the Illinois Department of Transportation has not yet decided whether
it would be economically feasible to construct the interchange, the construction
of such an interchange could have a significant financial impact on the owners
of the Windy Point Buildings. At closing, Wells OP agreed to be added as an
additional named surety on a $382,556 surety bond originally submitted by the
seller, pursuant to the request of the Village of Schaumburg, Illinois,
representing the estimated costs of demolition and restoration of constructed
parking and landscaped areas and protecting pipelines in connection with the
potential construction. The surety bond will remain in place until March 1,
2002. It is anticipated that at some time prior to March 1, 2002, Wells OP will
replace the surety bond with a $382,556 letter of credit issued on Wells OP's
behalf. The obligation to maintain the letter of credit will continue until the
costs of demolition and restoration are paid if the project proceeds or until
the Annexation Agreement expires in December 2015. If Wells OP is unable to
restore the parking spaces due to structural issues related to the utilities
underground, Wells OP would then be required to construct a new parking garage
on the site to accommodate the parking needs of its tenants. The cost for this
construction is currently estimated to be approximately $3,581,000. In addition,
if the interchange is constructed, Wells OP will be required to pay for its
share of the costs for widening Meacham Road as part of the project, which is
currently estimated to be approximately $288,300. In January 1999, the Illinois
State Toll Highway Authority performed an Interchange Feasibility Study and
determined that this proposed interchange at Meacham Road should not be
constructed at that time; however, there are no assurances that this
determination will not be reversed prior to the expiration of the Annexation
Agreement or that Wells OP will not be required to expend substantial sums to
construct a new parking garage on this property, as described above.

Description of the Windy Point Buildings and Site. The Windy Point I building
-------------------------------------------------
and the Windy Point II building, which were completed in 1999 and 2001,
respectively, are a seven-story office building with approximately 186,900
rentable square feet and an eleven-story office building with 300,000 rentable
square feet located on an 18.73 acre tract of land. The Windy Point Buildings
are constructed using a concrete and steel frame and a concrete and metal
foundation. The exterior walls of Windy Point I are made of primarily etched and
sand blasted pre-cast panels with granite inlays and punched window openings
above a two-story curtain wall of tinted and spandrel glass. The exterior walls
of Windy Point II consist of concrete panels with black granite medallions at
the base and the top of the building with seven foot high vision tinted glass
panels. The common areas of the Windy Point Buildings contain marble, granite
and stone flooring on the first floor lobby with carpeted corridors and painted
gypsum board walls and recessed florescent lighting. Windy Point I contains
three passenger elevators and one freight elevator and Windy Point II contains
five passenger elevators and one freight elevator. In addition, the Windy Point
Buildings have approximately 4.2 parking spaces per 1,000 rentable square feet
which includes a six level parking garage.

The Windy Point Buildings are located in the Northwest Suburban Office
Market approximately 30 miles northwest of downtown Chicago in the Village of
Schaumburg. The Windy Point Buildings include 500 feet of direct frontage to the
Northwest Tollway (I-90) which leads directly into downtown Chicago. The Windy
Point Buildings are one-half mile north of the 2.7 million square foot Woodfield

7

shopping mall and are in close proximity to Motorola's world headquarters and a
site for a planned Schaumburg convention center and hotel development.

The TCI Lease. TCI Great Lakes, Inc. (TCI) occupies approximately 129,150
-------------
rentable square feet (69%) of the Windy Point I building. The TCI lease
commenced on December 1, 1999 and expires on November 30, 2009. The current
annual base rent payable under the TCI lease is $2,067,204. TCI has the right to
extend the initial 10-year term of its lease for two additional five-year
periods at 95% of the then-current market rental rate.

TCI is a wholly-owned subsidiary of AT&T Broadband. AT&T Broadband
provides basic cable and digital television services, as well as high-speed
Internet access and cable telephony, with video-on-demand and other advanced
services. AT&T Broadband has its corporate headquarters in Denver, Colorado. As
of December 31, 2000, AT&T Broadband served approximately 16 million cable
customers. AT&T Broadband is a wholly-owned subsidiary of AT&T Corporation. AT&T
Corporation is listed on the New York Stock Exchange and has its corporate
headquarters in New York, New York.

The base rent payable under the remainder of the TCI lease is as
follows:

---------------------------------------------------------------
Lease Year         Annual Rent              Monthly Rent
---------------------------------------------------------------
3               $2,067,204               $172,267
---------------------------------------------------------------
4               $2,128,503               $177,375
---------------------------------------------------------------
5               $2,192,267               $182,689
---------------------------------------------------------------
6               $2,258,214               $188,184
---------------------------------------------------------------
7               $2,325,852               $193,821
---------------------------------------------------------------
8               $2,395,957               $199,663
---------------------------------------------------------------
9               $2,467,753               $205,646
---------------------------------------------------------------
10              $2,541,850               $211,821
---------------------------------------------------------------

Pursuant to the TCI lease, TCI is required to pay its pro rata portion
of all taxes relating to the Windy Point I building and all operating costs,
including, but not limited to, those associated with water, gas, steam,
electricity, air conditioning, telephone, garbage removal, power and other
utilities and services used by TCI. Wells OP, as the landlord, will be
responsible for maintenance of parking areas, walkways and landscaping and
building repairs caused by fire or other insurable casualty.

In addition, TCI has the right to lease additional space on the fifth
floor of the Windy Point I building within 15 months of the fifth lease year by
providing Wells OP with 14 months prior written notice. TCI also has a right of
first refusal on the fifth floor space and a right of first opportunity for the
seventh floor of the Windy Point I building. TCI may terminate the TCI lease on
the last day of the seventh lease year by providing 12 months prior written
notice and paying Wells OP a termination fee of approximately $4,119,500.

The Apollo Lease. The Apollo Group, Inc. (Apollo) has entered into a lease to
----------------
occupy approximately 28,322 rentable square feet (15%) of the Windy Point I
building. The Apollo lease is to commence on April 1, 2002, and expire on June
30, 2009. The initial annual base rent payable for the first nine months under
the Apollo lease will be $357,919. Apollo has the right to extend the initial
term of its lease for one additional five-year period at 95% of the then-current
market rental rate.

Apollo is an Arizona corporation having its corporate headquarters in
Phoenix, Arizona. Apollo provides higher education programs to working adults
through its subsidiaries, the University of Phoenix, Inc., the Institute for
Professional Development, the College for Financial Planning Institutes
Corporation and Western International University, Inc. Apollo offers educational
programs and services at 58

8

campuses and 102 learning centers in 36 states, Puerto Rico, and Vancouver,
British Columbia. For the fiscal year ended August 31, 2001, Apollo reported
assets of approximately $680 million and net income of approximately $107
million on revenues of approximately $769 million and a net worth, as of August
31, 2001, of approximately $481 million.

The base rent payable under the Apollo lease is as follows:

--------------------------------------------------------
Lease Year        Annual Rent           Monthly Rent
--------------------------------------------------------
1              $357,919*             $39,769
--------------------------------------------------------
2              $489,156              $40,763
--------------------------------------------------------
3              $501,385              $41,782
--------------------------------------------------------
4              $513,920              $42,827
--------------------------------------------------------
5              $526,768              $43,897
--------------------------------------------------------
6              $539,937              $44,995
--------------------------------------------------------
7              $553,436              $46,120
--------------------------------------------------------
8              $141,818**            $47,273
--------------------------------------------------------
*  Includes rent for only the last nine months.
** Includes rent for only three months.

Pursuant to the Apollo lease, Apollo is required to pay its pro rata
portion of all taxes relating to the Windy Point I building and all operating
costs, including, but not limited to, those associated with water, sewerage,
gas, steam, electricity, air conditioning, telephone, garbage removal, power and
other utilities and services used by Apollo. Wells OP, as the landlord, will be
responsible for building repairs caused by fire or other insurable casualties
and maintenance of parking areas, walkways and landscaping.

The Global Lease. Global Knowledge Network, Inc. (Global) occupies approximately
----------------
22,028 rentable square feet (12%) of the Windy Point I building. The Global
lease commenced on May 1, 2000, and expires on April 30, 2010. The current
annual base rent payable under the Global lease is $382,307. Global has the
right to extend the initial 10-year term of its lease for one additional
five-year period at the then-current market rental rate. Wells OP has the right
to terminate the Global lease on December 31, 2005 by giving Global written
notice on or before April 30, 2005.

Global is a privately held corporation with its corporate headquarters
in Cary, North Carolina and international headquarters in Tokyo, London and
Singapore. Global is owned by New York-based investment firm Welsh, Carson,
Anderson and Stowe, a New York limited partnership which acts as a private
equity investor in information services, telecommunications and healthcare.
Global provides information technology education solutions and certification
programs, offering more than 700 courses in more than 60 international locations
and in 15 languages. Global employs more than 1,600 people worldwide. Global has
posted a $100,000 letter of credit as security for the Global lease.

The base rent payable under the remainder of the Global lease is as
follows:

------------------------------------------------------
Lease Year       Annual Rent         Monthly Rent
------------------------------------------------------
2             $382,307             $31,859
------------------------------------------------------
3             $393,776             $32,815
------------------------------------------------------
4             $405,589             $33,799
------------------------------------------------------
5             $417,757             $34,813
------------------------------------------------------
6             $430,290             $35,857
------------------------------------------------------
7             $443,199             $36,933
------------------------------------------------------
8             $456,495             $38,041
------------------------------------------------------
9             $470,189             $39,182
------------------------------------------------------
10            $484,295             $40,358
------------------------------------------------------

9

Pursuant to the Global lease, Global is required to pay its pro rata
portion of all taxes relating to the Windy Point I building and all operating
costs, including, but not limited to, those associated with water, sewerage,
gas, steam, electricity, air conditioning, telephone, garbage removal, power and
other utilities and services used by Global. Wells OP, as the landlord, will be
responsible for building repairs caused by fire or other insurable casualties
and maintenance of parking areas, walkways and landscaping.

Together, TCI, Apollo and Global will occupy approximately 96% of the
rentable square feet of the Windy Point I building accounting for an aggregate
of $2,807,430 in annual base rent, and four other tenants will occupy the
remaining approximately 4% of rentable square feet which will account for
approximately $160,000 in annual base rent.

The Zurich Lease. The entire approximately 300,000 rentable square feet of the
----------------
Windy Point II building is currently under a net lease agreement with Zurich
American Insurance Company, Inc. (Zurich). The Zurich lease commenced on
September 1, 2001, and expires on August 31, 2011. The initial annual base rent
payable under the Zurich lease is $5,091,577. Zurich has the right to extend the
initial 10-year term of its lease for two additional five-year periods at 95% of
the then-current market rental rate.

Zurich is headquartered in Schaumburg, Illinois and is a wholly owned
subsidiary of Zurich Financial Services Group (ZFSG). ZFSG, which has its
corporate headquarters in Zurich, Switzerland, is a leading provider of
financial protection and wealth accumulation solutions for some 35 million
customers in over 60 countries. Zurich provides commercial property-casualty
insurance and serves the multinational, middle market and small business sectors
in the United States and Canada. For the fiscal year ended December 31, 2000,
Zurich reported a net income of approximately $718 million on revenues of
approximately $3.1 billion, and a net worth, as of December 31, 2000, of
approximately $2.4 billion. Zurich has approximately 11,650 employees and
received a financial strength rating of A+ from A.M. Best and a rating of AA
from Standard & Poor's.

The base rent payable under the Zurich lease is as follows:

-----------------------------------------------------------
Lease Year        Annual Rent            Monthly Rent
-----------------------------------------------------------
1              $5,091,577              $424,298
-----------------------------------------------------------
2              $5,244,594              $437,050
-----------------------------------------------------------
3              $5,400,612              $450,051
-----------------------------------------------------------
4              $5,562,630              $463,553
-----------------------------------------------------------
5              $5,730,649              $477,554
-----------------------------------------------------------
6              $5,901,669              $491,806
-----------------------------------------------------------
7              $6,078,689              $506,557
-----------------------------------------------------------
8              $6,261,710              $521,809
-----------------------------------------------------------
9              $6,450,731              $537,561
-----------------------------------------------------------
10              $6,642,753              $553,563
-----------------------------------------------------------

Pursuant to the Zurich lease, Zurich is required to pay all taxes and
operating costs relating to the Windy Point II building, including, but not
limited to, those associated with water, sewerage, gas, steam, electricity, air
conditioning, telephone, garbage removal, power and other utilities and services
used by Zurich. Reimbursements for taxes and certain operating expenses which
are within the control of the landlord are subject to certain limitations. Wells
OP, as the landlord, will be responsible for building repairs caused by fire or
other insurable casualties and maintenance and repair of public common areas,

10

HVAC systems and plumbing systems. In addition, Wells OP is responsible for
maintaining the landscaping, parking areas and walkways relating to the Windy
Point II building.

Zurich has the right to terminate the Zurich lease for up to 25% of the
rentable square feet leased by Zurich at the end of the fifth lease year. If
Zurich terminates a portion of the Zurich lease, it will be required to pay a
termination fee to Wells OP equal to three months of the current monthly rent
for the terminated space plus additional costs related to the space leased by
Zurich. In addition, Zurich may terminate the entire Zurich lease at the end of
the seventh lease year by providing Wells OP 18 months prior written notice and
paying Wells OP a termination fee of approximately $8,625,000. Zurich also has a
right of second opportunity behind TCI to lease the seventh floor of the Windy
Point I building should that floor become available.

The Arthur Andersen Building

Purchase of the Arthur Andersen Building. On January 11, 2002, Wells OP
----------------------------------------
purchased a three-story office building on a 9.8 acre tract of land located in
Sarasota, Sarasota County, Florida (Arthur Andersen Building). Wells OP
purchased the Arthur Andersen Building from Sarasota Haskell, LLC, which is not
in any way affiliated with the Wells REIT or our Advisor.

The purchase price for the Arthur Andersen Building was $21,400,000. In
addition, Wells OP incurred acquisition expenses in connection with the purchase
of the Arthur Andersen Building, including attorneys' fees, recording fees,
structural report and environmental report fees, and other closing costs, of
approximately $31,212.

An independent appraisal of the Arthur Andersen Building was prepared
by CB Richard Ellis, Inc., real estate appraisers, as of December 20, 2001,
pursuant to which the market value of the real property containing the leased
fee interest subject to the lease described below was estimated to be
$21,500,000, in cash or terms equivalent to cash. This value estimate was based
upon a number of assumptions, including that the Arthur Andersen Building will
continue operating at a stabilized level with Arthur Andersen, LLP occupying
100% of the rentable area, and is not necessarily an accurate reflection of the
fair market value of the property or the net proceeds which would result from an
immediate sale of this property. Wells OP also obtained an environmental report
and an engineering inspection report prior to the closing evidencing that the
condition of the land and the Arthur Andersen Building were satisfactory.

Description of the Arthur Andersen Building and Site. The Arthur Andersen
----------------------------------------------------
Building, which was completed in 1999, is a three-story office building
containing approximately 157,700 rentable square feet located on a 9.8 acre
tract of land. The building is constructed using a fireproof steel frame with
steel beams and a reinforced concrete foundation. The exterior walls are made of
concrete panels and a glass curtain wall. The common area interior walls consist
of metal studs with textured and painted sheetrock. In addition, the building
has two passenger elevators, one freight elevator and approximately 926 paved
parking spaces.

The Arthur Andersen Building is located in the Sarasota Commerce Park
at 101 Arthur Andersen Parkway in unincorporated Sarasota, Florida. The site is
south of the Tampa-St. Petersburg metropolitan area and approximately five miles
east of the Sarasota central business district with access to I-75. The
Sarasota/Bradenton MSA has added over 15,000 new jobs to the area during the
last three years.

The Andersen Lease. The entire approximately 157,700 rentable square feet of the
------------------
Arthur Andersen Building is currently under a net lease agreement with Arthur
Andersen LLP (Andersen). The current term of the lease is 10 years, which
commenced on November 1, 1999 and expires on October 31, 2009.

11

Andersen has the right to extend the initial 10-year term of this lease for two
additional five-year periods at 90% of the then-current market rental rate.

Andersen, with its corporate headquarters in Chicago, Illinois, is a
global professional services organization consisting of over 100 member firms in
84 countries. Andersen focuses its services in four main areas: business
advisory services, business consulting, global corporate finance and tax and
business advisory services. In fiscal year 2001, Andersen reported net revenues
of approximately $9.3 billion.

The base rent payable under the remainder of the Andersen lease is as
follows:

---------------------------------------------------------
Lease Year       Annual Rent           Monthly Rent
---------------------------------------------------------
3            $1,988,454             $165,705
---------------------------------------------------------
4            $2,067,992             $172,333
---------------------------------------------------------
5            $2,067,992             $172,333
---------------------------------------------------------
6            $2,150,712             $179,226
---------------------------------------------------------
7            $2,150,712             $179,226
---------------------------------------------------------
8            $2,236,740             $186,395
---------------------------------------------------------
9            $2,236,740             $186,395
---------------------------------------------------------
10            $2,326,210             $193,851
---------------------------------------------------------

Pursuant to the Andersen lease, Andersen is required to pay all taxes
relating to the Arthur Andersen Building and all operating costs, including, but
not limited to, those associated with water, fuel, steam, electricity, air
conditioning, telephone, painting, common area maintenance, power and other
utilities and services used by Andersen. Andersen is also required to pay for
all repair and maintenance costs, including but not limited to, security
personnel, elevator maintenance and janitorial service. Andersen has the right
to install a reception-only satellite dish antenna during the lease term and any
extension term. Wells OP, as the landlord, will be responsible for maintaining
the building's exterior walls, HVAC system, plumbing, elevators, fire
protection, other mechanical systems, public areas, including parking lot,
building structure, foundation and roof.

Andersen has the option to purchase the Arthur Andersen Building for a
purchase price of $23,250,000 by providing at least six months written notice to
Wells OP prior to the end of the fifth lease year. In addition, Andersen has the
option to purchase the Arthur Andersen Building for a purchase price of
$25,148,000 by providing at least six months written notice to Wells OP prior to
the expiration of the initial lease term.

Property Management Fees

Wells Management Company, Inc. (Wells Management), an affiliate of the
Wells REIT, Wells Fund XIII-REIT Joint Venture, and our Advisor, will manage and
lease the Convergys Building, the ADIC Buildings, the Windy Point Buildings and
the Arthur Andersen Building. Wells Management will be paid management and
leasing fees in the amount of 4.5% of gross revenues from the Convergys
Building, the ADIC Buildings, the Windy Point Buildings and the Arthur Andersen
Building, subject to certain limitations.

12

Plan of Distribution

The second full paragraph on page 157 in the "Plan of Distribution"
section of the prospectus and the information on page 13 of Supplement No. 5
previously revising such paragraph are revised as of the date of this supplement
by the deletion of such information and the insertion of the following paragraph
in lieu thereof:

Investors may agree with their broker-dealer to reduce the
amount of selling commissions payable with respect to the sale of their
shares down to zero (i) in the event that the investor has engaged the
services of a registered investment advisor or other financial advisor
with whom the investor has agreed to pay compensation for investment
advisory services or other financial or investment advice, or (ii) in
the event that the investor is investing in a bank trust account with
respect to which the investor has delegated the decision-making
authority for investments made in the account to a bank trust
department. The net proceeds to the Wells REIT will not be affected by
reducing the commissions payable in connection with such transactions.
All such sales must be made through a registered broker-dealer.

Management's Discussion and Analysis of Financial Condition and Results of
Operation

The following information should be read in conjunction with the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" section beginning on page 98 of the prospectus.

This section and other sections of the prospectus supplement contain
forward-looking statements, within the meaning of Section 27A of the Securities
Act of 1933 and 21E of the Securities Exchange Act of 1934, including discussion
and analysis of the financial condition of the Wells REIT, anticipated capital
expenditures required to complete certain projects, our ability to make cash
dividend payments to stockholders in the future and the anticipated amount of
such dividends and certain other matters. Readers of this supplement should be
aware that there are various factors that could cause actual results to differ
materially from any forward-looking statement made in this supplement, which
include changes in general economic conditions, changes in real estate
conditions, construction costs which may exceed estimates, construction delays,
increases in interest rates, lease-up risks, inability to obtain new tenants
upon the expiration of existing leases, lack of availability of financing and
the potential need to fund tenant improvements or other capital expenditures out
of operating cash flow.

Liquidity and Capital Resources

We began active operations on June 5, 1998, when we received and
accepted subscriptions for 125,000 shares pursuant to our initial public
offering, which commenced on January 30, 1998. We terminated our initial public
offering on December 19, 1999. Of the $132,181,919 raised in the initial
offering, we invested a total of $111,032,812 in properties. On December 20,
1999, we commenced a second public offering of up to 22,200,000 shares of common
stock. We terminated our second offering on December 19, 2000. Of the
$175,229,193 raised in the second offering, we invested a total of $147,192,522
in properties.

Pursuant to the prospectus, we commenced this third offering of shares
of our common stock on December 20, 2000. As of September 30, 2001, we had
received an additional $305,462,615 in gross offering proceeds from the sale of
30,546,262 shares in the third offering. As of January 15, 2002, we had raised
in the aggregate a total of $871,618,557 in offering proceeds through the sale
of 87,161,856 shares of common stock. As of January 15, 2002, we had paid a
total of $30,263,772 in acquisition and

13

advisory fees and acquisition expenses, had paid a total of $101,527,821 in
selling commissions and organizational and offering expenses, had expended a
total of $655,340,258 for investments in real estate joint ventures and
acquisitions of real property, had utilized $6,939,371 for the redemption of
stock pursuant to our share redemption program, and were holding net offering
proceeds of $77,547,017 available for investment in additional properties.

Cash and cash equivalents at September 30, 2001 and 2000 were $11,132,382
and $12,257,161, respectively. The decrease in cash and cash equivalents
resulted primarily from investments in real property acquisitions which were
more than offset by additional capital raised. Operating cash flows are expected
to increase as additional properties are added to the Wells REIT's investment
portfolio. Dividends to be distributed to the stockholders are determined by the
board of directors and are dependent upon a number of factors relating to the
Wells REIT, including funds available for payment of dividends, financial
condition, capital expenditure requirements and annual distribution requirements
in order to maintain our status as a REIT under the Internal Revenue Code. For a
description of our commitment and contingent liability as a result of the Take
Out Purchase and Escrow Agreement relating to the Ford Motor Credit Complex,
refer to Footnote 5 of the Condensed Notes to Consolidated Financial Statements
included at the end of this Supplement. As of September 30, 2001, we had
acquired interests in 36 real estate properties. These properties are generating
sufficient cash flows to cover our operating expenses and pay quarterly
dividends. Dividends declared for the third quarter of 2001 and the third
quarter of 2000 were approximately $0.1938 and $0.188 per share, respectively.
The dividends were declared on a daily record date basis to the stockholders of
record at the close of each business day during the quarter.

Cash Flows from Operating Activities

Net cash provided by operating activities was $26,484,288 for the nine
months ended September 30, 2001 and $6,979,295 for the nine months ended
September 30, 2000. The increase in net cash provided by operating activities
resulted primarily from additional rental revenues and equity income of joint
ventures generated from the properties acquired during the nine months ended
September 30, 2001.

Cash Flows from Investing Activities

Net cash used in investing activities was $155,704,215 for the nine months
ended September 30, 2001 and $115,665,441 for the nine months ended September
30, 2000. The increase in net cash used in investing activities resulted
primarily from our acquisition of a greater number of properties during the
first three quarters of 2001 as compared to the same period in 2000.

Cash Flows from Financing Activities

Net cash inflows generated through financing activities increased from
$118,013,503 for the nine months ended September 30, 2000, to $136,054,008 for
the nine months ended September 30, 2001, primarily due to our raising of
additional capital. We received $297,774,927 in offering proceeds for the nine
months ended September 30, 2001, as compared to $127,695,243 for the nine months
ended September 30, 2000. In addition, we received loan proceeds of $107,587,012
and repaid notes payable in the amount of $208,102,037 during the first three
quarters of 2001.

Results of Operations

As of September 30, 2001, the properties owned by the Wells REIT were 100%
occupied. Gross revenues for the nine months ended September 30, 2001, as
compared to the nine months ended September 30, 2000, increased to $34,068,857
from $15,734,638, respectively. This increase in gross revenues is primarily a
result of additional rental revenues and equity in income of joint ventures
generated from properties acquired during the prior twelve months. The purchase
of interests in

14

additional properties also resulted in increases in operating expenses,
management and leasing fees, depreciation expense, legal and accounting fees,
financing costs and interest expense. Administrative costs increased from
$282,330 for the nine months ended September 30, 2000 to $700,803 for the same
period in 2001 due to a non-use fee on the unused balance of the Bank of America
Note and additional taxes, license fees and postage and delivery costs
associated with the purchase of additional properties. Net income increased to
$14,423,380 for the nine months ended September 30, 2001, as compared to
$5,737,537 for the nine months ended September 30, 2000. Net income per share
was $0.11 for the quarters ended September 30, 2001 and 2000, respectively, and
$0.33 per share for the nine months ended September 30, 2001, an increase from
$0.30 per share for the nine months ended September 30, 2000.

Funds from Operations

Funds from Operations (FFO), as defined by the National Association of
Real Estate Investment Trusts (NAREIT), generally means net income, computed in
accordance with generally accepted accounting principles (GAAP) excluding
extraordinary items (as defined by GAAP) and gains (or losses) from sales of
property, plus depreciation and amortization on real estate assets, and after
adjustments for unconsolidated partnerships, joint ventures and subsidiaries. We
believe that FFO is helpful to investors as a measure of the performance of an
equity REIT. However, our calculation of FFO, while consistent with NAREIT's
definition, may not be comparable to similarly titled measures presented by
other REITs. Adjusted Funds from Operations (AFFO) is defined as FFO adjusted to
exclude the effects of straight-line rent, loan cost amortization and other
non-cash and/or unusual items. Neither FFO nor AFFO represent cash generated
from operating activities in accordance with GAAP and should not be considered
as alternatives to net income as an indication of our performance or to cash
flows as a measure of liquidity or ability to make distributions. The following
table reflects the calculation of FFO and AFFO for the three and nine months
ended September 30, 2001 and 2000, respectively:

Three Months Ended                 Nine Months Ended
--------------------------------  ---------------------------------
September 30,    September 30,     September 30,    September 30,
2001             2000             2001              2000
--------------  ----------------  ---------------  ----------------

FUNDS FROM OPERATIONS:
Net income                                   $  6,109,137      $  2,525,228     $ 14,423,380        $5,737,537
Add:
Depreciation of real assets                   3,947,425         2,155,366       10,341,242         5,084,689
Amortization of deferred leasing costs           75,837           101,598          227,510           269,482
Depreciation and amortization -
unconsolidated partnerships                   647,184           303,402        1,560,844           830,366

--------------    --------------  ---------------   ---------------
Funds from operations (FFO)                     10,779,583         5,085,594       26,552,976        11,922,074

Adjustments:
Loan cost amortization                            236,816            64,016          528,715           150,143
Straight line rent                               (707,581)         (468,487)      (1,930,297)       (1,132,052)
Straight line rent - unconsolidated
partnerships                                   (100,432)          (78,851)        (232,678)         (191,748)
Lease acquisition fees paid                             0                 0                0          (152,500)
Lease acquisition fees paid-
unconsolidated partnerships                           0              (103)          (7,826)           (8,002)
-------------    --------------   --------------    ---------------
Adjusted funds from operations               $ 10,208,386      $  4,602,169     $ 24,910,890      $ 10,587,915
=============    ==============   ==============    ===============

WEIGHTED AVERAGE SHARES:
BASIC AND DILUTED                               54,112,446        23,920,273       43,725,920        19,219,053
=============    ==============   ==============    ===============

15

Financial Statements

The consolidated balance sheets of the Wells REIT as of September 30, 2001
and December 31, 2000, and the financial statements of the Wells REIT for the
periods indicated, included in this supplement, have not been audited.

The Pro Forma Balance Sheet of the Wells REIT, as of September 30, 2001,
the Pro Forma Statement of Income (Loss) for the nine months ended September 30,
2001, and the Pro Forma Statement of Income (Loss) for the year ended December
31, 2000, which are included in this supplement, have not been audited.

The Statements of Revenues Over Certain Operating Expenses of the Windy
Point Buildings and the Arthur Andersen Building for the year ended December 31,
2000, included in this supplement and elsewhere in the registration statement,
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are included in this
supplement in reliance upon the authority of said firm as experts in giving said
reports.

The Statements of Revenues Over Certain Operating Expenses of the Windy
Point Buildings and the Arthur Andersen Building for the nine months ended
September 30, 2001, included in this supplement and elsewhere in the
registration statement, have not been audited.

16

INDEX TO FINANCIAL STATEMENTS

Wells Real Estate Investment Trust, Inc. and Subsidiary                             Page
----

Unaudited Financial Statements
------------------------------

Consolidated Balance Sheets as of September 30, 2001 and
December 31, 2000                                                           19

Consolidated Statements of Income for the three months ended
September 30, 2001 and September 30, 2000 and for the nine months
ended September 30, 2001 and September 30, 2000                             20

Consolidated Statements of Shareholders' Equity for the year ended
December 31, 2000 and for the nine months ended September 30, 2001          21

Consolidated Statements of Cash Flows for the nine months ended
September 30, 2001 and September 30, 2000                                   22

Condensed Notes to Consolidated Financial Statements                        23
September 30, 2001

Unaudited Pro Forma Financial Statements
----------------------------------------

Summary of Unaudited Pro Forma Financial Statements                         32

Pro Forma Balance Sheet as of September 30, 2001                            33

Pro Forma Statement of Income (Loss) for the year ended
December 31, 2000                                                           35

Pro Forma Statement of Income (Loss) for the nine months
ended September 30, 2001                                                    37

Windy Point Buildings

Report of Independent Accountants                                           38

Statements of Revenues Over Certain Operating Expenses                      39
for the year ended December 31, 2000 (audited) and for the
nine months ended September 30, 2001 (unaudited)

Notes to Statements of Revenues Over Certain Operating                      40
Expenses for the year ended December 31, 2000 (audited) and
for the nine months ended September 30, 2001 (unaudited)

17

Arthur Andersen Building

Report of Independent Accountants                                           42

Statements of Revenues over Certain Operating Expenses                      43
for the year ended December 31, 2000 (audited) and for the
nine months ended September 30, 2001 (unaudited)

Notes to Statements of Revenues over Certain Operating Expenses             44
for the year ended December 31, 2000 (audited) and
for the nine months ended September 30, 2001 (unaudited)

18

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

September 30,      December 31,
2001              2000
===============    ===============

ASSETS
REAL ESTATE, at cost:
Land                                                                         $    73,985,267    $    46,237,812
Building and improvements, less accumulated depreciation of
$19,810,895 in 2001 and $9,469,653 in 2000                                    381,590,591        287,862,655
Construction in progress                                                           2,202,200          3,357,720
---------------    ---------------
Total real estate                                                   457,778,058        337,458,187
INVESTMENT IN JOINT VENTURES (Note 2)                                                 71,060,872         44,236,597
INVESTMENT IN BONDS                                                                   22,000,000                  0
DUE FROM AFFILIATES                                                                    1,649,205            734,286
CASH AND CASH EQUIVALENTS                                                             11,132,382          4,298,301
ACCOUNTS RECEIVABLE                                                                    5,675,988          3,356,428
DEFERRED LEASE ACQUISITION COSTS, net                                                  1,662,822          1,890,332
DEFERRED PROJECT COSTS (Note 1)                                                          475,811            550,256
DEFERRED OFFERING COSTS (Note 1)                                                               0          1,291,376
PREPAID EXPENSES AND OTHER ASSETS, net                                                   994,809          4,734,583
---------------    ---------------
Total assets                                                    $   572,429,947    $   398,550,346
===============    ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses                                        $     5,475,619    $     2,166,387
Notes payable (Note 3)                                                            49,148,162        127,663,187
Deferred rental income                                                                     0            381,194
Due to affiliates (Note 4)                                                           247,131          1,772,956
Dividends payable                                                                  1,071,657          1,025,010
---------------    ---------------
Total liabilities                                                    55,942,569        133,008,734
---------------    ---------------

COMMITMENTS AND CONTINGENCIES (Note 5)
MINORITY INTEREST OF UNIT HOLDER IN
OPERATING PARTNERSHIP                                                                    200,000            200,000
---------------    ---------------
SHAREHOLDERS' EQUITY
Common shares, $.01 par value; 125,000,000 shares authorized,
61,287,300 shares issued and 60,932,270 shares outstanding at
September 30, 2001, and 31,509,807 shares issued and 31,368,510
shares outstanding at December 31, 2000                                             612,872            315,097
Additional paid-in capital                                                         519,224,798        266,439,484
Treasury stock, at cost, 355,029 shares at September 30, 2001, and
141,297 shares at December 31, 2000                                              (3,550,292)        (1,412,969)
---------------    ---------------
Total shareholders' equity                                          516,287,378        265,341,612
---------------    ---------------
Total liabilities and shareholders' equity                      $   572,429,947    $   398,550,346
===============    ===============

See accompanying condensed notes to consolidated financial statements.

19

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended               Nine Months Ended
September 30,   September 30,   September 30,   September 30,
2001            2000            2001            2000
=============   =============   =============   =============

REVENUES:
Rental income                        $11,316,960     $ 5,819,968     $31,028,212     $13,712,371
Equity in income of joint ventures     1,102,453         635,065       2,621,647       1,684,247
Interest and other income (Note 5)        88,491         131,578         418,998         338,020
-----------     -----------     -----------     -----------
12,507,904       6,586,611      34,068,857      15,734,638
-----------     -----------     -----------     -----------
EXPENSES:
Operating costs, net of
reimbursements                      1,293,845         289,140       3,168,273         631,407
Management and leasing fees              631,947         381,766       1,749,849         919,630
Depreciation                           3,947,425       2,155,366      10,341,242       5,084,689
Administrative costs                      58,843          43,979         700,803         282,330
Legal and accounting                      82,002          32,883         199,333         130,603
Amortization of deferred financing
costs                                 236,816          64,016         528,715         150,143
Interest expense                         147,889       1,094,233       2,957,262       2,798,299
-----------     -----------     -----------     -----------
6,398,767       4,061,383      19,645,477       9,997,101
-----------     -----------     -----------     -----------
NET INCOME                               $ 6,109,137     $ 2,525,228     $14,423,380     $ 5,737,537
===========     ===========     ===========     ===========

BASIC AND DILUTED
EARNINGS PER SHARE                   $      0.11     $      0.11     $      0.33     $      0.30
===========     ===========     ===========     ===========

See accompanying condensed notes to consolidated financial statements.

20

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2000

AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001

Additional                                                 Total
Common Stock          Paid-In        Retained         Treasury Stock        Shareholders'
----------------------                                ------------------------
Shares      Amount       Capital        Earnings       Shares       Amount        Equity
==========  ==========   ============   ============  ==========   ===========   =============

BALANCE, December 31, 1999          13,471,085    $134,710   $115,880,885   $          0           0   $         0   $116,015,595

Issuance of common stock         18,038,722     180,387    180,206,833              0           0             0    180,387,220
Treasury stock purchased                  0           0              0              0    (141,297)   (1,412,969)    (1,412,969)
Net income                                0           0              0      8,552,967           0             0      8,552,967
Dividends ($.73 per share)                0           0     (7,276,452)    (8,552,967)          0             0    (15,829,419)
Sales commissions and
discounts                              0           0    (17,002,554)             0           0             0    (17,002,554)
Other offering expenses                   0           0     (5,369,228)             0           0             0     (5,369,228)
----------   ---------   ------------   ------------   ---------   -----------   ------------

BALANCE, December 31, 2000          31,509,807     315,097    266,439,484              0    (141,297)   (1,412,969)   265,341,612

Issuance of common stock         29,777,493     297,775    297,477,152              0           0             0    297,774,927
Treasury stock purchased                  0           0              0              0    (213,732)   (2,137,323)    (2,137,323)
Net income                                0           0              0     14,423,380           0             0     14,423,380
Dividends ($.57 per share)                0           0     (9,125,583)   (14,423,380)          0             0    (23,548,963)
Sales commission                          0           0    (28,085,572)             0           0             0    (28,085,572)
Other offering expenses                   0           0     (7,480,683)             0           0             0     (7,480,683)
----------   ---------   ------------   ------------   ---------   -----------   ------------
BALANCE, September 30, 2001         61,287,300    $612,872   $519,224,798   $          0    (355,029)  $(3,550,292)  $516,287,378
==========   =========   ============   ============   =========   ===========   ============

See accompanying condensed notes to consolidated financial statements.

21

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended
----------------------------------
September 30,      September 30,
2001               2000
===============    ===============

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                      $    14,423,380    $     5,737,537
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation                                                   10,341,242          5,084,689
Amortization of deferred financing costs                          528,715            150,143
Amortization of deferred leasing costs                            227,510            269,482
Equity in income of joint ventures                             (2,621,647)        (1,684,247)
Changes in assets and liabilities:
Accounts receivable                                         (2,319,560)        (1,831,539)
Deferred rental income                                        (381,194)          (236,579)
Accounts payable                                             3,309,232            751,100
Prepaid expenses and other assets, net                       3,211,059         (1,411,068)
Due to affiliates                                             (234,449)           149,777
---------------    ---------------
Net cash provided by operating activities                26,484,288          6,979,295
---------------    ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in real estate                                         (121,366,009)      (103,469,511)
Investment in joint ventures                                        (27,017,957)        (7,612,005)
Deferred project costs                                              (10,347,316)        (4,446,307)
Deferred lease acquisition costs                                              0         (2,241,322)
Distributions received from joint ventures                            3,027,067          2,103,704
---------------    ---------------
Net cash used in investing activities                  (155,704,215)      (115,665,441)
---------------    ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from note payable                                          107,587,012         67,883,130
Repayment of note payable                                          (208,102,037)       (52,903,328)
Dividends paid                                                      (23,502,316)        (8,124,023)
Issuance of common stock                                            297,774,927        127,695,243
Sales commissions paid                                              (28,085,572)       (12,068,553)
Offering costs paid                                                  (7,480,683)        (3,811,122)
Treasury stock purchased                                             (2,137,323)          (657,844)
---------------    ---------------
Net cash provided by financing activities               136,054,008        118,013,503
---------------    ---------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                6,834,081          9,327,357

CASH AND CASH EQUIVALENTS, beginning of year                             4,298,301          2,929,804
---------------    ---------------
CASH AND CASH EQUIVALENTS, end of period                           $    11,132,382    $    12,257,161
===============    ===============
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:

Deferred project costs applied to Joint Ventures                $     1,126,657    $       295,680
===============    ===============
Deferred project costs applied to Real Estate                   $     9,295,104    $     3,707,715
===============    ===============
Decrease in deferred offering cost accrual                      $    (1,291,376)   $      (143,265)
===============    ===============
Assumption of mortgage                                          $    22,000,000    $             0
===============    ===============
Investment in bonds                                             $    22,000,000    $             0
===============    ===============

See accompanying condensed notes to consolidated financial statements.

22

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2001

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) General

Wells Real Estate Investment Trust, Inc. (the "Company") is a Maryland
corporation formed on July 3, 1997. The Company is the sole general partner
of Wells Operating Partnership, L.P. ("Wells OP"), a Delaware limited
partnership organized for the purpose of acquiring, developing, owning,
operating, improving, leasing, and otherwise managing income-producing
commercial properties for investment purposes.

On January 30, 1998, the Company commenced a public offering of up to
16,500,000 shares of common stock at $10 per share pursuant to a
Registration Statement on Form S-11 under the Securities Act of 1933. The
Company commenced active operations on June 5, 1998, when it received and
accepted subscriptions for 125,000 shares. The Company terminated its
initial public offering on December 19, 1999, and on December 20, 1999, the
Company commenced a second follow-on public offering of up to 22,200,000
shares of common stock at $10 per share. As of September 30, 2001, the
Company had received gross offering proceeds of approximately $305,462,615
from the sale of 30,546,262 shares from its third public offering. As of
September 30, 2001, the Company had received aggregate gross offering
proceeds of approximately $612,872,996 from the sale of 61,287,300 shares
of its common stock. After payment of $21,326,295 in Acquisition and
Advisory Fees and Acquisition Expenses, payment of $75,253,972 in selling
commissions and organization and offering expenses, and capital
contributions and acquisition expenditures by Wells OP of $504,065,814 in
property acquisitions and common stock redemptions of $3,550,292 pursuant
to the Company's share repurchase program, the Company was holding net
offering proceeds of $8,676,623 available for investment in properties.

Wells OP owns interests in properties directly and through equity ownership
in the following joint ventures: (i) a joint venture among Wells OP, Wells
Real Estate Fund IX, L.P., Wells Real Estate Fund X, L.P., and Wells Real
Estate Fund XI, L.P. (the "Fund IX-X-XI-REIT Joint Venture"), (ii)
Wells/Fremont Associates (the "Fremont Joint Venture"), a joint venture
between Wells OP and Fund X and Fund XI Associates, which is a joint
venture between Wells Real Estate Fund X, L.P. and Wells Real Estate Fund
XI, L.P. (the "Fund X-XI Joint Venture"), (iii) Wells/Orange County
Associates (the "Cort Joint Venture"), a joint venture between Wells OP and
the Fund X-XI Joint Venture, (iv) a joint venture among Wells OP, Wells
Real Estate Fund XI, L.P., and Wells Real Estate Fund XII, L.P. (the "Fund
XI-XII-REIT Joint Venture"), (v) a joint venture between Wells OP and Wells
Real Estate Fund XII, L.P. (the "Fund XII-REIT Joint Venture"), (vi) the
Fund VIII-IX-REIT Joint Venture, a joint venture between Wells OP and the
Fund VIII-IX Joint Venture, which is a joint venture between Wells Real
Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., and (vii) a
joint venture between Wells OP and Wells Real Estate Fund XIII, L.P. (the
"Fund XIII-REIT Joint Venture").

As of September 30, 2001, Wells OP owned interests in the following
properties either directly or through its interest in the foregoing joint
ventures: (i) a three-story office building in Knoxville, Tennessee (the
"Alstom Power-Knoxville Building"), (ii) a two-story office building in
Louisville, Colorado (the "Ohmeda Building"), (iii) a three-story office
building in Broomfield, Colorado (the "360 Interlocken Building"), (iv) a
one-story office building in Oklahoma City, Oklahoma (the "Avaya
Technologies Building"), (v) a one-story warehouse and office building in
Ogden, Utah (the "Iomega Building"), all five of which are owned by the

23

Fund IX-X-XI-REIT Joint Venture, (vi) a two-story warehouse office building
in Fremont, California (the "Fremont Building"), which is owned by the
Wells/ Fremont Joint Venture, (vii) a one-story warehouse and office
building in Fountain Valley, California (the "Cort Building"), which is
owned by the Wells/Orange County Joint Venture, (viii) a four-story office
building in Tampa, Florida (the "PWC Building"), (ix) a four-story office
building in Harrisburg, Pennsylvania (the "AT&T Harrisburg Building"),
which are owned directly by Wells OP, (x) a two-story manufacturing and
office building located in Fountain Inn, South Carolina (the "EYBL CarTex
Building"), (xi) a three-story office building located in Leawood, Kansas
(the "Sprint Building"), (xii) a one story office building and warehouse in
Tredyffrin Township, Pennsylvania (the "Johnson Matthey Building"), (xiii)
a two-story office building in Ft. Meyers, Florida (the "Gartner
Building"), all four of which are owned by Fund XI-XII-REIT Joint Venture,
(xiv) a two-story office building located in Lake Forest, California (the
"Matsushita Building"), (xv) a four-story office building located in
Richmond, Virginia (the "Alstom Power-Richmond Building"), (xvi) a
two-story office building and warehouse in Wood Dale, Illinois (the
"Marconi Building"), (xvii) a five-story office building in Plano, Texas
(the "Cinemark Building"), (xviii) a three-story office building in Tulsa,
Oklahoma (the "Metris Building"), (xix) a two-story office building in
Scottsdale, Arizona (the "Dial Building"), (xx) a two-story office building
in Tempe, Arizona (the "ASML Building"), (xxi) a two-story office building
in Tempe, Arizona (the "Motorola-Arizona Building"), (xxii) a two-story
office building in Tempe, Arizona (the "Avnet Building"), (xxiii) a
three-story office building in Troy, Michigan (the "Delphi Building") all
ten of which are owned directly by Wells OP, (xxiv) a three-story office
building in Troy, Michigan (the "Siemens Building"), which is owned by the
Wells Fund XII-REIT Joint Venture Partnership, (xxv) a two-story office
building in Orange County, California (the "Quest Building"), formerly the
Bake Parkway Building, previously owned by Fund VIII-IX Joint Venture,
which is now owned by Fund VIII-IX-REIT Joint Venture, (xxvi) a three-story
office building in South Plainfield, New Jersey (the "Motorola-New Jersey
Building"), (xxvii) a nine-story office building in Minnetonka, Minnesota
(the "Metris Minnetonka Building"), (xxviii) a six-story office building in
Houston, Texas (the "Stone and Webster Building"), all three of which are
owned directly by Wells OP, (xxix) a one-story and a two-story office
building in Oklahoma City, Oklahoma (the "AT&T-Oklahoma Buildings"), which
are owned by the Fund XII-REIT Joint Venture, (xxx) a three-story office
building in Brentwood, Tennessee (the "Comdata Building"), which is owned
by the Fund XII-REIT Joint Venture, (xxxi) a two-story office building in
Jacksonville, Florida (the "Amercredit Building"), which is owned by
XIII-REIT Joint Venture, (xxxii) a seven-story office building in Quincy,
Massachusetts (the "State Street Building"), (xxxiii) two one-story office
buildings in Houston, Texas (the "IKON Buildings"), (xxxiv) a 14.873 acre
tract of land in Irving, Texas (the "Nissan Property"), (xxxv) a one-story
office and warehouse building in Millington, Tennessee (the "Ingram
Building"), and (xxxvi) a four-story office building in Cary, North
Carolina (the "Lucent-NC Building"), all five of which are owned directly
by Wells OP.

(b) Deferred Project Costs

The Company pays a percentage of shareholder contributions to Wells
Capital, Inc. (the "Advisor") for acquisition and advisory services. These
payments, are stipulated in the prospectus. These payments may not exceed 3
1/2% of shareholders' capital contributions. Cumulative Acquisition and
Advisory Fees and Acquisition Expenses paid as of September 30, 2001,
amounted to $21,326,295 and represented approximately 3 1/2% of total
shareholders' capital contributions received. These fees are allocated to
specific properties as they are purchased or developed and are capitalized
with the real estate assets of the Company or of the joint venture invested
in by the Company. Deferred project costs at September 30, 2001 and
December 31, 2000, represent fees not yet applied to properties.

(c) Deferred Offering Costs

Offering expenses, to the extent that they exceed 3% of gross offering
proceeds, will be paid by the Advisor and not by the Company. Offering
expenses do not include sales or underwriting commissions but do include
such costs as certain legal and accounting fees, printing costs, and other
offering expenses. As of September 30, 2001, the Advisor had paid offering
expenses on behalf of the Company in an aggregate amount of $16,891,235,
which did not exceed the 3% limitation.

24

(d) Employees

The Company has no direct employees. The employees of the Advisor perform a
full range of real estate services including leasing and property
management, accounting, asset management, and investor relations for the
Company.

(e) Insurance

Wells Management Company, Inc., an affiliate of the Company and the
Advisor, carries comprehensive liability and extended coverage insurance
with respect to all of the properties owned directly and indirectly by the
Company. In the opinion of management, the properties are adequately
insured.

(f) Competition

The Company will experience competition for tenants from owners and
managers of competing projects, which may include its affiliates. As a
result, the Company may be required to provide free rent, reduced charges
for tenant improvements and other inducements, all of which may have an
adverse impact on results of operations. At the time the Company elects to
dispose of its properties, the Company will also be in competition with
sellers of similar properties to locate suitable purchasers for its
properties.

(g) Basis of Presentation

Substantially all of the Company's business is conducted through Wells OP.
On December 31, 1997, Wells OP issued 20,000 limited partner units to the
Advisor in exchange for a capital contribution of $200,000. The Company is
the sole general partner in Wells OP; consequently, the accompanying
consolidated balance sheet of the Company includes the amounts of the
Company and Wells OP. The Advisor, a limited partner, is not currently
receiving distributions from its investment in Wells OP.

The consolidated financial statements of the Company have been prepared in
accordance with instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. These quarterly statements
have not been examined by independent accountants, but in the opinion of
the Board of Directors, the statements for the unaudited interim periods
presented include all adjustments, which are of a normal and recurring
nature, necessary to present a fair presentation of the results for such
periods. For further information, refer to the financial statements and
footnotes included in the Company's Form 10-K for the year ended December
31, 2000.

(h) Distribution Policy

The Company will make distributions each taxable year (not including a
return of capital for federal income tax purposes) equal to at least 90% of
its real estate investment trusts taxable income. The Company intends to
make regular quarterly distributions to holders of the shares.
Distributions will be made to those shareholders who are shareholders as of
the record date selected by the Directors. Distributions will be declared
on a monthly basis and paid on a quarterly basis during the offering period
and declared and paid quarterly thereafter.

(i) Income Taxes

The Company has made an election under Section 856 (C) of the Internal
Revenue Code of 1986, as amended (the "Code"), to be taxed as a Real Estate
Investment Trust ("REIT") under the Code beginning with its taxable year
ended December 31, 1998. As a REIT for federal income tax purposes, the
Company generally will not be subject to federal income tax on income that
it distributes to its shareholders. If the Company fails to qualify as a
REIT in any taxable year, it will then be subject to federal income tax on
its taxable income at regular corporate rates and will not be permitted to
qualify for treatment as a REIT for federal income tax purposes for four
years following the year during which qualification is lost. Such an event
could materially adversely affect the Company's net income and net cash
available to distribute to shareholders. However, the Company believes

25

that it is organized and operates in such a manner as to qualify for
treatment as a REIT and intends to continue to operate in the foreseeable
future in such a manner so that the Company will remain qualified as a REIT
for federal income tax purposes.

(j) Statement of Cash Flows

For the purpose of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents. Cash equivalents include cash and
short-term investments.

2.   INVESTMENTS IN JOINT VENTURES

As of September 30, 2001, the Company, through its ownership in Wells OP,
which owns interests in seven joint ventures which, in turn own 16
properties. The Company does not have control over the operations of these
joint ventures; however, it does exercise significant influence.
Accordingly, investment in joint ventures is recorded using the equity
method.

The following describes additional investments in joint ventures which the
Company made during the three months ended September 30, 2001.

The Fund XIII-REIT Joint Venture

On June 27, 2001, Wells OP and Wells Real Estate Fund XIII, L.P. ("Wells
Fund XIII") entered into a Joint Venture Partnership Agreement for the
purpose of acquiring, owning, leasing, operating and managing real
properties. The joint venture partnership is known as the Wells Fund
XIII-REIT Joint Venture (the "Fund XIII-REIT Joint Venture").

The AmeriCredit Building

On July 16, 2001, the Fund XIII-REIT Joint Venture acquired a two-story
office building containing approximately 85,000 rentable square feet on a
12.33 acre tract of land located in Clay County, Florida (the "AmeriCredit
Building") from Adevco Contact Centers Jacksonville, L.L.C. pursuant to
that certain Agreement for Purchase and Sale of Property between Adevco and
Wells Capital, Inc., the Advisor. The rights under the agreement were
assigned by Wells Capital, Inc., the original purchaser under the
agreement, to the Fund XIII-REIT Joint Venture at closing. The purchase
price paid for the AmeriCredit Building was $12,500,000, excluding closing
costs.

The entire 85,000 rentable square feet of the AmeriCredit Building is
currently under a triple-net lease agreement with AmeriCredit dated
November 20, 2000. The landlord's interest in the AmeriCredit lease was
assigned to the Fund XIII-REIT Joint Venture at the closing. The initial
term of the AmeriCredit lease is 10 years, which commenced June 2001 and
expires in May 2011. AmeriCredit has the right to extend the AmeriCredit
lease for two additional five-year periods of time.

For additional information regarding the acquisition of the AmeriCredit
Building, refer to Supplement No. 3 dated July 20, 2001, to the Prospectus
of Wells Real Estate Investment Trust, Inc. dated December 20, 2000, which
was filed with the Commission in Post-Effective Amendment No. 3 to the Form
S-11 Registration Statement of Wells Real Estate Investment Trust, Inc. on
July 23, 2001 (Commission File No. 333-44900).

26

SUMMARY OF OPERATIONS

The following information summarizes the operations of the unconsolidated joint
ventures in which the Company, through Wells OP, had ownership interests as of
September 30, 2001 and 2000, respectively.

Wells OP's Share of Net
Total Revenues                  Net Income                     Income
----------------------------  ---------------------------- ----------------------------
Three Months Ended            Three Months Ended           Three Months Ended
----------------------------  ---------------------------- ----------------------------
September 30,  September 30,  September 30,  September 30, September 30,  September 30,
2001           2000           2001          2000           2001           2000
-------------- -------------  -------------- ------------- -------------- -------------

Fund IX-X-XI-REIT
Joint Venture             $1,082,768     $1,087,126     $  669,906     $ 678,125     $   24,864     $   25,178
Cort Joint Venture             203,812        198,885        149,477       137,099         65,272         59,866
Fremont Joint
Venture                      227,050        225,195        142,087       141,395        110,123        109,587
Fund XI-XII-REIT
Joint Venture                843,962        844,121        520,011       532,905        295,173        302,492
Fund XII-REIT Joint
Venture                    1,409,716        376,457        814,542       252,825        447,634        126,413
Fund VIII-IX-REIT
Joint Venture                313,536        259,148        155,976       196,497         24,629         11,529
Fund XIII-REIT
Joint Venture                305,600              0        155,194             0        134,758              0
----------     ----------     ----------    ----------     ----------     ----------
$4,386,444     $2,990,932     $2,607,193    $1,938,846     $1,102,453     $  635,065
==========     ==========     ==========    ==========     ==========     ==========

Wells OP's Share of Net
Total Revenues                  Net Income                     Income
----------------------------  ---------------------------- ----------------------------
Nine Months Ended            Nine Months Ended             Nine Months Ended
----------------------------  ---------------------------- ----------------------------
September 30,  September 30,  September 30,  September 30, September 30,  September 30,
2001           2000           2001          2000           2001           2000
-------------- -------------  -------------- ------------- -------------- -------------

Fund IX-X-XI-REIT
Joint Venture            $ 3,263,864     $3,297,516     $2,042,759    $1,992,374     $   75,817     $   74,057
Cort Joint Venture             602,280        596,656        414,603       422,477        181,046        184,484
Fremont Joint
Venture                      677,406        675,585        420,689       424,058        326,051        328,663
Fund XI-XII-REIT
Joint Venture              2,533,153      2,506,049      1,534,247     1,557,772        870,883        884,236
Fund XII-REIT Joint
Venture                    3,305,911        599,032      1,847,726       402,556        967,079        201,278
Fund VIII-IX-REIT
Joint Venture                894,460        259,148        416,328       196,497         66,013         11,529
Fund XIII-REIT
Joint Venture                305,600              0        155,194             0        134,758              0
-----------     ----------     ----------    ----------     ----------     ----------
$11,582,674     $7,933,986     $6,831,546    $4,995,734     $2,621,647     $1,684,247
===========     ==========     ==========    ==========     ==========     ==========

27

3.   INVESTMENTS IN REAL ESTATE

As of September 30, 2001, the Company, through its ownership in Wells OP,
owns 20 properties directly. The following describes acquisitions made
directly by Wells OP during the three months ended September 30, 2001.

The State Street Building

On July 30, 2001, Wells OP purchased a seven-story office building with
approximately 234,668 rentable square feet located on an 11.22 acre tract
of land at 1200 Crown Colony Drive, Norfolk County, Quincy, Massachusetts
(the "State Street Building) from Crownview, LLC. Crownview is not
affiliated with the Company or Wells Capital, Inc., our Advisor. The
purchase price for the State Street Building was $49,563,000, excluding
closing costs. The entire 234,668 rentable square feet of the State Street
Building is currently under a lease agreement with SSB Realty. The
landlord's interest in the SSB Realty Lease was assigned to Wells OP at the
closing. The current term of the lease is 10 years, which commenced on
February 1, 2001, and expires on March 31, 2011. SSB Realty has the right
to extend the term of this lease for one additional five-year period at the
then-current fair market rental rate.

Pursuant to the SSB Realty lease, SSB Realty is required to pay its
proportionate share of taxes relating to the SSB Building and all operating
costs incurred by the landlord in maintaining and operating the SSB
Building. In addition, the base operating costs and the base taxes will be
adjusted to reflect the actual operating costs and taxes for the preceding
calendar year. Wells OP, as the landlord, will be responsible for
maintaining the common areas of the building, the roof, foundation,
exterior walls and windows, load bearing items and the central heating,
ventilation and air conditioning, electrical, mechanical and plumbing
systems of the building.

For additional information regarding the acquisition of the State Street
Building, refer to Supplement No. 4 dated August 10, 2001, to the
Prospectus of Wells Real Estate Investment Trust, Inc. dated December 20,
2000, which was contained in Post-Effective Amendment No. 4 to the Form
S-11 Registration Statement of Wells Real Estate Investment Trust, Inc.
which was filed with the Commission on October 23, 2001 (Commission File
No. 333-44900).

The IKON Buildings

On September 7, 2001, Wells OP purchased two one-story office buildings
with approximately 157,900 rentable square feet located at 810 and 820
Gears Road, Harris County, Houston, Texas (the "IKON Buildings") from SV
Reserve, LP. Reserve, LP is not in any way affiliated with the Company or
Wells Capital, Inc., our Advisor.

The purchase price for the IKON Buildings was $20,650,000, excluding
closing costs. The entire 157,790 rentable square feet of the IKON
Buildings is currently under a net lease agreement with IKON. The
landlord's interest in the IKON lease was assigned to Wells OP at the
closing. The current term of the lease is 10 years, which commenced on May
1, 2000 and expires on April 30, 2010. IKON has the right to extend the
term of this lease for two additional five-year periods at the then-current
fair market rental rate, upon 12 months prior written notice.

Pursuant to the IKON lease, IKON is required to pay all taxes relating to
the IKON Buildings and all operating costs incurred by the landlord in
maintaining and operating the IKON Buildings. Wells OP, as landlord, will
be responsible for repairs related to insurable casualty and for
maintaining the roof, foundation, exterior walls and windows, load bearing
items and electrical, mechanical and plumbing systems.

For additional information regarding the acquisition of the IKON Buildings,
refer to the Company's Form 8-K dated September 7, 2001, which was filed
with the Commission on September 21, 2001 (Commission File No. 0-25739),
and Supplement No. 5 dated October 15, 2001 to the Prospectus of Wells Real
Estate Investment Trust, Inc. dated December 20, 2000, which was contained
in Post-Effective Amendment No. 4 to the Form S-11 Registration Statement
of Wells Real Estate Investment Trust, Inc. which was filed with the
Commission on October 23, 2001 (Commission File No. 333-44900).

28

The Nissan Property

On September 19, 2001, Wells OP purchased a 14.873 acre tract of land
located in Irving, Dallas County, Texas (the "Nissan Property"). Wells OP
purchased the Nissan Property from the Ruth Ray and H.L. Hunt Foundation
and the Ruth Foundation, each a Texas non-profit corporation and 50% owner
in the Nissan Property for a purchase price of $5,545,700, excluding
closing costs.

Wells OP has entered into agreements to construct a three-story office
building containing 268,290 rentable square feet (the "Nissan Project") on
the Nissan Property. The Nissan Project will be a concrete tilt-up, high
performance glass building. The site consists of a 14,873 acre tract of
land located in the Freeport Business Park.

The entire 268,290 rentable square feet of the Nissan Building is currently
under a lease agreement with Nissan Motor Acceptance Corporation
("Nissan"), a wholly owned subsidiary of Nissan North America, Inc. with
its corporate headquarters in Torrance, California. The initial lease term
began on September 19, 2001 and will extend 10 years beyond the rent
commencement date. Construction on the building is scheduled to begin on or
before February 1, 2001, and is scheduled to be completed within 20 months
from its commencement. The rent commencement date will occur shortly
thereafter. Nissan also has the right to extend the lease for two
additional five-year periods at 95% of the then current market rental rate
upon written notice. The initial annual base rent payable under the Nissan
lease will be $4,225,860.

The Ingram Micro Building

On September 27, 2001, Wells OP acquired a ground leasehold interest in a
701,819 square foot distribution facility located at 3820 Micro Drive in
the City of Millington, Shelby County, Tennessee (the "Ingram Micro
Building") pursuant to a Bond Real Property Lease dated December 20, 1995
(the "Bond Lease"). The rights under the Bond Lease were purchased from
Ingram Micro L.P. ("Ingram") in a sale lease-back transaction for a
purchase price of $21,050,000, excluding closing costs. The Bond Lease
expires on December 31, 2026. In addition, Wells OP purchased from Ingram
all rights, title and interest in an Industrial Development Revenue Note
Ingram Micro L.P. Series 1995 (the "Bond") issued by the Industrial
Development Board of the City of Millington, Tennessee ("Board") to Lease
Plan North America, Inc. ("Lease Plan") in a principal amount not to exceed
$22,000,000. The Bond is secured by a Fee Construction Mortgage Deed of
Trust and Assignment of Rents and Leases dated December 20, 1995 (the "Deed
of Trust") executed by the Board for the benefit of Lease Plan. Beginning
in 2006, Wells OP has the option under the Bond Lease to purchase the land
underlying the Ingram Micro Distribution Facility for $100 plus satisfying
the indebtedness evidenced by the Bond, which is currently held by Wells
OP.

The Board, as the fee simple owner of the Ingram Micro Building, had
originally entered into the Bond Lease with Lease Plan. The proceeds from
the issuance of the Bond were used to finance the construction of the
Ingram Micro Building. On December 20, 2000, Ingram purchased the Bond,
Deed of Trust and the ground leasehold interest in the Ingram Micro
Building under the Bond Lease from Lease Plan.

At closing, Wells OP entered into a new lease with Ingram pursuant to which
Ingram agreed to lease the entire Ingram Micro Building from Wells OP. The
Ingram lease has a term of 10 years with two successive options to extend
for 10 years each. The annual base rent for the Ingram Micro Building is
$2,035,275 for years one through five of the lease term. Ingram is also
required to pay as additional rent all other amounts, liabilities and
obligations relating to the Ingram Micro, including all taxes, assessments,
water rents, sewer rents and charges, duties, impositions, license and
permit fees, charges for public utilities and other charges of every kind
and nature incurred as a result of the use and occupation of the premises
by Ingram.

The Lucent Building

On September 28, 2001, Wells OP purchased a four-story office building with
approximately 120,000 rentable square feet located at 200 Lucent Lane,
Cary, North Carolina (the "Lucent Building"). Wells OP purchased this

29

building from Lucent Technologies, Inc. ("Lucent") pursuant to that certain
Agreement for the Purchase and Sale of Property between Lucent and Wells OP
for a purchase price of $17,650,000, excluding closing costs.

The Lucent Building, which was completed in 1999, is a four-story office
building located on a 29.19 acre tract of land, which includes a 11.84 acre
improved tract of land and a 17.34 acre undeveloped tract of land.

The Lucent Building is located at 200 Lucent Lane in Regency Park office
part in the "Research Triangle" in Cary, North Carolina, approximately 10
miles west of downtown Raleigh and 15 miles south of Raleigh-Durham
International Airport.

The entire Lucent Building is currently under a lease agreement with
Lucent, which does not include the 17.34 acre undeveloped tract of land
described above. The current term of the lease is 10 years, which commenced
September 28, 2001, and expires on September 30, 2011. Lucent has the right
to extend the term of this lease for three additional five-year periods at
the then-current fair market rental rate, upon 12 months prior written
notice. The current annual base rent payable under the Lucent lease is
$1,800,000.

For additional information regarding the acquisitions of the Nissan
property, the Ingram Micro Building and the Lucent Building, refer to the
Company's Form 8-K dated September 27, 2001, which was filed with the
Commission on October 10, 2001 (Commission File No. 0-25739), the Company's
Form 8-K/A dated September 27, 2001, which was filed with the Commission on
October 26, 2001 (Commission File No. 0-25739), and Supplement No. 5 dated
October 15, 2001 to the Prospectus of Wells Real Estate Investment Trust,
Inc. dated December 20, 2000, which was filed with the Commission in
Post-Effective Amendment No. 4 to the Form S-11 Registration Statement of
Wells Real Estate Investment Trust, Inc. on October 23, 2001 (Commission
File No. 333-44900).

4.   NOTES PAYABLE

Notes payable consists of loans of (i) $21,650,000 due to Bank of America,
N.A. secured by first mortgages against the ATT, Marconi, Matsushita,
Motorola, NJ, Metris, MN, and Delphi Buildings, (the "Bank of America
Note") (ii) $5,498,162 due to SouthTrust Bank collateralized by Wells OP's
interest in the Cinemark, Dial, ASML, Alstom Power Richmond, Avaya
Technologies, Motorola, and PWC Buildings, and (iii) $22,000,000 mortgage
note secured by the Deed of Trust to the Ingram Micro Building. Cash paid
for interest on the notes payable totaled $3,466,606 for the nine months
ended September 30, 2001.

5.   DUE TO AFFILIATES

Due to affiliates consists of amounts due to the Advisor for Acquisitions
and Advisory Fees and Acquisition Expenses, deferred offering costs, and
other operating expenses paid on behalf of the Company. Also included in
due to affiliates is the amount due to the Fund VIII-IX Joint Venture
related to the Matsushita Rental Income Guaranty Agreement, which is
explained in detail in the Company's Form 10-K for the year ended December
31, 2000. Aggregate payments of $601,963 have been made as of September 30,
2001 toward funding the obligation under the Matsushita Rental Income
Guaranty Agreement.

6.   COMMITMENTS AND CONTINGENCIES

Take Out Purchase and Escrow Agreement

An affiliate of the Advisor ("Wells Exchange") has developed a program (the
"Wells Section 1031 Program") involving the acquisition by Wells Exchange
of income-producing commercial properties and the formation of a series of
single member limited liability companies for the purpose of facilitating
the resale of co-tenancy interests in such real estate properties to be
owned in co-tenancy arrangements with persons ("1031 Participants") who are
looking to invest the proceeds from a sale of real estate held for
investment in another real estate investment for purposes of qualifying for
like-kind exchange treatment under Section 1031 of the Code. Each of these
properties will be financed by a combination of permanent first mortgage
financing and interim loan financing obtained from institutional lenders.

30

Following the acquisition of each property, Wells Exchange will attempt to
sell co-tenancy interests to 1031 Participants, the proceeds of which will
be used to pay off the interim financing. In consideration for the payment
of a Take Out Fee to the Company, and following approval of the potential
property acquisition by the Company's Board of Directors, it is anticipated
that Wells OP will enter into a Take Out Purchase and Escrow Agreement or
similar contract providing that, in the event that Wells Exchange is unable
to sell all of the co-tenancy interests in that particular property to 1031
Participants, Wells OP will purchase, at Wells Exchange's cost, any
co-tenancy interests remaining unsold at the end of the offering period.

As a part of the initial transaction in the Wells Section 1031 Program, and
in consideration for the payment of a Take Out Fee in the amount of
$137,500 to the Company, Wells OP entered into a Take Out Purchase and
Escrow Agreement dated April 16, 2001 providing, among other things, that
Wells OP is obligated to acquire, at Wells Exchange's cost ($839,694 in
cash plus $832,060 of assumed debt for each 7.63358% interest of co-tenancy
interest unsold), any unsold co-tenancy interests in the building known as
the Ford Motor Credit Complex which remain unsold at the expiration of the
offering of Wells Exchange, which has been extended to February 28, 2002,
which is also the maturity date of the interim loan relating to such
property. The Ford Motor Credit Complex consists of two connecting office
buildings containing 167,438 rentable square feet located in Colorado
Springs, Colorado currently under a triple-net lease with Ford Motor Credit
Company, a wholly owned subsidiary of Ford Motor Company, which is the
world's largest automotive finance company with more than 10 million
customers in 40 countries.

The obligations of Wells OP under the Take Out Purchase and Escrow
Agreement are secured by reserving against Wells OP's existing line of
credit with Bank of America, N.A. (the "Interim Lender"). If, for any
reason, Wells OP fails to acquire any of the co-tenancy interests in the
Ford Motor Credit Complex which remain unsold as of February 28, 2002, or
there is otherwise an uncured default under the interim loan or the line of
credit documents, the Interim Lender is authorized to draw down Wells OP's
line of credit in the amount necessary to pay the outstanding balance of
the interim loan in full, in which event the appropriate amount of
co-tenancy interests in the Ford Motor Credit Complex would be deeded to
Wells OP. Wells OP's maximum economic exposure in the transaction is
$11,000,000, in which event Wells OP would acquire the Ford Motor Credit
Complex for $11,000,000 in cash plus assumption of the first mortgage
financing in the amount of $10,900,000. If some, but not all, of the
co-tenancy interests are sold, Wells OP's exposure would be less, and it
would own an interest in the property in co-tenancy with the 1031
Participants who had previously acquired co-tenancy interests in the Ford
Motor Credit Complex from Wells Exchange.

For further information regarding the Wells Section 1031 Program, refer to
Supplement No. 2 dated April 25, 2001 to the Prospectus of Wells Real
Estate Investment Trust, Inc. dated December 20, 2000, which was filed with
the Commission in Post-Effective Amendment No. 2 to the Form S-11
Registration Statement of Wells Real Estate Investment Trust, Inc. on April
25, 2001 (Commission File No. 333-44900).

31

WELLS REAL ESTATE INVESTMENT TRUST, INC.

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The following unaudited pro forma balance sheet as of September 30, 2001 has
been prepared to give effect to the acquisition of the ADIC Buildings by Wells
XIII-REIT Joint Venture, a joint venture partnership between Wells Real Estate
Fund XIII, L.P. and Wells Operating Partnership, L.P. ("Wells OP"), and the
acquisitions of the Convergys Building, the Windy Point Buildings and the Arthur
Andersen Building by Wells OP as if the acquisitions occurred on September 30,
2001.

The following unaudited pro forma statement of income (loss) for the nine months
ended September 30, 2001 had been prepared to give effect to the acquisitions of
the Comdata Building, the AmeriCredit Building, the State Street Building, the
IKON Buildings, the Ingram Micro Distribution Facility, the Lucent Building, the
Nissan Property (collectively, the "Prior Acquisitions"), the ADIC Buildings,
the Convergys Building, the Windy Point Buildings and the Arthur Andersen
Building as if the acquisitions occurred on January 1, 2001.

The following unaudited pro forma statement of income (loss) for the year ended
December 31, 2000 has been prepared to give effect to the acquisitions of the
Comdata Building, the State Street Bank Building, the IKON Buildings, the Ingram
Micro Distribution Facility, the Lucent Building (collectively, the "Prior
Acquisitions"), the Windy Point Buildings and the Arthur Andersen Building as if
the acquisitions occurred on January 1, 2000. Operations commenced during 2001
for the following properties acquired: The AmeriCredit Building (June 2001), the
Convergys Building (September 2001), and the ADIC Buildings (December 2001). The
Nissan Property had no operations during 2001 or 2000.

Wells OP is a Delaware limited partnership that was organized to own and operate
properties on behalf of the Wells Real Estate Investment Trust, Inc., a Maryland
corporation. As the sole general partner of Wells OP, Wells Real Estate
Investment Trust, Inc. possesses full legal control and authority over the
operations of Wells OP. Accordingly, the accounts of Wells OP are consolidated
with the accompanying pro forma financials statements of Wells Real Estate
Investment Trust, Inc.

These unaudited pro forma financial statements are prepared for informational
purposes only and are not necessarily indicative of future results or of actual
results that would have been achieved had the acquisitions of the Comdata
Building, the AmeriCredit Building, the State Street Bank Building, the IKON
Buildings, the Ingram Micro Distribution Facility, the Lucent Building, the
Nissan Property, the ADIC Buildings, the Convergys Building, the Windy Point
Buildings and the Arthur Andersen Building been consummated at the beginning of
the periods presented.

As of September 30, 2001, the date of the accompanying pro forma balance sheet,
Wells OP held cash of $11,132,382. The additional cash used to purchase the
Convergys Building, the Windy Point Buildings and the Arthur Andersen Building,
including deferred project costs paid to Wells Capital, Inc. (an affiliate of
Wells OP), was raised through the issuance of additional shares subsequent to
September 30, 2001. This balance is reflected as purchase consideration payable
in the accompanying pro forma balance sheet.

32

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA BALANCE SHEET

SEPTEMBER 30, 2001

(Unaudited)

ASSETS

Pro Forma Adjustments
-----------------------------------------------------------------------
Wells Real
Estate
Investment Trust,                                           Wendy Point
Inc.           ADIC Buildings       Convergys          Buildings      Arthur Andersen
-------------------  ----------------    ---------------    --------------- -----------------
REAL ESTATE ASSETS, at cost:

Land                                   $ 73,985,267    $         0         $ 3,500,000 (a)    $ 7,960,000 (a)    $ 1,700,000 (a)
145,833 (d)        331,667 (d)         70,833 (b)
Building, less accumalated
depreciation of $19,810,895         381,590,591              0           9,997,361 (a)     79,755,625 (a)     19,444,911 (a)
416,557 (d)      3,323,151 (d)        810,205 (d)
Construction in progress                 2,202,200              0                                      0                  0
------------    -----------         -----------        -----------        -----------
Total real estate assets     457,778,058              0          14,059,751         91,370,443         22,025,949
------------    -----------         -----------        -----------        -----------

CASH AND CASH EQUIVALENTS                   11,132,382     (6,671,075) (a)     (4,461,307) (a)             0                  0

INVESTMENT IN JOINT VENTURES                71,060,872      6,949,036  (b)              0                  0                  0

INVESTMENT IN BONDS                         22,000,000              0                   0                  0                  0

ACCOUNTS RECEIVABLE                          5,675,988              0                   0                  0                  0

DEFERRED LEASE ACQUISITION COSTS             1,662,822              0                   0                  0                  0

DEFERRED PROJECT COSTS                         475,811       (277,961) (c)       (197,850) (d)             0                  0

DEFERRED OFFERING COSTS                              0              0                   0                  0                  0

DUE FROM AFFILIATES                          1,649,205              0                   0                  0                  0

PREPAID EXPENSES AND OTHER ASSETS              994,809              0                   0                  0                  0
------------    -----------         -----------        -----------        -----------
Total assets                $572,429,947    $         0         $ 9,400,594        $91,370,443        $22,025,949
============    ===========         ===========        ===========        ===========

Pro Forma Total
-----------------
REAL ESTATE ASSETS, at cost:

Land                                     $ 87,693,600

Building, less accumalated
depreciation of $19,810,895           495,338,401

Construction in progress                   2,202,200
------------
Total real estate assets       585,234,201
------------

CASH AND CASH EQUIVALENTS                              0

INVESTMENT IN JOINT VENTURES                  78,009,908

INVESTMENT IN BONDS                           22,000,000

ACCOUNTS RECEIVABLE                            5,675,988

DEFERRED LEASE ACQUISITION COSTS               1,662,822

DEFERRED PROJECT COSTS                                 0

DEFERRED OFFERING COSTS                                0

DUE FROM AFFILIATES                            1,649,205

PREPAID EXPENSES AND OTHER ASSETS                994,809
------------
Total assets                  $695,226,933
============

33

LIABILITIES AND SHAREHOLDERS' EQUITY

Pro Forma Adjustments
-----------------------------------------------------------------------
Wells Real
Estate
Investment Trust,                                           Wendy Point
Inc.           ADIC Buildings       Convergys          Buildings      Arthur Andersen
-------------------  ----------------   ---------------   ---------------   -----------------

LIABILITIES:

Accounts payable and accrued
expenses                               $  5,475,619        $       0      $        0         $         0                 0
Notes payable                              49,148,162                0               0                   0                 0
Purchase Consideration Payable                      0                0       9,036,054 (a)      87,715,625 (a)    21,144,911 (a)
Dividends payable                           1,071,657                0               0                   0                 0
Due to affiliate                              247,131                0         364,540 (d)       3,654,818 (d)       881,038 (d)
Deferred rental income                              0                0               0                   0                 0
------------        ---------      ----------         -----------       -----------
Total liabilities                55,942,569                0       9,400,594          91,370,443        22,025,949
------------        ---------      ----------         -----------       -----------
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST OF UNIT HOLDER
IN OPERATING PARTNERSHIP                      200,000                0               0                   0                 0
------------        ---------      ----------         -----------       -----------
SHAREHOLDERS' EQUITY:
Common shares, $.01 par value;
125,000,000 shares authorized,
61,287,300 shares issued and
60,932,270 shares outstanding              612,872                0               0                   0                 0
Additional paid-in capital                519,224,798                0               0                   0                 0

Treasury stock, at cost, 355,029
shares                                  (3,550,292)               0               0                   0                 0
------------        ---------      ----------         -----------       -----------
Total shareholders' equity      516,287,378                0               0                   0                 0
------------        ---------      ----------         -----------       -----------
Total liabilities and
shareholders' equity        $572,429,947        $       0      $9,400,594         $91,370,443       $22,025,949
============        =========      ==========         ===========       ===========

Pro Forma Total
-----------------

LIABILITIES:

Accounts payable and accrued
expenses                               $  5,475,619
Notes payable                              49,148,162
Purchase Consideration Payable            117,896,590
Dividends payable                           1,071,657
Due to affiliate                            5,147,527
Deferred rental income                              0
------------
Total liabilities               178,739,555
------------
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST OF UNIT HOLDER
IN OPERATING PARTNERSHIP                      200,000
------------
SHAREHOLDERS' EQUITY:
Common shares, $.01 par value;
125,000,000 shares authorized,
61,287,300 shares issued and
60,932,270 shares outstanding              612,872
Additional paid-in capital                519,224,798

Treasury stock, at cost, 355,029
shares                                  (3,550,292)
------------
Total shareholders' equity      516,287,378
------------
Total liabilities and
shareholders' equity        $695,226,933
============

(a)   Reflects Wells Real Estate Investment Trust, Inc.'s purchase price for the
land and building.
(b)   Reflects Wells Real Estate Investment Trust, Inc.'s contribution to Wells
XIII-REIT Joint Venture
(c)   Reflects deferred project costs contributed to Wells XIII-REIT Joint
Venture at approximately 4.17% of the purchase price.
(d)   Reflects deferred project costs applied to the land and building at
approximately 4.17% of the purchase price.

34

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF INCOME (LOSS)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001

(Unaudited)

Pro Forma Adjustments
-----------------------------------------------------------------
Wells Real
Estate Investment      Prior                         Windy Point
Trust, Inc.      Acquisitions     Convergys        Buildings     Arthur Andersen
-----------------  ---------------  -----------    --------------- -----------------

REVENUES:
Rental income                                  $31,028,212     $ 8,738,526 (a)   $116,533 (a)   $2,566,407 (a)   $1,577,125 (a)
Equity in income of joint ventures               2,621,647         328,061 (b)          0                0                0
107,410 (c)

Interest income                                    418,998        (418,998)(d)          0                0                0
1,320,000 (e)
-----------     -----------       --------       ----------       ----------
34,068,857      10,074,999        116,533        2,566,407        1,577,125
-----------     -----------       --------       ----------       ----------
EXPENSES:
Depreciation and amortization                   10,341,242       2,554,687 (f)     34,713 (f)    2,492,363 (f)      607,653 (f)
Interest                                         2,957,262       3,674,732 (g)          0                0                0
1,320,000 (h)
Operating costs, net of reimbursements           3,168,273       2,819,212 (i)        600 (i)      185,393 (i)      106,825 (i)
Management and leasing fees                      1,749,849         393,234 (j)      5,244 (j)      115,488 (j)       70,971 (j)
General and administrative                         700,803               0              0                0                0
Amortization of deferred financing costs           528,715               0              0                0                0
Legal and accounting                               199,333               0              0                0                0
-----------     -----------       --------       ----------       ----------
19,645,477      10,761,865         40,557        2,793,234          785,449
-----------     -----------       --------       ----------       ----------
NET INCOME (LOSS)                                  $14,423,380     $  (686,866)      $ 75,976       $ (226,827)      $  791,676
-----------     -----------       --------       ----------       ----------
EARNINGS PER SHARE, basic and diluted              $      0.33
===========

WEIGHTED AVERAGE SHARES, basic and diluted          43,707,212
===========

Pro Forma
Total
------------

REVENUES:
Rental income                                $44,026,803
Equity in income of joint ventures             3,057,118

Interest income                                        0
1,320,000
-----------
48,403,921
-----------
EXPENSES:
Depreciation and amortization                 16,030,658
Interest                                       7,951,994

Operating costs, net of reimbursements         6,280,293
Management and leasing fees                    2,334,786
General and administrative                       700,803
Amortization of deferred financing costs         528,715
Legal and accounting                             199,333
-----------
34,026,582
-----------
NET INCOME (LOSS)                                $14,377,339
===========

EARNIGS PER SHARE, basicn and diluted            $      0.33
===========

WEIGHTED AVERAGE SHARES, basic and diluted       $43,707,212
===========

The accompanying notes are an integral part of these statements.

35

(a)  Rental income is recognized on a straight-line basis.

(b)  Reflects Wells Real Estate Investment Trust, Inc.'s equity in income of
Wells XII-REIT Joint Venture, a joint venture partnership between Wells
Real Estate Fund XII, L.P. and Wells OP, related to the acquisition of the
Comdata Building. The pro forma adjustment results from rental revenues
less operating expenses, management fees and depreciation.

(c)  Reflects Wells Real Estate Investment Trust, Inc.'s equity in income of
Wells XIII-REIT Joint Venture related to the acquisition of the AmeriCredit
Building. The pro forma adjustment results from rental revenues less
operating expenses, management fees and depreciation.

(d)  Represent forgone interest income related to cash utilized to purchase the
prior acquisitions.

(e)  Represents interest income on the $22,000,000 investment in bonds due from
the Industrial Development Authority, which earns interest at 8% per annum.

(f)  Depreciation expense on the buildings is recognized using the straight-line
method and a 25-year life.

(g)  Represents interest expense on the $96,265,863 of cumulative borrowings due
to Bank of America, N.A., which bears interest at approximately 6.5% during
the period from January 1, 2001 through the respective acquisition dates.

(h)  Represents interest expense on the $22,000,000 mortgage note payable to the
Industrial Development Authority, which bears interest at 8%.

(i)  Consists of nonreimbursable operating expenses.

(j)  Management and leasing fees are calculated at 4.5% of rental income.

36

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF INCOME (LOSS)

FOR THE YEAR ENDED DECEMBER 31, 2000

(Unaudited)

Wells Real                    Pro Forma Adjustments
Estate      ------------------------------------------------------
Investment         Prior           Windy Point                          Pro Forma
Trust, Inc.      Acquisitions        Buildings       Arthur Andersen       Total
-----------    ---------------    ---------------   -----------------   -----------

REVENUES:
Rental income                            $20,505,000    $ 8,572,880 (a)    $ 2,576,653 (a)     $2,102,834 (a)    $33,757,367
Equity in income of joint ventures         2,293,873        930,181 (b)              0                  0          3,224,054
Interest income                              520,924       (520,924)(c)              0                  0                  0
0      1,760,000 (d)              0                  0          1,760,000
Other income                                  53,409              0                  0                  0             53,409
------------    -----------        -----------         ----------        -----------
23,373,206     10,742,137          2,576,653          2,102,834         38,794,830
------------    -----------        -----------         ----------        -----------
EXPENSES:

Depreciation and amortization              7,743,551      3,868,420 (e)      3,323,151 (e)        810,205 (e)     15,745,327
Interest                                   4,199,461      7,053,062 (f)              0                  0         13,012,523
1,760,000 (g)
Operating costs, net of
reimbursements                            888,091        553,347 (h)        144,790 (h)        122,704 (h)      1,708,932
Management and leasing fees                1,309,974        385,780 (i)        115,488 (i)         94,628 (i)      1,905,870
General and administrative                   426,680              0                  0                  0            426,680
Legal and accounting                         240,209              0                  0                  0            240,209
Computer costs                                12,273              0                  0                  0             12,273
------------    -----------        -----------         ----------        -----------
14,820,239     13,620,609          3,583,429          1,027,537         33,051,814
------------    -----------        -----------         ----------        -----------
NET INCOME (LOSS)                           $  8,552,967    $(2,878,472)       $(1,006,776)        $1,075,297        $ 5,743,016
============    ===========        ===========         ==========        ===========
EARNINGS PER SHARE, basic and diluted              $0.40                                                                   $0.27
============                                                             ===========

WEIGHTED AVERAGE SHARES, basic and
diluted                                   21,382,418                                                              21,382,418
============                                                             ===========

(a)  Rental Income is recognized on a straight-line basis.

(b)  Reflects Wells Real Estate Investment Trust, Inc.'s equity in income of
Wells XII-REIT Joint Venture, a joint venture partnership between Wells
Real Estate Fund XII, L.P. and Wells OP, related to the acquisition of the
Comdata Building. The pro forma adjustment results from rental revenues
less operating expenses, management fees and depreciation.

(c)  Represent forgone interest income related to cash utilized to purchase the
prior acquisitions.

(d)  Represents interest income on the $22,000,000 investment in bonds due from
the Industrial Development Authority, which earns interest at 8%.

(e)  Depreciation expense on the buildings is recognized using the straight-line
method and a 25-year life.

(f)  Represents interest expense on the $85,525,863 of cumulative borrowings due
to Bank of America, N.A., which bears interest at approximately 8.3% during
the year ended December 31, 2000.

(g)  Represents interest expense on the $22,000,000 mortgage note payable to the
Industrial Development Authority, which bears interest at 8%.

(h)  Consists of nonreimbursable operating expenses.

(i)  Management and leasing fees are calculated at 4.5% of rental income.

37

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the WINDY POINT BUILDINGS for the year ended December 31, 2000.
This financial statement is the responsibility of management. Our responsibility
is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. These standards require that we plan and perform the audit
to obtain reasonable assurance about whether the statement of revenues over
certain operating expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statement of revenues over certain operating expenses. An audit also
includes assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

As described in Note 2, this financial statement excludes certain expenses that
would be comparable with those resulting from the operations of the Windy Point
Buildings after acquisition by the Wells Operating Partnership, L.P., a
subsidiary of Wells Real Estate Investment Trust, Inc. The accompanying
statement of revenues over certain operating expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission and is not intended to be a complete presentation of the
Windy Point Buildings' revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Windy Point Buildings for the year ended December 31, 2000 in
conformity with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

Atlanta, Georgia
January 11, 2002

38

WINDY POINT BUILDINGS

STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 (UNAUDITED)

AND THE YEAR ENDED DECEMBER 31, 2000 (AUDITED)

2001             2000
------------     ------------
(Unaudited)

RENTAL REVENUES                                     $2,566,407       $2,576,653

OPERATING EXPENSES, net of reimbursements              185,383          144,790
----------       ----------
REVENUES OVER CERTAIN OPERATING EXPENSES            $2,381,024       $2,431,863
==========       ==========

The accompanying notes are an integral part of these statements.

39

WINDY POINT BUILDINGS

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 (UNAUDITED)

AND THE YEAR ENDED DECEMBER 31, 2000 (AUDITED)

1.   ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On December 31, 2001, the Wells Operating Partnership, L.P. ("Wells OP")
acquired the Windy Point Buildings from Windy Point of Schaumburg, LLC (the
"Seller"). Wells OP is a Delaware limited partnership that was organized to
own and operate properties on behalf of Wells Real Estate Investment Trust,
Inc., a Maryland corporation. As the sole general partner of Wells OP,
Wells Real Estate Investment Trust, Inc. possesses full legal control and
authority over the operations of Wells OP. The Seller is not in anyway
affiliated with Wells OP.

Zurich American Insurance, Inc. ("Zurich") and TCI Great Lakes, Inc.
("TCI") currently occupy 300,034 square feet and 129,157 square feet,
respectively, of the total 486,956 rentable square feet of the two
multi-story office buildings comprising the Windy Point Buildings under net
lease agreements (the "Zurich Lease" and the "TCI Lease", respectively).
The Seller's interests in the Zurich Lease and the TCI Lease were assigned
to Wells OP at the closing. The initial term of the Zurich Lease commenced
on September 1, 2001 and expires on August 31, 2011. The initial term of
the TCI Lease commenced on December 1, 1999 and expires on November 30,
2009. Zurich and TCI have the right to extend their respective leases for
two additional periods of five years each at the corresponding then current
fair market rental rates.

Under the Zurich lease, Zurich is required to pay, as additional monthly
rent, its proportionate share of all controllable costs including, but not
limited to, costs for electricity, fuel, insurance, snow removal and the
wages for union employees. Beginning with the third lease year,
controllable expenses for any lease year shall not exceed an amount equal
to the product of total actual controllable expenses for the preceding
lease year multiplied by 1.04. Zurich is also required to pay its
proportionate share of property taxes not to exceed (a) for calendar year
2001: $1.63 per rentable square foot, and (b) for calendar year 2002 and
thereafter: the sum of $3.17, plus the amount which $1.63 exceeded actual
controllable costs during calendar year 2001, per rentable square foot.
Under the TCI lease, TCI is required to pay, as additional monthly rent,
its proportionate share of operating expenses and property taxes subject to
the following limitations: (a) for the first lease year: not to exceed
$7.36 per rentable square foot, (b) for the second lease year: not to
exceed $9.14 per rentable square foot, (c) for the third lease year: no
limitations, and (d) for the fourth lease year and thereafter: not to
exceed more than 5% of controllable costs for the immediately preceding
lease year, including cleaning and landscaping services. Under the TCI
lease, the following items are specifically excluded from the definition of
controllable costs: electricity, fuels, insurance, snow-plowing, and wages
of union employees. Wells OP will be responsible for repairing and
maintaining all structural elements of the premises including the roof,
exterior walls and windows, parking areas, walkways, internal common areas,
building systems including plumbing, heating, ventilating and air
conditioning, and providing landscaping services.

40

The remaining rentable square footage of the Windy Point Buildings is
occupied by the following tenants: Global Knowledge Network, Inc. (22,028
square feet), National SemiConductor Corporation (6,294 square feet),
Cushman & Wakefield (1,121 square feet), and G&R Service Management II,
Inc. (1,469 square feet). Additionally, SprintCom, Inc. leases an antenna
on the roof of the Windy Point Buildings, which is not included in the
property's total rentable square footage.

Rental Revenues

Rental income is recognized on a straight-line basis over the terms of
respective leases.

2.   BASIS OF ACCOUNTING

The accompanying statements of revenues over certain operating expenses are
presented on the accrual basis. These statements have been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired. Accordingly, these
statements exclude certain historical expenses, such as depreciation,
interest, and management fees. Therefore, these statements are not
comparable to the operations of the Windy Point Buildings after acquisition
by Wells OP.

41

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the ARTHUR ANDERSEN BUILDING for the year ended December 31, 2000.
This financial statement is the responsibility of management. Our responsibility
is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. These standards require that we plan and perform the audit
to obtain reasonable assurance about whether the statement of revenues over
certain operating expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statement of revenues over certain operating expenses. An audit also
includes assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

As described in Note 2, this financial statement excludes certain expenses that
would be comparable with those resulting from the operations of the Arthur
Andersen Building after acquisition by the Wells Operating Partnership, L.P., a
subsidiary of Wells Real Estate Investment Trust, Inc. The accompanying
statement of revenues over certain operating expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission and is not intended to be a complete presentation of the
Arthur Andersen Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Arthur Andersen Building for the year ended December 31, 2000 in
conformity with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

Atlanta, Georgia
January 14, 2002

42

ARTHUR ANDERSEN BUILDING

STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 (UNAUDITED)

AND THE YEAR ENDED DECEMBER 31, 2000 (AUDITED)

2001             2000
-----------      -----------
(Unaudited)

RENTAL REVENUES                                     $1,577,125       $2,102,834

OPERATING EXPENSES, net of reimbursements              106,825          122,704
----------       ----------
REVENUES OVER CERTAIN OPERATING EXPENSES            $1,470,300       $1,980,130
==========       ==========

The accompanying notes are an integral part of these statements.

43

ARTHUR ANDERSEN BUILDING

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED)

AND THE YEAR ENDED DECEMBER 31, 2001 (AUDITED)

1.   ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On January 11, 2002, the Wells Operating Partnership, L.P. ("Wells OP")
acquired the Arthur Andersen Building from Sarasota Haskell, LLC
("Haskell"). Wells OP is a Delaware limited partnership formed to acquire,
own, lease, operate, and manage real properties on behalf of Wells Real
Estate Investment Trust, Inc., a Maryland corporation. As the sole general
partner of Wells OP, Wells Real Estate Investment Trust, Inc. possesses
full legal control and authority over the operations of Wells OP. The
Seller is not in anyway affiliated with Wells OP.

Arthur Andersen, LLP ("Andersen") currently occupies the entire 157,704
rentable square feet of the three-story office building under a net lease
agreement (the "Andersen Lease"). Haskell's interest in the Andersen Lease
was assigned to Wells OP at the closing. The initial term of the Andersen
Lease commenced on November 1, 1999 and expires on October 31, 2009.
Andersen has the right to extend the Andersen Lease for two additional
periods of five years at a rate equal to 90% of the then current fair
market rental rates. Under the Andersen Lease, Andersen is required to pay,
as additional monthly rent, all operating costs, including but not limited
to electricity, water, heating, air cooling, property and personal
insurance and property taxes. In addition, Andersen is responsible for all
routine maintenance and repairs to the interior of the Arthur Andersen
Building. Wells OP is responsible for the repair and replacement of the
exterior walls, foundation, roof, plumbing, elevators, HVAC systems, fire
protection systems and other mechanical systems of the Arthur Andersen
Building.

Rental Revenues

Rental income is recognized on a straight-line basis over the term of the
Andersen lease.

2.   BASIS OF ACCOUNTING

The accompanying statements of revenues over certain operating expenses are
presented on the accrual basis. These statements have been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired. Accordingly, these
statements exclude certain historical expenses, such as depreciation,
interest, and management fees. Therefore, these statements are not
comparable to the operations of the Arthur Andersen Building after
acquisition by Wells OP.

44

WELLS REAL ESTATE INVESTMENT TRUST, INC.
SUPPLEMENT NO. 7 DATED MARCH 30, 2002 TO THE PROSPECTUS
DATED DECEMBER 20, 2000

This document supplements, and should be read in conjunction with, the
prospectus of Wells Real Estate Investment Trust, Inc. dated December 20, 2000,
as supplemented and amended by Supplement No. 1 dated February 5, 2001,
Supplement No. 2 dated April 25, 2001, Supplement No. 3 dated July 20, 2001,
Supplement No. 4 dated August 10, 2001, Supplement No. 5 dated October 15, 2001
and Supplement No. 6 dated January 20, 2002. When we refer to the "prospectus"
in this supplement, we are also referring to any and all supplements to the
prospectus. Unless otherwise defined in this supplement, capitalized terms used
in this supplement shall have the same meanings as set forth in the prospectus.

The purpose of this supplement is to describe the following:

(1)   Status of the offering of shares in Wells Real Estate Investment
Trust, Inc. (Wells REIT);

(2)   Declaration of dividends for the second quarter of 2002;

(3)   Revisions to the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section of the
prospectus;

(4)   Updated audited financial statements of the Wells REIT, and
unaudited Schedule III-Real Estate Investments and Accumulated
Depreciation; and

(5)   Updated prior performance tables.

Status of the Offering

We commenced our initial public offering of common stock on January 30,
1998. Our initial public offering was terminated on December 19, 1999. We
received approximately $132,181,919 in gross offering proceeds from the sale of
13,218,192 shares in our initial public offering. We commenced our second
offering of common stock on December 20, 1999. Our second public offering was
terminated on December 19, 2000. We received approximately $175,229,193 in gross
offering proceeds from the sale of 17,522,919 shares in our second public
offering.

Pursuant to the prospectus, we commenced our third offering of common
stock on December 20, 2000. As of March 25, 2002, we had received an additional
$771,748,412 in gross offering proceeds from the sale of 77,174,841 shares in
the third offering. Accordingly, as of March 25, 2002, we had received in the
aggregate approximately $1,079,159,524 in gross offering proceeds from the sale
of 107,915,952 shares of our common stock.

Dividends

On March 6, 2002, our board of directors declared dividends for the
second quarter of 2002 in the amount of $0.19375 per share, or a 7.75%
annualized percentage return on an investment of $10.00 per share, payable to
our stockholders on a daily record basis. Below is a table reflecting the level
of dividends declared and paid to date:

1

Annualized
Percentage Return
on an Investment
Quarter             Approximate Amount (Rounded)          of $10 per Share
-------             ----------------------------          ----------------

3/rd/ Qtr. 1998               $0.150 per share                     6.00%
4/th/ Qtr. 1998               $0.163 per share                     6.50%

1/st/ Qtr. 1999               $0.175 per share                     7.00%
2/nd/ Qtr. 1999               $0.175 per share                     7.00%
3/rd/ Qtr. 1999               $0.175 per share                     7.00%
4/th/ Qtr. 1999               $0.175 per share                     7.00%

1/st/ Qtr. 2000               $0.175 per share                     7.00%
2/nd/ Qtr. 2000               $0.181 per share                     7.25%
3/rd/ Qtr. 2000               $0.188 per share                     7.50%
4/th/ Qtr. 2000               $0.188 per share                     7.50%

1/st/ Qtr. 2001               $0.188 per share                     7.50%
2/nd/ Qtr. 2001               $0.188 per share                     7.50%
3/rd/ Qtr. 2001               $0.188 per share                     7.50%
4/th/ Qtr. 2001               $0.194 per share                     7.75%

1/st/ Qtr. 2002               $0.194 per share                     7.75%
2/nd/ Qtr. 2002               $0.194 per share                     7.75%

Management's Discussion and Analysis of Financial Condition and Results of
Operation

The following information should be read in conjunction with the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" section beginning on page 98 of the prospectus. The following
discussion and analysis should also be read in conjunction with our accompanying
financial statements and notes thereto.

Forward Looking Statements

This section and other sections in the prospectus contain
forward-looking statements, within the meaning of Section 27A of the Securities
Act of 1933 and 21E of the Securities Exchange Act of 1934, including discussion
and analysis of the financial condition of the Wells REIT, anticipated capital
expenditures required to complete certain projects, amounts of anticipated cash
distributions to stockholders in the future and certain other matters. Readers
of this prospectus should be aware that there are various factors that could
cause actual results to differ materially from any forward-looking statements
made in this prospectus, which include changes in general economic conditions,
changes in real estate conditions, construction costs which may exceed
estimates, construction delays, increases in interest rates, lease-up risks,
inability to obtain new tenants upon the expiration of existing leases, and the
potential need to fund tenant improvements or other capital expenditures out of
operating cash flow.

We have made an election under Section 856 (c) of the Internal Revenue
Code (Code) to be taxed as a REIT under the Code beginning with its taxable year
ended December 31, 1999. As a REIT for federal income tax purposes, we generally
will not be subject to Federal income tax on income that we distribute to our
stockholders. If we fail to qualify as a REIT in any taxable year, we will be
subject to federal income tax on our taxable income at regular corporate rates
and will not be permitted to qualify

2

for treatment as a REIT for federal income tax purposes for four years following
the year in which our qualification is lost. Such an event could materially,
adversely affect our net income. However, we believe that we are organized and
operate in a manner, which has enabled us to qualify for treatment as a REIT for
federal income tax purposes during the year ended December 31, 2001. In
addition, we intend to continue to operate the Wells REIT so as to remain
qualified as a REIT for federal income tax purposes.

Liquidity and Capital Resources

General

During the fiscal year ended December 31, 2001, we received aggregate
gross offering proceeds of $522,516,620 from the sale of 52,251,662 shares of
our common stock. After payment of $18,143,307 in acquisition and advisory fees
and acquisition expenses, payment of $58,387,809 in selling commissions and
organization and offering expenses, and common stock redemptions of $4,137,427
pursuant to our share redemption program, we raised net offering proceeds
available for investment in properties of $441,848,077 during 2001.

As of December 31, 2001, we had received aggregate gross offering
proceeds of approximately $837,614,690 from the sale of 83,761,469 shares of our
common stock to 84,002 investors. After payment of $29,122,286 in acquisition
and advisory fees and acquisition expenses, payment of $98,125,735 in selling
commissions and organization and offering expenses, capital contributions to
joint ventures and acquisitions expenditures by Wells OP of $642,106,041 in
property acquisitions, and common stock redemptions of $5,550,396 pursuant to
our share redemption program, we held net offering proceeds of $62,711,000
available for investment in properties, as of December 31, 2001. As of March 25,
2002, we had received aggregate gross offering proceeds of approximately
$1,079,159,524 from the sale of 107,915,952 shares of our common stock to 27,809
investors.

The net increase in cash and cash equivalents during 2001, as compared
to 2000, is primarily the result of raising $522,516,620 in capital
contributions from the sale of 52,251,662 shares of common stock, offset by the
acquisition of nine properties during 2001, and the payment of acquisition and
advisory fees and acquisition expenses, commissions, organization and offering
costs and capital contributions to joint ventures.

As of December 31, 2001, we owned interests in 39 real estate
properties either directly or through interests in joint ventures. These
properties are generating operating cash flow sufficient to cover our operating
expenses and pay dividends to our stockholders. We pay dividends on a quarterly
basis regardless of the frequency with which such distributions are declared.
Dividends will be paid to investors who are stockholders as of the record dates
selected by our board of directors. We currently calculate quarterly dividends
based on the daily record and dividend declaration dates; thus, stockholders are
entitled to receive dividends immediately upon the purchase of shares. Dividends
declared during 2001 and 2000 totaled $.76 per share and $.73 per share,
respectively. Although we can make no assurance, we anticipate that dividend
distributions to stockholders will continue in 2002 at a level at least
comparable with 2001 dividend distributions.

Dividends to be distributed to the stockholders are determined by our
board of directors and are dependent on a number of factors, including funds
available for payment of dividends, financial condition, capital expenditure
requirements and annual distribution requirements in order to maintain our
status as a REIT under the Internal Revenue Code. Operating cash flows are
expected to increase as additional properties are added to our investment
portfolio.

3

Cash Flows From Operating Activities

Our net cash provided by operating activities was $42,349,342 for 2001,
$7,319,639 for 2000 and $4,008,275 for 1999. The increase in net cash provided
by operating activities was due primarily to the net income generated by
properties acquired during 2000 and 2001.

Cash Flows Used In Investing Activities

Our net cash used in investing activities was $274,605,735 for 2001,
$249,316,460 for 2000 and $105,394,956 for 1999. The increase in net cash used
in investing activities was due primarily to investments in properties, directly
and through contributions to joint ventures, and the payment of related deferred
project costs.

Cash Flows From Financing Activities

Our net cash provided by financing activities was $303,544,260 for
2001, $243,365,318 for 2000, and $96,337,082 for 1999. The increase in net cash
provided by financing activities was due primarily to the raising of additional
capital offset by the repayment of notes payable. We raised $522,516,620 in
offering proceeds for fiscal year ended December 31, 2001, as compared to
$180,387,220 for fiscal year ended December 31, 2000, and $103,169,490 for
fiscal year ended December 31, 1999. In addition, we received loan proceeds from
financing secured by properties of $110,243,145 and repaid notes payable in the
amount of $229,781,888 for fiscal year ended December 31, 2001.

Results of Operations

As of December 31, 2001, our real estate properties were 100% leased to
tenants. Gross revenues were $49,308,802 for the fiscal year ended December 31,
2001, $23,373,206 for fiscal year ended December 31, 2000 and $6,495,395 for
fiscal year ended December 31, 1999. Gross revenues for the year ended December
31, 2001, 2000 and 1999 were attributable to rental income, interest income
earned on funds we held prior to the investment in properties, and income earned
from joint ventures. The increase in revenues in 2001 was primarily attributable
to the purchase of additional properties during 2000 and 2001. The purchase of
additional properties also resulted in an increase in expenses which totaled
$27,584,835 for the year ended December 31, 2001, $14,820,239 for the year ended
December 31, 2000 and $2,610,746 for the year ended December 31, 1999. Expenses
in 2001, 2000 and 1999 consisted primarily of depreciation, interest expense and
management and leasing fees. Our net income also increased from $3,884,649 for
fiscal year ended December 31, 1999 to $8,552,967 for fiscal year ended December
31, 2000 to $21,723,967 for the year ended December 31, 2001.

4

Property Operations

The following table summarizes the operations of the joint ventures in which we
owned an interest as of December 31, 2001, 2000 and 1999:

Total Revenue                           Net Income                  Well REIT's Share of Net Income
For Years Ended December 31            For Years Ended December 31           For Years Ended December 31
-------------------------------------  -------------------------------------  -----------------------------------
2001        2000         1999         2001         2000         1999         2001        2000        1999
-----------  -----------  -----------  -----------  -----------  -----------  ----------- ----------- -----------

Fund IX-X-XI-
REIT Joint         $ 4,344,209  $ 4,388,193   $4,053,042   $2,684,837   $2,669,143   $2,172,244  $   99,649  $   99,177  $  81,501
Venture

Orange County          797,937      795,545      795,545      546,171      568,961      550,952     238,542     248,449    240,585
Joint Venture

Fremont                907,673      902,946      902,946      562,893      563,133      559,174     436,265     436,452    433,383
Joint Venture

Fund XI-XII-
REIT Joint           3,371,067    3,349,186    1,443,503    2,064,911    2,078,556      853,073   1,172,103   1,179,848    488,500
Venture

Fund XII-REIT        4,708,467      976,865        N/A      2,611,522      614,250       N/A      1,386,877     305,060       N/A
Joint Venture

Fund VIII-IX-REIT    1,208,724      563,049        N/A        566,840      309,893       N/A         89,779      24,887       N/A
Joint Venture

Fund XIII-REIT         706,373         N/A         N/A        356,355       N/A          N/A        297,745       N/A         N/A
Joint Venture
-----------------------------------------------------------------------------------------------------------------
$16,044,450  $10,975,784   $7,195,036   $8,977,529   $6,803,936   $4,135,443  $3,720,960  $2,293,873  $1,243,969
=================================================================================================================

Subsequent Events

As described in Supplement No. 6 to our prospectus dated January 20, 2002,
on January 11, 2002, Wells OP purchased a three-story office building containing
approximately 157,700 rentable square feet (Arthur Andersen Building) on a 9.8
acre tract of land located in Sarasota County, Florida for a purchase price of
$21,400,000. The Arthur Andersen Building is leased to Arthur Andersen LLP
(Andersen). The current term of the Andersen lease is 10 years, which commenced
on November 11, 1998 and expires on October 31, 2009. Andersen has the right to
extend the initial 10-year term of its lease for two additional five-year
periods at 90% of the ten-current market rental rate. The current annual base
rent payable under the Andersen lease is $1,988,454. Andersen has the option to
purchase the Arthur Andersen Building prior to the end of the fifth lease year
for $23,250,000 and again at the expiration of the initial lease term for
$25,148,000.

On March 6, 2002, our board of directors declared dividends for the second
quarter of 2002 in the amount of $0.19375 per share, or a 7.75% annualized
percentage return on an investment of $10.00 per share, payable to our
stockholders on a daily record basis.

Funds from Operations

Funds from Operations (FFO), as defined by the National Association of Real
Estate Investment Trusts (NAREIT), generally means net income, computed in
accordance with GAAP excluding extraordinary items (as defined by GAAP) and
gains (or losses) from sales of property, plus depreciation and amortization on
real estate assets, and after adjustments for unconsolidated partnerships, joint
ventures and subsidiaries. We believe that FFO is helpful to investors as a
measure of the performance of an equity REIT. However, our calculation of FFO,
while consistent with NAREIT's definition, may not be comparable to similarly
titled measures presented by other REITs. Adjusted Funds from Operations (AFFO)
is defined as FFO adjusted to exclude the effects of straight-line rent
adjustments, deferred loan cost amortization and other non-cash and/or unusual
items. Neither FFO nor AFFO represent cash

5

generated from operating activities in accordance with GAAP and should not be
considered as alternatives to net income as an indication of our performance or
to cash flows as a measure of liquidity or ability to make distributions.

The following table reflects the calculation of FFO and AFFO for the three years
ended December 31, 2001, 2000, and 1999, respectively:

December 31,     December 31,     December 31,
2001             2000             1999
---------------- ---------------- ----------------

FUNDS FROM OPERATIONS:
Net income                                   $    21,723,967  $     8,552,967  $     3,884,649
Add:
Depreciation of real assets                     15,344,801        7,743,550        1,726,103
Amortization of deferred leasing costs             303,347          350,991                0
Depreciation and amortization -
unconsolidated partnerships                    3,211,828          852,968          652,167

---------------- ---------------- ----------------
Funds from operations (FFO)                          40,583,943       17,500,476        6,262,919

Adjustments:
Loan cost amortization                               770,192          232,559            8,921
Straight line rent                                (2,754,877)      (1,650,791)        (847,814)
Straight line rent - unconsolidated
partnerships                                      (543,039)        (245,288)        (140,076)

Lease acquisition fees paid                                 0         (152,500)               0
Lease acquisition fees paid-
unconsolidated partnerships                              0           (8,002)            (512)
---------------- ---------------- ----------------
Adjusted funds from operations               $    38,056,219  $    15,676,454  $     5,283,438
================ ================ ================

WEIGHTED AVERAGE SHARES:
BASIC AND DILUTED                                    51,081,867       21,616,051        7,769,298
================ ================ ================

Inflation

The real estate market has not been affected significantly by inflation
in the past three years due to the relatively low inflation rate. However, there
are provisions in the majority of tenant leases which would protect us from the
impact of inflation. These provisions include reimbursement billings for common
area maintenance charges (CAM), real estate tax and insurance reimbursements on
a per square foot basis, or in some cases, annual reimbursement of operating
expenses above a certain per square foot allowance.

Critical Accounting Policies

Our accounting policies have been established and conform with
generally accepted accounting principles in the United States (GAAP). The
preparation of financial statements in conformity with GAAP requires management
to use judgment in the application of accounting policies, including making
estimates and assumptions. These judgments affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the dates
of the financial statements and the reported amounts of revenue and expenses
during the reporting periods. If our judgment or interpretation of the facts and
circumstances relating to various transactions had been different, it is
possible that different accounting policies would have been applied; thus,
resulting in a different presentation of our financial statements. Below is a
discussion of the accounting policies that we consider to be critical in that
they may require complex judgment in their application or require estimates
about matters which are inherently uncertain.

6

Straight-Lined Rental Revenues

We recognize rental income generated from all leases on real estate
assets in which we have an ownership interest, either directly or through
investments in joint ventures, on a straight-line basis over the terms of the
respective leases. If a tenant was to encounter financial difficulties in future
periods, the amount recorded as a receivable may not be realized.

Operating Cost Reimbursements

We generally bill tenants for operating cost reimbursements, either
directly or through investments in joint ventures, on a monthly basis at amounts
estimated largely based on actual prior period activity and the respective lease
terms. Such billings are generally adjusted on an annual basis to reflect
reimbursements owed to the landlord based on the actual costs incurred during
the period and the respective lease terms. Financial difficulties encountered by
tenants may result in receivables not being realized.

Real Estate

We continually monitor events and changes in circumstances indicating
that the carrying amounts of the real estate assets in which we have an
ownership interest, either directly or through investments in joint ventures,
may not be recoverable. When such events or changes in circumstances are
present, we assess the potential impairment by comparing the fair market value
of the asset, estimated at an amount equal to the future undiscounted operating
cash flows expected to be generated from tenants over the life of the asset and
from its eventual disposition, to the carrying value of the asset. In the event
that the carrying amount exceeds the estimated fair market value, we would
recognize an impairment loss in the amount required to adjust the carrying
amount of the asset to its estimated fair market value. Neither the Wells REIT
nor our joint ventures have recognized impairment losses on real estate assets
in 2001, 2000 or 1999.

Deferred Project Costs

Wells Capital, Inc., our advisor, expects to continue to fund 100% of
the acquisition and advisory fees and acquisition expenses and recognize related
expenses, to the extent that such costs exceed 3.5% of cumulative capital raised
(subject to certain overall limitations described in this prospectus) on our
behalf. We record acquisition and advisory fees and acquisition expenses by
capitalizing deferred project costs and reimbursing our advisor in an amount
equal to 3.5% of cumulative capital raised to date. As we invest our capital
proceeds, deferred project costs are applied to real estate assets, either
directly or through contributions to joint ventures, at an amount equal to 3.5%
of each investment and depreciated over the useful lives of the respective real
estate assets.

Deferred Offering Costs

Our advisor expects to continue to fund 100% of the organization and
offering costs and recognize related expenses, to the extent that such costs
exceed 3% of cumulative capital raised, on our behalf. Organization and offering
costs include items such as legal and accounting fees, marketing and promotional
costs, and printing costs, and specifically exclude sales costs and underwriting
commissions. We record offering costs by accruing deferred offering costs, with
an offsetting liability included in due to affiliates, at an amount equal to the
lesser of 3% of cumulative capital raised to date or actual costs incurred from
third-parties less reimbursements paid to our advisor. As the actual equity is
raised, we reverse the deferred offering costs accrual and recognize a charge to
stockholders' equity upon reimbursing our advisor.

7

Financial Statements

The consolidated balance sheets of the Wells REIT, as of December 31,
2001 and 2000, and the financial statements of the Wells REIT for each of the
years in the three year period ended December 31, 2001, included in this
supplement and elsewhere in the registration statement, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included in this supplement in reliance
upon the authority of said firm as experts in giving said report.

Schedule III-Real Estate Investments and Accumulated Depreciation, as
of December 31, 2001, which is included in this supplement, has not been
audited.

Prior Performance Tables

The prior performance tables dated as of December 31, 2001, which are
included in this supplement, have not been audited.

8

INDEX TO FINANCIAL STATEMENTS AND PRIOR PERFORMANCE TABLES

Page
----

Wells Real Estate Investment Trust, Inc. and Subsidiary

Audited Financial Statements
----------------------------
Report of Independent Public Accountants                                         10

Consolidated Balance Sheets as of December 31, 2001 and
December 31, 2000                                                                11

Consolidated Statements of Income for the years ended
December 31, 2001, December 31, 2000, and December 31, 1999                      12

Consolidated Statements of Shareholders' Equity for the years ended
December 31, 2001, December 31, 2000, and December 31, 1999                      13

Consolidated Statements of Cash Flows for the years ended
December 31, 2001, December 31, 2000, and December 31, 1999                      14

Notes to Consolidated Financial Statements
December 31, 2001, December 31, 2000, and December 31, 1999                      15

Unaudited Financial Statements
------------------------------

Schedule III-Real Estate Investments and Accumulated
Depreciation as of December 31, 2001                                             49

Prior Performance Tables (Unaudited)                                                               54

9

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying consolidated balance sheets of Wells Real
Estate investment trust, inc. (a Maryland corporation) and subsidiary as of
December 31, 2001 and 2000 and the related consolidated statements of income,
shareholders' equity, and cash flows for each of the three years in the period
ended December 31, 2001. These financial statements and the schedule referred to
below are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements and schedule based on our
audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
schedule are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wells Real Estate Investment
Trust, Inc. and subsidiary as of December 31, 2001 and 2000 and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 2001 in conformity with accounting principles generally
accepted in the United States.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. Schedule III--Real Estate Investments and
Accumulated Depreciation as of December 31, 2001 is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states, in all material respects, the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.

/s/ Arthur Andersen LLP

Atlanta, Georgia
January 25, 2002

10

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2001 AND 2000

ASSETS

2001            2000
--------------- ---------------

REAL ESTATE ASSETS, at cost:
Land                                                                              $  86,246,985   $  46,237,812
Building, less accumulated depreciation of $24,814,454 and $9,469,653 at
December 31, 2001 and 2000, respectively                                         472,383,102     287,862,655
Construction in progress                                                              5,738,573       3,357,720
--------------- ---------------
Total real estate assets                                                   564,368,660     337,458,187

INVESTMENT IN JOINT VENTURES                                                            77,409,980      44,236,597

CASH AND CASH EQUIVALENTS                                                               75,586,168       4,298,301

INVESTMENT IN BONDS                                                                     22,000,000               0

ACCOUNTS RECEIVABLE                                                                      6,003,179       3,781,034

DEFERRED PROJECT COSTS                                                                   2,977,110         550,256

DUE FROM AFFILIATES                                                                      1,692,727         309,680

DEFERRED LEASE ACQUISITION COSTS                                                         1,525,199       1,890,332

DEFERRED OFFERING COSTS                                                                          0       1,291,376

PREPAID EXPENSES AND OTHER ASSETS, net                                                     718,389       4,734,583
--------------- ---------------
Total assets                                                             $ 752,281,412   $ 398,550,346
=============== ===============

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES:

Notes payable                                                                     $   8,124,444   $ 127,663,187

Obligation under capital lease                                                       22,000,000               0
Accounts payable and accrued expenses                                                 8,727,473       2,166,387
Due to affiliate                                                                      2,166,161       1,772,956
Dividends payable                                                                     1,059,026       1,025,010
Deferred rental income                                                                  661,657         381,194
--------------- ---------------
Total liabilities                                                        $  42,738,761   $ 133,008,734
--------------- ---------------
COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST OF UNIT HOLDER IN OPERATING PARTNERSHIP                                  200,000         200,000
--------------- ---------------
SHAREHOLDERS' EQUITY:
Common shares, $.01 par value; 125,000,000 shares authorized, 83,761,469
shares issued and 83,206,429 shares outstanding at December 31, 2001;
125,000,000 shares authorized, 31,509,807 shares issued, and 31,368,510
shares outstanding at December 31, 2000                                              837,614         315,097
Additional paid-in capital                                                          738,236,525     275,573,339
Cumulative distributions in excess of earnings                                      (24,181,092)     (9,133,855)
Treasury stock, at cost, 555,040 shares at December 31, 2001 and 141,297
shares at December 31, 2000                                                       (5,550,396)     (1,412,969)
--------------- ---------------
Total shareholders' equity                                                 709,342,651     265,341,612
--------------- ---------------
Total liabilities and shareholders' equity                               $ 752,281,412   $ 398,550,346
=============== ===============

The accompanying notes are an integral part of these consolidated balance
sheets.

11

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999

2001           2000           1999
-------------- -------------- --------------

REVENUES:
Rental income                                                  $ 44,204,279   $ 20,505,000    $ 4,735,184
Equity in income of joint ventures                                3,720,959      2,293,873      1,243,969
Take out fee (Note 9)                                               137,500              0              0
Interest and other income                                         1,246,064        574,333        516,242
-------------- -------------- --------------
49,308,802     23,373,206      6,495,395
-------------- -------------- --------------
EXPENSES:
Depreciation                                                     15,344,801      7,743,551      1,726,103
Interest expense                                                  3,411,210      3,966,902        442,029
Amortization of deferred financing costs                            770,192        232,559          8,921
Operating costs, net of reimbursements                            4,128,883        888,091        (74,666)
Management and leasing fees                                       2,507,188      1,309,974        257,744
General and administrative                                          973,785        438,953        135,144
Legal and accounting                                                448,776        240,209        115,471
-------------- -------------- --------------
27,584,835     14,820,239      2,610,746
-------------- -------------- --------------
NET INCOME                                                         $ 21,723,967   $  8,552,967    $ 3,884,649
============== ============== ==============

EARNINGS PER SHARE:
Basic and diluted                                                     $0.43          $0.40          $0.50
============== ============== ==============

The accompanying notes are an integral part of these consolidated statements.

12

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999

Cumulative
Additional   Distributions                                          Total
Common Stock          Paid-In      in Excess      Retained       Treasury Stock      Shareholders'
---------------------                                             ----------------------
Shares      Amount       Capital     of Earnings     Earnings     Shares       Amount      Equity
----------  ---------  -------------  -------------- -----------  ----------   ---------  -------------

BALANCE, December 31,
1998                       3,154,136  $  31,541  $  27,567,275  $   (511,163)  $   334,034         0            0   $  27,421,687

Issuance of common
stock                 10,316,949    103,169    103,066,321             0             0         0            0     103,169,490
Net income                         0          0              0             0     3,884,649         0            0       3,884,649
Dividends ($.70 per
share)                         0          0              0    (1,346,240)   (4,218,683)        0            0      (5,564,923)
Sales commissions and
discounts                      0          0     (9,801,197)            0             0         0            0      (9,801,197)
Other offering expenses            0          0     (3,094,111)            0             0         0            0      (3,094,111)
----------  ---------  -------------  ------------   -----------  --------     ---------  -------------
BALANCE, December 31,
1999                      13,471,085    134,710    117,738,288    (1,857,403)            0         0            0     116,015,595

Issuance of common
stock                 18,038,722    180,387    180,206,833             0             0         0            0     180,387,220
Treasury stock                                                             0
purchased                      0          0              0                           0  (141,297)  (1,412,969)     (1,412,969)
Net income                         0          0              0             0     8,552,967         0            0       8,552,967
Dividends ($.73 per
share)                         0          0              0    (7,276,452)   (8,552,967)        0            0     (15,829,419)
Sales commissions and
discounts                       0          0    (17,002,554)            0             0         0            0     (17,002,554)
Other offering expenses            0          0     (5,369,228)            0             0         0            0      (5,369,228)
----------  ---------  -------------  ------------   -----------  --------     ---------  -------------
BALANCE, December 31,
2000                      31,509,807    315,097    275,573,339    (9,133,855)            0  (141,297)  (1,412,969)    265,341,612

Issuance of common
stock                  52,251,662    522,517    521,994,103             0             0         0            0     522,516,620
Treasury stock
purchased                       0          0              0             0             0  (413,743)  (4,137,427)     (4,137,427)
Net income                         0          0              0             0    21,723,967         0            0      21,723,967
Dividends ($.76 per
share)                          0          0              0   (15,047,237)  (21,723,967)        0            0     (36,771,204)
Sales commissions and
discounts                       0          0    (49,246,118)            0             0         0            0     (49,246,118)

Other offering expenses            0          0    (10,084,799)                          0         0            0     (10,084,799)
----------  ---------  -------------  ------------   -----------  --------  -----------   -------------
BALANCE, December 31,
2001                      83,761,469  $ 837,614  $ 738,236,525  $(24,181,092)  $         0  (555,040) $(5,550,396)  $ 709,342,651
==========  =========  =============  ============   ===========  ========  ===========   =============

The accompanying notes are an integral part of
these consolidated statements.

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999

2001           2000            1999
--------------- --------------- ---------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                       $  21,723,967   $   8,552,967   $   3,884,649
--------------- --------------- ---------------
Adjustments to reconcile net income to net cash provided
by operating activities:
Equity in income of joint ventures                            (3,720,959)     (2,293,873)     (1,243,969)
Depreciation                                                  15,344,801       7,743,551       1,726,103
Amortization of deferred financing costs                         770,192         232,559           8,921
Amortization of deferred leasing costs                           303,347         350,991               0
Write-off of deferred lease acquisition fees                      61,786               0               0
Changes in assets and liabilities:
Accounts receivable                                        (2,222,145)     (2,457,724)       (898,704)
Due from affiliates                                            10,995        (435,600)              0
Prepaid expenses and other assets, net                      3,246,002      (6,826,568)        149,501
Accounts payable and accrued expenses                       6,561,086       1,941,666          36,894
Deferred rental income                                        280,463         144,615         236,579
Due to affiliates                                             (10,193)        367,055         108,301
--------------- --------------- ---------------
Total adjustments                                       20,625,375      (1,233,328)        123,626
--------------- --------------- ---------------
Net cash provided by operating activities               42,349,342       7,319,639       4,008,275
--------------- --------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate                                         (227,933,858)   (231,518,138)    (85,514,506)
Investment in joint ventures                                       (33,690,862)    (15,063,625)    (17,641,211)
Deferred project costs paid                                        (17,220,446)     (6,264,098)     (3,610,967)
Distributions received from joint ventures                           4,239,431       3,529,401       1,371,728
--------------- --------------- ---------------
Net cash used in investing activities                 (274,605,735)   (249,316,460)   (105,394,956)
--------------- --------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable                                        110,243,145     187,633,130      40,594,463
Repayments of notes payable                                       (229,781,888)    (83,899,171)    (30,725,165)
Dividends paid to shareholders                                     (36,737,188)    (16,971,110)     (3,806,398)
Issuance of common stock                                           522,516,620     180,387,220     103,169,490
Treasury stock purchased                                            (4,137,427)     (1,412,969)              0
Sales commissions paid                                             (49,246,118)    (17,002,554)     (9,801,197)
Offering costs paid                                                 (9,312,884)     (5,369,228)     (3,094,111)
--------------- --------------- ---------------
Net cash provided by financing activities              303,544,260     243,365,318      96,337,082
--------------- --------------- ---------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                   71,287,867       1,368,497      (5,049,599)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                            4,298,301       2,929,804       7,979,403
--------------- --------------- ---------------
CASH AND CASH EQUIVALENTS, END OF YEAR                              $  75,586,168   $   4,298,301   $   2,929,804
=============== =============== ===============

SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES:
Deferred project costs applied to real estate assets          $  14,321,416   $   5,114,279   $   3,183,239
=============== =============== ===============

Deferred project costs contributed to joint ventures          $   1,395,035   $     627,656   $     735,056
=============== =============== ===============

Deferred project costs due to affiliate                       $   1,114,140   $     191,281   $     191,783
=============== =============== ===============

Deferred offering costs due to affiliate                      $           0   $   1,291,376   $     964,941
=============== =============== ===============

Reversal of deferred offering costs due to affiliate          $     964,941   $           0   $           0
=============== =============== ===============

Other offering expenses due to affiliate                      $     943,107   $           0   $           0
=============== =============== ===============

Assumption of obligation under capital lease                  $  22,000,000   $           0   $           0
=============== =============== ===============

Investment in bonds                                           $  22,000,000   $           0   $           0
=============== =============== ===============

The accompanying notes are an integral part of these consolidated statements.

14

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001, 2000, AND 1999

1.    Organization and Summary of Significant Accounting Policies

Wells Real Estate Investment Trust, Inc. (the "Company") is a Maryland
corporation that qualifies as a real estate investment trust ("REIT"). The
Company is conducting an offering for the sale of a maximum of 125,000,000
(exclusive of 10,000,000 shares available pursuant to the Company's
dividend reinvestment program) shares of common stock, $.01 par value per
share, at a price of $10 per share. The Company will seek to acquire and
operate commercial properties, including, but not limited to, office
buildings, shopping centers, business and industrial parks, and other
commercial and industrial properties, including properties which are under
construction, are newly constructed, or have been constructed and have
operating histories. All such properties may be acquired, developed, and
operated by the Company alone or jointly with another party. The Company
is likely to enter into one or more joint ventures with affiliated
entities for the acquisition of properties. In connection therewith, the
Company may enter into joint ventures for the acquisition of properties
with prior or future real estate limited partnership programs sponsored by
Wells Capital, Inc. (the "Advisor") or its affiliates.

Substantially all of the Company's business is conducted through Wells
Operating Partnership, L.P. (the "Operating Partnership"), a Delaware
limited partnership. During 1997, the Operating Partnership issued 20,000
limited partner units to the Advisor in exchange for $200,000. The Company
is the sole general partner in the Operating Partnership and possesses
full legal control and authority over the operations of the Operating
Partnership; consequently, the accompanying consolidated financial
statements of the Company include the accounts of the Operating
Partnership. All significant intercompany balances have been eliminated in
consolidation.

The Company owns interests in the following properties directly through
its ownership in the Operating Partnership: (i) the PricewaterhouseCoopers
property (the "PwC Building"), a four-story office building located in
Tampa, Florida; (ii) the AT&T Building, a four-story office building
located in Harrisburg, Pennsylvania; (iii) the Marconi Data Systems
property (the "Marconi Building"), a two-story office, assembly, and
manufacturing building located in Wood Dale, Illinois; (iv) the Cinemark
Property (the "Cinemark Building"), a five-story office building located
in Plano, Texas; (v) the Matsushita Property (the "Matsushita Building"),
a two-story office building located in Lake Forest, California; (vi) the
ASML Property (the "ASML Building"), a two-story office and warehouse
building located in Tempe, Arizona; (vii) the Motorola Property (the
"Motorola Tempe Building"), a two-story office building located in Tempe,
Arizona; (viii) the Dial Property (the "Dial Building"), a two-story
office building located in Scottsdale, Arizona; (ix) the Delphi Building,
a three-story office building located in Troy, Michigan; (x) the Avnet
Property (the "Avnet Building"), a two-story office building located in
Tempe, Arizona; (xi) the Metris Oklahoma Building, a three-story office
building located in Tulsa, Oklahoma; (xii) the Alstom Power-Richmond
Building, a four-story office building located in Richmond, Virginia;
(xiii) the Motorola Plainfield Building, a three-story office building
located in South Plainfield, New Jersey; (xiv) the Stone & Webster
Building, a six-story office building located in Houston, Texas; (xv) the
Metris Minnetonka Building, a nine-story office building located in
Minnetonka, Minnesota; (xvi) the State Street Bank Building, a seven-story
office building located in Quincy, Massachusetts; (xvii) the IKON
Buildings, two one-story office buildings located in Houston, Texas;
(xviii) the Ingram Micro Distribution Facility, a one-story office and
warehouse building located in Millington, Tennessee; (xix) the Lucent
Building, a four-story office building located in Cary, North Carolina;
(xx) the Nissan land (the "Nissan Property"), a 14.873 acre tract of
undeveloped land located in Irving, Texas; (xxi) the Convergys Building, a
two-story office building located in Tamarac, Florida; and (xxii) the
Windy Point Buildings, a seven-story office building and an eleven-story
office building located in Schaumburg, Illinois.

15

The Company owns an interest in one property through a joint venture
between the Operating Partnership, Wells Real Estate Fund VIII, L.P.
("Wells Fund VIII"), and Wells Real Estate Fund IX, L.P. ("Wells Fund
IX"), which is referred to as the Fund VIII, IX, and REIT Joint Venture.
The Company also owns interests in five properties through a joint venture
between the Operating Partnership, Wells Fund IX, Wells Real Estate Fund
X, L.P. ("Wells Fund X"), and Wells Real Estate Fund XI, L.P. ("Wells Fund
XI"), which is referred to as the Fund IX, Fund X, Fund XI, and REIT Joint
Venture. The Company owns an interest in one property through each of two
unique joint ventures between the Operating Partnership and Fund X and XI
Associates, a joint venture between Wells Fund X and Wells Fund XI. In
addition, the Company owns interests in four properties through a joint
venture between the Operating Partnership, Wells Fund XI, and Wells Real
Estate Fund XII, L.P. ("Wells Fund XII"), which is referred to as the Fund
XI, XII, and REIT Joint Venture. The Company owns interests in three
properties through a joint venture between the Operating Partnership and
Wells Fund XII, which is referred to as the Fund XII and REIT Joint
Venture. The Company also owns interests in two properties through a joint
venture between the Operating Partnership and Wells Fund XIII, which is
referred to as the Fund XIII and REIT Joint Venture.

Through its investment in the Fund VIII, IX, and REIT Joint Venture, the
Company owns an interest in a two-story office building in Irvine,
California (the "Quest Building").

The following properties are owned by the Company through its investment
in the Fund IX, X, XI, and REIT Joint Venture: (i) a three-story office
building in Knoxville, Tennessee (the "Alstom Power Building"), (ii) a
two-story office building in Louisville, Colorado (the "Ohmeda Building"),
(iii) a three-story office building in Broomfield, Colorado (the "360
Interlocken Building"), (iv) a one-story office and warehouse building in
Ogden, Utah (the "Iomega Building"), and (v) a one-story office building
in Oklahoma City, Oklahoma (the "Avaya Building").

Through its investment in two joint ventures with Fund X and XI
Associates, the Company owns interests in the following properties: (i) a
one-story office and warehouse building in Fountain Valley, California
(the "Cort Furniture Building"), owned by Wells/Orange County Associates
and (ii) a two-story manufacturing and office building in Fremont,
California (the "Fairchild Building"), owned by Wells/Fremont Associates.

The following properties are owned by the Company through its investment
in the Fund XI, XII, and REIT Joint Venture: (i) a two-story manufacturing
and office building in Fountain Inn, South Carolina (the "EYBL CarTex
Building"), (ii) a three-story office building Leawood, Kansas (the
"Sprint Building"), (iii) an office and warehouse building in Chester
County, Pennsylvania (the "Johnson Matthey Building"), and (iv) a
two-story office building in Ft. Myers, Florida (the "Gartner Building").

Through its investment in the Fund XII and REIT Joint Venture, the Company
owns interests in the following properties: (i) a three-story office
building in Troy, Michigan (the "Siemens Building"), (ii) a one-story
office building and a two-story office building in Oklahoma City, Oklahoma
(collectively referred to as the "AT&T Call Center Buildings"), and (iii)
a three-story office building in Brentwood, Tennessee (the "Comdata
Building").

The following properties are owned by the Company through its investment
in the Fund XIII and REIT Joint Venture: (i) a one-story office building
in Orange Park, Florida (the "AmeriCredit Building"), and (ii) two
connected one-story office and assembly buildings in Parker, Colorado (the
"ADIC Buildings").

Use of Estimates and Factors Affecting the Company

The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.

The carrying values of real estate are based on management's current
intent to hold the real estate assets as long-term investments. The
success of the Company's future operations and the ability to realize the
investment in its assets will be dependent on the Company's ability to
maintain rental rates, occupancy, and an appropriate level of

16

operating expenses in future years. Management believes that the steps it
is taking will enable the Company to realize its investment in its assets.

Income Taxes

The Company has elected to be taxed as a REIT under the Internal Revenue
Code of 1986, as amended. To qualify as a REIT, the Company must meet a
number of organizational and operational requirements, including a
requirement to currently distribute at least 90% of the REIT's ordinary
taxable income to shareholders. It is management's current intention to
adhere to these requirements and maintain the Company's REIT status. As a
REIT, the Company generally will not be subject to federal income tax on
distributed taxable income. Even if the Company qualifies as a REIT, it
may be subject to certain state and local taxes on its income and real
estate assets, and to federal income and excise taxes on its undistributed
taxable income. No provision for federal income taxes has been made in the
accompanying consolidated financial statements, as the Company made
distributions equal to or in excess of its taxable income in each of the
three years in the period ended December 31, 2001.

Real Estate Assets

Real estate assets held by the Company and joint ventures are stated at
cost less accumulated depreciation. Major improvements and betterments are
capitalized when they extend the useful life of the related asset. All
repair and maintenance expenditures are expensed as incurred.

Management continually monitors events and changes in circumstances which
could indicate that carrying amounts of real estate assets may not be
recoverable. When events or changes in circumstances are present which
indicate that the carrying amounts of real estate assets may not be
recoverable, management assesses the recoverability of real estate assets
by determining whether the carrying value of such real estate assets will
be recovered through the future cash flows expected from the use of the
asset and its eventual disposition. Management has determined that there
has been no impairment in the carrying value of real estate assets held by
the Company or the joint ventures as of December 31, 2001 and 2000.

Depreciation of building and improvements is calculated using the
straight-line method over 25 years. Tenant improvements are amortized over
the life of the related lease or the life of the asset, whichever is
shorter.

Revenue Recognition

All leases on real estate assets held by the Company or the joint ventures
are classified as operating leases, and the related rental income is
recognized on a straight-line basis over the terms of the respective
leases.

Cash and Cash Equivalents

For the purposes of the statements of cash flows, the Company considers
all highly liquid investments purchased with an original maturity of three
months or less to be cash equivalents. Cash equivalents include cash and
short-term investments. Short-term investments are stated at cost, which
approximates fair value, and consist of investments in money market
accounts.

Deferred Lease Acquisition Costs

Costs incurred to procure operating leases are capitalized and amortized
on a straight-line basis over the terms of the related leases.

Earnings Per Share

Earnings per share are calculated based on the weighted average number of
common shares outstanding during each period. The weighted average number
of common shares outstanding is identical for basic and fully diluted
earnings per share, as there is no dilutive impact created from the
Company's stock option plan (Note 10) using the treasury stock method.

17

Reclassifications

Certain prior year amounts have been reclassified to conform with the
current year financial statement presentation.

Investment in Joint Ventures

Basis of Presentation

The Operating Partnership does not have control over the operations
of the joint ventures; however, it does exercise significant
influence. Accordingly, the Operating Partnership's investments in
joint ventures are recorded using the equity method of accounting.

Partners' Distributions and Allocations of Profit and Loss

Cash available for distribution and allocations of profit and loss
to the Operating Partnership by the joint ventures are made in
accordance with the terms of the individual joint venture
agreements. Generally, these items are allocated in proportion to
the partners' respective ownership interests. Cash is paid from the
joint ventures to the Operating Partnership on a quarterly basis.

Deferred Lease Acquisition Costs

Costs incurred to procure operating leases are capitalized and
amortized on a straight-line basis over the terms of the related
leases. Deferred lease acquisition costs are included in prepaid
expenses and other assets, net, in the balance sheets presented in
Note 5.

2.    DEFERRED PROJECT COSTS

The Company paid a percentage of shareholder contributions to the Advisor
for acquisition and advisory services and acquisition expenses. These
payments, as stipulated in the prospectus, can be up to 3.5% of
shareholder contributions, subject to certain overall limitations
contained in the prospectus. Aggregate fees paid through December 31, 2001
were $29,122,286 and amounted to 3.5% of shareholders' contributions
received. These fees are allocated to specific properties as they are
purchased or developed and are included in capitalized assets of the joint
ventures or real estate assets. Deferred project costs at December 31,
2001 and 2000 represent fees not yet applied to properties.

3.    DEFERRED OFFERING COSTS

Offering expenses, to the extent they exceed 3% of gross offering
proceeds, will be paid by the Advisor and not by the Company. Offering
expenses include such costs as legal and accounting fees, printing costs,
and other offering expenses and specifically exclude sales costs and
underwriting commissions.

As of December 31, 2001, the Advisor paid offering expenses on behalf of
the Company in the aggregate amount of $20,459,289, of which the Advisor
had been reimbursed $18,551,241, which did not exceed the 3% limitation.

18

4.    RELATED-PARTY TRANSACTIONS

Due from affiliates at December 31, 2001 and 2000 represents the Operating
Partnership's share of the cash to be distributed from its joint venture
investments for the fourth quarter of 2001 and 2000 and advances due from
the Advisor as of December 31, 2000:

2001          2000
-------------  -------------

Fund VIII, IX, and REIT Joint Venture                   $    46,875     $  21,605
Fund IX, X, XI, and REIT Joint Venture                       36,073        12,781
Wells/Orange County Associates                               83,847        24,583
Wells/Fremont Associates                                    164,196        53,974
Fund XI, XII, and REIT Joint Venture                        429,980       136,648
Fund XII and REIT Joint Venture                             680,542        49,094
Fund XIII and REIT                                          251,214             0
Advisor                                                           0        10,995
-------------  -------------
$ 1,692,727     $ 309,680
=============  =============

The Operating Partnership entered into a property management and leasing
agreement with Wells Management Company, Inc. ("Wells Management"), an
affiliate of the Advisor. In consideration for supervising the management
and leasing of the Operating Partnership's properties, the Operating
Partnership will pay management and leasing fees equal to the lesser of
(a) 4.5% of the gross revenues generally paid over the life of the lease
or (b) .6% of the net asset value of the properties (excluding vacant
properties) owned by the Company to Wells Management. These management and
leasing fees are calculated on an annual basis plus a separate competitive
fee for the one-time initial lease-up of newly constructed properties
generally paid in conjunction with the receipt of the first month's rent.

The Operating Partnership's portion of the management and leasing fees and
lease acquisition costs paid to Wells Management, both directly and at the
joint venture level, were $2,468,294, $1,111,748, and $336,517 for the
years ended December 31, 2001, 2000, and 1999, respectively.

The Advisor performs certain administrative services for the Operating
Partnership, such as accounting and other partnership administration, and
incurs the related expenses. Such expenses are allocated among the
Operating Partnership and the various Wells Real Estate Funds based on
time spent on each fund by individual administrative personnel. In the
opinion of management, such allocation is a reasonable basis for
allocating such expenses.

The Advisor is a general partner in various Wells Real Estate Funds. As
such, there may exist conflicts of interest where the Advisor, while
serving in the capacity as general partner for Wells Real Estate Funds,
may be in competition with the Operating Partnership for tenants in
similar geographic markets.

19

5.    INVESTMENT IN JOINT VENTURES

The Operating Partnership's investment and percentage ownership in joint
ventures at December 31, 2001 and 2000 are summarized as follows:

2001                     2000
------------------------ ------------------------
Amount      Percent      Amount      Percent
-------------- --------- -------------- ---------

Fund VIII, IX, and REIT Joint Venture                      $  1,189,067   16%       $  1,276,551   16%
Fund IX, X, XI, and REIT Joint Venture                        1,290,360   4            1,339,636   4
Wells/Orange County Associates                                2,740,000   44           2,827,607   44
Wells/Fremont Associates                                      6,575,358   78           6,791,287   78
Fund XI, XII, and REIT Joint Venture                         17,187,985   57          17,688,615   57
Fund XII and REIT Joint Venture                              30,299,872   55          14,312,901   47
Fund XIII and REIT Joint Venture                             18,127,338   68                   0    0
--------------           --------------
$ 77,409,980             $ 44,236,597
==============           ==============

The following is a roll forward of the Operating Partnership's investment
in joint ventures for the years ended December 31, 2001 and 2000:

2001              2000
----------------  ----------------

Investment in joint ventures, beginning of year                   $ 44,236,597      $ 29,431,176
Equity in income of joint ventures                               3,720,959         2,293,873
Contributions to joint ventures                                 35,085,897        15,691,281
Distributions from joint ventures                               (5,633,473)       (3,179,733)
----------------  ----------------
Investment in joint ventures, end of year                         $ 77,409,980      $ 44,236,597
================  ================

FUND VIII, IX, AND REIT JOINT VENTURE

On June 15, 2000, Fund VIII and IX Associates, a joint venture between
Wells Real Estate Fund VIII, L.P. ("Fund VIII") and Wells Real Estate Fund
IX, L.P. ("Fund IX"), entered into a joint venture with the Operating
Partnership to form Fund VIII, IX, and REIT Joint Venture, for the purpose
of acquiring, developing, operating, and selling real properties.

On July 1, 2000, Fund VIII and IX Associates contributed the Quest
Building (formerly the Bake Parkway Building) to the joint venture. Fund
VIII, IX, and REIT Joint Venture recorded the net assets of the Quest
Building at an amount equal to the respective historical net book values.
The Quest Building is a two-story office building containing approximately
65,006 rentable square feet on a 4.4-acre tract of land in Irvine,
California. During 2000, the Operating Partnership contributed $1,282,111
to the Fund VIII, IX, and REIT Joint Venture. Ownership percentage
interests were recomputed accordingly.

20

Following are the financial statements for Fund VIII, IX, and REIT Joint
Venture:

Fund VIII, IX, and REIT Joint Venture
(A Georgia Joint Venture)
Balance Sheets
December 31, 2001 and 2000

Assets

2001            2000
--------------  --------------

Real estate assets, at cost:
Land                                                                               $ 2,220,993     $ 2,220,993
Building and improvements, less accumulated depreciation of $649,436 in
2001 and $187,891 in 2000                                                         4,952,724       5,408,892
--------------  --------------
Total real estate assets                                                   7,173,717       7,629,885
Cash and cash equivalents                                                                  297,533         170,664
Accounts receivable                                                                        164,835         197,802
Prepaid expenses and other assets, net                                                     191,799         283,864
--------------  --------------
Total assets                                                             $ 7,827,884     $ 8,282,215
==============  ==============

Liabilities and Partners' Capital

Liabilities:
Accounts payable                                                                   $       676     $         0
Partnership distributions payable                                                      296,856         170,664
--------------  --------------
Total liabilities                                                            297,532         170,664
--------------  --------------
Partners' capital:
Fund VIII and IX Associates                                                          6,341,285       6,835,000
Wells Operating Partnership, L.P.                                                    1,189,067       1,276,551
--------------  --------------
Total partners' capital                                                    7,530,352       8,111,551
--------------  --------------
Total liabilities and partners' capital                                  $ 7,827,884     $ 8,282,215
==============  ==============

21

Fund VIII, IX, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Income
for the Year Ended December 31, 2001 and
the Period from June 15, 2000 (Inception) Through
December 31, 2000

2001           2000
------------    -----------

Revenues:
Rental income                                                 $  1,207,995    $   563,049
Interest income                                                        729              0
------------    -----------
1,208,724        563,049
------------    -----------
Expenses:
Depreciation                                                       461,545        187,891
Management and leasing fees                                        142,735         54,395
Property administration expenses                                    22,278          5,692
Operating costs, net of reimbursements                              15,326          5,178
------------    -----------
641,884        253,156
------------    -----------
Net income                                                        $    566,840    $   309,893
============    ===========

Net income allocated to Fund VIII and IX Associates               $    477,061    $   285,006
============    ===========

Net income allocated to Wells Operating Partnership, L.P.         $     89,779    $    24,887
============    ===========

Fund VIII, IX, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Year Ended December 31, 2001 and
the Period from June 15, 2000 (Inception) Through
December 31, 2000

Fund VIII            Wells             Total
and IX           Operating         Partners'
Associates      Partnership, L.P.     Capital
-------------    -----------------   --------------

Balance, June 15, 2000 (inception)    $           0    $             0     $            0
Net income                              285,006             24,887            309,893
Partnership contributions             6,857,889          1,282,111          8,140,000
Partnership distributions              (307,895)           (30,447)          (338,342)
-------------    ---------------     --------------
Balance, December 31, 2000                6,835,000          1,276,551          8,111,551
Net income                              477,061             89,779            566,840
Partnership contributions                     0              5,377              5,377
Partnership distributions              (970,776)          (182,640)        (1,153,416)
-------------    ---------------     --------------
Balance, December 31, 2001            $   6,341,285    $     1,189,067     $    7,530,352
=============    ===============     ==============

22

Fund VIII, IX, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Cash Flows
for the Year Ended December 31, 2001 and
the Period from June 15, 2000 (Inception) Through
December 31, 2000

2001            2000
-------------    ------------

Cash flows from operating activities:
Net income                                                              $     566,840    $    309,893
-------------    ------------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation                                                           461,545         187,891
Changes in assets and liabilities:
Accounts receivable                                                  32,967        (197,802)
Prepaid expenses and other assets, net                               92,065        (283,864)
Accounts payable                                                        676               0
-------------    ------------
Total adjustments                                                587,253        (293,775)
-------------    ------------
Net cash provided by operating activities                      1,154,093          16,118
-------------    ------------
Cash flows from investing activities:
Investment in real estate                                                      (5,377)       (959,887)
-------------    ------------
Cash flows from financing activities:
Contributions from joint venture partners                                       5,377       1,282,111
Distributions to joint venture partners                                    (1,027,224)       (167,678)
-------------    ------------
Net cash (used in) provided by financing activities           (1,021,847)      1,114,433
-------------    ------------
Net increase in cash and cash equivalents                                         126,869         170,664
Cash and cash equivalents, beginning of period                                    170,664               0
-------------    ------------
Cash and cash equivalents, end of year                                      $     297,533    $    170,664
=============    ============
Supplemental disclosure of noncash activities:

Real estate contribution received from joint venture partner            $           0    $  6,857,889
=============    ============

Fund IX, X, XI, and REIT Joint Venture

On March 20, 1997, Fund IX and Wells Real Estate Fund X, L.P. ("Fund X") entered
into a joint venture agreement. The joint venture, Fund IX and X Associates, was
formed to acquire, develop, operate, and sell real properties. On March 20,
1997, Wells Fund IX contributed a 5.62-acre tract of real property in Knoxville,
Tennessee, and improvements thereon, known as the Alstom Power Building, to the
Fund IX and X Associates joint venture. An 84,404-square foot, three-story
building was constructed and commenced operations at the end of 1997.

On February 13, 1998, the joint venture purchased a two-story office building,
known as the Ohmeda Building, in Louisville, Colorado. On March 20, 1998, the
joint venture purchased a three-story office building, known as the 360
Interlocken Building, in Broomfield, Colorado. On June 11, 1998, Fund IX and X
Associates was amended and restated to admit Wells Real Estate Fund XI, L.P.
("Fund XI") and the Operating Partnership. The joint venture was renamed the
Fund IX, X, XI, and REIT Joint Venture. On June 24, 1998, the new joint venture
purchased a one-story office building, known as the Avaya Building, in Oklahoma
City, Oklahoma. On April 1, 1998, Wells Fund X purchased a one-story warehouse
facility, known as the Iomega Building, in Ogden, Utah. On July 1, 1998, Wells
Fund X contributed the Iomega Building to the Fund IX, X, XI, and REIT Joint
Venture.

During 1999, Fund IX and Fund XI made contributions to the Fund IX, X, XI, and
REIT Joint Venture; during 2000, Fund IX and Fund X made contributions to the
Fund IX, X, XI, and REIT Joint Venture.

23

Following are the financial statements for the Fund IX, X, XI, and REIT Joint
Venture:

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Balance Sheets
December 31, 2001 and 2000
Assets

2001             2000
-------------     -------------

Real estate assets, at cost:
Land                                                           $   6,698,020     $   6,698,020
Building and improvements, less accumulated depreciation of
$5,619,744 in 2001 and $4,203,502 in 2000                      27,178,526        28,594,768
-------------     -------------
Total real estate assets, net                           33,876,546        35,292,788
Cash and cash equivalents                                              1,555,917         1,500,044
Accounts receivable                                                      596,050           422,243
Prepaid expenses and other assets, net                                   439,002           487,276
-------------     -------------
Total assets                                         $  36,467,515     $  37,702,351
=============     =============

Liabilities and Partners' Capital

Liabilities:
Accounts payable and accrued liabilities                       $     620,907     $     568,517
Refundable security deposits                                         100,336            99,279
Due to affiliates                                                     13,238             9,595
Partnership distributions payable                                    966,912           931,151
-------------     -------------
Total liabilities                                        1,701,393         1,608,542
-------------     -------------
Partners' capital:
Wells Real Estate Fund IX                                         13,598,505        14,117,803
Wells Real Estate Fund X                                          16,803,586        17,445,277
Wells Real Estate Fund XI                                          3,073,671         3,191,093
Wells Operating Partnership, L.P.                                  1,290,360         1,339,636
-------------     -------------
Total partners' capital                                 34,766,122        36,093,809
-------------     -------------
Total liabilities and partners' capital              $  36,467,515     $  37,702,351
=============     =============

24

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Income
for the Years Ended December 31, 2001, 2000, and 1999

2001         2000         1999
-----------  -----------  -----------

Revenues:
Rental income                                         $ 4,174,379  $ 4,198,388  $ 3,932,962
Other income                                              119,828      116,129       61,312
Interest income                                            50,002       73,676       58,768
-----------  -----------  -----------
4,344,209    4,388,193    4,053,042
-----------  -----------  -----------
Expenses:
Depreciation                                            1,416,242    1,411,434    1,538,912
Management and leasing fees                               357,761      362,774      286,139
Operating costs, net of reimbursements                   (232,601)    (133,505)     (34,684)
Property administration expense                            91,747       57,924       59,886
Legal and accounting                                       26,223       20,423       30,545
1,659,372    1,719,050    1,880,798
-----------  -----------  -----------
Net income                                                $ 2,684,837  $ 2,669,143  $ 2,172,244
===========  ===========  ===========

Net income allocated to Wells Real Estate Fund IX         $ 1,050,156  $ 1,045,094  $   850,072
===========  ===========  ===========

Net income allocated to Wells Real Estate Fund X          $ 1,297,665  $ 1,288,629  $ 1,056,316
===========  ===========  ===========

Net income allocated to Wells Real Estate Fund XI         $   237,367  $   236,243  $   184,355
===========  ===========  ===========

Net income allocated to Wells Operating Partnership, L.P. $    99,649  $    99,177  $    81,501
===========  ===========  ===========

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Years Ended December 31, 2001, 2000, and 1999

Wells
Wells Real     Wells Real    Wells Real    Operating        Total
Estate         Estate        Estate     Partnership,     Partners'
Fund IX         Fund X       Fund XI        L.P.          Capital
------------   ------------   -----------   ------------   ------------

Balance, December 31, 1998     $ 14,960,100   $ 18,707,139   $ 2,521,003   $ 1,443,378   $ 37,631,620
Net income                       850,072      1,056,316       184,355        81,501      2,172,244
Partnership contributions        198,989              0       911,027             0      1,110,016
Partnership distributions     (1,418,535)    (1,762,586)     (307,982)     (135,995)    (3,625,098)
------------   ------------   -----------   -----------   ------------
Balance, December 31, 1999       14,590,626     18,000,869     3,308,403     1,388,884     37,288,782
Net income                     1,045,094      1,288,629       236,243        99,177      2,669,143
Partnership contributions         46,122         84,317             0             0        130,439
Partnership distributions     (1,564,039)    (1,928,538)     (353,553)     (148,425)    (3,994,555)
------------   ------------   -----------   -----------   ------------
Balance, December 31, 2000       14,117,803     17,445,277     3,191,093     1,339,636     36,093,809
Net income                     1,050,156      1,297,665       237,367        99,649      2,684,837
Partnership distributions     (1,569,454)    (1,939,356)     (354,789)     (148,925)    (4,012,524)
------------   ------------   -----------   -----------   ------------
Balance, December 31, 2001     $ 13,598,505   $ 16,803,586   $ 3,073,671   $ 1,290,360   $ 34,766,122
============   ============   ===========   ===========   ============

25

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Cash Flows
for the Years Ended December 31, 2001, 2000, and 1999

2001             2000            1999
--------------    -------------    ------------

Cash flows from operating activities:
Net income                                                     $    2,684,837    $   2,669,143    $  2,172,244
--------------    -------------    ------------
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation                                                 1,416,242        1,411,434       1,538,912
Changes in assets and liabilities:
Accounts receivable                                        (173,807)         132,722        (421,708)
Prepaid expenses and other assets, net                       48,274           39,133         (85,281)
Accounts payable and accrued liabilities, and
refundable security deposits                              53,447          (37,118)        295,177
Due to affiliates                                             3,643            3,216           1,973
--------------    -------------    ------------
Total adjustments                                      1,347,799        1,549,387       1,329,073
--------------    -------------    ------------
Net cash provided by operating activities              4,032,636        4,218,530       3,501,317
--------------    -------------    ------------
Cash flows from investing activities:
Investment in real estate                                                   0         (127,661)       (930,401)
--------------    -------------    ------------
Cash flows from financing activities:
Distributions to joint venture partners                            (3,976,763)      (3,868,138)     (3,820,491)
Contributions received from partners                                        0          130,439       1,066,992
--------------    -------------    ------------
Net cash used in financing activities                 (3,976,763)      (3,737,699)     (2,753,499)
--------------    -------------    ------------
Net increase (decrease) in cash and cash equivalents                       55,873          353,170        (182,583)
Cash and cash equivalents, beginning of year                            1,500,044        1,146,874       1,329,457
--------------    -------------    ------------
Cash and cash equivalents, end of year                             $    1,555,917    $   1,500,044    $  1,146,874
==============    =============    ============

Supplemental disclosure of noncash activities:
Deferred project costs contributed to joint venture            $            0    $           0    $     43,024
==============    =============    ============

Wells/Orange County Associates

On July 27, 1998, the Operating Partnership entered into a joint venture
agreement with Wells Development Corporation, referred to as Wells/Orange County
Associates. On July 31, 1998, Wells/Orange County Associates acquired a
52,000-square foot warehouse and office building located in Fountain Valley,
California, known as the Cort Furniture Building.

On September 1, 1998, Fund X and XI Associates acquired Wells Development
Corporation's interest in Wells/Orange County Associates, which resulted in Fund
X and XI Associates becoming a joint venture partner with the Operating
Partnership in the ownership of the Cort Furniture Building.

26

Following are the financial statements for Wells/Orange County Associates:

Wells/Orange County Associates
(A Georgia Joint Venture)
Balance Sheets
December 31, 2001 and 2000

Assets

2001            2000
------------    ------------

Real estate assets, at cost:
Land                                                                      $  2,187,501    $  2,187,501
Building, less accumulated depreciation of $651,780 in 2001 and $465,216
in 2000                                                                   4,012,335       4,198,899
------------    ------------
Total real estate assets                                           6,199,836       6,386,400
Cash and cash equivalents                                                          188,407         119,038
Accounts receivable                                                                 80,803          99,154
Prepaid expenses and other assets                                                    9,426               0
------------    ------------
Total assets                                                    $  6,478,472    $  6,604,592
============    ============

Liabilities and Partners' Capital

Liabilities:
Accounts payable                                                                11,792    $      1,000
Partnership distributions payable                                              192,042         128,227
------------    ------------
Total liabilities                                                    203,834         129,227
------------    ------------
Partners' capital:
Wells Operating Partnership, L.P.                                            2,740,000       2,827,607
Fund X and XI Associates                                                     3,534,638       3,647,758
------------    ------------
Total partners' capital                                            6,274,638       6,475,365
------------    ------------
Total liabilities and partners' capital                         $  6,478,472    $  6,604,592
============    ============

27

Wells/Orange County Associates
(A Georgia Joint Venture)
Statements of Income
for the Years Ended December 31, 2001, 2000, and 1999

2001          2000          1999
----------    ----------    ----------

Revenues:
Rental income                                          $  795,528    $  795,545    $  795,545
Interest income                                             2,409             0             0
----------    ----------    ----------
797,937       795,545       795,545
----------    ----------    ----------
Expenses:
Depreciation                                              186,564       186,564       186,565
Management and leasing fees                                33,547        30,915        30,360
Operating costs, net of reimbursements                     21,855         5,005        22,229
Legal and accounting                                        9,800         4,100         5,439
----------    ----------    ----------
251,766       226,584       244,593
----------    ----------    ----------
Net income                                                 $  546,171    $  568,961    $  550,952
==========    ==========    ==========

Net income allocated to Wells Operating Partnership, L.P.  $  238,542    $  248,449    $  240,585
==========    ==========    ==========

Net income allocated to Fund X and XI Associates           $  307,629    $  320,512    $  310,367
==========    ==========    ==========

Wells/Orange County Associates
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Years Ended December 31, 2001, 2000, and 1999

Wells
Operating         Fund X         Total
Partnership,       and XI        Partners'
L.P.         Associates       Capital
------------    ------------    ------------
Balance, December 31, 1998        $  2,958,617    $  3,816,766    $  6,775,383
Net income                         240,585         310,367         550,952
Partnership distributions         (306,090)       (394,871)       (700,961)
------------    ------------    ------------
Balance, December 31, 1999           2,893,112       3,732,262       6,625,374
Net income                         248,449         320,512         568,961
Partnership distributions         (313,954)       (405,016)       (718,970)
------------    ------------    ------------
Balance, December 31, 2000           2,827,607       3,647,758       6,475,365
Net income                         238,542         307,629         546,171
Partnership distributions         (326,149)       (420,749)       (746,898)
------------    ------------    ------------
Balance, December 31, 2001        $  2,740,000    $  3,534,638    $  6,274,638
============    ============    ============

28

Wells/Orange County Associates
(A Georgia Joint Venture)
Statements of Cash Flows
for the Years Ended December 31, 2001, 2000, and 1999

2001          2000          1999
-----------  -----------   -----------

Cash flows from operating activities:
Net income                                                            $   546,171  $   568,961   $   550,952
-----------  -----------   -----------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation                                                       186,564      186,564       186,565
Changes in assets and liabilities:
Accounts receivable                                              18,351      (49,475)      (36,556)
Accounts payable                                                 10,792        1,000        (1,550)
Prepaid and other expenses                                       (9,426)           0             0
-----------  -----------   -----------
Total adjustments                                            206,281      138,089       148,459
-----------  -----------   -----------
Net cash provided by operating activities                    752,452      707,050       699,411
Cash flows from financing activities:
Distributions to partners                                                (683,083)    (764,678)     (703,640)
-----------  -----------   -----------
Net increase (decrease) in cash and cash equivalents                           69,369      (57,628)       (4,229)
Cash and cash equivalents, beginning of year                                  119,038      176,666       180,895
-----------  -----------   -----------
Cash and cash equivalents, end of year                                    $   188,407  $   119,038   $   176,666
===========  ===========   ===========

Wells/Fremont Associates

On July 15, 1998, the Operating Partnership entered into a joint venture
agreement with Wells Development Corporation, referred to as Wells/Fremont
Associates. On July 21, 1998, Wells/Fremont Associates acquired a 58,424-square
foot two-story manufacturing and office building located in Fremont, California,
known as the Fairchild Building.

On October 8, 1998, Fund X and XI Associates acquired Wells Development
Corporation's interest in Wells/Fremont Associates, which resulted in Fund X and
XI Associates becoming a joint venture partner with the Operating Partnership in
the ownership of the Fairchild Building.

29

Following are the financial statements for Wells/Fremont Associates:

Wells/Fremont Associates
(A Georgia Joint Venture)
Balance Sheets
December 31, 2001 and 2000
Assets

2001             2000
-------------   -------------

Real estate assets, at cost:
Land                                                                             $   2,219,251   $   2,219,251
Building, less accumulated depreciation of $999,301 in 2001 and $713,773
in 2000                                                                           6,138,857       6,424,385
-------------   -------------
Total real estate assets                                                   8,358,108       8,643,636
Cash and cash equivalents                                                                  203,750          92,564
Accounts receivable                                                                        133,801         126,433
-------------   -------------
Total assets                                                           $   8,695,659   $   8,862,633
=============   =============

Liabilities and Partners' Capital

Liabilities:
Accounts payable                                                                 $       1,896   $       3,016
Due to affiliate                                                                         8,030           7,586
Partnership distributions payable                                                      201,854          89,549
-------------   -------------
Total liabilities                                                            211,780         100,151
-------------   -------------
Partners' capital:
Wells Operating Partnership, L.P.                                                    6,575,358       6,791,287
Fund X and XI Associates                                                             1,908,521       1,971,195
-------------   -------------
Total partners' capital                                                    8,483,879       8,762,482
-------------   -------------
Total liabilities and partners' capital                                $   8,695,659   $   8,862,633
=============   =============

30

Wells/Fremont Associates
(A Georgia Joint Venture)
Statements of Income
for the Years Ended December 31, 2001, 2000, and 1999

2001          2000          1999
----------    ----------    ----------

Revenues:
Rental income                                             $  902,945    $  902,946    $  902,946
Interest income                                                2,713             0             0
Other income                                                   2,015             0             0
----------    ----------    ----------
907,673       902,946       902,946
----------    ----------    ----------
Expenses:
Depreciation                                                 285,528       285,527       285,526
Management and leasing fees                                   36,267        36,787        37,355
Operating costs, net of reimbursements                        16,585        13,199        16,006
Legal and accounting                                           6,400         4,300         4,885
----------    ----------    ----------
344,780       339,813       343,772
----------    ----------    ----------
Net income                                                    $  562,893    $  563,133    $  559,174
==========    ==========    ==========

Net income allocated to Wells Operating Partnership, L.P.     $  436,265    $  436,452    $  433,383
==========    ==========    ==========

Net income allocated to Fund X and XI Associates              $  126,628    $  126,681    $  125,791
==========    ==========    ==========

Wells/Fremont Associates
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Years Ended December 31, 2001, 2000, and 1999

Wells
Operating           Fund X           Total
Partnership,         and XI         Partners'
L.P.           Associates        Capital
------------      ------------     ------------
Balance, December 31, 1998     $  7,166,682      $  2,080,155     $  9,246,837
Net income                      433,383           125,791          559,174
Partnership distributions      (611,855)         (177,593)        (789,448)
------------      ------------     ------------
Balance, December 31, 1999        6,988,210         2,028,353        9,016,563
Net income                      436,452           126,681          563,133
Partnership distributions      (633,375)         (183,839)        (817,214)
------------      ------------     ------------
Balance, December 31, 2000        6,791,287         1,971,195        8,762,482
Net income                      436,265           126,628          562,893
Partnership distributions      (652,194)         (189,302)        (841,496)
------------      ------------     ------------
Balance, December 31, 2001     $  6,575,358      $  1,908,521     $  8,483,879
============      ============     ============

31

Wells/Fremont Associates
(A Georgia Joint Venture)
Statements of Cash Flows
for the Years Ended December 31, 2001, 2000, and 1999

2001          2000           1999
-----------   -----------   -----------

Cash flows from operating activities:
Net income                                                      $   562,893   $   563,133   $   559,174
-----------   -----------   -----------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation                                                 285,528       285,527       285,526
Changes in assets and liabilities:
Accounts receivable                                        (7,368)      (33,454)      (58,237)
Accounts payable                                           (1,120)        1,001        (1,550)
Due to affiliate                                              444         2,007         3,527
-----------   -----------   -----------
Total adjustments                                      277,484       255,081       229,266
-----------   -----------   -----------
Net cash provided by operating activities              840,377       818,214       788,440
Cash flows from financing activities:
Distributions to partners                                          (729,191)     (914,662)     (791,940)
-----------   -----------   -----------
Net increase (decrease) in cash and cash equivalents                    111,186       (96,448)       (3,500)
Cash and cash equivalents, beginning of year                             92,564       189,012       192,512
-----------   -----------   -----------
Cash and cash equivalents, end of year                              $   203,750   $    92,564   $   189,012
===========   ===========   ===========

Fund XI, XII, and REIT Joint Venture

On May 1, 1999, the Operating Partnership entered into a joint venture with Fund
XI and Wells Real Estate Fund XII, L.P. ("Fund XII"). On May 18, 1999, the joint
venture purchased a 169,510-square foot, two-story manufacturing and office
building, known as EYBL CarTex Building, in Fountain Inn, South Carolina. On
July 21, 1999, the joint venture purchased a 68,900-square foot,
three-story-office building, known as the Sprint Building, in Leawood, Kansas.
On August 17, 1999, the joint venture purchased a 130,000-square foot office and
warehouse building, known as the Johnson Matthey Building, in Chester County,
Pennsylvania. On September 20, 1999, the joint venture purchased a 62,400-square
foot, two-story office building, known as the Gartner Building, in Fort Myers,
Florida.

32

Following are the financial statements for the Fund XI, XII, and REIT Joint
Venture:

The Fund XI, XII, and REIT Joint Venture
(A Georgia Joint Venture)
Balance Sheets
December 31, 2001 and 2000
Assets

2001             2000
-------------    -------------

Real estate assets, at cost:
Land                                                                     $   5,048,797    $   5,048,797
Building and improvements, less accumulated depreciation of $2,692,116
in 2001 and $1,599,263 in 2000                                           24,626,336       25,719,189
-------------    -------------
Total real estate assets                                          29,675,133       30,767,986
Cash and cash equivalents                                                          775,805          541,089
Accounts receivable                                                                675,022          394,314
Prepaid assets and other expenses                                                   26,486           26,486
-------------    -------------
Total assets                                                   $  31,152,446    $  31,729,875
=============    =============

Liabilities and Partners' Capital

Liabilities:
Accounts payable                                                         $     114,612    $     114,180
Partnership distributions payable                                              757,500          453,395
-------------    -------------
Total liabilities                                                    872,112          567,575
-------------    -------------
Partners' capital:
Wells Real Estate Fund XI                                                    7,917,646        8,148,261
Wells Real Estate Fund XII                                                   5,174,703        5,325,424
Wells Operating Partnership, L.P.                                           17,187,985       17,688,615
-------------    -------------
Total partners' capital                                           30,280,334       31,162,300
-------------    -------------
Total liabilities and partners' capital                        $  31,152,446    $  31,729,875
=============    =============

33

The Fund XI, XII, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Income
for the Years Ended December 31, 2001, 2000, and 1999

2001             2000            1999
-------------    -------------    ------------

Revenues:
Rental income                                           $   3,346,227    $   3,345,932    $  1,443,446
Interest income                                                24,480            2,814               0
Other income                                                      360              440              57
-------------    -------------    ------------
3,371,067        3,349,186       1,443,503
-------------    -------------    ------------

Expenses:
Depreciation                                                1,092,853        1,092,680         506,582
Management and leasing fees                                   156,987          157,236          59,230
Operating costs, net of reimbursements                        (27,449)         (30,718)          4,639
Property administration                                        65,765           36,707          15,979
Legal and accounting                                           18,000           14,725           4,000
-------------    -------------    ------------
1,306,156        1,270,630         590,430
-------------    -------------    ------------
Net income                                                  $   2,064,911    $   2,078,556    $    853,073
=============    =============    ============

Net income allocated to Wells Real Estate Fund XI           $     539,930    $     543,497    $    240,031
=============    =============    ============

Net income allocated to Wells Real Estate Fund XII          $     352,878    $     355,211    $    124,542
=============    =============    ============

Net income allocated to Wells Operating Partnership, L.P.   $   1,172,103    $   1,179,848    $    488,500
=============    =============    ============

The Fund XI, XII, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Years Ended December 31, 2001, 2000, and 1999

Wells
Wells Real      Wells Real       Operating           Total
Estate           Estate        Partnership,       Partners'
Fund XI         Fund XII           L.P.            Capital
-------------   -------------    --------------   ---------------

Balance, December 31, 1998         $           0   $           0    $            0   $             0
Net income                           240,031         124,542           488,500           853,073
Partnership contributions          8,470,160       5,520,835        18,376,267        32,367,262
Partnership distributions           (344,339)       (177,743)         (703,797)       (1,225,879)
-------------   -------------    --------------   ---------------
Balance, December 31, 1999             8,365,852       5,467,634        18,160,970        31,994,456
Net income                           543,497         355,211         1,179,848         2,078,556
Partnership distributions           (761,088)       (497,421)       (1,652,203)       (2,910,712)
-------------   -------------    --------------   ---------------
Balance, December 31, 2000             8,148,261       5,325,424        17,688,615        31,162,300
Net income                           539,930         352,878         1,172,103         2,064,911
Partnership distributions           (770,545)       (503,599)       (1,672,733)       (2,946,877)
-------------   -------------    --------------   ---------------
Balance, December 31, 2001         $   7,917,646   $   5,174,703    $   17,187,985   $    30,280,334
=============   =============    ==============   ===============

34

The Fund XI, XII, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Cash Flows
for the Years Ended December 31, 2001, 2000, and 1999

2001          2000          1999
-----------   -----------  ------------

Cash flows from operating activities:
Net income                                                $ 2,064,911   $ 2,078,556  $    853,073
-----------   -----------  ------------
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation                                           1,092,853     1,092,680       506,582
Changes in assets and liabilities:
Accounts receivable                                   (280,708)     (260,537)     (133,777)
Prepaid expenses and other assets                            0             0       (26,486)
Accounts payable                                           432         1,723       112,457
-----------   -----------  ------------
Total adjustments                                    812,577       833,866       458,776
-----------   -----------  ------------
Net cash provided by operating activities          2,877,488     2,912,422     1,311,849
Cash flows from financing activities:
Distributions to joint venture partners                    (2,642,772)   (3,137,611)     (545,571)
-----------   -----------  ------------
Net increase (decrease) in cash and cash equivalents             234,716      (225,189)      766,278
Cash and cash equivalents, beginning of year                     541,089       766,278             0
-----------   -----------  ------------
Cash and cash equivalents, end of year                       $   775,805   $   541,089  $    766,278
===========   ===========  ============
Supplemental disclosure of noncash activities:
Deferred project costs contributed to joint venture       $         0   $         0  $  1,294,686
===========   ===========  ============
Contribution of real estate assets to joint venture       $         0   $         0  $ 31,072,562
===========   ===========  ============

Fund XII and REIT Joint Venture

On May 10, 2000, the Operating Partnership entered into a joint venture with
Fund XII. The joint venture, Fund XII and REIT Joint Venture, was formed to
acquire, develop, operate, and sell real property. On May 20, 2000, the joint
venture purchased a 77,054-square foot, three-story office building known as the
Siemens Building in Troy, Oakland County, Michigan. On December 28, 2000, the
joint venture purchased a 50,000-square foot, one-story office building and a
78,500-square foot two-story office building collectively known as the AT&T Call
Center Buildings in Oklahoma City, Oklahoma County, Oklahoma. On May 15, 2001,
the joint venture purchased a 201,237-square foot, three-story office building
known as the Comdata Building located in Brentwood, Williamson County,
Tennessee.

35

Following are the financial statements for Fund XII and REIT Joint Venture:

Fund XII and REIT Joint Venture
(A Georgia Joint Venture)
Balance Sheets
December 31, 2001 and 2000

Assets

2001          2000
------------  ------------

Real estate assets, at cost:
Land                                                        $  8,899,574  $  4,420,405
Building and improvements, less accumulated depreciation of $  2,131,838
in 2001 and $324,732 in 2000                                  45,814,781    26,004,918
------------  ------------
Total real estate assets                                   54,714,355    30,425,323
Cash and cash equivalents                                         1,345,562       207,475
Accounts receivable                                                 442,023       130,490
------------  ------------
Total assets                                             $ 56,501,940  $ 30,763,288
============  ============

Liabilities and Partners' Capital

Liabilities:
Accounts payable                                            $    134,969  $          0
Partnership distributions payable                              1,238,205       208,261
------------  ------------
Total liabilities                                           1,373,174       208,261
------------  ------------
Partners' capital:
Wells Real Estate Fund XII                                    24,828,894    16,242,127
Wells Operating Partnership, L.P.                             30,299,872    14,312,900
------------  ------------
Total partners' capital                                    55,128,766    30,555,027
------------  ------------
Total liabilities and partners' capital                  $ 56,501,940  $ 30,763,288
============  ============

36

Fund XII and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Income
for the Year Ended December 31, 2001 and
the Period From May 10, 2000 (Inception) Through
December 31, 2000

2001           2000
----------      ---------

Revenues:
Rental income                                                   $4,683,323      $974,796
Interest income                                                     25,144         2,069
----------      --------
4,708,467       976,865
----------      --------
Expenses:
Depreciation                                                     1,807,106       324,732
Management and leasing fees                                        224,033        32,756
Partnership administration                                          38,928         3,917
Legal and accounting                                                16,425             0
Operating costs, net of reimbursements                              10,453         1,210
----------      --------
2,096,945       362,615
----------      --------
Net income                                                          $2,611,522      $614,250
==========      ========

Net income allocated to Wells Real Estate Fund XII                  $1,224,645      $309,190
==========      ========

Net income allocated to Wells Operating Partnership, L.P.           $1,386,877      $305,060
==========      ========

Fund XII and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Year Ended December 31, 2001 and
the Period From May 10, 2000 (Inception) Through
December 31, 2000

Wells Real           Wells                Total
Estate            Operating            Partners'
Fund XII       Partnership, L.P.         Capital
------------    ------------------      ------------

Balance, May 10, 2000 (inception)                             $          0      $            0        $          0
Net income                                                     309,190             305,060             614,250
Partnership contributions                                   16,340,884          14,409,171          30,750,055
Partnership distributions                                     (407,948)           (401,330)           (809,278)
------------      --------------        ------------
Balance, December 31, 2000                                      16,242,126          14,312,901          30,555,027
Net income                                                   1,224,645           1,386,877           2,611,522
Partnership contributions                                    9,298,084          16,795,441          26,093,525
Partnership distributions                                   (1,935,961)         (2,195,347)         (4,131,308)
------------      --------------        ------------
Balance, December 31, 2001                                    $ 24,828,894      $   30,299,872        $ 55,128,766
============      ==============        ============

37

Fund XII and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Cash Flows
for the Year Ended December 31, 2001 and
the Period From May 10, 2000 (Inception) Through
December 31, 2000

2001             2000
------------     ------------

Cash flows from operating activities:
Net income                                                                       $  2,611,522     $    614,250
------------     ------------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation                                                                 1,807,106          324,732
Changes in assets and liabilities:
Accounts receivable                                                        (311,533)        (130,490)
Accounts payable                                                            134,969                0
------------     ------------
Total adjustments                                                      1,630,542          194,242
------------     ------------
Net cash provided by operating activities                              4,242,064          808,492
------------     ------------
Cash flows from investing activities:
Investment in real estate                                                         (26,096,138)     (29,520,043)
------------     ------------
Cash flows from financing activities:
Distributions to joint venture partners                                            (3,101,364)        (601,017)
Contributions received from partners                                               26,093,525       29,520,043
------------     ------------
Net cash provided by financing activities                             22,992,161       28,919,026
------------     ------------
Net increase in cash and cash equivalents                                               1,138,087          207,475
Cash and cash equivalents, beginning of period                                            207,475                0
------------     ------------
Cash and cash equivalents, end of year                                               $  1,345,562     $    207,475
============     ============

Supplemental disclosure of noncash activities:
Deferred project costs contributed to joint venture                              $          0     $  1,230,012
============     ============

38

Fund XIII and REIT Joint Venture

On June 27, 2001, Wells Real Estate Fund XIII, L.P. ("Fund XIII") entered into a
joint venture with the Operating Partnership to form the Fund XIII and REIT
Joint Venture. On July 16, 2001, the Fund XIII and REIT Joint Venture purchased
an 85,000-square foot, two-story office building known as the AmeriCredit
Building in Clay County, Florida. On December 21, 2001, the Fund XIII and REIT
Joint Venture purchased two connected one-story office and assembly buildings
consisting of 148,200 square feet known as the ADIC Buildings in Douglas County,
Colorado.

Following are the financial statements for the Fund XIII and REIT Joint Venture:

The Fund XIII and REIT Joint Venture
(A Georgia Joint Venture)
Balance Sheet
December 31, 2001

Assets

Real estate assets, at cost:
Land                                                                                            $   3,724,819
Building and improvements, less accumulated depreciation of $266,605 in 2001                       22,783,948
-------------
Total real estate assets                                                                 26,508,767
Cash and cash equivalents                                                                                 460,380
Accounts receivable                                                                                        71,236
Prepaid assets and other expenses                                                                             773
-------------
Total assets                                                                          $  27,041,156
=============

Liabilities and Partners' Capital

Liabilities:
Accounts payable                                                                                $     145,331
Partnership distributions payable                                                                     315,049
-------------
Total liabilities                                                                           460,380
-------------
Partners' capital:
Wells Real Estate Fund XIII                                                                         8,453,438
Wells Operating Partnership, L.P.                                                                  18,127,338
-------------
Total partners' capital                                                                  26,580,776
-------------
Total liabilities and partners' capital                                               $  27,041,156
=============

39

The Fund XIII and REIT Joint Venture
(A Georgia Joint Venture)
Statement of Income
for the Period From June 27, 2001 (Inception) Through
December 31, 2001

Revenues:
Rental income                                                    $ 706,373
---------
Expenses:
Depreciation                                                       266,605
Management and leasing fees                                         26,954
Operating costs, net of reimbursements                              53,659
Legal and accounting                                                 2,800
---------
350,018
---------
Net income                                                           $ 356,355
=========

Net income allocated to Wells Real Estate Fund XIII                  $  58,610
=========

Net income allocated to Wells Operating Partnership, L.P.            $ 297,745
=========

The Fund XIII and REIT Joint Venture
(A Georgia Joint Venture)
Statement of Partners' Capital
for the Period From June 27, 2001 (Inception) Through
December 31, 2001

Wells
Wells Real    Operating       Total
Estate     Partnership,    Partners'
Fund XIII        L.P.         Capital
------------- --------------  -----------

Balance, June 27, 2001 (inception)      $        0   $         0   $         0
Net income                              58,610       297,745       356,355
Partnership contributions            8,491,069    18,285,076    26,776,145
Partnership distributions              (96,241)     (455,483)     (551,724)
----------   -----------   -----------
Balance, December 31, 2001              $8,453,438   $18,127,338   $26,580,776
==========   ===========   ===========

40

The Fund XIII and REIT Joint Venture
(A Georgia Joint Venture)
Statement of Cash Flows
for the Period From June 27, 2001 (Inception) Through
December 31, 2001

Cash flows from operating activities:
Net income                                                                                       $     356,355
-------------
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation                                                                                        266,605
Changes in assets and liabilities:
Accounts receivable                                                                             (71,236)
Prepaid expenses and other assets                                                                  (773)
Accounts payable                                                                                145,331
-------------
Total adjustments                                                                            339,927
-------------
Net cash provided by operating activities                                                    696,282
-------------
Cash flows from investing activities:
Investment in real estate                                                                          (25,779,337)
-------------
Cash flows from financing activities:
Contributions from joint venture partners                                                           25,780,110
Distributions to joint venture partners                                                               (236,675)
-------------
Net cash provided by financing activities                                                 25,543,435
-------------
Net increase in cash and cash equivalents                                                                  460,380
Cash and cash equivalents, beginning of period                                                                   0
-------------
Cash and cash equivalents, end of year                                                               $     460,380
=============
Supplemental disclosure of noncash activities:
Deferred project costs contributed to Joint Venture                                              $     996,035
=============

6.  INCOME TAX BASIS NET INCOME AND PARTNERS' CAPITAL

The Operating Partnership's income tax basis net income for the years ended
December 31, 2001 and 2000 are calculated as follows:

2001               2000
------------       ------------

Financial statement net income                                                    $ 21,723,967       $  8,552,967
Increase (decrease) in net income resulting from:
Depreciation expense for financial reporting purposes in excess of
amounts for income tax purposes                                               7,347,459          3,511,353
Rental income accrued for financial reporting purposes in excess of
amounts for income tax purposes                                              (2,735,237)        (1,822,220)
Expenses deductible when paid for income tax purposes, accrued for
financial reporting purposes                                                     25,658             37,675
------------       ------------
Income tax basis net income                                                       $ 26,361,847       $ 10,279,775
============       ============

41

The Operating Partnership's income tax basis partners' capital at December
31, 2001 and 2000 is computed as follows:

2001               2000
------------       ------------

Financial statement partners' capital                                            $710,285,758       $265,341,612
Increase (decrease) in partners' capital resulting from:
Depreciation expense for financial reporting purposes in excess of
amounts for income tax purposes                                             11,891,061          4,543,602
Capitalization of syndication costs for income tax purposes, which
are accounted for as cost of capital for financial reporting
purposes                                                                    12,896,312         12,896,312
Accumulated rental income accrued for financial reporting purposes
in excess of amounts for income tax purposes                                (5,382,483)        (2,647,246)
Accumulated expenses deductible when paid for income tax purposes,
accrued for financial reporting purposes                                       114,873             89,215
Dividends payable                                                               1,059,026          1,025,010
Other                                                                            (222,378)          (222,378)
------------       ------------
Income tax basis partners' capital                                               $730,642,169       $281,026,127
============       ============

7.   RENTAL INCOME

The future minimum rental income due from the Operating Partnership's
direct investment in real estate or its respective ownership interest in
the joint ventures under noncancelable operating leases at December 31,
2001 is as follows:

Year ended December 31:
2002                                         $  69,364,229
2003                                            70,380,691
2004                                            71,184,787
2005                                            70,715,556
2006                                            71,008,821
Thereafter                                         270,840,299
-------------
$ 623,494,383
=============

One tenant contributed 10% of rental income for the year ended December 31,
2001. In addition, one tenant will contribute 12% of future minimum rental
income.

Future minimum rental income due from Fund VIII, IX, and REIT Joint Venture
under noncancelable operating leases at December 31, 2001 is as follows:

Year ended December 31:
2002                                           $ 1,287,119
2003                                             1,287,119
2004                                               107,260
2005                                                     0
2006                                                     0
Thereafter                                                   0
-----------
$ 2,681,498
===========

One tenant contributed 100% of rental income for the year ended December
31, 2001. In addition, one tenant will contribute 100% of future minimum
rental income.

42

The future minimum rental income due from Fund IX, X, XI, and REIT Joint
Venture under noncancelable operating leases at December 31, 2001 is as
follows:

Year ended December 31:
2002                                           $  3,648,769
2003                                              3,617,432
2004                                              3,498,472
2005                                              2,482,815
2006                                              2,383,190
Thereafter                                            3,053,321
------------
$ 18,683,999
============

Four tenants contributed 26%, 23%, 13%, and 13% of rental income for the
year ended December 31, 2001. In addition, four tenants will contribute
38%, 21%, 20%, and 17% of future minimum rental income.

The future minimum rental income due Wells/Orange County Associates under
noncancelable operating leases at December 31, 2001 is as follows:

Year ended December 31:
2002                                           $    834,888
2003                                                695,740
------------
$  1,530,628
============

One tenant contributed 100% of rental income for the year ended December
31, 2001 and will contribute 100% of future minimum rental income.

The future minimum rental income due Wells/Fremont Associates under
noncancelable operating leases at December 31, 2001 is as follows:

Year ended December 31:
2002                                           $    922,444
2003                                                950,118
2004                                                894,832
------------
$  2,767,394
============

One tenant contributed 100% of rental income for the year ended December
31, 2001 and will contribute 100% of future minimum rental income.

The future minimum rental income due from Fund XI, XII, and REIT Joint
Venture under noncancelable operating leases at December 31, 2001 is as
follows:

Year ended December 31:
2002                                           $  3,277,512
2003                                              3,367,510
2004                                              3,445,193
2005                                              3,495,155
2006                                              3,552,724
Thereafter                                            2,616,855
------------
$ 19,754,949
============

Four tenants contributed approximately 30%, 28%, 24%, and 18% of rental
income for the year ended December 31, 2001. In addition, four tenants will
contribute approximately 30%, 27%, 25%, and 18% of future minimum rental
income.

43

The future minimum rental income due from Fund XII and REIT Joint Venture
under noncancelable operating leases at December 31, 2001 is as follows:

Year ended December 31:
2002                                           $  5,352,097
2003                                              5,399,451
2004                                              5,483,564
2005                                              5,515,926
2006                                              5,548,289
Thereafter                                           34,677,467
------------
$ 61,976,794
============

Three tenants contributed approximately 31%, 29%, and 27% of rental income
for the year ended December 31, 2001. In addition, three tenants will
contribute approximately 58%, 21%, and 18% of future minimum rental income.

The future minimum rental income due Fund XIII and REIT Joint Venture under
noncancelable operating leases at December 31, 2001 is as follows:

Year ended December 31:
2002                                           $  2,545,038
2003                                              2,602,641
2004                                              2,661,228
2005                                              2,721,105
2006                                              2,782,957
Thereafter                                           13,915,835
------------
$ 27,228,804
============

One tenant contributed approximately 95% of rental income for the year
ended December 31, 2001. In addition, two tenants will contribute
approximately 51% and 49% of future minimum rental income.

8.   INVESTMENT IN BONDS AND OBLIGATION UNDER CAPITAL LEASE

On September 27, 2001, the Operating Partnership acquired a ground
leasehold interest in the Ingram Micro Distribution Facility pursuant to a
Bond Real Property Lease dated December 20, 1995 (the "Bond Lease"). The
ground leasehold interest under the Bond Lease, along with the Bond and
Bond Deed of Trust described below, were purchased from Ingram Micro, L.P.
("Ingram") in a sale lease-back transaction for a purchase price of
$21,050,000. The Bond Lease expires on December 31, 2026. At closing, the
Operating Partnership also entered into a new lease with Ingram pursuant to
which Ingram agreed to lease the entire Ingram Micro Distribution Facility
for a lease term of 10 years with two successive 10-year renewal options.

In connection with the original development of the Ingram Micro
Distribution Facility, the Industrial Development Board of the City of
Milington, Tennessee (the "Industrial Development Board") issued an
Industrial Development Revenue Note dated December 20, 1995 in the
principal amount of $22,000,000 (the "Bond") to Lease Plan North America,
Inc. (the "Original Bond Holder"). The proceeds from the issuance of the
Bond were utilized to finance the construction of the Ingram Micro
Distribution Facility. The Bond is secured by a Fee Construction Mortgage
Deed of Trust Assignment of Rents and Leases also dated December 20, 1995
(the "Bond Deed of Trust") executed by the Industrial Development Board for
the benefit of the Original Bond Holder. Beginning in 2006, the holder of
the Bond Lease has the option to purchase the land underlying the Ingram
Micro Distribution Facility for $100.00 plus satisfaction of the
indebtedness evidenced by the Bond which, as set forth below, was acquired
and is currently held by the Operating Partnership.

On December 20, 2000, Ingram purchased the Bond and the Bond Deed of Trust
from the Original Bond Holder. On September 27, 2001, along with purchasing
the Ingram Micro Distribution Facility through its acquisition of the
ground leasehold interest under the Bond Lease, the Operating Partnership
also acquired the Bond and the Bond

44

Deed of Trust from Ingram. Because the Operating Partnership is
technically subject to the obligation to pay the $22,000,000
indebtedness evidenced by the Bond, the obligation to pay the Bond is
carried on the Company's books as a liability; however, since Operating
Partnership is also the owner of the Bond, the Bond is also carried on
the Company's books as an asset.

9.       NOTES PAYABLE

As of December 31, 2001, the Operating Partnership's notes payable
included the following:

Note payable to Bank of America, interest at 5.9%, interest
payable monthly, due July 30, 2003, collateralized by the
Nissan property                                                 $   468,844

Note payable to SouthTrust Bank, interest at LIBOR plus 175
basis points, principal and interest payable monthly, due June
10, 2002; collateralized by the Operating Partnership's
interests in the Cinemark Building, the Dial Building, the
ASML Building, the Motorola Tempe Building, the Avnet
Building, the Matsushita Building, and the PwC  Building          7,655,600
-----------
Total                                             $ 8,124,444
===========

The contractual maturities of the Operating Partnership's notes payable
are as follows as of December 31, 2001:

2002                                               $7,655,600
2003                                                  468,844
----------
Total                                $8,124,444
==========

10.      COMMITMENTS AND CONTINGENCIES

Take Out Purchase and Escrow Agreement

An affiliate of the Advisor ("Wells Exchange") has developed a program
(the "Wells Section 1031 Program") involving the acquisition by Wells
Exchange of income-producing commercial properties and the formation of
a series of single member limited liability companies for the purpose
of facilitating the resale of co-tenancy interests in such real estate
properties to be owned in co-tenancy arrangements with persons ("1031
Participants") who are looking to invest the proceeds from a sale of
real estate held for investment in another real estate investment for
purposes of qualifying for like-kind exchange treatment under Section
1031 of the Code. Each of these properties will be financed by a
combination of permanent first mortgage financing and interim loan
financing obtained from institutional lenders.

Following the acquisition of each property, Wells Exchange will attempt
to sell co-tenancy interests to 1031 Participants, the proceeds of
which will be used to pay off the interim financing. In consideration
for the payment of a take out fee to the Company, and following
approval of the potential property acquisition by the Company's board
of directors, it is anticipated that Wells OP will enter into a take
out purchase and escrow agreement or similar contract providing that,
in the event that Wells Exchange is unable to sell all of the
co-tenancy interest in that particular property to 1031 Participants,
the Operating Partnership will purchase, at Wells Exchange's cost, any
co-tenancy interests remaining unsold at the end of the offering
period.

As a part of the initial transaction in the Wells Section 1031 Program,
and in consideration for the payment of a take out fee in the amount of
$137,500 to the Company, Wells OP entered into a take out purchase and
escrow agreement dated April 16, 2001 providing that, among other
things, Wells OP is obligated to acquire, at Wells Exchange's cost
($839,694 in cash plus $832,060 of assumed debt for each 7.63358%
interest of co-tenancy interest unsold), any co-tenancy interest in the
building known as the Ford Motor Credit Complex which remains unsold at
the expiration of the offering of Wells Exchange, which has been
extended to April 15, 2002, which is also the maturity date of the
interim loan relating to such property. The Ford Motor Credit Complex
consists of two connecting office buildings containing 167,438 rentable
square feet located in Colorado Springs, Colorado, currently under a
triple-net lease with Ford Motor Credit Company, a wholly owned
subsidiary of Ford Motor Company.

45

The obligations of Wells OP under the take out purchase and escrow agreement are
secured by reserving against a portion of Wells OP's existing line of credit
with Bank of America, N.A. (the "Interim Lender"). If, for any reason, Wells OP
fails to acquire any of the co-tenancy interest in the Ford Motor Credit Complex
which remains unsold as of April 15, 2002, or there is otherwise an uncured
default under the interim loan or the line of credit documents, the Interim
Lender is authorized to draw down Wells OP's line of credit in the amount
necessary to pay the outstanding balance of the interim loan in full, in which
event the appropriate amount of co-tenancy interest in the Ford Motor Credit
Complex would be deeded to Wells OP. Wells OP's maximum economic exposure in the
transaction is $21,900,000, in which event Wells OP would acquire the Ford Motor
Credit Complex for $11,000,000 in cash plus assumption of the first mortgage
financing in the amount of $10,900,000. If some, but not all, of the co-tenancy
interests are sold, Wells OP's exposure would be less, and it would own an
interest in the property in co-tenancy with the 1031 Participants who had
previously acquired co-tenancy interests in the Ford Motor Credit Complex from
Wells Exchange.

Development of the Nissan Property

The Operating Partnership has entered into an agreement with an independent
third-party general contractor for the purpose of designing and constructing a
three-story office building containing 268,290 rentable square feet on the
Nissan Property. The construction agreement provides that the Operating
Partnership will pay the contractor a maximum of $25,326,017 for the design and
construction of the building. Construction commenced on January 25, 2002 and is
scheduled to be completed within 20 months.

General

Management, after consultation with legal counsel, is not aware of any
significant litigation or claims against the Company, the Operating Partnership,
or the Advisor. In the normal course of business, the Company, the Operating
Partnership, or the Advisor may become subject to such litigation or claims.

46

11.      SHAREHOLDERS' EQUITY

Common Stock Option Plan

The Wells Real Estate Investment Trust, Inc. Independent Director Stock
Option Plan ("the Plan") provides for grants of stock to be made to
independent nonemployee directors of the Company. Options to purchase
2,500 shares of common stock at $12 per share are granted upon
initially becoming an independent director of the Company. Of these
shares, 20% are exercisable immediately on the date of grant. An
additional 20% of these shares become exercisable on each anniversary
following the date of grant for a period of four years. Effective on
the date of each annual meeting of shareholders of the Company,
beginning in 2000, each independent director will be granted an option
to purchase 1,000 additional shares of common stock. These options vest
at the rate of 500 shares per full year of service thereafter. All
options granted under the Plan expire no later than the date
immediately following the tenth anniversary of the date of grant and
may expire sooner in the event of the disability or death of the
optionee or if the optionee ceases to serve as a director.

The Company has adopted the disclosure provisions in Statement of
Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation." As permitted by the provisions of SFAS No.
123, the Company applies Accounting Principles Board Opinion No. 25 and
the related interpretations in accounting for its stock option plans
and, accordingly, does not recognize compensation cost.

A summary of the Company's stock option activity during 2001 and 2000
is as follows:

Exercise
Number     Price
--------  ---------

Outstanding at December 31, 1999                             17,500     $12
Granted                                                   7,000      12
-------
Outstanding at December 31, 2000                             24,500      12
Granted                                                   7,000      12
-------
Outstanding at December 31, 2001                             31,500      12
=======

Outstanding options exercisable as of December 31, 2001      10,500      12
=======

For SFAS No. 123 purposes, the fair value of each stock option for 2001
and 2000 has been estimated as of the date of the grant using the
minimum value method. The weighted average risk-free interest rates
assumed for 2001 and 2000 were 5.05% and 6.45%, respectively. Dividend
yields of 7.8% and 7.3% were assumed for 2001 and 2000, respectively.
The expected life of an option was assumed to be six years and four
years for 2001 and 2000, respectively. Based on these assumptions, the
fair value of the options granted during 2001 and 2000 is $0.

Treasury Stock

During 1999, the Company's board of directors authorized a dividend
reinvestment program (the "DRP"), through which common shareholders may
elect to reinvest an amount equal to the dividends declared on their
common shares into additional shares of the Company's common stock in
lieu of receiving cash dividends. During 2000, the Company's board of
directors authorized a common stock repurchase plan subject to the
amount reinvested in the Company's common shares through the DRP, less
shares already redeemed, and a limitation in the amount of 3% of the
average common shares outstanding during the preceding year. During
2001 and 2000, the Company repurchased 413,743 and 141,297 of its own
common shares at an aggregate cost of $4,137,427 and $1,412,969,
respectively. These transactions were funded with cash on hand and did
not exceed either of the foregoing limitations.

47

12.      QUARTERLY RESULTS (UNAUDITED)

Presented below is a summary of the unaudited quarterly financial
information for the years ended December 31, 2001 and 2000:

2001 Quarters Ended
------------------------------------------------------------------------
March 31           June 30            September 30        December 31
------------       -----------        --------------      --------------

Revenues                                  $10,669,713       $10,891,240         $ 12,507,904        $ 15,239,945
Net income                                  3,275,345         5,038,898            6,109,137           7,300,587
Basic and diluted earnings per share
(a)                                    $      0.10       $      0.12         $       0.11        $      0.10
Dividends per share (a)                          0.19              0.19                 0.19               0.19

(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.

2000 Quarters Ended
------------------------------------------------------------------------
March 31           June 30         September 30           December 31
------------       -----------      --------------        --------------

Revenues                                        $ 3,710,409        $ 5,537,618       $ 6,586,611          $  7,538,568
Net income                                        1,691,288          1,521,021         2,525,228             2,815,430
Basic and diluted earnings per share            $      0.11        $      0.08       $      0.11          $       0.10
Dividends per share                                    0.18               0.18              0.18                  0.19

13.      SUBSEQUENT EVENT

On January 11, 2002, the Operating Partnership purchased a three-story
office building on a 9.8-acre tract of land located in Sarasota County,
Florida known as the Arthur Andersen Building, from an unaffiliated
third party for $21,400,000. The Operating Partnership incurred
additional related acquisition expenses, including attorneys' fees,
recording fees, structural report and environmental report fees, and
other closing costs, of approximately $30,000.

48

WELLS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARY

(A Georgia Public Limited Partnership)

SCHEDULE III--REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2001

Initial Cost
---------------------------

Costs of
Ownership                               Buildings and   Capitalized
Description        Percentage  Encumbrances     Land        Improvements   Improvements
--------------------    ----------  ------------  -----------    ------------   ------------

ALSTOM
POWER--KNOXVILLE
PROPERTY
(a)                          4%      None      $   582,897        744,164     $ 6,744,547

AVAYA BUILDING                  4       None        1,002,723      4,386,374         242,241

360
INTERLOCKEN (c)                 4       None        1,570,000      6,733,500         437,266

IOMEGA
PROPERTY(d)                     4       None          597,000      4,674,624         876,459

OHMEDA
PROPERTY (e)                    4       None        2,613,600      7,762,481         528,415

FAIRCHILD
PROPERTY (f)                   78       None        2,130,480      6,852,630         374,300

ORANGE COUNTY
PROPERTY (g)                   44       None        2,100,000      4,463,700         287,916

PRICEWATER-
HOUSECOOPERS
PROPERTY (h)                  100       None        1,460,000     19,839,071         825,560

EYBL CARTEX
PROPERTY (i)                   57       None          330,000      4,791,828         213,411

SPRINT BUILDING
(j)                            57       None        1,696,000      7,850,726         397,783

JOHNSON
MATTHEY (k)                    57       None        1,925,000      6,131,392         335,685

GARTNER
PROPERTY (l)                   57       None          895,844      7,451,760         347,820

AT&T--PA
PROPERTY (m)                  100       None          662,000     11,836,368         265,740

Gross Amount at Which Carried at December 31, 2001
--------------------------------------------------
Life on Which
Depreciation
Buildings and  Construction               Accumulated     Date of        Date      is Computed
Description         Land     Improvements   in Progress     Total      Depreciation  Construction   Acquired       (dd)
------------------    ----------  ------------   -----------  ----------    ------------  ------------   --------  ---------------

ALSTOM
POWER--KNOXVILLE
PROPERTY
(a)                $   607,930   $ 7,463,678  $       0   $ 8,071,608    $ 1,844,482       1997       12/10/96   20 to 25 years

AVAYA BUILDING          1,051,138     4,580,200          0     5,631,338        656,495       1998        6/24/98   20 to 25 years

360
INTERLOCKEN (c)         1,650,070     7,090,696          0     8,740,766      1,098,339       1996        3/20/98   20 to 25 years

IOMEGA
PROPERTY(d)               641,988     5,506,095          0     6,148,083        742,404       1998        7/01/98   20 to 25 years

OHMEDA
PROPERTY (e)            2,746,894     8,157,602          0    10,904,496      1,278,024       1998        2/13/98   20 to 25 years

FAIRCHILD
PROPERTY (f)            2,219,251     7,138,159          0     9,357,410        999,301       1998        7/21/98   20 to 25 years

ORANGE COUNTY
PROPERTY (g)            2,187,501     4,664,115          0     6,851,616        651,780       1988        7/31/98   20 to 25 years

PRICEWATER-
HOUSECOOPERS
PROPERTY (h)            1,520,834    20,603,797          0    22,124,631      2,469,792       1998       12/31/98   20 to 25 years

EYBL CARTEX
PROPERTY (i)              343,750     4,991,489          0     5,335,239        532,416       1998        5/18/99   20 to 25 years

SPRINT BUILDING
(j)                     1,766,667     8,177,842          0     9,944,509        817,785       1998        7/2/99    20 to 25 years

JOHNSON
MATTHEY (k)             2,005,209     6,386,868          0     8,392,077        617,438       1973       8/17/99    20 to 25 years

GARTNER
PROPERTY (l)              933,171     7,762,253          0     8,695,424        724,477       1998       9/20/99    20 to 25 years

AT&T--PA
PROPERTY (m)              689,583    12,074,525          0    12,764,108      1,408,686       1998        2/4/99    20 to 25 years

49

Initial Cost                      Gross Amount at Which Carried at December 31, 2001
--------------------------              ----------------------------------------------------

Costs of
Ownership                           Buildings and Capitalized               Buildings and Construction
Description   Percentage Encumbrances     Land     Improvements  Improvements     Land     Improvements  in Progress     Total
--------------- ---------- ------------ ------------ ------------- ------------ ------------ ------------- ------------ ------------

MARCONI
PROPERTY (n)           100         None    5,000,000    28,161,665    1,381,747    5,208,335    29,335,077            0   34,543,412

CINEMARK
PROPERTY (O)           100         None    1,456,000    20,376,881      908,217    1,516,667    21,224,431            0   22,741,098

MATSUSHITA
PROPERTY (p)           100         None    4,577,485             0   13,860,142    4,768,215    13,773,660            0   18,541,875

ALSTOM
POWER--
RICHMOND
PROPERTY(q)            100         None      948,401             0    9,938,308      987,918     9,923,454            0   10,911,372

METRIS--OK
PROPERTY (r)           100         None    1,150,000    11,569,583      541,489    1,197,917    12,063,155            0   13,261,072

DIAL
PROPERTY
(s)                    100         None    3,500,000    10,785,309      601,264    3,645,835    11,240,738       83,125   14,969,698

ASML PROPERTY
(t)                    100         None            0    17,392,633      731,685            0    18,124,318            0   18,124,318

MOTOROLA--AZ
PROPERTY (u)           100         None            0    16,036,219      669,639            0    16,705,858            0   16,705,858

AVNET
PROPERTY (v)           100         None            0    13,271,502      551,156            0    13,822,658            0   13,822,658

DELPHI
PROPERTY (w)           100         None    2,160,000    16,775,971    1,676,956    2,250,008    18,469,408       14,877   20,734,293

SIEMENS
PROPERTY (x)            47         None    2,143,588    12,048,902      591,358    2,232,905    12,550,943       43,757   14,827,605

QUEST
PROPERTY (y)            16         None    2,220,993     5,545,498       51,285    2,220,993     5,602,160            0    7,823,153

MOTOROLA--NJ
PROPERTY (z)           100         None    9,652,500    20,495,243            0   10,054,720    25,540,919      392,104   35,987,743

METRIS--MN
PROPERTY (aa)          100         None    7,700,000    45,151,969        2,181    8,020,859    47,042,309            0   55,063,168

STONE &
WEBSTER
PROPERTY (bb)          100         None    7,100,000    37,914,954            0    7,395,857    39,498,469            0   46,894,326

AT&T--OK
PROPERTY (cc)           47         None    2,100,000    13,227,555      638,651    2,187,500    13,785,631            0   15,973,131

COMDATA
PROPERTY                64         None    4,300,000    20,650,000      572,944    4,479,168    21,566,287            0   26,045,455

AMERICREDIT
PROPERTY                87         None    1,610,000    10,890,000      563,257    1,677,084    11,386,174            0   13,063,258

STATE STREET
PROPERTY               100         None   10,600,000    38,962,988    4,344,837   11,041,670    40,666,305    2,201,913   53,909,888

IKON PROPERTY          100         None    2,735,000    17,915,000      985,856    2,847,300    18,792,672            0   21,639,972

NISSAN
PROPERTY               100   $8,124,444    5,545,700             0       21,353    5,567,053             0    2,653,777    8,220,830

Life on Which
Depreciation
Accumulated      Date of       Date     is Computed
Description         Depreciation   Consturction  Acquired       (dd)
---------------     ---------------  ------------  --------  --------------

MARCONI
PROPERTY (n)              2,737,941      1991       9/10/99  20 to 25 years

CINEMARK
PROPERTY (O)              1,768,692      1999      12/21/99  20 to 25 years

MATSUSHITA
PROPERTY (p)              2,032,803      1999       3/15/99  20 to 25 years

ALSTOM
POWER--
RICHMOND
PROPERTY(q)                 921,980      1999       7/22/99  20 to 25 years

METRIS--OK
PROPERTY (r)                881,413      2000       2/11/00  20 to 25 years

DIAL
PROPERTY                                 1997       3/29/00  20 to 25 years
(s)                         821,315

ASML PROPERTY
(t)                       1,314,573      1995       3/29/00  20 to 25 years

MOTOROLA--AZ
PROPERTY (u)              1,218,400      1998       3/29/00  20 to 25 years

AVNET
PROPERTY (v)                868,060      2000       6/12/00  20 to 25 years

DELPHI
PROPERTY (w)              1,286,705      2000       6/29/00  20 to 25 years

SIEMENS
PROPERTY (x)                959,465      2000       5/10/00  20 to 25 years

QUEST
PROPERTY (y)                649,436      1997       9/10/97  20 to 25 years

MOTOROLA--NJ
PROPERTY (z)              1,541,768      2000       11/1/00  20 to 25 years

METRIS--MN
PROPERTY (aa)             2,000,737      2000      12/21/00  20 to 25 years

STONE &
WEBSTER
PROPERTY (bb)             1,679,981      1994      12/21/00  20 to 25 years

AT&T--OK
PROPERTY (cc)               597,317      1999      12/28/00  20 to 25 years

COMDATA
PROPERTY                    575,056      1986      5/15/2001 20 to 25 years

AMERICREDIT
PROPERTY                    227,724      2001      7/16/2001 20 to 25 years

STATE STREET
PROPERTY                    807,903      1998      7/30/2001 20 to 25 years

IKON PROPERTY
250,689      2000      9/7/2001  20 to 25 years

NISSAN
PROPERTY                          0      2002      9/19/2001 20 to 25 years

50

Costs of
Ownership                                          Buildings and      Capitalized
Description       Partnership    Encumbrances          Land           Improvements      Improvements         Land
-----------       -----------    ------------          ----           ------------      ------------         ----

INGRAM MICRO
PROPERTY               100         $22,000,000          333,049          20,666,951          922,657          333,049

LUCENT
PROPERTY               100             None           7,000,000          10,650,000        1,106,240        7,275,830

CONVERGYS
PROPERTY               100             None           3,500,000           9,755,000          791,672        3,642,442

ADIC
PROPERTY                51             None           1,954,213          11,000,000          757,902        2,047,735

WINDY POINT
I PROPERTY             100             None           4,360,000          29,298,642        1,440,568        4,536,862

WINDY POINT II
PROPERTY               100             None           3,600,000          52,016,358        2,385,402        3,746,033
-----------     ------------        ------------      -----------     ------------
Total                           $30,124,444     $112,812,473        $584,077,441      $57,913,909     $117,245,941
===========     ============        ============      ===========     ============

Life on Which
Depreciation
Buildings and    Construction                      Accumulated        Date of          Date        is Computed
Improvements     in Progress           Total      Depreciation    Construction      Acquired          (dd)
------------     -----------           -----      ------------    ------------      --------          ----
INGRAM MICRO
PROPERTY            21,590,010             0           21,923,059         292,307         1997        9/27/2001     20 to 25 years

LUCENT
PROPERTY            11,484,562             0           18,760,392         153,093         2000        9/28/2001     20 to 25 years

CONVERGYS
PROPERTY            10,404,230             0           14,046,672          34,681         2001        12/21/2001    20 to 25 years

ADIC
PROPERTY            11,664,380             0           13,712,115          38,881         2001        12/21/2001    20 to 25 years

WINDY POINT
I PROPERTY          30,562,349             0           35,099,211         101,875         1999        12/31/2001    20 to 25 years

WINDY POINT II
PROPERTY            54,255,727             0           58,001,760         180,852         2001        12/31/2001    20 to 25 years
------------    ----------         ------------     -----------

Total          $645,673,203    $5,389,553         $768,308,697     $37,785,066
============    ==========         ============     ===========

(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

51

(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.

52

WELLS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARY

SCHEDULE III--REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2001

Accumulated
Cost           Depreciation
--------------     --------------

BALANCE AT DECEMBER 31, 1998                  $  76,201,910       $  1,487,963

1999 additions                              103,916,288          4,243,688
-------------       ------------
BALANCE AT DECEMBER 31, 1999                    180,118,198          5,731,651

2000 additions                              293,450,036         11,232,378
-------------       ------------
BALANCE AT DECEMBER 31, 2000                    473,568,234         16,964,029
=============       ============

=============       ============
2001 additions                              294,740,403         20,821,037
=============       ============
BALANCE AT DECEMBER 31, 2001                  $ 768,308,697       $ 37,785,066
=============       ============

53

PRIOR PERFORMANCE TABLES

The following Prior Performance Tables (Tables) provide information
relating to real estate investment programs sponsored by Wells Capital, Inc.,
our advisor, and its affiliates (Wells Public Programs) which have investment
objectives similar to Wells Real Estate Investment Trust, Inc. (Wells REIT).
(See "Investment Objectives and Criteria.") Except for the Wells REIT, all of
the Wells Public Programs, have used capital, and no acquisition indebtedness,
to acquire their properties.

Prospective investors should read these Tables carefully together with the
summary information concerning the Wells Public Programs as set forth in the
"Prior Performance Summary" section of this prospectus.

Investors in the Wells REIT will not own any interest in the other Wells
Public Programs and should not assume that they will experience returns, if any,
comparable to those experienced by investors in other Wells Public Programs.

The advisor is responsible for the acquisition, operation, maintenance and
resale of the real estate properties. The financial results of the Wells Public
Programs, thus, may provide some indication of the advisor's performance of its
obligations during the periods covered. However, general economic conditions
affecting the real estate industry and other factors contribute significantly to
financial results.

The following tables are included herein:

Table I - Experience in Raising and Investing Funds (As a Percentage of
Investment)

Table II - Compensation to Sponsor (in Dollars)

Table III - Annual Operating Results of Wells Public Programs

Table IV (Results of completed programs) has been omitted since none of the
Wells Public Programs have been liquidated.

Table V - Sales or Disposals of Property

Additional information relating to the acquisition of properties by the
Wells Public Programs is contained in Table VI, which is included in Part II of
the registration statement which the Wells REIT has filed with the Securities
and Exchange Commission. Copies of any or all information will be provided to
prospective investors at no charge upon request.

The following are definitions of certain terms used in the Tables:

"Acquisition Fees" shall mean fees and commissions paid by a Wells Public
Program in connection with its purchase or development of a property, except
development fees paid to a person not affiliated with the Wells Public Program
or with a general partner or advisor of the Wells Public Program in connection
with the actual development of a project after acquisition of the land by the
Wells Public Program.

"Organization Expenses" shall include legal fees, accounting fees,
securities filing fees, printing and reproduction expenses and fees paid to the
sponsor in connection with the planning and formation of the Wells Public
Program.

"Underwriting Fees" shall include selling commissions and wholesaling fees
paid to broker-dealers for services provided by the broker-dealers during the
offering.

54

TABLE I
(UNAUDITED)

EXPERIENCE IN RAISING AND INVESTING FUNDS

This Table provides a summary of the experience of the sponsors of Wells
Public Programs for which offerings have been completed since December 31, 1998.
Information is provided with regard to the manner in which the proceeds of the
offerings have been applied. Also set forth is information pertaining to the
timing and length of these offerings and the time period over which the proceeds
have been invested in the properties. All figures are as of December 31, 2001.

Wells Real          Wells Real       Wells Real Estate
Estate Fund         Estate Fund         Investment
XI, L.P.            XII, L.P.          Trust, Inc.
--------            ---------          -----------

Dollar Amount Raised                           $ 16,532,802/(3)/   $ 35,611,192/(4)/    $ 307,411,112/(5)/
============        ============         =============

Percentage Amount Raised                                100%/(3)/           100%/(4)/             100%/(5)/

Less Offering Expenses
Underwriting Fees                                     9.5%                9.5%                  9.5%
Organizational Expenses                               3.0%                3.0%                  3.0%
Reserves/(1)/                                           0.0%                0.0%                  0.0%
-------------       -------------        -------------
Percent Available for Investment                     87.5%               87.5%                 87.5%

Acquisition and Development Costs
Prepaid Items and Fees related to
Purchase of Property                               0.0%                0.0                   0.5%
Cash Down Payment                                    84.0%               84.0%                 73.8%
Acquisition Fees/(2)/                                 3.5%                3.5%                  3.5%
Development and Construction Costs                    0.0%                0.0                   9.7%

Reserve for Payment of Indebtedness                     0.0%                0.0%                  0.0%
-------------       -------------        -------------

Total Acquisition and Development Cost                 87.5%               87.5%                 87.5%

Percent Leveraged                                       0.0%                0.0%                 30.9%
=============       ============         =============

Date Offering Began                                12/31/97            03/22/99              01/30/98

Length of Offering                                   12 mo.              24 mo.                35 mo.

Months to Invest 90% of Amount Available
for Investment (Measured from Beginning of           20 mo.              26 mo.                21 mo.
Offering)

Number of Investors as of 12/31/01                    1,338               1,337                 7,422

(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.

55

TABLE II
(UNAUDITED)
COMPENSATION TO SPONSOR

The following sets forth the compensation received by Wells Capital and its
affiliates, including compensation paid out of offering proceeds and
compensation paid in connection with the ongoing operations of Wells Public
Programs having similar or identical investment objectives the offerings of
which have been completed since December 31, 1998. All figures are as of
December 31, 2001.

Wells Real
Wells Real     Wells Real      Estate             Other
Estate Fund    Estate Fund   Investment          Public
XI, L.P.       XII, L.P.   Trust, Inc./(1)/   Programs/(2)/
--------       ---------   --------------     -----------

Date Offering Commenced                                      12/31/97       03/22/99      01/30/98                --

Dollar Amount Raised                                     $ 16,532,802   $ 35,611,192  $307,411,112      $268,370,007
To Sponsor from Proceeds of Offering:
Underwriting Fees/(3)/                                  $    151,911   $    362,416  $  3,076,844      $  1,494,470
Acquisition Fees
Real Estate Commissions                                        --              --            --                --
Acquisition and Advisory Fees/(4)/                     $    578,648   $  1,246,392  $ 10,759,389      $ 12,644,556

Dollar Amount of Cash Generated from
Operations Before Deducting Payments to Sponsor/(5)/     $  3,494,174   $  3,508,128  $116,037,681      $ 58,169,461

Amount Paid to Sponsor from Operations:
Property Management Fee/(2)/                            $     90,731   $    113,238  $  1,899,140      $  2,257,424
Partnership Management Fee                                        --             --            --                --
Reimbursements                                          $    164,746   $    142,990  $  1,047,449      $  2,503,609
Leasing Commissions                                     $     90,731   $    113,238  $  1,899,140      $  2,257,426
General Partner Distributions                                     --             --            --                --
Other                                                             --             --            --                --

Dollar Amount of Property Sales and
Refinancing Payments to Sponsors:
Cash                                                             --             --            --                --
Notes                                                            --             --            --                --

Amount Paid to Sponsor from Property Sales
and Refinancing:
Real Estate Commissions                                          --             --            --                --
Incentive Fees                                                   --             --            --                --
Other                                                            --             --            --                --

(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.

56

(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.

57

TABLE III
(UNAUDITED)

The following five tables set forth operating results of Wells Public
Programs the offerings of which have been completed since December 31, 1996. The
information relates only to public programs with investment objectives similar
to those of the Wells REIT. All figures are as of December 31 of the year
indicated.

58

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND VIII, L.P.

2001          2000            1999           1998          1997
----          ----            ----           ----          ----

Gross Revenues/(1)/                                       $  1,521,303    $ 1,373,795    $ 1,360,497  $  1,362,513   $  1,204,018
Profit on Sale of Properties                                        --             --             --            --             --
Less: Operating Expenses/(2)/                                   87,597         85,732         87,301        87,092         95,201
Depreciation and Amortization/(3)/                             0              0          6,250         6,250          6,250
------------    -----------    -----------  ------------   ------------
Net Income GAAP Basis/(4)/                                $  1,433,706      1,288,063    $ 1,266,946  $  1,269,171   $  1,102,567
============    ===========    ===========  ============   ============
Taxable Income: Operations                                $  2,000,231      1,707,431    $ 1,672,844  $  1,683,192   $  1,213,524
============    ===========    ===========  ============   ============
Cash Generated (Used By):
Operations                                                   (85,637)       (68,968)       (87,298)      (63,946)         7,909
Joint Ventures                                             2,602,975      2,474,151      2,558,623     2,293,504      1,229,282
------------    -----------    -----------  ------------   ------------
$  2,517,338    $ 2,405,183      2,471,325  $  2,229,558   $  1,237,191
Less Cash Distributions to Investors:
Operating Cash Flow                                        2,507,159      2,405,183      2,379,215     2,218,400      1,237,191
Return of Capital                                                 --             --             --            --        183,315
Undistributed Cash Flow from Prior Year Operations                --         82,180             --            --             --
------------    -----------    -----------  ------------   ------------
Cash Generated (Deficiency) after Cash Distributions      $     10,179    $   (82,180)   $    92,110  $     11,158   $   (183,315)

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                     --             --             --            --             --
Increase in Limited Partner Contributions/(5)/                    --             --             --            --             --
------------    -----------    -----------  ------------   ------------
$     10,179    $   (82,180)   $    92,110  $     11,158   $   (183,315)

Use of Funds:
Sales Commissions and Offering Expenses                                          --             --            --             --
------------
Return of Limited Partner's Investment                            --             --             --            --          8,600
Property Acquisitions and Deferred Project Costs                                  0              0     1,850,859     10,675,811
------------    -----------    -----------  ------------   ------------
Cash Generated (Deficiency) after Cash
Distributions and Special Items                           $     10,179    $   (82,180)   $    92,110  $ (1,839,701)  $(10,867,726)
============    ===========    ===========  ============   ============

Net Income and Distributions Data per $1,000
Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                        51             84             91            91             73
- Operations Class B Units                                       (93)          (219)          (247)         (212)          (150)
Capital Gain (Loss)                                               --             --             --            --             --

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                        98             89             88            89             65
- Operations Class B Units                                      (190)          (169)          (154)          (131)           (95)
Capital Gain (Loss)                                               --             --             --            --             --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                 51             83             87            83             54
- Return of Capital Class A Units                                 38              7             --            --             --
- Return of Capital Class B Units                                 --             --             --            --             --
Source (on Cash Basis)
- Operations Class A Units                                        89             87             87            83             47
- Return of Capital Class A Units                                 --              3             --            --              7
- Operations Class B Units                                        --             --             --            --             --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                                 77             73             70            69             42
- Return of Capital Class A Units                                 12             17             17            16             12
- Return of Capital Class B Units                                 --             --             --            --             --

Amount (in Percentage Terms) Remaining Invested
in Program Properties at the end of the Last Year
Reported in the Table                                              100%

59

(1)  Includes $1,034,907 in equity in earnings of joint ventures and $169,111
from investment of reserve funds in 1997; $1,346,367 in equity in earnings
of joint ventures and $16,146 from investment of reserve funds in 1998;
$1,360,494 in equity in earnings of joint ventures and $3 from investment
of reserve funds in 1999; $1,363,174 in equity in earnings of joint
ventures and $10,621 from investment of reserve funds in 2000; and
$1,519,727 in equity in earnings of joint ventures and $1,576 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 $841,666 for 1997; $1,157,355 for 1998; $1,209,171 for
1999; $1,173,630 for 2000; and $992,830 for 2001.

(4)  In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $1,947,536 to Class A Limited
Partners, $(844,969) to Class B Limited Partners and $0 to the General
Partners for 1997; $2,431,246 to Class A Limited Partners, $(1,162,075) to
Class B Limited Partners and $0 to the General Partners for 1998;
$2,481,559 to Class A Limited Partners, $(1,214,613) to Class B Limited
Partners and $0 to the General Partners for 1999; $2,294,288 to Class A
Limited Partners, $(1,006,225) to Class B Limited Partners and $0 to the
General Partners for 2000; and $1,433,706 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
$2,295,381.

60

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND IX, L.P.

2001           2000           1999          1998           1997
----           ----           ----          ----           ----

Gross Revenues/(1)/                                         $ 1,874,290    $ 1,836,768    $ 1,593,734    $ 1,561,456  $   1,199,300
Profit on Sale of Properties                                         --             --             --             --             --
Less: Operating Expenses/(2)/                                   105,816         78,092         90,903        105,251        101,284
Depreciation and Amortization/(3)/                              0              0         12,500          6,250          6,250
-----------    -----------    -----------   ------------  -------------
Net Income GAAP Basis/(4)/                                  $ 1,768,474    $ 1,758,676    $ 1,490,331    $ 1,449,955  $   1,091,766
===========    ===========    ===========    ===========  =============
Taxable Income: Operations                                  $ 2,251,474    $ 2,147,094    $ 1,924,542    $ 1,906,011  $   1,083,824
===========    ===========    ===========    ===========  =============
Cash Generated (Used By):
Operations                                                 $  (101,573)   $   (66,145)   $   (94,403)   $    80,147  $     501,390
Joint Ventures                                               2,978,785      2,831,329      2,814,870      2,125,489        527,390
-----------    -----------    -----------    -----------  -------------
$ 2,877,212    $ 2,765,184    $ 2,720,467    $ 2,205,636  $   1,028,780
Less Cash Distributions to Investors:
Operating Cash Flow                                         2,877,212      2,707,684      2,720,467      2,188,189      1,028,780
Return of Capital                                                  --             --         15,528             --         41,834
Undistributed Cash Flow From Prior Year Operations            (20,074)            --         17,447             --          1,725
-----------    -----------    -----------   ------------  -------------
Cash Generated (Deficiency) after Cash Distributions        $   (20,074    $    57,500    $   (32,975)   $    17,447  $     (43,559)

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                      --             --             --             --             --
Increase in Limited Partner Contributions                          --             --             --             --             --
-----------    -----------    -----------    -----------  -------------
$   (20,074)   $    57,500    $   (32,975)   $    17,447  $     (43,559)
Use of Funds:
Sales Commissions and Offering Expenses                            --             --             --             --        323,039
Return of Original Limited Partner's Investment                    --             --             --             --            100
Property Acquisitions and Deferred Project Costs                   --         44,357        190,853      9,455,554     13,427,158
-----------    -----------    -----------   ------------  -------------
Cash Generated (Deficiency) after Cash Distributions and
Special Items                                             $   (20,074)   $    13,143    $  (223,828)   $(9,438,107) $ (13,793,856)
===========    ===========    ===========    ===========  =============

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                         57             93             89             88             53
- Operations Class B Units                                         (0)          (267)          (272)          (218)           (77)
Capital Gain (Loss)                                                --             --             --             --             --

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                         94             91             86             85             46
- Operations Class B Units                                       (195)          (175)          (164)          (123)           (47)
Capital Gain (Loss)                                                --             --             --             --             --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                   56             87             88             73             36
- Return of Capital Class A Units                                   36             --              2             --             --
- Return of Capital Class B Units                                   --             --             --             --             --
Source (on Cash Basis)
- Operations Class A Units                                          92             87             89             73             35
- Return of Capital Class A Units                                   --             --              1             --              1
- Operations Class B Units                                          --             --             --             --             --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                                   81             76             77             61             29
- Return of Capital Class A Units                                   11             11             13             12              7
- Return of Capital Class B Units                                   --             --             --             --             --

Amount (in Percentage Terms) Remaining Invested in Program
Properties at the end of the Last Year Reported in the Table        100%

61

(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.

62

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND X, L.P.

2001          2000           1999            1998           1997
----          ----           ----            ----           ----

Gross Revenues/(1)/                                         $ 1,559,026   $ 1,557,518    $ 1,309,281    $  1,204,597   $    372,507
Profit on Sale of Properties                                         --            --             --              --             --
Less: Operating Expenses/(2)/                                   109,177        81,338         98,213          99,034         88,232
Depreciation and Amortization/(3)/                              0             0         18,750          55,234          6,250
-----------   -----------    -----------    ------------   ------------
Net Income GAAP Basis/(4)/                                  $ 1,449,849   $ 1,476,180    $ 1,192,318    $  1,050,329   $    278,025
===========   ===========    ===========    ============   ============
Taxable Income: Operations                                  $ 1,688,775   $ 1,692,792      1,449,771    $  1,277,016   $    382,543
===========   ===========    ===========    ============   ============
Cash Generated (Used By):
Operations                                                   (100,983)      (59,595)       (99,862)        300,019        200,668
Joint Ventures                                              2,307,137     2,192,397      2,175,915         886,846             --
-----------   -----------    -----------    ------------   ------------
$ 2,206,154   $ 2,132,802      2,076,053    $  1,186,865   $    200,668
Less Cash Distributions to Investors:
Operating Cash Flow                                       $ 2,206,154     2,103,260      2,067,801       1,186,865             --
Return of Capital                                                  --            --             --          19,510             --
Undistributed Cash Flow From Prior Year Operations             25,647            --             --         200,668             --
-----------   -----------    -----------    ------------   ------------
Cash Generated (Deficiency) after Cash Distributions        $   (25,647)  $    29,542    $     8,252    $   (220,178)  $    200,668

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                     --            --             --              --             --
Increase in Limited Partner Contributions                         --            --             --              --     27,128,912
-----------   -----------    -----------    ------------   ------------
$   (25,647)  $    29,542    $     8,252    $   (220,178)  $ 27,329,580
Use of Funds:
Sales Commissions and Offering Expenses                            --            --             --         300,725      3,737,363
Return of Original Limited Partner's Investment                    --            --             --              --            100
Property Acquisitions and Deferred Project Costs                    0        81,022              0      17,613,067      5,188,485
-----------   -----------    -----------    ------------   ------------
Cash Generated (Deficiency) after Cash Distributions and
Special Items                                              $   (25,647)  $   (51,480)   $     8,252    $(18,133,970)  $ 18,403,632
===========   ===========    ===========    ============   ============

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                        99           104             97              85             28
- Operations Class B Units                                      (188)         (159)          (160)           (123)            (9)
Capital Gain (Loss)                                               --            --             --              --             --

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                        95            98             92              78             35
- Operations Class B Units                                      (130)         (107)          (100)            (64)             0
Capital Gain (Loss)                                               --            --             --              --             --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                   96            94             95              66             --
- Return of Capital Class A Units                                   --            --             --              --             --
- Return of Capital Class B Units                                   --            --             --              --             --
Source (on Cash Basis)
- Operations Class A Units                                          96            94             95              56             --
- Return of Capital Class A Units                                   --            --             --              10             --
- Operations Class B Units                                          --            --             --              --             --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                                   80            74             71              48             --
- Return of Capital Class A Units                                   16            20             24              18             --
- Return of Capital Class B Units                                   --            --             --              --             --

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year Reported in
the Table                                                           100%

63

(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.

64

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND XI, L.P.

2001            2000            1999            1998        1997
----            ----            ----            ----        ----

Gross Revenues/(1)/                                      $   960,676     $   975,850    $    766,586     $   262,729      N/A
Profit on Sale of Properties                                      --              --              --              --
Less: Operating Expenses/(2)/                                 90,326          79,861         111,058         113,184
Depreciation and Amortization/(3)/                            0              --          25,000           6,250
-----------     -----------    ------------     -----------
Net Income GAAP Basis/(4)/                               $   870,350     $   895,989    $    630,528     $   143,295
===========     ===========    ============     ===========
Taxable Income: Operations                               $ 1,038,394     $   944,775    $    704,108     $   177,692
===========     ===========    ============     ===========
Cash Generated (Used By):

Operations                                                (128,985)        (72,925)         40,906         (50,858)
Joint Ventures                                           1,376,673       1,333,337         705,394         102,662
-----------     -----------    ------------     -----------
$ 1,247,688     $ 1,260,412    $    746,300     $    51,804
Less Cash Distributions to Investors:
Operating Cash Flow                                      1,247,688       1,205,303         746,300          51,804
Return of Capital                                            4,809              --          49,761          48,070
Undistributed Cash Flow From Prior Year Operations          55,109              --              --              --
-----------     -----------    ------------     ------------
Cash Generated (Deficiency) after Cash Distributions     $   (59,918)    $    55,109    $    (49,761)    $   (48,070)

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                   --              --              --              --
Increase in Limited Partner Contributions                       --              --              --      16,532,801
-----------     -----------    ------------     -----------
$   (59,918)    $    55,109    $    (49,761)    $16,484,731
Use of Funds:
Sales Commissions and Offering Expenses                         --              --         214,609       1,779,661
Return of Original Limited Partner's Investment                 --              --             100              --
Property Acquisitions and Deferred Project Costs                --              --       9,005,979       5,412,870
-----------     -----------      ----------     -----------
Cash Generated (Deficiency) after Cash Distributions
and Special Items                                      $   (59,918)    $    55,109    $ (9,270,449)    $ 9,292,200
===========     ===========    ============     ===========

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                    101             103              77              50
- Operations Class B Units                                   (158)           (155)           (112)            (77)
Capital Gain (Loss)                                             --              --              --              --

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                    100              97              71              18
- Operations Class B Units                                   (100)           (112)            (73)            (17)
Capital Gain (Loss)                                             --              --              --              --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                               97              90              60               8
- Return of Capital Class A Units                               --              --              --              --
- Return of Capital Class B Units                               --              --              --              --
Source (on Cash Basis)
- Operations Class A Units                                      97              90              56               4
- Return of Capital Class A Units                               --              --               4               4
- Operations Class B Units                                      --              --              --              --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                               75              69              46               6
- Return of Capital Class A Units                               22              21              14               2
- Return of Capital Class B Units                               --              --              --              --

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year
Reported in the Table                                            100%

65

(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.

66

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND XII, L.P.

2001            2000            1999
----            ----            ----

Gross Revenues/(1)/                                         $  1,661,194    $    929,868     $   160,379
Profit on Sale of Properties                                          --              --              --
Less: Operating Expenses/(2)/                                    105,776          73,640          37,562
Depreciation and Amortization/(3)/                               0               0               0
------------    ------------     -----------
Net Income GAAP Basis/(4)/                                  $  1,555,418    $    856,228     $   122,817
============         =======         =======
Taxable Income: Operations                                  $  1,850,674    $    863,490     $   130,108
============         =======     ===========
Cash Generated (Used By):
Operations                                                     (83,406)        247,244           3,783
Joint Ventures                                               2,036,837         737,266          61,485
$  1,953,431    $    984,510     $    65,268

Less Cash Distributions to Investors:
Operating Cash Flow                                          1,953,431         779,818          62,934
Return of Capital                                                   --              --              --
Undistributed Cash Flow From Prior Year Operations             174,859              --              --
Cash Generated (Deficiency) after Cash Distributions        $   (174,859)   $    204,692     $     2,334

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                       --              --              --
Increase in Limited Partner Contributions                   10,625,431      15,617,575       9,368,186
$ 10,450,572    $ 15,822,267     $ 9,370,520
Use of Funds:
Sales Commissions and Offering Expenses                      1,328,179       1,952,197       1,171,024
Return of Original Limited Partner's Investment                     --              --             100
Property Acquisitions and Deferred Project Costs             9,298,085      16,246,485       5,615,262
Cash Generated (Deficiency) after Cash Distributions and
Special Items                                              $   (175,692)   $ (2,376,415)    $ 2,584,134
============    ============     ===========

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                          98              89              50
- Operations Class B Units                                        (131)            (92)            (56)
Capital Gain (Loss)                                                 --              --              --

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                          84              58              23
- Operations Class B Units                                         (74)            (38)            (25)
Capital Gain (Loss)                                                 --              --              --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                   77              41               8
- Return of Capital Class A Units                                   --              --              --
- Return of Capital Class B Units                                   --              --              --
Source (on Cash Basis)
- Operations Class A Units                                          77              41               8
- Return of Capital Class A Units                                   --              --              --
- Operations Class B Units                                          --              --              --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                                   55              13               6
- Return of Capital Class A Units                                   22              28               2
- Return of Capital Class B Units                                   --              --              --

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year
Reported in the Table                                                100%

67

(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.

68

TABLE V (UNAUDITED)
SALES OR DISPOSALS OF PROPERTIES

The following Table sets forth sales or other disposals of properties
by Wells Public Programs within the most recent three years. The information
relates to only public programs with investment objectives similar to those of
Wells Real Estate Investment Trust, Inc. All figures are as of December 31,
2001.

Date                                                                                Cost Of Properties
Date       Of                         Selling Price, Net Of                                  Including Closing And
Property      Acquired   Sale                  Closing Costs And GAAP Adjustments                                Soft Costs
====================================================================================================================================
Total
Cash                           Adjustments                           Acquisition
Received    Mortgage  Purchase    Resulting                               Cost,
Net Of     Balance    Money        From                  Original/1/    Capital
Closing     At Time   Mortgage   Application               Mortgage     Improvement,
Costs      Of Sale    Taken      Of GAAP       Total     Financing     Closing And      Total
Back By                                          Soft Costs/1/
Program
------------------------------------------------------------------------------------------------------------------------------------

3875          12/1/85  08/31/00  $  727,982     -0-        -0-         -0-     $  727,982/2/    -0-       $   647,648  $   647,648
Peachtree
Place,
Atlanta,
Georgia

Crowe's       12/31/86 01/11/01  $6,487,000     -0-        -0-         -0-     $6,487,000/3/    -0-       $ 9,388,869  $ 9,368,869
Crossing
Shopping
Center,
DeKalb
Count,
Georgia

Cherokee      10/30/87 10/01/01  $8,434,089     -0-        -0-         -0-     $8,434,089/4/    -0-       $10,650,750  $10,650,750
Commons
Shopping
Center,
Cherokee
County,
Georgia

Excess
(Deficiency)
Of Property
Operating
Cash
Receipts
Over
Cash
Property      Expenditures
==========================

==========================

3875
Peachtree
Place,
Atlanta,
Georgia

Crowe's
Crossing
Shopping
Center,
DeKalb
Count,
Georgia

Cherokee
Commons
Shopping
Center,
Cherokee
County,
Georgia

__________________

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.

69

WELLS REAL ESTATE INVESTMENT TRUST, INC.
SUPPLEMENT NO. 8 DATED APRIL 15, 2002 TO THE PROSPECTUS
DATED DECEMBER 20, 2000

This document supplements, and should be read in conjunction with, the
prospectus of Wells Real Estate Investment Trust, Inc. dated December 20, 2000,
as supplemented and amended by Supplement No. 1 dated February 5, 2001,
Supplement No. 2 dated April 25, 2001, Supplement No. 3 dated July 20, 2001,
Supplement No. 4 dated August 10, 2001, Supplement No. 5 dated October 15, 2001,
Supplement No. 6 dated January 20, 2002 and Supplement No. 7 dated March 30,
2002. When we refer to the "prospectus" in this supplement, we are also
referring to any and all supplements to the prospectus. Unless otherwise defined
in this supplement, capitalized terms used in this supplement shall have the
same meanings as set forth in the prospectus.

The purpose of this supplement is to describe the following:

(1)  Status of the offering of shares in Wells Real Estate Investment
Trust, Inc. (Wells REIT);

(2)  Acquisition of a six-story office building in Houston, Texas
(Transocean Houston Building);

(3)  Acquisition of a four-story office building in Duluth, Georgia
(Novartis Atlanta Building);

(4)  Acquisition of a three-story office and research and development
building in Farmington Hills, Michigan and a two-story office and
industrial building in Kalamazoo, Michigan (Dana Corporation
Buildings;

(5)  Acquisition of two connected one-story office buildings in Lakewood,
Colorado (Travelers Express Denver Buildings);

(6)  Revisions to the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" section of the prospectus;

(7)  Audited financial statements relating to the Novartis Atlanta Building
and Dana Corporation Buildings; and

(8)  Unaudited pro forma financial statements of Wells REIT reflecting the
acquisitions of the Transocean Houston Building, Novartis Atlanta
Building, Dana Corporation Buildings and Travelers Express Denver
Buildings.

Status of the Offering

We commenced our initial public offering of common stock on January 30,
1998. Our initial public offering was terminated on December 19, 1999. We
received approximately $132,181,919 in gross offering proceeds from the sale of
13,218,192 shares in our initial public offering. We commenced our second
offering of common stock on December 20, 1999. Our second public offering was
terminated on December 19, 2000. We received approximately $175,229,193 in gross
offering proceeds from the sale of 17,522,919 shares in our second public
offering.

Pursuant to the prospectus, we commenced our third offering of common stock
on December 20, 2000. As of April 15, 2002, we had received an additional
$840,447,424 in gross offering proceeds from the sale of 84,044,742 shares in
the third offering. Accordingly, as of April 15, 2002, we had received in

1

the aggregate approximately $1,147,858,536 in gross offering proceeds from the
sale of 114,785,854 shares of our common stock.

The Transocean Houston Building

Purchase of the Transocean Houston Building. On March 15, 2002, Wells Operating
-------------------------------------------
Partnership, L.P. (Wells OP), a Delaware limited partnership formed to acquire,
own, lease and operate real properties on behalf of the Wells REIT, purchased a
six-story office building in Houston, Harris County, Texas (Transocean Houston
Building). Wells OP purchased the Transocean Houston Building from Broadfield
Associates, L.P., which is not in any way affiliated with the Wells REIT or
Wells Capital, Inc. (Wells Capital), our advisor.

The purchase price for the Transocean Houston Building was $22,000,000. In
addition, Wells OP incurred acquisition expenses in connection with the purchase
of the Transocean Houston Building, including attorneys' fees, recording fees,
structural report and environmental report fees and other closing costs, of
$45,082.

An independent appraisal of the Transocean Houston Building was prepared by
CB Richard Ellis, Inc., real estate appraisers, as of February 5, 2002, pursuant
to which the market value of the real property containing the leased fee
interest subject to the leases described below was estimated to be $22,400,000,
in cash or terms equivalent to cash. This value estimate was based upon a number
of assumptions, including that the Transocean Houston Building will continue
operating at a stabilized level with 100% occupancy of the rentable area, and is
not necessarily an accurate reflection of the fair market value of the property
or the net proceeds which would result from an immediate sale of this property.
Wells OP also obtained an environmental report and an engineering inspection
report prior to the closing evidencing that the condition of the land and the
Transocean Houston Building were satisfactory.

Description of the Transocean Houston Building and Site. The Transocean Houston
-------------------------------------------------------
Building, which was completed in 1999, is a six-story office building containing
155,991 rentable square feet located on a 3.88 acre tract of land. The building
is constructed using a composite frame with a metal deck and concrete slab at
elevated levels and a reinforced concrete foundation. The exterior walls are
made of reflective glass with color accent panels. The common area interior
walls consists of wall coverings with granite around the elevators and the
ceiling consists of gypsum board. In addition, the building has three elevators
and approximately 550 paved parking spaces, which include 430 garage spaces and
120 surface spaces.

The Transocean Houston Building is located at 1311 Broadfield Avenue in
Houston, Harris County, Texas in the western portion of the city of Houston. The
Transocean Houston Building is accessible from Interstate 10 and Highway 6. The
city of Houston is one of North America's major international business centers
with 65 consulates, 27 foreign chambers of commerce and trade associations and
57 foreign bank offices.

The entire Transocean Houston Building is under net lease agreements (i.e.,
operating costs and maintenance costs are paid by the tenant) with Transocean
Deepwater Offshore Drilling, Inc. (Transocean) which occupies 103,260 rentable
square feet (66%), and Newpark Drilling Fluids, Inc. (Newpark) which occupies
52,731 rentable square feet (34%).

The Transocean Lease. The Transocean lease commenced in December 2001 and
--------------------
expires in March 2011. The current annual base rent payable under the Transocean
lease is $2,110,035. Transocean, at its option, has the right to extend the
initial term of its lease for either (1) two additional five-year periods, or
(2) one additional ten-year period, at the then-current market rental rate. In
addition, Transocean has an expansion option and a right of first refusal for up
to an additional 52,731 rentable square feet.

2

Transocean is an offshore drilling company specializing in technically
demanding segments of the offshore drilling industry. The Transocean lease is
guaranteed by Transocean Sedco Forex, Inc., one of the world's largest offshore
drilling companies whose shares are traded on the NASDAQ. Transocean Sedco
Forex, Inc. reported a net worth, as of September 30, 2001, of approximately
$10.86 billion.

The base rent payable under the Transocean lease is as follows:

------------------------------------------------------------------
Lease Period                   Annual Rent     Monthly Rent
------------------------------------------------------------------
December 2001-August 2003            $2,110,635       $175,836
------------------------------------------------------------------
September 2003-August 2005           $2,161,815       $180,151
------------------------------------------------------------------
September 2005-March 2011            $2,291,265       $190,939
------------------------------------------------------------------

Pursuant to the Transocean lease, Transocean is required to pay its
proportionate share of taxes relating to the Transocean Houston Building and its
proportionate share of operating costs, including, but not limited to, those
associated with water, gas, steam, electricity, air conditioning, telephone,
garbage removal, power and other utilities and services used by Transocean.
Wells OP, as the landlord, will be responsible for building maintenance and
repairs to the structural elements, the building systems and the roof of the
Transocean Houston Building. In addition, Wells OP will be responsible for
maintenance and repair of all common areas of the Transocean Houston Building,
including landscaping.

The Newpark Lease. The Newpark lease commenced in August 1999 and expires in
-----------------
August 2009. The current annual base rent payable under the Newpark lease is
$1,153,227.

Newpark is a full service drilling fluids processing, management and waste
disposal company. The Newpark lease is guaranteed by Newpark Resources, Inc.,
which provides drilling fluids services to the oil and gas production industry,
primarily in North America. Newpark Resources, Inc. reported a net worth, as of
December 31, 2001, of approximately $294 million.

The base rent payable under the Newpark lease is as follows:

------------------------------------------------------------
Lease Years          Annual Rent            Monthly Rent
------------------------------------------------------------
2003              $1,153,227               $96,102
------------------------------------------------------------
2004              $1,132,135               $94,345
------------------------------------------------------------
2005              $1,132,662               $94,388
------------------------------------------------------------
2006              $1,165,355               $97,113
------------------------------------------------------------
2007-2010           $1,122,116               $93,510
------------------------------------------------------------

Pursuant to the Newpark lease, Newpark is required to pay its proportionate
share of taxes relating to the Transocean Houston Building and its proportionate
share of operating costs, including, but not limited to, those associated with
water, gas, steam, electricity, air conditioning, telephone, garbage removal,
power and other utilities and services used by Newpark. Wells OP, as the
landlord, will be responsible for building maintenance and repairs to all common
areas and to the structural elements, the building systems and the roof of the
Transocean Houston Building. In addition, Wells OP will be responsible for
maintenance and repair of all common areas of the Transocean Houston Building,
including landscaping.

3

The Novartis Atlanta Building

Purchase of the Novartis Atlanta Building. On March 28, 2002, Wells OP purchased
-----------------------------------------
a four-story office building located in Duluth, metropolitan Atlanta, Georgia
(Novartis Atlanta Building). Wells OP purchased the Novartis Atlanta Building
from Technology Park/Atlanta Inc., which is not in any way affiliated with the
Wells REIT or Wells Capital, our advisor.

The purchase price for the Novartis Atlanta Building was $15,000,000.
In addition, Wells OP incurred acquisition expenses in connection with the
purchase of the Novartis Atlanta Building, including attorneys' fees, recording
fees, structural report and environmental report fees and other closing costs,
of $45,996.

An independent appraisal of the Novartis Atlanta Building was prepared
by CB Richard Ellis, Inc., real estate appraisers, as of March 12, 2002,
pursuant to which the market value of the real property containing the leased
fee interest subject to the lease described below was estimated to be
$15,000,000, in cash or terms equivalent to cash. This value estimate was based
upon a number of assumptions, including that the Novartis Atlanta Building will
continue operating at a stabilized level with 100% occupancy of the rentable
area, and is not necessarily an accurate reflection of the fair market value of
the property or the net proceeds which would result from an immediate sale of
this property. Wells OP also obtained an environmental report and an engineering
inspection report prior to the closing evidencing that the condition of the land
and the Novartis Atlanta Building were satisfactory.

Description of the Novartis Atlanta Building and Site. The Novartis Atlanta
-----------------------------------------------------
Building, which was completed in 2001, is a four-story office building
containing 100,087 rentable square feet located on a 7.57 acre tract of land.
The building is constructed using a steel frame with steel beams and steel deck
and a reinforced concrete foundation. The exterior walls are made of reflective
glass panels with brick and masonry accents. The common area interior walls
consist of cloth wall covering and extensive wood trim in the ground floor lobby
and textured and painted gypsum board in the upper levels. The ceiling consists
of textured and painted gypsum board with suspended acoustic tiles. In addition,
the building has two elevators located in the main lobby area and approximately
419 paved parking spaces.

The Novartis Atlanta Building is located at 11695 Johns Creek Parkway
in Duluth, metropolitan Atlanta, Georgia in the northeastern portion of Fulton
County, approximately 25 miles north of the Atlanta central business district.
The Novartis Atlanta Building is five miles east of Georgia Highway 400 and is
easily accessible from Peachtree Parkway (Georgia Highway 141). The Atlanta
metropolitan area is headquarters for many major companies including Delta Air
Lines, BellSouth Corporation, The Home Depot and United Parcel Service.

The Novartis Lease. The entire Novartis Atlanta Building is currently under a
------------------
net lease agreement with Novartis Opthalmics, Inc. (Novartis) that commenced in
August 2001 and expires in July 2011. The current annual base rent payable under
the Novartis lease is $1,426,240. Novartis, at its option, has the right to
extend the initial term of its lease for three additional five-year periods at
the then-current market rental rate. In addition, Novartis may terminate the
lease at the end of the fifth lease year by paying a $1,500,000 termination fee.

The Novartis lease is guaranteed by Novartis' parent company, Novartis
Corporation. Novartis is a global leader in research, development and
manufacturing of innovative ophthalmic pharmaceuticals that assist in the
treatment of glaucoma, Age-related Macular Degeneration, infections,
inflammation, ocular allergies, dry eye and other diseases and disorders of the
eye. Novartis Corporation, a public company whose shares are traded on the NYSE,
is a world leader in healthcare with core businesses in pharmaceuticals,
consumer health, generics, eye-care and animal health. Novartis Corporation
reported a

4

net worth, as of December 31, 2001, of approximately $28.1 billion.

The base rent payable under the Novartis lease is as follows:

----------------------------------------------------------------------
Lease Year           Annual Rent                    Monthly Rent

----------------------------------------------------------------------
1                 $1,426,240                       $118,853
----------------------------------------------------------------------
2                 $1,454,765                       $121,230
----------------------------------------------------------------------
3                 $1,483,860                       $123,655
----------------------------------------------------------------------
4                 $1,513,537                       $126,128
----------------------------------------------------------------------
5                 $1,543,808                       $128,651
----------------------------------------------------------------------
6                 $1,574,684                       $131,224
----------------------------------------------------------------------
7                 $1,606,178                       $133,848
----------------------------------------------------------------------
8                 $1,638,301                       $136,525
----------------------------------------------------------------------
9                 $1,671,067                       $139,256
----------------------------------------------------------------------
10                 $1,704,489                       $142,041
----------------------------------------------------------------------

Pursuant to the Novartis lease, Novartis is required to pay all taxes,
assessments and governmental charges relating to the Novartis Atlanta Building
and all operating costs, expenses and disbursements including, but not limited
to, employees, supplies and materials, insurance, repairs and general
maintenance, accounting fees, management fees, window cleaning, landscaping,
necessary capital expenditures, water, sewer, heating, lighting, ventilation,
air conditioning, electricity and other utilities and services benefiting the
Novartis Atlanta Building. Novartis may make non-structural alterations,
additions and improvements to the Novartis Atlanta Building and may install or
attach fixtures without Wells OP's consent only so long as they do not affect
the structural components of the Novartis Atlanta Building or overburden the
systems therein. Wells OP, as the landlord, will be responsible for building
repairs to the roof, exterior walls, window frames, windows, foundation,
structural elements, irrigation facilities, parking lot lights, roads,
driveways, parking areas, grounds, utilities and landscaping relating to the
Novartis Atlanta Building.

The Dana Corporation Buildings

Purchase of the Dana Corporation Buildings. On March 29, 2002, Wells OP
------------------------------------------
purchased all of the membership interests in Danacq Farmington Hills, LLC and
Danacq Kalamazaoo, LLC, two Delaware limited liability companies which own,
respectively, a three-story office and research and development building located
in Farmington Hills, Oakland County, Michigan (Dana Detroit Building) and a
two-story office and industrial building located in Kalamazoo, Kalamazoo County,
Michigan (Dana Kalamazoo Building). Wells OP purchased the Dana Corporation
Buildings from Gebam, Inc., which is not in any way affiliated with the Wells
REIT or Wells Capital, our advisor.

The purchase price for the Dana Corporation Buildings was $41,950,000.
In addition, Wells OP incurred acquisition expenses in connection with the
purchase of the Dana Corporation Buildings, including commissions, tenant lease
amendment payments, attorneys' fees, recording fees, structural report and
environmental report fees and other closing costs, of $862,669.

Independent appraisals of the Dana Detroit Building and the Dana
Kalamazoo Building were prepared by CB Richard Ellis, Inc., real estate
appraisers, as of March 15, 2002, and March 14, 2002, respectively, pursuant to
which the respective market value of the real property containing the leased fee
interest subject to the leases described below was estimated to be $24,200,000
and $18,700,000, in cash or terms equivalent to cash. These value estimates were
based upon a number of assumptions, including that the Dana Corporation
Buildings will continue operating at a stabilized level with 100% occupancy of

5

the rentable area, and is not necessarily an accurate reflection of the fair
market value of the property or the net proceeds which would result from an
immediate sale of this property. Wells OP also obtained environmental reports
and engineering inspection reports prior to the closing evidencing that the
condition of the land and the Dana Corporation Buildings were satisfactory.

Description of the Dana Detroit Building and Site. The Dana Detroit Building,
-------------------------------------------------
which was completed in 1999, is a three-story office and research and
development building containing 112,480 rentable square feet located on a 7.8
acre tract of land. The building is constructed using a steel frame with steel
beams and steel deck and a reinforced concrete foundation. The exterior walls
are made of brick veneer and the roof is made of flat rubber with balast and
pitched shingles. The interior office walls consist of textured and painted
sheetrock and the ceilings are equipped with acoustic tile. The interior
research area floors and walls consist of concrete with exposed steel webbed
ceilings. In addition, the building has one elevator located in the center of
the building and approximately 257 paved parking spaces. The landscaping at the
facility contains grass and natural forest landscaping.

The Dana Detroit Building is located at 27404 Drake Road in Farmington
Hills, Michigan in Southwest Oakland County about 25 miles northwest of the
Detroit central business district and within the Detroit metropolitan area. The
Dana Detroit Building is easily accessible from Interstate Highway 696 and
Interstate 275. The Detroit metropolitan area serves as the headquarters for
three of the top five industrial corporations and 12 of the top 500 businesses
in the country.

The Dana Detroit Lease. The entire Dana Detroit Building is leased to Dana
----------------------
Corporation (Dana). The Dana Detroit lease is a net lease that commenced in
October 2001 and expires in October 2021. The current annual base rent payable
under the Dana Detroit lease is $2,330,600. Dana, at its option, has the right
to extend the initial term of its lease for six additional five-year periods at
the then-current market rental rate. Dana may terminate the lease at any time
during the initial lease term after the 11/th/ lease year, subject to certain
conditions.

Dana is one of the world's largest suppliers of components, modules and
complete systems to global vehicle manufacturers and their related aftermarkets.
Dana operates approximately 300 major facilities in 34 countries and employs
nearly 70,000 people. Dana reported a net worth, as of December 31, 2001, of
approximately $1.9 billion.

The base rent payable under the Dana Detroit lease is as follows:

------------------------------------------------------------------
Lease Years         Annual Rent         Monthly Rent

------------------------------------------------------------------
1-10              $2,330,600           $194,217
------------------------------------------------------------------
11-20             $2,563,660           $213,638
------------------------------------------------------------------

Pursuant to the Dana Detroit lease, Dana is required to pay all taxes
relating to the Dana Detroit Building and all operating costs, including, but
not limited to, those associated with water, gas, steam, electricity, air
conditioning, telephone, garbage removal, snow removal, common area maintenance,
landscaping, power and other utilities and services used by Dana. Dana is also
required to pay for all repair and maintenance costs, including but not limited
to, window cleaning, security personnel, elevator maintenance, HVAC maintenance,
janitorial service, waste recycling service and landscaping maintenance. In
addition, Dana will be responsible for building repairs to the structural
elements, the building systems, exterior walls, windows and the roof of the Dana
Detroit Building.

6

Description of the Dana Kalamazoo Building and Site. The Dana Kalamazoo
---------------------------------------------------
Building, which was completed in 1999, is a two-story office and industrial
building containing 147,004 rentable square feet located on a 27.5 acre tract of
land. The building is constructed using a steel frame with steel beams and steel
deck and a reinforced concrete foundation. The exterior walls are made of brick
veneer. The interior office walls consist of textured and painted sheetrock and
the ceilings are equipped with acoustic tile. The interior research area floors
and walls consist of concrete with exposed steel webbed ceilings. In addition,
the building has one elevator and four stairwells and approximately 344 paved
parking spaces. The landscaping at the facility includes grass and natural
forest landscaping.

The Dana Kalamazoo Building is located at 6938 Elm Valley Drive in
Kalamazoo, Michigan, approximately 20 miles west of Battle Creek, Michigan and
40 miles south of Grand Rapids, Michigan. The Dana Kalamazoo Building is easily
accessible from Interstate 94, which links Chicago with Detroit. Some of
Kalamazoo's major employers include Pharmacia and Upjohn, Western Michigan
University (with an enrollment of approximately 30,000 students) and National
City Bank.

The Dana Kalamazoo Lease. The entire Dana Kalamazoo Building is also leased to
------------------------
Dana. The Dana Kalamazoo lease is a net lease that commenced in October 2001 and
expires in October 2021. The current annual base rent payable under the Dana
Kalamazoo lease is $1,842,800. Dana, at its option, has the right to extend the
initial term of its lease for six additional five-year periods at the
then-current market rental rate. Dana may terminate the lease at any time during
the initial lease term after the sixth lease year and before the 19th lease
year, subject to certain conditions.

The base rent payable under the Dana Kalamazoo lease is as follows:

--------------------------------------------------------------------
Lease Years        Annual Rent              Monthly Rent

--------------------------------------------------------------------
1-10             $1,842,800                $153,567
--------------------------------------------------------------------
11-20            $2,027,080                $168,923
--------------------------------------------------------------------

Pursuant to the Dana Kalamazoo lease, Dana is required to pay all taxes
relating to the Dana Kalamazoo Building and all operating costs, including, but
not limited to, those associated with water, gas, steam, electricity, air
conditioning, telephone, garbage removal, snow removal, common area maintenance,
landscaping, power and other utilities and services used by Dana. Dana is also
required to pay for all repair and maintenance costs, including but not limited
to, window cleaning, security personnel, elevator maintenance, HVAC maintenance,
janitorial service, waste recycling service and landscaping maintenance. In
addition, Dana will be responsible for building repairs to the structural
elements, the building systems, exterior walls, windows and the roof of the Dana
Kalamazoo Building.

The Travelers Express Denver Buildings

Purchase of the Travelers Express Denver Buildings. On April 10, 2002, Wells OP
--------------------------------------------------
purchased two connected one-story office buildings located in Lakewood,
Metropolitan Denver, Colorado (Travelers Express Denver Buildings). Wells OP
purchased the Travelers Express Denver Buildings from Opus Northwest, L.L.C.,
which is not in any way affiliated with the Wells REIT or Wells Capital, our
advisor.

The purchase price for the Travelers Express Denver Buildings was
$10,395,845. In addition, Wells OP incurred acquisition expenses in connection
with the purchase of the Travelers Express Denver Buildings, including
attorneys' fees, recording fees, structural report and environmental report fees
and other closing costs, of $159,646.

An independent appraisal of the Travelers Express Denver Buildings was
prepared by Integra Joseph Farner & Company, real estate appraisers, as of
October 17, 2001, pursuant to which the market value of the real property
containing the leased fee interest subject to the lease described below was

7

estimated to be $10,700,000, in cash or terms equivalent to cash. This value
estimate was based upon a number of assumptions, including that the Travelers
Express Denver Buildings will continue operating at a stabilized level with 100%
occupancy of the rentable area, and is not necessarily an accurate reflection of
the fair market value of the property or the net proceeds which would result
from an immediate sale of this property. Wells OP also obtained an environmental
report and an engineering inspection report prior to the closing evidencing that
the condition of the land and the Travelers Express Denver Buildings were
satisfactory.

Description of the Travelers Express Denver Buildings and Site. The Travelers
--------------------------------------------------------------
Express Denver Buildings, which were completed in 2002, are two connected
one-story office buildings containing 68,165 rentable square feet located on a
7.88 acre tract of land. The buildings are constructed using a pre-cast concrete
and steel frame and a reinforced concrete foundation. The exterior walls are
made of concrete panels and a storefront window system. The interior walls
consist of gypsum board and the ceilings are equipped with acoustic tile. In
addition, the building has 350 paved parking spaces.

The Travelers Express Denver Buildings are located at 3940 South Teller
Street in Lakewood, Metropolitan Denver, Colorado in the Academy Business Park
approximately 15 miles southwest of downtown Denver. The Denver metropolitan
area's largest employers include Qwest Communications International, Safeway
Inc., United Airlines and AT&T Corp.

The Travelers Lease. The Travelers Express Denver Buildings are currently
-------------------
under a net lease agreement with Travelers Express Company, Inc. (Travelers)
that commenced in April 2002 and expires in March 2012. The current annual base
rent payable under the Travelers lease is $1,012,250. Travelers, at its option,
has the right to extend the initial term of its lease for two additional
five-year periods. The annual base rent for the first three years of the first
renewal term shall be $19 per rentable square foot and the annual base rent for
the last two years shall be $20.50 per rentable square foot. The annual base
rent for the second renewal term shall be at the then-current market rental rate
for each year of the renewal term. In addition, Travelers may terminate the
Travelers lease at the end of the seventh lease year by paying a termination fee
of $1,040,880. Travelers also has the right to expand the Travelers Express
Denver Buildings between 10% and 20% by providing notice on or before May 1,
2004, subject to certain limitations and potential acceleration.

Travelers is the largest money order processor and second largest
money-wire transfer company in the nation, processing more than 775 million
transactions per year, including official checks and share drafts for financial
institutions. Travelers is a wholly owned subsidiary of Viad Corporation, a
public company whose shares are traded on the NYSE. Travelers reported a net
worth, as of December 31, 2000, of approximately $652 million.

The base rent payable under the Travelers lease is as follows:

---------------------------------------------------------------------
Lease Years       Annual Rent               Monthly Rent

---------------------------------------------------------------------
1-3            $1,012,250                   $84,354
---------------------------------------------------------------------
4-5            $1,090,640                   $90,887
---------------------------------------------------------------------
6-8            $1,169,030                   $97,419
---------------------------------------------------------------------
9-10           $1,239,921                  $103,327
---------------------------------------------------------------------

Pursuant to the Travelers lease, Travelers is required to pay all
taxes, assessments and governmental charges relating to the Travelers Express
Denver Buildings and all operating costs, expenses and disbursements including,
but not limited to, insurance, repairs and general maintenance, window washing,
janitorial, trash and rubbish removal costs, water, sewer, heating, lighting,
ventilation, air conditioning, electricity, and other utilities and services
benefiting the Travelers Express Denver

8

Buildings. Travelers may make non-structural alterations, additions and
improvements to the Travelers Express Denver Buildings and may install or attach
fixtures without Wells OP's consent only so long as they do not affect the
structural components of the Travelers Express Denver Buildings or overburden
the systems therein. Wells OP, as the landlord, will be responsible for building
repairs to the roof, exterior walls, foundation, structural elements, lobbies,
elevators, stairways, restrooms and HVAC system, driveways, parking areas,
grounds, relating to the Travelers Express Denver Buildings.

Property Management Fees

Wells Management Company, Inc. (Wells Management), an affiliate of the
Wells REIT, and our advisor, will manage and lease the Transocean Houston
Building, the Novartis Atlanta Building, the Dana Corporation Buildings and the
Travelers Express Denver Buildings. Wells Management will be paid management and
leasing fees in the amount of 4.5% of gross revenues from the Transocean Houston
Building, the Novartis Atlanta Building, the Dana Corporation Buildings and the
Travelers Express Denver Buildings, subject to certain limitations.

Management's Discussion and Analysis of Financial Condition and Results of
Operation

The following information should be read in conjunction with the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" section beginning on page 98 of the prospectus, as supplemented by
Supplement No. 7 dated March 30, 2002.

We began active operations on June 5, 1998, when we received and
accepted subscriptions for 125,000 shares pursuant to our initial public
offering, which commenced on January 30, 1998. We terminated our initial public
offering on December 19, 1999. Of the $132,181,919 raised in the initial
offering, we invested a total of $111,032,812 in properties. On December 20,
1999, we commenced a second public offering of up to 22,200,000 shares of common
stock. We terminated our second offering on December 19, 2000. Of the
$175,229,193 raised in the second offering, we invested a total of $147,192,522
in properties.

Pursuant to the prospectus, we commenced this third offering of shares
of our common stock on December 20, 2000. As of April 15, 2002, we had received
an additional $840,447,424 in gross offering proceeds from the sale of
84,044,742 shares in the third offering. As of April 15, 2002, we had raised in
the aggregate a total of $1,147,858,536 in offering proceeds through the sale of
114,785,854 shares of common stock. As of April 15, 2002, we had paid a total of
$39,874,315 in acquisition and advisory fees and acquisition expenses, had paid
a total of $130,797,646 in selling commissions and organizational and offering
expenses, had expended a total of $735,823,145 for investments in real estate
joint ventures and acquisitions of real property, had utilized $8,592,385 for
redemptions of stock pursuant to our share redemption program, and were holding
net offering proceeds of $232,771,045 available for investment in additional
properties.

Financial Statements

The Statements of Revenues Over Certain Operating Expenses of the
Novartis Atlanta Building and the Dana Corporation Buildings for the year ended
December 31, 2001, which are included in this supplement and elsewhere in the
registration statement, have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
included in this supplement in reliance upon the authority of said firm as
experts in giving said reports.

The Pro Forma Balance Sheet of the Wells REIT, as of December 31,
2001, and the Pro Forma Statement of Income (loss) for the year ended December
31, 2001, which are included in this supplement, have not been audited.

9

INDEX TO FINANCIAL STATEMENTS

Page
----

Novartis Atlanta Building

Report of Independent Accountants                                                       11

Statements of Revenues Over Certain Operating Expenses                                  12
for the year ended December 31, 2001 (audited)

Notes to Statements of Revenues Over Certain Operating                                  13
Expenses for the year ended December 31, 2001 (audited)

Dana Corporation Buildings

Report of Independent Accountants                                                       14

Statements of Revenues over Certain Operating Expenses                                  15
for the year ended December 31, 2001 (audited)

Notes to Statements of Revenues over Certain Operating Expenses                         16
for the year ended December 31, 2001 (audited)

Wells Real Estate Investment Trust, Inc. and Subsidiary

Unaudited Pro Forma Financial Statements
----------------------------------------

Summary of Unaudited Pro Forma Financial Statements                                     17

Pro Forma Balance Sheet as of December 31, 2001                                         18

Pro Forma Statement of Income (Loss) for the year ended                                 20
December 31, 2001

10

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the NOVARTIS ATLANTA BUILDING for the year ended December 31, 2001.
This financial statement is the responsibility of management. Our responsibility
is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. These standards require that we plan and perform the audit
to obtain reasonable assurance about whether the statement of revenues over
certain operating expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statement of revenues over certain operating expenses. An audit also
includes assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Novartis
Atlanta Building after acquisition by the Wells Operating Partnership, L.P., a
subsidiary of Wells Real Estate Investment Trust, Inc. The accompanying
statement of revenues over certain operating expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission and is not intended to be a complete presentation of the
Novartis Atlanta Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Novartis Atlanta Building for the year ended December 31, 2001
in conformity with accounting principles generally accepted in the United
States.

/s/ ARTHUR ANDERSEN LLP

Atlanta, Georgia
April 12, 2002

11

NOVARTIS ATLANTA BUILDING

STATEMENT OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2001

RENTAL REVENUES                                                        $650,705

OPERATING EXPENSES, net of reimbursements                                 4,929
------------
REVENUES OVER CERTAIN OPERATING EXPENSES                               $645,776
============

The accompanying notes are an integral part of this statement.

12

NOVARTIS ATLANTA BUILDING

NOTES TO STATEMENT OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2001

1.       ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On March 28, 2002, the Wells Operating Partnership, L.P. ("Wells OP")
acquired the Novartis Atlanta Building from Technology Park/Atlanta,
Inc. ("Technology Park"). Wells OP is a Delaware limited partnership
formed to acquire, own, lease, operate, and manage real properties on
behalf of Wells Real Estate Investment Trust, Inc., a Maryland
corporation. As the sole general partner of Wells OP, Wells Real Estate
Investment Trust, Inc. possesses full legal control and authority over
the operations of Wells OP.

Novartis Opthalmics, Inc ("Novartis") currently occupies the entire
100,087 rentable square feet of the four-story office building under a
net lease agreement (the "Novartis Lease"). Novartis is a wholly owned
subsidiary of Novartis Corporation, which is the guarantor of the
Novartis Lease. Novartis Corporation is a public entity traded on the
New York Stock Exchange. Technology Park's interest in the Novartis
Lease was assigned to Wells OP at the closing. The initial term of the
Novartis Lease commenced on August 1, 2001 and expires on July 31,
2011. Novartis has the right to extend the Novartis Lease for up to
three consecutive renewal terms of five years each at a rate equal to
the then current fair market rental rate. Under the Novartis Lease,
Novartis is required to pay, as additional monthly rent, all operating
costs, including but not limited to water, sewer, heating, air
conditioning, lighting, property and personal insurance and property
taxes. In addition, Novartis is responsible for all supplies,
materials, wages and salaries and all attributable overhead expenses
related to routine maintenance and repairs to the Novartis Atlanta
Building. Wells OP will be responsible for the repair and replacement
of the structural portions of the building, including, roof, exterior
walls, window frames, foundation, irrigation, parking lots, roads,
walkways and landscaping of the Novartis Atlanta Building.

Rental Revenues

Rental income is recognized on a straight-line basis over the terms of
the respective lease.

2.       BASIS OF ACCOUNTING

The accompanying statement of revenues over certain operating expenses
is presented in conformity with accounting principles generally
accepted in the United States and in accordance with the applicable
rules and regulations of the Securities and Exchange Commission for
real estate properties acquired. Accordingly, this statement excludes
certain historical expenses, such as depreciation, interest, and
management fees. Therefore, this statement is not comparable to the
operations of the Novartis Atlanta Building after acquisition by Wells
OP.

13

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the DANA CORPORATION BUILDINGS for the year ended December 31,
2001. This financial statement is the responsibility of management. Our
responsibility is to express an opinion on this financial statement based on our
audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. These standards require that we plan and perform the audit
to obtain reasonable assurance about whether the statement of revenues over
certain operating expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statement of revenues over certain operating expenses. An audit also
includes assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Dana
Corporation Buildings after acquisition by the Wells Operating Partnership,
L.P., a subsidiary of Wells Real Estate Investment Trust, Inc. The accompanying
statement of revenues over certain operating expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission and is not intended to be a complete presentation of the
Dana Corporation Buildings' revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Dana Corporation Buildings for the year ended December 31, 2001
in conformity with accounting principles generally accepted in the United
States.

/s/ ARTHUR ANDERSEN LLP

Atlanta, Georgia
April 12, 2002

14

DANA CORPORATION BUILDINGS

STATEMENT OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2001

RENTAL REVENUES                                                       $730,345

OPERATING EXPENSES, net of reimbursements                                    0
-------------
REVENUES OVER CERTAIN OPERATING EXPENSES                              $730,345
=============

The accompanying notes are an integral part of this statement.

15

DANA CORPORATION BUILDINGS

NOTES TO STATEMENT OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2001

1.       ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On March 29, 2002, the Wells Operating Partnership, L.P. ("Wells OP")
acquired the Dana Corporation Buildings from GEBAM, Inc. ("GEBAM").
Wells OP is a Delaware limited partnership formed to acquire, own,
lease, operate, and manage real properties on behalf of Wells Real
Estate Investment Trust, Inc., a Maryland corporation. As the sole
general partner of Wells OP, Wells Real Estate Investment Trust, Inc.
possesses full legal control and authority over the operations of Wells
OP.

The Dana Corporation Buildings are comprised of Dana Corporation
Detroit, which consists of 112,480 square feet in one three-story
building and Dana Corporation Kalamazoo, which consists of 147,004
square feet in one two-story building. Dana Corporation, Inc ("Dana")
currently occupies the entire 259,484 rentable square feet of the two
office buildings under two net lease agreements (the "Dana Leases").
Dana Corporation is a public entity traded on the New York Stock
Exchange. GEBAM's interest in the Dana Leases was assigned to Wells OP
at the closing. The initial term of the Dana Leases commenced on
October 26, 2001 and expires on October 31, 2021. Dana has the right to
extend the Dana Leases for up to six successive renewal terms of five
years each at the then current market rental rate. Under the Dana
Leases, Dana is required to pay, as additional monthly rent, all ad
valorem real estate taxes, insurance premiums, utility charges,
maintenance, repair and replacement expenses. In addition, Dana is
responsible for maintaining the buildings in good order and repair,
subject to ordinary wear and tear, including necessary repairs,
replacements and renewals, whether interior or exterior, structural or
nonstructural.

Rental Revenues

Rental income is recognized on a straight-line basis over the terms of
the respective leases.

2.       Basis of Accounting

The accompanying statement of revenues over certain operating expenses
is presented in conformity with accounting principles generally
accepted in the United States and in accordance with the applicable
rules and regulations of the Securities and Exchange Commission for
real estate properties acquired. Accordingly, this statement excludes
certain historical expenses, such as depreciation, interest, and
management fees. Therefore, this statement is not comparable to the
operations of the Dana Corporation Buildings after acquisition by Wells
OP.

16

WELLS REAL ESTATE INVESTMENT TRUST, INC.

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The following unaudited pro forma balance sheet as of December 31, 2001 has been
prepared to give effect to the acquisitions of the Arthur Andersen Building, the
Transocean Houston Building, the Novartis Atlanta Building, the Dana Corporation
Buildings and the Travelers Express Denver Buildings by Wells OP as if the
acquisitions occurred on December 31, 2001.

The following unaudited pro forma statement of income for the year ended
December 31, 2001 has been prepared to give effect to the acquisitions of the
Arthur Andersen Building, the Transocean Houston Building, the Novartis Atlanta
Building, and the Dana Corporation Buildings as if the acquisitions occurred on
January 1, 2001. The Travelers Express Denver Buildings had no operations during
2001.

Wells OP is a Delaware limited partnership that was organized to own and operate
properties on behalf of the Wells Real Estate Investment Trust, Inc., a Maryland
corporation. As the sole general partner of Wells OP, Wells Real Estate
Investment Trust, Inc. possesses full legal control and authority over the
operations of Wells OP. Accordingly, the accounts of Wells OP are consolidated
with the accompanying pro forma financials statements of Wells Real Estate
Investment Trust, Inc.

These unaudited pro forma financial statements are prepared for informational
purposes only and are not necessarily indicative of future results or of actual
results that would have been achieved had the acquisitions of the Arthur
Andersen Building, the Transocean Houston Building, the Novartis Atlanta
Building, the Dana Corporation Buildings and the Travelers Express Denver
Buildings been consummated at the beginning of the period presented.

As of December 31, 2001, the date of the accompanying pro forma balance sheet,
Wells OP held cash of $75,586,168. The additional cash used to purchase the Dana
Corporation Buildings and the Travelers Express Denver Buildings, including
deferred project costs paid to Wells Capital, Inc. (an affiliate of Wells OP),
was raised through the issuance of additional shares subsequent to December 31,
2001. This balance is reflected as purchase consideration payable in the
accompanying pro forma balance sheet.

17

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA BALANCE SHEET

DECEMBER 31, 2001

(Unaudited)

ASSETS

Pro Forma Adjustments
-----------------------------------------------------------------------------------------
Wells Real
Estate
Investment     Arthur Andersen      Transocean      Novartis Atlanta   Dana Corporation
Trust, Inc.        Building      Houston Building       Building           Buildings
---------------- ----------------- ------------------ ------------------ ------------------

REAL ESTATE
ASSETS, at cost:
Land                    $ 86,246,985     $1,700,000(a)      $845,000(a)      $  2,000,000(a)    $ 3,171,000(a)
70,833(b)        33,994(c)            80,460(c)        127,569(c)
Buildings, less
accumulated
depreciation of
$24,814,454           472,383,102     19,444,911(a)    21,203,182(a)        13,047,316(a)     39,608,512(a)
810,205(b)       853,002(c)           524,892(c)      1,593,446(c)

Construction in
progress                5,738,573              0                0                    0                 0
---------------- ----------------- ------------------ ------------------ ------------------

Total real
estate assets         564,368,660     22,025,949       22,935,178           15,652,668        44,500,527
---------------- ----------------- ------------------ ------------------ ------------------

CASH AND CASH                                                      0
EQUIVALENTS             75,586,168    (21,144,911)(a)  (22,048,182)(a)      (15,047,316)(a)   (17,345,759)(a)

INVESTMENT IN
JOINT VENTURES          77,409,980              0                0                    0                 0

INVESTMENT IN
BONDS                   22,000,000              0                0                    0                 0

ACCOUNTS
RECEIVABLE               6,003,179              0                0                    0                 0

DEFERRED LEASE
ACQUISITION
COSTS                    1,525,199              0                0                    0                 0

DEFERRED
PROJECT COSTS            2,977,110       (881,038)(b)     (886,996)(c)         (605,352)(c)      (603,724)(c)

DEFERRED
OFFERING COSTS                   0              0                0                    0                 0

DUE FROM
AFFILIATES              1,692,727              0                0                    0                 0

PREPAID
EXPENSES AND
OTHER ASSETS               718,389              0                0                    0                 0
---------------- ----------------- ------------------ ------------------ ------------------
Total assets            $752,281,412     $        0       $        0         $          0       $26,551,044
================ ================= ================== ================== ==================

Pro Forma Adjustments
-------------------------------

Travelers Express
Buildings          Pro Forma
------------------- -----------------

REAL ESTATE
ASSETS, at cost:
Land                      $1,487,000(a)     $ 95,822,663
59,822(c)
Buildings, less
accumulated
depreciation of
$24,814,454             9,068,492(a)      578,901,884
364,824(c)

Construction in
progress                        0           5,738,573
------------------- -----------------

Total real
estate assets          10,980,138         680,463,120
------------------- -----------------

CASH AND CASH
EQUIVALENTS                      0                   0

INVESTMENT IN
JOINT VENTURES                   0          77,409,980

INVESTMENT IN
BONDS                            0          22,000,000

ACCOUNTS
RECEIVABLE                       0           6,003,179

DEFERRED LEASE
ACQUISITION
COSTS                            0           1,525,199

DEFERRED
PROJECT COSTS                    0                   0

DEFERRED
OFFERING COSTS                   0                   0

DUE FROM
AFFILIATES                      0           1,692,727

PREPAID
EXPENSES AND
OTHER ASSETS                     0             718,389
------------------- -----------------
Total assets             $10,980,138        $789,812,594
=================== =================

18

LIABILITIES AND SHAREHOLDERS' EQUITY

Pro Forma Adjustments
--------------------------------------------------------------------------------------
Wells Real
Estate      Arthur   Transocean   Novartis
Investment   Andersen    Houston    Atlanta    Dana Corporation  Travelers Express
Trust, Inc.  Building   Building    Building       Buildings          Building      Pro Forma Total
-------------  --------  -----------  --------   ----------------- -----------------  ---------------

LIABILITIES:

Accounts payable and
accrued expenses            $   8,727,473     $0         $0          $0      $          0      $           0      $     8,727,473
Notes payable                    8,124,444      0          0           0                 0                  0            8,124,444

Obligations under
capital lease                  22,000,000      0          0           0                 0                  0           22,000,000

Purchase Consideration
Payable                                 0      0          0           0        25,433,753 (a)     10,555,492 (a)       35,989,245
Dividends payable                1,059,026      0          0           0                 0                  0            1,059,026
Due to affiliate                 2,166,161      0          0           0         1,117,291 (c)        424,646 (c)        3,708,098
Deferred rental income             661,657      0          0           0                 0                  0              661,657
-------------  --------  -----------  --------   ----------------- -----------------  ---------------
Total liabilities               42,738,761      0          0           0        26,551,044         10,980,138           80,269,943
-------------  --------  -----------  --------   ----------------- -----------------  ---------------
COMMITMENTS AND
CONTINGENCIES
MINORITY INTEREST
OF UNIT HOLDER IN
OPERATING
PARTNERSHIP                       200,000      0          0           0                 0                  0              200,000
-------------  --------  -----------  --------   ----------------- -----------------  ---------------
SHAREHOLDERS'
EQUITY:

Common shares, $.01 par
value; 125,000,000 shares
authorized, 83,761,469
shares issued and
83,206,429 shares
outstanding                       837,614      0          0           0                 0                  0              837,614

Additional paid-in capital     738,236,525      0          0           0                 0                  0          738,236,525

Cumulative distributions in
excess of earnings            (24,181,092)     0          0           0                 0                  0          (24,181,092)

Treasury stock, at cost,
555,040 shares                 (5,550,396)     0          0           0                 0                  0           (5,550,396)
-------------  --------  -----------  --------   ----------------- -----------------  ---------------

Total shareholders' equity     709,342,651      0          0           0                 0                  0          709,342,651
-------------  --------  -----------  --------   ----------------- -----------------  ---------------

Total liabilities and
shareholders' equity        $ 752,281,412     $0         $0          $0      $ 26,551,044      $  10,980,138      $   789,812,594
=============  ========  ===========  ========   ================= =================  ===============

(a)    Reflects Wells Real Estate Investment Trust, Inc.'s purchase
price for the land and the building.

(b)    Reflects deferred project costs applied to the land and building
at approximately 4.17% of the purchase price.

(c)    Reflects deferred project costs applied to the land and building
at approximately 4.02% of the purchase price.

19

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF INCOME (LOSS)

FOR THE YEAR ENDED DECEMBER 31, 2001

(Unaudited)

Pro Forma Adjustments
---------------------------------------------------------------------------
Wells Real Estate       Arthur              Transocean                                Dana
Investment         Andersen               Houston       Novartis Atlanta      Corporation      Pro Forma
Trust, Inc.         Building              Building           Building           Buildings         Total
-----------------  -----------------    -----------------   ----------------    --------------   -------------

REVENUES:
Rental income         $    44,204,279    $ 2,102,834  (a)     $ 1,549,527  (a)    $   650,705 (a)     $  730,345 (a)   $ 49,237,690
Equity in income of
joint ventures           3,720,959              0                    0                   0                  0          3,720,959
Interest income             1,246,064     (1,246,064) (b)               0                   0                  0                  0
Take out fee            137,500              0                    0                   0                  0            137,500
-----------------  -----------------    -----------------   ----------------    --------------   -------------
49,308,802        856,770            1,549,527             650,705            730,345         53,096,149
-----------------  -----------------    -----------------   ----------------    --------------   -------------
EXPENSES:
Depreciation and
amortization            15,344,801        810,205  (c)         882,247  (c)        542,888 (c)      1,648,078 (c)     19,228,219
Interest                    3,411,210              0                    0                   0                  0          3,411,210
Operating costs, net
of reimbursements        4,128,883        142,433  (d)       1,151,107  (d)          4,929 (d)              0          5,427,352
Management and
leasing fees             2,507,188         94,628  (e)          69,729  (e)         29,282 (e)         32,866 (e)      2,733,693
General and
administrative             973,785              0                    0                   0                  0            973,785
Amortization of
deferred financing
costs                      770,192              0                    0                   0                  0            770,192
Legal and
accounting                 448,776              0                    0                   0                  0            448,776
-----------------  -----------------    -----------------   ----------------    --------------   -------------
27,584,835      1,047,266            2,103,083             577,099          1,680,944         32,993,227
-----------------  -----------------    -----------------   ----------------    --------------   -------------

NET INCOME (LOSS)     $    21,723,967    $  (190,496)         $  (553,556)        $    73,606         $ (950,599)      $ 20,102,922
=================  =================    =================   ================    ==============   =============

EARNINGS PER
SHARE, basic
and diluted        $          0.43                                                                                  $       0.40
=================                                                                                =============

WEIGHTED AVERAGE
SHARES, basic
and diluted             50,520,853                                                                                    50,520,853
=================                                                                                =============

(a)  Rental income is recognized on a straight-line basis.
(b)  Represent forgone interest income related to cash utilized to purchase the
prior acquisitions.
(c)  Depreciation expense on the buildings is recognized using the straight-line
method and a 25-year life.
(d)  Consists of nonreimbursable operating expenses.
(e)  Management and leasing fees are calculated at 4.5% of rental income.

20

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Items 31 through 35 and Item 37 of Part II are incorporated by reference to the
Registrant's Registration Statement, as amended to date, Commission File No.
333-44900

Item 36           Financial Statements and Exhibits
---------------------------------

(a)      Financial Statements:
--------------------

The following financial statements of the Registrant
are filed as part of this Registration Statement and
included in the Prospectus:

Audited Financial Statements
----------------------------

(1)     Report of Independent Public
Accountants,
(2)     Consolidated Balance Sheets as of
December 31, 1999 and December 31,
1998,
(3)     Consolidated Statements of Income
for the years ended December 31,
1999 and 1998,
(4)     Consolidated Statements of
Stockholders' Equity for the years
ended December 31, 1999 and 1998,
(5)     Consolidated Statements of Cash
Flows for the years ended December
31, 1999 and 1998, and
(6)     Notes to Consolidated Financial
Statements.

Unaudited Financial Statements
------------------------------

(1)     Balance Sheets as of September 30,
2000 and December 31, 1999,
(2)     Statements of Income for the three
months and nine months ended
September 30, 2000 and 1999,
(3)     Statements of Shareholders' Equity
for the year ended December 31, 1999
and the nine months ended September
30, 2000,
(4)     Statements of Cash Flows for the
nine months ended September 30, 2000
and 1999, and
(5)     Condensed Notes to Financial
Statements.

The following financial statements relating to the
acquisition of the Dial Building are filed as part of
this Registration Statement and are included in the
Prospectus:

(1)     Report of Independent Public
Accountants,
(2)     Statement of Revenues Over Certain
Operating Expenses for the year
ended December 31, 1999, and
(3)     Notes to Statement of Revenues Over
Certain Operating Expenses for the
year ended December 31, 1999.

II-1

The following financial statements relating to the
acquisition of the ASML Building are filed as part of
this Registration Statement and are included in the
Prospectus:

(1)     Report of Independent Public
Accountants,
(2)     Statement of Revenues Over Certain
Operating Expenses for the year
ended December 31, 1999, and
(3)     Notes to Statement of Revenues Over
Certain Operating Expenses for the
year ended December 31, 1999.

The following financial statements relating to the
acquisition of the Motorola Tempe Building are filed
as part of this Registration Statement and are
included in the Prospectus:

(1)     Report of Independent Public
Accountants,
(2)     Statement of Revenues Over Certain
Operating Expenses for the year
ended December 31, 1999, and
(3)     Notes to Statement of Revenues Over
Certain Operating Expenses for the
year ended December 31, 1999.

The following financial statements relating to the
acquisition of the Motorola Plainfield Building are
filed as part of this Registration Statement and are
included in the Prospectus:

(1)     Report of Independent Public
Accountants,
(2)     Statement of Revenues Over Certain
Operating Expenses for the year
ended December 31, 1999 (audited)
and the nine months ended September
30, 2000 (unaudited), and
(3)     Notes to Statement of Revenues Over
Certain Operating Expenses for the
year ended December 31, 1999
(audited), and the nine months ended
September 30, 2000 (unaudited).

The following unaudited pro forma financial
statements of the Registrant are filed as part of
this Registration Statement and are included in the
Prospectus:

(1)     Summary of Unaudited Pro Forma
Financial Statements,
(2)     Pro Forma Balance Sheet as of
September 30, 2000,
(3)     Pro Forma Statement of Income for
the year ended December 31, 1999,
and
(4)     Pro Forma Statement of Income for
the nine months ended September 30,
2000.

The following financial statements relating to the
acquisition of the Stone & Webster Building are filed
as part of this Registration Statement and included
in Supplement No. 1 to the Prospectus:

(1)     Report of Independent Public
Accountants,
(2)     Statements of Revenues Over Certain
Operating Expenses for the year
ended December 31, 1999 (audited)
and the nine months ended September
30, 2000 (unaudited), and
(3)     Notes to Statements of Revenues Over
Certain Operating Expenses for the
year ended December 31, 1999
(audited)

II-2

and the nine months ended September
30, 2000 (unaudited).

The following financial statements relating to the
acquisition of the AT&T Call Center Buildings are
filed as part of this Registration Statement and
included in Supplement No. 1 to the Prospectus:

(1)     Report of Independent Public
Accountants,
(2)     Statements of Revenues Over Certain
Operating Expenses for the year
ended December 31, 1999 (audited)
and the nine months ended September
30, 2000 (unaudited), and
(3)     Notes to Statements of Revenues Over
Certain Operating Expenses for the
year ended December 31, 1999
(audited) and the nine months ended
September 30, 2000 (unaudited).

The following unaudited pro forma financial
statements of the Registrant are filed as part of
this Registration Statement and included in
Supplement No. 1 to the Prospectus:

(1)     Summary of Unaudited Pro Forma
Financial Statements,
(2)     Pro Forma Balance Sheet as of
September 30, 2000,
(3)     Pro Forma Statements of Income
(Loss) for the year ended December
31, 1999, and
(4)     Pro Forma Statements of Income for
the nine months ended September 30,
2000.

The following financial statements of the Registrant
are filed as part of this Registration Statement and
included in Supplement No. 2 to the Prospectus:

Audited Financial Statements
----------------------------

(1)     Report of Independent Public
Accountants,
(2)     Consolidated Balance Sheets as of
December 31, 2000 and December 31,
1999,
(3)     Consolidated Statements of Income
for the years ended December 31,
2000, 1999 and 1998,
(4)     Consolidated Statements of
Stockholders' Equity for the years
ended December, 31, 2000, 1999 and
1998,
(5)     Consolidated Statements of Cash
Flows for the years ended December
31, 2000, 1999 and 1998, and
(6)     Notes to Consolidated Financial
Statements.

The following financial statements relating to the
acquisition of the Comdata Building are filed as part
of this Registration Statement and included in
Supplement No. 3 to the Prospectus:

(1)     Report of Independent Public
Accountants,
(2)     Statements of Revenues Over Certain
Operating Expenses for the year
ended December 31, 2000 (audited)
and the three months ended March 31,
2001 (unaudited), and
(3)     Notes to Statements of Revenues Over
Certain Operating Expenses for the
year ended December 31, 2000
(audited) and the three months ended
March 31, 2001 (unaudited).

II-3

The following unaudited pro forma financial
statements of the Registrant are filed as part of
this Registration Statement and included in
Supplement No. 3 to the Prospectus:

(1)     Summary of Unaudited Pro Forma
Financial Statements,
(2)     Pro Forma Balance Sheet as of March
31, 2001,
(3)     Pro Forma Statement of Income for
the three months ended March 31,
2001, and
(4)     Pro Forma Statement of Income for
the year ended December 31, 2000.

The following financial statements relating to the
acquisition of the State Street Building are filed as
part of this Registration Statement and included in
Supplement No. 4 to the Prospectus:

(1)     Report of Independent Public
Accountants,
(2)     Statements of Revenues Over Certain
Operating Expenses for the year
ended December 31, 2000 (audited)
and the six months ended June 30,
2001 (unaudited), and
(3)     Notes to Statements of Revenues Over
Certain Operating Expenses for the
year ended December 31, 2000
(audited) and the six months ended
June 30, 2001 (unaudited).

The following unaudited pro forma financial
statements of the Registrant are filed as part of
this Registration Statement and included in
Supplement No. 4 to the Prospectus:

(1)     Summary of Unaudited Pro Forma
Financial Statements,
(2)     Pro Forma Balance Sheet as of June
30, 2001,
(3)     Pro Forma Statement of Income for
the six months ended June 30, 2001,
and
(4)     Pro Forma Statement of Income for
the year ended December 31, 2000.

The following financial statements relating to the
acquisition of the IKON Buildings are filed as part
of this Registration Statement and included in
Supplement No. 5 to the Prospectus:

(1)     Report of Independent Public
Accountants,
(2)     Statements of Revenues Over Certain
Operating Expenses for the year
ended December 31, 2000 (audited)
and the six months ended June 30,
2001 (unaudited), and
(3)     Notes to Statements of Revenues Over
Certain Operating Expenses for the
year ended December 31, 2000
(audited) and the six months ended
June 30, 2001 (unaudited).

The following financial statements relating to the
acquisition of the Ingram Micro Distribution Facility
are filed as part of this Registration Statement and
included in Supplement No. 5 to the Prospectus:

(1)     Report of Independent Public
Accountants,
(2)     Statements of Certain Operating
Expenses in Excess of Revenues for
the year ended December 31, 2000
(audited) and the six months ended
June 30, 2001 (unaudited), and

II-4

(3)     Notes to Statements of Certain
Operating Expenses in Excess of
Revenues for the year ended December
31, 2000 (audited) and the six
months ended June 30, 2001
(unaudited).

The following financial statements relating to the
acquisition of the Lucent Building are filed as part
of this Registration Statement and included in
Supplement No. 5 to the Prospectus:

(1)     Report of Independent Public
Accountants,
(2)     Statements of Certain Operating
Expenses in Excess of Revenues for
the year ended December 31, 2000
(audited) and the six months ended
June 30, 2001 (unaudited), and
(3)     Notes to Statements of Certain
Operating Expenses in Excess of
Revenues for the year ended December
31, 2000 (audited) and the six
months ended June 30, 2001
(unaudited).

The following unaudited pro forma financial
statements of the Registrant are filed as part of
this Registration Statement and included in
Supplement No. 5 to the Prospectus:

(1)     Summary of Unaudited Pro Forma
Financial Statements,
(2)     Pro Forma Balance Sheet as of June
30, 2001,
(3)     Pro Forma Statement of Income for
the six months ended June 30, 2001,
and
(4)     Pro Forma Statement of Income (Loss)
for the year ended December 31,
2000.

The following financial statements relating to the
acquisition of the Windy Point Buildings are filed as
part of this Registration Statement and included in
Supplement No. 6 to the Prospectus:

(1)     Report of Independent Public
Accountants,
(2)     Statements of Certain Operating
Expenses in Excess of Revenues for
the year ended December 31, 2000
(audited) and the nine months ended
September 30, 2001 (unaudited), and
(3)     Notes to Statements of Certain
Operating Expenses in Excess of
Revenues for the year ended December
31, 2000 (audited) and the nine
months ended September 30, 2001
(unaudited).

The following financial statements relating to the
acquisition of the Arthur Andersen Building are filed
as part of this Registration Statement and included
in Supplement No. 6 to the Prospectus:

(1)     Report of Independent Public
Accountants,
(2)     Statements of Certain Operating
Expenses in Excess of Revenues for
the year ended December 31, 2000
(audited) and the nine months ended
September 30, 2001 (unaudited), and
(3)     Notes to Statements of Certain
Operating Expenses in Excess of
Revenues for the year ended December
31, 2000 (audited) and the nine
months ended September 30, 2001
(unaudited).

II-5

The following financial statements of the Registrant
are filed as part of this Registration Statement and
included in Supplement No. 6 to the Prospectus:

Unaudited Financial Statements
------------------------------

(1)     Consolidated Balance Sheets as of
September 30, 2001 and December 31,
2000,
(2)     Consolidated Statements of Income
for the three months ended September
30, 2001 and September 30, 2000 and
for the nine months ended September
30, 2001 and September 30, 2000,
(3)     Consolidated Statements of
Shareholders' Equity for the year
ended December 31, 2000 and for the
nine months ended September 30,
2001,
(4)     Consolidated Statements of Cash
Flows for the nine months ended
September 30, 2001 and September 30,
2000, and
(5)     Condensed Notes to Consolidated
Financial Statements.

The following unaudited pro forma financial
statements of the Registrant are filed as part of
this Registration Statement and included in
Supplement No. 6 to the Prospectus:

(1)     Summary of Unaudited Pro Forma
Financial Statements,
(2)     Pro Forma Balance Sheet as of
September 30, 2001,
(3)     Pro Forma Statement of Income (Loss)
for the nine months ended September
30, 2001, and
(4)     Pro Forma Statement of Income (Loss)
for the year ended December 31,
2000.

The following financial statements of the Registrant
are filed as part of this Registration Statement and
included in Supplement No. 7 to the Prospectus:

Audited Financial Statements
----------------------------

(1)     Report of Independent Public
Accountants,
(2)     Consolidated Balance Sheets as of
December 31, 2001 and December 31,
2000,
(3)     Consolidated Statements of Income
for the years ended December 31,
2001, 2000 and 1999,
(4)     Consolidated Statements of
Stockholders' Equity for the years
ended December, 31, 2001, 2000 and
1999,
(5)     Consolidated Statements of Cash
Flows for the years ended December
31, 2001, 2000 and 1999, and
(6)     Notes to Consolidated Financial
Statements.

The following financial statements relating to the
acquisition of the Novartis Atlanta Building are
filed as part of this Registration Statement and
included in Supplement No. 8 to the Prospectus:

(1)     Report of Independent Public
Accountants,
(2)     Statements of Certain Operating
Expenses in Excess of Revenues for
the year ended December 31, 2001
(audited), and
(3)     Notes to Statements of Certain
Operating Expenses in Excess of
Revenues for the year ended December
31, 2001 (audited).

II-6

The following financial statements relating to the
acquisition of the Dana Corporation Buildings are
filed as part of this Registration Statement and
included in Supplement No. 8 to the Prospectus:

(1)     Report of Independent Public
Accountants,
(2)     Statements of Certain Operating
Expenses in Excess of Revenues for
the year ended December 31, 2001
(audited), and
(3)     Notes to Statements of Certain
Operating Expenses in Excess of
Revenues for the year ended December
31, 2001 (audited).

The following unaudited pro forma financial
statements of the Registrant are filed as part of
this Registration Statement and included in
Supplement No. 8 to the Prospectus:

(1)     Summary of Unaudited Pro Forma
Financial Statements,
(2)     Pro Forma Balance Sheet as of
December 31, 2001,
(3)     Pro Forma Statement of Income (Loss)
for the year ended December 31,
2001.

(b)      Exhibits (See Exhibit Index):
----------------------------

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

1.1                Form of Dealer Manager Agreement (previously filed in and
incorporated by reference to Amendment No. 1 to Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on December 1, 2000)

1.2                Form of Warrant Purchase Agreement (previously filed in and
incorporated by reference to Registrant's Registration
Statement on Form S-11, Commission File No. 333-44900, filed
on August 31, 2000)

3.1                Amended and Restated Articles of Incorporation (previously
filed in and incorporated by reference to Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on August 31, 2000)

3.2                Form of Bylaws (previously filed in and incorporated by
reference to Amendment No. 4 to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-32099, filed
on January 23, 1998)

3.3                Amendment No. 1 to Bylaws (previously filed in and
incorporated by reference to Post-Effective Amendment No. 5
to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on April 15, 1999)

4.1                Form of Subscription Agreement and Subscription Agreement
Signature Page (included as Exhibit A to Prospectus)

5.1                Opinion of Holland & Knight LLP as to legality of securities
(previously filed in and incorporated by reference to
Amendment No. 1 to Registrant's Registration Statement on
Form S-11, Commission File No. 333-44900, filed on December
1, 2000)

8.1                Opinion of Holland & Knight LLP as to tax matters (previously
filed in and incorporated by reference to Amendment No. 1 to
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on December 1, 2000)

8.2                Opinion of Holland & Knight LLP as to ERISA matters
(previously filed in and incorporated by reference to
Amendment No. 1 to Registrant's Registration Statement on
Form S-11, Commission File No. 333-44900, filed on December
1, 2000)

II-7

10.1               Agreement of Limited Partnership of Wells Operating
Partnership, L.P. (previously filed in and incorporated by
reference to Amendment No. 4 to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-32099, filed
on January 23, 1998)

10.2               Advisory Agreement dated January 30, 2002 (previously filed
in and incorporated by reference to Registrant's Registration
Statement on Form S-11, Commission File No. 333-85848, filed
on April 8, 2002)

10.3               Amended and Restated Property Management and Leasing
Agreement among Registrant, Wells Operating Partnership, L.P.
and Wells Management Company, Inc. (previously filed in and
incorporated by reference to Pre-Effective Amendment No. 2 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on December 18, 2000)

10.4               Amended and Restated Joint Venture Agreement of The Fund IX,
Fund X, Fund XI and REIT Joint Venture (previously filed in
and incorporated by reference to Post-Effective Amendment No.
2 of the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on July 9, 1998)

10.5               Lease Agreement for the Alstom Power Knoxville Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 2 of the Registrant's
Registration Statement on Form S-11, Commission File No.
333-32099, filed on July 9, 1998)

10.6               Net Lease Agreement for the Avaya Building (previously filed
in and incorporated by reference to Post-Effective Amendment
No. 2 of the Registrant's Registration Statement on Form
S-11, Commission File No. 333-32099, filed on July 9, 1998)

10.7               First Amendment to Net Lease Agreement for the Avaya Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 2 of the Registrant's
Registration Statement on Form S-11, Commission File No.
333-32099, filed on July 9, 1998)

10.8               Lease Agreement for the Iomega Building (previously filed in
and incorporated by reference to Post-Effective Amendment No.
3 of the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on August 14, 1998)

10.9               Joint Venture Agreement of Wells/Fremont Associates
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 3 of the Registrant's
Registration Statement on Form S-11, Commission File No.
333-32099, filed on August 14, 1998)

10.10              Lease Agreement for the Fairchild Building (previously filed
in and incorporated by reference to Post-Effective Amendment
No. 3 of the Registrant's Registration Statement on Form
S-11, Commission File No. 333-32099, filed on August 14,
1998)

10.11              Joint Venture Agreement of Wells/Orange County Associates
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 3 of the Registrant's
Registration Statement on Form S-11, Commission File No.
333-32099, filed on August 14, 1998)

10.12              Lease for the PwC Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 4
of the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on January 15, 1999)

10.13              Amended and Restated Promissory Note for $15,500,000 for the
SouthTrust Loan (previously filed in and incorporated by
reference to Post-Effective Amendment No. 4

II-8

of the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on January 15, 1999)

10.14              Amendment No. 1 to Mortgage and Security Agreement and other
Loan Documents for the PwC Building securing the SouthTrust
Loan (previously filed in and incorporated by reference to
Post-Effective Amendment No. 4 of the Registrant's
Registration Statement on Form S-11, Commission File No.
333-32099, filed on January 15, 1999)

10.15              Build-To-Suit Office Lease Agreement for the AT&T Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 5 of the Registrant's
Registration Statement on Form S-11, Commission File No.
333-32099, filed on April 15, 1999)

10.16              Amendment No. 1 to Build-To-Suit Office Lease Agreement for
the AT&T Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 5 of the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-32099, filed on April 15, 1999).

10.17              Amendment No. 2 to Build-To-Suit Office Lease Agreement for
the AT&T Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 5 of the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-32099, filed on April 15, 1999)

10.18              Build-To-Suit Office Lease Agreement Guaranty Payment and
Performance for the AT&T Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 5
of the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on April 15, 1999)

10.19              Rental Income Guaranty Agreement relating to the Quest
Building (previously filed in and incorporated by reference
to Post-Effective Amendment No. 5 of the Registrant's
Registration Statement on Form S-11, Commission File No.
333-32099, filed on April 15, 1999)

10.20              Office Lease for the Matsushita Building (previously filed in
and incorporated by reference to Post-Effective Amendment No.
5 of the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on April 15, 1999)

10.21              Guaranty of Lease for the Matsushita Building (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 5 of the Registrant's Registration Statement on
Form S-11, Commission File No. 333-32099, filed on April 15,
1999)

10.22              Fifth Amendment to Lease for the Johnson Matthey Building
(previously filed as Exhibit 10.7 and incorporated by
reference to Post-Effective Amendment No. 1 to the
Registration Statement of Wells Real Estate Fund XII, L.P. on
Form S-11, Commission File No. 33-66657, filed on September
1, 1999)

10.23              Lease Agreement for the Gartner Building (previously filed in
and incorporated by reference to Post-Effective Amendment No.
7 to Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on October 14, 1999)

10.24              Lease Agreement for the Alstom Power Richmond Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 7 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-32099, filed
on October 14, 1999)

10.25              Second Amendment to Lease Agreement for the Alstom Power
Richmond Building (previously filed in and incorporated by
reference to Amendment No. 1 to the

II-9

Registrant's Registration Statement on Form S-11, Commission
File No. 333-83933, filed on November 17, 1999)

10.26              Amended and Restated Joint Venture Partnership Agreement of
The Wells Fund XI-Fund XII - REIT Joint Venture (previously
filed in and incorporated by reference to Amendment No. 1 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-83933, filed on November 17, 1999)

10.27              Lease Agreement with Cinemark USA, Inc. for a portion of the
Cinemark Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 1 to Registrant's
Registration Statement on Form S-11, Commission File No.
333-83933, filed on March 15, 2000)

10.28              Lease Agreement with The Coca-Cola Company for a portion of
the Cinemark Building (previously filed in and incorporated
by reference to Post-Effective Amendment No. 1 to
Registrant's Registration Statement on Form S-11, Commission
File No. 333-83933, filed on March 15, 2000)

10.29              Lease Agreement for the Metris Building (previously filed in
and incorporated by reference to Post-Effective Amendment No.
1 to Registrant's Registration Statement on Form S-11,
Commission File No. 333-83933, filed on March 15, 2000)

10.30              Promissory Note for $26,725,000 for the Bank of America Loan
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 1 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed
on March 15, 2000)

10.31              Mortgage, Assignment and Security Agreement for the Marconi
Building and the AT&T Building securing the Bank of America
Loan (previously filed in and incorporated by reference to
Post-Effective Amendment No. 1 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed
on March 15, 2000)

10.32              Assumption and Modification Agreement for the Metris Loan
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 1 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed
on March 15, 2000)

10.33              Joint Venture Partnership Agreement of Wells Fund XII-REIT
Joint Venture Partnership (previously filed as Exhibit 10.11
and incorporated by reference to Post-Effective Amendment No.
2 to Form S-11 Registration Statement of Wells Real Estate
Fund XII, L.P. on Form S-11, Commission File No. 33-66657,
filed on April 25, 2000)

10.34              Lease Agreement for the Dial Building (previously filed in
and incorporated by reference to Post-Effective Amendment No.
2 to Registrant's Registration Statement on Form S-11,
Commission File No. 333-83933, filed on June 9, 2000)

10.35              First Amendment to Lease Agreement for the Dial Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 2 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed
on June 9, 2000)

10.36              Lease Agreement for the ASML Building (previously filed in
and incorporated by reference to Post-Effective Amendment No.
2 to Registrant's Registration Statement on Form S-11,
Commission File No. 333-83933, filed on June 9, 2000)

10.37              First Amendment to Lease Agreement for the ASML Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 2 to Registrant's

II-10

Registration Statement on Form S-11, Commission File No.
333-83933, filed on June 9, 2000)

10.38              Ground Lease Agreement for the ASML Building (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 2 to Registrant's Registration Statement on
Form S-11, Commission File No. 333-83933, filed on June 9,
2000)

10.39              First Amendment to Ground Lease Agreement for the ASML
Building (previously filed in and incorporated by reference
to Post-Effective Amendment No. 2 to Registrant's
Registration Statement on Form S-11, Commission File No.
333-83933, filed on June 9, 2000)

10.40              Lease Agreement for the Motorola Tempe Building (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 2 to Registrant's Registration Statement on
Form S-11, Commission File No. 333-83933, filed on June 9,
2000)

10.41              First Amendment to Lease Agreement for the Motorola Tempe
Building (previously filed in and incorporated by reference
to Post-Effective Amendment No. 2 to Registrant's
Registration Statement on Form S-11, Commission File No.
333-83933, filed on June 9, 2000)

10.42              Ground Lease Agreement for the Motorola Tempe Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 2 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed
on June 9, 2000)

10.43              Office Lease for the Siemens Building (previously filed as
Exhibit 10.13 and incorporated by reference to Post-Effective
Amendment No. 3 to the Registration Statement of Wells Real
Estate Fund XII, L.P. on Form S-11, Commission File No.
33-66657, filed on July 25, 2000)

10.44              Joint Venture Partnership Agreement of Fund VIII-IX-REIT
Joint Venture (previously filed in and incorporated by
reference to Registrant's Registration Statement on Form
S-11, Commission File No. 333-44900, filed on August 31,
2000)

10.45              Lease Agreement for the Avnet Building (previously filed in
and incorporated by reference to Registrant's Registration
Statement on Form S-11, Commission File No. 333-44900, filed
on August 31, 2000)

10.46              Ground Lease Agreement for the Avnet Building (previously
filed in and incorporated by reference to Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on August 31, 2000)

10.47              Lease Agreement for the Delphi Building (previously filed in
and incorporated by reference to Registrant's Registration
Statement on Form S-11, Commission File No. 333-44900, filed
on August 31, 2000)

10.48              Lease Agreement for the Quest Building (previously filed in
and incorporated by reference to Registrant's Registration
Statement on Form S-11, Commission File No. 333-44900, filed
on August 31, 2000)

10.49              Loan Agreement with SouthTrust Bank, N.A. for a $35,000,000
revolving line of credit dated May 3, 2000 (previously filed
in and incorporated by reference to Post-Effective Amendment
No. 3 to Registrant's Registration Statement on Form S-11,
Commission File No. 333-83933, filed on September 8, 2000)

10.50              Promissory Note for $35,000,000 to SouthTrust Bank, N.A.
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 3 to Registrant's

II-11

Registration Statement on Form S-11, Commission File No.
333-83933, filed on September 8, 2000)

10.51              Deed of Trust and Security Agreement with SouthTrust, N.A.
relating to the Cinemark Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 3
to Registrant's Registration Statement on Form S-11,
Commission File No. 333-83933, filed on September 8, 2000)

10.52              Deed of Trust and Security Agreement with SouthTrust, N.A.
relating to the Dial Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 3
to Registrant's Registration Statement on Form S-11,
Commission File No. 333-83933, filed on September 8, 2000)

10.53              Leasehold Deed of Trust and Security Agreement with
SouthTrust, N.A. relating to the ASML Building (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 3 to Registrant's Registration Statement on
Form S-11, Commission File No. 333-83933, filed on September
8, 2000)

10.54              Lease Agreement for the Motorola Plainfield Building
(previously filed in and incorporated by reference to
Amendment No. 1 to Registrant's Registration Statement on
Form S-11, Commission File No. 333-44900, filed on December
1, 2000)

10.55              Allonge to Revolving Note relating to the SouthTrust Bank
N.A. $32,393,000 revolving line of credit (previously filed
in and incorporated by reference to Pre-Effective Amendment
No. 2 to the Registrant's Registration Statement on Form
S-11, Commission File No. 333-44900, filed on December 18,
2000)

10.56              First Amendment to Revolving Loan Agreement and Other Loan
Documents relating to the SouthTrust Bank N.A. $32,393,000
revolving line of credit (previously filed in and
incorporated by reference to Pre-Effective Amendment No. 2 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on December 18, 2000)

10.57              Second Note Modification Agreement relating to the SouthTrust
Bank N.A. $12,844,000 revolving line of credit (previously
filed in and incorporated by reference to Pre-Effective
Amendment No. 2 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-44900, filed on December
18, 2000)

10.58              Second Amendment to Amended and Restated Loan Agreement and
Other Loan Documents relating to the SouthTrust Bank N.A.
$12,844,000 revolving line of credit (previously filed in and
incorporated by reference to Pre-Effective Amendment No. 2 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on December 18, 2000)

10.59              Revolving Note relating to the SouthTrust Bank N.A.
$19,003,000 revolving line of credit (previously filed in and
incorporated by reference to Pre-Effective Amendment No. 2 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on December 18, 2000)

10.60              Revolving Loan Agreement relating to the SouthTrust Bank N.A.
$19,003,000 revolving line of credit (previously filed in and
incorporated by reference to Pre-Effective Amendment No. 2 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on December 18, 2000)

10.61              Leasehold Deed of Trust and Security Agreement with
SouthTrust Bank N.A. relating to the Motorola Tempe Building
and the Avnet Building (previously filed in and incorporated
by reference to Pre-Effective Amendment No. 2 to the
Registrant's

II-12

Registration Statement on Form S-11, Commission File No.
333-44900, filed on December 18, 2000)

10.62              Amended and Restated Revolving Note relating to the
SouthTrust Bank N.A. $7,900,000 revolving line of credit
(previously filed in and incorporated by reference to
Pre-Effective Amendment No. 2 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on December 18, 2000)

10.63              Amended and Restated Loan Agreement relating to the
SouthTrust Bank N.A. $7,900,000 revolving line of credit
(previously filed in and incorporated by reference to
Pre-Effective Amendment No. 2 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on December 18, 2000)

10.64              Credit Line Deed of Trust and Security Agreement to
SouthTrust N.A. relating to the Alstom Power Richmond
Building (previously filed in and incorporated by reference
to Pre-Effective Amendment No. 2 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on December 18, 2000)

10.65              First Amendment to Credit Line Deed of Trust and Security
Agreement to SouthTrust N.A. relating to the Alstom Power
Richmond Building (previously filed in and incorporated by
reference to Pre-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on December 18, 2000)

10.66              Agreement for Purchase and Sale of Property for the Stone &
Webster Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on February 9, 2001)

10.67              First Amendment to Agreement for Purchase and Sale of
Property for the Stone & Webster Building (previously filed
in and incorporated by reference to Post-Effective Amendment
No. 1 to the Registrant's Registration Statement on Form
S-11, Commission File No. 333-44900, filed on February 9,
2001)

10.68              Promissory Note for $35,900,000 for the Guaranty Federal Bank
Loan (previously filed in and incorporated by reference to
Post-Effective Amendment No. 1 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on February 9, 2001)

10.69              Deed of Trust, Mortgage and Security Agreement with Guaranty
Federal Bank, F.S.B., relating to the Stone & Webster
Building (previously filed in and incorporated by reference
to Post-Effective Amendment No. 1 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on February 9, 2001)

10.70              Promissory Note for $3,000,000 for the Cardinal Paragon, Inc.
Loan (previously filed in and incorporated by reference to
Post-Effective Amendment No. 1 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on February 9, 2001)

10.71              Deed of Trust with Cardinal Paragon, Inc. relating to the
Stone & Webster Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 1
to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on February 9, 2001)

10.72              Lease Agreement with Stone & Webster, Inc. for a portion of
the Stone & Webster Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 1
to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on February 9, 2001)

II-13

10.73              Lease Agreement with Sysco Corporation for a portion of the
Stone & Webster Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 1
to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on February 9, 2001)

10.74              Purchase Agreement for Metris Minnetonka Building (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 1 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-44900, filed on February
9, 2001)

10.75              Lease Agreement for the Metris Minnetonka Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 1 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on February 9, 2001)

10.76              Fourth Amendment to Lease Agreement for the Metris Minnetonka
Building (previously filed in and incorporated by reference
to Post-Effective Amendment No. 1 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on February 9, 2001)

10.77              Guaranty of Lease for the Metris Minnetonka Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 1 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on February 9, 2001)

10.78              Agreement for the Purchase and Sale of Property for the AT&T
Call Center Buildings (previously filed as Exhibit 10.14 and
incorporated by reference to Post-Effective Amendment No. 4
to the Registration Statement of Wells Real Estate Fund XII,
L.P., Commission File No. 333-66657, filed on February 9,
2001)

10.79              First Amendment to Agreement for the Purchase and Sale of
Property for the AT&T Call Center Buildings (previously filed
as Exhibit 10.15 and incorporated by reference to
Post-Effective Amendment No. 4 to the Registration Statement
of Wells Real Estate Fund XII, L.P., Commission File No.
333-66657, filed on February 9, 2001)

10.80              Lease Agreement with AT&T Corp. for a portion of the AT&T
Call Center Buildings (previously filed as Exhibit 10.16 and
incorporated by reference to Post-Effective Amendment No. 4
to the Registration Statement of Wells Real Estate Fund XII,
L.P., Commission File No. 333-66657, filed on February 9,
2001)

10.81              Lease Agreement with Jordan Associates, Inc. for a portion of
the AT&T Call Center Buildings (previously filed as Exhibit
10.17 and incorporated by reference to Post-Effective
Amendment No. 4 to the Registration Statement of Wells Real
Estate Fund XII, L.P., Commission File No. 333-66657, filed
on February 9, 2001)

10.82              Agreement for the Purchase and Sale of Property for the
Comdata Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 3 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on July 23, 2001)

10.83              Lease Agreement for the Comdata Building (previously filed in
and incorporated by reference to Post-Effective Amendment No.
3 to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on July 23, 2001)

10.84              First Amendment to Lease Agreement for the Comdata Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 3 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on July 23, 2001)

II-14

10.85              Joint Venture Partnership Agreement of Wells Fund XIII-REIT
Joint Venture Partnership (previously filed in and
incorporated by reference to Post-Effective Amendment No. 3
to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on July 23, 2001)

10.86              Agreement for the Purchase and Sale of Property for the
AmeriCredit Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 3 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on July 23, 2001)

10.87              Lease Agreement for the AmeriCredit Building (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 3 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-44900, filed on July 23,
2001)

10.88              Agreement for the Purchase and Sale of Property for the State
Street Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 4 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on October 23, 2001)

10.89              Lease Agreement for the State Street Building (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 4 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-44900, filed on October
23, 2001)

10.90              Agreement for the Purchase and Sale of Property for the IKON
Buildings (previously filed in and incorporated by reference
to Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on October 23, 2001)

10.91              Lease Agreement for the IKON Buildings (previously filed in
and incorporated by reference to Post-Effective Amendment No.
4 to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on October 23, 2001)

10.92              First Amendment to Lease Agreement for the IKON Buildings
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on October 23, 2001)

10.93              Reinstatement of and Second Amendment to Lease Agreement for
the IKON Buildings (previously filed in and incorporated by
reference to Post-Effective Amendment No. 4 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on October 23, 2001)

10.94              Agreement of Sale for the Nissan Property (previously filed
in and incorporated by reference to Post-Effective Amendment
No. 4 to the Registrant's Registration Statement on Form
S-11, Commission File No. 333-44900, filed on October 23,
2001)

10.95              Lease Agreement for the Nissan Property (previously filed in
and incorporated by reference to Post-Effective Amendment No.
4 to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on October 23, 2001)

10.96              Guaranty of Lease for the Nissan Property (previously filed
in and incorporated by reference to Post-Effective Amendment
No. 4 to the Registrant's Registration Statement on Form
S-11, Commission File No. 333-44900, filed on October 23,
2001)

10.97              Development Agreement for the Nissan Property (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 4 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-44900, filed on October
23, 2001)

II-15

10.98              Architect Agreement for the Nissan Property (previously filed
in and incorporated by reference to Post-Effective Amendment
No. 4 to the Registrant's Registration Statement on Form
S-11, Commission File No. 333-44900, filed on October 23,
2001)

10.99              Design and Build Construction Agreement for the Nissan
Property (previously filed in and incorporated by reference
to Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on October 23, 2001)

10.100             Agreement for the Purchase and Sale of Property for the
Ingram Micro Distribution Facility (previously filed in and
incorporated by reference to Post-Effective Amendment No. 4
to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on October 23, 2001)

10.101             Indenture of Lease Agreement for Ingram Micro Distribution
Facility (previously filed in and incorporated by reference
to Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on October 23, 2001)

10.102             Guaranty of Lease Agreement for Ingram Micro Distribution
Facility (previously filed in and incorporated by reference
to Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on October 23, 2001)

10.103             Absolute Assignment of Lease and Assumption Agreement for
Ingram Micro Distribution Facility (previously filed in and
incorporated by reference to Post-Effective Amendment No. 4
to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on October 23, 2001)

10.104             Bond Real Property Lease Agreement for the Ingram Micro
Distribution Facility (previously filed in and incorporated
by reference to Post-Effective Amendment No. 4 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on October 23, 2001)

10.105             Agreement for the Purchase and Sale of Property for the
Lucent Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 4 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on October 23, 2001)

10.106             Lease Agreement for the Lucent Building (previously filed in
and incorporated by reference to Post-Effective Amendment No.
4 to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on October 23, 2001)

10.107             Second Amendment to Lease Agreement for Matsushita Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on October 23, 2001)

10.108             Agreement of Limited Partnership of Wells Operating
Partnership, L.P. as Amended and Restated as of January 1,
2000 (previously filed in and incorporated by reference to
Form 10-K of Registrant for the fiscal year ended December
31, 2000, Commission File No. 0-25739)

10.109             Agreement for the Purchase and Sale of Property for the
Convergys Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 5 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on January 23, 2002)

II-16

10.110             Lease Agreement for the Convergys Building (previously filed
in and incorporated by reference to Post-Effective Amendment
No. 5 to the Registrant's Registration Statement on Form
S-11, Commission File No. 333-44900, filed on January 23,
2002)

10.111             Purchase Agreement for the ADIC Buildings (previously filed
as Exhibit 10.6 and incorporated by reference to
Post-Effective Amendment No. 3 to the Registration Statement
of Wells Real Estate Fund XIII, L.P. on Form S-11, Commission
File No. 333-48984)

10.112             Purchase Agreement for the land immediately adjacent to the
ADIC Buildings (previously filed as Exhibit 10.7 and
incorporated by reference to Post-Effective Amendment No. 3
to the Registration Statement of Wells Real Estate Fund XIII,
L.P. on Form S-11, Commission File No. 333-48984)

10.113             Lease Agreement for the ADIC Buildings (previously filed as
Exhibit 10.8 and incorporated by reference to Post-Effective
Amendment No. 3 to the Registration Statement of Wells Real
Estate Fund XIII, L.P. on Form S-11, Commission File No.
333-48984)

10.114             Agreement for Purchase and Sale of the Windy Point Buildings
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 5 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on January 23, 2002)

10.115             Lease Agreement with TCI Great Lakes, Inc. for a portion of
the Windy Point I Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 5
to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on January 23, 2002)

10.116             First Amendment to Office Lease with TCI Great Lakes, Inc.
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 5 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on January 23, 2002)

10.117             Lease Agreement with The Apollo Group, Inc. for a portion of
the Windy Point I Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 5
to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on January 23, 2002)

10.118             Lease Agreement with Global Knowledge Network, Inc. for a
portion of the Windy Point I Building (previously filed in
and incorporated by reference to Post-Effective Amendment No.
5 to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on January 23, 2002)

10.119             Lease Agreement with Zurich American Insurance Company for
the Windy Point II Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 5
to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on January 23, 2002)

10.120             Third Amendment to Office Lease with Zurich American
Insurance Company (previously filed in and incorporated by
reference to Post-Effective Amendment No. 5 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on January 23, 2002)

10.121             Agreement for Purchase and Sale of the Arthur Andersen
Building (previously filed in and incorporated by reference
to Post-Effective Amendment No. 5 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on January 23, 2002)

II-17

10.122             Lease Agreement for the Arthur Andersen Building (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 5 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-44900, filed on January
23, 2002)

10.123             Revolving Credit Agreement relating to the Bank of America,
N.A. $85,000,000 revolving line of credit (previously filed
in and incorporated by reference to Registrant's Registration
Statement on Form S-11, Commission File No. 333-85848, filed
on April 8, 2002)

10.124             Construction Loan Agreement relating to the Bank of America,
N.A. $34,200,000 construction loan (previously filed
in and incorporated by reference to Registrant's Registration
Statement on Form S-11, Commission File No. 333-85848, filed
on April 8, 2002)

10.125             Agreement for Purchase and Sale of the Transocean Houston
Building

10.126             Lease Agreement with Transocean Deepwater Offshore Drilling,
Inc. for a portion of the Transocean Houston Building

10.127             Lease Agreement with Newpark Drilling Fluids, Inc. for a
portion of the Transocean Houston Building

10.128             Membership Interests Purchase Agreement for the Dana Detroit
Building and the Dana Kalamazoo Building

10.129             Lease Agreement for the Dana Detroit Building

10.130             Second Amendment to Lease Agreement for the Dana Detroit
Building

10.131             Lease Agreement for the Dana Kalamazoo Building

10.132             Second Amendment to Lease Agreement for the Dana Kalamazoo
Building

23.1               Consent of Holland & Knight LLP (included in exhibits 5.1 and
8.1)

23.2               Consent of Arthur Andersen LLP

24.1               Power of Attorney

99.1               Letter regarding independent public accountants

II-18

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-11 and has duly caused this Post-Effective
Amendment No. 6 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Norcross, and State of
Georgia, on the 22/nd/ day of April, 2002.

WELLS REAL ESTATE INVESTMENT TRUST, INC.
A Maryland corporation
(Registrant)

By:/s/ Leo F. Wells, III
--------------------------------------------
Leo F. Wells, III, President

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 6 to Registration Statement has been signed below
on April 22, 2002 by the following persons in the capacities indicated.

Name                                                                   Title
----                                                                   -----

/s/ Leo F. Wells, III                                                  President and Director
-----------------------------------------------------
Leo F. Wells, III                                                      (Principal Executive Officer)

/s/ Douglas P. Williams                                                Executive Vice President and Director
-----------------------------------------------------
Douglas P. Williams                                                    (Principal Financial and Accounting
Officer)

/s/ John L. Bell                                     *                 Director
-----------------------------------------------------
John L. Bell (By Douglas P. Williams, as Attorney-in-fact)

/s/ Richard W. Carpenter                             *                 Director
-----------------------------------------------------
Richard W. Carpenter (By Douglas P. Williams, as Attorney-in-fact)

/s/ Bud Carter                                       *                 Director
-----------------------------------------------------
Bud Carter (By Douglas P. Williams, as Attorney-in-fact)

/s/ William H. Keogler, Jr.                          *                 Director
-----------------------------------------------------
William H. Keogler, Jr. (By Douglas P. Williams, as Attorney-in-fact)

/s/ Donald S. Moss                                   *                 Director
-----------------------------------------------------
Donald S. Moss (By Douglas P. Williams, as Attorney-in-fact)

/s/ Walter W. Sessoms                                *                 Director
-----------------------------------------------------
Walter W. Sessoms (By Douglas P. Williams, as Attorney-in-fact)

/s/ Neil H. Strickland                               *                 Director
-----------------------------------------------------
Neil H. Strickland (By Douglas P. Williams, as Attorney-in-fact)

*    By Douglas P. Williams, as Attorney-in-fact, pursuant to Power of Attorney
dated October 31, 2001 and included as Exhibit 24.1 herein.

EXHIBIT INDEX

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

1.1               Form of Dealer Manager Agreement (previously filed in and
incorporated by reference to Amendment No. 1 to Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on December 1, 2000)

1.2               Form of Warrant Purchase Agreement (previously filed in and
incorporated by reference to Registrant's Registration
Statement on Form S-11, Commission File No. 333-44900, filed
on August 31, 2000)

3.1               Amended and Restated Articles of Incorporation (previously
filed in and incorporated by reference to Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on August 31, 2000)

3.2               Form of Bylaws (previously filed in and incorporated by
reference to Amendment No. 4 to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-32099, filed
on January 23, 1998)

3.3               Amendment No. 1 to Bylaws (previously filed in and
incorporated by reference to Post-Effective Amendment No. 5 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on April 15, 1999)

4.1               Form of Subscription Agreement and Subscription Agreement
Signature Page (included as Exhibit A to Prospectus)

5.1               Opinion of Holland & Knight LLP as to legality of securities
(previously filed in and incorporated by reference to
Amendment No. 1 to Registrant's Registration Statement on Form
S-11, Commission File No. 333-44900, filed on December 1,
2000)

8.1               Opinion of Holland & Knight LLP as to tax matters (previously
filed in and incorporated by reference to Amendment No. 1 to
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on December 1, 2000)

8.2               Opinion of Holland & Knight LLP as to ERISA matters
(previously filed in and incorporated by reference to
Amendment No. 1 to Registrant's Registration Statement on Form
S-11, Commission File No. 333-44900, filed on December 1,
2000)

10.1              Agreement of Limited Partnership of Wells Operating
Partnership, L.P. (previously filed in and incorporated by
reference to Amendment No. 4 to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-32099, filed
on January 23, 1998)

10.2              Advisory Agreement dated January 30, 2002 (previously filed in
and incorporated by reference to Registrant's Registration
Statement on Form S-11, Commission File No. 333-85848, filed
on April 8, 2002)

10.3              Amended and Restated Property Management and Leasing Agreement
among Registrant, Wells Operating Partnership, L.P. and Wells
Management Company, Inc. (previously filed in and incorporated
by reference to Pre-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on December 18, 2000)

10.4              Amended and Restated Joint Venture Agreement of The Fund IX,
Fund X, Fund XI and REIT Joint Venture (previously filed in
and incorporated by reference to Post-Effective Amendment No.
2 of the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on July 9, 1998)

10.5              Lease Agreement for the Alstom Power Knoxville Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 2 of the Registrant's
Registration Statement on Form S-11, Commission File No.
333-32099, filed on July 9, 1998)

10.6              Net Lease Agreement for the Avaya Building (previously filed
in and incorporated by reference to Post-Effective Amendment
No. 2 of the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on July 9, 1998)

10.7              First Amendment to Net Lease Agreement for the Avaya Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 2 of the Registrant's
Registration Statement on Form S-11, Commission File No.
333-32099, filed on July 9, 1998)

10.8              Lease Agreement for the Iomega Building (previously filed in
and incorporated by reference to Post-Effective Amendment No.
3 of the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on August 14, 1998)

10.9              Joint Venture Agreement of Wells/Fremont Associates
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 3 of the Registrant's
Registration Statement on Form S-11, Commission File No.
333-32099, filed on August 14, 1998)

10.10             Lease Agreement for the Fairchild Building (previously filed
in and incorporated by reference to Post-Effective Amendment
No. 3 of the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on August 14, 1998)

10.11             Joint Venture Agreement of Wells/Orange County Associates
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 3 of the Registrant's
Registration Statement on Form S-11, Commission File No.
333-32099, filed on August 14, 1998)

10.12             Lease for the PwC Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 4 of
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on January 15, 1999)

10.13             Amended and Restated Promissory Note for $15,500,000 for the
SouthTrust Loan (previously filed in and incorporated by
reference to Post-Effective Amendment No. 4 of the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-32099, filed on January 15, 1999)

10.14             Amendment No. 1 to Mortgage and Security Agreement and other
Loan Documents for the PwC Building securing the SouthTrust
Loan (previously filed in and incorporated by reference to
Post-Effective Amendment No. 4 of the Registrant's
Registration Statement on Form S-11, Commission File No.
333-32099, filed on January 15, 1999)

10.15             Build-To-Suit Office Lease Agreement for the AT&T Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 5 of the Registrant's
Registration Statement on Form S-11, Commission File No.
333-32099, filed on April 15, 1999)

10.16             Amendment No. 1 to Build-To-Suit Office Lease Agreement for
the AT&T Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 5 of the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-32099, filed on April 15, 1999).

10.17             Amendment No. 2 to Build-To-Suit Office Lease Agreement for
the AT&T Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 5 of the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-32099, filed on April 15, 1999)

10.18             Build-To-Suit Office Lease Agreement Guaranty Payment and
Performance for the AT&T Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 5 of
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on April 15, 1999)

10.19             Rental Income Guaranty Agreement relating to the Quest
Building (previously filed in and incorporated by reference to
Post-Effective Amendment No. 5 of the Registrant's
Registration Statement on Form S-11, Commission File No.
333-32099, filed on April 15, 1999)

10.20             Office Lease for the Matsushita Building (previously filed in
and incorporated by reference to Post-Effective Amendment No.
5 of the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on April 15, 1999)

10.21             Guaranty of Lease for the Matsushita Building (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 5 of the Registrant's Registration Statement on
Form S-11, Commission File No. 333-32099, filed on April 15,
1999)

10.22             Fifth Amendment to Lease for the Johnson Matthey Building
(previously filed as Exhibit 10.7 and incorporated by
reference to Post-Effective Amendment No. 1 to the
Registration Statement of Wells Real Estate Fund XII, L.P. on
Form S-11, Commission File No. 33-66657, filed on September 1,
1999)

10.23             Lease Agreement for the Gartner Building (previously filed in
and incorporated by reference to Post-Effective Amendment No.
7 to Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on October 14, 1999)

10.24             Lease Agreement for the Alstom Power Richmond Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 7 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-32099, filed
on October 14, 1999)

10.25             Second Amendment to Lease Agreement for the Alstom Power
Richmond Building (previously filed in and incorporated by
reference to Amendment No. 1 to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed
on November 17, 1999)

10.26             Amended and Restated Joint Venture Partnership Agreement of
the Wells Fund XI-Fund XII - REIT Joint Venture (previously
filed in and incorporated by reference to Amendment No. 1 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-83933, filed on November 17, 1999)

10.27             Lease Agreement with Cinemark USA, Inc. for a portion of the
Cinemark Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 1 to Registrant's
Registration Statement on Form S-11, Commission File No.
333-83933, filed on March 15, 2000)

10.28             Lease Agreement with The Coca-Cola Company for a portion of
the Cinemark Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 1 to Registrant's
Registration Statement on Form S-11, Commission File No.
333-83933, filed on March 15, 2000)

10.29             Lease Agreement for the Metris Building (previously filed in
and incorporated by reference to Post-Effective Amendment No.
1 to Registrant's Registration Statement on Form S-11,
Commission File No. 333-83933, filed on March 15, 2000)

10.30             Promissory Note for $26,725,000 for the Bank of America Loan
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 1 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed
on March 15, 2000)

10.31             Mortgage, Assignment and Security Agreement for the Marconi
Building and the AT&T Building securing the Bank of America
Loan (previously filed in and incorporated by reference to
Post-Effective Amendment No. 1 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed
on March 15, 2000)

10.32             Assumption and Modification Agreement for the Metris Loan
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 1 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed
on March 15, 2000)

10.33             Joint Venture Partnership Agreement of Wells Fund XII-REIT
Joint Venture Partnership (previously filed as Exhibit 10.11
and incorporated by reference to Post-Effective Amendment No.
2 to Form S-11 Registration Statement of Wells Real Estate
Fund XII, L.P. on Form S-11, Commission File No. 33-66657,
filed on April 25, 2000)

10.34             Lease Agreement for the Dial Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 2 to
Registrant's Registration Statement on Form S-11, Commission
File No. 333-83933, filed on June 9, 2000)

10.35             First Amendment to Lease Agreement for the Dial Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 2 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed
on June 9, 2000)

10.36             Lease Agreement for the ASML Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 2 to
Registrant's Registration Statement on Form S-11, Commission
File No. 333-83933, filed on June 9, 2000)

10.37             First Amendment to Lease Agreement for the ASML Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 2 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed
on June 9, 2000)

10.38             Ground Lease Agreement for the ASML Building (previously filed
in and incorporated by reference to Post-Effective Amendment
No. 2 to Registrant's Registration Statement on Form S-11,
Commission File No. 333-83933, filed on June 9, 2000)

10.39             First Amendment to Ground Lease Agreement for the ASML
Building (previously filed in and incorporated by reference to
Post-Effective Amendment No. 2 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed
on June 9, 2000)

10.40             Lease Agreement for the Motorola Tempe Building (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 2 to Registrant's Registration Statement on Form
S-11, Commission File No. 333-83933, filed on June 9, 2000)

10.41             First Amendment to Lease Agreement for the Motorola Tempe
Building (previously filed in and incorporated by reference to
Post-Effective Amendment No. 2 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed
on June 9, 2000)

10.42             Ground Lease Agreement for the Motorola Tempe Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 2 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed
on June 9, 2000)

10.43             Office Lease for the Siemens Building (previously filed as
Exhibit 10.13 and incorporated by reference to Post-Effective
Amendment No. 3 to the Registration Statement of Wells Real
Estate Fund XII, L.P. on Form S-11, Commission File No.
33-66657, filed on July 25, 2000)

10.44             Joint Venture Partnership Agreement of Fund VIII-IX-REIT Joint
Venture (previously filed in and incorporated by reference to
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on August 31, 2000)

10.45             Lease Agreement for the Avnet Building (previously filed in
and incorporated by reference to Registrant's Registration
Statement on Form S-11, Commission File No. 333-44900, filed
on August 31, 2000)

10.46             Ground Lease Agreement for the Avnet Building (previously
filed in and incorporated by reference to Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on August 31, 2000)

10.47             Lease Agreement for the Delphi Building (previously filed in
and incorporated by reference to Registrant's Registration
Statement on Form S-11, Commission File No. 333-44900, filed
on August 31, 2000)

10.48             Lease Agreement for the Quest Building (previously filed in
and incorporated by reference to Registrant's Registration
Statement on Form S-11, Commission File No. 333-44900, filed
on August 31, 2000)

10.49             Loan Agreement with SouthTrust Bank, N.A. for a $35,000,000
revolving line of credit dated May 3, 2000 (previously filed
in and incorporated by reference to Post-Effective Amendment
No. 3 to Registrant's Registration Statement on Form S-11,
Commission File No. 333-83933, filed on September 8, 2000)

10.50             Promissory Note for $35,000,000 to SouthTrust Bank, N.A.
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 3 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed
on September 8, 2000)

10.51             Deed of Trust and Security Agreement with SouthTrust, N.A.
relating to the Cinemark Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 3 to
Registrant's Registration Statement on Form S-11, Commission
File No. 333-83933, filed on September 8, 2000)

10.52             Deed of Trust and Security Agreement with SouthTrust, N.A.
relating to the Dial Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 3 to
Registrant's Registration Statement on Form S-11, Commission
File No. 333-83933, filed on September 8, 2000)

10.53             Leasehold Deed of Trust and Security Agreement with
SouthTrust, N.A. relating to the ASML Building (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 3 to Registrant's Registration Statement on Form
S-11, Commission File No. 333-83933, filed on September 8,
2000)

10.54             Lease Agreement for the Motorola Plainfield Building
(previously filed in and incorporated by reference to
Amendment No. 1 to Registrant's Registration Statement on Form
S-11, Commission File No. 333-44900, filed on December 1,
2000)

10.55             Allonge to Revolving Note relating to the SouthTrust Bank N.A.
$32,393,000 revolving line of credit (previously filed in and
incorporated by reference to Pre-Effective Amendment No. 2 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on December 18, 2000)

10.56             First Amendment to Revolving Loan Agreement and Other Loan
Documents relating to the SouthTrust Bank N.A. $32,393,000
revolving line of credit (previously filed in and incorporated
by reference to Pre-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on December 18, 2000)

10.57             Second Note Modification Agreement relating to the SouthTrust
Bank N.A. $12,844,000 revolving line of credit (previously
filed in and incorporated by reference to Pre-Effective
Amendment No. 2 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-44900, filed on December
18, 2000)

10.58             Second Amendment to Amended and Restated Loan Agreement and
Other Loan Documents relating to the SouthTrust Bank N.A.
$12,844,000 revolving line of credit (previously filed in and
incorporated by reference to Pre-Effective Amendment No. 2 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on December 18, 2000)

10.59             Revolving Note relating to the SouthTrust N.A. $19,003,000
revolving line of credit (previously filed in and incorporated
by reference to Pre-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on December 18, 2000)

10.60             Revolving Loan Agreement relating to the SouthTrust Bank N.A.
$19,003,000 revolving line of credit (previously filed in and
incorporated by reference to Pre-Effective Amendment No. 2 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on December 18, 2000)

10.61             Leasehold Deed of Trust and Security Agreement with SouthTrust
Bank N.A. relating to the Motorola Tempe Building and the
Avnet Building (previously filed in and incorporated by
reference to Pre-Effective Amendment No. 2 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on December 18, 2000)

10.62             Amended and Restated Revolving Note relating to the SouthTrust
Bank N.A. $7,900,000 revolving line of credit (previously
filed in and incorporated by reference to Pre-Effective
Amendment No. 2 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-44900, filed on December
18, 2000)

10.63             Amended and Restated Loan Agreement relating to the SouthTrust
Bank N.A. $7,900,000 revolving line of credit (previously
filed in and incorporated by reference to Pre-Effective
Amendment No. 2 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-44900, filed on December
18, 2000)

10.64             Credit Line Deed of Trust and Security Agreement to SouthTrust
Bank N.A. relating to the Alstom Power Richmond Building
(previously filed in and incorporated by reference to
Pre-Effective Amendment No. 2 to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-44900, filed
on December 18, 2000)

10.65             First Amendment to Credit Line Deed of Trust and Security
Agreement to SouthTrust Bank N.A. relating to the Alstom Power
Richmond Building (previously filed in and incorporated by
reference to Pre-Effective Amendment No. 2 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on December 18, 2000)

10.66             Agreement for Purchase and Sale of Property for the Stone &
Webster Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on February 9, 2001)

10.67             First Amendment to Agreement for Purchase and Sale of Property
for the Stone & Webster Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 1 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on February 9, 2001)

10.68             Promissory Note for $35,900,000 for the Guaranty Federal Bank
Loan (previously filed in and incorporated by reference to
Post-Effective Amendment No. 1 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on February 9, 2001)

10.69             Deed of Trust, Mortgage and Security Agreement with Guaranty
Federal Bank, F.S.B., relating to the Stone & Webster Building
(previously filed in and incorporated by

reference to Post-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on February 9, 2001)

10.70             Promissory Note for $3,000,000 for the Cardinal Paragon, Inc.
Loan (previously filed in and incorporated by reference to
Post-Effective Amendment No. 1 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on February 9, 2001)

10.71             Deed of Trust with Cardinal Paragon, Inc. relating to the
Stone & Webster Building (previously filed in and incorporated
by reference to Post-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on February 9, 2001)

10.72             Lease Agreement with Stone & Webster, Inc. for a portion of
the Stone & Webster Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 1 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on February 9, 2001)

10.73             Lease Agreement with Sysco Corporation for a portion of the
Stone & Webster Building (previously filed in and incorporated
by reference to Post-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on February 9, 2001)

10.74             Purchase Agreement for Metris Minnetonka Building (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 1 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-44900, filed on February 9,
2001)

10.75             Lease Agreement for the Metris Minnetonka Building (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 1 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-44900, filed on February 9,
2001)

10.76             Fourth Amendment to Lease Agreement for the Metris Minnetonka
Building (previously filed in and incorporated by reference to
Post-Effective Amendment No. 1 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on February 9, 2001)

10.77             Guaranty of Lease for the Metris Minnetonka Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 1 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on February 9, 2001)

10.78             Agreement for the Purchase and Sale of Property for the AT&T
Call Center Buildings (previously filed as Exhibit 10.14 and
incorporated by reference to Post-Effective Amendment No. 4 to
the Registration Statement of Wells Real Estate Fund XII,
L.P., Commission File No. 333-66657, filed on February 9,
2001)

10.79             First Amendment to Agreement for the Purchase and Sale of
Property for the AT&T Call Center Buildings (previously filed
as Exhibit 10.15 and incorporated by reference to
Post-Effective Amendment No. 4 to the Registration Statement
of Wells Real Estate Fund XII, L.P., Commission File No.
333-66657, filed on February 9, 2001)

10.80             Lease Agreement with AT&T Corp. for a portion of the AT&T Call
Center Buildings (previously filed as Exhibit 10.16 and
incorporated by reference to Post-Effective Amendment No. 4 to
the Registration Statement of Wells Real Estate Fund XII,
L.P., Commission File No. 333-66657, filed on February 9,
2001)

10.81             Lease Agreement with Jordan Associates, Inc. for a portion of
the AT&T Call Center Buildings (previously filed as Exhibit
10.17 and incorporated by reference to Post-Effective
Amendment No. 4 to the Registration Statement of Wells Real
Estate Fund XII, L.P., Commission File No. 333-66657, filed on
February 9, 2001)

10.82             Agreement for the Purchase and Sale of Property for the
Comdata Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 3 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on July 23, 2001)

10.83             Lease Agreement for the Comdata Building (previously filed in
and incorporated by reference to Post-Effective Amendment No.
3 to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on July 23, 2001)

10.84             First Amendment to Lease Agreement for the Comdata Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 3 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on July 23, 2001)

10.85             Joint Venture Partnership Agreement of Wells Fund XIII-REIT
Joint Venture Partnership (previously filed in and
incorporated by reference to Post-Effective Amendment No. 3 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on July 23, 2001)

10.86             Agreement for the Purchase and Sale of Property for the
AmeriCredit Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 3 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on July 23, 2001)

10.87             Lease Agreement for the AmeriCredit Building (previously filed
in and incorporated by reference to Post-Effective Amendment
No. 3 to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on July 23, 2001)

10.88             Agreement for the Purchase and Sale of Property for the State
Street Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 4 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on October 23, 2001)

10.89             Lease Agreement for the State Street Building (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 4 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-44900, filed on October 23,
2001)

10.90             Agreement for the Purchase and Sale of Property for the IKON
Buildings (previously filed in and incorporated by reference
to Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on October 23, 2001)

10.91             Lease Agreement for the IKON Buildings (previously filed in
and incorporated by reference to Post-Effective Amendment No.
4 to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on October 23, 2001)

10.92             First Amendment to Lease Agreement for the IKON Buildings
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on October 23, 2001)

10.93             Reinstatement of and Second Amendment to Lease Agreement for
the IKON Buildings (previously filed in and incorporated by
reference to Post-Effective Amendment No. 4 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on October 23, 2001)

10.94             Agreement of Sale for the Nissan Property (previously filed in
and incorporated by reference to Post-Effective Amendment No.
4 to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on October 23, 2001)

10.95             Lease Agreement for the Nissan Property (previously filed in
and incorporated by reference to Post-Effective Amendment No.
4 to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on October 23, 2001)

10.96             Guaranty of Lease for the Nissan Property (previously filed in
and incorporated by reference to Post-Effective Amendment No.
4 to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on October 23, 2001)

10.97             Development Agreement for the Nissan Property (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 4 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-44900, filed on October 23,
2001)

10.98             Architect Agreement for the Nissan Property (previously filed
in and incorporated by reference to Post-Effective Amendment
No. 4 to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on October 23, 2001)

10.99             Design and Build Construction Agreement for the Nissan
Property (previously filed in and incorporated by reference to
Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on October 23, 2001)

10.100            Agreement for the Purchase and Sale of Property for the Ingram
Micro Distribution Facility (previously filed in and
incorporated by reference to Post-Effective Amendment No. 4 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on October 23, 2001)

10.101            Indenture of Lease Agreement for Ingram Micro Distribution
Facility (previously filed in and incorporated by reference to
Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on October 23, 2001)

10.102            Guaranty of Lease Agreement for Ingram Micro Distribution
Facility (previously filed in and incorporated by reference to
Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on October 23, 2001)

10.103            Absolute Assignment of Lease and Assumption Agreement for
Ingram Micro Distribution Facility (previously filed in and
incorporated by reference to Post-Effective Amendment No. 4 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on October 23, 2001)

10.104            Bond Real Property Lease Agreement for the Ingram Micro
Distribution Facility (previously filed in and incorporated by
reference to Post-Effective Amendment No. 4 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on October 23, 2001)

10.105            Agreement for the Purchase and Sale of Property for the Lucent
Building (previously filed in and incorporated by reference to
Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on October 23, 2001)

10.106            Lease Agreement for the Lucent Building (previously filed in
and incorporated by reference to Post-Effective Amendment No.
4 to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on October 23, 2001)

10.107            Second Amendment to Lease Agreement for Matsushita Building
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on October 23, 2001)

10.108            Agreement of Limited Partnership of Wells Operating
Partnership, L.P. as Amended and Restated as of January 1,
2000 (previously filed in and incorporated by reference to
Form 10-K of Registrant for the fiscal year ended December 31,
2000, Commission File No. 0-25739)

10.109            Agreement for the Purchase and Sale of Property for the
Convergys Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 5 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on January 23, 2002)

10.110            Lease Agreement for the Convergys Building (previously filed
in and incorporated by reference to Post-Effective Amendment
No. 5 to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on January 23, 2002)

10.111            Purchase Agreement for the ADIC Buildings (previously filed as
Exhibit 10.6 and incorporated by reference to Post-Effective
Amendment No. 3 to the Registration Statement of Wells Real
Estate Fund XIII, L.P. on Form S-11, Commission File No.
333-48984)

10.112            Purchase Agreement for the land immediately adjacent to the
ADIC Buildings (previously filed as Exhibit 10.7 and
incorporated by reference to Post-Effective Amendment No. 3 to
the Registration Statement of Wells Real Estate Fund XIII,
L.P. on Form S-11, Commission File No. 333-48984)

10.113            Lease Agreement for the ADIC Buildings (previously filed as
Exhibit 10.8 and incorporated by reference to Post-Effective
Amendment No. 3 to the Registration Statement of Wells Real
Estate Fund XIII, L.P. on Form S-11, Commission File No.
333-48984)

10.114            Agreement for Purchase and Sale of the Windy Point Buildings
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 5 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on January 23, 2002)

10.115            Lease Agreement with TCI Great Lakes, Inc. for a portion of
the Windy Point I Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 5 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on January 23, 2002)

10.116            First Amendment to Office Lease with TCI Great Lakes, Inc.
(previously filed in and incorporated by reference to
Post-Effective Amendment No. 5 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on January 23, 2002)

10.117            Lease Agreement with The Apollo Group, Inc. for a portion of
the Windy Point I Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 5 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on January 23, 2002)

10.118            Lease Agreement with Global Knowledge Network, Inc. for a
portion of the Windy Point I Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 5 to
the Registrant's Registration Statement on Form S-11,
Commission File No. 333-44900, filed on January 23, 2002)

10.119            Lease Agreement with Zurich American Insurance Company for the
Windy Point II Building (previously filed in and incorporated
by reference to Post-Effective Amendment No. 5 to the
Registrant's Registration Statement on Form S-11, Commission
File No. 333-44900, filed on January 23, 2002)

10.120            Third Amendment to Office Lease with Zurich American Insurance
Company (previously filed in and incorporated by reference to
Post-Effective Amendment No. 5 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on January 23, 2002)

10.121            Agreement for Purchase and Sale of the Arthur Andersen
Building (previously filed in and incorporated by reference to
Post-Effective Amendment No. 5 to the Registrant's
Registration Statement on Form S-11, Commission File No.
333-44900, filed on January 23, 2002)

10.122            Lease Agreement for the Arthur Andersen Building (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 5 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-44900, filed on January 23,
2002)

10.123            Revolving Credit Agreement relating to the Bank of America,
N.A. $85,000,000 revolving line of credit (previously filed
in and incorporated by reference to Registrant's Registration
Statement on Form S-11, Commission File No. 333-85848, filed
on April 8, 2002)

10.124            Construction Loan Agreement relating to the Bank of America,
N.A. $34,200,000 construction loan (previously filed in and
incorporated by reference to Registrant's Registration
Statement on Form S-11, Commission File No. 333-85848, filed
on April 8, 2002)

10.125            Agreement for Purchase and Sale of the Transocean Houston
Building, filed herewith

10.126            Lease Agreement with Transocean Deepwater Offshore Drilling,
Inc. for a portion of the Transocean Houston Building, filed
herewith

10.127            Lease Agreement with Newpark Drilling Fluids, Inc. for a
portion of the Transocean Houston Building, filed herewith

10.128            Membership Interests Purchase Agreement for the Dana Detroit
Building and the Dana Kalamazoo Building, filed herewith

10.129            Lease Agreement for the Dana Detroit Building, filed herewith

10.130            Second Amendment to Lease Agreement for the Dana Detroit
Building, filed herewith

10.131            Lease Agreement for the Dana Kalamazoo Building, filed
herewith

10.132            Second Amendment to Lease Agreement for the Dana Kalamazoo
Building, filed herewith

23.1              Consent of Holland & Knight LLP (included in exhibits 5.1 and
8.1)

23.2              Consent of Arthur Andersen LLP, filed herewith

24.1              Power of Attorney, filed herewith

99.1              Letter regarding independent public accountants, filed
herewith

EXHIBIT 10.125

PURCHASE AGREEMENT FOR TRANSOCEAN HOUSTON BUILDING

AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY
-----------------------------------------------

THIS AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY (the "Agreement"), is
made and entered into as of the 15 day of January, 2002, by and between
BROADFIELD ASSOCIATES, L.P., a Texas limited partnership ("Seller") and WELLS
CAPITAL, INC., a Georgia corporation ("Purchaser").

W I T N E S S E T H:
- - - - - - - - - -

WHEREAS, Seller desires to sell and Purchaser desires to purchase the
Property (as hereinafter defined) subject to the terms and conditions
hereinafter set forth.

NOW, THEREFORE, for and in consideration of the premises, the mutual
agreements contained herein, the sum of Ten Dollars ($10.00) in hand paid by
Purchaser to Seller at and before the sealing and delivery of these presents and
for other good and valuable consideration, the receipt, adequacy, and
sufficiency which are hereby expressly acknowledged by the parties hereto, the
parties hereto do hereby covenant and agree as follows:

1.   Purchase and Sale of Property. Subject to and in accordance with the
-----------------------------
terms and provisions of this Agreement, Seller hereby agrees to sell to
Purchaser and Purchaser hereby agrees to purchase from Seller, the Property,
which term "Property" shall mean and include the following:

(a)  all that tract or parcel of land (the "Land") located in Houston,
Texas, containing approximately 3.879 acres, having an address of 1311
Broadfield Boulevard, and being more particularly described on Exhibit "A"
-----------
hereto; and

(b)  all rights, privileges, and easements appurtenant to the Land,
including all water rights, mineral rights, reversions, or other
appurtenances to said Land, and all right, title, and interest of Seller,
if any, in and to any land lying in the bed of any street, road, alley, or
right-of-way, open or proposed, adjacent to or abutting the Land; and

(c)  all buildings, structures, and improvements situated on the Land,
including, without limitation, that certain two story office building
containing approximately 155,040 rentable square feet, the parking areas
containing approximately 521 parking spaces and other amenities located on
the Land, and all apparatus, built-in appliances, equipment, pumps,
machinery, plumbing, heating, air conditioning, electrical and other
fixtures located on the Land which are owned by Seller (all of which are
herein collectively referred to as the "Improvements"); and

(d)  all personal property, if any, now owned by Seller and located on
or to be located on or in, or used in connection with, the Land and
Improvements ("Personal Property"); and

(e)  all of Seller's right, title, and interest, as landlord or
lessor, in and to (i) that certain Lease Agreement (the "Transocean Lease")
with Transocean Offshore Deepwater Drilling, Inc., a Delaware Corporation
("Transocean"), dated as of April 18, 2001, guaranteed by Transocean Sedco
Forex, Inc., a Cayman Islands corporation, and (ii) that certain Lease
Agreement with Newpark Drilling Fluids, Inc., a Texas corporation
("Newpark"), dated as of May 28, 1998, last amended by Third Amendment to
Lease Agreement, dated April 19, 2001 (the "Newpark Lease"), guaranteed by
Newpark Resources, Inc., a Delaware corporation; and

(f)  all of Seller's right, title, and interest in and to (i) the
plans and specifications with respect to the Improvements, (ii) any
guarantees, trademarks, rights of copyright, warranties, or other rights
related to the ownership of or use and operation of the Land, Personal
Property, or Improvements, and (iii) all governmental licenses and permits,
and all intangibles associated exclusively with the Land, Personal
Property, and Improvements.

2.   Earnest Money. Within two (2) business days after the full execution
-------------
of this Agreement, Purchaser shall deliver to Charter Title Insurance Company
("Escrow Agent"), whose offices are at 4265 San Felipe, Suite

350, Houston, Texas 77027, Purchaser's check, payable to Escrow Agent, in the
amount of $250,000 (the "Earnest Money"), which Earnest Money shall be held and
disbursed by Escrow Agent in accordance with this Agreement. The Earnest Money
shall be paid by Escrow Agent to Seller at Closing (as hereinafter defined) and
shall be applied as a credit to the Purchase Price (as hereinafter defined), or
shall otherwise be paid to Seller or refunded to Purchaser in accordance with
the terms of this Agreement. All interest and other income from time to time
earned on the Earnest Money shall become a part of the Earnest Money and be paid
or credited to the party entitled to the Earnest Money.

3.   Purchase Price. Subject to adjustment, prorations and credits as
--------------
otherwise specified in this Agreement, the purchase price (the "Purchase Price")
to be paid by Purchaser to Seller for the Property shall be TWENTY TWO MILLION
THREE HUNDRED FIFTY THOUSAND DOLLARS ($22,350,000.00). The Purchase Price shall
be paid by Purchaser to Seller at the Closing (as hereinafter defined) by wire
transfer of immediately available federal funds, less the amount of Earnest
Money and subject to prorations, adjustments and credits as otherwise specified
in this Agreement.

4.   Purchaser's Inspection and Review Rights. Subject to the rights of the
----------------------------------------
tenants under the leases (as hereinafter defined), Purchaser and its agents,
engineers, or representatives, with Seller's reasonable, good faith cooperation,
shall have the privilege of going upon the Land and Improvements as needed to
inspect, examine, test, and survey the Property at all reasonable times and from
time to time. Purchaser hereby agrees to indemnify Seller and hold Seller
harmless from any liens, claims, liabilities, and damages incurred through the
exercise of such privilege, and Purchaser further agrees to repair any damage to
the Land and Improvements caused by the exercise of such privilege. Said
indemnity shall survive Closing or termination of this Agreement. All such
inspections shall be non-destructive in nature and specifically shall not
include any physically intrusive testing; provided however, that if Purchaser
desires to undertake such intrusive testing, Purchaser shall first obtain
Seller's written approval which shall not be unreasonably withheld if Purchaser
conducts such testing in accordance with commercially customary standards.
Purchaser shall maintain and shall insure that Purchaser and Purchaser's
consultants and contractors maintain public liability insurance and property
damage insurance in an amount not less than Two Million Dollars ($2,000,000) and
in form and substance adequate to insure against all liability of Purchaser and
its consultants and contractors, respectively, and each of their respective
agents, employees and contractors, arising out of inspections and testing of the
Land and Improvements or any part thereof made on Purchaser's behalf and, at
Seller's request, Purchaser shall furnish Sellers with appropriate certificates
and endorsements reflecting Seller as an additional insured under any such
insurance. At all reasonable times prior to the Closing (as hereinafter
defined), Seller shall make available to Purchaser, or Purchaser's agents and
representatives, for review and copying, all books, records, and files in
Seller's possession relating to the ownership and operation of the Property,
including, without limitation, title matters, surveys, tenant files, service and
maintenance agreements, and other contracts, books, records, operating
statements, and other information relating solely to the operation of the
Property. Seller further agrees to in good faith assist and cooperate with
Purchaser in coming to a thorough understanding of the books, records, and files
relating to the Property. Seller further agrees to provide to Purchaser prior to
the date which is five (5) days after the Effective Date of this Agreement the
most current boundary and "as-built" surveys of the Land and Improvements (the
"Existing Survey") and any title insurance policies, appraisals, building
inspection reports and environmental reports relating thereto and in the
possession or under the control of Seller. At no cost or liability to Seller,
Seller shall cooperate with Purchaser, its counsel, accountants, agents, and
representatives, provide them with access to Seller's books and records with
respect to the ownership, management, maintenance, and operation of the Property
for the applicable period, and permit them to copy the same. Seller shall use
commercially reasonable efforts but shall have no obligation to spend any funds,
to cause the authors of appraisal, environmental and building inspection reports
to issue reliance letters addressed to Purchaser and Purchaser's lender, if any,
in form and substance reasonably acceptable to Purchaser, at least 15 days prior
to the expiration of the Inspection Period. Failure of Seller to accomplish the
matters described in the immediately preceding sentence shall not be a condition
at Closing.

5.   Special Condition to Closing. Purchaser shall have thirty (30) days
----------------------------
from the Effective Date of this Agreement (the "Inspection Period") to make
investigations, examinations, inspections, market studies, feasibility studies,
lease reviews, and tests relating to the Property and the operation thereof in
order to determine, in Purchaser's sole opinion and discretion, the suitability
of the Property for acquisition by Purchaser. Purchaser shall have the right to
terminate this Agreement at any time prior to the expiration of the Inspection
Period by giving written notice to Seller of such election to terminate. In the
event Purchaser so elects to terminate this Agreement,

2

Seller shall be entitled to receive and retain the sum of Twenty-Five Dollars
($25.00) of the Earnest Money, and the balance of the Earnest Money shall be
promptly refunded by Escrow Agent to Purchaser, whereupon, except as expressly
provided to the contrary in this Agreement, no party hereto shall have any other
or further rights or obligations under this Agreement. Seller acknowledges that
the sum of $25.00 is good and adequate consideration for the termination rights
granted to Purchaser hereunder.

6.   General Conditions Precedent to Closing. In addition to the conditions
---------------------------------------
to Purchaser's obligations set forth in Paragraph 5 above, the obligations and
liabilities of Seller and Purchaser hereunder shall in all respects be
conditioned upon the satisfaction of each of the following conditions, any of
which may be waived by written notice from the party entitled to the benefit
thereof:

(a)  The parties shall have complied in all material respects with and
otherwise performed in all material respects each of the covenants and
obligations set forth in this Agreement, as of the date of Closing (as
hereinafter defined).

(b)  All representations and warranties as set forth in this Agreement
shall be true and correct in all material respects as of the date of
Closing.

(c)  There shall have been no adverse change to the title to the
Property subsequent to the effective date of the Title Commitment, which
has not been cured, and the Title Company (as hereinafter defined) shall
have issued the Title Commitment (as hereinafter defined) on the Land and
Improvements without exceptions other than as described in paragraph 7 and
the Title Company shall be prepared to issue to Purchaser upon the Closing
a fee simple owner's title insurance policy on the Land and Improvements
pursuant to such Title Commitment.

(d)  Purchaser shall have received the Tenant Estoppel Certificates
referred to in Paragraph 9(c) hereof, duly executed by each tenant and
guarantor at least five (5) days prior to the end of the Inspection Period.

7.   Title and Survey. Seller covenants and agrees that it shall on or
----------------
before ten (10) days after the Effective Date of this Agreement, cause Charter
Title Insurance Company (herein referred to as the "Title Company"), to deliver
to Purchaser its commitment (herein referred to as the "Title Commitment") to
issue to Purchaser, upon the recording of the Deed conveying title to the Land
and Improvements from Seller to Purchaser, the payment of the Purchase Price,
and the payment to the Title Company of the policy premium therefor, an owner's
policy of title insurance, in the amount of the Purchase Price, insuring good
and marketable fee simple record title to the Land and Improvements to be in
Purchaser subject only to the Permitted Exceptions (as hereinafter defined).
Such Title Commitment shall not contain any exception for rights of tenants
except for the rights of Newpark and Transocean, as tenants only, under their
respective leases. If Purchaser desires, the survey exception shall be amended
to except only "shortages in area." The additional premium for the survey
modification shall be borne by Purchaser. If Purchaser desires to update the
Existing Survey, Purchaser shall, at its sole initial cost, obtain an "as built"
survey of the Land and the Improvements (the "As-built Survey") prior to the
expiration of the Inspection Period certified to Purchaser, Purchaser's lender,
if any, and to the Title Company showing the boundaries and the legal
description of the Land, which survey shall be made in compliance with the
"Minimum Standard Detail Requirements for Land Title Surveys" established by the
ALTA/ACSM for Urban Land title surveys, including all items on Table A thereof,
except items 5, 12 and 14, and currently in effect. The As-built Survey shall
disclose no encroachments or improvements from or upon adjoining properties,
shall show the availability of all utility services at the perimeter of the
Land, and shall otherwise be in form and content sufficient to enable the Title
Company to issue include only those survey exceptions which have been approved
or deemed to have been approved by Purchaser. If Purchaser closes the
transaction contemplated herein, Seller will reimburse Purchaser for the cost of
the As-built Survey at Closing. Seller shall also cause to be delivered to
Purchaser together with such Title Commitment, legible copies of all documents
and instruments referred to therein. Purchaser, upon receipt of the Title
Commitment, the copies of the documents and instruments referred to therein and
the As-built Survey, shall then have ten (10) days during which to examine the
same, after which Purchaser shall notify Seller of any defects or objections
affecting the marketability of the title to the Property. Current year ad
valorem taxes which are not past due and any matters not objected to by the
Purchaser shall be deemed to be "Permitted Exceptions." Seller shall then have
until the Closing to cure such defects and objections and shall, in good faith,

3

exercise reasonable diligence to cure such defects and objections, but shall not
be obligated to expend any funds to do so. If any such defects or objections
arose by, through, or under Seller or if any such defects or objections consist
of past due taxes, mortgages, deeds of trust, deeds to secure debt, uncontested
mechanic's or materialman's liens, or other such monetary encumbrances,
Purchaser shall have the right to cure such defects or objections, in which
event the Purchase Price shall be reduced by an amount equal to the costs and
expenses incurred by Purchaser in connection with the curing of such defects or
objections, and upon such curing, the Closing hereof shall proceed in accordance
with the terms of this Agreement.

8.   Representations and Warranties of Seller. Seller hereby makes the
----------------------------------------
following representations and warranties to Purchaser, each of which shall be
deemed material:

(a)  Leases. The Transocean Lease and the Newpark Lease (the "Leases")
------
are the only leases with respect to the property. True and accurate copies
of the Leases, together with all modifications and amendments thereto have
been delivered to Purchaser. Seller is the "landlord" under the Leases and
owns unencumbered legal and beneficial title to the Leases and the rents
and other income thereunder, subject only to the collateral assignment of
the Leases and the rents thereunder in favor of the holder of an existing
mortgage or deed of trust encumbering the Property, which mortgage or deed
of trust shall be cancelled and satisfied by Seller at the Closing.

(b)  Leases - Assignment. To the best of Seller's knowledge, without
-------------------
further investigation, no tenant has assigned its interest in its Lease or
sublet any portion of its premises.

(c)  Leases - Default. (i) Seller has not received any notice of
----------------
termination or default under the Leases, (ii) to the best of Seller's
knowledge and belief, there are no existing or uncured defaults by Seller
or any tenant under the Leases, (iii) to the best of Seller's knowledge,
there are no events which with the passage of time or notice, or both,
would constitute a default by Seller or by any tenant, and to the best of
Seller's knowledge, Seller has complied with each and every material
undertaking, covenant, and obligation of Seller under the Leases, and (iv)
no tenant has asserted any defense, set-off, or counterclaim with respect
to its tenancy or its obligation to pay rent, additional rent, or other
charges pursuant to its Lease.

(d)  Leases - Rents and Special Consideration. Except as set forth on
----------------------------------------
Schedule 8(d) hereto, no tenant: (i) has prepaid rent for more than the
current month under its lease, (ii) has received or is entitled to receive
any rent concession in connection with its tenancy under its lease, (iii)
is entitled to any special work (not yet performed), or consideration (not
yet given) in connection with its tenancy, and (iv) except as expressly set
forth in its lease, has any deed, option, or other evidence of any right or
interest in or to the Property. Installation of the fiber optic service has
been completed in anticipation of the requirements of paragraph 8 of the
Addendum to the Transocean Lease.

(e)  Leases - Commissions. Except as set forth on Schedule 8(e)
--------------------
hereto, there are no obligations for rental, leasing or other commissions
with respect to the Leases which will not be cashed-out and paid prior to
Closing. All such obligations which are currently due and payable have been
paid in full. Seller agrees to indemnify, defend and hold Purchaser
harmless from and against any such obligations created or arising by,
through or under Seller or its affiliates, which are currently due and
payable. This indemnity shall survive Closing.

(f)  Leases - Acceptance of Premises. (i) Each tenant has accepted its
-------------------------------
leased premises located within the Property, including any and all work
performed therein or thereon pursuant to its lease, (ii) each tenant is in
full and complete possession of its premises, and (iii) Seller has not
received notice from any tenant that its premises are not in full
compliance with the terms and provisions of its lease or are not
satisfactory for its purposes.

(g)  No Other Agreements. Other than the Leases, the Permitted
-------------------
Exceptions and those matters, if any, listed on Schedule 8(g) hereto, there
are no leases, service contracts, management agreements, or other similar
agreements in force and effect, oral or written, to which Seller is a party
and that grant to any person whomsoever or any entity whatsoever any right,
title, interest or benefit in or to all or any part of the Property or any
rights relating to the use, operation, management, maintenance, or repair

4

of all or any part of the Property that will survive Closing.

(h)  No Litigation. There are no actions, suits, or proceedings
-------------
pending, or, to the best of Seller's knowledge, threatened by any
organization, person, individual, or governmental agency against Seller
with respect to the Property or against the Property which could affect
title to the Property, nor does Seller know of any basis for such action.
Seller has no knowledge of any pending or threatened application for
changes in the zoning applicable to the Property or any portion thereof.

(i)  Condemnation. No condemnation or other taking by eminent domain
------------
of the Property or any portion thereof has been instituted and, to the best
of Seller's knowledge, there are no pending or threatened condemnation or
eminent domain proceedings (or proceedings in the nature or in lieu
thereof) affecting the Property or any portion thereof or its use.

(j)  Intentionally Omitted.
---------------------

(k)  No Assessments. To the best of Seller's knowledge, no assessments
--------------
have been made against the Property that are past due, whether or not they
have become liens.

(l)  Condition of Improvements. Seller is not aware of any structural
-------------------------
or other defects, in the Improvements. The heating, ventilating, air
conditioning, electrical, plumbing, water, elevator(s), roofing, storm
drainage and sanitary sewer systems at or servicing the Land and
Improvements are, to the best of the Seller's knowledge, in good condition
and working order and Seller is not aware of any defects or deficiencies,
latent or otherwise, therein.

(m)  Certificates. To the best of Seller's knowledge, there are
------------
presently in effect temporary certificates of occupancy, licenses, and
permits as may be required for the Property. There has been no notice or
request of any municipal department, insurance company or board of fire
underwriters (or organization exercising functions similar thereto), or
mortgagee directed to Seller and requesting the performance of any work or
alteration to the Property which has not been complied with. Seller will
obtain and deliver to Purchaser at Closing permanent Certificates of
Occupancy.

(n)  Violations. To the best of Seller's knowledge, there are no
----------
violations of law, municipal or county ordinances, or other legal
requirements with respect to the Property, and the Improvements thereon
comply with all applicable legal requirements with respect to the use,
occupancy, and construction thereof; Notwithstanding anything contained
herein to the contrary, no representation is given as to compliance with
legal requirements that are the obligation of tenants under the Leases.

(o)  Utilities. All utilities necessary for the use of the Property as
---------
an office building of the size and nature situated thereon and required to
be furnished pursuant to the Lease, including water, sanitary sewer, storm
sewer, electricity, and telephone, are installed and operational, and such
utilities either enter the Property through adjoining public streets, or,
if they pass through adjoining private land, do so in accordance with valid
public easements or private easements which inure to the benefit of the
Property.

(p)  Tax Returns. All property tax returns required to be filed by
-----------
Seller relating to the Property under any law, ordinance, rule, regulation,
order, or requirement of any governmental authority have been, or will be,
as the case may be, truthfully, correctly, and timely filed.

(q)  Bankruptcy. Seller is "solvent as said term is defined by
----------
bankruptcy law" and has not made a general assignment for the benefit of
creditors nor been adjudicated a bankrupt or insolvent, nor has a receiver,
liquidator, or trustee for any of Seller's properties (including the
Property) been appointed or a petition filed by or against Seller for
bankruptcy, reorganization, or arrangement pursuant to the Federal
Bankruptcy Act or any similar Federal or state statute, or any proceeding
instituted for the dissolution or liquidation of Seller.

(r)  Pre-existing Right to Acquire. No person or entity has any right
-----------------------------
or option to acquire the Property or any portion thereof, which will have
any force or effect after the execution of this Agreement,

5

other than Purchaser.

(s)  Effect of Certification. To the best of Seller's knowledge,
-----------------------
neither this Agreement nor the transactions contemplated herein will
constitute a breach or violation of, or default under, or will be modified,
restricted, or precluded by the Leases or the Permitted Exceptions.

(t)  Authorization. Seller is a duly organized and validly existing
-------------
limited partnership under the laws of the State of Texas and is qualified
to conduct business in Texas. This Agreement has been duly authorized and
executed on behalf of Seller and constitutes the valid and binding
agreement of Seller, enforceable in accordance with its terms subject to
equitable principles, and all necessary action on the part of Seller to
authorize the transactions herein contemplated has been taken, and no
further action is necessary for such purpose.

(u)  Seller Not a Foreign Person. Seller is not a "foreign person"
---------------------------
which would subject Purchaser to the withholding tax provisions of Section
1445 of the Internal Revenue Code of 1986, as amended.

(v)  Approvals. The requirements of all covenants, conditions and
---------
restrictions of record relating to the development or construction of the
Improvements, including all covenants requiring consent from any third
party, have been, or on the Closing Date will be, fully satisfied and
complied with in all material respects.

Except as specifically provided herein (or in any other documents executed
by Seller at Closing), Seller hereby specifically disclaims any warranty,
guaranty, or representation, oral or written, past, present or future, of, as
to, or concerning (A) the nature and condition of the Property, for and all
activities and uses which Purchaser may elect to conduct thereon, income to be
derived therefrom or expenses to be incurred with respect thereto, or any
obligations or any other matter or thing relating to or affecting the same; (B)
the manner of construction and condition and state of repair or lack of repair
of any Improvements, (C) the nature and extent of any easement, right-of-way,
lease, possession, lien, encumbrance, license, reservation, condition or
otherwise; and (D) the compliance of the Property or the operation of the
Property with any laws, rules, ordinances, or regulations of any government or
other body. EXCEPT AS PROVIDED HEREIN (OR IN ANY OTHER DOCUMENTS EXECUTED BY
SELLER AT CLOSING), IN CONNECTION WITH THE CONVEYANCE OF THE PROPERTY AS
PROVIDED FOR HEREIN, SELLER HAS NOT MADE AND IS NOT MAKING ANY REPRESENTATIONS,
WARRANTIES OR COVENANTS OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR
IMPLIED, WITH RESPECT TO THE QUALITY OR CONDITION OF THE PROPERTY, THE
SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH PURCHASER
MAY CONDUCT THEREON, COMPLIANCE BY THE PROPERTY WITH ANY LAWS, RULES, ORDINANCES
OR REGULATIONS OF ANY APPLICABLE GOVERNMENT AUTHORITY OR HABITABILITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND SPECIFICALLY, EXCEPT AS
PROVIDED HEREIN, SELLER MAKES NO REPRESENTATIONS REGARDING HAZARDOUS SUBSTANCES
AFFECTING THE PROPERTY. Purchaser agrees to accept the Property at Closing with
the Property being in its present AS IS condition WITH ALL FAULTS except as
specifically provided herein (or in any other documents executed by Seller at
Closing) and except for Seller's special warranty of title to be contained in
the deed.

PURCHASER ACKNOWLEDGES AND AGREES THAT PURCHASER IS EXPERIENCED IN THE
OWNERSHIP, DEVELOPMENT AND/OR OPERATION OF PROPERTIES SIMILAR TO THE PROPERTY
AND THAT PURCHASER PRIOR TO THE CLOSING WILL HAVE INSPECTED THE PROPERTY TO
PURCHASER'S SATISFACTION AND IS QUALIFIED TO MAKE SUCH INSPECTION. PURCHASER
ACKNOWLEDGES THAT PURCHASER HAS (OR PURCHASER'S REPRESENTATIVES HAVE) OR PRIOR
TO THE CLOSING WILL HAVE, THOROUGHLY INSPECTED AND EXAMINED THE PROPERTY TO THE
EXTENT DEEMED NECESSARY BY PURCHASER IN ORDER TO ENABLE PURCHASER TO EVALUATE
THE CONDITION OF THE PROPERTY AND ALL OTHER ASPECTS OF THE PROPERTY (INCLUDING,
BUT NOT LIMITED TO, THE ENVIRONMENTAL CONDITION OF THE PROPERTY); AND PURCHASER
ACKNOWLEDGES THAT PURCHASER IS RELYING UPON ITS OWN (OR ITS

6

REPRESENTATIVES') INSPECTION, EXAMINATION AND EVALUATION OF THE PROPERTY AND NOT
UPON ANY STATEMENT (ORAL OR WRITTEN) THAT MAY HAVE BEEN MADE OR MAY BE MADE BY
SELLER OR ANY OF ITS REPRESENTATIVES EXCEPT SUCH REPRESENTATIONS PROVIDED HEREIN
(OR IN ANY OTHER DOCUMENTS EXECUTED BY SELLER AT CLOSING).

At Closing, Seller shall represent and warrant to Purchaser that all
representations and warranties of Seller in this Agreement remain true and
correct as of the date of the Closing in all material respects, except for any
changes in any such representations or warranties that occur and are disclosed
by Seller to Purchaser expressly and in writing at any time and from time to
time prior to Closing upon their occurrence, which disclosures shall thereafter
be updated by Seller to the date of Closing. Subject to the limitations
expressly provided in this Agreement, each and all of the express warranties,
covenants, and indemnifications made and given by either party given to the
other party herein shall survive the execution and delivery of the Deed by
Seller to Purchaser for a period of one (1) year.

9.   Seller's Additional Covenants. Seller does hereby further covenant and
-----------------------------
agree as follows:

(a)  Operation of Property. Seller hereby covenants that, from the
---------------------
date of this Agreement up to and including the date of Closing, Seller
shall: (i) not negotiate with any third party respecting the sale of the
Property or any interest therein, (ii) not modify, amend, or terminate the
Leases or enter into any new lease, contract, or other agreement respecting
the Property without Purchaser's consent (not to be unreasonably withheld),
(iii) not grant or otherwise create or consent to the creation of any
easement, restriction, lien, assessment, or encumbrance respecting the
Property, (iv) cause the Property to be operated, maintained, and repaired
in the same manner as the Property is currently being operated, maintained,
and repaired; and (v) not discharge, release, store or generate any
hazardous substances on the Property.

(b)  Preservation of Leases. Seller shall, from and after the date of
----------------------
this Agreement to the date of Closing, use its good faith efforts to
perform and discharge all of the duties and obligations and shall otherwise
comply with every covenant and agreement of the landlord under the Leases,
at Seller's expense, in the manner and within the time limits required
thereunder. Furthermore, Seller shall, for the same period of time, use
diligent and good faith efforts to cause the Tenant under the Leases to
perform all of its duties and obligations and otherwise comply with each
and every one of its covenants and agreements under such Leases and shall
take such actions as are reasonably necessary to enforce the terms and
provisions of the Leases.

(c)  Tenant Estoppel Certificates. Seller shall use commercially
----------------------------
reasonable efforts to obtain and deliver to Purchaser at least five (5)
days prior to expiration of the Inspection Period a fully completed
estoppel certificate with respect to the Leases in substantially the form
of Exhibit "B" (the "Tenant Estoppel Certificate"), duly executed by each
-----------
tenant. The Tenant Estoppel Certificates shall be executed as of a date no
earlier than the Effective Date.

(d)  Insurance. From and after the date of this Agreement to the date
---------
and time of Closing, Seller shall (or shall cause Tenant), at its expense,
continue to maintain the all risk fire and extended coverage insurance
policy covering the Property which is currently in force and effect.

10.  Closing. The consummation of the sale by Seller and purchase by
-------
Purchaser of the Property (herein referred to as the "Closing") shall be held at
2:00 p.m., local time, on the first business day which is at least 10 business
days after the end of the Inspection Period, at the offices of Title Company, or
at such earlier time as shall be designated by Purchaser in a written notice to
Seller not less than two (2) business days prior to Closing.

11.  Seller's Closing Documents. For and in consideration of, and as a
--------------------------
condition precedent to, Purchaser's delivery to Seller of the Purchase Price
described in Paragraph 3 hereof, Seller shall obtain or execute, at Seller's
expense, and deliver to Purchaser at Closing the following documents (all of
which shall be duly executed, acknowledged, and notarized where required and
shall survive the Closing):

(a)  Special Warranty Deed. A Special Warranty Deed (the "Deed") in
---------------------
substantially the form of Exhibit "C" hereto subject only to the Permitted
-----------
Exceptions. The legal description set forth in the Deed shall be as set
forth on Exhibit "A". In the event Purchaser shall obtain a new or updated
-----------
survey of the Land

7

and Improvements and the legal description set forth in Purchaser's survey
shall differ from the legal description set forth on Exhibit "A", the Deed
-----------
shall convey title by the legal description based upon such survey;

(b)  Bill of Sale. A Bill of Sale conveying to Purchaser the Personal
------------
Property in the form and substance of Exhibit "D";
-----------

(c)  Blanket Transfer. A Blanket Transfer and Assignment in the form
----------------
and substance of Exhibit "E";
----------

(d)  Assignment and Assumption of Leases. An Assignment and Assumption
-----------------------------------
of Lease in the form and substance of Exhibit "F", assigning to Purchaser
-----------
all of Seller's right, title, and interest in and to the Lease and the
rents thereunder;

(e)  Seller's Affidavit. A customary seller's affidavit in the form
------------------
required by the Title Company;

(f)  FIRPTA Certificate. A FIRPTA Certificate in such form as
------------------
Purchaser shall reasonably approve;

(g)  Certificates of Occupancy. The original or copies of Certificates
-------------------------
of Occupancy for all space within the Improvements;

(h)  Marked Title Commitment. The Title Commitment marked to delete
-----------------------
the "gap" exception and to reflect that Purchaser is vested with the fee
simple title to the Land and the Improvements, and to reflect that all
requirements for the issuance of the final title policy pursuant to such
Title Commitment have been satisfied;

(i)  Keys and Records. All of the keys to any doors or locks on the
----------------
Property and the original tenant files and other books and records and
warranties relating to the Property in Seller's possession;

(j)  Tenant Notices. Notice from Seller to each tenant of the sale of
--------------
the Property to Purchaser in such form as Purchaser shall reasonably
approve;

(k)  Settlement Statement. A settlement statement setting forth the
--------------------
amounts paid by or on behalf of and/or credited to each of Purchaser and
Seller pursuant to this Agreement; and

(l)  Other Documents. Such other documents as shall be reasonably
---------------
required by Purchaser's counsel.

12.  Purchaser's Closing Documents. At Closing, Purchaser shall deliver the
-----------------------------
balance of the Purchase Price and shall obtain or execute and deliver to Seller
at Closing the following documents, all of which shall be duly executed and
acknowledged where required and shall survive the Closing:

(a)  Blanket Transfer. The Blanket Transfer and Assignment;
----------------

(b)  Assignment and Assumption of Lease. The Assignment and Assumption
----------------------------------
of Lease;

(c)  Settlement Statement. A settlement statement setting forth the
--------------------
amounts paid by or on behalf of and/or credited to each of Purchaser and
Seller pursuant to this Agreement; and

(d)  Other Documents. Such other documents as shall be reasonably
---------------
required by Seller's counsel.

13.  Closing Costs. Seller shall pay the cost of any recording, transfer or
-------------
documentary tax imposed by any jurisdiction in which the Property is located,
the cost of the base premium for the title policy, reimburse

8

Purchaser for the cost of the As-built Survey, the attorneys' fees of Seller,
and all other costs and expenses incurred by Seller in closing and consummating
the purchase and sale of the Property pursuant hereto. Purchaser shall pay the
attorneys' fees of Purchaser, and all other costs and expenses incurred by
Purchaser in closing and consummating the purchase and sale of the Property
pursuant hereto. Each party shall pay one-half of any escrow fees.

14.  Prorations. The following items shall be prorated and/or credited
----------
between Seller and Purchaser as of Midnight preceding the date of Closing:

(a)  Rents. Rents, additional rents, and other income of the Property
-----
(other than security deposits, which shall be assigned and paid over to
Purchaser) collected by Seller for the month of Closing. Purchaser shall
also receive a credit against the Purchase Price payable by Purchaser to
Seller at Closing for any rents or other sums (not including security
deposits) prepaid by any tenant for any period following the month of
Closing, or otherwise.

(b)  Property Taxes. To the extent not paid or reimbursed by tenants,
--------------
city, state, county, and school district ad valorem taxes based on the ad
valorem tax bills for the Property, if then available, or if not, then on
the basis of the latest available tax figures and information. Should such
proration be based on such latest available tax figures and information and
prove to be inaccurate upon receipt of the ad valorem tax bills for the
Property for the year of Closing, either Seller or Purchaser, as the case
may be, may demand at any time after Closing a payment from the other
correcting such malapportionment. In addition, if after Closing there is an
adjustment or reassessment by any governmental authority with respect to,
or affecting, any ad valorem taxes for the Property for the year of Closing
or any prior year, any additional tax payment for the Property required to
be paid with respect to the year of Closing shall be prorated between
Purchaser and Seller, any such additional tax payment for the Property for
any year prior to the year of Closing shall be paid by Seller and any
refund for any year prior to the year of Closing shall be paid to Seller.
This agreement shall expressly survive the Closing.

(c)  Utility Charges/Operating Expenses. To the extent not paid or
----------------------------------
reimbursed by tenants, Seller shall be responsible for all such costs
applicable to the period prior to Closing and Purchaser shall be
responsible for all such costs applicable to the period subsequent to the
Closing. Seller and Purchaser hereby agree to prorate and pay their
respective shares of all utility bills and operating costs received
subsequent to Closing, which agreement shall survive Closing.

15.  Purchaser's Default. In the event of default by Purchaser under the
-------------------
terms of this Agreement, Seller's sole and exclusive remedy shall be to receive
the Earnest Money as liquidated damages and thereafter the parties hereto shall
have no further rights or obligations hereunder whatsoever except matters which
by their express terms survive termination of this Agreement. It is hereby
agreed that Seller's damages will be difficult to ascertain and that the Earnest
Money constitutes a reasonable liquidation thereof and is intended not as a
penalty, but as fully liquidated damages. Seller agrees that in the event of
default by Purchaser, it shall not initiate any proceeding to recover damages
from Purchaser, but shall limit its recovery to the retention of the Earnest
Money.

16.  Seller's Default. In the event of default by Seller under the terms of
----------------
this Agreement (i) Purchaser shall have the right to terminate this Agreement by
giving written notice of such termination to Seller, whereupon Escrow Agent
shall promptly refund all Earnest Money to Purchaser, and Purchaser and Seller
shall have no further rights, obligations, or liabilities hereunder, except as
may be expressly provided to the contrary herein; or (ii) Purchaser shall have
the right to accept title to the Property subject to such defects and objections
with no reduction in the Purchase Price, in which event such defects and
objections shall be deemed "Permitted Exceptions"; or (iii) Purchaser may elect
to seek specific performance of this Agreement.

17.  Condemnation. If, prior to the Closing, all or any part of the
------------
Property is subjected to a bona fide threat of condemnation by a body having the
power of eminent domain or is taken by eminent domain or condemnation (or sale
in lieu thereof), or if Seller has received notice that any condemnation action
or proceeding with respect to the Property is contemplated by a body having the
power of eminent domain, Seller shall give Purchaser immediate written notice of
such threatened or contemplated condemnation or of such taking or sale, and
Purchaser may by written notice to Seller given within fifteen (15) days of the
receipt of such notice from Seller, elect to cancel this Agreement. If Purchaser
chooses to cancel this Agreement in accordance with this Paragraph 17,

9

then the Earnest Money shall be returned immediately to Purchaser by Escrow
Agent and the rights, duties, obligations, and liabilities of the parties
hereunder shall immediately terminate and be of no further force and effect,
except matters which by their express terms survive termination of this
Agreement. If Purchaser does not elect to cancel this Agreement in accordance
herewith, this Agreement shall remain in full force and effect and the sale of
the Property contemplated by this Agreement, less any interest taken by eminent
domain or condemnation, or sale in lieu thereof, shall be effected with no
further adjustment and without reduction of the Purchase Price, and at the
Closing, Seller shall assign, transfer, and set over to Purchaser all of the
right, title, and interest of Seller in and to any awards that have been or that
may thereafter be made for such taking.

18.  Damage or Destruction. If any of the Improvements shall be destroyed
---------------------
or damaged prior to the Closing, and the estimated cost of repair or replacement
exceeds Two Hundred Fifty Thousand Dollars ($250,000.00) or if the Lease shall
terminate as a result of such damage, Purchaser may, by written notice given to
Seller within twenty (20) days after receipt of written notice from Seller of
such damage or destruction, elect to terminate this Agreement, in which event
the Earnest Money shall immediately be returned by Escrow Agent to Purchaser and
except as expressly provided herein to the contrary, the rights, duties,
obligations, and liabilities of all parties hereunder shall immediately
terminate and be of no further force or effect. If Purchaser does not elect to
terminate this Agreement pursuant to this Paragraph 18, or has no right to
terminate this Agreement (because the damage or destruction does not exceed
$250,000.00 and the Lease remains in full force and effect), and the sale of the
Property is consummated, Purchaser shall be entitled to receive all insurance
proceeds paid or payable to Seller by reason of such destruction or damage under
the insurance required to be maintained by Seller pursuant to Paragraph 9(d)
hereof (less amounts of insurance theretofore received and applied by Seller to
restoration). If the amount of said casualty or rent loss insurance proceeds is
not settled by the date of Closing, Seller shall execute at Closing all proofs
of loss, assignments of claim, and other similar instruments to ensure that
Purchaser shall receive all of Seller's right, title, and interest in and under
said insurance proceeds, plus the amount of any deductible and Seller shall have
no further obligation with respect thereto.

19.  Hazardous Substances. Seller hereby warrants and represents, to the
--------------------
best of Seller's actual knowledge but without investigation other than that
certain Phase I Environmental Site Assessment dated June 9, 1998, prepared by
Environmental Systems Design and Management, Inc. for the benefit of Seller (the
"Phase I Report"), that, except as shown on the Phase I Report (i) no "hazardous
substances", as that term is defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section
9601, et. seq., the Resource Conservation and Recovery Act, as amended, 42
--  ---
U.S.C. Section 6901 et. seq., and the rules and regulations promulgated pursuant
--  ---
to these acts, any so-called "super-fund" or "super-lien" laws or any applicable
state or local laws, nor any other pollutants, toxic materials, or contaminants
have been discharged, disbursed, released, stored, treated, generated, disposed
of, or allowed to escape on the Property, (ii) no asbestos or asbestos
containing materials have been installed, used, incorporated into, or disposed
of on the Property, (iii) no polychlorinated biphenyls are located on or in the
Property, in the form of electrical transformers, fluorescent light fixtures
with ballasts, cooling oils, or any other device or form, (iv) no underground
storage tanks are located on the Property or were located on the Property and
subsequently removed or filled, (v) no investigation, administrative order,
consent order and agreement, litigation, or settlement with respect to Hazardous
Substances is proposed, threatened, anticipated or in existence with respect to
the Property, and (vi) the Property has not previously been used as a landfill,
cemetery, or as a dump for garbage or refuse. Seller hereby indemnifies
Purchaser and holds Purchaser harmless from and against any loss, cost, damage,
liability or expense due to or arising out of the breach of any representation
or warranty contained in this paragraph. The provisions of this paragraph shall
survive Closing for a period of one year, except for such matters arising during
Seller's ownership of the Property which shall survive for an unlimited time.

20.  Assignment. Purchaser's rights and duties under this Agreement shall
----------
not be assignable except to an affiliate of Purchaser without the consent of
Seller which consent shall not be unreasonably withheld.

21.  Broker's Commission. In the event, but only in the event, this
-------------------
transaction closes in accordance with its terms, Seller will pay, at Closing, a
brokerage commission to Broadfield Associates in the amount of 1% of the
Purchase Price, and to Means Knaus in the amount of 1% of the Purchase Price and
to Fletcher Gibson in the amount of $50,000.00 (the "Brokers"). Purchaser and
Seller hereby represent each to the other that they have not discussed this
Agreement or the subject matter hereof with any real estate broker or agent
other than Brokers so as to create any legal right in any such broker or agent
to claim a real estate commission with respect to the conveyance of

10

the Property contemplated by this Agreement. Seller shall and does hereby
indemnify and hold harmless Purchaser from and against any claim, whether or not
meritorious, for any real estate sales commission, finder's fees, or like
compensation in connection with the sale contemplated hereby and arising out of
any act or agreement of Seller, including any claim asserted by Brokers and any
broker or agent claiming under Brokers. Likewise, Purchaser shall and does
hereby indemnify and hold harmless Seller from and against any claim, whether or
not meritorious, for any real estate sales commission, finder's fees, or like
compensation in connection with the sale contemplated hereby and arising out of
any act or agreement of Purchaser. The provisions of this paragraph shall
survive the Closing or any termination of this Agreement.

22.  Notices. Wherever any notice or other communication is required or
-------
permitted hereunder, such notice or other communication shall be in writing and
shall be delivered by overnight courier, by facsimile or telecopy, by hand, or
sent by U.S. registered or certified mail, return receipt requested, postage
prepaid, to the addresses set out below or at such other addresses as are
specified by written notice delivered in accordance herewith:

PURCHASER:                 c/o Wells Capital, Inc.
6200 The Corners Parkway, Suite 250
Norcross, Georgia 30092
Attn: Mr. Joseph H. Pangburn
Facsimile: 770.200.8199

with a copy to:            O'Callaghan & Stumm LLP
127 Peachtree Street, N. E., Suite 1330
Atlanta, Georgia 30303
Attn: William L. O'Callaghan, Esq.
Facsimile: 404.522.3080

SELLER:                    Broadfield Associates, L.P.
c/o Fidinam Capital
11811 North Freeway, Suite 300
Houston, Texas 77060
Attn:  Charles S. Iupe
Facsimile: 281.820.1673

with a copy to:            Gardere Wynne Sewell & Riggs, L.L.P.
1000 Louisiana, Suite 3400
Houston Texas 77002-4086
Attn: W. David Tidholm, Esq.
Facsimile: 713.276.6565

All notices shall be deemed given three (3) business days following deposit in
the United States mail with respect to certified or registered letters, one (1)
business day following deposit if delivered to an overnight courier guaranteeing
next day delivery and on the same day if sent by personal delivery or by
telecopy or facsimile transmission (with proof of transmission). Attorneys for
each party shall be authorized to give notices for each such party. Any party
may change its address for the service of notice by giving written notice of
such change to the other party, in any manner above specified.

23.  Possession. Possession of the Property shall be granted by Seller to
----------
Purchaser on the date of Closing, subject only to the Lease and the Permitted
Exceptions.

24.  Time Periods. If the time period by which any right, option, or
------------
election provided under this Agreement must be exercised, or by which any act
required hereunder must be performed, or by which the Closing must be held,
expires on a Saturday, Sunday, or holiday, then such time period shall be
automatically extended through the close of business on the next regularly
scheduled business day.

25.  Survival of Provisions. All covenants, warranties, indemnities and
----------------------
agreements set forth in this

11

Agreement shall survive the execution or delivery of any and all deeds and other
documents at any time executed or delivered under, pursuant to, or by reason of
this Agreement, and shall survive the payment of all monies made under, pursuant
to, or by reason of this Agreement, for a period of one year from Closing or for
such longer period as may be specified in the paragraph relating thereto.

26.  Severability. This Agreement is intended to be performed in accordance
------------
with, and only to the extent permitted by, all applicable laws, ordinances,
rules, and regulations. If any provision of this Agreement, or the application
thereof to any person or circumstance, shall, for any reason and to any extent
be invalid or unenforceable, the remainder of this Agreement and the application
of such provision to other persons or circumstances shall not be affected
thereby but rather shall be enforced to the greatest extent permitted by law.

27.  Authorization. Purchaser represents to Seller that this Agreement has
-------------
been duly authorized and executed on behalf of Purchaser and constitutes the
valid and binding agreement of Purchaser, enforceable in accordance with its
terms subject to equitable principles, and all necessary action on the part of
Purchaser to authorize the transactions herein contemplated has been taken, and
no further action is necessary for such purpose.

28.  General Provisions. No failure of either party to exercise any power
------------------
given hereunder or to insist upon strict compliance with any obligation
specified herein, and no custom or practice at variance with the terms hereof,
shall constitute a waiver of either party's right to demand exact compliance
with the terms hereof. This Agreement contains the entire agreement of the
parties hereto, and no representations, inducements, promises, or agreements,
oral or otherwise, between the parties not embodied herein shall be of any force
or effect. Any amendment to this Agreement shall not be binding upon the parties
hereto unless such amendment is in writing and executed by all parties hereto.
The provisions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors, and assigns. Time is of the essence of this Agreement. This
Agreement may be executed in multiple counterparts, each of which shall
constitute an original, but all of which taken together shall constitute one and
the same agreement. The headings inserted at the beginning of each paragraph are
for convenience only, and do not add to or subtract from the meaning of the
contents of each paragraph. This Agreement shall be construed and interpreted
under the laws of the State of Texas. Except as otherwise provided herein, all
rights, powers, and privileges conferred hereunder upon the parties shall be
cumulative but not restrictive to those given by law. All personal pronouns used
in this Agreement, whether used in the masculine, feminine, or neuter gender
shall include all genders, and all references herein to the singular shall
include the plural and vice versa.

29.  Effective Date. The "Effective Date" of this Agreement shall be deemed
--------------
to be the date this Agreement is fully executed by both Purchaser and Seller and
a fully executed original counterpart of this Agreement has been received by
both Purchaser and Seller.

30.  Duties as Escrow Agent. In performing its duties hereunder, Escrow
----------------------
Agent shall not incur any liability to anyone for any damages, losses or
expenses, except for its gross negligence or willful misconduct, and it shall
accordingly not incur any such liability with respect to any action taken or
omitted in good faith upon advice of its counsel or in reliance upon any
instrument, including any written notice or instruction provided for in this
Agreement, not only as to its due execution and the validity and effectiveness
of its provision, but also as to the truth and accuracy of any information
contained therein that Escrow Agent shall in good faith believe to be genuine,
to have been signed or presented by a proper person and to conform to the
provisions of this Agreement. Seller and Purchaser hereby agree to indemnify and
hold harmless Escrow Agent against any and all losses, claims, damages,
liabilities and expenses, including reasonable costs of investigation and legal
fees and disbursements, that may be imposed upon Escrow Agent or incurred by
Escrow Agent in connection with its acceptance or performance of its duties
hereunder as escrow agent, including without limitation, any litigation arising
out of this Agreement. If any dispute shall arise between Seller and Purchaser
sufficient in the discretion of Escrow Agent to justify its doing so, Escrow
Agent shall be entitled to tender into the registry or custody of the clerk of
the Court for the county in which the Property is located or the clerk for the
United States District Court having jurisdiction over the county in which the
Property is located, any or all money (less any sums required to pay Escrow
Agent's attorneys' fees in filing such action), property or documents in its
hands relating to this Agreement, together with such pleadings as it shall deem
appropriate, and thereupon be discharged from all further duties under this
Agreement. Seller and Purchaser shall bear all costs and expenses of any such
legal proceedings.

12

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective seals to be affixed hereunto as of the day,
month and year first above written.

"SELLER":

BROADFIELD ASSOCIATES, L.P., a Texas limited partnership
By:   Broadfield Management, L.L.C., a Texas limited
liability company, its general partner

By:   /s/ Charles Iupe
-------------------------------------

Its:  President
-------------------------------------

"PURCHASER":

WELLS CAPITAL, INC., a Georgia corporation

By:   /s/ Douglas P. Williams
-------------------------------------

Its:  Senior Vice President
-------------------------------------

"ESCROW AGENT":

Charter Title Insurance Corporation

By:   /s/ James L. Johnson
-------------------------------------

Its:  _____________________________________

13

Schedule of Exhibits
--------------------

Exhibit "A"    -        Description of Land
Schedule 8(b)  -        List of Agreements, if any
Schedule 8(d)  -        List of Special Consideration
Schedule 8(e)  -        List of Lease Commission Obligations
Exhibit "B"    -        Tenant Estoppel Certificate Form
Exhibit "C"    -        Special Warranty Deed Form
Exhibit "D"    -        Bill of Sale Form
Exhibit "E"    -        Blanket Transfer and Assignment Form
Exhibit "F"    -        Assignment and Assumption of Lease Form

14

EXHIBIT 10.126

LEASE AGREEMENT WITH TRANSOCEAN DEEPWATER OFFSHORE DRILLING, INC. FOR A
PORTION OF THE TRANSOCEAN HOUSTON BUILDING

LEASE AGREEMENT

BETWEEN

BROADFIELD ASSOCIATES, L.P.
AS LANDLORD

AND

TRANSOCEAN OFFSHORE DEEPWATER DRILLING INC.
AS TENANT

AND

TRANSOCEAN SEDCO FOREX INC.
AS GUARANTOR

TABLE OF CONTENTS

Page
----

Article 1   Leased Premises, Term, and Use .................................................          1
1.01  Leased Premises ................................................................          1
1.02  Term ...........................................................................          2
1.03  Use ............................................................................          2

Article 2   Rental .........................................................................          2
2.01  Base Rental ....................................................................          2
2.02  Operating Expenses .............................................................          2
2.03  Parking ........................................................................          8
2.04  Payment of Rent ................................................................          8

Article 3   Landlord's Services ............................................................          9
3.01  Services to be Furnished by Landlord ...........................................          9
3.02  Access by Tenant Prior to Commencement of Term .................................         12
3.03  Condition of Building and Leased Premises ......................................         12
3.04  Repair and Maintenance by Landlord .............................................         14

Article 4   Tenant's Covenants .............................................................         15
4.01  Payments by Tenant .............................................................         15
4.02  Certain Taxes ..................................................................         15
4.03  Repairs by Tenant ..............................................................         15
4.04  Care of the Leased Premises ....................................................         15
4.05  [Intentionally Deleted] ........................................................         15
4.06  Assignment of Lease ............................................................         15
4.07  Alterations, Additions, Improvements ...........................................         18
4.08  Compliance with Laws and Usage; Building Rules and Regulations; Liens ..........         19
4.09  Access by Landlord .............................................................         19
4.10  Landlord's Mortgagee ...........................................................         19
4.11  Estoppel Certificate ...........................................................         20

Article 5   Mutual Covenants ...............................................................         21
5.01  Condemnation, Loss or Damage ...................................................         21
5.02

Fire or Other Casualty; Certain Repairs ........................................         21
5.03  Holding Over ...................................................................         22
5.04  Assignment by Landlord .........................................................         22
5.05  Control of Common Areas and Parking Facilities by Landlord .....................         22
5.06  Default by Tenant ..............................................................         22
5.07  Non-Waiver .....................................................................         25
5.08  Independent Obligations ........................................................         25
5.09  Time of Essence ................................................................         25
5.10  Remedies Cumulative ............................................................         25
5.11  Insurance, Liability, Indemnity, Subrogation and Waiver ........................         26

-i-

Page
----

5.12  Venue; Governing Law ...........................................................       27
5.13  Notice .........................................................................       28
5.14  Entire Agreement, Binding Effect, Severability .................................       28
5.15  Right of Reentry ...............................................................       28
5.16  Number and Gender; Captions; References ........................................       28
5.17  Delinquent Payments; Handling Charge ...........................................       29
5.18  Quiet Enjoyment ................................................................       29
5.19  Signs ..........................................................................       29
5.20  Brokerage ......................................................................       29
5.21  Limitation of Implied Warranty .................................................       29
5.22  Environmental and Land Use Matters .............................................       30
5.23  Newpark Agreements .............................................................       30
5.24  Parent Company Guarantee .......................................................       31

Addendum and Exhibits
---------------------

"A"     -      Leased Premises Floor Plans
"B"     -      Legal Description
"C"     -      Commencement Date Memorandum
"D"     -      Reserve Parking Plan
"E"     -      Janitorial Service Specifications
"F"     -      Landlord Improvements
"G"     -      Workletter
"H"     -      Subordination, Attornment and Non-Disturbance Agreement
"I"     -      Building Rules and Regulations
"J"     -      Parking Rules and Regulations
"K"     -      Sublease Termination Agreement

-ii-

LEASE AGREEMENT

THIS LEASE AGREEMENT ("Lease") is entered as of the 18th day of April,
2001 ("Effective Date"), between Broadfield Associates, L.P., a Texas limited
partnership ("Landlord"), Transocean Offshore Deepwater Drilling Inc., a
Delaware corporation ("Tenant"), and Transocean Sedco Forex Inc., a Cayman
Islands corporation ("Guarantor").

Article 1
Leased Premises, Term, and Use

1.01  Leased Premises.

(a)  Upon the terms, provisions and conditions hereof, Landlord hereby
leases to Tenant and Tenant hereby leases from Landlord the premises reflected
on the floor plans set forth in Exhibit "A" hereto in the building known as the
Park 10 Center ("Building"). Such premises, together with any other space in the
Complex leased by Tenant pursuant hereto, are herein called the "Leased
Premises." References in this Lease to the "Complex" shall mean the Building,
the parking garage ("Garage") adjacent to and servicing the Building and all
other facilities, parking areas, improvements, structures, and landscaping areas
relating to or servicing the Building and Garage and located on or installed in
or to be located on or installed in the land ("Land") described in Exhibit "B"
hereto. Landlord also grants to Tenant, its licensees and invitees, the
non-exclusive right to use the Common Areas (as hereinafter defined).

(b)  Initially, the Leased Premises consists of the entirety of the first
(1st), second (2nd), third (3rd) and fourth (4th) floors of the Building
("Initial Leased Premises"). The "Rentable Area" of the Initial Leased Premises
is hereby stipulated and agreed for all purposes to be 103,260 rentable square
feet ("Initial Leased Premises Rentable Area"), comprising of 25,590 rentable
square feet on the first (1st) floor and 25,890 rentable square feet on each of
the second (2nd), third (3rd) and fourth (4th) floors. Tenant understands that
the Rentable Area is greater than the square footage of the area contained
within the Leased Premises (the "add-on factor"), and includes an amount
attributable to areas within the Building not specifically leased or held for
lease by Tenant such as i) lobbies, foyers, corridors, restrooms and all other
areas of the Building available for non-exclusive use by tenants of the Building
("Common Areas"), and ii) machine rooms, mechanical rooms, electrical rooms,
telephone and equipment rooms, janitor rooms and other similar facilities
("Service Areas"), for purposes of this Lease. For purposes of calculating any
additional space leased by Tenant in the Building, Landlord agrees to calculate
the add-on factor of each single and multi-tenant floor utilizing the Building
Owners and Managers Association's definition -- ANSIZ65.1-1996, ("BOMA
Definition"). If and when Tenant exercises either of its options to lease the
Additional Premises or the Expansion Space (as those terms are defined in the
Addendum hereto, paragraph 2), the Leased Premises shall include the Initial
Leased Premises and either the Additional Premises or Expansion Space, as
applicable.

Notwithstanding the above, for the purposes of this Lease Agreement,
Tenant and Landlord agree that for the duration of this Lease Agreement
(including any renewal periods) that the "Rentable Area" of the Building is
155,040 square feet ("Building Rentable Area"). In the event any future
modification to the Building would result in a change of the Rentable Area

of the Building or the Leased Premises using the BOMA Definition, then the
Rentable Area of the Building and/or Leased Premises shall be adjusted utilizing
the BOMA Definition.

1.02  Term.

(a)  Subject to the terms, provisions and conditions hereof, this Lease
shall commence on the Premises Delivery Date (as that term is defined in Section
3.03(a)), (such commencement date being subject to adjustment as provided in
Sections 3.03(b) and (c), and being hereinafter called the "Commencement Date")
and ending on the 31st day of March, 2011 (as the same may be extended pursuant
to Section 1.02(b) below, the "Expiration Date"), such period being referred to
as the "Term".

(b)  Tenant shall have the right to extend the Term hereof for an
additional period, not less than one (1) month nor greater than twenty-four (24)
months (the "Extended Term") by written notice given to Landlord on or before
December 31, 2001. Base Rental during the Extended Term will be equal to $23.50
per square foot of Rentable Area for the entire Leased Premises, and all other
terms and conditions of this Lease shall apply.

(c)  Within thirty (30) days following the Commencement Date, Landlord and
Tenant agree to execute a memorandum in the form attached hereto as Exhibit "C"
which specifies the exact Commencement Date and Term of the Lease.

1.03  Use. Tenant (and its permitted assignees and sublessees, if any) will
occupy and use the Leased Premises solely for general business office and other
ancillary uses of Tenant (including, but not limited to, training rooms, IT and
data rooms) and for no other purpose.

Article 2

Rental

2.01  Base Rental. Tenant shall pay as Base Rental during the term of this
Lease, monthly rental in the amounts set forth in the Addendum hereto, Paragraph
1.

2.02  Operating Expenses. In addition to Base Rental, Tenant shall pay, as
additional rent, Tenant's Proportionate Share of Actual Operating Expenses in
excess of the Base Operating Expenses Rate.

(a)  The "Base Operating Expenses Rate" is stipulated to be $7.89 per
square foot of Rentable Area of the Leased Premises on an annual basis.

(b)  The term "Actual Operating Expenses" shall mean, with respect to each
calendar year during the term of this agreement, the actual Operating Expenses
for that year computed in accordance with the provisions of Section 2.02 (e) and
(f). The "Actual Operating Expenses Rate" for each such calendar year during the
term hereof shall be calculated by dividing the Actual Operating Expenses for a
calendar year by the Rentable Area in the Building. The term "Tenant's
Proportionate Share of the Actual Operating Expenses" shall mean, with respect
to each calendar year, an amount equal to the product of (i) the difference
between the Actual

2

Operating Expenses Rate in the calendar year and the Base Operating Expenses
Rate, multiplied by (ii) the Rentable Area of the Leased Premises.

(c)  In the event the Actual Operating Expenses Rate, as calculated above,
during any calendar year during the term of this Lease shall be greater than the
Base Operating Expenses Rate, Tenant shall be obligated to pay to Landlord, in
addition to the Base Rental, and Parking Rental (if any, pursuant to the terms
and conditions of Section 2.03 of this Lease Agreement), as additional rent, an
amount equal to Tenant's Proportionate Share of the Actual Operating Expenses.
In order to implement the above, Landlord shall provide to Tenant within ninety
(90) days, or as soon thereafter as reasonably possible (but not later than one
hundred eighty (180) days), after the end of the calendar year in which the
commencement of the term of this agreement occurs, a statement of the Actual
Operating Expenses for the prior calendar year, the Actual Operating Expenses
Rate for the prior calendar year and Tenant's Proportionate Share of the Actual
Operating Expenses.

(d)  At the time Landlord gives the annual statement of Actual Operating
Expenses for each year during the term of this agreement, Landlord may, at
Landlord's option, provide Tenant a schedule of projected Operating Expenses for
the next calendar year expressed as an expense per net rentable square foot in
the project on an annual basis (herein referred to as the "projected Operating
Expenses Rate"). Tenant shall thereafter pay an adjusted monthly rental which
shall include the Base Rental stated in Section 2.01 and an amount (herein
referred to as a "projected Operating Expenses Installment") equal to
one-twelfth (1/12th) of an amount equal to the product of (i) the difference
between the projected Operating Expenses Rate for the next calendar year and the
Base Operating Expenses Rate, multiplied by (ii) the Rentable Area in the leased
premises. Landlord shall provide Tenant a statement, within ninety (90) days (or
as soon thereafter as reasonably possible but not later than one hundred eighty
(180) days) after the end of each calendar year during the term of this
agreement, showing the Actual Operating Expenses and the Actual Operating
Expenses Rate for such calendar year, as compared to the projected Operating
Expenses and the projected Operating Expenses Rate for the calendar year. In the
event Tenant's Proportionate Share of the Actual Operating Expenses for such
calendar year shall exceed the aggregate of the projected Operating Expenses
Installments actually collected by Landlord from Tenant for such calendar year,
Tenant shall pay to Landlord within thirty (30) days following Tenant's receipt
of a statement, the amount of such excess. If, however, Tenant's Proportionate
Share of the Actual Operating Expenses for the calendar year is less than the
aggregate of the projected Operating Expenses installments actually collected by
Landlord from Tenant, for the calendar year, Landlord shall pay to Tenant within
thirty (30) days after the giving of the statement to Tenant, the amount of the
overpayment of the projected Operating Expenses Installments. If the expiration
or termination of this Lease occurs other than on the last day of a calendar
year, the amount to be paid by Tenant or reimbursed to Tenant hereunder shall be
a pro rata amount based on the ratio of the number of days of the term of this
agreement in such last calendar year to 365 days.

(e)  Except for the exclusions from Actual Operating Expenses in Section
2.02 (f), "Actual Operating Expenses" shall mean the operating expenses of the
Complex and all expenditures by Landlord to own, maintain and operate the
Complex. All operating expenses shall be determined on an accrual basis in
accordance with generally accepted accounting

3

principles which shall be consistently applied. Such operating expenses shall
include all expenses, costs and disbursements of every kind and nature which
Landlord shall pay or become obligated to pay because of or in connection with
the ownership, operation, and maintenance of the Complex, including, but not
limited to, the following:

(1)  Wages and salaries of all employees engaged in direct operation
and maintenance of the Complex, employer's social security taxes,
unemployment taxes or insurance and any other taxes which may be levied on
such wages and salaries, and the cost of disability and hospitalization
insurance for such employees;

(2)  Cost of leasing or purchasing all supplies, tools, equipment and
materials used in the operation, maintenance and ownership of the Complex;

(3)  Cost of all utilities for the Complex, including the cost of
water and power, sewage, heating, lighting, air-conditioning and
ventilating for the Complex;

(4)  Cost of all maintenance and service agreements for the Complex
and surrounding grounds, including but not limited to janitorial service,
security service, equipment leasing, energy management system leasing,
landscape maintenance, alarm service, window cleaning and elevator
maintenance;

(5)  Cost of all insurance relating to the Complex, including, but not
limited to, casualty insurance, rental insurance and liability insurance
applicable to the Complex and Landlord's personal property used in
connection therewith as well as any deductible sum required by any such
policies and actually paid by Landlord;

(6)  All taxes and assessments and governmental charges (including but
not limited to mortgage taxes and other taxes and assessments passed on to
Landlord by a mortgagee holding a lien on the Complex), whether federal,
state, county or municipal and whether they be by taxing districts or
authorities presently taxing the Leased Premises or by others, subsequently
created or otherwise and any other taxes, association dues and assessments
attributable to the Complex or its operation excluding, however, income
taxes, estate and inheritance taxes, excess profit taxes, franchise taxes,
taxes imposed on or measured by the income of Landlord from operation of
Complex, sales and other taxes imposed on amounts paid by Tenant hereunder
(including, without limitation, sales taxes imposed on the Parking Rentals,
as hereinafter defined), and taxes imposed on account of a transfer of
ownership of the Complex or the Land;

(7)  Cost of repairs and general maintenance (excluding such repairs
and general maintenance paid by insurance proceeds or by Tenant or other
third parties and alterations attributable solely to tenants of the
Building other than Tenant);

(8)  Legal expenses and accounting expenses incurred with respect to
the Complex;

(9)  Fees for management services, whether provided by an independent
management company, by Landlord or by any affiliate of Landlord;

4

(10)  Costs in order to comply with federal or state laws or municipal
ordinances or codes or regulations promulgated under any of the same;

(11)  Amortization of the cost of installation of capital investment
items which are primarily for the purpose of reducing (or avoiding
increases in) operating costs (not to exceed the savings actually realized
from such investments), or which may be required by governmental authority.
The costs of such capital investment items under this Section 2.02(e )(11)
shall include costs incurred in financing the purchase of such items,
including loan fees and interest. All costs of such capital investment
items shall be amortized over the reasonable life of such items with the
reasonable life and amortization schedule being determined in accordance
with generally accepted accounting principles and in no event to extend
beyond the reasonable life of the Complex;

(12)  Replacement of fluorescent lamps in Building Standard and Tenant
specified fluorescent light fixtures and incandescent bulb or fluorescent
lamp replacement in public toilet and restroom areas, Complex common areas
and stairwells;

(13)  Rent or rental value of Landlord's leasing and management
offices on or near the Building (provided, in the event Landlord's leasing
and management offices are located outside the Building, such rent or
rental value shall be prorated);

(f)  Actual Operating Expenses shall not include (i) expenditures
classified as capital expenditures for Federal income tax purposes (except as
set forth in Section 2.02(d)(11), (ii) costs for which Landlord is entitled to
specific reimbursement by Tenant, any other tenant of the Building, or any other
third party, (iii) allowances for expenses to be incurred by Landlord for
improvements to the premises of which the Leased Premises are a part, (iv)
leasing commissions, and all non-cash expenses (including depreciation), and (v)
debt service on any indebtedness secured by the Complex (except debt service on
indebtedness to purchase or pay for items specified as permissible Basic
Operating Costs under Section 2.02(e)(1) through (13)), (vi) unless otherwise
permitted pursuant to this Lease, the cost of any improvements, repairs,
alterations, additions, changes, replacements, equipment, tools and other items
which under generally accepted accounting principles are required to be
classified as capital expenditures, (whether incurred directly or through a
lease or service contract or otherwise) other than amortization of the cost of
capital (and the installation thereof) items which are reasonably expected to
reduce operating costs for the benefit of all of the Building's tenants or which
may be required by any governmental authority (all of such costs, including
interest costs, shall be amortized over the reasonable life of the capital
items, with a reasonable life and amortization schedule being determined by
Landlord according to generally accepted accounting principles), (vii)
depreciation of the Building, and all equipment, fixtures, improvements and
facilities used in connection therewith, except as provided in (vi) above,
(viii) advertising, promotional expenses, leasing commissions, attorneys fees
(unless incurred as a result of Landlord's effort to reduce Actual Operating
Expenses), costs and disbursements and other expenses incurred in connection
with negotiations with tenants or prospective tenants or other occupants in the
Building, (ix) any property taxes, assessments, or other governmental charges to
the extent that Landlord is reimbursed for same by any tenant of the Building
(excluding reimbursements paid through additional rent payments), (x) the cost
of repairs or other work occasioned by any

5

casualty which is covered by insurance, but only to the extent of the insurance
proceeds received by Landlord net of deductibles and cost of adjustment, (xi)
the cost of renovating or otherwise improving or decorating, painting or
redecorating space in the Building which is or normally would be occupied by
tenants, except in connection with general maintenance of the Building, (xii)
Landlord's costs of electricity and other services sold or provided to tenants
in the Building and for which Landlord is reimbursed by such tenants as a
separate additional charge, (xiii) expenses incurred in connection with services
or other benefits which are in excess of the services provided by Landlord
pursuant to Section 3.01 hereof, but are provided to other tenants or occupants
of the Building, (xiv) costs (limited to penalties, fines and associated legal
expenses) incurred due to violation by Landlord of the terms and conditions of
any lease or rental arrangement covering space in the Building, (xv) overhead
and profit increment paid to subsidiaries, partners or other affiliates of
Landlord and salaries and associated costs of Landlord's employees for services
on or to the Building, to the extent only that the cost of such services exceeds
competitive costs of such services were they not so rendered by a subsidiary or
other affiliate of Landlord, (xvi) any compensation paid to clerks, attendants
or other persons in commercial concessions operated by Landlord, (xvii) all
items and services for which tenants reimburse Landlord, but only to the extent
Landlord is reimbursed for same, (xviii) the costs incurred related to
maintaining Landlord's existence, either as a corporation, partnership or other
entity, (xix) the costs incurred in connection with correcting defects in the
construction of the Building or in the Building equipment (except the conditions
resulting from ordinary wear and tear and use shall not be deemed defects for
the purposes of this category), (xx) interest on debt or amortization payments
on any mortgage or mortgages or rental payments under any ground or underlying
leases (except to the extent that same may be made to pay insurance and taxes),
(xxi) interest and penalties due to late payments of taxes, utility bills and
other such costs, (xxii) salaries or other compensation paid to employees of
Landlord above the grade of building manager, (xxiii) the cost of any repairs
occasioned by eminent domain to the extent that such costs are reimbursed to
Landlord by governmental authorities in eminent domain proceedings, (xxiv) costs
(limited to penalties, fines and associated legal expenses) incurred due to the
violation by Landlord of any applicable federal, state and/or local government
laws, codes and similar regulations that would not have been incurred but for
such violations by Landlord, (xxv) transfer tax, and (xxvi) management fees
incurred by Landlord for the management of the Building which exceed three
percent (3%) of gross rentals of the Building, (xxvii) those costs incurred by
Landlord attributable to any calendar year that exceed one hundred five percent
(105%) of the total costs of all Actual Operating Expenses in the preceding
calendar year of the Term, except this limitation shall not apply to those costs
attributable to Section 2.02 (e), (3), (5), (6), (10) and (11), and (xxviii)
notwithstanding any provision herein, costs of removing hazardous materials or
asbestos or of correcting any other conditions in order to comply with any
environmental law. In addition, any costs associated with the operation and
maintenance of the Building Garage, which costs shall be a part of the overall
operating expenses of the Complex, shall be offset by any parking revenue
received by Landlord from parking permits issued in the Building Garage.

(g)  Notwithstanding any other provision herein to the contrary, it is
agreed that in the event the Building is not fully occupied during any calendar
year or any portion of any calendar year of the Term, an adjustment shall be
made in computing the Actual Operating Expenses for

6

that year (utilizing the same methodology each year) so that certain expenses
(limited to janitorial services and utilities) shall be increased for that year
to the amount that, in Landlord's reasonable judgment (subject to Tenant's audit
rights prescribed below), would have been incurred had the total Rentable Area
of the entire Building been ninety-five percent (95%) occupied during the
entirety of that year ("Gross Up Factor"). It is the intent of this Section that
Landlord shall not be required to bear any portion of the Actual Operating
Expenses which exceed the Base Operating Expenses Rate for any calendar year or
partial calendar year of the Term of this Lease.

(h)  If Tenant desires that Landlord contest any ad valorem taxes, Tenant
shall provide Landlord written notice thereof, expressly requesting that
Landlord contest such ad valorem taxes, providing a reasonable basis for such
request. If Tenant's notice is submitted to Landlord at such time so as to
permit Landlord to timely contest, Landlord shall contest the amount or
validity, in whole or in part, of any ad valorem taxes, by appropriate
proceedings. In the event Landlord does not notify Tenant within fifteen (15)
days following receipt of Tenant's written notice (or such shorter time if the
deadline for filing any such contest is sooner) that Landlord intends to contest
the ad valorem taxes, then Tenant will have the right to contest such ad valorem
taxes which have been identified by Tenant in its written notice to Landlord;
provided, however, that Tenant will make timely payment of Tenant's
Proportionate Share, as provided in this Lease, of the ad valorem taxes
notwithstanding the pendency of any such contest. Tenant will notify Landlord
within five (5) days after the commencement of any such contest. Costs incurred
by Landlord pursuant to this Section 2.02(h) will be included as Actual
Operating Expenses.

(i)  Provided that Tenant is not in default under this Lease, and subject
to this paragraph, Tenant, at its sole expense, shall have the right, upon
giving reasonable notice, to audit Landlord's books and records relating to any
increased or additional rental payable hereunder for the immediately preceding
calendar year for the purpose of determining whether the provisions of this
Section 2.02 have been followed. If Tenant elects to exercise this right, Tenant
must do so within one hundred twenty (120) days after the date Landlord delivers
to Tenant the statement described in Section 2.02(b) or Tenant shall be deemed
to have accepted the Actual Operating Expenses as presented by Landlord. If
Tenant elects to audit Landlord's books and records, such audit shall be
conducted by a certified public accountant licensed in Texas. Should Tenant's
audit reveal that Landlord's determination of Actual Operating Expenses exceeded
Actual Operating Expenses by an amount exceeding five percent (5%), then,
provided Landlord's reputable "third party" CPA reasonably agrees with the
conclusions reached by Tenant's CPA, Landlord shall reimburse Tenant for the
reasonable costs of performing such audit and shall further promptly reimburse
to Tenant the total excess amount paid; provided, however, nothing herein shall
preclude Tenant from seeking reimbursement of any contested amount it claims to
have paid to Landlord irrespective of whether Landlord's reputable "third party"
CPA is in agreement with such audit results. Notwithstanding the foregoing, in
the event of an unresolved dispute between Landlord as to the Base Operating
Expense Rate or Actual Operating Expenses, either Landlord or Tenant may elect
(upon written request to the other party) to submit such unresolved dispute to
binding arbitration, pursuant to the procedures set forth in Paragraph 7 of the
Addendum.

7

2.03 Parking. Landlord hereby agrees to make available to Tenant without charge,
during the Term of this Lease, up to four (4) parking permits for each 1,000
rentable square feet leased by Tenant, to be provided first in the Building
Garage twenty-five percent (25%) of which permits shall be assigned, reserved
permits located in the covered portion of the Building Garage as detailed on
Exhibit "D", and second (i.e., if not available in the Building Garage) in the
surface parking areas surrounding the Building. Subject to the foregoing, Tenant
may, at its option, from time to time upon at least thirty (30) days notice to
Landlord, reduce (or subsequently increase) the parking permits it takes
pursuant to this section. Tenant acknowledges that the foregoing ratio of 4
permits per 1000 rentable square feet includes a 15% oversale, exclusive of any
reserved permits which will be provided to Tenant on an actual basis. Such
oversale (meaning 15% more spaces than actually exist) shall be consistently
applied to all tenants in the Building. In addition, if during the Term of this
Lease Landlord provides assigned, reserved parking permits in the covered
portion of the Building Garage to other tenants in a ratio greater than that
granted Tenant hereunder, Landlord will provide Tenant with additional assigned,
reserved spaces in the covered portion of the Parking Garage so that Tenant's
ratio of assigned, reserved parking spaces in the covered portion of the
Building Garage is as high as any other tenant in the Building. With the
exception of Tenant's assigned, reserved permits in the covered portion of the
Building Garage, all of Tenant's permits shall be provided on an unassigned,
first come, first served basis.

Tenant agrees to comply with Landlord's Parking rules and regulations as
described in Exhibit "J." Any additional assigned or unassigned parking permits
granted Tenant as a result of an expansion of the Leased Premises shall be
provided at the same ratios provided herein and at no charge during the Term.
Any parking spaces leased during any renewal period shall be charged to Tenant
at a rate that is not greater than the prevailing monthly rate offered by
comparable office buildings in the Park Ten area of Houston, Texas, including
the Building; provided, however, if the other tenants in the Building are not
being charged for parking in the Garage, neither shall Tenant.

2.04  Payment of Rent. The term "Rent" as used herein shall mean the Base
Rental, the Tenant's proportionate Share of Actual Operating Expenses in excess
of the Base Operating Expenses Rate, the Parking Rentals and all other amounts
provided for in this Lease to be paid by Tenant, all of which shall constitute
rental in consideration for this Lease and the leasing of the Leased Premises.
The term "Additional Rent" as used herein means Rent exclusive of Base Rental.
The Rent shall be due and payable in advance in monthly installments on the
first (1st) day of each calendar month after the Rent Commencement Date (defined
in the Addendum) during the Term hereof, in legal tender of the United States of
America to Landlord at the address shown in Section 5.16 or to such other person
or at such other address as Landlord may from time to time designate in writing.
The Rent shall be paid without notice, demand, abatement, deduction or offset
except as otherwise expressly provided for in the Lease. In no event shall the
Landlord accept or be bound by any payment of Rent more than thirty (30) days in
advance, unless otherwise agreed to in writing between Landlord and Tenant. If
the Term commences or ends on other than the first or last day of a calendar
month, then the installment of Base Rental and the Parking Rentals for such
partial month shall be appropriately prorated. If the Term commences or ends at
any time other than the first day of a calendar year, the Tenant's

8

Proportional Share of Actual Operating Expenses in excess of the Base Operating
Expenses Rate shall be prorated for such year according to the number of days of
the Term during such year. In no event shall Base Rental or monthly installments
thereof be less than the amounts specified in Section 2.01 (subject to Tenant's
abatement rights as set forth in Section 3.01(c) and Section 5.02 of this Lease
Agreement).

Article 3
Landlord's Services

3.01   Services to be Furnished by Landlord.

(a)   Subject to Section 3.01(c) of this Lease Agreement, Landlord shall
furnish the following services ("Landlord Services"):

(1)  Air-conditioning and heating in season, during Normal Building
Operating Hours (hereafter defined), at such temperatures and in such
amounts as are considered to be standard for other Class A office
buildings in Houston, Texas;

(2)  Hot and cold water for lavatory and drinking purposes in
amounts considered to be standard for other Class A office buildings in
Houston, Texas.

(3)  Janitor service in and about the Building and the Leased
Premises five (5) days per week (as stipulated and detailed on Exhibit
"E" attached hereto and made a part hereof), and semi-annual window
washing; however, Tenant shall pay, as additional Rent upon presentation
of a statement therefor by Landlord, the additional costs attributable to
the cleaning of improvements within the Leased Premises other than
Building Standard (hereinafter defined) improvements;

(4)  Elevators for access to and egress from the Leased Premises on
a non-exclusive basis 7 days per week, 24 hours per day;

(5)  Electrical facilities (seven (7) days per week, twenty-four
(24) hours per day) to furnish sufficient power for typewriters,
calculating machines, photocopying machines, fax machines, computers and
other machines of similar low voltage electrical consumption such that
the total electrical power connected load shall not exceed six and
one-half (6 1/2) watts per square foot of the Rentable Area contained
within the Leased Premises; but not including electricity required for
electronic data processing equipment, special lighting in excess of
Building Standard (defined as one (1) 2'x4' fluorescent fixture per
seventy-five (75) usable square feet), and any other electrical equipment
which requires a voltage other than 110/120 volts single phase (other
than photo duplication machines, which shall be considered building
standard so long as the connected load does not exceed 6.5 watts per
square foot of rentable area continued within the Leased Premises. If the
installation of said electrical equipment requires additional air
conditioning capacity above that provided by the Building Standard
system, then the additional air conditioning installation and operating
costs will be the obligation of Tenant. Landlord, at its option and at
Tenant's expense, may cause an electric current

9

meter or such similar device to be installed in or near the Leased
Premises so as to measure the amount of electric current consumed by
Tenant.

(6)  Electrical facilities (seven (7) days per week, twenty-four
(24) hours per day) to furnish power to operate Tenant's Building
standard lighting and other equipment that operates on 480/277 volts
(collectively, the "High Power Equipment"), provided that the total
connected load for the High Power Equipment shall not exceed two (2)
watts per square foot of the Rentable Area contained in the Leased
Premises.

(7)  Replacement of fluorescent lamps in Building Standard light
fixtures and incandescent bulb or fluorescent lamp replacement in public
toilet and restroom areas, Complex common areas and stairwells; and

(8)  Equipment and personnel to limit access to the Building after
normal business hours which shall consist of an unmanned security cardkey
access system similar in design and quality found in similar buildings in
the Park Ten area; PROVIDED, HOWEVER, SO LONG AS LANDLORD IS PROVIDING
THE AFOREMENTIONED SECURITY CARDKEY ACCESS SYSTEM, LANDLORD SHALL HAVE NO
FURTHER RESPONSIBILITY TO PREVENT, AND SHALL NOT BE LIABLE TO TENANT FOR,
AND SHALL BE INDEMNIFIED BY TENANT AGAINST, LIABILITY OR LOSS TO TENANT,
ITS AGENTS, EMPLOYEES AND VISITORS ARISING OUT OF LOSSES DUE TO THEFT,
BURGLARY, OR DAMAGE OR INJURY TO PERSONS OR PROPERTY CAUSED BY PERSONS
GAINING ACCESS TO THE BUILDING, GARAGE OR THE LEASED PREMISES, AND TENANT
HEREBY RELEASES LANDLORD FROM ALL LIABILITY RELATING THERETO, EXCEPT TO
THE EXTENT SUCH LOSSES ARE CAUSED IN WHOLE OR IN PART BY THE WILLFUL
MISCONDUCT OF LANDLORD. Landlord shall furnish an adequate number of
cardkeys for the Leased Premises (not to exceed 4 cardkeys per 1,000
square feet of Rentable Area), and any additional cardkeys will be
furnished at a charge equal to Landlord's actual cost on an order signed
by Tenant or Tenant's authorized representative. All such cardkeys shall
remain the property of Landlord. No additional locks shall be allowed on
any door of the Leased Premises without Landlord's permission, and Tenant
shall not make or permit to be made any duplicates of such cardkeys,
except those furnished by Landlord. Upon termination of this Lease,
Tenant shall surrender to Landlord all the cardkeys for the Leased
Premises, and give to Landlord the explanation of the combination of all
locks for safes, safe cabinets, and vault doors, if any, in the Leased
Premises.

(b)  "Normal Building Operating Hours" shall be from 7:00 a.m. to 6:00
p.m. Monday through Friday, and 7:00 a.m. to 1:00 p.m. Saturday, exclusive of
Sundays and "Holidays". "Holidays" shall refer to New Year's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Friday following
Thanksgiving Day, Christmas Day, and other holidays commonly observed by a
majority of the tenants of the Building. If the holiday occurs on Saturday or
Sunday, the Friday preceding or the Monday following may, at Landlord's
discretion, be observed as a Holiday.

10

(c)    Failure by Landlord to any extent to furnish services hereunder or
any cessation thereof shall not render Landlord liable in any respect for
damages to either person or property, nor be construed as an eviction of Tenant,
nor work an abatement of Rent (except as provided for herein), nor relieve
Tenant from fulfillment of any covenant or agreement hereof. Should any of such
services be interrupted, Landlord shall use reasonable diligence to restore the
same promptly, but Tenant shall have no claim for rebate of Rent, damages, or
eviction on account thereof, and Tenant waives all rights it may have at law or
in equity, including any rights Tenant may have arising from implied warranties
of suitability. Notwithstanding the above, Landlord acknowledges that there are
certain Essential Landlord Services. For purposes herein, "Essential Landlord
Services" shall be defined, and strictly limited to, air conditioning and
heating, hot and cold water (for laboratory, lavatory and drinking purposes
only), elevator service, sewer service and electrical power in the absence of
which Tenant would not be able to conduct business in or utilize the Leased
Premises for the purpose they were let. In the event Essential Landlord Services
are interrupted, and such interruption is not caused by the act or omission of
Tenant, and such interruption continues for a period of five (5) consecutive
business days, then commencing upon the sixth (6th) consecutive business day
Tenant (as its sole and exclusive remedy) shall be entitled to an abatement of
Base Rental and Additional Rent until such time as the Essential Landlord
Services are restored. Notwithstanding the foregoing, in the event Essential
Landlord Services are interrupted and unavailable to Tenant for more than
seventy-five (75) consecutive days, and such interruption has not been caused by
the willful acts of Tenant, Tenant shall have the right to terminate this Lease
upon payment of all Rent due hereunder through the date that rental abatement
due to interruption of Essential Landlord Services first occurred.

(d)    Tenant shall pay to Landlord, monthly as billed, as Additional Rent
hereunder, such charges for additional electrical services (in excess of the
electrical allowances provided to Tenant in Section 3.01) as may be separately
metered for (i) any utility services utilized by Tenant for computers, data
processing equipment or other similar electrical equipment; (ii) extra lighting;
(iii) air-conditioning, heating and other services in excess of that stated in
Sections 3.01 hereof; or (iv) other air-conditioning, heating and services not
standard for the Building or provided at times other than Normal Building
Operating Hours. Tenant shall pay all costs associated with providing separate
utility meters to the Leased Premises. In the event separate utility meters are
provided to the Leased Premises, Landlord may elect to have all charges for the
utilities separately metered to the Leased Premises, and if such utility
consumption exceeds the amounts described in Sections 3.01a(5) and (6), Tenant
will be responsible for the costs of utilities in excess of Building Standard
amounts. In the event that Landlord furnishes extra or additional services to be
paid for by Tenant, a failure to pay for such services within ten (10) days
after notice shall constitute an Event of Default and shall further authorize
Landlord, at Landlord's discretion and without notice, to discontinue all such
services. Notwithstanding the foregoing, Landlord will provide, at no cost to
Tenant, 240 hours per calendar year of after hours heating and air-conditioning
to each floor (or portion thereof) in the Leased Premises (the "After Hours HVAC
Allowance"). Unused hours in the After Hours HVAC Allowance may carry over into
the following year, but not beyond the following year. After hours
air-conditioning and heating in excess of the After Hours HVAC Allowance will be
available and provided by Landlord at a charge of $16.50 per hour per floor
(subject to future increases equal to the actual

11

increases in Landlord's cost of providing such after hours HVAC service). Except
in cases of unforeseeable emergencies, which Landlord will use reasonable
efforts to accommodate, all requests for after hours heating and
air-conditioning must be received no later than 4:00 p.m. on the day service is
required, and, in the case of weekends or holidays, by 4:00 p.m. on the
immediately preceding business day.

(e)   Any services requested by Tenant from Landlord on Sundays, Building
Holidays and outside of Normal Building Operating Hours (to the extent not
provided as a Landlord Service on a seven (7) days per week, twenty-four (24)
hours per day basis) or which are in excess of those Landlord Services to be
provided by Landlord pursuant to Section 3.01(a) (collectively, "Additional
Services") shall be provided only upon Tenant's request and agreement in advance
to bear the cost of operations attributable to such Additional Services, not to
exceed Landlord's actual cost plus a reasonable repair/depreciation charge.

3.02   Access by Tenant Prior to Commencement of Term. Landlord shall permit
Tenant and its employees, agents and suppliers to enter the Leased Premises
prior to, and after, the Commencement Date to enable Tenant to do such things as
may be required by Tenant to make the Leased Premises ready for Tenant's
occupancy. Such parties will not interfere with or delay the performance of any
typical and normal office use activities by Landlord or other occupants of the
Building. Landlord may withdraw such permission upon twenty-four (24) hours
notice to Tenant if Landlord determines that any such interference or delay has
been or may be caused. Any such entry into the Leased Premises shall be at
Tenant's risk and neither Landlord nor Landlord shall be liable in any way for
personal injury, death, or property damage which may be suffered in or about the
Leased Premises or the Building by Tenant or its employees, agents, contractors,
suppliers or workmen, and Tenant hereby indemnifies Landlord therefrom except
for those personal injuries, deaths or property damages caused by the willful
misconduct of Landlord.

3.03   Condition of Building and Leased Premises.

(a)   The Initial Leased Premises shall be delivered to Tenant no later
than the date which is ten (10) days from the Effective Date (such date being
hereinafter called the "Premises Delivery Date"). On the Premises Delivery Date,
the leasehold improvements and tenant finish set forth and described on Exhibit
"F" attached hereto ("Landlord Improvements") will be completed on the first
(1st), second (2nd) and third (3rd) floors of the Leased Premises at Landlord's
sole cost and expense. The portion of the Leased Premises located on the fourth
(4th) floor will be delivered in its as-is condition as of the Effective Date.
Notwithstanding the provisions of Exhibit "G" ("Workletter"), the cost of all
installation (to be performed by Landlord) of any improvements to the Leased
Premises in addition to the Landlord Improvements requested by Tenant following
the Premises Delivery Date (calculated at Landlord's actual cost plus an
additional charge of five percent (5 %) to cover overhead) shall be for Tenant's
account and at Tenant's cost (and Tenant shall pay ad valorem taxes thereon),
which cost shall be payable by Tenant to Landlord as a part of the Rent
hereunder promptly upon being invoiced therefor, and failure by Tenant to pay
such cost in full within thirty (30) days after the date of billing shall
constitute failure to pay Rent when due and an Event of Default by Tenant
hereunder giving rise to all remedies available to Landlord under this Lease.

12

(b)   Subject to Section 3.03(c), if on the Premises Delivery Date any of
the Landlord Improvements have not been substantially completed as reasonably
determined by Tenant's designated architect, or if Landlord is unable to tender
possession of the Leased Premises to Tenant on the Premises Delivery Date, then
the Commencement Date (and the Rent Commencement Date) shall be postponed until
such work to be performed in the Leased Premises at Landlord's expense is
substantially completed as reasonably determined by Tenant's designated
architect or until Landlord is able to tender possession of the Leased Premises
to Tenant, as the case may be. The deferment of installments of Rent and
postponement of the Commencement Date pursuant to this Section 3.03(b) shall,
except as provided below, be Tenant's exclusive remedy for Landlord's delay of
completion of Landlord Improvements to the Leased Premises or failure to tender
possession of the Leased Premises to Tenant and Tenant shall have no claim
against Landlord because of any such delay in completion of the Landlord
Improvements or failure to deliver the Leased Premises.

(c)   No delay in the completion of the Leased Premises resulting from (i)
delay or failure on the part of Tenant in furnishing information or other
matters required in, by or in connection with Exhibit "F", or (ii) changes
ordered by Tenant in the Landlord Improvements (hereinafter defined) shall delay
the Commencement Date, or Rent Commencement Date. If prior to the Commencement
Date Tenant shall enter into possession of all or any part of the Leased
Premises, (other than an entry with Landlord's consent pursuant to Section 3.02)
then the Term, and all obligations of Tenant to be performed during the Term
shall commence on, and the Commencement Date shall be deemed for all purposes to
be, the date of such entry, provided that no such early entry shall operate to
change the expiration date provided herein. Notwithstanding the above, if the
Landlord Improvements have not been completed by May 1, 2001, Tenant shall have
the right, by written notice delivered to Landlord no later than May 15, 2001 to
terminate this Lease Agreement

(d)   Subject to the provisions of Section 4.07 of this Lease Agreement,
unless otherwise agreed to in writing between Landlord and Tenant, all
alterations, physical additions, or improvements in or to the Leased Premises
(including fixtures) shall, when made, become the property of Landlord and shall
be surrendered to Landlord upon termination of this Lease, whether by lapse of
time or otherwise; provided, however, this clause shall not apply to trade
fixtures (including any and all filing systems), moveable equipment or furniture
owned by Tenant or any other party.

(e)   Upon the Premises Delivery Date, Landlord represents and warrants
that the Leased Premises, as same shall be constructed or improved in accordance
with this Lease, including Exhibit "F", will be in compliance with all
applicable building codes, rules, regulations and applicable laws governing
occupancy of the Building ("Applicable Laws") including Title III of the
Americans with Disabilities Act of 1990, Public Law 101-336, as amplified by the
final rule promulgated by the Department of Justice in Section 28 of the Code of
the Federal Regulations, part 35, as the aforesaid Act of Regulations may be
hereafter modified or amended (the "ADA"). If, subsequent to the Premises
Delivery Date, any Applicable Law or the ADA is modified or new legislation
enacted ("New Applicable Law" or "New ADA") so that the Leased Premises (but not
improvements or modifications to the Building code elements or the Complex) or
any improvements, personal property, fixtures or any other matter or thing
comprising of or

13

located within the Leased Premises must be removed, altered, modified, improved,
reconstructed, added or changed in order to cause the Leased Premises, or any
aspect thereof, to be in compliance with the requirements of such Applicable Law
or the ADA, Landlord shall use reasonable best efforts to notify Tenant of the
same, in which event Tenant shall promptly undertake such removal, alteration,
modification improvement, reconstruction, addition or change at the sole cost of
the Tenant, so that the Leased Premises and all aspects thereof shall be in
compliance with such Applicable Law or the ADA and any other law, code, statute,
regulation or ordinance applicable to the Leased Premises. Prior to commencing
work necessary to cause the Leased Premises to comply with the requirements of
the ADA and all other Applicable Laws, the Tenant shall notify the Landlord of
the work to be undertaken by the Tenant in this regard. The failure of the
Tenant to undertake work necessary to cause the Leased Premises to comply with
the requirements of such New Applicable Law or the New ADA within thirty (30)
days after receipt of notice to undertake such work, whether from the Landlord
or regulatory authority, shall constitute an Event of Default pursuant to the
terms and provisions of this Lease. The cost of improving, altering, modifying,
or otherwise changing the Leased Premises in order to comply with the
requirements of the New ADA shall be the Tenant's cost, notwithstanding the fact
that compliance with such New Applicable Law or the New ADA was necessitated by,
or as a result of, alterations in the Leased Premises, which alterations were or
are to be undertaken by the Landlord at the Landlord's sole cost and expense. In
the event that the Leased Premises, the Building, the Complex or any portion or
aspect of any of them is determined to fail to comply with such New Applicable
Law or the New ADA, and that portions of the Building or the Complex (other than
the Leased Premises) should be improved, altered, modified or otherwise changed
in order to cause the Building or the Complex, or any portion of any of them, to
be in compliance with the requirements of such Applicable Law or the ADA,
Landlord shall undertake such improvements, alterations, modification or changes
to the Building or the Complex as the Landlord deems necessary to cause such
improvements to comply with the requirements of such New Applicable Law or the
New ADA. Notwithstanding anything to the contrary contained in this Lease
following the Commencement Date, all costs and expenses for labor, materials,
architectural fees, engineering fees, overhead, insurance, services or supplies
incurred by the Landlord in causing the Building or the Complex to comply with
the requirements of any New Applicable Law or the New ADA shall constitute
Actual Operating Expenses of the Building even though such costs may be in the
nature of capital improvements or expenses, and shall be reimbursed to the
Landlord as a part of Actual Operating Expense in accordance with the terms and
provisions of this Lease.

3.04   Repair and Maintenance by Landlord. Landlord shall provide cleaning and
maintenance of the public portions of the Complex in a first class manner,
including painting and landscaping around the Complex. Landlord shall perform
and make such maintenance, repairs, replacements and improvements to the Complex
in a first class manner, including the base mechanical and electrical systems,
as may be required during the Term to keep the same in good condition and repair
in a manner consistent with other comparable Class A office buildings in
Houston, Texas. Except as required of Landlord above, after the Commencement
Date, Landlord shall not be required to make any improvements or repairs of any
kind or character to the Leased Premises. This Section 3.04 shall not apply in
the case of damage or destruction by fire or other casualty (as to which Section
5.02 shall apply), or in the case of latent or structural

14

defects to the Complex or Leased Premises (including, but not limited to the
roof and curtain wall), which Landlord shall repair, or damage resulting from an
eminent domain taking (as to which Section 5.01 shall apply). Except to the
extent not reasonably avoidable in connection with temporary construction,
renovation, repair, maintenance or other necessary activities of Landlord in the
Building, and except in connection with the exercise of remedies it may have
against Tenant in the event of default by Tenant under this Lease, Landlord
shall conduct its business and control its agents, employees and contractors in
such manner as not to create any nuisance, or interfere with, annoy or disturb
Tenant in its occupancy of the Leased Premises.

Article 4
Tenant's Covenants

4.01   Payments by Tenant. Tenant agrees to timely pay the Rent and all rents
and sums provided to be paid to Landlord hereunder at the times and in the
manner herein provided.

4.02   Certain Taxes. Tenant shall pay all ad valorem taxes on all improvements
installed in the Leased Premises that are in excess of those installed by
Landlord from time to time as Building Standard and in excess of the items to be
installed by Landlord at Landlord's cost under Exhibit "F" or specified in
Section 3.03(a) hereof.

4.03   Repairs by Tenant. Tenant shall, at its cost, repair or replace any
damage to the Building, or any part thereof, caused by Tenant or Tenant's
agents, employees, invitees or visitors; provided if Tenant fails to make such
repairs or replacements promptly, Landlord may, at its option, make such repairs
or replacements and the cost thereof (plus five percent (5%) for overhead to
Landlord) shall be payable by Tenant on demand as a part of the Rent hereunder,
and failure of Tenant to pay such costs within thirty ( 30 ) days, following
written notice from Landlord, shall constitute a failure to pay Rent when due
and an Event of Default by Tenant hereunder.

4.04   Care of the Leased Premises. Tenant shall maintain the Leased Premises in
a clean, attractive condition, and not commit or allow any waste or damage to be
committed on or to any portion of the Leased Premises, and at the expiration or
termination of this Lease shall deliver up the Leased Premises to Landlord in as
good condition as at date of possession by Tenant, ordinary wear and tear and
damage from casualty or condemnation excepted.

4.05   [Intentionally Deleted]

4.06   Assignment of Lease.

(a)   Tenant shall not assign this Lease or sublease the Leased Premises
or any part thereof or mortgage, pledge or hypothecate its leasehold interest or
grant any concession or license within the Leased Premises (any such assignment,
lease, mortgage, pledge, hypothecation, or grant of a concession or license
being hereinafter referred to in this Section 4.06 as a "Transfer") without the
prior express written permission of Landlord, which will not be unreasonably
withheld or delayed; provided, however, that Landlord's right to terminate this
Lease as to any space for which Tenant requests permission to make a Transfer
shall not be

15

limited, qualified or in any way affected by or subject to the agreement that
permission will not be unreasonably withheld, it being understood and agreed
that if Tenant requests Landlord's permission to make a Transfer, Landlord shall
have the right, in its sole discretion, for any reason or for no reason, to
terminate this Lease as to the space so affected as hereinafter provided unless
such transfer is to a subsidiary, affiliate or successor of Tenant pursuant to
Section 4.06(f) whereby Landlord will not have the right prescribed herein to
terminate this Lease as to the space so affected. Any attempt to effect a
Transfer without such permission of Landlord shall be void and of no effect.
Tenant acknowledges that any assignment or Lease is also subject to the prior
written consent of any Landlord's Mortgagee (as defined in Section 4.10).
Without limiting the generality of what may constitute reasonable grounds for
withholding permission, it is stipulated and agreed that during the initial
twelve (12) months of the Lease Term, a refusal to permit a Transfer to another
tenant in the Building, or a refusal to permit a Transfer to a proposed assignee
or sublessee with whom Landlord has been negotiating to lease space in the
Building shall be deemed reasonable. Without limiting the foregoing, Landlord
shall have the right to refuse to permit a Transfer to any Transferee that is
engaged in the business of telemarketing call-out services, sexually oriented
businesses, government agencies not typically found in Class A office buildings,
or any other use that is not compatible with the other tenants in the Building.
In order for Tenant to make a Transfer, Tenant must request in writing
Landlord's permission within at least thirty (30) days in advance of the date on
which Tenant desires to make a Transfer, which request will be accompanied by a
detailed term sheet outlining the terms of the Transfer. Landlord and Landlord's
Mortgagees shall then have a period of fifteen (15) calendar days following
receipt of such notice within which to notify Tenant in writing that Landlord
elects (i) to permit Tenant to assign or sublet such space, subject, however, to
the subsequent written approval of the proposed assignee or sublessee by
Landlord, or (ii) to refuse consent (only for those reasons prescribed herein)
to Tenant's requested Transfer and to continue this Lease in full force and
effect as to the entire Leased Premises. If Landlord shall fail to notify Tenant
in writing of such election within said fifteen (15) day period, Landlord shall
be deemed to have elected option (ii) above. If Landlord elects to exercise
option (ii) above, Tenant agrees to provide at its expense, direct access from
any sublet space or concession area to a public corridor of the Building. The
prohibition against a Transfer contained herein shall be construed to include a
prohibition against any Transfer by operation of law.

(b)  Notwithstanding that the prior express written permission of Landlord
to a Transfer may have been obtained under the provisions of Section 4.06(a),
the following shall apply:

(1)  Tenant shall (i) in the event of an assignment, cause the
assignee to expressly assume in writing and to agree to perform all of the
covenants, duties and obligations of Tenant hereunder, and such assignee
shall be jointly and severally liable therefor along with Tenant; (ii)
cause such assignee or sublessee to grant Landlord an express first and
prior contract lien and security interest in the same manner as the lien
granted by Tenant to Landlord under Section 5.03 hereof; (iii) subordinate
to Landlord's statutory lien and the aforesaid contract lien and security
interest any liens or other rights which Tenant may claim with respect to
any fixtures, equipment, goods, merchandise or other property owned by or
leased to the proposed assignee or sublessee or other party intending to
occupy the Leased Premises; and (iv) agree with Landlord that in the event

16

that the rent or other consideration due and payable by a sublessee or
assignee under any such permitted Lease or assignment exceeds the Rent
for the portion of the Leased Premises so transferred, then Tenant
shall pay Landlord as additional rental hereunder fifty percent (50%)
of such excess rental and other consideration immediately upon receipt
thereof by Tenant from such transferee.

(2)  A signed counterpart of all instruments relative to a
Transfer (executed by all parties to such transaction with the
exception of Landlord) shall be submitted by Tenant to Landlord prior
to or contemporaneously with the request for Landlord's written
consent thereto; and, Tenant shall reimburse Landlord for all
reasonable attorney's fees incurred in connection with Landlord's
review and approval of such instruments;

(3)  No usage of the Lease Premises different from the usage
herein provided to be made by Tenant shall be permitted without the
prior written consent of the Landlord, and all of the terms and
provisions of this Lease shall continue to apply after a Transfer; and

(4)  In the event Landlord consents to a Transfer, Tenant will
nevertheless remain directly and primarily liable for the performance
of all the covenants, duties and obligations of Tenant hereunder
(including, without limitation, the obligation to pay all Rent herein
provided to be paid), and Landlord shall be permitted to enforce the
provisions of this Lease against the undersigned Tenant or any
transferee, or both, without demand upon or proceeding in any way
against any other persons. Notwithstanding the foregoing, in the event
Tenant assigns the Lease to a third party which is reasonably
acceptable to Landlord and which is publicly traded, has a market
capitalization of at least $10 billion and whose price/earnings ratio
as of the business day immediately preceding the date of such
assignment is not greater than the average price/earnings ratio for
the stocks comprising the Standard & Poors 500 index as of the same
date, then, in such case, Tenant shall be relieved of all liability as
Tenant hereunder following the date of such assignment.

(c)  If Tenant is a corporation then any transfer of this Lease by merger,
consolidation or dissolution or any change in ownership or power to vote a
majority of the voting stock in Tenant outstanding at the time of execution of
this Lease shall constitute a Transfer for the purposes of this Lease; provided,
however, that acquisition of all stock of a corporate tenant by any corporation,
the stock of which is registered pursuant to the Securities Act of 1933 or the
merger of a corporate tenant into such a corporation, the stock of which is so
registered, shall not be deemed to be a violation of Section 4.06(a). For
purposes of this Section 4.06(c), the term "voting stock" shall refer to shares
of stock regularly entitled to vote for the election of directors of the
corporation involved.

(d)  If Tenant is a general partnership having one or more corporations as
partners or if Tenant is a limited partnership having one or more corporations
as general partners, the provisions of Section 4.06(c) shall apply to each of
such corporations as if such corporations alone had been the Tenant hereunder.
If Tenant is a general or limited partnership, joint venture,

17

or other form of association, the transfer of a majority of the ownership
interests therein shall constitute a Transfer for the purposes of this Lease.

(e)  The consent by Landlord to a particular Transfer shall not be deemed a
consent to any other subsequent Transfer. If this Lease, the Leased Premises or
the Tenant's leasehold interest therein, or if any portion of the foregoing is
transferred, or if the Leased Premises are occupied in whole or in part by
anyone other than Tenant without the prior consent of Landlord as provided
herein, Landlord may nevertheless collect rent from the transferee or other
occupant and apply the net amount collected to the Rent payable hereunder, but
no such transaction or collection of rent or application thereof by Landlord
shall be deemed a waiver of the provisions hereof or a release of Tenant from
the further performance by Tenant of its covenants, duties and obligations
hereunder.

(f)  Notwithstanding anything to the contrary, no approval or consent shall
be required for a Transfer to a "subsidiary", "affiliate" or a "successor" of
Tenant.

For purposes of this Section 4.06, a "subsidiary", "affiliate" or a "successor"
of Tenant shall mean the following:

(1)  An "affiliate" shall mean any corporation which, directly or
indirectly, controls or is controlled by or is under common control with
Tenant. For this purpose, "control" shall mean the possession, directly or
indirectly, or the power to direct or cause a direction of the management
and policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.

(2)  A "subsidiary" shall mean any corporation not less than fifty
percent (50%) of whose outstanding stock shall, at the time, be owned
directly or indirectly by Tenant.

(3)  A "successor" of Tenant shall mean; (i) a corporation with which
Tenant, its corporate successors or assigns, is merged or consolidated in
accordance with applicable statutory provisions for merger or consolidation
of a corporation, or (ii) a corporation acquiring the lease hereby demised
in conjunction with such corporation's acquisitions of all or substantially
all of the assets of Tenant, its corporate successors or assigns, or (iii)
any corporate successor to a successor corporation becoming such by either
of the methods described in (i) or (ii). Notwithstanding anything to the
contrary contained herein, in the event of a Transfer to an affiliate,
subsidiary or successor (as defined herein) all excess rental or other
consideration shall be for the sole benefit of Tenant. Landlord's right to
terminate this Lease as to the space so affected as described in 4.06(a)(i)
shall be null and void.

4.07 Alterations, Additions, Improvements. Tenant will make no alteration,
change, improvement, repair, replacement or addition to the Leased Premises
without the prior written consent of Landlord, which consent will not be
unreasonably withheld or delayed. Tenant may remove its trade fixtures, office
supplies and movable office furniture and equipment not attached to the Building
provided (i) such removal is made prior to the termination or expiration

18

of the Term; (ii) Tenant is not then in default in the timely performance of any
obligation or covenant under this Lease; and (iii) Tenant promptly repairs all
damage caused by such removal. All other property and the Leased Premises and
any alteration or addition to the Leased Premises and any other articles
attached or affixed to the floor, wall, or ceiling of the Leased Premises is a
part of the property of Landlord and shall be surrendered with the Leased
Premises as part thereof at the termination or expiration of this Lease, without
payment or compensation therefor. If, however, Landlord so requests in writing,
Tenant will, prior to termination or expiration of this Lease, remove any and
all alterations, additions, fixtures, equipment and property placed or installed
by Tenant or installed by Landlord at Tenant's expense in the Leased Premises
and will repair any damage caused by such removal, so long as Landlord
stipulates in writing the removal or such items to be removed contemporaneously
with Landlord's approval of any requested alterations, additions or improvements
by Tenant.

4.08  Compliance with Laws and Usage; Building Rules and Regulations; Liens.
Tenant, at its cost, shall comply with all federal, state, municipal and other
laws and ordinances applicable to the Leased Premises and the business conducted
therein by Tenant (including, but not limited to, all statutes, rules and
regulations covering the use, storage, transportation and disposal of hazardous
substances, including petroleum and other petrochemicals), and with the Building
Rules and Regulations attached hereto as Exhibit "I" hereto as such rules and
regulations are modified and supplemented by Landlord from time to time, and
such other rules and regulations as may be adopted by Landlord from time to
time, which when sent by Landlord to Tenant in writing shall be thereafter
carried out and observed by Tenant (so long as such rules and regulations, and
any changes or modifications thereto, are uniformly and consistently applied to
all Tenants of the Building); will not engage in any activity which would cause
landlord's fire and extended coverage insurance to be canceled or the rate
thereof to be increased (or, at Landlord's option, will pay any such increase);
and will not commit any act which is a nuisance or annoyance to Landlord or to
other tenants in the Building or which might, in the reasonable judgment of
Landlord, appreciably damage Landlord's goodwill or reputation, or tend to
injure or depreciate the value of the Complex. Tenant has no authority to
encumber the Complex or Leased Premises with any lien, and Tenant shall not
suffer or permit any such lien to exist. Should any such lien hereafter be
filed, Tenant shall promptly discharge the same at its sole cost.

4.09  Access by Landlord. Tenant shall permit Landlord and its agents or
representatives to enter into and upon any part of the Leased Premises at all
reasonable hours with reasonable prior advance written notice (emergencies
excepted) to inspect same; to clean (after Normal Building Operating Hours); to
make repairs, alterations or additions thereto, as Landlord may deem necessary
or desirable; to show the Leased Premises to prospective purchasers or tenants
(only during the last 9 months of the Term); or for any other purpose deemed
reasonable by Landlord; and Tenant shall not be entitled to any abatement or
reduction or Rent by reason thereof. In connection with the foregoing, Landlord
will minimize interference with Tenant's business to the extent reasonably
possible.

4.10  Landlord's Mortgagee. Contemporaneously with the execution hereof, Tenant
and American National Insurance Company, the current mortgagee under the
mortgage constituting the current and only mortgage lien on the Complex or the
Leased Premises ("Landlord's Mortgagee") have executed a Subordination,
Non-Disturbance and Attornment Agreement in the

19

form attached hereto and made a part hereof as Exhibit "H." Tenant agrees with
Landlord and with the mortgagee of any mortgage or the beneficiary of any deed
of trust hereafter placed against and constituting a lien on the Complex or the
Leased Premises ("Landlord's Future Mortgagee") that any Landlord's Future
Mortgagee shall have the right at any time to elect, by notice in writing given
to Tenant, to make this Lease superior to the lien of such mortgage or deed of
trust and upon the giving of such notice to Tenant, this Lease shall be deemed
prior and superior to the mortgage or deed of trust in respect to which such
notice is given; and at Landlord's Mortgagee's request Tenant shall execute a
recordable instrument establishing this Lease as superior to such lien; or
Landlord's Future Mortgagee may, by like notice, make this Lease subordinate to
such mortgage or deed of trust. If Landlord's Future Mortgagee shall elect to
make this Lease subordinate to such mortgage or deed of trust, Tenant agrees to
attorn to such Landlord's Future Mortgagee so long as such Landlord's Future
Mortgagee also agrees to not disturb Tenant's possession under this Lease in the
event such Landlord Future Mortgagee becomes the owner of the Building through
foreclosure or otherwise. In confirmation of such subordination, attornment and
non-disturbance agreement, Tenant shall execute promptly any reasonable
Subordination, Attornment and Non-Disturbance Agreement that Landlord or such
Landlord's Future Mortgagee may request. Without limiting the foregoing, Tenant
agrees to enter into a Subordination, Non-Disturbance and Attornment Agreement
substantially in the form attached as Exhibit "H." Tenant further agrees that
any Landlord's Mortgagee or Landlord's Future Mortgagee may demand the payment
of Rent and performance of this Lease at any time. Tenant hereby constitutes
Landlord as Tenant's attorney-in-fact to execute such Subordination, Attornment
and Non-Disturbance Agreement for and on behalf of Tenant should Tenant fail to
execute such agreement within fifteen (15) days after written request to do so.
In the event of the enforcement by Landlord's Mortgagee or Landlord's Future
Mortgagee of the remedies provided for by law or by such mortgage or deed of
trust, Tenant will, upon request of any person or party succeeding to the
interest of Landlord as a result of such enforcement, automatically become the
Tenant of such successor in interest without change in terms or other provisions
of such lease provided, however, that such successor in interest shall not be
(i) bound by any payment of Rent for more than one month in advance except
payments in the nature of security for the performance by Tenant of its
obligations under this Lease; (ii) subject to any offset, defense or damages
arising out of a default (except as provided for in Section 3.01(c) and Section
5.02 of this Lease Agreement) or any obligations any preceding Landlord; or
(iii) bound by any amendment or modification of this Lease made without the
written consent of such successor in interest, provided Tenant has been given
prior notice of the identity of such successor in interest. Upon request by such
successor in interest, Tenant shall execute and deliver reasonable instruments
confirming the attornment provided for herein.

4.11  Estoppel Certificate. At Landlord's request from time to time, Tenant will
within ten (10) days, without further consideration, execute an estoppel
certificate addressed to Landlord's Mortgagee or to such party as Landlord may
designate certifying to such notice provisions and other matters as Landlord's
Mortgagee or as the other party designated by Landlord may reasonably request.
At Landlord's request from time to time, Tenant will within ten (10) days
execute, without further consideration, a certificate stating the commencement
and expiration dates of the Term, the rental then payable hereunder, that (to
its actual knowledge) there are no defaults on the part of Landlord or claims
against Landlord hereunder (or if there are any, stating

20

the same with particularity), and such other information pertaining to this
Lease as Landlord may reasonably request, addressed to such party as Landlord
may designate.

Article 5
Mutual Covenants

5.01   Condemnation, Loss or Damage. If the Leased Premises, Complex, or any
part thereof shall be taken or condemned for any public purpose (or conveyed in
lieu or in settlement thereof) to such an extent as to render the remainder of
the Building or Leased Premises, in the opinion of an independent architect
selected by Landlord, not reasonably suitable for occupancy, this Lease shall,
at the option of Landlord, forthwith cease and terminate (and if the Leased
Premises, including access thereto, shall be taken or condemned, or conveyed in
lieu or in settlement thereof, to such an extent as to render the remainder of
the Leased Premises, in Tenant's opinion, unsuitable for its occupancy, this
Lease shall, at the option of Tenant, forthwith cease and terminate), and all
proceeds from any taking or condemnation of the Building and the Leased Premises
shall belong to and be paid to Landlord; provided, however, any award for
Tenant's personal property and improvements in excess of Building Standard shall
be paid to Tenant. If this Lease is not so terminated, Landlord shall repair any
damage resulting from such taking, to the extent and in the manner provided in
Section 5.02, and Base Rental and Additional Rent hereunder shall be abated to
the extent the Leased Premises are rendered untenantable during the period of
repair and thereafter be adjusted on an equitable basis considering the areas of
the Leased Premises taken and remaining. Nothing contained herein shall preclude
the Tenant from seeking a separate damage award from the condemning authority.

5.02   Fire or Other Casualty; Certain Repairs.

(a)   In the event of a fire or other casualty in the Leased Premises, to
the extent that the Building or Leased Premises shall be partially destroyed by
fire or other casualty so as to render the Leased Premises untenantable in whole
or in part in the opinion of Landlord and Tenant, or if, as a result of such
fire or other casualty, Tenant is denied access to the Leased Premises, the Base
Rental and Additional Rent provided for herein shall abate as to the portion of
the Leased Premises rendered untenantable until such time as the Leased Premises
are made tenantable as determined by Landlord and Landlord agrees to commence
and prosecute such repair work promptly and with reasonable diligence, or if
such destruction results in the Leased Premises being untenantable in
substantial part for a period reasonably estimated by Landlord to be six (6)
months or longer after the date of the destruction, or in the event of total or
substantial damage or destruction of the Building where Landlord decides not to
rebuild, then all Rent owed up to the date of such damage or destruction shall
be paid by Tenant and this Lease shall terminate upon notice thereof to Tenant.
Landlord will give Tenant written notice of its decisions, estimates or
elections under this Section 5.02 within sixty (60) days after any such damage
or destruction. If Landlord elects to rebuild following the damage or
destruction of the Leased Premises in accordance with this Section 5.02, then if
such repairs are not completed within nine (9) months after the date of such
damage or destruction, Tenant shall have the right to cancel this Lease
Agreement upon payment to Landlord of all Rent due and owing through the date of
such damage or destruction.

21

(b)   Should Landlord elect to effect any repairs under Sections 5.01 or
5.02(a), Landlord shall only be obligated to restore or rebuild the Leased
Premises to a Building Standard condition, and then only to the extent that
insurance proceeds are actually available to Landlord therefor, plus (i) an
amount equal to Landlord's deductible under each applicable insurance policy,
and (ii) the amount that would have been available under an insurance policy
that should have been applicable but proceeds from which are not available due
to Landlord's failure to maintain the policy as and to the extent required under
this Lease. In the event the Base Rental and Additional Rent or any portion of
the Base Rental and Additional Rent is abated under Sections 5.01 or 5.02(a),
the expiration date of the Term specified in Section 1.02 shall be extended for
the period of such abatement. If insurance proceeds are insufficient to rebuild
and Landlord elects not to rebuild with other funds, this Lease will terminate
effective the date of destruction.

5.03   Holding Over. If Tenant should remain in possession of the Leased
Premises after the termination or expiration of the Term without written consent
of Landlord, then Tenant shall be deemed to be occupying the Leased Premises as
a tenant-at-sufferance, subject to all the covenants and obligations of this
Lease, except that the daily Rent shall be one hundred fifty percent (150%) the
Base Rental in effect immediately prior to such expiration or termination, but
such holding over shall not extend the Term.

5.04   Assignment by Landlord. Landlord shall have the right to transfer and
assign, in whole or in part, all its rights and obligations hereunder and
property referred to herein, and upon any such transfer of assignment and
assumption of Landlord's obligations by such assignee, no further liability or
obligation shall thereafter accrue against Landlord hereunder.

5.05   Control of Common Areas and Parking Facilities by Landlord. All public
lobbies, foyers, corridors and restrooms, all automobile parking areas including
(without limitation), the Garage, driveways, entrances and exits thereto, and
other facilities furnished by Landlord, including all parking areas, truck way
or ways, loading areas, pedestrian walkways, ramps, landscaped areas, stairways
and other areas and improvements provided by Landlord for the general use, in
common, of tenants, their officers, agents, employees, invitees, licensees,
visitors and customers shall be at all times subject to the exclusive control
and management of Landlord; Landlord shall have the right, in its reasonable
discretion and at any time, to change or modify any of the facilities and areas
mentioned in this Section so long as such change or modification does not unduly
interfere or disrupt Tenant's use of this Leased Premises under Section 1.03 and
Section 5.18 of this Lease Agreement; and Landlord shall have the right from
time to time to establish, modify and enforce reasonable rules and regulations
(herein called the "Building Rules and Regulations") with respect to all
facilities and areas mentioned in this Section; the initial Building Rules and
Regulations are set out in Exhibit "I" hereto and are of equal dignity herewith
(which shall be consistently and uniformly applied to all tenants and visitors
of the Building).

5.06   Default by Tenant.

(a)   Each of the following occurrences relative to Tenant shall
constitute an "Event of Default:"

22

(1)   Failure or refusal of Tenant to make the timely payment of any
Rent payable under this Lease within five (5) business days following
written notice from Landlord, that the same is due and payable, but not yet
received by Landlord;

(2)   The filing or execution or occurrence of a petition in bankruptcy
or other insolvency proceeding by or against Tenant or petition or answer
seeking relief under any provision of the Bankruptcy Act; or as assignment
for the benefit of creditors or composition; or a petition or other
proceeding by or against the Tenant for the appointment of a trustee,
receiver or liquidator of Tenant or any of Tenant's property; or a
proceeding by any governmental authority for the dissolution or liquidation
of Tenant or any guarantor of Tenant;

(3)   Failure by Tenant in the performance or compliance with any of the
agreements, terms, covenants or conditions provided in this Lease, other
than those referred to in (1) and (2) above, for a period of thirty (30)
days (or longer so long as Tenant is diligently pursuing any compliance or
cure) after notice from Landlord to Tenant specifying the items in default.

(b) This Lease and the Term and estate hereby made are subject to the
limitation that if and whenever any Event of Default shall occur, Landlord may,
at its option and without further written notice to Tenant, in addition to all
other remedies given hereunder or by law or equity, do any one or more of the
following:

(1)   Terminate this Lease, in which event Tenant shall immediately
surrender possession of the Leased Premises to Landlord;

(2)   Enter upon and take  possession  of the Leased  Premises  and
expel or remove  Tenant and any other  occupant and all property therefrom
with or without having terminated the Lease; and

(3)   Alter locks and other security devices at the Leased Premises so
that Tenant will not have access to the Leased Premises (other than to
retrieve files, chattels and personal belongings, which Landlord shall
provide access to the Leased Premises for such purposes during the normal
business hours of the Building). Landlord may take these actions without
incurring any liability and without relinquishing Landlord's right to Rent
or any other right given to Landlord hereunder or by operation of law;
Tenant hereby waiving any right to claim damage for such re-entry expulsion.

(c) Once all applicable written notices are given, cure periods have elapsed
and an Event of Default has occurred, any right of Tenant to receive notice of
Landlord's intent to exercise any of its remedies is hereby waived.

(d) Exercise by Landlord of any one or more remedies shall not constitute
an acceptance of surrender of the Leased Premises by Tenant, it being understood
that such surrender can be effected only by the written agreement of the
Landlord and Tenant, with the prior written consent of any Landlord's Mortgagee
(as defined in Section 4.10).

23

(e)    If Landlord terminates this Lease by reason of an Event of
Default, Tenant shall pay to Landlord the sum of all Rent and other indebtedness
accrued hereunder to the date of such termination, the amounts stated in Section
5.06(f) hereof, plus, as liquidated damages, an amount equal to the then present
value of the Rent and all other indebtedness as would otherwise have been
required to be paid by Tenant to Landlord during the period following the
termination of the Term measured from the date of such termination to the date
of expiration stated in section 1.02, less the then present fair market rental
value of the Leased Premises for such period as reasonably determined by
arbitration proceedings.

(f)    If Landlord repossesses the Leased Premises without terminating
the Lease, then Tenant shall pay to Landlord all Rent and other indebtedness
accrued to the date of such repossession, plus Rent and other sums required to
be paid by Tenant during the remainder of the Term, diminished by any net sums
thereafter received by Landlord through reletting the Leased Premises during
said period (after deducting expenses incurred by Landlord as provided below);
reentry by Landlord will not affect the obligations of Tenant for the unexpired
Term. Tenant shall not be entitled to any excess of any Rent obtained by
reletting over the Rent herein reserved. Actions to collect amounts due by
Tenant may be brought on one or more occasions, without the necessity of
Landlord's waiting until expiration of the Term.

(g)    In case of an Event of Default, to the extent the same were not
paid or deducted, as appropriate, under Section 5.06(e) or (f), Tenant shall
also pay to Landlord: (i) broker's fees incurred by Landlord in connection with
reletting the whole or any part of the Leased Premises; (ii) the cost of
removing and storing Tenant's or any other occupant's property; (iii) and the
cost of repairing, altering, remodeling or otherwise putting the Leased Premises
into condition acceptable to a new tenant or tenants; and (iv) all reasonable
expenses incurred by Landlord in enforcing Landlord's remedies, including
reasonable attorney's fees and court costs. Notwithstanding the above, Tenant's
obligation pursuant to this Section (g) shall be limited to the total of items
(i), (ii), (iii) and (iv) multiplied by the percentage obtained by dividing the
remainder of Tenant's Lease Term by the substitute tenant(s) lease term.

(h)    Upon termination or repossession of the Leased Premises for an
Event of Default, Landlord shall use reasonable efforts to relet the Leased
Premises, or any portion thereof, and to collect rental after reletting. In the
event of reletting, Landlord may relet the whole or any portion of the Leased
Premises for any period, to any tenant, and for any use and purpose. In no event
shall Landlord be required to extend any preference to the reletting of the
Leased Premises or any portion thereof over other vacant space in the Building.
Notwithstanding the above, Landlord shall not discriminate against the Leased
Premises over the leasing of other vacant space in the Building.

(i)    Any and all property which may be removed from the Leased Premises
by Landlord pursuant to the authority of this Lease or of law, to which Tenant
is or may be entitled, may be handled, removed and stored, as the case may be,
by or at the direction of Landlord at the risk, cost and expense of Tenant, and
Landlord shall use reasonable efforts to safeguard such property. Tenant shall
pay to Landlord, upon demand, any and all expenses incurred in such removal and
all storage charges against such property so long as the same shall be in
Landlord's possession or under Landlord's control. Any such property of Tenant
not retaken by Tenant

24

from storage within thirty (30) days after removal from the Leased Premises
shall, at Landlord's option, be deemed conveyed by Tenant to Landlord under this
Lease as by a bill of sale without further payment or credit by Landlord to
Tenant.

(j) If Tenant should fail to make any payment or perform any obligation
hereunder, and such failure continues beyond any applicable cure period allowed
hereunder, Landlord, without obligation to do so and without thereby waiving
such failure or default, may make such payment and/or perform such obligation
for the account of Tenant (and enter the Lease Premises for such purpose), and
Tenant shall pay upon demand all costs, expenses and disbursements (including
reasonable attorneys' fees) incurred by Landlord in taking such remedial action,
plus interest thereon at the highest rate of interest permitted by law.

(k) In addition to the foregoing, if Tenant abandons or fails to occupy
the Leased Premises (without the payment of rent), or any significant portion
thereof, Landlord may, at its election, terminate this Lease.

5.07     Non-Waiver. Neither acceptance of rent by Landlord nor failure by a
party to complain of any action, non-action or default of the other shall
constitute a waiver of any of the first party's rights hereunder. Waiver by
either party of any right for any default of the other shall not constitute a
waiver of any right for either a subsequent default of the same obligation or
any other default. Notwithstanding anything contained herein to the contrary,
should Tenant default under this Lease and subsequently cure such default to
Landlord's satisfaction, Landlord shall acknowledge such cure in writing, and
Landlord agrees no further action shall be taken against Tenant as a consequence
thereof.

5.08     Independent Obligations. The obligation of Tenant to pay all Rent and
other sums hereunder provided to be paid by Tenant and the obligation of Tenant
to perform Tenant's other covenants and duties hereunder constitute independent
unconditional obligations to be performed at all times provided for hereunder,
save and except only when an abatement thereof or reduction therein is
hereinabove expressly provided for and not otherwise. Tenant waives and
relinquishes all rights which Tenant might have to claim any nature of lien
against or withhold, or deduct from or offset against any Rent and other sums
provided hereunder to be paid Landlord by Tenant.

5.09     Time of Essence. In all instances where any act is required at a
particular indicated time or within an indicated period, it is understood and
stipulated that time is of the essence.

5.10     Remedies Cumulative. Either party may restrain or enjoin any breach or
threatened breach of any covenant, duty or obligation of the other herein
contained without the necessity of proving the inadequacy of any legal remedy or
irreparable harm. The remedies of the parties hereunder shall be deemed
cumulative and no remedy of either party, whether exercised by the party or not,
shall be deemed to be in exclusion of any other.

25

5.11   Insurance, Liability, Indemnity, Subrogation and Waiver.

(a) Tenant shall maintain at its sole expense fire and extended coverage
insurance with vandalism, malicious mischief and theft endorsements and with the
additional of the all other peril coverage (formerly known as all risk) and a
sprinkler leakage endorsement and flood coverage (where applicable), on all of
its personal property, including removable trade fixtures, located in the Leased
Premises and on non-Building Standard leasehold improvements and all additions
and improvements made by Tenant in excess of Building Standard leasehold
improvements.

(b) Tenant shall, at its sole expense, maintain in effect at all times
commercial general liability insurance, including contractual liability
coverage, naming Landlord as an additional insured, issued by and binding upon
some solvent insurance company authorized to do business in Texas and
satisfactory to Landlord and with an A.M. Best rating of at least A-VI, with
bodily injury and property damage limits of no less than $1,000,000.00 combined
single limit for each occurrence and $3,000,000.00 in the aggregate for all
liability including products and completed operations coverage. Tenant shall
provide to Landlord (i) copies of such insurance policies prior to the
Commencement Date of the Term, (ii) upon written request from Landlord,
certificates of renewal at least thirty (30) days prior to the expiration date
of any such policies, and (iii) copies of new policies at least thirty (30) days
prior to terminating, or changing insurance companies for, any such policies.

(c) Tenant agrees to release, indemnify, defend and hold harmless
Landlord and Landlord's partners, agents, directors, officers, employees,
invitees and contractors, from and against any and all liabilities, claims,
demands, expenses, fees, fines, penalties, suits, proceedings, actions and
causes of action of any and every kind and nature (including, but not limited
to, legal and investigative costs and all other reasonable costs, expenses and
liabilities from the first notice that any claim or demand is to be made or may
be made) arising or growing out of or in any way connected with Tenant's use,
occupancy, management or control of the Leased Premises, Tenant's use of the
Complex, Tenant's operations or activities in the Building or the Complex, any
breach of this Lease by Tenant or the negligence or intentional misconduct of
Tenant, or its agents, directors, officers or employees. Landlord agrees to
release, indemnify, defend and hold harmless Tenant, and Tenant's partners,
agents, directors, officers, employees, invitees and contractors, from and
against any and all liabilities, claims, demands, expenses, fines, penalties,
suits, proceedings, actions, and causes of action of any kind and every kind and
nature (including, but not limited to, legal and investigative costs and all
other reasonable costs, expenses and liabilities from the first notice that any
claim or demand is to be made or may be made) arising or growing out of or in
any way connected with Landlord's use, occupancy and management or control of
the Leased Premises, Landlord's use of the Complex, Landlord's operations or
activities in the Building or the Complex, any breach of this Lease by Landlord,
or the negligence or intentional misconduct of Landlord, or their respective
agents, directors, officers or employees. This obligation to indemnify shall not
be limited in any way by any limitation of the amount or type of damages,
compensation or benefit payable under applicable worker's compensation acts,
disability benefit acts or other employee benefit acts. The provisions of this
paragraph shall survive the termination of the Lease with respect to any claim
arising before such termination.

26

(d) ANYTHING HEREIN TO THE CONTRARY NOTWITHSTANDING, TENANT AND
LANDLORD HEREBY RELEASE AND WAIVE ALL CLAIMS, RIGHTS OF RECOVERY AND CAUSES OF
ACTION THAT EITHER PARTY OR ANY PARTY CLAIMING BY, THROUGH OR UNDER EITHER PARTY
BY SUBROGATION OR OTHERWISE MAY NOW OR HEREAFTER HAVE AGAINST EACH OTHER OR
THEIR RESPECTIVE PARTNERS, DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS FOR ANY LOSS
OR DAMAGE THAT MAY OCCUR TO THE COMPLEX, LEASED PREMISES, TENANT IMPROVEMENTS OR
ANY OF THE CONTENTS OF ANY OF THE FOREGOING BY REASON OF FIRE OR OTHER CASUALTY,
OR ANY OTHER CAUSE INCLUDING GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR NEGLIGENCE
OF LANDLORD OR TENANT, LANDLORD'S OR TENANT'S PARTNERS, DIRECTORS, OFFICERS,
EMPLOYEES, OR AGENTS (THE "INSURED CLAIMS"), TO THE EXTENT SUCH INSURED CLAIMS
ARE COVERED BY INSURANCE POLICES REQUIRED TO BE MAINTAINED UNDER THE TERMS OF
THIS LEASE.

(e) Tenant and Landlord agree that each shall not be responsible or
liable to the other or to their agents, customers or invitees, for bodily injury
(fatal or non-fatal) or property damage occasioned by the acts or omissions of
any other tenant or such tenant's employees, agents, contractors, customers or
invitees within the Complex, or for any loss or damage to any property or
persons occasioned by theft, fire act of God, public enemy, injunction, riot,
strike, insurrection, war, court order, requisition or order of governmental
body or authority, or any other cause beyond the control of either party, or for
any inconvenience or loss to either party (other than as may arise as a result
of breach of covenant under this Lease) in connection with any of the repair,
maintenance, damage, destruction, restoration or replacement referred to in this
Lease, provided the party causing such inconvenience or loss uses reasonable
efforts to avoid or minimize the same.

(f) Landlord Insurance. Landlord covenants and agrees that it maintain
or cause to be maintained in full force and effect, at all times, "all risk"
fire and extended coverage insurance covering the Building and the Building
Standard leasehold improvements in amounts equal to ninety-five percent (95%) of
the insurable value thereof (actual replacement value without deduction for
physical depreciation) and rental abatement insurance in an amount sufficient to
cover rentals from the Building (except non-continuing charges). Landlord agrees
to maintain throughout the Term comprehensive general public liability and broad
form property damage insurance with a Best rating of at least A-VI, in such
amounts as shall be appropriate for a first-class office building project
similar to the Building, but in any event with limits of not less than One
Million and No/100 Dollars ($1,000,000.00) for injury to or death of any one
person, Five Million and No/100 Dollars ($5,000,000.00) for injury to or death
of any number of persons in any one occurrence, and One Million and No/100
Dollars ($1,000,000.00) for damage to or destruction of property for any one
occurrence. Landlord will maintain employer's liability insurance with a minimum
limit of One Million and No/100 Dollars ($1,000,000.00) for bodily injury.

5.12     Venue; Governing Law. This Lease shall be governed by the laws of the
State of Texas. All monetary and other obligations of Landlord and Tenant are
performable exclusively in Houston, Harris County, Texas.

27

5.13  Notice. Any notice which may or shall be given under the terms of this
Lease shall be in writing and shall be either delivered by hand (with receipt of
notice verified by signature) or sent by United States Registered or Certified
Mail, postage prepaid, if for Landlord to c/o Fidinam Capital, 11811 North
Freeway, Suite 300, Houston, Texas 77060, Attn: Charles S. Iupe; if for Tenant
to Attn: David Mullen, Vice President - Human Resources at the Leased Premises.
Such addresses may be changed from time to time by either party by giving notice
as provided above. Notice shall be deemed given when delivered (if delivered by
hand) or when postmarked (if sent by mail).

5.14  Entire Agreement, Binding Effect, Severability. This Lease and any written
addenda and all exhibits hereto (which are expressly incorporated herein by this
reference) shall constitute the entire agreement between Landlord and Tenant; no
prior written or prior or contemporaneous oral promises, inducements,
representations or agreements not embodied herein shall be binding or have any
force or effect. Landlord's agents do not and will not have authority to make
any promises, agreements, or representations not expressly contained in this
Lease, and Tenant will make no claim on account of any representation
whatsoever, whether made by a renting agent, broker, officer or other
representative of Landlord, or which may be contained in any circular,
prospectus or advertising relating to the Leased Premises, the Building, the
Complex or otherwise, unless the same is specifically set forth in the Lease.
This Lease shall not be amended, changed or extended except by written
instrument signed by both parties hereto. The provisions of this Lease shall be
binding upon and inure to the benefit of the heirs, executors, administrators,
successors and assigns of the parties, but this provision shall in no way alter
the restrictions on assignment and subletting applicable to Tenant hereunder. If
any provision of this Lease or the application thereof to any person or
circumstance shall at any time or to any extent be held invalid or
unenforceable, and the basis of the bargain between the parties hereto is not
destroyed or rendered ineffective thereby, the remainder of the Lease or the
application of such provision to persons or circumstances other than those as to
which it is held invalid or unenforceable shall not be affected thereby.

5.15  Right of Reentry. Upon the expiration or termination of the Term for
whatever cause, Landlord shall have the right to immediately reenter and
reassume possession of the Leased Premises and remove Tenant's property
therefrom, and Tenant expressly acknowledges such right. In connection with the
exercise of Landlord's remedies hereunder, Landlord agrees to store Tenant's
property, either on the Leased Premises or elsewhere, that Tenant has left in
the Leased Premises following the expiration or termination of the term of this
Lease, for thirty (30) days after the expiration or termination of the term of
this Lease. Landlord shall use reasonable efforts to safeguard Tenant's property
during such period, but shall have no other obligation to ensure that it is
maintained or otherwise cared for during such thirty (30) day period. In the
event Tenant fails to remove such property at the expiration of thirty (30) day
period, Landlord shall be free to dispose of the property by whatever means and
in whatever manner it deems appropriate.

5.16  Number and Gender; Captions; References. Pronouns, where used herein, of
whatever gender, shall include natural persons, corporations, and associations
of every kind and character, and the singular shall include the plural and vice
versa where and as often as may be appropriate. Article and section headings
under this Lease are for convenience of reference and

28

shall not affect the construction or interpretation of this Lease. Whenever the
terms "hereof," "hereby," "herein," or words of similar import are used in this
Lease, they shall be construed as referring to this Lease in its entirety rather
than to a particular section or provision, unless the context specifically
indicates to the contrary. Any reference to a particular "Article" or "Section"
shall be construed as referring to the indicated article or section of this
Lease.

5.17  Delinquent Payments; Handling Charge. Any payments required of Tenant
hereunder, whether as Rent or otherwise, shall bear interest from the time due
(subject to the grace periods as provided in Section 5.06 of this Lease
Agreement) until paid at the maximum rate of interest permitted by law.
Furthermore, should Tenant fail to timely pay any installment of Rent hereunder,
Landlord shall have the option to charge Tenant, as additional Rent hereunder, a
fee equal to five percent (5%) of the delinquent installment to reimburse
Landlord for its cost and inconvenience incurred in dealing with Tenant's
delinquent payment. In no event, however, shall the charges imposed under this
Section 5.20 and elsewhere in this Lease, to the extent the same are considered
to be interest under applicable law, exceed the maximum rate of interest
allowable under applicable law.

5.18  Quiet Enjoyment. Tenant, on paying all sums herein called for and
performing and observing all of its covenants and agreements hereunder (subject
to the compliance or cure periods as provided in Section 5.06 of this Lease
Agreement), shall and may peaceably and quietly have, hold, occupy, use, and
enjoy the Leased Premises during the Term subject to the provisions of this
Lease and applicable governmental laws, rules, and regulations; and Landlord
agrees to warrant and forever defend Tenant's right to such occupancy against
the claims of any and all persons whomsoever lawfully claiming the same or any
part thereof, by, through, or under Landlord, but not otherwise, subject only to
the provisions of this Lease and all applicable governmental laws, rules, and
regulations.

5.19  Signs. Unless otherwise specifically permitted pursuant to the Lease, no
signs, symbols or identifying marks shall be placed in or upon the Complex, in
the halls, elevators, staircases, entrances, or exterior of the Building or
Garage, or upon the doors or walls of the Leased Premises without prior written
approval of Landlord. Landlord agrees to provide and install, at Tenant's cost,
all letters or numerals on doors in the Leased Premises. All such letters and
numerals shall be in the Building Standard graphics, and no others shall be used
or permitted on the Leased Premises without written permission from Landlord.

5.20  Brokerage. Tenant represents and warrants that it has dealt with no
broker, agent or other person in connection with this transaction and that no
broker, agent or other person brought about this transaction, other than Trione
& Gordon, L.L.P., and Tenant agrees to indemnify and hold Landlord harmless from
and against any claims by any other broker, agent or other person claiming a
commission or other form of compensation by virtue of having dealt with Tenant
with regard to this leasing transaction. The provision of this Paragraph, in
addition to all of Tenant's indemnities and covenants expressly set forth in
this Lease, shall survive the termination of this Lease.

5.21  Limitation of Implied Warranty. Landlord's duties and warranties are
limited to those expressly stated in this Lease and shall not include any
implied duties or implied warranty now

29

or in the future. LANDLORD HAS NOT MADE, AND TENANT MAY NOT RELY ON, ANY
REPRESENTATION OR WARRANTIES WITH REGARD TO THE BUILDING, LEASED PREMISES OR
OTHERWISE, EXPRESSED OR IMPLIED, EXCEPT AS STATED IN THIS LEASE. IN PARTICULAR,
LANDLORD HAS NOT AUTHORIZED ANY AGENT OR BROKER TO MAKE A REPRESENTATION OR
WARRANTY INCONSISTENT WITH THE TERMS OF THIS LEASE AND TENANT MAY NOT RELY ON
ANY SUCH INCONSISTENT REPRESENTATION OR WARRANTY.

5.22  Environmental and Land Use Matters. Landlord represents and warrants that,
after diligent inquiry, it has no knowledge of the existence of asbestos in the
Complex, or other Hazardous Materials in, on, under or about the Complex (except
in quantities that do not violate Environmental Laws or constitute a threat to
human health, or that could require remediation were such existence known to
applicable governmental authorities). In the event asbestos or other Hazardous
Materials were used in the construction of the Complex, and, as a consequence,
applicable Environmental Laws require removal or abatement, Landlord will comply
with such Environmental Laws at its sole cost and expense and such cost shall
not be part of the Actual Operating Expenses of the Building under Section
2.02(e). Neither Landlord nor Tenant shall use, store, treat, transport,
manufacture, refine, handle, produce or dispose of hazardous materials on, or
affecting the Leased Premises in any manner that violates federal, state or
local laws, ordinances, rules, regulations or policies governing the use,
storage, treating, transportation, manufacture, refinement, handling, production
or disposal of Hazardous Materials (collectively, "Environmental Laws"). For
purposes of this agreement, "Hazardous Materials" shall mean any flammable
substances, explosives, radioactive materials, hazardous wastes, toxic
substances, pollutants, pollution, or related materials specified in any of the
Environmental Laws. Tenant indemnifies Landlord against, and agrees to hold
Landlord harmless from, any and all loss, cost or expense that Landlord may
incur as a result of violations by Tenant or any of its agents, employees or
invitees, of Environmental Laws in connection with the use of the Leased
Premises which violations occurred in the period in which Tenant leased the
Leased Premises, and such indemnity shall survive the term of this agreement and
any and all renewal terms. Landlord indemnifies Tenant against, and agrees to
hold Tenant harmless from, any and all loss, cost or expense that Tenant may
incur as a result of violations by Landlord, or any of its agents, employees, or
invitees, of Environmental Laws in connection with the use of the premises of
which the Leased Premises are a part which violations occurred in the period in
which Landlord leased such premises under the Lease, and such indemnity shall
survive the term of this agreement and any and all renewal terms. The
indemnities of this Section 5.22 shall expire on a date five (5) years after the
termination of the Term unless the indemnified party has notified the indemnitor
party before such date that a violation or suspected violation had been
discovered or claimed, in which case the indemnity will survive as to the
claimed or suspected violation to the maximum extent permitted by law.

5.23  Newpark Agreements. The parties hereto acknowledge that Tenant is an
existing sublessee of Newpark Drilling Fluids, L.L.C. ("Newpark") of certain
space in the Building pursuant to Sublease Agreement dated February 15, 2000
(the "Newpark Sublease"). The Newpark Sublease will be terminated effective the
Commencement Date hereof (pursuant to Exhibit "K"). It is the intent of the
parties that no interruption in rent payments covering the space described in
the Newpark Sublease shall occur.

30

5.24 Guaranty. Guarantor agrees to guarantee payment and performance of all of
Tenant's obligations, including, but not limited to, payment of Rent hereunder.
This guaranty obligation is absolute and unconditional. If Tenant defaults
hereunder, and as a result an Event of Default occurs, Guarantor is primarily
liable for all of Tenant's obligations hereunder and Landlord shall have the
right to make demand on, and bring an action directly against Guarantor, and
will not be required to first exhaust its remedies against Tenant. This guaranty
obligation will not be limited, reduced or affected by any amendment to this
Lease (whether or not approved by Guarantor), any waiver by Landlord of any
default or remedy hereunder, or by the bankruptcy, dissolution or any other
event that may occur with respect to Tenant. Guarantor acknowledges that
Landlord is relying primarily upon the credit of Guarantor, but for this
guaranty agreement, would not enter into this Lease with Tenant.

THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.

31

5.25  EXECUTED in multiple counterparts, each of which shall have the force and
effect of an original on the date first above written.

"LANDLORD"

BROADFIELD ASSOCIATES, L.P.,
a Texas limited partnership

By: Broadfield Management, L.L.C.,
A Texas limited liability company,
its general partner

By:  /s/ Charles Iupe
-----------------------------------
Name: Charles Iupe
---------------------------------
Title: President
--------------------------------

"TENANT"

TRANSOCEAN OFFSHORE DEEPWATER DRILLING
INC., a Delaware corporation

By: /s/ David Mullen
---------------------------------------
David Mullen
Vice President - Human Resources

"GUARANTOR"

TRANSOCEAN SEDCO FOREX INC., a Cayman
Islands corporation

By: /s/ David Mullen
---------------------------------------
David Mullen
Vice President - Human Resources

[Signature page to Lease Agreement dated April 18, 2001 between Broadfield
Associates, L.P., a Texas limited partnership, as Landlord, Transocean Offshore
Deepwater Drilling Inc., a Delaware corporation, as Tenant, and Transocean Sedco
Forex Inc., a Cayman Islands corporation, as Guarantor.]

32

ADDENDUM TO LEASE BETWEEN
BROADFIELD ASSOCIATES, L.P., AS LANDLORD,
AND TRANSOCEAN OFFSHORE DEEPWATER DRILLING INC., AS TENANT

1.       BASE RENTAL

Tenant shall pay monthly Base Rental beginning on the Rent Commencement
Date for the Leased Premises pursuant to the following schedule:

---------------------------------------------------------------------------------------------------
Premises                            Period                       Annual Base Rental/
Rentable Square Foot

1/st/ & 2/nd/ Floors                     RCD - 08/31/05                         $22.50
09/01/05 - 03/31/11                      $23.50

3/rd/ Floor                            ("RCD") - 08/31/03                       $18.50
09/01/03 - 08/31/05                      $19.75
09/01/05 - 03/31/11                      $20.75

4/th/ Floor                        Commencement Date - 08/31/03                 $18.00
09/01/03 - 08/31/05                      $19.25
09/01/05 - 03/31/11                      $20.75

5th Floor (if leased                      RCD - 08/31/03                        $18.50
pursuant to Additional                 09/01/03 - 08/31/05                      $19.75
Premises Option)                       09/01/05 - 03/31/11                      $20.75

5/th/ Floor (If leased                    RCD - 08/31/05                        $19.75
pursuant to Expansion Option)          09/01/05 - 03/31/11                      $20.75

6/th/ Floor                               RCD - 08/31/05                        $22.50
09/01/05 - 03/31/11                      $23.50
Entirety of the Leased
Premises                               During Extended Term                     $23.50
---------------------------------------------------------------------------------------------------

Base Rental shall be payable monthly on the first (1st) day of each month during
the Term of the Lease beginning on December 1, 2001 (the "Rent Commencement
Date" or the "RCD"); provided, however, if the Commencement Date is delayed due
to circumstances described in Sections 3.03(b) or (c) of the Lease, the Rent
Commencement Date will be delayed by a like number of days. Notwithstanding the
foregoing, Tenant's obligation to pay Rent for the 25,890 rentable square feet
of space on the fourth (4th) floor of the Building shall commence effective the
Commencement Date hereof, and Tenant shall not be granted any abatement of Rent
for the Leased Premises on the fourth (4/th/) floor if the Commencement Date is
delayed.

1

2.    ADDITIONAL PREMISES OPTION; EXPANSION OPTIONS.

(a)  Tenant will have the option (the "Additional Premises Option"), which
may be exercised (in writing to Landlord) at any time after the Effective Date
of the Lease and before December 31, 2001, to expand the Initial Leased Premises
to include all of the space, being 25,890 square feet of Rentable Area, on the
fifth (5/th/) floor of the Building (the "Additional Premises"). In exercising
the Additional Premises Option, the following will apply:

Tenant may exercise the Additional Premises Option as to all or a
portion of the fifth (5th) floor in a single exercise. However, the
minimum space taken by Tenant on the fifth (5th) floor pursuant to the
Additional Premises Option shall be 2,500 square feet of Rentable Area
and, except for an exercise of the Additional Premises Option covering all
of the fifth (5th) floor, no exercise of the Additional Premises Option
covering a portion of the fifth (5th) floor shall cover more than 24,890
square feet of Rentable Area. Furthermore, no space in the Additional
Premises occupied by Newpark (currently 5,940 square feet of Rentable
Area) may be taken by Tenant pursuant to the Additional Premises Option
until all of the other space in the Additional Premises is taken by Tenant
hereunder. The Additional Premises will be leased on the same terms as the
Initial Leased Premises hereunder. For purposes of clarification, no
Landlord Improvements will be required of Landlord with respect to the
Additional Premises. The Base Rental for the Additional Premises is set
forth in paragraph 1 of this Addendum. Landlord shall deliver the
Additional Premises to Tenant in its current (as of the Effective Date
hereof) "as-is" condition (including, but not limited to, restrooms and
related fixtures and plumbing, all permanent millwork and doors, hot water
heaters, sinks, ice machines, dishwashers, refrigerators, electrical
equipment and facilities and supplemental HVAC systems). Space in the
Additional Premises that is not occupied by Newpark (currently 19,950
square feet of Rentable Area) will be delivered to Tenant within thirty
(30) days after Landlord receives Tenant's notice of exercise of the
Additional Premises Option. The balance of the space in the Additional
Premises will be delivered to Tenant within one hundred twenty (120) days
after Landlord receives Tenant's notice of exercise of the Additional
Premises Option. The Additional Premises will be delivered to Tenant with
all personal property of Newpark removed therefrom and the Additional
Premises broom-cleaned and vacuumed.

(b)   To the extent that Tenant does not exercise the Additional Premises
Option with respect to all of the Additional Premises pursuant to clause (a)
foregoing, Tenant will have the option (the "Fifth Floor Expansion Option"),
which may be exercised (in writing to Landlord) at any time or times after
December 31, 2001 and before August 31, 2009, to expand the Leased Premises to
include all of the remaining space in the Additional Premises not leased by
Tenant under the Additional Premises Option ("Expansion Space"). In exercising
the Fifth Floor Expansion Option, all the following will apply:

(i)  Tenant will not have the right to exercise the Fifth Floor
Expansion Option as to the portion of the Fifth Floor Expansion
Space occupied by

2

Newpark on the Effective Date unless it has previously or
concurrently exercised the Fifth Floor Expansion Option
as to the remainder of the Fifth Floor Expansion Space
not occupied by Newpark on the Effective Date.

(ii)    Tenant may exercise the Fifth Floor Expansion Option on
multiple occasions as to a portion of the Fifth Floor
Expansion Space; provided, however, the minimum space
taken by Tenant on the fifth (5th) floor pursuant to the
Fifth Floor Expansion Option shall be 2,500 square feet
of Rentable Area, and after the initial exercise, each
subsequent exercise of the Fifth Floor Expansion Option
shall cover Fifth Floor Expansion Space that is
contiguous to space on the fifth floor that was the
subject of a previous exercise of the Fifth Floor
Expansion Option by Tenant (so long as contiguous space
on the fifth floor is available), and further provided,
no exercise of the Fifth Floor Expansion Option covering
a portion of the fifth (5th) floor shall result in less
than 1,000 square feet of contiguous Rentable Area, with
access to Building Common Areas, remaining available for
lease to third parties.

(iii)   All of the space occupied by Newpark in the Fifth Floor
Expansion Space as of the Effective Date must be taken,
if at all, in a single exercise of the Fifth Floor
Expansion Option.

(iv)    Notwithstanding the foregoing provisions of this clause
(b), at any time after December 31, 2002, and unless and
until Landlord receives Tenant's notice of exercise of
the Fifth Floor Expansion Option, Landlord (and/or
Newpark) will, subject to the right of first refusal
allowed Tenant under paragraph 3 of this Addendum, be
free to sublease and/or lease space in the Fifth Floor
Expansion Space to third parties, and to the extent that
occurs, such space will be removed from space available
to Tenant under the Fifth Floor Expansion Option without
the necessity of further act. Provided, however, if such
space that was leased or subleased by Landlord or Newpark
on the fifth floor to third parties subsequently becomes
vacant anytime before August 31, 2009, such space will,
upon becoming vacant, become subject to Tenant's Fifth
Floor Expansion Option.

The Fifth Floor Expansion Space leased under the Fifth Floor Expansion Option
will be leased on the same terms as the Leased Premises hereunder. The Base
Rental for the Fifth Floor Expansion Space is set forth in paragraph 1 of the
Addendum. The Fifth Floor Expansion Space will be delivered to Tenant in the
condition it is in as of the Effective Date (including, but not limited to,
restrooms and related fixtures and plumbing, all permanent millwork and doors,
hot water heaters, sinks, ice machines, dishwashers, refrigerators, electrical
equipment and facilities and supplemental HVAC systems, to the extent such
improvements currently exist on the fifth (5th) floor), reasonable wear and tear
excepted, and except to the extent of modifications made by Newpark thereto as
permitted in its existing Lease with Landlord in effect as of the date

3

hereof, being Lease Agreement dated May 28, 1998, as amended by Amendment dated
April 19, 2001 (the "Newpark Lease"), within one hundred and twenty (120) days
from the date of Tenant's notice, with all personal property of Newpark removed
therefrom and the Fifth Floor Expansion Space broom-cleaned and vacuumed.
Notwithstanding the foregoing, any Fifth Floor Expansion Space that was leased
or subleased by Landlord or Newpark to a third party pursuant to the provisions
of paragraph (b)(iv) foregoing, and subsequently became vacant before August 31,
2009, and thereafter was the subject of the exercise of a Fifth Floor Expansion
Option by Tenant, will be delivered to Tenant in its then-existing, as-is
condition, with all personal property of third parties removed therefrom and
broom-cleaned and vacuumed. If any improvement described in the foregoing
parenthetical clause currently exists on the fifth (5th) floor, Newpark shall
not remove the same unless it substitutes equivalent improvements therefor.

(c)    If, but only if, either (i) Tenant has taken all of the space on
the fifth floor of the Building pursuant to either clause (a) or (b) foregoing,
or paragraph 3 below, or (ii) Landlord and/or Newpark has leased or subleased to
third parties all of the space on the fifth floor not taken by Tenant, Tenant
will have the option (the "Sixth Floor Expansion Option") to expand the Leased
Premises to include all of the space on the sixth (6/th/) floor of the Building
("Sixth Floor Expansion Space"). In exercising the Sixth Floor Expansion Option,
all the following will apply:

(i)   All of the Sixth Floor Expansion Space must be taken, if
at all, in a single exercise of the Sixth Floor Expansion
Option;

(ii)  The Sixth Floor Expansion Space leased under the Sixth
Floor Expansion Option will be leased on the same terms as
the Leased Premises hereunder. The Base Rental for the
Sixth Floor Expansion space is set forth in paragraph I of
the Addendum. The Sixth Floor Expansion Space will be
delivered to Tenant in the condition it is in as of the
Effective Date (including, but not limited to, restrooms
and related fixtures and plumbing, all permanent millwork
and doors, hot water heaters, sinks, ice machines,
dishwashers, refrigerators, electrical equipment and
facilities and supplemental HVAC systems, to the extent
such improvements currently exist on the sixth (6th)
floor), reasonable wear and tear excepted, and except to
the extent of modifications made by Newpark thereto as
permitted in the Newpark Lease. If any improvement
described in the foregoing parenthetical clause currently
exists on the sixth (6th) floor, Newpark shall not remove
the same unless it substitutes equivalent improvements
therefor.

(iii) The Sixth Floor Expansion Option may be exercised, if at
all, by written notice given Landlord by Tenant no earlier
that April 1, 2002, and no later than August 31, 2009.
Landlord shall deliver the Sixth Floor Expansion Space in
the condition described in clause (c)(iii) hereof, to
Tenant within nine (9) months from the date of Tenant's
notice, with all personal property of Newpark removed
therefrom and the Sixth Floor Expansion Space
broom-cleaned and vacuumed.

4

(iv)  Notwithstanding the foregoing provisions of this clause
(c), at any time after August 31, 2005, and unless and
until Landlord receives Tenant's notice of exercise of the
Sixth Floor Expansion Option, Landlord (and/or Newpark)
will, subject to the right of first refusal allowed Tenant
under paragraph 3 of this Addendum, be free to sublease
and/or lease space in the Sixth Floor Expansion Space to
third parties, and to the extent that occurs, such space
will be removed from space available to Tenant under the
Sixth Floor Expansion Option without the necessity of
further act. Provided, however, if such space that was
leased or subleased by Landlord or Newpark on the sixth
floor to third parties subsequently becomes vacant anytime
before August 31, 2009, such space will, upon becoming
vacant, become subject to Tenant's Sixth Floor Expansion
Option.

(d)    The lease term for the Additional Premises, Fifth Floor
Expansion Space or Sixth Floor Expansion Space, as applicable, shall commence
(including all monetary obligations) on the earlier to occur of (i) the date
that Tenant occupies the Additional Premises, Fifth Floor Expansion Space or
Sixth Floor Expansion Space, as applicable, or (ii) the date that is one hundred
twenty (120) days after Landlord delivers the Additional Premises, Fifth Floor
Expansion Space or Sixth Floor Expansion Space to Tenant and shall be
coterminous with the Term of the Lease.

3.       RIGHT OF FIRST REFUSAL

Without limiting Tenant's rights under paragraph 2 foregoing, Tenant
will have the continuing and reoccurring right of first refusal throughout the
Term ("Right of First Refusal") to expand the Leased Premises to include any
space on the fifth (5th) and sixth (6/th/) floors of the Building (to the extent
not leased by Tenant hereunder) that is offered to a third party (the "ROFR
Space"). In that regard, in the event Landlord receives a bona fide third party
offer to lease any portion of the ROFR Space which Landlord intends to accept
("Third Party Offer"), Landlord will deliver notice to Tenant accompanied by a
written summary of the economic and all other material terms of such offer.
Tenant shall have ten (10) business days to deliver written acceptance of the
terms of such offer to Landlord. If Tenant fails to deliver written acceptance,
within said ten (10) day period, Landlord shall be free to Lease the space
covered by the Third Party Offer to the third party on terms no more favorable
to the third party than the Third Party Offer. In the event Landlord does not
consummate the execution of a lease with the third party on such basis within
one hundred eighty (180) days after Tenant's rejection of the Third Party Offer,
Tenant's Right of First Refusal shall again apply. In the event that the term of
the Third Party Offer expires before the Expiration Date, Tenant will have the
right to extend the term of the ROFR Space to be conterminous with the Term
hereof, with the rent during any extension period of the term of the ROFR Space
being at the highest per square foot rental rates to be paid by Tenant under
this Lease during such period. If the term of the Third Party Offer expires
after the Expiration Date, Tenant will have the right to lease the ROFR Space
for a term conterminous with the Term hereof, providing Landlord the right to
extend an equivalent proration of any monetary allowances provided by Landlord
in the Third Party Offer. Notwithstanding anything in this lease to the
contrary, Tenant will have the same leasehold improvements allowance as the
third party offeree, if Tenant exercises the rights herein granted.

5

4.   LEASEHOLD IMPROVEMENTS ALLOWANCE

Landlord will construct and install the improvements described on Exhibit
"F" to the Lease ("Landlord Improvements") on the first (1/st/), second (2/nd/)
and third (3/rd/) floors of the Leased Premises at no cost or charge to Tenant,
subject to the provisions of Section 3.03(a) and Section 3.03(b) of this Lease
Agreement. Tenant currently occupies the fourth (4th) floor pursuant to the
Newpark Sublease and no Landlord Improvements are required therein, except to
the extent such Landlord Improvements were not provided as specifically required
under the Newpark Sublease.

In addition, subject to the provisions of Exhibit "G" ("Workletter"),
Landlord will provide a Leasehold Improvements Allowance to Tenant equal to
$28.00 per rentable square foot of the first (1/st/), second (2/nd/) and third
(3/rd/) floors of the Leased Premises as an allowance for the costs of Tenant's
Leasehold Improvements over and above the Landlord Improvements, which will
include fees of design professionals, labor and materials costs, permit fees,
signage, cabling and other telecommunication costs, moving expenses and related
costs, which may be applied to any improvements desired by Tenant within the
Initial Leased Premises or Additional Premises. In the event Tenant does not use
the entire Leasehold Improvements Allowance, Tenant shall have the right to
apply such unused portion to the first Base Rental payments due hereunder. If
Tenant exercises either the Additional Premises Option or the Fifth Floor
Expansion Option, Landlord will provide a Leasehold Improvements Allowance equal
to $28.00 per rentable square foot for the fifth (5/th/) floor, provided,
however, if such exercise occurs after December 31, 2002, the fifth (5/th/)
floor Tenant Improvements Allowance will be prorated to equal the result
obtained from the following calculation:

$724,920 x A = Prorated full fifth floor Tenant Improvements Allowance
-
B

where

A  =  the number of days between the date the term commences for
either the Additional Premises or Expansion Space with respect
to the fifth floor and March 31, 2011; and

B  =  the number of days between December 31, 2002 and March 31, 2011.

The foregoing formula provides a full fifth (5th) floor prorated Tenant
Improvements Allowance. In the event Tenant exercises the Additional Premises
Option or the Fifth Floor Expansion Option as to less than all of the space in
the fifth (5th) floor, the prorated Tenant Improvements will be further prorated
to reflect the total number of rentable square feet taken by Tenant thereunder.

6

No Leasehold Improvement Allowance will be given for space on the fourth (4/th/)
floor of the Leased Premises but the Leasehold Improvements Allowance may be
utilized for any improvements made by Tenant to the fourth (4/th/) floor,
provided such improvements are made within ten (10) months after the
Commencement Date.

In the event Tenant exercises the Sixth Floor Expansion Option, Landlord will
provide a Leasehold Improvements Allowance equal to $5.00 per rentable square
foot on the sixth (6/th/) floor ($129,450), provided, however, if the lease term
for the Sixth Floor Expansion Space commences after March 31, 2006, the sixth
floor Tenant Improvements Allowance will be prorated to equal the result
obtained from the following calculation:

$129,450 x A = Prorated sixth floor Tenant Improvements Allowance
-
B

where

A  =  the number of days between the date the lease term
commences for the Sixth Floor Expansion Space and March 31,
2011; and;

B  =  the number of days between March 31, 2006 and March 31,
2011.

5.    SIGNAGE

Tenant shall have the right to (i) non-exclusive monument signage (more
prominent than that of any tenant in the Complex, including Newpark), or (ii) an
exclusive monument sign, plus exclusive signage affixed to the upper most
portion of the Building on the east and/or south sides thereof. The location,
size and design of the exclusive monument or Building signage will be agreed
upon by Tenant and Landlord, in their reasonable judgment, prior to its
erection. The parties agree that Tenant's existing Building monument signage
will be modified to be the uppermost signage position, provided that Tenant
chooses the option of non-exclusive monument signage. The monument signage will
be at Landlord's expense (unless Tenant desires an exclusive monument sign, in
which case such signage will be at Tenant's expense). The Building signage will
be at Tenant's expense. Any subsequent signage desired by Tenant, subject to
Landlord's approval, will be at Tenant's expense.

6.    RENEWAL OPTIONS

(a) Provided an Event of Default does not exist on the part of Tenant
hereunder, Tenant will have the option to renew the Lease in its entirety, or at
a minimum for one full floor, for either (i) two terms of five years, or (ii)
one term of ten years, at Tenant's option (each a "Renewal Option"). In order to
exercise such option, Tenant must give Landlord written notice of its intention
to exercise at least nine (9) months prior to the expiration of the Term. The
renewal notice will specify which Renewal Option Tenant has selected and the
amount of space covered thereby. All of the terms and conditions of this Lease
shall continue into the renewal period except that Base Rental for the renewal
period will be equal to the Prevailing Market Rental Terms.

7

(b) Landlord will advise Tenant of its opinion of Prevailing Market
Rental Terms within thirty (30) days after receipt of Tenant's renewal notice.
If Landlord and Tenant do not agree on Prevailing Market Rental Terms, the
parties will negotiate in good faith and attempt to reach agreement. If Landlord
and Tenant cannot agree on the determination of the Prevailing Market Rental
Terms within sixty (60) days after the date Landlord receives Tenant's renewal
notice, the unresolved dispute shall be submitted to arbitration within five (5)
days after the end of such sixty (60) day period. If Tenant is not satisfied
with the decision of the arbitrators, Tenant shall have the right to rescind any
exercise of an option to renew the lease for which the Prevailing Market Rental
Terms were determined within ten (10) business days following the decision of
the Arbitration Panel.

(c) For purposes hereof, the term "Prevailing Market Rental Terms" means
the rental rate and other economic terms (including tenant inducements such as
allowances and rental abatement) that a willing tenant would pay and a willing
landlord would accept in arm's length, bona fide negotiations for a new lease of
the space for which the Prevailing Market Rental Terms is being determined to be
executed at the time of determination and to commence on the commencement of
Tenant's lease of that space under this Lease. The determination of the
Prevailing Market Rental Terms will be based upon other lease transactions made
in the Building and other comparable office buildings in the market area, and
will take into consideration the terms of the Lease (including any leasehold
improvements allowance to be provided to Tenant under the terms of the Lease),
and all relevant terms and conditions of any comparable leasing transactions,
including, without limitation: (i) location, quality and age of the Building;
(ii) use and size of the space in question; (iii) location and/or floor level
within the Building; (iv) extent of the leasehold improvement allowances; (v)
the amount of any abatement of rental or other charges; parking charges or
including of same in rental; (vi) lease takeover/assumptions; (vii) club
memberships; (viii) relocation allowances; (ix) refurbishment and repainting
allowances; (x) any and all other concessions or inducements; (xi) extent of
services provided or to be provided; (xii) distinctions between "gross" and
"net" leases; (xiii) base year or dollar amount for escalation purposes (for
both operating costs and ad valorem/real estate taxes); (xiv) any other
adjustments (including by way of indexes) to base rental rate; (xv) credit
standing and financial stature of the tenant; and (xvi) length of term.

7       ARBITRATION

Any determination of the Prevailing Market Rental Terms, Base Operating
Expense Rate or Actual Operating Expenses ("Arbitral Dispute(s)") that is
submitted to arbitration shall be made under procedures set forth below. Pending
the final determination of any dispute, Tenant shall continue to pay the
amount(s) equal to the amounts paid by Tenant for rent during the last month of
the Term; in the event of a final determination, Landlord or Tenant shall refund
to the other party any overpayment. The determination of any Arbitral Dispute
shall be submitted to an "Arbitration Panel" comprised of three (3) members,
each of whom shall be a licensed real estate broker, with no less than ten (10)
years experience in negotiating office leases in Houston. As a condition to
selection, each panel member must also have negotiated at least one (1) major
office lease (50,000 square feet or more) in West Houston during the thirty-six
(36) months preceding his or her selection to the arbitration panel. No more
than one (1) panel member may be with the same brokerage firm. No panel member
may have an economic interest in the

40

outcome of the arbitration, other than a reasonable fee (not to exceed
$2,000.00). Landlord and Tenant shall each bear the expense of the panel member
of its own selection, and shall equally share the expense of the Third Panel
Member.

The Arbitration Panel shall be selected as follows:

A.     Within ten (10) business days after submission of the determination of
the Prevailing Market Rental Terms, Base Operating Expense Rate or Actual
Operating Expenses to the Arbitration Panel, Tenant shall select its panel
member meeting the criteria established above (`Tenant's Panel Member"). If
Tenant fails to timely select the Tenant Panel Member, Landlord may notify
Tenant in writing of such failure, and if Tenant fails to select the Tenant
Panel Member within five (5) business days from Landlord's notice, then Landlord
may select the Tenant Panel Member on Tenant's behalf, at Tenant's expense.

B.     Within ten (10) business days after the Tenant Panel Member is selected,
Landlord shall select its panel member meeting the criteria established above
("Landlord's Panel Member"). If Landlord fails to timely select the Landlord
Panel Member, Tenant may notify Landlord in writing of such failure, and if
Landlord fails to select the Landlord Panel Member within five (5) business days
from Tenant's notice, then Tenant may select the Landlord Panel Member on
Landlord's behalf.

C.     Within ten (10) business days after the Landlord Panel Member is
selected, the Tenant Panel Member and the Landlord Panel Member shall jointly
select a third panel member meeting the criteria of Paragraph (i) above (`the
Third Panel Member"). If the Landlord Panel Member and the Tenant Panel Member
fail to timely select the Third Panel Member and such failure continues for more
than five (5) business days after written notice of such failure is delivered to
the Landlord Panel Member and Tenant Panel Member by either Landlord or Tenant,
either Landlord or Tenant may request the managing officer of the American
Arbitration Association to appoint the Third Panel Member.

D.     Within ten (10) business days after the selection of the three member
Arbitration Panel, Landlord and Tenant shall each submit to the Arbitration
Panel a written statement identifying the specific items in dispute bearing upon
the computation of the Prevailing Market Rental Terms, Base Operating Expense
Rate or Actual Operating Expenses. The Arbitration Panel shall make its decision
within twenty (20) days after submission of such written statement of
particulars. The Arbitration Panel shall select either Landlord's determination
or Tenant's determination of the above item under Arbitral Dispute, whichever in
the panel's judgment most closely resembles the actual Prevailing Market Rental
Terms, Base Operating Expense Rate or Actual Operating Expenses. The Arbitration
Panel shall reach its decision by majority vote and shall communicate its
decision by written notice to the parties.

E.     The decision by the Arbitration Panel shall be final and conclusive and
shall be nonappealable and enforceable in any court having jurisdiction. All
hearings and proceedings held by the Arbitration Panel shall take place in
Houston, Texas.

9

F.    The determination of any Arbitral Dispute resolution procedure described
in this Paragraph shall be governed by the Commercial Rules of the American
Arbitration Association, subject to the Texas General Arbitration Act, to the
extent such act is applicable hereto.

G.    Until the Prevailing Market Rental Terms, Base Operating Expense Rate or
Actual Operating Expenses have been finally determined, Tenant shall pay Rent
equal to the amounts Landlord claims are due by Tenant, and an appropriate
refund shall be made to the other party within thirty (30) days after a final
determination of the item under Arbitral Dispute is made. Notwithstanding the
foregoing, if Landlord and Tenant disagree with the Prevailing Market Rental
Terms for any extended Term under Tenant's Renewal Option and Tenant elects to
submit same to arbitration under this Paragraph, Tenant shall continue to pay
the Rent due hereunder during the last month of the Term, until a final
determination of the Prevailing Market Rental Terms is made.

H.    Tenant shall bear all fees, costs and expense of the Tenant Panel Member
and Landlord shall bear all fees, costs and expenses of the Landlord Panel
Member. Each party shall bear the fees, costs and expenses of its own attorneys
and consultants. Each party shall also bear the fees, costs and expenses
(equally) of the Third Panel Member and all other costs and expenses of the
Arbitration Panel in conducting the arbitration.

8.    TECHNOLOGY

So long as no Event of Default on the part of Tenant exists under the
terms of this Lease, Tenant shall be granted the right during the Term to
install, repair, maintain and replace (i) whip and dish antennas and related
equipment on the roof of the Building, (ii) a back-up generator (with fuel tank)
in the main Building mechanical room (if feasible), or in a mutually agreed
location in the Garage, and (iii) cabling from the antennas and equipment
(described herein) to the Leased Premises, utilizing the Building's conduits,
chases and risers, and (iv) fiber optic service (termination tie-in) in the
phone room on the first (1/st/) floor of the Building, all at no additional
rental, fee or charge. All of the foregoing is referred to as the "Technology
and Communication Equipment". All installation, repair, maintenance and
replacement of the Technology and Communication Equipment will be done at
Tenant's sole cost and expense, and such work will be coordinated with and
supervised by Landlord (such supervision being at no charge to Tenant)
Notwithstanding the foregoing, Landlord will be responsible and pay for the
costs of extending and maintaining the fiber optic service to the Building's
phone room on the first (1st) floor. Tenant will be obligated to engage
Landlord's roofing contractor (at a reasonable charge) to perform any
penetrations or modifications. Tenant will indemnify and hold Landlord harmless
from and against any damages to the Complex, or to any other tenant's leased
premises in the Building caused by the installation, repair, maintenance
replacement and operation of the Technology and Communication Equipment. If, as
a result of the operation of Tenant's Technology and Communications Equipment,
Landlord experiences an increase in Operating Expenses, Tenant will reimburse
Landlord, on demand, for all of the actual increase in Operating Expenses
attributable to such Technology and Communications Equipment so long as Landlord
advises Tenant promptly (i) upon request by Tenant, of any such increases that
it anticipates

10

given its understanding of Tenant's proposed installation and operation of any
such equipment, and (ii) of such increases as they are actually incurred.

9.    ADDITIONAL SECURITY

Tenant shall have the right, at its sole cost and expense, to provide
additional security service (i.e., equipment and personnel) for the Leased
Premises at any time during the Term ("Additional Security"). Tenant will be
obligated to provide Landlord with written notice of its election to provide
such Additional Security at least thirty (30) days in advance, unless such
security is, in Tenant's reasonable opinion, required and necessary in the case
of an emergency situation, whereby Tenant will not be required to provide
Landlord notice in advance. Tenant shall only hire reputable "third party"
security service providers, to be approved in writing by Landlord, which such
approval shall not be unreasonably withheld or delayed. Tenant will indemnify
and hold Landlord harmless from and against all claims, liability, damages,
expenses and costs (including reasonable legal fees) asserted against or
incurred by Landlord arising out of the acts or omissions of the Additional
Security personnel provided by Tenant hereunder.

10.   DEFAULT BY LANDLORD

If Landlord shall fail to perform any of its obligations under this Lease
and such failure (i) materially adversely affects Tenant's use and enjoyment of
the Leased Premises, or (ii) results in a substantial likelihood of personal
injury or material damage to Tenant's personal property situated in the Leased
Premises, and such failure continues for thirty (30) days after written notice
thereof from Tenant to Landlord and Landlord's mortgagee of which Tenant had
notice, then Tenant shall have the right to cure such default and thereafter
seek recovery of the sums spent to cure such default from Landlord; provided,
however, Tenant shall not be entitled to offset the cost of such cure against
future payments of Rent or any other obligations due from Tenant under this
Lease, unless and until a final, non-appealable judgment is rendered against
Landlord which is not paid in the time permitted therefore (or, if no time for
payment is provided for, within thirty (30) days after the date such
non-appealable judgment is rendered), in which event Tenant shall be entitled to
offset only the amount of such judgment against Rent or other obligations
hereunder.

11.   BROKERAGE FEES

Pursuant to a separate agreement between Landlord and Trione & Gordon,
L.L.P. ("Broker") dated January 4, 2001 ("Commission Agreement"), Landlord has
agreed to pay Broker a commission as therein provided ("Commission"). Landlord
hereby agrees that if Landlord fails and/or refused to timely pay such
Commission, as it becomes due and payable under the Commission Agreement, then
Tenant shall have the right to offset any unpaid Commission against the next
installment(s) of Rent due and payable under this Lease and extend such funds to
Broker as payment of any unpaid Commission, until such unpaid Commission is paid
in the manner described in the Commission Agreement.

11

12.    MANAGEMENT AND OTHER SERVICES

Landlord will provide building management consisting of (i) a full time
on-site property manager, full time on-site engineer and a full time on-site
porter Monday through Friday during regular Building hours, and (ii) an on-site
security guard between the hours of 4:00 p.m. and midnight. If Tenant is
dissatisfied with the quality of any management or service (including, but not
limited to, janitorial and security services) being provided to the Complex by
companies retained by Landlord for such services ("Service Providers"), Tenant
may given Landlord written notice of its dissatisfaction and reason therefor. If
Landlord is unable to remedy the situation giving rise to Tenant's
dissatisfaction within thirty (30) days, Landlord and Tenant will jointly
interview one or more other Service Providers to provide such services to the
Complex. Upon Landlord's and Tenant's agreement on a new Service Provider to
provide such services, Landlord agrees to terminate the current Service Provider
and retain the Service Provider mutually acceptable to Landlord and Tenant,
provided, however, all termination penalties, charges or damages payable to the
terminated Service Provider under its contract or applicable law will be
included as part of the Actual Operating Expenses, and if the cost of the new
Service Provider exceeds the costs which are customarily being paid for such
service by building owners of buildings similar to the Building to third party
service providers in the Greater Houston Market area, Tenant shall bear and be
responsible for all of such excess costs.

12

DECLARATION OF LEASE COMMENCEMENT DATE

WHEREAS, Broadfield Associates, L.P. ("Landlord") and Transocean
Deepwater Offshore Drilling Inc. ("Tenant") entered into a Lease Agreement dated
April 18, 2001 (the "Lease Agreement"), covering certain Leased Premises
described as 103,260 rentable square feet of the Park 10 Centre Building, whose
address is 1311 Broadfield, Suite 600, in the City of Houston, Harris County,
Texas; and

NOW, THEREFORE, Landlord and Tenant do hereby declare and stipulate
that Landlord's Improvements (as that term is defined in the Lease) were
completed on April 28, 2001. They do further stipulate and declare that the
Commencement Date of said Lease Agreement is April 28, 2001, and the Rent
Commencement Date is December 1, 2001. The Term of the Lease will expire on
March 31, 2011.

EXECUTED in duplicate counterparts this 14/th/ day of June, 2001.

Landlord:                           BROADFIELD ASSOCIATES, L.P.

By:  Broadfield Management, L.L.C.,
its general partner

By: /s/ CHARLES IUPE
---------------------------
Title: President
------------------------

Tenant:                             TRANSOCEAN DEEPWATER OFFSHORE
DRILLING INC.

By: /S/ [ILLEGIBLE]
-------------------------------
Title:   VICE PRESIDENT
----------------------------

EXHIBIT 10.127

LEASE AGREEMENT WITH NEWPARK DRILLING FLUIDS, INC. FOR A PORTION OF THE
TRANSOCEAN HOUSTON BUILDING

LEASE AGREEMENT

Between

Broadfield Associates, L.L.C

as Landlord

and

Newpark Drilling Fluids, Inc.

as Tenant

and

Newpark Resources, Inc.

as Guarantor

TABLE OF CONTENTS

Page
----

1.   Article 1 - Leased Premises, Term, and Use ...........................................      1
1.01.    Leased Premises .............................................................      1
1.02.    Term ........................................................................      1
1.03.    Use .........................................................................      2
2.   Article 2 - Rental ...................................................................      2
2.01.    Base Rental .................................................................      2
2.02.    Operating Expenses ..........................................................      2
2.03.    Parking .....................................................................      7
2.04.    Payment of Rent .............................................................      8
2.05.    First Month's Rental ........................................................      8
3.   Article 3 - Landlord's Services ......................................................      8
3.01.    Services to be Furnished by Landlord ........................................      8
3.02.    Access by Tenant Prior to Commencement of Term ..............................     11
3.03.    Condition of Building, Premises and Leasehold Improvements ..................     11
3.04.    Repair and Maintenance by Landlord ..........................................     14
4.   Article 4 - Tenant's Covenants .......................................................     15
4.01.    Payments by Tenant ..........................................................     15
4.02.    Certain Taxes ...............................................................     15
4.03.    Repairs by Tenant ...........................................................     15
4.04.    Care of the Leased Premises .................................................     15
4.05.    Tenant Floor Plans: See Exhibit "C" .........................................     15
4.06.    Assignment or Sublease ......................................................     15
4.07.    Alterations, Additions, Improvements ........................................     18
4.08.    Compliance with Laws and Usage; Building Rules and Regulations; Liens .......     19
4.09.    Access by Landlord ..........................................................     19
4.10.    Landlord's Mortgagee ........................................................     19
4.11.    Estoppel Certificate ........................................................     20
5.   Article 5 - Mutual Covenants .........................................................     21
5.01.    Condemnation,

Loss or Damage ................................................     21
5.02.    Fire or Other Casualty; Certain Repairs .....................................     21
5.03.    Holding Over ................................................................     22
5.04.    Assignment by Landlord ......................................................     22
5.05.    Recourse Limitation .........................................................     22
5.07.    Control of Common Areas and Parking Facilities by Landlord ..................     22
5.08.    Default by Tenant ...........................................................     23
5.09.    Right to Relocate ...........................................................     25
5.10.    Non-Waiver ..................................................................     26
5.11.    Independent Obligations .....................................................     26
5.12.    Time of Essence .............................................................     26

-i-

5.13.  Remedies Cumulative ...........................................  26
5.14.  Insurance, Liability, Indemnity, Subrogation and Waiver .......  26
5.15.  Venue; Governing Law ..........................................  28
5.16.  Notice ........................................................  28
5.17.  Entire Agreement, Binding Effect, Severability ................  28
5.18.  Right of Reentry ..............................................  29
5.19.  Number and Gender; Captions; References .......................  29
5.20.  Delinquent Payments; Handling Charge ..........................  29
5.21.  Quiet Enjoyment ...............................................  29
5.22.  Signs .........................................................  29
5.23.  Brokerage .....................................................  30
5.24.  Limitation of Implied Warranty ................................  30
5.25.  Environmental and Land Use Matters ............................  30
5.26.  Name of Building and Building Signage .........................  30
5.27.  Guaranty ......................................................  31

ADDENDUM AND EXHIBITS TO LEASE:
Addendum
A.  Leased Premises
B.  Legal Description
C.  Initial Tenant Improvements
D.  Building Description
E.  Building Rules and Regulations
F.  Parking Rules and Regulations
7.  Commencement Memorandum

-ii-

LEASE AGREEMENT

THIS LEASE AGREEMENT ("Lease") is entered as of the 28/th/ day of May,
-----
1998, between Broadfield Associates, L.L.C., a Texas limited liability company,
("Landlord"), Newpark Drilling Fluids, Inc., a Texas corporation, ("Tenant"),
and Newpark Resources, Inc., a Delaware corporation ("Guarantor").

Article 1
Leased Premises, Term, and Use
------------------------------

1.01.  Leased Premises.

(a)   Upon the terms, provisions and conditions hereof, Landlord hereby
leases to Tenant and Tenant hereby leases from Landlord the premises reflected
on the floor plans set forth in Exhibit "A" hereto in the building known as the
Newpark Resources Building which will be constructed by Landlord in accordance
with Exhibit "D" hereto ("Building"). Such premises, together with any other
space in the Complex leased by Tenant pursuant hereto, are herein called the
"Leased Premises." References in this Lease to the "Complex" shall mean the
Building, the parking garage ("Garage") adjacent to and servicing the Building
and all other facilities, parking areas, improvements, structures, and
landscaping areas relating to or servicing the Building and Garage and located
on or installed in or to be located on or installed in the land ("Land")
described in Exhibit "B" hereto.

(b)   The "Rentable Area" of the Leased Premises is hereby stipulated and
agreed for all purposes to be the greater of (i) three (3) entire floors within
the Building or (ii) 78,000 rentable square feet ("Minimum Rentable Area").
Tenant understands that the Rentable Area is greater than the square footage of
the area contained within the Leased Premises (the "add-on factor"), and
includes an amount attributable to areas within the building not leased or held
for lease such as lobbies, foyers, corridors, restrooms, machine rooms,
mechanical rooms, electrical rooms, telephone and equipment rooms, janitor rooms
and other similar facilities, for purposes of this Lease, Landlord agrees to
calculate the add-on factor of each single and multi-tenant floor utilizing the
Building and Owners Managers Association's definition (ANSIZ65.1-1996).

1.02.  Term. Subject to the terms, provisions and conditions hereof, this Lease
shall continue in force for a term ("Term") of one hundred twenty-three (123)
calendar months, beginning on the 1st day of June, 1999 (such commencement date
being subject to adjustment as provided in Sections 3.03(b) and (c), and being
hereinafter called the "Commencement Date") and ending on the 31st day of
August, 2009. If the Commencement Date is after June 1, 1999, due to the
circumstances described in Section 3.03(b) or (c) hereof, within ten (10) days
following the Commencement Date, Landlord and Tenant agree to execute a
memorandum in the form attached hereto as Exhibit "G" which specifies the exact
Commencement Date and Term of the Lease.

1

1.03.  Use. Tenant (and its permitted  assignees and  sublessees,  if any) will
occupy and use the Leased Premises solely for general business office and
laboratory purposes of a lawful nature and for no other purpose, except as may
be described in the Addendum.

Article 2
Rental
------

2.01.  Base Rental.  Tenant shall pay as Base Rental  during the term of this
Lease, monthly rental in the amounts set forth in the Addendum hereto, Paragraph
1.

2.02.  Operating  Expenses. In addition to Base Rental,  Tenant  shall pay, as
additional rent, Tenant's Proportionate Share of Actual Operating Expenses in
excess of the Base Operating Expenses Rate.

(a)   The "Base Operating Expenses Rate" is stipulated to be $6.50 per
square foot of net rentable area of the Leased Premises on an annual basis.

(b)   The term "Actual Operating Expenses" shall mean, with respect to
each calendar year during the term of this agreement, the actual Operating
Expenses for that year computed in accordance with the provisions of Section
2.02 (e). The "Actual Operating Expenses Rate" for each such calendar year
during the term hereof shall be calculated by dividing the Actual Operating
Expenses for a calendar year by the net rentable area in the building. The term
"Tenant's Proportionate Share of the Actual Operating Expenses" shall mean, with
respect to each calendar year, an amount equal to the product of (i) the
difference between the Actual Operating Expenses Rate in the calendar year and
the Base Operating Expenses Rate, multiplied by (ii) the Rentable Area of the
premises.

(c)   In the event the Actual Operating Expenses Rate, as calculated
above, during any calendar year during the term of this Lease shall be greater
than the Base Operating Expenses Rate, Tenant shall be obligated to pay to
Landlord, in addition to the Base Rental, and Parking Rental, as additional
rent, an amount equal to Tenant's Proportionate Share of the Actual Operating
Expenses. In order to implement the above, Landlord shall provide to Tenant
within ninety (90) days, or as soon thereafter as reasonably possible, after the
end of the calendar year in which the commencement of the term of this agreement
occurs, a statement of the Actual Operating Expenses for the prior calendar
year, the Actual Operating Expenses Rate for the prior calendar year and
Tenant's Proportionate Share of the Actual Operating Expenses. In the event the
Actual Operating Expenses Rate for the prior calendar year is in excess of the
Base Operating Expenses Rate, Tenant shall pay to Landlord within thirty (30)
days after Tenant's receipt of the statement, an amount equal to Tenant's
Proportionate Share of the Actual Operating Expenses for the prior calendar
year. If the term of this agreement commences other than on the first day of a
calendar year, Tenant's Proportionate Share of the Actual Operating Expenses
shall be a pro rata amount based on the ratio of the number of days of the term
of the lease during the first calendar year to 365 days.

2

(d)    At the time Landlord gives the annual statement of Actual Operating
Expenses for each year during the term of this agreement, Landlord may, at
Landlord's option, provide Tenant a schedule of projected Operating Expenses for
the next calendar year expressed as an expense per net rentable square foot in
the project on an annual basis (herein referred to as the "projected Operating
Expenses Rate"). Tenant shall thereafter pay an adjusted monthly rental which
shall include the Base Rental stated in Section 2.01 and an amount (herein
referred to as a "projected Operating Expenses Installment") equal to
one-twelfth (1/12th) of an amount equal to the product of (i) the difference
between the projected Operating Expenses Rate for the next calendar year and the
Base Operating Expenses Rate, multiplied by (ii) the Rentable Area in the leased
premises. Landlord shall provide Tenant a statement, within ninety (90) days (or
as soon thereafter as reasonably possible) after the end of each calendar year
during the term of this agreement, showing the Actual Operating Expenses and the
Actual Operating Expenses Rate for such calendar year, as compared to the
projected Operating Expenses and the projected Operating Expenses Rate for the
calendar year. In the event Tenant's Proportionate Share of the Actual Operating
Expenses for such calendar year shall exceed the aggregate of the projected
Operating Expenses Installments actually collected by Landlord from Tenant for
such calendar year, Tenant shall pay to Landlord within thirty (30) days
following Tenant's receipt of a statement, the amount of such excess. If,
however, Tenant's Proportionate Share of the Actual Operating Expenses for the
calendar year is less than the aggregate of the projected Operating Expenses
installments actually collected by Landlord from Tenant, for the calendar year,
Landlord shall pay to Tenant within thirty (30) days after the giving of the
statement to Tenant, the amount of the overpayment of the projected Operating
Expenses Installments. If the expiration of the lease term is more than ninety
(90) days from the date of the statement, Landlord may, at Landlord's option,
retain the excess and apply same to the next installments of Tenant's projected
Operating Expenses Installment. If the expiration or termination of this Lease
occurs other than on the last day of a calendar year, the amount to be paid by
Tenant or reimbursed to Tenant hereunder shall be a pro rata amount based on the
ratio of the number of days of the term of this agreement in such last calendar
year to 365 days.

(e)  "Actual Operating Expenses" shall mean the operating expenses of
the Complex and all expenditures by Landlord to own, maintain and operate the
Complex. All operating expenses shall be determined on an accrual basis in
accordance with generally accepted accounting principles which shall be
consistently applied. Such operating expenses shall include all expenses, costs
and disbursements of every kind and nature which Landlord shall pay or become
obligated to pay because of or in connection with the ownership, operation, and
maintenance of the Complex, including, but not limited to, the following:

(1)   Wages and salaries of all employees engaged in direct
operation operation and maintenance of the Complex, employer's social
security taxes, unemployment taxes or insurance and any other taxes which
may be levied on such wages and salaries, and the cost of disability and
hospitalization insurance and pension or retirement benefits for such
employees;

3

(2)   Cost of leasing or purchasing all supplies, tools, equipment
and materials used in the operation, maintenance and ownership of the
Complex;

(3)   Cost of all utilities for the Complex, including  the cost
of water and power, sewage, heating, lighting, air-conditioning and
ventilating for the Complex;

(4)   Cost of all maintenance and service agreements for the
Complex and surrounding grounds, including but not limited to janitorial
service, security service, equipment leasing, energy management system
leasing, landscape maintenance, alarm service, window cleaning and
elevator maintenance;

(5)   Cost of all insurance relating to the Complex, including,
but not limited to, casualty insurance, rental insurance and liability
insurance applicable to the Complex and Landlord's personal property used
in connection therewith as well as any deductible sum required by any
such policies;

(6)   All taxes and assessments and governmental charges (including
but not limited to mortgage taxes and other taxes and assessments passed
on to Landlord by a mortgagee holding a lien on the Complex), whether
federal, state, county or municipal and whether they be by taxing
districts or authorities presently taxing the Leased Premises or by
others, subsequently created or otherwise and any other taxes,
association dues and assessments attributable to the Complex or its
operation excluding, however, income taxes, estate and inheritance taxes,
excess profit taxes, franchise taxes, taxes imposed on or measured by the
income of Landlord from operation of Complex, sales and other taxes
imposed on amounts paid by Tenant hereunder (including, without
limitation, sales taxes imposed on the Parking Charge, as hereinafter
defined), and taxes imposed on account of a transfer of ownership of the
Complex or the Land;

(7)   Cost of repairs and general maintenance (excluding such
repairs and general maintenance paid by insurance proceeds or by Tenant
or other third parties and alterations attributable solely to tenants of
the Building other than Tenant);

(8)   Legal expenses and accounting expenses incurred with respect
to the Complex;

(9)   Fees for management  services, whether provided by an
independent management company, by Landlord or by any affiliate of
Landlord;

(10)  Costs in order to comply with federal or state laws or
municipal ordinances or codes or regulations promulgated under any of
the same;

4

(11)  Amortization of the cost of installation of capital
investment items which are primarily for the purpose of reducing (or
avoiding increases in) operating costs or which may be required by
governmental authority. The costs of such capital investment items under
this Section 2.02(d)(11) shall include costs incurred in financing the
purchase of such items, including loan fees and interest. All costs of
such capital investment items shall be amortized over the reasonable life
of such items with the reasonable life and amortization schedule being
determined in accordance with generally accepted accounting principles
and in no event to extend beyond the reasonable life of the Complex;

(12)  Replacement of flourescent lamps in Building Standard light
fixtures and incandescent bulb or flourescent lamp replacement in public
toilet and restroom areas, Complex common areas and stairwells;

(13)  Rent or rental value of Landlord's leasing and management
offices on or near the Building (provided, in the event Landlord's
leasing and management offices are located outside the Building, such
rent or rental value shall be prorated);

(14)  Actual Operating Expenses shall not include (i) expenditures
classified as capital expenditures for Federal income tax purposes
(except as set forth in Section 2.02(d)(11), (ii) costs for which
Landlord is entitled to specific reimbursement by Tenant, any other
tenant of the Building, or any other third party, (iii) allowances for
expenses to be incurred by Landlord for improvements to Leased Premises,
(iv) leasing commissions, and all non-cash expenses (including
depreciation), and (v) debt service on any indebtedness secured by the
Complex (except debt service on indebtedness to purchase or pay for items
specified as permissible Basic Operating Costs under Section 2.02(d)(1)
through (12)), (vi) unless otherwise permitted pursuant to this Lease,
the cost of any improvements, repairs, alterations, additions, changes,
replacements, equipment, tools and other items which under generally
accepted accounting principles are required to be classified as capital
expenditures, (whether incurred directly or through a lease or service
contract or otherwise) other than amortization of the cost of capital
(and the installation thereof) items which are reasonably expected to
reduce operating costs for the benefit of all of the Building's tenants
or which may be required by any governmental authority (all of such
costs, including interest costs, shall be amortized over the reasonable
life of the capital items, with a reasonable life and amortization
schedule being determined by Landlord according to generally accepted
accounting principles), (vii) depreciation of the Building, and all
equipment, fixtures, improvements and facilities used in connection
therewith, except as provided in (vi) above, (viii) advertising,
promotional expenses, leasing commissions, attorneys fees (unless
incurred as a result of Landlord's effort to reduce Actual Operating
Expenses), costs and disbursements and other expenses incurred in
connection with negotiations with tenants or prospective tenants or other
occupants in the Building, (ix) any property

5

taxes, assessments, or other governmental charges to the extent that
Landlord is reimbursed for same by any tenant of the Building (excluding
reimbursements paid through additional rent payments), (x) the cost of
repairs or other work occasioned by any casualty which is covered by
insurance, but only to the extent of the insurance proceeds received by
Landlord net of deductibles and cost of adjustment, (xi) the cost of
renovating or otherwise improving or decorating, painting or redecorating
space in the Building which is or normally would be occupied by tenants,
except in connection with general maintenance of the Building, (xii)
Landlord's costs of electricity and other services sold or provided to
tenants in the Building and for which Landlord is reimbursed by such
tenants as a separate additional charge, (xiii) expenses incurred in
connection with services or other benefits which are in excess of the
services provided by Landlord pursuant to Section 3.01 hereof, but are
provided to other tenants or occupants of the Building, (xiv) costs
(limited to penalties, fines and associated legal expenses) incurred due
to violation by Landlord of the terms and conditions of any lease or
rental arrangement covering space in the Building, (xv) overhead and
profit increment paid to subsidiaries, partners or other affiliates of
Landlord and salaries and associated costs of Landlord's employees for
services on or to the Building, to the extent only that the cost of such
services exceeds competitive costs of such services were they not so
rendered by a subsidiary or other affiliate of Landlord, (xvi) any
compensation paid to clerks, attendants or other persons in commercial
concessions operated by Landlord, (xvii) all items and services for which
tenants reimburse Landlord, but only to the extent Landlord is reimbursed
for same, (xviii) the costs incurred related to maintaining Landlord's
existence, either as a corporation, partnership or other entity, (xix)
the costs incurred in connection with correcting defects in the
construction of the Building or in the Building equipment (except the
conditions resulting from ordinary wear and tear and use shall not be
deemed defects for the purposes of this category), (xx) interest on debt
or amortization payments on any mortgage or mortgages or rental payments
under any ground or underlying leases (except to the extent that same may
be made to pay insurance and taxes), (xxi) interest and penalties due to
late payments of taxes, utility bills and other such costs, (xxii)
salaries or other compensation paid to employees of Landlord above the
grade of building manager, (xxiii) the cost of any repairs occasioned by
eminent domain to the extent that such costs are reimbursed to Landlord
by governmental authorities in eminent domain proceedings, (xxiv) costs
(limited to penalties, fines and associated legal expenses) incurred due
to the violation by Landlord of any applicable federal, state and/or
local government laws, codes and similar regulations that would not have
been incurred but for such violations by Landlord, (xxv) transfer tax,
and (xxvi) management fees incurred by Landlord for the management of the
Building which exceed three percent (3%) of gross rentals of the
Building.

(15)  Notwithstanding any other provision herein to the contrary,
it is agreed that in the event the Building is not fully occupied during
any year or any

6

portion of any year of the Term, an adjustment shall be made in computing
the Actual Operating Expenses for that year so that such expenses shall
be increased for that year to the amount that, in Landlord's judgment,
would have been incurred had the total Rentable Area of the entire
Building been fully occupied during the entirety of that year. It is the
intent of this Section that Landlord shall not be required to bear any
portion of the Actual Operating Expenses which exceed the Base Operating
Expenses Rate for any year or partial year of the Term of this Lease.

(f)   Provided that Tenant is not in default under this Lease, and
subject to this paragraph, Tenant, at its sole expense, shall have the right,
upon giving reasonable notice, to audit Landlord's books and records relating to
any increased or additional rental payable hereunder for the immediately
preceding calendar year for the purpose of determining whether the provisions of
this Section 2.02 have been followed. If Tenant elects to exercise this right,
Tenant must do so within one hundred twenty (120) days after the date Landlord
delivers to Tenant the statement described in Section 2.02(b) or Tenant shall be
deemed to have accepted the Actual Operating Expenses as presented by Landlord.
If Tenant elects to audit Landlord's books and records, such audit shall be
conducted by a certified public accountant licensed in Texas. Should Tenant's
audit reveal that Landlord's determination of Actual Operating Expenses exceeded
Actual Operating Expenses by an amount exceeding five percent (5%), then,
provided Landlord's CPA reasonably agrees with the conclusions reached by
Tenant's CPA, Landlord shall reimburse Tenant for the reasonable costs of
performing such audit and shall further promptly reimburse to Tenant the total
excess amount paid; provided, however, nothing herein shall preclude Tenant from
seeking reimbursement of any contested amount it claims to have paid to Landlord
irrespective of whether Landlord's CPA is in agreement with such audit results.

2.03.  Parking. Landlord hereby agrees to make available to Tenant and Tenant
hereby agrees to pay for and take, during the full term of this Lease, 3.5
parking permits for each 1,000 rentable square feet leased by Tenant, of which
up to ninety (90) of such permits may be assigned permits located in the covered
portion of the Building Garage. With the exception of Tenant's assigned permits
in the covered portion of the Building Garage, all of Tenant's permits shall be
provided on an unassigned, first come, first served basis.

The monthly rate for each of the parking permits for assigned parking
shall be $ 25.00 plus taxes, and for unassigned parking shall be $0.00 plus
taxes. Said rentals shall be due and payable to Landlord as additional Rent
("Parking Rental") on the first day of each calendar month during the term of
this Lease. Failure by Tenant to pay Parking Rentals when due shall constitute
an Event of Default pursuant to Section 5.08(a) herein. Tenant agrees to comply
with Landlord's Parking rules and regulations as described in the attached
Exhibit "F". Notwithstanding the above, Parking Rental for Tenant's assigned
parking permits shall be abated months one (1) through sixty-three (63) of the
Lease Term. Any additional assigned or unassigned parking permits granted Tenant
as a result of an expansion of the Leased Premises shall be provided at the then
prevailing monthly rate offered by comparable office buildings in the Park Ten
area of Houston, Texas, including the Building. Effective upon the expiration of
month sixty-three (63) of the primary Lease Term, Tenant shall have

7

the one (1) time option of reducing the number of assigned permits in the
Building Garage. In order to exercise this option, Tenant shall notify Landlord
not later than expiration of month sixty-one (61) of the primary Lease Term, and
shall include in such notice the number and location of assigned permits it
shall pay for and take during the remainder of primary Lease Term.

2.04.  Payment of Rent. The term "Rent" as used herein shall mean the Base
Rental, the Tenant's proportionate Share of Actual Operating Expenses in excess
of the Base Operating Expenses Rate, the Parking Rentals and all other amounts
provided for in this Lease to be paid by Tenant, all of which shall constitute
rental in consideration for this Lease and the leasing of the Leased Premises.
The term "Additional Rent" as used herein means Rent exclusive of Base Rental.
The Rent shall be due and payable in advance in monthly installments on the
first day of each calendar month during the Term hereof, in legal tender of the
United States of America to Landlord at the address shown in Section 5.16 or to
such other person or at such other address as Landlord may from time to time
designate in writing. The Rent shall be paid without notice, demand, abatement,
deduction or offset except as otherwise expressly provided for in the Lease . In
no event shall the Landlord accept or be bound by any payment of Rent more than
thirty (30) days in advance, unless otherwise agreed to in writing between
Landlord and Tenant. If the Term commences or ends on other than the first or
last day of a calendar month, then the installment of Base Rental and the
Parking Rentals for such partial month shall be appropriately prorated. If the
Term commences or ends at any time other than the first day of a calendar year,
the Tenant's Proportional Share of Actual Operating Expenses in excess of the
Base Operating Expenses Rate shall be prorated for such year according to the
number of days of the Term during such year. In no event shall Base Rental or
monthly installments thereof be less than the amounts specified in Section 2.01.

2.05.  First Month's Rental. Landlord hereby acknowledges receipt of
$125,128.00, representing the first month's rental paid in advance, to be
applied to the Rent for the first month of the Term when due. In the event
Tenant leases more area of the Building than the Minimum Rentable Area, then
Tenant agrees to remit the equivalent of one (1) month's rental to Landlord for
the additional space within ten (10) days following the receipt of invoice.

Article 3
Landlord's Services
-------------------

3.01.  Services to be Furnished by Landlord.

(a)  Landlord shall use reasonable efforts to furnish, subject to the
Building Rules and Regulations (hereinafter defined) and Tenant's performance of
its obligations hereunder, the following services:

(1)   Air-conditioning and heating in season, during Normal
Building Operating Hours (hereafter defined), at such temperatures and in
such amounts as are considered by Landlord to be standard, and in
accordance with other comparable buildings in the Park Ten area of
Houston, Texas;

8

(2)   Hot and cold water for laboratory, lavatory and drinking
purposes in amounts considered by Landlord to be standard, and in
accordance with other comparable office buildings in the Park Ten area of
Houston, Texas. If Tenant requires water in excess of such amounts for
laboratory purposes, the costs of furnishing such excess water will be
borne solely by Tenant.

(3)   Janitor service in and about the Building and the Leased
Premises five (5) days per week, and semi-annual window washing; however,
Tenant shall pay, as additional Rent upon presentation of a statement
therefor by Landlord, the additional costs attributable to the cleaning
of improvements within the Leased Premises other than Building Standard
(hereinafter defined) improvements;

(4)   Elevators for access to and egress from the Leased Premises
on a non-exclusive basis 7 days per week, 24 hours per day;

(5)   Electrical facilities to furnish sufficient power for
typewriters, calculating machines, photocopying machines, fax machines,
computers and other machines of similar low voltage electrical
consumption such that the total electrical power consumption shall not
exceed one and one-half (1 1/2) watts per square foot of the rentable
area contained within the Leased Premises; but not including electricity
required for electronic data processing equipment, special lighting in
excess of Building Standard (defined as one (1) 2'x4' fluorescent fixture
per ninety (90) rentable square feet), and any other electrical equipment
which requires a voltage other than 110/120 volts single phase (other
than photo duplication machines, which shall be considered building
standard so long as Tenant's consumption of electricity does not exceed
1.5 watts per square foot of rentable area continued within the Leased
Premises. If the installation of said electrical equipment requires
additional air conditioning capacity above that provided by the Building
Standard system, then the additional air conditioning installation and
operating costs will be the obligation of Tenant. Landlord, at its option
and at Tenant's expense, may cause an electric current meter or such
similar device to be installed in or near the Leased Premises so as to
measure the amount of electric current consumed by Tenant.

(6)   Replacement of fluorescent lamps in Building Standard light
fixtures and incandescent bulb or fluorescent lamp replacement in public
toilet and restroom areas, Complex common areas and stairwells; and

(7)   Equipment and personnel to limit access to the Building after
normal business hours which shall consist of an unmanned security cardkey
access system similar in design and quality found in similar buildings in
the Park Ten area; PROVIDED, HOWEVER, SO LONG AS LANDLORD IS PROVIDING
THE AFOREMENTIONED SECURITY CARDKEY ACCESS SYSTEM, LANDLORD SHALL HAVE NO
FURTHER RESPONSIBILITY TO PREVENT, AND SHALL

9

NOT BE LIABLE TO TENANT FOR, AND SHALL BE INDEMNIFIED BY TENANT AGAINST,
LIABILITY OR LOSS TO TENANT, ITS AGENTS, EMPLOYEES AND VISITORS ARISING
OUT OF LOSSES DUE TO THEFT, BURGLARY, OR DAMAGE OR INJURY TO PERSONS OR
PROPERTY CAUSED BY PERSONS GAINING ACCESS TO THE BUILDING, GARAGE OR THE
LEASED PREMISES, AND TENANT HEREBY RELEASES LANDLORD FROM ALL LIABILITY
RELATING THERETO, REGARDLESS OF WHETHER SUCH LOSSES ARE CAUSED IN WHOLE
OR IN PART BY THE NEGLIGENCE OF LANDLORD. Landlord shall furnish an
adequate number of cardkeys for the Leased Premises (not to exceed 3.5
cardkeys per 1,000 square feet of Rentable Area), and any additional
cardkeys will be furnished at a charge equal to Landlord's actual cost on
an order signed by Tenant or Tenant's authorized representative. All such
cardkeys shall remain the property of Landlord. No additional locks shall
be allowed on any door of the Leased Premises without Landlord's
permission, and Tenant shall not make or permit to be made any duplicates
of such cardkeys, except those furnished by Landlord. Upon termination of
this Lease, Tenant shall surrender to Landlord all the cardkeys for the
Leased Premises, and give to Landlord the explanation of the combination
of all locks for safes, safe cabinets, and vault doors, if any, in the
Leased Premises.

(b)  "Normal Building Operating Hours" shall be from 7:00 a.m. to 6:00
p.m. Monday through Friday, and 7:00 a.m. to 1:00 p.m. Saturday, exclusive of
Sundays and "holidays". Service on Sundays, building holidays and outside of
Normal Building Operating Hours shall be provided only upon Tenant's request and
agreement in advance to bear the cost of operations attributable to such
additional services, not to exceed Landlord's actual cost plus a reasonable
repair/depreciation charge. "Holidays" shall refer to New Year's Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Friday
following Thanksgiving Day, Christmas Day, and other holidays commonly observed
by a majority of the tenants of the Building. If the holiday occurs on Saturday
or Sunday, the Friday preceding or the Monday following may, at Landlord's
discretion, be observed as a holiday.

(c)   Failure by Landlord to any extent to furnish services hereunder or
any cessation thereof shall not render Landlord liable in any respect for
damages to either person or property, nor be construed as an eviction of Tenant,
nor work an abatement of Rent, nor relieve Tenant from fulfillment of any
covenant or agreement hereof. Should any of such services be interrupted,
Landlord shall use reasonable diligence to restore the same promptly, but Tenant
shall have no claim for rebate of Rent, damages, or eviction on account thereof,
and Tenant waives all rights it may have at law or in equity, including any
rights Tenant may have arising from implied warranties of suitability.
Notwithstanding the above, Landlord acknowledges that there are certain
Essential Landlord Services in the absence of which Tenant would not be able to
conduct business in or utilize the Leased Premises for the purpose they were
let. For purposes herein, Essential Landlord Services shall be defined, and
strictly limited to, air conditioning and heating, hot and cold water (for
laboratory, lavatory and drinking purposes only), elevator service, sewer
service and electrical

10

power. In the event Essential Landlord Services are interrupted, and such
interruption is not caused by the act or omission of Tenant, and such
interruption continues for a period of five (5) consecutive business days, then
commencing upon the sixth (6th) consecutive business day Tenant (as its sole and
exclusive remedy) shall be entitled to an abatement of Base Rental and
Additional Rent until such time as the Essential Landlord Services are restored.

(d)   Tenant shall pay to Landlord, monthly as billed, as Additional
Rent hereunder, such charges as may be separately metered for (i) any utility
services utilized by Tenant for computers, data processing equipment or other
similar electrical equipment; (ii) extra lighting; (iii) air-conditioning,
heating and other services in excess of that stated in Sections 3.01(5) hereof;
or (iv) other air-conditioning, heating and services not standard for the
Building or provided at times other than Normal Building Operating Hours. Tenant
shall pay all costs associated with providing separate utility meters to the
Leased Premises. In the event separate utility meters are provided to the Leased
Premises, Landlord may elect to have all charges for the utilities separately
metered to the Leased Premises, and if such utility consumption exceeds the
Building Standard amounts described in Section 3.01a(5), Tenant will be
responsible for the costs of utilities in excess of Building Standard amounts.
In the event that Landlord furnishes extra or additional services to be paid for
by Tenant, a failure to pay for such services within ten (10) days after notice
shall constitute an Event of Default and shall further authorize Landlord, at
Landlord's discretion and without notice, to discontinue all such services.

3.02.    Access by Tenant Prior to Commencement of Term. Landlord shall permit
Tenant and its employees, agents and suppliers to enter the Leased Premises
prior to the Commencement Date to enable Tenant to do such things as may be
required by Tenant to make the Leased Premises ready for Tenant's occupancy. If
such permission is granted, such parties will not interfere with or delay the
performance of any activities by Landlord or other occupants of the Building.
Landlord may withdraw such permission upon twenty-four (24) hours notice to
Tenant if Landlord determines that any such interference or delay has been or
may be caused. Any such entry into the Leased Premises shall be at Tenant's risk
and Landlord shall not be liable in any way for personal injury, death, or
property damage which may be suffered in or about the Leased Premises or the
Building by Tenant or its employees, agents, contractors, suppliers or workmen,
and Tenant hereby indemnifies Landlord therefrom.

3.03.    Condition of Building, Premises and Leasehold Improvements.

(a)   Landlord will cause the Building to be constructed in accordance
with Exhibit "D." The Leased Premises shall be delivered to Tenant at the
Commencement Date with the leasehold improvements and tenant finish set forth
and described on Exhibit "C" attached hereto. The cost of all installation of
improvements to the Leased Premises requested by Tenant following the
Commencement Date (calculated at Landlord's actual cost plus an additional
charge of five percent (5 %) to cover overhead) shall be for Tenant's account
and at Tenant's cost (and Tenant shall pay ad valorem taxes thereon), which cost
shall be payable by Tenant to Landlord as a part of the Rent hereunder promptly
upon being invoiced therefor, and failure by Tenant to pay such cost in full

11

within thirty (30) days after the date of billing shall constitute failure to
pay Rent when due and an Event of Default by Tenant hereunder giving rise to all
remedies available to Landlord under this Lease.

(b)   Subject to Section 3.03(c), if on the Commencement Date specified
in Section 1.02 the Building has not been completed or any of the work described
in Exhibit "C" that is required to be performed by Landlord at Landlord's
expense has not been substantially completed as reasonably determined by
Landlord, or if Landlord is unable to tender possession of the Leased Premises
to Tenant on the Commencement Date, then the Commencement Date (and commencement
of installments of Rent) shall be postponed until the Building is completed
and/or such work to be performed in the Leased Premises at Landlord's expense is
substantially completed as reasonably determined by Landlord or until Landlord
is able to tender possession of the Leased Premises to Tenant, as the case may
be, and such postponement shall operate to extend the expiration date specified
in Section 1.02 hereof in order to give full effect to the stated duration of
the Term. The deferment of installments of Rent and postponement of the
Commencement Date pursuant to this Section 3.03(b) shall, except as provided
below, be Tenant's exclusive remedy for Landlord's delay of completion of
improvements to the Leased Premises or failure to tender possession of the
Leased Premises to Tenant of Building and/or Tenant shall have no claim against
Landlord because of any such delay in completion of Improvements or failure to
deliver the Leased Premises. Notwithstanding the foregoing, if the Building
and/or Landlord's work for the Leased Premises is not substantially complete by
June 1, 2000, either Tenant or Landlord shall have the right to terminate this
Lease.

(c)   No delay in the completion of the Leased Premises resulting from
(i) delay or failure on the part of Tenant in furnishing information or other
matters required in, by or in connection with Exhibit "C", (ii) changes ordered
by Tenant in the Leasehold Improvements (hereinafter defined), or (iii) delay or
failure on the part of Tenant to pay any amounts required to be paid by Tenant
for construction of improvements to the Leased Premises, shall delay the
Commencement Date, expiration date, or commencement of payment of Rent. If prior
to the Commencement Date Tenant shall enter into possession of all or any part
of the Leased Premises, (other than an entry with Landlord's consent pursuant to
Section 3.02) then the Term, the payment of monthly installments of Rent and all
other obligations of Tenant to be performed during the Term shall commence on,
and the Commencement Date shall be deemed for all purposes to be, the date of
such entry, and the total amount of Rent shall be increased accordingly,
provided that no such early entry shall operate to change the expiration date
provided herein.

(d)   Unless otherwise agreed to in writing between Landlord and
Tenant, all alterations, physical additions, or improvements in or to the Leased
Premises (including fixtures) shall, when made, become the property of Landlord
and shall be surrendered to Landlord upon termination of this Lease, whether by
lapse of time or otherwise; provided, however, this clause shall not apply to
trade fixtures, moveable equipment or furniture owned by Tenant or any other
party. Notwithstanding the above, upon request by Landlord, Tenant agrees to
remove all equipment and fixtures from its laboratory facility upon termination
of the Lease.

12

(e)   Tenant shall indemnify and hold harmless Landlord from and
against all costs (including attorneys' fees and costs of suit), losses,
liabilities, or causes of action arising out of or relating to any alterations,
additions or improvements made by Tenant to the Leased Premises, including but
not limited to any mechanics' or materialmen's liens asserted in connection
therewith.

(f)   Tenant shall not be deemed to be the agent or representative of
Landlord in making any such alterations, physical additions or improvements to
the Leased Premises, and shall have no right, power or authority to encumber any
interest in the Complex in connection therewith other than Tenant's leasehold
estate under this Lease. However, should any mechanics' or other liens be filed
against any portion of the Complex or any interest therein (other than Tenant's
leasehold estate hereunder) by reason of Tenant's acts or omissions or because
of a claim against Tenant or its contractors, Tenant shall cause the same to be
canceled or discharged by record of bond or otherwise within thirty (30)
business days after notice by Landlord. If Tenant shall fail to cancel or
discharge said lien or liens, within said thirty (30) business day period, which
failure shall be deemed to be a default hereunder, Landlord may, at its sole
option and in addition to any other remedy of Landlord hereunder, cancel or
discharge the same and upon Landlord's demand, Tenant shall promptly reimburse
Landlord for all costs incurred in canceling or discharging such lien or liens.

(g)   Upon the Commencement Date, Landlord represents and warrants that
the Complex and Leased Premises, as same shall be constructed or improved in
accordance with this Lease, including Exhibits "C" and "D" will be in compliance
with all applicable building codes, rules, regulations and applicable laws
governing occupancy of the Building ("Applicable Laws") including Title III of
the Americans with Disabilities Act of 1990, Public Law 101-336, as amplified by
the final rule promulgated by the Department of Justice in Section 28 of the
Code of the Federal Regulations, part 35, as the aforesaid Act of Regulations
may be hereafter modified or amended (the "ADA"). If, subsequent to the
Commencement Date, any Applicable Law or the ADA is modified or new legislation
enacted so that the Leased Premises or any improvements, personal property,
fixtures or any other matter or thing comprising of or located within the Leased
Premises must be removed, altered, modified, improved, reconstructed, added or
changed in order to cause the Leased Premises, or any aspect thereof, to be in
compliance with the requirements of such Applicable Law or the ADA, Landlord
shall use reasonable best efforts to notify Tenant of the same, in which event
Tenant shall promptly undertake such removal, alteration, modification
improvement, reconstruction, addition or change at the sole cost of the Tenant,
so that the Leased Premises and all aspects thereof shall be in compliance with
such Applicable Law or the ADA and any other law, code, statute, regulation or
ordinance applicable to the Leased Premises. Prior to commencing work necessary
to cause the Leased Premises to comply with the requirements of the ADA and all
other Applicable Laws, the Tenant shall notify the Landlord of the work to be
undertaken by the Tenant in this regard. The failure of the Tenant to undertake
work necessary to cause the Leased Premises to comply with the requirements of
such Applicable Law or the ADA within thirty (30) days after receipt of notice
to undertake such work, whether from the Landlord or regulatory authority, shall
constitute an Event of Default pursuant to the terms and provisions of this
Lease. The cost of improving, altering, modifying, or otherwise changing the
Leased Premises in order to comply with the requirements of the ADA shall be the
Tenant's cost, notwithstanding the fact that compliance

13

with such Applicable Law or the ADA was necessitated by, or as a result of,
alterations in the Leased Premises, which alterations were or are to be
undertaken by the Landlord at the Landlord's sole cost and expense. In the event
that the Leased Premises, the Building, the Complex or any portion or aspect of
any of them is determined to fail to comply with such Applicable Law or the ADA,
such failure of compliance shall not constitute a default or a failure of
performance on the part of the Landlord pursuant to the terms and provisions of
this Lease. In the event that the Landlord determines, in its sole discretion,
that portions of the Building or the Complex should be improved, altered,
modified or otherwise changed in order to cause the Building or the Complex, or
any portion of any of them, to be in compliance with the requirements of such
Applicable Law or the ADA, it shall undertake such improvements, alterations,
modification or changes to the Building or the Complex as the Landlord deems
necessary to cause such improvements to comply with the requirements of such
Applicable Law or the ADA. Notwithstanding anything to the contrary contained in
this Lease following the Commencement Date, all costs and expenses for labor,
materials, architectural fees, engineering fees, overhead, insurance, services
or supplies incurred by the Landlord in causing the Building or the Complex to
comply with the requirements of any Applicable Law or the ADA shall constitute
Actual Operating Expenses of the Building even though such costs may be in the
nature of capital improvements or expenses, and shall be reimbursed to the
Landlord as a part of Actual Operating Expense in accordance with the terms and
provisions of this Lease.

3.04.    Repair and Maintenance by Landlord. After the Commencement Date and
completion of Tenant's punch list items, Landlord shall not be required to make
any improvements or repairs of any kind or character to the Leased Premises or
the Complex, other than such repairs as may be required to the Building
corridors and lobbies and structural members of the Building and Garage and as
contained in the Addendum, any damage to the Leased Premises caused by Landlord,
or its contractors, making other space in the Building ready for occupancy by
other tenants, and such repairs and maintenance as may be deemed necessary
solely by Landlord for normal operations for the Complex consistent with the
standards maintained by owners of similar buildings in the Park Ten area. This
Section 3.04 shall not apply in the case of damage or destruction by fire or
other casualty (as to which Section 5.02 shall apply), or damage resulting from
an eminent domain taking (as to which Section 5.01 shall apply). Except to the
extent not reasonably avoidable in connection with temporary construction,
renovation, repair, maintenance or other necessary activities of Landlord in the
Building, and except in connection with the exercise of remedies it may have
against Tenant in the event of default by Tenant under this Lease, Landlord
shall conduct its business and control its agents, employees and contractors in
such manner as not to create any nuisance, or interfere with, annoy or disturb
Tenant in its occupancy of the Leased Premises. Landlord shall not, in its
operation of the Building, cause any strong, unusual, offensive or objectionable
odors, gases or vapors to be produced within, or to migrate to, the Building,
Garage or Leased Premises at such times as they are occupied by Tenant or its
employees or invitees except to the extent not reasonably avoidable in
connection with temporary construction, renovation, repair, maintenance or other
necessary activities of Landlord in the Building. Landlord will make reasonable
efforts to notify Tenant prior to any construction or other activity in the
Building which may temporarily disturb Tenant in its normal business operations.
Landlord agrees it will not engage in construction or other activity in the

14

Building which will interfere unreasonably with Tenant's conduct of business on
the Leased Premises and there will be no core drilling on the floors on which
the Leased Premises are located or on any adjacent floors between the hours of
8:00 AM and 5:00 PM, Monday through Friday.

Article 4
Tenant's Covenants
------------------

4.01.    Payments by Tenant. Tenant agrees to timely pay the Rent and all rents
and sums provided to be paid to Landlord hereunder at the times and in the
manner herein provided.

4.02.    Certain Taxes. Tenant shall pay all ad valorem taxes on all
improvements installed in the Leased Premises that are in excess of those
installed by Landlord from time to time as Building Standard or in excess of the
items to be installed by Landlord at Landlord's cost under Exhibit "C" or
specified in Section 3.03(a) hereof.

4.03.    Repairs by Tenant. Tenant shall, at its cost,  repair or replace any
damage to the Building, or any part thereof, caused by Tenant or Tenant's
agents, employees, invitees or visitors; provided if Tenant fails to make such
repairs or replacements promptly, Landlord may, at its option, make such repairs
or replacements and the cost thereof (plus five percent (5%) for overhead to
Landlord) shall be payable by Tenant on demand as a part of the Rent hereunder,
and failure of Tenant to pay such costs within thirty ( 30 ) days, following
written notice from Landlord, shall constitute a failure to pay Rent when due
and an Event of Default by Tenant hereunder.

4.04.    Care of the Leased Premises. Tenant shall maintain the Leased Premises
in a clean, attractive condition, and not commit or allow any waste or damage to
be committed on or to any portion of the Leased Premises, and at the expiration
or termination of this Lease shall deliver up the Leased Premises to Landlord in
as good condition as at date of possession by Tenant, ordinary wear and tear and
damage from casualty or condemnation excepted.

4.05.    Tenant Floor Plans: See Exhibit "C".

4.06.    Assignment or Sublease.

(a)   Tenant shall not assign this Lease or sublease the Leased
Premises or any part thereof or mortgage, pledge or hypothecate its leasehold
interest or grant any concession or license within the Leased Premises (any such
assignment, sublease, mortgage, pledge, hypothecation, or grant of a concession
or license being hereinafter referred to in this Section 4.06 as a "Transfer")
without the prior express written permission of Landlord, which will not be
unreasonably withheld or delayed; provided, however, that Landlord's right to
terminate this Lease as to any space for which Tenant requests permission to
make a Transfer shall not be limited, qualified or in any way affected by or
subject to the agreement that permission will not be unreasonably withheld, it
being understood and agreed that if Tenant requests Landlord's permission to
make a Transfer, Landlord shall have the right, in its sole discretion, for any
reason or for no reason, to terminate this Lease as to the space

15

so affected as hereinafter provided. Any attempt to effect a Transfer without
such permission of Landlord shall be void and of no effect. Tenant acknowledges
that any assignment or sublease is also subject to the prior written consent of
any Landlord's Mortgagee (as defined in Section 4.10). Without limiting the
generality of what may constitute reasonable grounds for withholding permission,
it is stipulated and agreed that during the initial eighteen (18) months of the
Lease Term, a refusal to permit a Transfer to another tenant in the Building, or
a refusal to permit a Transfer to a proposed assignee or sublessee with whom
Landlord has been negotiating to lease space in the Building shall be deemed
reasonable. At all times a refusal to permit a Transfer that is related to the
creditworthiness or financial condition of the proposed assignee or sublessee
shall be deemed reasonable. In order for Tenant to make a Transfer, Tenant must
request in writing Landlord's permission within at least sixty (60) days in
advance of the date on which Tenant desires to make a Transfer, after which
Landlord shall then have a period of thirty (30) days following receipt of such
notice within which to notify Tenant in writing that Landlord elects (i) to
terminate this Lease as to the space so affected as of the date so specified by
Tenant in which event Tenant will be relieved of all further obligations
hereunder as to such space, (ii) to permit Tenant to assign or sublet such
space, subject, however, to prior written approval of the proposed assignee or
sublessee by Landlord, or (iii) to refuse consent to Tenant's requested Transfer
and to continue this Lease in full force and effect as to the entire Leased
Premises. If Landlord shall fail to notify Tenant in writing of such election
within said thirty (30) day period, Landlord shall be deemed to have elected
option (iii) above. If Landlord elects to exercise option (ii) above, Tenant
agrees to provide at its expense, direct access from any sublet space or
concession area to a public corridor of the Building. The prohibition against a
Transfer contained herein shall be construed to include a prohibition against
any Transfer by operation of law. Tenant shall not cause or permit any
advertisement for a proposed Transfer to be published without the prior approval
of Landlord, and during the initial eighteen (18) months of the Lease Term, no
advertisement of a rental rate less than that which Landlord is then asking for
similar space in the Building will be permitted.

(b)   Notwithstanding that the prior express written permission of
Landlord to a Transfer may have been obtained under the provisions of Section
4.06(a), the following shall apply:

(1) Tenant shall (i) in the event of an assignment, cause the
assignee to expressly assume in writing and to agree to perform all of
the covenants, duties and obligations of Tenant hereunder, and such
assignee shall be jointly and severally liable therefor along with
Tenant; (ii) cause such assignee or sublessee to grant Landlord an
express first and prior contract lien and security interest in the same
manner as the lien granted by Tenant to Landlord under Section 5.03
hereof; (iii) subordinate to Landlord's statutory lien and the
aforesaid contract lien and security interest any liens or other rights
which Tenant may claim with respect to any fixtures, equipment, goods,
merchandise or other property owned by or leased to the proposed
assignee or sublessee or other party intending to occupy the Leased
Premises; and (iv) agree with Landlord that in the event that the rent
or other consideration due and payable by a sublessee or assignee under
any such permitted sublease or assignment exceeds the Rent for the
portion of the Leased Premises so transferred, then Tenant

16

shall pay Landlord as additional rental hereunder fifty percent (50%)
of such excess rental and other consideration immediately upon receipt
thereof by Tenant from such transferee.

(2) A signed counterpart of all instruments relative to a
Transfer (executed by all parties to such transaction with the
exception of Landlord) shall be submitted by Tenant to Landlord prior
to or contemporaneously with the request for Landlord's written consent
thereto; and, Tenant shall reimburse Landlord for all reasonable
attorney's fees incurred in connection with Landlord's review and
approval of such instruments;

(3) No usage of the Lease Premises different from the usage
herein provided to be made by Tenant shall be permitted without the
prior written consent of the Landlord, and all of the terms and
provisions of this Lease shall continue to apply after a Transfer; and

(4) In any case where Landlord consents to a Transfer, Tenant
will nevertheless remain directly and primarily liable for the
performance of all the covenants, duties and obligations of Tenant
hereunder (including, without limitation, the obligation to pay all
Rent herein provided to be paid), and Landlord shall be permitted to
enforce the provisions of this Lease against the undersigned Tenant or
any transferee, or both, without demand upon or proceeding in any way
against any other persons.

(c)   If Tenant is a corporation then any transfer of this Lease by
merger, consolidation or dissolution or any change in ownership or power to vote
a majority of the voting stock in Tenant outstanding at the time of execution of
this Lease shall constitute a Transfer for the purposes of this Lease; provided,
however, that acquisition of all stock of a corporate tenant by any corporation,
the stock of which is registered pursuant to the Securities Act of 1933 or the
merger of a corporate tenant into such a corporation, the stock of which is so
registered, shall not be deemed to be a violation of Section 4.06(a). For
purposes of this Section 4.06(c), the term "voting stock" shall refer to shares
of stock regularly entitled to vote for the election of directors of the
corporation involved.

(d)   If Tenant is a general partnership having one or more
corporations as partners or if Tenant is a limited partnership having one or
more corporations as general partners, the provisions of Section 4.06(c) shall
apply to each of such corporations as if such corporations alone had been the
Tenant hereunder. If Tenant is a general or limited partnership, joint venture,
or other form of association, the transfer of a majority of the ownership
interests therein shall constitute a Transfer for the purposes of this Lease.

(e)   The consent by Landlord to a particular Transfer shall not be
deemed a consent to any other subsequent Transfer. If this Lease, the Leased
Premises or the Tenant's leasehold interest therein, or if any portion of the
foregoing is transferred, or if the Leased Premises are occupied in

17

whole or in part by anyone other than Tenant without the prior consent of
Landlord as provided herein, Landlord may nevertheless collect rent from the
transferee or other occupant and apply the net amount collected to the Rent
payable hereunder, but no such transaction or collection of rent or application
thereof by Landlord shall be deemed a waiver of the provisions hereof or a
release of Tenant from the further performance by Tenant of its covenants,
duties and obligations hereunder.

(f)   Notwithstanding anything to the contrary, no approval or consent
shall be required for a Transfer to a "subsidiary", "affiliate" or a "successor"
of Tenant.

For purposes of this Section 4.06, a "subsidiary", "affiliate" or a "successor"
of Tenant shall mean the following:

(1)   An "affiliate" shall mean any corporation which, directly
or indirectly, controls or is controlled by or is under common control
with Tenant. For this purpose, "control" shall mean the possession,
directly or indirectly, or the power to direct or cause a direction of
the management and policies of such corporation, whether through the
ownership of voting securities, by contract or otherwise.

(2)   A "subsidiary" shall mean any corporation not less than
fifty percent (50%) of whose outstanding stock shall, at the time, be
owned directly or indirectly by Tenant.

(3)   A "successor" of Tenant shall mean; (i) a corporation with
which Tenant, its corporate successors or assigns, is merged or
consolidated in accordance with applicable statutory provisions for
merger or consolidation of a corporation, or (ii) a corporation
acquiring the lease hereby demised in conjunction with such
corporation's acquisitions of all or substantially all of the assets of
Tenant, its corporate successors or assigns, or (iii) any corporate
successor to a successor corporation becoming such by either of the
methods described in (i) or (ii). Notwithstanding anything to the
contrary contained herein, in the event of a Transfer to an affiliate,
subsidiary or successor (as defined herein) all excess rental or other
consideration shall be for the sole benefit of Tenant. Landlord's right
to terminate this Lease as to the space so affected as described in
4.06(a)(i) shall be null and void.

4.07.    Alterations, Additions, Improvements. Tenant will make no alteration,
change, improvement, repair, replacement or addition to the Leased Premises
without the prior written consent of Landlord, which consent will not be
unreasonably withheld or delayed; provided, however, that Landlord shall have no
obligation to consent to any alteration or change if, in Landlord's sole
opinion, the residual value of the resulting improvements to the Leased Premises
will be less than before such alteration or change, unless Tenant, at its
expense, agrees to reconstruct the Leased Premises to the condition that existed
prior to such alteration, change, improvement, repair, replacement or additions.
Tenant may remove its trade fixtures, office supplies and movable office
furniture and equipment not attached to the Building provided (i) such removal
is made prior to the

18

termination or expiration of the Term; (ii) Tenant is not then in default in the
timely performance of any obligation or covenant under this Lease; and (iii)
Tenant promptly repairs all damage caused by such removal. All other property
and the Leased Premises and any alteration or addition to the Leased Premises
and any other articles attached or affixed to the floor, wall, or ceiling of the
Leased Premises is a part of the property of Landlord and shall be surrendered
with the Leased Premises as part thereof at the termination or expiration of
this Lease, without payment or compensation therefor. If, however, Landlord so
requests in writing, Tenant will, prior to termination or expiration of this
Lease, remove any and all alterations, additions, fixtures, equipment and
property placed or installed by Tenant or installed by Landlord at Tenant's
expense in the Leased Premises and will repair any damage caused by such
removal.

4.08.  Compliance with Laws and Usage; Building Rules and Regulations; Liens.
Tenant, at its cost, shall comply with all federal, state, municipal and other
laws and ordinances applicable to the Leased Premises and the business conducted
therein by Tenant (including, but not limited to, all statutes, rules and
regulations covering the use, storage, transportation and disposal of hazardous
substances, including petroleum and other petrochemicals), and with the Building
Rules and Regulations set out in Exhibit "E" hereto as such rules and
regulations are modified and supplemented by Landlord from time to time, and
such other rules and regulations as may be adopted by Landlord from time to
time, which when sent by Landlord to Tenant in writing shall be thereafter
carried out and observed by Tenant; will not engage in any activity which would
cause landlord's fire and extended coverage insurance to be canceled or the rate
thereof to be increased (or, at Landlord's option, will pay any such increase);
and will not commit any act which is a nuisance or annoyance to Landlord or to
other tenants in the Building or which might, in the reasonable judgment of
Landlord, appreciably damage Landlord's goodwill or reputation, or tend to
injure or depreciate the value of the Complex. Tenant has no authority to
encumber the Complex or Leased Premises with any lien, and Tenant shall not
suffer or permit any such lien to exist. Should any such lien hereafter be
filed, Tenant shall promptly discharge the same at its sole cost.

4.09.  Access by Landlord. Tenant shall permit Landlord or its agents or
representatives to enter into and upon any part of the Leased Premises at all
reasonable hours with reasonable prior advance notice (emergencies excepted) to
inspect same; to clean (after Normal Building Operating Hours); to make repairs,
alterations or additions thereto, as Landlord may deem necessary or desirable;
to show the Leased Premises to prospective purchasers or tenants; or for any
other purpose deemed reasonable by Landlord; and Tenant shall not be entitled to
any abatement or reduction or Rent by reason thereof. In connection with the
foregoing, Landlord will minimize interference with Tenant's business to the
extent reasonably possible.

4.10.  Landlord's Mortgagee. Tenant agrees with Landlord and with the mortgagee
of any mortgage or the beneficiary of any deed of trust now or hereafter
constituting a lien on the Complex or the Leased Premises ("Landlord's
Mortgagee") that any Landlord's Mortgagee shall have the right at any time to
elect, by notice in writing given to Tenant, to make this Lease superior to the
lien of such mortgage or deed of trust and upon the giving of such notice to
Tenant, this Lease shall be deemed prior and superior to the mortgage or deed of
trust in respect to which such notice is given;

19

and at Landlord's Mortgagee's request Tenant shall execute a recordable
instrument establishing this Lease as superior to such lien; or Landlord's
Mortgagee may, by like notice, make this Lease subordinate to such mortgage or
deed of trust. If Landlord's Mortgagee shall elect to make this Lease
subordinate to such mortgage or deed of trust, Tenant agrees to attorn to such
Landlord's Mortgagee so long as such Landlord's Mortgagee also agrees to not
disturb Tenant's possession under this Lease in the event such Landlord
Mortgagee becomes the owner of the Building. In confirmation of such
subordination, attornment and non-disturbance agreement, Tenant shall execute
promptly any reasonable Subordination, Attornment and Non-Disturbance Agreement
that Landlord or such Landlord's Mortgagee may request. Without limiting the
foregoing, Tenant agrees to enter into a Subordination, Non-Disturbance and
Attornment Agreement in the form attached as Exhibit "H." Tenant further agrees
that any Landlord's Mortgagee may demand the payment of Rent and performance of
this Lease at any time. Tenant hereby constitutes Landlord as Tenant's
attorney-in-fact to execute such Subordination, Attornment and Non-Disturbance
Agreement for and on behalf of Tenant should Tenant fail to execute such
agreement within fifteen (15) days after written request to do so. In the event
of the enforcement by Landlord's Mortgagee of the remedies provided for by law
or by such mortgage or deed of trust, Tenant will, upon request of any person or
party succeeding to the interest of Landlord as a result of such enforcement,
automatically become the Tenant of such successor in interest without change in
terms or other provisions of such lease provided, however, that such successor
in interest shall not be (i) bound by any payment of Rent for more than one
month in advance except payments in the nature of security for the performance
by Tenant of its obligations under this Lease; (ii) subject to any offset,
defense or damages arising out of a default or any obligations any preceding
Landlord; or (iii) bound by any amendment or modification of this Lease made
without the written consent of such successor in interest, provided Tenant has
been given prior notice of the identity of such successor in interest. Upon
request by such successor in interest, Tenant shall execute and deliver
reasonable instruments confirming the attornment provided for herein.

4.11.  Estoppel Certificate. At Landlord's request from time to time, Tenant
will promptly, without further consideration, execute an estoppel certificate
addressed to Landlord's Mortgagee or to such party as Landlord may designate
certifying to such notice provisions and other matters as Landlord's Mortgagee
or as the other party designated by Landlord may reasonably request. At
Landlord's request from time to time, Tenant will promptly execute, without
further consideration, a certificate stating the commencement and expiration
dates of the Term, the rental then payable hereunder, that there are no defaults
on the part of Landlord or claims against Landlord hereunder (or if there are
any, stating the same with particularity), and such other information pertaining
to this Lease as Landlord may reasonably request, addressed to such party as
Landlord may designate.

Article 5
Mutual Covenants
----------------

5.01.  Condemnation, Loss or Damage. If the Leased Premises, Complex, or any
part thereof shall be taken or condemned for any public purpose (or conveyed in
lieu or in settlement thereof) to such an extent as to render a material portion
of the remainder of the Building or Leased Premises,

20

in the opinion of an independent architect selected by Landlord, not reasonably
suitable for occupancy, this Lease shall, at the option of Landlord, forthwith
cease and terminate, and all proceeds from any taking or condemnation of the
Building and the Leased Premises shall belong to and be paid to Landlord;
provided, however, any award for Tenant's personal property and improvements in
excess of Building Standard shall be paid to Tenant. If this Lease is not so
terminated, Landlord shall repair any damage resulting from such taking, to the
extent and in the manner provided in Section 5.02, and Base Rental and
Additional Rent hereunder shall be abated to the extent the Leased Premises are
rendered untenantable during the period of repair and thereafter be adjusted on
an equitable basis considering the areas of the Leased Premises taken and
remaining. Nothing contained herein shall preclude the Tenant from seeking a
separate damage award from the condemning authority.

5.02.  Fire or Other Casualty; Certain Repairs.

(a)  In the event of a fire or other casualty in the Leased Premises,
Tenant shall immediately give notice thereof to Landlord. If the Building or
Leased Premises shall be partially destroyed by fire or other casualty so as to
render the Leased Premises untenantable in whole or in part in the opinion of
Landlord and Tenant, or if, as a result of such fire or other casualty, Tenant
is denied access to the Leased Premises, the Base Rental and Additional Rent
provided for herein shall abate as to the portion of the Leased Premises
rendered untenantable until such time as the Leased Premises are made tenantable
as determined by Landlord and Landlord agrees to commence and prosecute such
repair work promptly and with reasonable diligence, or if such destruction
results in the Leased Premises being untenantable in substantial part for a
period reasonably estimated by Landlord to be six (6) months or longer after the
date of the destruction, or in the event of total or substantial damage or
destruction of the Building where Landlord decides not to rebuild, then all Rent
owed up to the date of such damage or destruction shall be paid by Tenant and
this Lease shall terminate upon notice thereof to Tenant. Landlord shall give
Tenant written notice of its decisions, estimates or elections under this
Section 5.02 within sixty (60) days after any such damage or destruction.

(b)  Should Landlord elect to effect any repairs under Sections 5.01 or
5.02(a), Landlord shall only be obligated to restore or rebuild the Leased
Premises to a Building Standard condition, and then only to the extent that
insurance proceeds are actually available to Landlord therefor. In the event the
Base Rental and Additional Rent or any portion of the Base Rental and Additional
Rent is abated under Sections 5.01 or 5.02(a), the expiration date of the Term
specified in Section 1.02 shall be extended for the period of such abatement. If
insurance proceeds are insufficient to rebuild and Landlord elects not to
rebuild with other funds, this Lease will terminate effective the date of
destruction.

5.03.  Holding Over. If Tenant should remain in possession of the Leased
Premises after the termination or expiration of the Term without written consent
of Landlord, then Tenant shall be deemed to be occupying the Leased Premises as
a tenant-at-sufferance, subject to all the covenants and obligations of this
Lease, except that the daily Rent shall be one hundred fifty percent (150%)

21

the Base Rental in effect immediately prior to such expiration or termination,
but such holding over shall not extend the Term.

5.04.  Assignment by Landlord. Landlord shall have the right to transfer and
assign, in whole or in part, all its rights and obligations hereunder and in the
Building and property referred to herein, and upon any such transfer of
assignment and assumption of Landlord's obligations by such assignee, no further
liability or obligation shall thereafter accrue against Landlord hereunder.

5.05.  Recourse Limitation. Tenant specifically agrees to look solely to the
value of Landlord's equity interest in the Building at the time a cause of
action in favor of Tenant against Landlord accrues, it being agreed that
Landlord (and its partners, officers, directors and shareholders) shall never be
personally liable for any such judgment. In addition, Tenant also agrees that
Tenant shall not be entitled to recover from Landlord nor any of its agents,
servants, employees, partners, officers, directors or shareholders any indirect,
special or consequential damages Tenant may incur as a result of a default under
this Lease or other action by Landlord, its agents, servants, employees,
partners, officers, directors or shareholders. The provisions contained in the
foregoing sentences shall not limit any right that Tenant might otherwise have
to obtain injunctive relief against Landlord, or any other action not involving
the liability of Landlord to respond in monetary damages from assets other than
Landlord's interest in the Building.

5.07.  Control of Common Areas and Parking Facilities by Landlord. All public
lobbies, foyers, corridors and restrooms, all automobile parking areas including
(without limitation), the Garage, driveways, entrances and exits thereto, and
other facilities furnished by Landlord, including all parking areas, truck way
or ways, loading areas, pedestrian walkways, ramps, landscaped areas, stairways
and other areas and improvements provided by Landlord for the general use, in
common, of tenants, their officers, agents, employees, invitees, licensees,
visitors and customers shall be at all times subject to the exclusive control
and management of Landlord; Landlord shall have the right, in its sole
discretion and at any time, to change or modify any of the facilities and areas
mentioned in this Section; and Landlord shall have the right from time to time
to establish, modify and enforce reasonable rules and regulations (herein called
the "Building Rules and Regulations") with respect to all facilities and areas
mentioned in this Section; the initial Building Rules and Regulations are set
out in Exhibit "E" hereto and are of equal dignity herewith. Notwithstanding the
above, Landlord shall not have the right to change or modify any of the
facilities and areas in this Section if such change or modification would have
the effect of materially restricting Tenant's access to the Leased Premises.

5.08.  Default by Tenant.

(a)   Each of the following occurrences relative to Tenant shall
constitute an "Event of Default:"

(1)  Failure or refusal of Tenant to make the timely payment of any
Rent payable under this Lease within five (5) business days following
written notice from

22

Landlord, that the same is due and payable, but not yet received by
Landlord; provided, in no event shall such notice be required of
Landlord in excess of two (2) times during any twelve (12) month
period;

(2)  The filing or execution or occurrence of a petition in
bankruptcy or other insolvency proceeding by or against Tenant or
Guarantor, or petition or answer seeking relief under any provision of
the Bankruptcy Act; or as assignment for the benefit of creditors or
composition; or a petition or other proceeding by or against the Tenant
or Guarantor for the appointment of a trustee, receiver or liquidator
of Tenant or Guarantor or any of Tenant's or Guarantor's property; or a
proceeding by any governmental authority for the dissolution or
liquidation of Tenant or any guarantor of Tenant;

(3)  Failure by Tenant in the performance or compliance with any
of the agreements, terms, covenants or conditions provided in this
Lease, other than those referred to in (1), (2) or (3) above, for a
period of thirty (30) days after notice from Landlord to Tenant
specifying the items in default; or

(4)  The occurrence of any other event herein provided to be an
Event of Default.

(b)  This Lease and the Term and estate hereby made are subject to the
limitation that if and whenever any Event of Default shall occur, Landlord may,
at its option and without further written notice to Tenant, in addition to all
other remedies given hereunder or by law or equity, do any one or more of the
following:

(1)  Terminate this Lease, in which event Tenant shall
immediately surrender possession of the Leased Premises to Landlord;

(2)  Enter upon and take possession of the Leased Premises and
expel or remove Tenant and any other occupant and all property
therefrom with or without having terminated the Lease; and

(3)  Alter locks and other security devices at the Leased
Premises so that Tenant will not have access to the Leased Premises.
Landlord may take these actions without incurring any liability and
without relinquishing Landlord's right to Rent or any other right given
to Landlord hereunder or by operation of law; Tenant hereby waiving any
right to claim damage for such re-entry expulsion.

(c)  Once all applicable written notices are given, cure periods have
elapsed and an Event of Default has occurred, any right of Tenant to receive
notice of Landlord's intent to exercise any of its remedies is hereby waived.

23

(d)  Exercise by Landlord of any one or more remedies shall not
constitute an acceptance of surrender of the Leased Premises by Tenant, it being
understood that such surrender can be effected only by the written agreement of
the Landlord and Tenant, with the prior written consent of any Landlord's
Mortgagee (as defined in Section 4.10).

(e)  If Landlord terminates this Lease by reason of an Event of
Default, Tenant shall pay to Landlord the sum of all Rent and other indebtedness
accrued hereunder to the date of such termination, the amounts stated in Section
5.08(f) hereof, plus, as liquidated damages, an amount equal to the then present
value of the Rent and all other indebtedness as would otherwise have been
required to be paid by Tenant to Landlord during the period following the
termination of the Term measured from the date of such termination to the date
of expiration stated in section 1.02, less the then present fair market rental
value of the Leased Premises for such period as reasonably determined by
Landlord.

(f)  If Landlord repossesses the Leased Premises without terminating
the Lease, then Tenant shall pay to Landlord all Rent and other indebtedness
accrued to the date of such repossession, plus Rent and other sums required to
be paid by Tenant during the remainder of the Term, diminished by any net sums
thereafter received by Landlord through reletting the Leased Premises during
said period (after deducting expenses incurred by Landlord as provided below);
reentry by Landlord will not affect the obligations of Tenant for the unexpired
Term. Tenant shall not be entitled to any excess of any Rent obtained by
reletting over the Rent herein reserved. Actions to collect amounts due by
Tenant may be brought on one or more occasions, without the necessity of
Landlord's waiting until expiration of the Term.

(g)  In case of an Event of Default, to the extent the same were not
paid or deducted, as appropriate, under Section 5.08(e) or (f), Tenant shall
also pay to Landlord: (i) broker's fees incurred by Landlord in connection with
reletting the whole or any part of the Leased Premises; (ii) the cost of
removing and storing Tenant's or any other occupant's property; (iii) and the
cost of repairing, altering, remodeling or otherwise putting the Leased Premises
into condition acceptable to a new tenant or tenants; and (iv) all reasonable
expenses incurred by Landlord in enforcing Landlord's remedies, including
reasonable attorney's fees and court costs. Notwithstanding the above, Tenant's
obligation pursuant to this Section (g) shall be limited to the total of items
(i), (ii), (iii) and (iv) multiplied by the percentage obtained by dividing the
remainder of Tenant's Lease Term by the substitute tenant(s) lease term.

(h)  Upon termination or repossession of the Leased Premises for an
Event of Default, Landlord shall use reasonable efforts to relet the Leased
Premises, or any portion thereof, and to collect rental after reletting. In the
event of reletting, Landlord may relet the whole or any portion of the Leased
Premises for any period, to any tenant, and for any use and purpose. In no event
shall Landlord be required to extend any preference to the reletting of the
Leased Premises or any portion thereof over other vacant portions of the
Building.

24

(i)  Any and all property which may be removed from the Leased Premises
by Landlord pursuant to the authority of this Lease or of law, to which Tenant
is or may be entitled, may be handled, removed and stored, as the case may be,
by or at the direction of Landlord at the risk, cost and expense of Tenant, and
Landlord shall in no event be responsible for the value, preservation or
safekeeping thereof. Tenant shall pay to Landlord, upon demand, any and all
expenses incurred in such removal and all storage charges against such property
so long as the same shall be in Landlord's possession or under Landlord's
control. Any such property of Tenant not retaken by Tenant from storage within
thirty (30) days after removal from the Leased Premises shall, at Landlord's
option, be deemed conveyed by Tenant to Landlord under this Lease as by a bill
of sale without further payment or credit by Landlord to Tenant.

(j)  If Tenant should fail to make any payment or perform any obligation
hereunder, and such failure continues beyond any applicable cure period allowed
hereunder, Landlord, without obligation to do so and without thereby waiving
such failure or default, may make such payment and/or perform such obligation
for the account of Tenant (and enter the Lease Premises for such purpose), and
Tenant shall pay upon demand all costs, expenses and disbursements (including
reasonable attorneys' fees) incurred by Landlord in taking such remedial action,
plus interest thereon at the highest rate of interest permitted by law.

(k)  In addition to the foregoing, if Tenant abandons or fails to occupy
the Leased Premises, or any significant portion thereof, Landlord may, at its
election, terminate this Lease.

5.09.  Right to Relocate. Notwithstanding anything herein to the contrary,
Landlord shall in all cases retain the right and power to relocate Tenant within
the Building in space which is comparable in size and location and suited to
Tenant's use; such right and power to be exercised reasonably and such
relocation to be made at Landlord's sole cost and expense. Landlord shall not be
liable or responsible for any claims, damages, or liabilities in connection with
or occasioned by such relocation. Landlord's reasonable exercise of such right
and power shall include, but shall in no way be limited to, a relocation to
consolidate the rentable area occupied in order to provide Landlord services
more efficiently, or a relocation to provide contiguous vacant space for a
prospective tenant. Notwithstanding the above, Landlord shall not have the right
to relocate Tenant from the top two (2) floors of the Building, and shall have
the right to relocate Tenant only from the remainder of the Leased Premises, if
any, which is located on a portion of an entire floor of the Building.

5.10.  Non-Waiver. Neither acceptance of rent by Landlord nor failure by
Landlord to complain of any action, non-action or default of Tenant shall
constitute a waiver of any of Landlord's rights hereunder. Waiver by Landlord of
any right for any default of Tenant shall not constitute a waiver of any right
for either a subsequent default of the same obligation or any other default.
Notwithstanding anything contained herein to the contrary, should Tenant default
under this Lease and subsequently cure such default to Landlord's satisfaction,
Landlord shall acknowledge such cure in writing, and Landlord agrees no further
action shall be taken against Tenant as a consequence thereof.

25

5.11.  Independent Obligations. The obligation of Tenant to pay all Rent and
other sums hereunder provided to be paid by Tenant and the obligation of Tenant
to perform Tenant's other covenants and duties hereunder constitute independent
unconditional obligations to be performed at all times provided for hereunder,
save and except only when an abatement thereof or reduction therein is
hereinabove expressly provided for and not otherwise. Tenant waives and
relinquishes all rights which Tenant might have to claim any nature of lien
against or withhold, or deduct from or offset against any Rent and other sums
provided hereunder to be paid Landlord by Tenant.

5.12.  Time of Essence. In all instances where any act is required at a
particular indicated time or within an indicated period, it is understood and
stipulated that time is of the essence.

5.13.  Remedies Cumulative. Landlord may restrain or enjoin any breach or
threatened breach of any covenant, duty or obligation of Tenant herein contained
without the necessity of proving the inadequacy of any legal remedy or
irreparable harm. The remedies of Landlord hereunder shall be deemed cumulative
and no remedy of Landlord, whether exercised by Landlord or not, shall be deemed
to be in exclusion of any other.

5.14.  Insurance, Liability, Indemnity, Subrogation and Waiver.

(a)  Tenant shall maintain at its sole expense fire and extended
coverage insurance with vandalism, malicious mischief and theft endorsements and
with the additional of the all other peril coverage (formerly known as all risk)
and a sprinkler leakage endorsement and flood coverage (where applicable), on
all of its personal property, including removable trade fixtures, located in the
Leased Premises and on non-Building Standard leasehold improvements and all
additions and improvements made by Tenant.

(b)  Tenant shall, at its sole expense, maintain in effect at all times
commercial general liability insurance, including contractual liability
coverage, naming Landlord as an additional insured, issued by and binding upon
some solvent insurance company authorized to do business in Texas and
satisfactory to Landlord and with an A.M. Best rating of at least A-VI, with
bodily injury and property damage limits of no less than $1,000,000.00 combined
single limit for each occurrence and $3,000,000.00 in the aggregate for all
liability including products and completed operations coverage. Tenant shall
provide to Landlord (i) copies of such insurance policies prior to the
Commencement Date of the Term, (ii) upon written request from Landlord,
certificates of renewal at least thirty (30) days prior to the expiration date
of any such policies, and (iii) copies of new policies at least thirty (30) days
prior to terminating, or changing insurance companies for, any such policies.

(c)  Tenant agrees to release, indemnify, defend and hold harmless
Landlord and Landlord's partners, agents, directors, officers, employees,
invitees and contractors, from and against any and all liabilities, claims,
demands, expenses, fees, fines, penalties, suits, proceedings, actions and
causes of action of any and every kind and nature (including, but not limited
to, legal and investigative costs and all other reasonable costs, expenses and
liabilities from the first notice that

26

any claim or demand is to be made or may be made) arising or growing out of or
in any way connected with Tenant's use, occupancy, management or control of the
Leased Premises, Tenant's use of the Complex, Tenant's operations or activities
in the Building or the Complex, any breach of this lease by Tenant or the
negligence or intentional misconduct of Tenant, or its agents, directors,
officers or employees. This obligation to indemnify shall not be limited in any
way by any limitation of the amount or type of damages, compensation or benefit
payable under applicable worker's compensation acts, disability benefit acts or
other employee benefit acts. The provisions of this paragraph shall survive the
termination of the Lease with respect to any claim arising before such
termination.

(d)  Anything herein to the contrary notwithstanding, Tenant hereby
releases and waives all claims, rights of recovery and causes of action that
Tenant or any party claiming by, through or under Tenant by subrogation or
otherwise may now or hereafter have against the Landlord or any of Landlord's
partners, directors, officers, employees or agents for any loss or damage that
may occur to the Complex, Leased Premises, Tenant improvements or any of the
contents of any of the foregoing by reason of fire or other casualty, or any
other cause except gross negligence or willful misconduct (but including
negligence of Landlord or Landlord's partners, directors, officers, employees,
or agents) that could have been insured against under the terms of (i) any
standard fire and extended coverage insurance policies required under the terms
of this Lease, or (ii) any other loss covered by insurance required to be
maintained under the terms of this Lease.

(e)  Tenant and Landlord agree that each shall not be responsible or
liable to the other or to their agents, customers or invitees, for bodily injury
(fatal or non-fatal) or property damage occasioned by the acts or omissions of
any other tenant or such tenant's employees, agents, contractors, customers or
invitees within the Complex, or for any loss or damage to any property or
persons occasioned by theft, fire act of God, public enemy, injunction, riot,
strike, insurrection, war, court order, requisition or order of governmental
body or authority, or any other cause beyond the control of either party, or for
any inconvenience or loss to either party in connection with any of the repair,
maintenance, damage, destruction, restoration or replacement referred to in this
Lease.

(f)  Landlord Insurance. Landlord covenants and agrees that Landlord
will maintain or cause to be maintained in full force and effect, at all times,
"all risk" fire and extended coverage insurance covering the Building and the
Building Standard leasehold improvements in amounts equal to ninety-five percent
(95%) of the insurable value thereof (actual replacement value without deduction
for physical depreciation) and rental abatement insurance in an amount
sufficient to cover rentals from the Building (except non-continuing charges).
Landlord shall maintain throughout the Term comprehensive general public
liability and broad form property damage insurance with a Best rating of at
least A-VI, in such amounts as shall be appropriate for a first-class office
building project similar to the Building, but in any event with limits of not
less than One Million and No/100 Dollars ($1,000,000.00) for injury to or death
of any one person, Five Million and No/100 Dollars ($5,000,000.00) for injury to
or death of any number of persons in any one occurrence, and One Million and
No/100 Dollars ($1,000,000.00) for damage to or destruction of property for any
one

27

occurrence. Landlord shall also maintain employer's liability insurance with a
minimum limit of One Million and No/100 Dollars ($1,000,000.00) for bodily
injury.

5.15.  Venue; Governing Law. This Lease shall be governed by the laws of the
State of Texas. All monetary and other obligations of Landlord and Tenant are
performable exclusively in Houston, Harris County, Texas.

5.16.  Notice. Any notice which may or shall be given under the terms of this
Lease shall be in writing and shall be either delivered by hand or sent by
United States Registered or Certified Mail, postage prepaid, if for Landlord to
c/o Fidinam Capital, 11811 North Freeway, Suite 300, Houston, Texas 77060, Attn:
Charles S. Iupe; or if for Tenant (i) prior to the Commencement Date to Tenant
at 15810 Park Ten, Suite 300, Houston, Texas, ____________, Attn: Mike Journey,
V.P. or (ii) subsequent to the Commencement Date to the Leased Premises, attn:
Mike Journey, V.P. Such addresses may be changed from time to time by either
party by giving notice as provided above. Notice shall be deemed given when
delivered (if delivered by hand) or when postmarked (if sent by mail).

5.17.  Entire Agreement, Binding Effect, Severability. This Lease and any
written addenda and all exhibits hereto (which are expressly incorporated herein
by this reference) shall constitute the entire agreement between Landlord and
Tenant; no prior written or prior or contemporaneous oral promises, inducements,
representations or agreements not embodied herein shall be binding or have any
force or effect. Landlord's agents do not and will not have authority to make
any promises, agreements, or representations not expressly contained in this
Lease, and Tenant will make no claim on account of any representation
whatsoever, whether made by a renting agent, broker, officer or other
representative of Landlord, or which may be contained in any circular,
prospectus or advertising relating to the Leased Premises, the Building, the
Complex or otherwise, unless the same is specifically set forth in the Lease.
This Lease shall not be amended, changed or extended except by written
instrument signed by both parties hereto. The provisions of this Lease shall be
binding upon and inure to the benefit of the heirs, executors, administrators,
successors and assigns of the parties, but this provision shall in no way alter
the restrictions on assignment and subletting applicable to Tenant hereunder. If
any provision of this Lease or the application thereof to any person or
circumstance shall at any time or to any extent be held invalid or
unenforceable, and the basis of the bargain between the parties hereto is not
destroyed or rendered ineffective thereby, the remainder of the Lease or the
application of such provision to persons or circumstances other than those as to
which it is held invalid or unenforceable shall not be affected thereby.

5.18.  Right of Reentry. Upon the expiration or termination of the Term for
whatever cause, Landlord shall have the right to immediately reenter and
reassume possession of the Leased Premises and remove Tenant's property
therefrom, and Tenant expressly acknowledges such right.

5.19.  Number and Gender; Captions; References. Pronouns, where used herein, of
whatever gender, shall include natural persons, corporations, and associations
of every kind and character, and the singular shall include the plural and vice
versa where and as often as may be appropriate. Article

28

and section headings under this Lease are for convenience of reference and shall
not affect the construction or interpretation of this Lease. Whenever the terms
"hereof," "hereby," "herein," or words of similar import are used in this Lease,
they shall be construed as referring to this Lease in its entirety rather than
to a particular section or provision, unless the context specifically indicates
to the contrary. Any reference to a particular "Article" or "Section" shall be
construed as referring to the indicated article or section of this Lease.

5.20.  Delinquent Payments; Handling Charge. Any payments required of Tenant
hereunder, whether as Rent or otherwise, shall bear interest from the time due
until paid at the maximum rate of interest permitted by law. Furthermore, should
Tenant fail to timely pay any installment of Rent hereunder, Landlord shall have
the option to charge Tenant, as additional Rent hereunder, a fee equal to five
percent (5%) of the delinquent installment to reimburse Landlord for its cost
and inconvenience incurred in dealing with Tenant's delinquent payment. In no
event, however, shall the charges imposed under this Section 5.20 and elsewhere
in this Lease, to the extent the same are considered to be interest under
applicable law, exceed the maximum rate of interest allowable under applicable
law.

5.21.  Quiet Enjoyment. Tenant, on paying all sums herein called for and
performing and observing all of its covenants and agreements hereunder, shall
and may peaceably and quietly have, hold, occupy, use, and enjoy the Leased
Premises during the Term subject to the provisions of this Lease and applicable
governmental laws, rules, and regulations; and Landlord agrees to warrant and
forever defend Tenant's right to such occupancy against the claims of any and
all persons whomsoever lawfully claiming the same or any part thereof, by,
through, or under Landlord, but not otherwise, subject only to the provisions of
this Lease and all applicable governmental laws, rules, and regulations.

5.22.  Signs. Unless otherwise specifically permitted pursuant to the Lease, no
signs, symbols or identifying marks shall be placed in or upon the Complex, in
the halls, elevators, staircases, entrances, or exterior of the Building or
Garage, or upon the doors or walls of the Leased Premises without prior written
approval of Landlord. Landlord agrees to provide and install, at Tenant's cost,
all letters or numerals on doors in the Leased Premises. All such letters and
numerals shall be in the Building Standard graphics, and no others shall be used
or permitted on the Leased Premises without written permission from Landlord.

5.23.  Brokerage. Tenant represents and warrants that it has dealt with no
broker, agent or other person in connection with this transaction and that no
broker, agent or other person brought about this transaction, other than J. B.
Richardson and Company, L.L.C. and Fidinam Investment Consulting, Inc., and
Tenant agrees to indemnify and hold Landlord harmless from and against any
claims by any other broker, agent or other person claiming a commission or other
form of compensation by virtue of having dealt with Tenant with regard to this
leasing transaction. The provision of this Paragraph, in addition to all of
Tenant's indemnities and covenants expressly set forth in this Lease, shall
survive the termination of this Lease. In the event of a sale or other
conveyance of the Building, Landlord, as Grantor, agrees to obtain and deliver
to J.B. Richardson

29

& Company L.L.C. a written agreement from the Grantee assuming payment of any
and all commissions then due or any additional commissions, which may become
payable to J.B. Richardson & Company, L.L.C., at which time Landlord's liability
for such payment of commissions shall be forever relieved.

5.24.  Limitation of Implied Warranty. Landlord duties and warranties are
limited to those expressly stated in this Lease and shall not include any
implied duties or implied warranty now or in the future. LANDLORD HAS NOT MADE,
AND TENANT MAY NOT RELY ON, ANY REPRESENTATION OR WARRANTIES WITH REGARD TO THE
BUILDING, LEASED PREMISES OR OTHERWISE, EXPRESSED OR IMPLIED, EXCEPT AS STATED
IN THIS LEASE. IN PARTICULAR, LANDLORD HAS NOT AUTHORIZED ANY AGENT OR BROKER TO
MAKE A REPRESENTATION OR WARRANTY INCONSISTENT WITH THE TERMS OF THIS LEASE AND
TENANT MAY NOT RELY ON ANY SUCH INCONSISTENT REPRESENTATION OR WARRANTY.

5.25.  Environmental and Land Use Matters. Tenant shall not use, store, treat,
transport, manufacture, refine, handle, produce or dispose of hazardous
materials on, or affecting the Leased Premises in any manner that violates
federal, state or local laws, ordinances, rules, regulations or policies
governing the use, storage, treating, transportation, manufacture, refinement,
handling, production or disposal of Hazardous Materials (collectively,
"Environmental Laws"). For purposes of this agreement, "Hazardous Materials"
shall mean any flammable substances, explosives, radioactive materials,
hazardous wastes, toxic substances, pollutants, pollution, or related materials
specified in any of the Environmental Laws. Tenant indemnities Landlord against,
and agrees to hold Landlord harmless from, any and all loss, cost or expense
that Landlord may incur as a result of violations by Tenant or any of its
agents, employees or invitees, of Environmental Laws in connection with the use
of the Leased Premises which violations occurred in the period in which Tenant
leased the Leased Premises, and such indemnity shall survive the term of this
agreement and any and all renewal terms. The indemnity of Landlord shall expire
on a date five (5) years after the termination of the lease term unless Landlord
has notified Tenant before such date that a violation or suspected violation had
been discovered or claimed, in which case the indemnity will survive as to the
claimed or suspected violation to the maximum extent permitted by law.

5.26.  Name of Building and Building Signage. So long as an Event of Default
shall not exist on the part of Tenant, Landlord and Tenant mutually covenant and
agree that provided Tenant (but not any unrelated subtenant or unrelated
assignee or transferee) leases and occupies more Rentable Area than any other
tenant in the Building, Tenant shall be permitted the non-exclusive use of a
monument sign to be provided by Landlord in a mutually acceptable location which
sign shall be of a size, constructed of materials and affixed in a location
which shall be approved by Landlord prior to erection of same, which approval
shall not be unreasonably withheld. Other than to the extent provided in this
Section, Tenant shall not be permitted to place signage on any part of the
Building exterior except for Tenant's name which shall be of a size, constructed
of materials and affixed in a location which shall be approved by Landlord prior
to erection of same, which approval shall not be unreasonably withheld,
conditioned or delayed. Should an Event of Default occur

30

hereunder, or should Tenant fail to lease and occupy more Rentable Area than any
other tenant in the Building, Landlord hereby reserves and shall have the right
at any time and from time to time to change the name of the Building and remove
Tenant's name from the Building signage and Building as Landlord may deem
advisable, and Landlord shall not incur any liability whatsoever to Tenant as a
consequence thereof. Tenant shall bear all costs associated with the materials
used to affix its identity to the monument sign, and shall bear the entire
expense of erecting its name on the Building exterior.

5.27.  Guaranty. Guarantor agrees to guaranty payment and performance of all of
Tenant's obligations, including, but not limited to, payment of Rent hereunder.
This guaranty obligation is absolute and unconditional. If Tenant defaults
hereunder, and as a result an Event of Default occurs, Guarantor is primarily
liable for all of Tenant's obligations hereunder and Landlord shall have the
right to make demand on, and bring an action directly against Guarantor, and
will not be required to first exhaust its remedies against Tenant. This guaranty
obligation will not be limited, reduced or affected by any amendment to this
Lease (whether or not approved by Guarantor), any waiver by Landlord of any
default or remedy hereunder, or by the bankruptcy, dissolution or any other
event that may occur with respect to Tenant. Guarantor acknowledges that
Landlord is relying primarily upon the credit of Guarantor, and but for this
Guaranty Agreement, would not enter into this Lease with Tenant.

31

EXECUTED in multiple counterparts, each of which shall have the force
and effect of an original on the date first above written.

BROADFIELD ASSOCIATES, L.L.C.,
a Texas limited liability company

By: /s/ Charles Iupe
--------------------------------
Name:   Charles Iupe
------------------------------
Title: Managing General Partner
-----------------------------
"LANDLORD"

NEWPARK DRILLING FLUIDS, INC.,
a Texas corporation

By: /s/ James A. Sampey
--------------------------------
Name:  JAMES A. SAMPEY
------------------------------
Title: President
-----------------------------
"TENANT"

NEWPARK RESOURCES, INC.,
a Delaware corporation

By: /s/ James D. Cole
--------------------------------
Name: JAMES D. COLE
------------------------------
Title: President
-----------------------------
"GUARANTOR"

[Signature page to Lease Agreement dated 28/th/ May 1998 between Broadfield
Associates, L.L.C., a Texas limited liability company, as Landlord, Newpark
Drilling Fluids, Inc., a Texas corporation, as Tenant, and Newpark Resources,
Inc., a Delaware corporation, as Guarantor]

32

ADDENDUM TO LEASE BETWEEN
BROADFIELD ASSOCIATES, LLC, AS LANDLORD, AND NEWPARK DRILLING FLUIDS,
INC., AS TENANT, AND NEWPARK RESOURCES, INC., AS GUARANTOR

1.       BASE RENTAL

Tenant shall pay monthly Base Rental for the initial Leased Premises
pursuant to the following schedule:

MONTH          MONTHLY BASE RENTAL/RENTABLE SQUARE FOOT
01                       $1.6042
02-04                    $0.00
05-63                    $1.6042
64-123                   $1.6708

Upon completion of Tenant's plans and specifications and the
determination of the exact Rentable Area to be leased by Tenant in the
Building, Landlord and Tenant agree to enter into an amendment of this
Lease describing the monthly Base Rental due Landlord during the term
of this Lease, it being understood between the parties that Tenant's
monthly Base Rental shall be calculated pursuant to the above schedule
up to and including 98,000 rentable square feet contained within the
Leased Premises. Base Rental shall be payable monthly on the first day
of each month during the Term of the Lease.

2.       AD VALOREM TAX REIMBURSEMENT

The Base Operating Expenses Rate includes a component for ad valorem
taxes in the amount of $2.40 per rentable square foot ("Landlord's
Estimate"). If, during the 1999 and 2000 calendar years ("Tax Years")
the Harris County Appraisal District assesses the Building below
Landlord's Estimate. Landlord agrees to refund Tenant ("Tenant Refund")
Tenant's proportionate share of the difference between Landlord's
Estimate and the actual taxes due during such Tax Years at the time
such taxes are due to be paid by Landlord to the appropriate taxing
authority. At Landlord's option, such refund, if any, shall be applied
to Tenant in cash, Base Rental abatement, or a combination of both. If
Landlord elects to apply such refund in the form of Base Rental
abatement, Tenant's monthly Base Rental shall be abated commencing
February 1, 2000 (in the event of a 1999 calendar year refund) and
February 1, 2001 (in the event of a 2000 calendar year refund) until
the value of the rental abatement is equivalent to the value of
Tenant's refund, at which time Tenant shall resume payment of monthly
Base Rental.

3.       AD VALOREM TAX ABATEMENT

In the event any ad valorem taxes applicable to the Building are abated
by any taxing authority and, as a result, are not in fact payable by
Landlord (the "Abated Taxes"), Tenant and Landlord agree the Actual
Operating Expenses for any calendar year shall include the amount of
Abated Taxes applicable to such year for purposes of computing Actual
Operating Expenses and Tenant's Proportionate Share of Actual Operating
Expenses.

During each year of the Lease Term during which the Building receives
Abated Taxes, Landlord shall pay to Tenant not later than January
31/st/ of each succeeding year an amount equal to the product of the
Abated Taxes for the preceding year multiplied by Tenant's
Proportionate Share of Actual Operating Expenses, or as otherwise
required by any taxing authority. For each subsequent year of the Lease
Term, Landlord shall pay to Tenant not later than January 31/st/ of
each succeeding year the amount of the Abated Taxes due Tenant.

4.   TENANT'S RIGHT TO CONTRACT THE LEASED PREMISES

Tenant, (but not any subtenant, assignee or transferee of Tenant other than
an approved subsidiary, affiliate or successor of Tenant as defined in
4.06 (f)(1), (2), (3)) upon not less than twelve (12) months prior written
notice in each instance, shall have two (2) separate options to reduce the
Rentable Area under lease ("Contraction Space"). Tenant's first option to
contract shall be effective upon expiration of month eighty-seven (87) of
the Lease Term. Tenant's second option to contract shall be effective upon
expiration of month ninety-nine (99) of the Lease Term. Upon Tenant's
timely notice and payment of stipulated damages as defined below, Tenant's
obligation to Landlord with respect to the Contraction Space would cease
and be of no further force or effect (excepting Tenant's obligations as
contained in paragraphs 4.03 and 4.04 of the Lease which would survive). In
each instance the Contraction Space shall be limited to and shall not
exceed 12,500 rentable square feet. Unless otherwise approved by Landlord,
the Contraction Space shall be on a single floor and in a single contiguous
unit of space. In no event may the Contraction Space include all or any
portion of Tenant's laboratory or special purpose facilities in the
Building. Simultaneous with Tenant's notice to landlord of its intent to
contract it shall identify the location of the Contraction Space. In the
event Tenant desires to contract on a portion of a floor which is
configured in a single tenant condition then Tenant, at its sole cost and
expense, agrees to construct a Building standard multi-tenant corridor
utilizing materials identical to the remaining multi-tenant floors of the
Building. Simultaneously, Tenant's unreserved parking permits and reserved
parking permits shall be proportionately reduced in the Building Garage.
Tenant's right to contract shall be null and void in the event (i) an Event
of Default on the part of Tenant shall exist as of the date of Tenant's
Notice to Landlord, (ii) Tenant fails to submit Tenant's Notice to Landlord
when due, (iii) Tenant fails to pay stipulated damages when due.

For purposes herein, "stipulated damages" shall be defined as the
unamortized sum, calculated as of the effective date of Tenant's
contraction, of the following: (i) Tenant's Leasehold Improvement
Allowance, (ii) Tenant's Architectural Allowance, (iii) Tenant's
Refurbishment Allowance, (iv) brokerage commissions paid by Landlord and
(v) two (2) month's Base Rental applicable to the Contraction Space. The
sum of items (i), (ii), (iii), (iv) shall be treated as a loan, fully
amortized over the Lease Term (but excluding any month in which monthly
Base Rental is abated), at twelve percent (12%) annual interest, computed
monthly. Stipulated damages shall be due simultaneous with Tenant's notice
of its election to contract.

5.   TENANT'S RENEWAL OPTION

Provided an Event of Default does not exist on the part of the Tenant,
Tenant (but not any subtenant, assignee or transferee of Tenant other than
an approved subsidiary, affiliate or successor of Tenant as defined in 4.06
(f) (1), (2), (3)) shall have the option of renewing this Lease for two
(2), successive but independent five (5) year periods under the same terms
and conditions of the Lease with the exception of Base Rental, which shall
be adjusted to ninety-five percent (95%) of the Prevailing Market Rental
Rate, as such is defined below, offered by comparable office buildings
(including the Building) in the Park Ten area of Houston, Texas. With
respect to Tenant's first renewal option, Tenant shall renew not less than
seventy-five percent (75%) of the rentable area leased by Tenant at the
time Tenant exercises its option to renew the Lease. With respect to
Tenant's second renewal option, Tenant shall lease the entire rentable area
then under lease. The location of the Leased Premises renewed by Tenant
shall be in a contiguous location within the Building reasonably acceptable
to Landlord. Unless otherwise approved by Landlord, Tenant agrees to renew
its Lease with respect Tenant's laboratory or special purpose facilities in
the Building. In order to exercise its option, Tenant must notify Landlord
in writing not earlier than fifteen (15) months nor later than twelve (12)
months prior to expiration of the Lease Term. Within thirty (30) days
following receipt of Tenant's notice, Landlord shall provide Tenant with
its determination of the Prevailing Market

Rental Rate. Within thirty (30) days following receipt of the Prevailing
Market Rental Rate as determined by Landlord, Tenant shall notify Landlord
of its acceptance or rejection of the Prevailing Market Rental Rate.
Landlord and Tenant agree to negotiate in good faith concerning the
determination of the Prevailing Market Rental Rate, as defined herein,
however, if Landlord and Tenant are unable to agree as to be the Prevailing
Market Rental Rate within thirty (30) days following the date Tenant
rejects Landlord's determination of the Prevailing Market Rental Rate, the
resolution shall be submitted to arbitration as described in Paragraph 10
herein.

6.   DEFINITION OF PREVAILING MARKET RENTAL RATE

The "Prevailing Market Rental Rate" as used herein shall be that rate
charged for comparable space and conditions by comparable office buildings
in the Park Ten area of Houston, Texas (including the Building) taking into
consideration the location, quality and age of the building, floor level,
definition of rentable area, leasehold improvement allowances to be
provided, parking charges, space planning, rentable abatement, lease
takeovers and/or lease assumptions, relocation expenses and other
applicable concessions, brokerage commissions, term of lease, extent of
services to be provided, base year or figure for escalation purposes (both
operating costs and real estate taxes), adjustments to base rental,
applicable distinction between "gross" and "net" leases, credit standing
and financial stature of the tenant, the time the particular rate under
consideration became or is to become effective, or any other relevant term
or condition. It is agreed that written offers to lease comparable space
located elsewhere in the Building from third parties and leases completed
in the Building within six (6) months prior to Tenant's exercise of its
Renewal Option may be used by Landlord as an indication of the Prevailing
Market Rental Rate.

7.   TENANT'S PREFERENTIAL RIGHT

So long as not less than twenty-four (24) months remain in the primary
Lease Term or any renewal or extension thereof, and further subject to (i)
the condition that an Event of Default shall not exist on the part of
Tenant or (ii) any option, right or like provision granted to a tenant as a
result of Tenant's waiver of its Preferential Right, Landlord hereby grants
to Tenant (but not any subtenant, assignee or transferee of Tenant other
than an approved subsidiary, affiliate or successor of Tenant as defined in
4.06 (f) (1), (2), (3)) a Preferential Right ("Preferential Right") with
respect to the entire rentable area contained within the Building, such
space being defined herein as the "Subject Space". In the event Landlord
receives interest from a prospective tenant for all or any portion of the
Subject Space, in each instance Landlord shall so notify Tenant
("Landlord's Notice") and shall include in such notice the Prevailing
Market Rental Rate, as such is defined, for the Subject Space. Within seven
(7) business days from the receipt of such notice, Tenant shall notify
Landlord (Tenant's Acceptance Notice") of the exercise or the waiver of its
Preferential Right. In the event Tenant fails to notify Landlord within
such seven (7) business day period, then Tenant shall be deemed as having
waived its Preferential Right and Landlord may enter into a lease with such
third-party tenant. In the event Tenant exercises its Preferential Right,
Landlord and Tenant shall, within ten (10) business days following Tenant's
Acceptance Notice to Landlord (or as soon thereafter as possible), enter
into a written agreement modifying and supplementing this Lease. In the
event Tenant fails to exercise its Preferential Right by timely delivery to
Landlord of the said Tenant's Acceptance Notice, then Tenant shall
conclusively be deemed to have forfeited and waived its Preferential Right
to lease the Subject Space identified in Landlord's Notice. In the event
Tenant exercises its Preferential Right by timely delivery to Landlord of
Tenant's Acceptance Notice, or if Tenant shall by written notice elect to
waive (or by failure to timely deliver to Landlord the said Tenant's
Acceptance Notice, waive) its Preferential Right to lease the Subject Space
contained in Landlord's Notice, then in either such event, Tenant shall not
thereafter by entitled to revoke either such election, or such waiver to
its right to lease the Subject Space. Except as may be

specifically modified in such written agreement and except with respect to
the rent applicable to the Subject Space, the terms and provisions of the
Lease, including the expiration date shall, on the day of delivery of the
Subject Space to Tenant, automatically apply and become applicable to the
Subject Space; and the Subject Space, as of the date of such delivery,
shall automatically and without the necessity of further documentation,
become and be deemed to be a part of the Leased Premises. In the event
Tenant disagrees with Landlord's determination of the Prevailing Market
Rental Rate. Tenant shall still be entitled to exercise its Preferential
Right with respect to the Subject Space: provided, in the event Landlord
and Tenant are unable to agree on the Prevailing Market Rental Rate within
ten (10) days following the date of Tenant's Acceptance Notice, then such
determination shall be submitted to arbitration as described in Paragraph
10 herein. Effective as of the Commencement Date of delivery of the Subject
Space to Tenant, Tenant's Proportionate Share of Actual Operating Expenses
shall be automatically increased so as to include the rentable area within
the Subject Space. Although Landlord shall have no obligation to make any
alterations or install or modify any improvements within the Subject Space,
and by virtue of Tenant's exercise of its Preferential Right it shall be
deemed to have accepted the Subject Space in its present "as-is" condition,
the Commencement Date shall be defined as the earlier to occur of (i)
Tenant's occupancy of all or any portion of the Subject Space or (ii),
sixty (60) days following the date the Subject Space is delivered to Tenant
in a vacant condition.

8.   REFURBISHMENT ALLOWANCE

Effective upon expiration of month sixty-three (63) of the Lease Term,
Landlord shall provide Tenant an allowance of up to $3.00 per rentable
square foot contained in the initial Leased Premises, as such is defined in
Paragraph 1.01, toward permanent Leasehold Improvements Tenant elects to
install in the Leased Premises. Tenant's architectural plans and
specifications describing the refurbishment of the Leased Premises shall be
subject to Landlord's prior approval.

9.   EXPANSION OPTION

Provided Tenant notifies Landlord in writing not later than June 30, 1998,
Tenant shall have the option of expanding the Leased Premises by up to an
additional 20,000 rentable square feet in a location of the Building
acceptable to Landlord and Tenant, otherwise subject to the same terms and
conditions applicable to the initial Leased Premises.

10.  ARBITRATION

Any determination of the Prevailing Market Rental Rate that is submitted to
binding arbitration shall be made under procedures set forth below. Pending
the final determination of any dispute, Tenant shall pay the amount(s)
claimed by landlord; in the event of a final determination in Tenant's
favor, Landlord shall refund to Tenant any overpayment. The determination
of the Prevailing Market Rental Rate shall be submitted to an "Arbitration
Panel" comprised of three

(3) members, each of whom shall be a licensed real estate broker, with no
less than ten (10) years experience in negotiating office leases in
Houston. As a condition to selection, each panel member must also have
negotiated at least one (1) major office lease (50,000 square feet or more)
in West Houston during the thirty-six (36) months preceding his or her
selection to the arbitration panel. No more than one (1) panel member may
be with the same brokerage firm. No panel member may have an economic
interest in the outcome of the arbitration, other than a reasonable fee
(not to exceed $2,000.00). Landlord and Tenant shall each bear the expense
of the panel member of its own selection, and shall equally share the
expense of the Third Panel Member.

The Arbitration Panel shall be selected as follows:

A.      Within ten (10) business days after submission of the determination of
the Prevailing Market Rental Rate to the Arbitration Panel, Tenant shall
select its panel member meeting the criteria established above
("Tenant's Panel Member"). If Tenant fails to timely select the Tenant
Panel Member, Landlord may notify Tenant in writing of such failure,
and if Tenant fails to select the Tenant Panel Member within five (5)
business days from Landlord's notice, then Landlord may select the
Tenant Panel Member on Tenant's behalf, at Tenant's expense.

B.      Within ten (10) business days after the Tenant Panel Member is selected,
Landlord shall select its panel member meeting the criteria established
above ("Landlord's Panel Member"). If Landlord fails to timely select
the Landlord Panel Member, Tenant may notify Landlord in writing of such
failure, and if Landlord fails to select the Landlord Panel Member
within five (5) business days from Tenant's notice, then Tenant may
select the Landlord Panel Member on Landlord's behalf.

C.      Within ten (10) business days after the Landlord Panel Member is
selected, the Tenant Panel Member and the Landlord Panel Member shall
jointly select a third panel member meeting the criteria of Paragraph
(i) above ("the Third Panel Member"). If the Landlord Panel Member and
the Tenant Panel Member fail to timely select the Third Panel Member and
such failure continues for more than five (5) busines days after written
notice of such failure is delivered to the Landlord Panel Member and
Tenant Panel Member by either Landlord or Tenant, either Landlord or
Tenant may request the managing officer of the American Arbitration
Association to appoint the Third Panel Member.

(iii)   Within ten (10) business days after the selection of the three member
Arbitration Panel, Landlord and Tenant shall each submit to the
Arbitration Panel a written statement identifying the specific items in
dispute bearing upon the computation of the Prevailing Marketing Rental
Rate. The Arbitration Panel shall make its decision within twenty (20)
days after submission of such written statement of particulars. The
Arbitration Panel shall select either Landlord's proposed Prevailing
Market Rental Rate or Tenant's proposed Prevailing Market Rental Rate,
whichever in the panel's judgment most closely resembles the actual
Prevailing Market Rental Rate. The Arbitration Panel shall reach its
decision by majority vote and shall communicate its decision by written
notice to the parties.

(iv).   The decision by the Arbitration Panel shall be final, binding and
conclusive and shall be non-appealable and enforceable in any court
having jurisdiction. All hearings and proceedings held by the
Arbitration Penal shall take place in Houston, Texas.

(v).    The Prevailing Market Rental Rate determination resolution procedure
described in this Paragraph shall be governed by the Commercial Rules of
the American Arbitration Association, subject to the Texas General
Arbitration Act, to the extend such act is applicable hereto.

(vi).   Until the Prevailing Market Rental Rate has been finally determined,
Tenant shall pay Base Rental based upon Landlord's good faith
determination thereof, and an appropriate refund shall be made to or by
Tenant within thirty (30) days after a final determination of the
Prevailing Market Rental Rate is made.

(vii).  Tenant shall bear all fees, costs and expenses of the Tenant Panel
Member and Landlord shall bear all fees, costs and expenses of the
Landlord Panel Member. Each party shall bear the fees, costs and
expenses of its own attorneys and consultants. The non-prevailing party
shall bear the

fees, and costs and expenses of the Third Panel Member and all other costs and
expenses of the Arbitration Panel in conducting the arbitration.

EXHIBIT "A"

[FLOOR PLAN]

The initial Leased Premises shall be comprised of the top three (3) floors of
the Building. In addition, Tenant may lease a portion of the first (1/st/)
floor, not to exceed 2,000 rentable square feet. In the event additional
rentable area is required to satisfy section 1.01 (b) of the Lease or if Tenant
otherwise increases the rentable area under lease, such premises shall be
contiguous to Tenant's Leased Premises on the upper floors of the Building.

EXHIBIT "B"

LEGAL DESCRIPTION

Metes and Bounds Description of 3.879 Acres of Land out of Reserve "C",
Park Ten, Section Six and Reserve "B", Block Two, Park Ten,
Section Three, Harris County, Texas.

All that certain 3.879 acres of land out of Reserve "C", Park Ten, Section Six,
according to the correction plat recorded in Vol. 297, Page 91, Harris County
Map Records, out of Reserve "B", Block Two, Park Ten, Section Three, according
to the plat thereof recorded in Volume 259, Page 122, Harris County Map Records
and out of the David Middleton Survey, A-535, Harris County, Texas and being
more particularly described as follows:

COMMENCING at a 5/8" iron rod marking the northwest corner of said Park Ten,
Section Three: Thence N 88 42' 37" - 435.09' along the north line of said
Section Three to a point for the northwest corner of said Section Six; Thence S
02 31' 29" E - 564.83' along the west line of said Section Six to a 5/8" iron
rod set for the POINT OF BEGINNING of the herein described tract, said POINT
located in the south right-of-way line of Park Row (width varies);

THENCE the following courses and distances along the south right-of-way line of
Park Row;

N 88 42' 12" E, - 94.03' to the Point of Curvature of a curve to the right,
having a radius of 320.00' a central angle of 11 14' 40" and an arc length of
62.80' to a 5/8" iron rod set for the Point of Tangency;

S 80 03' 08" E - 54.65' to the Point of Curvature of a curve to the left, having
a radius of 320.00', a central angle of 23 04' 59" and an arc distance of
128.92' to a 5/8" iron rod set for cut-back corner;

S 63 20' 15" E - 15.04' along said cut-back corner to a 5/8" iron rod set in the
westerly right-of-way line of Broadfield Boulevard (100' wide);

THENCE S 21 39' 37" E - 316.04' along said westerly right-of-way line to a 5/8"
iron rod set for the Point of Curvature of a curve to the right, having a radius
of 1,250,00' and a central angle of 04 27' 24";

THENCE along said curve to the right and said westerly right-of-way line an arc
distance of 97.23' to a 5/8" iron rod set in the centerline of a 30' wide
Texas-New Mexico pipeline easement recorded in County Clerk File No. D-833865,
Harris County Deed Records;

THENCE S 88 35' 29" W - 486.68' along said centerline to a 5/8" iron rod set for
the southeast corner of a 4.000 acre tract described in a deed from Wolff,
Morgan & Company to Servomation Corporation, recorded in County Clerk File No.
F-045265, Harris County Deed Records.

EXHIBIT 10.128

MEMBERSHIP INTERESTS PURCHASE AGREEMENT FOR THE DANA DETROIT
BUILDING AND THE DANA KALAMAZOO BUILDING

MEMBERSHIP INTERESTS PURCHASE AGREEMENT

between

GEBAM, INC.

as Seller,

and

WELLS REAL ESTATE INVESTMENT TRUST, INC.

as Buyer

Dated as of March 15, 2002

MEMBERSHIP INTERESTS PURCHASE AGREEMENT
---------------------------------------

THIS MEMBERSHIP INTERESTS PURCHASE AGREEMENT, dated as of March 15,
2002 (this "Agreement"), is by and between GEBAM, INC., a Delaware corporation
("Seller"), and WELLS REAL ESTATE INVESTMENT TRUST, INC., a Maryland corporation
("Buyer"). The Seller and the Buyer are herein referred to individually as a
"Party" and collectively as the "Parties."

WITNESSETH:
-----------

WHEREAS, Seller is the beneficial owner of all of the outstanding
membership interests (collectively, the "Membership Interests") in (i) DANACQ
KALAMAZOO, LLC, a Delaware limited liability company (the "Kalamazoo LLC"), and
(ii) DANACQ FARMINGTON HILLS, LLC, a Delaware limited liability company (the
"Farmington LLC"). The term "Companies" as used herein shall mean, collectively,
the Kalamazoo LLC and the Farmington LLC , and the term "Company" as used herein
shall mean, singularly, Kalamazoo LLC and Farmington LLC;

WHEREAS, the Kalamazoo LLC was formed on October 22, 2001, by the
filing of the Certificate of Formation (the "Kalamazoo Certificate") pursuant to
the Delaware Limited Liability Company Act (6 Del. C. Section 18-101 et seq.).
-------                ------
The Kalamazoo LLC was organized by the Limited Liability Company Agreement of
Danacq Kalamazoo, LLC, a Delaware Limited Liability Company (the "Kalamazoo
Operating Agreement"), dated as of October 22, 2001, executed by Seller;

WHEREAS, the Farmington LLC was formed on October 22, 2001, by the
filing of the Certificate of Formation (the "Farmington Certificate") pursuant
to the Delaware Limited Liability Company Act (6 Del. C. Section 18-101 et
-------                --
seq.). The Farmington LLC was organized by the Limited Liability Company
---
Agreement of Danacq Farmington Hills, LLC, a Delaware Limited Liability Company
(the "Farmington Operating Agreement"), dated as of October 22, 2001, executed
by Seller. The term "Certificates" as used herein shall mean, collectively, the
Kalamazoo Certificate and the Farmington Certificate. The term "Operating
Agreements" as used herein shall mean, collectively, the Kalamazoo Operating
Agreement and the Farmington Operating Agreement;

WHEREAS, the Kalamazoo LLC has (a) purchased the Kalamazoo Property
(as hereinafter defined) located in the City of Kalamazoo, County of Kalamazoo,
State of Michigan, and (b) leased the Kalamazoo Property to Dana Corporation, a
Virginia corporation ("Lessee") pursuant to that certain Lease Agreement dated
as of October 26, 2001, between the Kalamazoo LLC, as lessor, and Lessee, as
lessee, as amended pursuant to that certain First Amendment to Lease Agreement
dated as of December 6, 2001, between the Kalamazoo LLC, as lessor, and Lessee,
as lessee (as amended, the "Kalamazoo Lease");

WHEREAS, the Farmington LLC has (a) purchased the Farmington
Property (as hereinafter defined) located in the City of Farmington Hills,
County of

1

Oakland, State of Michigan, and (b) leased the Farmington Property to Lessee
pursuant to that certain Lease Agreement dated as of October 26, 2001, between
the Farmington LLC, as lessor, and Lessee, as lessee, as amended pursuant to
that certain First Amendment to Lease Agreement dated as of December 6, 2001,
between the Farmington LLC, as lessor, and Lessee, as lessee (as amended, the
"Farmington Lease"). The term "Leases" as used herein shall mean, collectively,
the Kalamazoo Lease and the Farmington Lease;

WHEREAS, Seller desires to sell the Membership Interests to Buyer,
and Buyer desires to purchase the Membership Interests from Seller, upon the
terms and conditions hereinafter provided;

NOW, THEREFORE, in consideration of the premises and the mutual
representations and warranties herein contained, the Parties hereto agree as
follows:

SECTION 1

PURCHASE AND SALE OF MEMBERSHIP INTERESTS
-----------------------------------------

1.1   Definitions. In addition to the terms defined elsewhere in
-----------
this Agreement, the following capitalized terms whenever used in this Agreement
shall have the meanings ascribed below:

"Business Day" shall mean any day other than Saturday, Sunday, a
recognized United States holiday or a day on which banks in New York, New York
are permitted or required to be closed for business.

"Existing Title Exceptions" shall mean the documents, instruments
and other matters listed and described in Schedule B of the Existing Title
Policies.

"Existing Title Policies" shall mean, collectively, the Kalamazoo
Title Policy and the Farmington Title Policy.

"Farmington Improvements" shall mean all buildings, structures and
improvements situated on the Farmington Land, including, without limitation,
that certain building containing approximately 112,480 square feet of floor
area, all parking areas, and other amenities located on the Farmington Land and
all apparatus, elevators, built-in appliances, equipment, pumps, machinery,
plumbing, air conditioning and electrical and other fixtures located on the
Farmington Land, exclusive of any of same which are owned by Lessee.

"Farmington Intangible Personal Property" shall mean all intangible
personal property owned by Farmington LLC and related to the Farmington Land,
Farmington Improvements, and Farmington Personal Property, including all
governmental licenses and permits, the Existing Title Policy relating to the
Farmington Land and Farmington Improvements, any guaranties, warranties, or
other rights related to the ownership of or use and operation of the Farmington
Land, Farmington Improvements, and the Farmington Personal Property, and also
specifically including,

2

whether or not same is deemed to be "intangible" personal property, all right,
title and interest of Farmington LLC in and to all plans and specifications with
respect to the Farmington Improvements.

"Farmington Land" shall mean all that tract or parcel of land
located in the City of Farmington Hills, County of Oakland, State of Michigan,
containing approximately 7.7 acres and being more particularly described on
Exhibit E attached hereto, together with all rights, privileges and easements
---------
appurtenant, benefiting or pertaining thereto, including all water rights,
mineral rights, development rights, air rights, reversions, or other
appurtenances to said property, and all right, title and interest of Farmington
LLC, if any, in and to any land lying in the bed of any street, road, alley or
right-of-way, open or proposed, adjacent to or abutting said property.

"Farmington Personal Property" shall mean all personal property now
owned or acquired by Farmington LLC prior to Closing and located on or in, or
used in connection with, the Farmington Land and Farmington Improvements,
including, without limitation, the items set forth and described on Exhibit F
---------
attached hereto.

"Farmington Property" shall mean, collectively, the Farmington
Land, the Farmington Improvements, the Farmington Personal Property, and the
Farmington Intangible Personal Property.

"Farmington Title Policy" shall mean that certain owner's policy of
title insurance issued by Title Company in favor of Farmington LLC, policy file
no. E053708, dated November 6, 2001, including endorsements thereto.

"GECC" shall mean General Electric Capital Corporation, a Delaware
corporation.

"Kalamazoo Improvements" shall mean all buildings, structures and
improvements situated on the Kalamazoo Land, including, without limitation, that
certain building containing approximately 150,000 square feet of floor area, all
parking areas, and other amenities located on the Land and all apparatus,
elevators, built-in appliances, equipment, pumps, machinery, plumbing, air
conditioning and electrical and other fixtures located on the Kalamazoo Land,
exclusive of any of same which are owned by Lessee.

"Kalamazoo Intangible Property" shall mean all intangible personal
property owned by Kalamazoo LLC and related to the Kalamazoo Land, Kalamazoo
Improvements, and Kalamazoo Personal Property, including all governmental
licenses and permits, the Existing Title Policy relating to the Kalamazoo Land
and Kalamazoo Improvements, any guaranties, warranties, or other rights related
to the ownership of or use and operation of the Kalamazoo Land, Kalamazoo
Improvements, and the Kalamazoo Personal Property, and also specifically
including, whether or not same is deemed to be "intangible" personal property,
all right, title and interest of Kalamazoo LLC in and to all plans and
specifications with respect to the Kalamazoo Improvements.

3

"Kalamazoo Land" shall mean all that tract or parcel of land
located in the City of Kalamazoo, County of Kalamazoo, State of Michigan,
containing approximately 27 acres and being more particularly described on
Exhibit C attached hereto, together with all rights, privileges and easements
---------
appurtenant, benefiting or pertaining thereto, including all water rights,
mineral rights, development rights, air rights, reversions, or other
appurtenances to said property, and all right, title and interest of Kalamazoo
LLC, if any, in and to any land lying in the bed of any street, road, alley or
right-of-way, open or proposed, adjacent to or abutting said property.

"Kalamazoo Personal Property" shall mean all personal property now
owned or acquired by Kalamazoo LLC prior to Closing and located on or in, or
used in connection with, the Kalamazoo Land and Kalamazoo Improvements,
including, without limitation, the items set forth and described on Exhibit D
---------
attached hereto.

"Kalamazoo Property" shall mean, collectively, the Kalamazoo Land,
the Kalamazoo Improvements, the Kalamazoo Personal Property, and the Kalamazoo
Intangible Personal Property.

"Kalamazoo Title Policy" shall mean that certain owner's policy of
title insurance issued by Title Company in favor of Kalamazoo LLC, policy file
no. E053710, dated November 7, 2001, including endorsements thereto.

"Person" shall mean an individual, partnership, corporation, trust,
limited liability company, unincorporated association, joint stock company or
other entity or association.

"Properties" shall mean, collectively, the Kalamazoo Property and
the Farmington Property.

"Tax" or "Taxes" shall mean any federal, state, local, or foreign
income, gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Section 59A of the Internal Revenue Code of 1986, as amended), customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, personal property, sales, use, transfer, registration,
value added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not, but expressly excluding any real property taxes or other taxes
which are the responsibility of the Lessee under the Leases.

"Tax Return" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.

"Title Company" shall mean Commonwealth Land Title Insurance
Company.

4

1.2   Basic Transaction. In reliance upon the representations,
-----------------
warranties and agreements contained herein and subject to the terms and
conditions hereof, Seller hereby agrees to sell, convey, transfer and deliver to
Buyer, and Buyer hereby agrees to purchase from Seller, all of the Membership
Interests, for the purchase price set forth in Section 1.3 (the "Purchase
-----------
Price").

1.3   Purchase Price. The Purchase Price shall be an amount equal
--------------
to Forty-One Million Nine Hundred Fifty Thousand Dollars ($41,950,000), payable
as follows:

(a)   by deposit by the Buyer, concurrently with its execution and
delivery of this Agreement, of the sum of Five Hundred Thousand Dollars
($500,000) (together with any interest earned thereon, the "Deposit") with the
Escrowee (as defined in Section 1.4) by wire transfer in accordance with such
-----------
instructions as the Escrowee shall deliver to Buyer for such purpose, to be held
in an interest-bearing account; and

(b)   the balance, at the Closing (as defined in Section 1.4) by
-----------
wire transfer in accordance with Section 1.5, provided that, if the Closing
-----------
occurs on any day other than the last day of a calendar month, there shall be
credited against payment of the Purchase Price an amount equal to (i) (A) the
Basic Rent (as defined in the Leases) actually paid by the Lessee with respect
to the calendar month in which the Closing occurs, times (B) a fraction, the
numerator of which is the number of days (including the date of the Closing)
remaining in the calendar month in which the Closing occurs as of the date of
the Closing, and the denominator of which is the number of days in such calendar
month, plus (ii) any Basic Rent prepaid by Lessee for any period following the
month of Closing (collectively, the "Proration Credit").

In addition, Buyer shall assume the obligations of "Lessor Parent" under Article
XXI of the Leases.

(c)   Seller and Purchaser acknowledge and agree that the Purchase
Price shall be allocated (the "Allocation") as follows:

Membership Interests in Kalamazoo LLC:      $18,300,000.00
Membership Interests in Farmington LLC:     $23,650,000.00

Each of the Buyer and the Seller agree that, at its own cost and
expense, it (i) will prepare all required Tax Returns and reports in a manner
that is consistent with such Allocation, and (ii) will not voluntarily take any
position inconsistent therewith upon examination of any such Tax Return, in any
refund claim, in any litigation or otherwise with respect to such Tax Returns.

1.4   The Closing. Subject to the conditions set forth in
-----------
Section 5, the closing of the purchase and sale of the Membership Interests
---------
hereunder (the "Closing") shall occur on or before March 29, 2002, or such other
date as the Parties shall agree ("Closing Date"). The Closing shall take place
with an escrow with Commonwealth Land Title Insurance Company ("Escrowee")
pursuant to a written escrow agreement

5

among Buyer, Seller and Escrowee containing terms and conditions consistent with
the terms and conditions of this Agreement (which shall in all events be
controlling) and mutually satisfactory to Buyer and Seller.

1.5   Deliveries. At the Closing, Seller shall sell, convey,
----------
transfer and deliver to Buyer, and Buyer will purchase from Seller, the
Membership Interests. As payment in full for the Membership Interests being
purchased by it under this Agreement at the Closing, Buyer shall deliver to
Seller by electronic funds transfer of immediately available funds, through
escrow, the amount of the Purchase Price less the Proration Credit. In addition,
at the Closing, Buyer and Seller shall execute and deliver to escrow (a) a
settlement statement setting forth the amounts paid by or on behalf of, and the
amounts to be paid to, Buyer and Seller pursuant to this Agreement; (b) executed
counterparts of two (2) originals of an assignment and assumption of the
Membership Interests ("Membership Assignment") in the form of Exhibit A attached
---------
hereto; (c) executed counterparts of two (2) originals of an assignment and
assumption of the obligations of "Lessor Parent" under Article XXI of the Leases
("Lessor Parent Assignment") in form reasonably acceptable to Seller and to
Lessee as required under Article XXI of the Leases; (d) executed counterparts of
two (2) originals of an assignment and assumption of the rights and obligations
of that certain Tax Indemnification Agreement between Seller and Dana
Corporation dated as of October 26, 2001 in form reasonably acceptable to Seller
and to Buyer; and (e) a notice from Seller and Buyer to Lessee of the sale of
the Membership Interests to Buyer in the form attached hereto as Exhibit G, and
---------
each of Seller and Buyer shall also execute and deliver, or cause to be executed
and delivered, such other agreements or documents, and shall take, or cause to
be taken, such other acts, as may be required of it pursuant to Article XXI of
the Leases to effect the purchase and sale of the Membership Interests in
compliance with such Article XXI. In addition, Buyer shall deliver into escrow,
or cause to be delivered into escrow, fully executed originals of the Amendments
(as defined in Section 5.1(g) hereof), and Seller shall deliver into escrow the
--------------
following: (i) a non-foreign affidavit in the form of Exhibit L attached hereto
---------
(the "Non-Foreign Affidavit"); (ii) a standard owner's affidavit in the form and
substance reasonably required by the Title Company, together with an affidavit
or other documentation reasonably acceptable to the Title Company so that the
Title Company will issue an endorsement to each of the Existing Title Policies
increasing the amount of the insurance provided thereunder to the amount of the
Purchase Price (as allocated as provided in Section 1.3 above) and changing the
-----------
effective date thereof to the date of Closing and a "non-imputation endorsement"
with respect to each of the Existing Title Policies; (iii) appropriate evidence
of Seller's authorization to consummate the subject transaction as reasonably
required by the Title Company; (iv) a certificate evidencing the reaffirmation
of the truth and accuracy of Seller's representations and warranties set forth
in Section 3.1 hereof; (v) such surveys, site plans, plans and specifications
-----------
and other similar, material documents relating to the Kalamazoo Property and the
Farmington Property as are in the possession or control of Seller or the
Companies; (vii) original certificates of occupancy (or if originals are not
available, then copies) for all space within the Kalamazoo Improvements and the
Farmington Improvements, to the extent same are in the possession or control of
Seller or the Companies; (viii) the original Existing Title Policies; and (ix)
original executed counterparts of the Leases.

6

1.6   Resignation. As of the Closing, each Person nominated by
-----------
Seller who serves as an officer, manager, director or in any other similar
capacity of either Company shall deliver a signed resignation from all such
positions and release of all claims against the Companies effective as of the
Closing Date in form reasonably acceptable to Buyer, and each such Person shall
thereupon be deemed to have been discharged of any and all liability to either
Company.

1.7   Tax Returns. Seller agrees that Buyer shall prepare or cause
-----------
to be prepared and file or cause to be filed all Tax Returns for the Companies
which are filed after the Closing Date.

SECTION 2

INSPECTIONS AND INSPECTION PERIOD
---------------------------------

2.1   Right to Inspect. Buyer, and Buyer's agents and
----------------
representatives, shall have the right, from time to time, prior to the Closing
Date or earlier termination of this Agreement, during normal business hours, to
enter upon the Properties for the purpose of conducting visual inspections of
the Properties, testing of machinery and equipment, taking of measurements,
making of surveys and generally for the reasonable ascertainment of matters
relating to the Properties; provided, however, that Buyer shall (i) give Seller
-----------------
reasonable prior written notice of the time and place of such entry, in order to
permit a representative of Seller to accompany Buyer; (ii) use commercially
reasonable efforts in good faith not to interfere with the operations of the
Properties or Lessee; (iii) restore any damage to the Properties or any adjacent
property caused by such actions; (iv) indemnify, defend and save Seller and, as
the case may be, its partners, trustees, shareholders, directors, members,
officers, employees and agents harmless of and from any and all claims and/or
liabilities which Seller and its partners, trustees, shareholders, directors,
members, officers, employees and agents may suffer or be subject by reason of or
in any manner relating to such entry and such activities, including, without
limitation, any claims by Lessee or its invitees; (v) not enter into Lessee's
leased premises or communicate with Lessee unless Buyer gives Seller at least 24
hours prior written notice and Buyer is accompanied by Seller or Seller's agent
in each instance; (vi) prior to entry onto the Properties, furnish Seller with a
certificate of general liability and property damage insurance maintained by
Buyer with single occurrence coverage of at least $2,000,000 (and aggregate
coverage of $5,000,000) and naming Seller, Lessee and the property manager of
Seller and/or Lessee (as applicable) as additional insureds; and (vii) not
conduct any environmental investigations or testing other than a standard "Phase
I" investigation, without the prior written consent of Seller, which Seller may
withhold in its sole and absolute discretion. All inspection rights under this
Section 2.1 shall be subject to the rights of Lessee under the Leases. To
facilitate Buyer's investigation of the Properties, Buyer acknowledges that
Seller has delivered to Buyer prior to the date hereof the documents with
respect to the Properties, described on Exhibit H attached hereto.
---------

2.2   No Liens Permitted. Nothing contained in this Agreement shall
------------------
be deemed or construed in any way as constituting the consent or request of
Seller, express or implied by inference or otherwise, to any party for the
performance of any

7

labor or the furnishing of any materials to the Properties or any part thereof,
nor as giving Buyer any right, power or authority to contract for or permit the
rendering of any services or the furnishing of any materials that would give
rise to the filing of any liens against the Properties or any part thereof.
Buyer agrees to promptly cause the removal of, and indemnify, defend and hold
Seller harmless with respect to, any mechanic's or similar lien filed against
the Properties or any part thereof by any party performing any labor or services
at the Properties at Buyer's request or supplying any materials to the
Properties at Buyer's request.

2.3   Buyer's Right of Termination. If Buyer determines that it is
----------------------------
not satisfied with the Properties and all matters relating thereto as a result
of Buyer's inspection, Buyer shall have the right to terminate this Agreement,
for any reason whatsoever, by giving Seller written notice (the "Termination
Notice") at any time prior to 2:00 p.m. Eastern Standard Time on March 29, 2002.
The period from the date hereof to 2:00 p.m. Eastern Standard Time on March 29,
2002, is referred to herein as the "Inspection Period". Upon giving the
Termination Notice, this Agreement shall immediately terminate (except for the
indemnity obligations of Buyer to Seller under this Agreement in Section 2.1
-----------
which shall survive termination of this Agreement and the indemnity obligations
of the Parties under Section 8.2 which shall survive the termination of this
Agreement) and the Deposit shall be returned to Buyer, as Buyer's sole and
exclusive remedy. Except as may otherwise be expressly provided in this
Agreement, Buyer shall be deemed to have consented to every fact, item and
condition relating to the Properties if a Termination Notice is not delivered by
Buyer prior to the expiration of the Inspection Period. Buyer's failure to
deliver the Termination Notice prior to the expiration of the Inspection Period
shall be deemed a waiver of Buyer's right to terminate this Agreement under this
Section 2.3 or by reason of the physical condition of the Properties or any
other matter whatsoever relating to the Properties.

2.4   Survival. The provisions of this Section 2 shall survive
--------
termination of this Agreement or the Closing, as the case may be, for a period
of twelve (12) months; provided, however, that any indemnity set forth in this
Section 2 shall survive the termination of this Agreement or the Closing, as the
case may be, without any such limitation.

SECTION 3

REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER
---------------------------------------------------

3.1   Representations and Warranties of Seller. Seller hereby
----------------------------------------
represents and warrants to Buyer as of the date of this Agreement as follows:

(a)   Organization and Good Standing of Seller. Seller is a
----------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware.

(b)   Organization and Good Standing of Companies. Each of the
-------------------------------------------
Companies is a limited liability company, duly organized, validly existing and
in good

8

standing under the laws of the State of Delaware and is qualified to do business
in the State of Michigan. Seller has provided to Buyer true and correct copies
of the Certificates and the Operating Agreements, in each case, including all
amendments, as currently in full force and effect.

(c)   Validity. Seller has the power, capacity and authority to
--------
enter into this Agreement, the Membership Assignment and the Lessor Parent
Assignment and to sell the Membership Interests in accordance with the terms
hereof and to perform Seller's obligations hereunder and thereunder. This
Agreement has been (and each of the Membership Assignment and the Lessor Parent
Assignment, upon the Closing, will be) duly authorized by all necessary action
on the part of Seller and GECC and executed and delivered by Seller and
constitutes (or will constitute, as the case may be) the legal, valid and
binding obligation of Seller enforceable against Seller in accordance with its
terms, except as the enforceability thereof may be limited by (i) bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally or (ii) by general equitable principles regardless
of whether considered in a proceeding in equity or at law. No other proceedings
on the part of Seller or GECC are necessary to authorize the execution, delivery
and performance of this Agreement by Seller and GECC.

(d)   Consents. No consent, approval, order or authorization of, or
--------
registration, qualification, or filing with any Person or governmental entity is
required that has not been made or obtained in connection with the consummation
of the transactions contemplated by this Agreement.

(e)   No Conflict. The execution, delivery and performance of this
-----------
Agreement, and the consummation of the transactions contemplated hereby, will
not result in (a) any violation or be in conflict with or constitute, with or
without the passage of time or giving of notice, either a breach or default
under, (i) any provision of the certificate of incorporation or by-laws of
Seller, (ii) the Certificates or Operating Agreements, (iii) any instrument,
judgment, order, writ, decree or agreement to which Seller is, or the Companies
are, a party or by which they or any of them are bound, or (iv) to the knowledge
of Seller, any provision of any federal or state statute, rule or regulation
applicable to Seller or the Companies or (b) an event that results in the
creation of any lien upon any assets of Seller or the Companies.

(f)   Title to Membership Interests. Seller is the sole record and
-----------------------------
beneficial owner of all of the Membership Interests, free and clear of any
liens, claims, charging orders or encumbrances of any kind or nature (including
any restrictions on the right to vote, assign or otherwise transfer such
Membership Interests), and, subject to the terms and conditions of this
Agreement, Seller will transfer and deliver to Buyer at Closing good and valid
title to the Membership Interests free and clear of such limitations or
restrictions. The Membership Interests constitute all outstanding membership
interests in the Companies, and there are no outstanding options, warrants or
other rights that would entitle any Person or entity to acquire any interest in
the Companies. All such Membership Interests have been duly authorized and
validly issued, are fully paid and, except as may be expressly set forth in the
Certificates or Operating Agreements, have no

9

requirement for the owner thereof to make additional contributions to, or be
liable for obligations of, the Companies.

(g)   Kalamazoo Property. Since the date of Kalamazoo LLC's
------------------
acquisition of the Kalamazoo Property, Kalamazoo LLC has not granted or
otherwise created or consented to the creation of any easement, restriction,
lien, assessment, or encumbrance respecting the Kalamazoo Property other than
the Kalamazoo Lease.

(h)   Farmington Property. Since the date of Farmington LLC's
-------------------
acquisition of the Farmington Property, Farmington LLC has not granted or
otherwise created or consented to the creation of any easement, restriction,
lien, assessment, or encumbrance respecting the Farmington Property other than
the Farmington Lease.

(i)   Title Policies. No claims have been made by Seller or the
--------------
Companies under either of the Title Policies, and to the Seller's knowledge, (i)
the Title Policies are in full force and effect, and (ii) neither Seller nor the
Companies have acted or failed to act in any manner that would impair the
coverage under the Title Policies.

(j)   Assets; Liabilities. Since their formation, neither of the
-------------------
Companies have acquired any assets other than any contributions made to the
Companies by Seller, the Properties and personal property and rights incidental
thereto, the Companies' interest in the Certificates, the Operating Agreements
and the Leases and any payments made to the Companies under such agreements,
including, without limitation, rent under the Leases. The Companies have no
subsidiaries and own no interests in any other entity. Except as disclosed to
Buyer in this Agreement, since the Companies' formation, neither of the
Companies have incurred any obligation or liability, including, without
limitation, any contingent liabilities, other than those arising under the
Certificates, the Operating Agreements, the Leases and those arising solely by
reason of the Companies' acquisition and ownership of the Properties such as
covenants, conditions and restrictions which burden the Properties. Seller does
not own any assets relating or with respect to the Properties or the Companies
other than the Membership Interests.

(k)   Litigation. Neither the Seller nor any of the Companies have
----------
been served with any litigation or administrative proceeding and, to Seller's
knowledge, there is no pending or threatened litigation, arbitration, mediation
or administrative proceedings affecting Seller, the Companies or the Properties.
Neither the Seller nor any of the Companies are a party or subject to the
provisions of any order, writ, injunction, judgment or decree of any court or
other governmental entity, and there is no action, suit or proceeding initiated
by Seller or any of the Companies currently pending.

(l)   Taxes. The Companies have not been required to file any
-----
income or franchise tax returns or to pay any income or franchise taxes (other
than any fees or costs paid in order to qualify to do business in the State of
Michigan). Each Company since the date of its formation has been classified as a
"disregarded entity" within the meaning of Treasury Regulation Section
301.7701-2(a). Neither the Seller nor the Companies are delinquent on any Taxes
imposed on Seller or the Companies. Neither of the Companies has waived any
statute of limitations in respect of Taxes or agreed to any

10

extension of time with respect to any Taxes (including any deficiency). The
Companies do not have any liability, either individually or on a joint and
several basis with Seller or General Electric Capital Corporation, arising under
the Employee Retirement Income Security Act of 1974.

(m)   Copies of Reports. All environmental, engineering, title and
-----------------
appraisal reports (collectively, the "Reports") delivered to Buyer by Seller are
true and complete copes of the reports received by Seller from the issuers of
such reports.

(n)   No Notices. Except as disclosed in the Reports, to Seller's
----------
knowledge, neither Seller nor the Companies have received any written notice of
(i) any pending or threatened condemnation, taking or similar proceeding
affecting the Properties or any portion thereof, (ii) any pending public
improvements in or about any portion of the Properties which could result in a
special assessment or any reassessments against or affecting the Properties, or
(iii) any building code, zoning or environmental law violation by the Companies
or the Properties.

(o)   Leases and Tenants. Seller has delivered to Buyer true and
------------------
complete copies of the Leases. Except for the Leases, the Companies have not
entered into and, to Seller's knowledge, there exist no other occupancy
agreements, leases, lettings or tenancies in effect which will affect the
Properties after Closing. None of the Companies' interest in the Leases or of
the Companies' right to receive rent payable by Lessee has been assigned,
conveyed, pledged or in any manner encumbered by the Companies.

(p)   Leases - Default. No default with respect to the payment of
----------------
Basic Rent (as defined in the Leases) under the Leases has occurred, and to
Seller's knowledge, there are no existing or uncured other defaults by the
Lessee under the Leases.

(q)   Leases - Commissions. No rental, lease, or other commissions
--------------------
with respect to the Leases are payable to any third party whatsoever.

(r)   Warranties and Guaranties. To Seller's knowledge, attached
-------------------------
hereto as Exhibit I is a complete and accurate list and description of all of
---------
the warranties and guaranties of contractors, vendors, manufacturers and other
parties in effect and related to the Properties (other than any such warranties
or guaranties that are in favor of Lessee). Seller has heretofore provided
Purchaser with complete and accurate copies of all such warranties and
guaranties listed on Exhibit I.
---------

(s)   No Other Agreements. Except for the agreements described on
-------------------
Exhibit M, the Leases and the exceptions set forth in the Existing Title
---------
Policies, the Companies have not entered into or assumed any other leases,
service contracts, management agreements, or other contracts or agreements, oral
or written, that grant to any Person whomsoever any right, title, interest or
benefit in or to all or any part of the Properties, any rights to acquire all or
any part of the Properties or any rights relating to the use, operation,
management, maintenance, or repair of all or any part of the Properties.

11

(t)   Proceedings Affecting Access. To Seller's knowledge, neither
----------------------------
Seller nor the Companies have received written notice of any pending or
threatened proceedings that could have the effect of impairing or restricting
access between the Properties and adjacent public roads.

(u)   No Roll-Back Taxes. To the Seller's knowledge, the Properties
------------------
have not been classified under any designation authorized by law to obtain a
special low ad valorem tax rate or to receive a reduction, abatement or
deferment of ad valorem taxes which, in such case, will result in additional,
catch-up or roll-back ad valorem taxes in the future in order to recover the
amounts previously reduced, abated or deferred.

(v)   No Assessments. To Seller's knowledge, other than real
--------------
property ad valorem taxes, neither Seller nor the Companies have received
written notice of any assessments that have been made against the Properties
that are unpaid, whether or not they have become liens, and no impact fees or
similar charges or sums are payable as a result of the construction of the
Kalamazoo Improvements or the Farmington Improvements.

(w)   Surveys. Seller has heretofore delivered to Buyer the most
-------
current boundary and "as-built" surveys of the Properties in the possession or
control of Seller.

(x)   No Liens. All contractors, subcontractors, and other persons
--------
or entities furnishing work, labor, materials, or supplies at the request of the
Companies or Seller for the Properties have been paid in full.

(y)   Bankruptcy. Seller is solvent and has not made a general
----------
assignment for the benefit of creditors nor been adjudicated a bankrupt or
insolvent, nor has a receiver, liquidator, or trustee for any of Seller's
properties (including the Membership Interests) been appointed or a petition
filed by or against Seller for bankruptcy, reorganization, or arrangement
pursuant to the Federal Bankruptcy Act or any similar Federal or state statute,
or any proceeding instituted for the dissolution or liquidation of Seller.

(z)   Employees. At no time has either of the Companies employed
---------
any persons as employees (whether on a full-time, part-time or temporary basis)
or independent contractors. At no time have either of the Companies been party
to, subject to the terms of, responsible for liabilities of, maintained,
contributed to or been required to contribute to any "Benefit Arrangement." The
term "Benefit Arrangement" shall mean any employment, severance or similar
contract or arrangement (whether or not written) or any plan (specifically
including, but not limited to, any "employee benefit plan," as defined in
Section 3(3) of ERISA, and any "group health plan," as defined in Section
5000(b)(1) of the Internal Revenue Code), policy, fund, program or contract or
arrangement (whether or not written) providing for compensation, bonus,
profit-sharing, stock option, employee stock purchase plan (as that term is
defined in Section 423 of the Internal Revenue Code), or other stock related
rights or other forms of incentive or deferred compensation, vacation benefits,
insurance coverage (including any self-insured arrangements), health or medical
benefits, disability benefits, workers' compensation,

12

supplemental unemployment benefits, severance benefits and post-employment or
retirement benefits (including compensation, pension, health, medical or life
insurance or other benefits). No Person serving as officer, manager, director or
in any other similar capacity of either Company is entitled to any form of
compensation or other benefits (including benefits pursuant to a Benefit
Arrangement) from the Companies.

(aa)  Seller Not a Foreign Person. Seller is not a "foreign person"
---------------------------
which would subject Purchaser to the withholding tax provisions of Section 1445
of the Internal Revenue Code of 1986, as amended.

(bb)  Ordinary Course of the Business. Each Company has operated
-------------------------------
its business in the ordinary course, and since the acquisition of the Properties
by the Companies:

(i)    to Seller's knowledge, there has been no destruction
or loss of or to any of the assets or properties of any Company;

(ii)   there has been no sale, transfer or other disposition
of any material asset or properties of any Company;

(iii)  there has been no amendment, termination or waiver of
any right of any Company under any contract or agreement or governmental
license, permit or authorization;

(iv)   Except as disclosed in the Existing Title Policies and
except for the Leases, there has been no mortgage, lien, security interest,
pledge, hypothecation or other encumbrance created by the Companies on or in any
of the Properties or assumed by any Company with respect to any of its assets;
and

(v)    No Company has made or committed to make any capital
expenditures.

(cc)  Compliance with Laws. To Seller's knowledge, each Company has
--------------------
complied with all statutes, laws, rules, regulations, orders, decrees and
ordinances applicable to it or the operation of the Properties (collectively,
the "Laws"). Neither Seller nor any Company has received any written notice
alleging any such violations of Laws.

(dd)  Absence of Certain Payments. Neither Seller, or any director,
---------------------------
officer, manager, agent, employee or other Person acting on behalf of Seller,
nor any Company, or any officer, manager, agent or other Person acting on behalf
of any Company, has directly or indirectly, made contributions, gifts, or
payments relating to any political activity or solicitation of business which
was prohibited by law or, on behalf of Seller or any Company, made any direct or
indirect unlawful payment to any governmental official or employee or
established or maintained any unlawful or unreported funds. Neither Seller nor
any Company, or any officer, manager, agent or other Person acting on behalf of
any Company, has accepted or received any unlawful contribution, payment, gift,
entertainment or expenditure.

13

(ee)  Certificates. To Seller's knowledge, Seller has heretofore
------------
provided Buyer with complete and accurate copies of all such certificates of
occupancy, licenses and permits related to the Properties and which are in the
possession or control of Seller, and to Seller's knowledge, each of the
Companies is in compliance with the terms of such licenses, permits and
approvals.

All references in this Section 3.1 or elsewhere in this Agreement
and/or in any other document or instrument executed by Seller in connection with
or pursuant to this Agreement, to "Seller's knowledge", "Seller's actual
knowledge", "to the knowledge of Seller" and words of similar import shall refer
solely to facts within the actual knowledge (without independent investigation
or inquiry) of Cathleen Crowley, Stephen Benko, Kevin Korsh, Kathleen Fanning
and Vickie Cottrell, and shall not be construed to refer to the knowledge of any
other employee, officer, director, shareholder or agent of Seller or any
affiliate of Seller, and shall in no event be deemed to include imputed or
constructive knowledge. Buyer acknowledges that Seller has owned its interest in
the Companies and that the Companies have owned the Properties since
approximately October 26, 2001 and thus that Seller's knowledge regarding the
Properties is limited.

At Closing, Seller shall represent and warrant to Buyer that all
such representations and warranties of Seller in this Agreement remain true and
correct as of the date of the Closing, except for any changes in any such
representations or warranties that occur and are disclosed by Seller to Buyer
expressly and in writing at any time and from time to time prior to Closing,
which disclosures shall thereafter be updated by Seller to the date of Closing.

3.2   Covenants of Seller. Seller hereby covenants for the benefit
-------------------
of Buyer that during the term of this Agreement:

(a)   Amendments to Agreements. Except with Buyer's prior written
------------------------
consent, neither Seller nor the Companies will agree to any amendment or
modification of, any supplement to, or any termination or surrender of, or any
waiver of any rights of the Companies under, any of the Certificates, the
Operating Agreements, Existing Title Exceptions or the Leases.

(b)   Rents. Neither Seller nor the Companies shall accept any
-----
payment of rent under the Leases more than thirty (30) days in advance of the
due date.

(c)   Consents and Approvals. Except with Buyer's prior written
----------------------
consent, neither Seller nor the Companies will grant or withhold any consent or
approval right in favor of either Company under the applicable Lease or commence
any action against Lessee, provided, however, that Seller shall have the right
to grant any such consent or approval or take any such action in its reasonable
discretion if Buyer fails to respond to Seller's request for Buyer's consent by
the earlier of five (5) days after request from Buyer or the date one day before
the deadline for either Company's response under the applicable Lease. Seller
shall provide Buyer with a copy of any request for consent or approval under
either Lease within one (1) business day of receipt by either Company of such
request.

14

(d)   Cooperation. Seller shall cooperate with Buyer in its
-----------
acquisition of the Membership Interests, including, without limitation, allowing
Buyer access to the Properties, subject to the rights of Lessee under the
Leases, provided, that nothing contained herein shall obligate Seller to incur
any cost or expense for which it is not expressly liable under the other
provisions of this Agreement. Furthermore, nothing in this Agreement shall
obligate Seller to take any action against Lessee under the Leases for Seller's
refusal to allow access or to execute any document requested of Seller under
this Agreement.

(e)   Ordinary Course of Business. During the term of this
---------------------------
Agreement Seller shall operate the Companies in the ordinary course of business
consistent with past practice and shall use its commercially reasonable efforts
to preserve intact the Companies and their business relationships, and Seller
shall not permit the Companies to undertake any business activity other than the
ownership of the Properties or enter into any other contracts or agreements or
assume or incur any additional obligation or indebtedness, and Seller shall
cause the Companies to perform and discharge all of the duties and obligations
and comply with the covenants and agreements of the landlord or lessor under the
Leases in the manner and within the time limits required thereunder. In
addition, during the term of this Agreement, Seller shall not permit the
Companies or any of their respective officers, managers, representatives or
agents to:

(i)    issue or agree to issue any additional membership
interests;

(ii)   merge or consolidate with any other Person or acquire
any assets outside of the normal operation of the Properties;

(iii)  sell, lease, license or otherwise dispose of any
assets or property;

(v)    cancel any debts or waive any claims or rights; or

(vi)   agree or commit to do any of the foregoing.

(f)   Further Encumbrance. Except with Buyer's prior written
-------------------
consent, neither Seller nor the Companies shall grant or otherwise create or
consent to the creation of any easement, restriction, lien, assessment or
encumbrance respecting any of the Properties or any of the Membership Interests.

(g)   Employees. Seller shall not allow the Companies to: (i) enter
---------
into any agreement with any person, labor union, or association regarding the
employment of persons for either Company, (ii) institute or adopt any Benefit
Arrangement, (iii) hire any persons as employees, or (iv) enter into any
agreement or Benefit Arrangement with any person serving as an officer, manager,
director, member or in any other similar capacity of either Company.

(h)   No Action. Neither Seller nor any Company will knowingly
---------
take, or agree or commit to take, any action that would make any representation
or warranty of the Seller hereunder inaccurate in any respect at or prior to the
Closing Date.

15

(i)   Estoppel Certificates. Seller shall use good faith, diligent
---------------------
efforts to obtain (i) the Estoppel Certificate executed by Arboretum Office Park
Association and Arboretum Development Limited Partnership, and (ii) the Estoppel
Certificate executed by Kalamazoo Valley Education and Office Park Condominium
Association, in the forms set forth on Exhibit J attached hereto without any
---------
material deviations.

(j)   Taxes. Seller acknowledges and agrees that Seller shall be
-----
responsible for (i) the payment of all Taxes of the Companies attributable to
Seller's period of ownership of the Membership Interests (other than any such
Taxes that are the responsibility of Lessee under the Leases) and (ii) the
filing of all Tax Returns related to the Taxes described in the preceding clause
------
(i) for any period as to which the Tax Returns are required to be filed prior to
---
the Closing.

3.3   Seller's Indemnity Seller hereby agrees to indemnify,
------------------
protect, defend, save and hold harmless Buyer from and against any and all
debts, duties, obligations, liabilities, suits, claims (including any claim for
damage to property or injury to or death of any persons), demands, liens,
encumbrances, causes of action, damages, losses, fees and expenses (including,
without limitation, attorneys' fees and expenses and court costs) (all of the
foregoing, collectively, "Claims") in any way relating to, or in connection with
or arising out of:

(a)  any breach by Seller of any of its representations,
warranties or covenants set forth herein;

(b)  any act or omission of Seller or the Companies occurring
prior to the Closing (other than for any Claim related thereto which (i) is the
responsibility or obligation of Lessee under the Leases; (ii) arises out of
Buyer's inspection of the Properties; or (iii) would be covered by any insurance
policy that Lessee is required to maintain under the Leases; provided that the
--------
insurer under such policy has not (y) denied liability under the insurance
policy or (z) accepted defense of such Claim with reservation of its rights
against the applicable Company and ultimately denies liability due to an
exclusion under the insurance policy; provided, further, that if either of the
-----------------
events in clauses (y) or (z) above should occur, then Buyer will cooperate with
Seller in exercising the rights of the Company with respect to any such denial
of liability);

(c)  any personal or bodily injury or death or property
damage occurring prior to Closing at or in respect of any of the Properties
(other than for any Claim related thereto which (i) is the responsibility or
obligation of Lessee under the Leases; (ii) arises out of Buyer's inspection of
the Properties; or (iii) would be covered by any insurance policy that Lessee is
required to maintain under the Leases; provided that the insurer under such
--------
policy has not (y) denied liability under the insurance policy or (z) accepted
defense of such Claim with reservation of its rights against the applicable
Company and ultimately denies liability due to an exclusion under the insurance
policy; provided, further, that if either of the events in clauses (y) or (z)
-----------------
above should occur, then Buyer will cooperate with Seller in exercising the
rights of the Company with respect to any such denial of liability); or

16

(d)  any breach by Seller of its obligations as "Lessor Parent"
under Article XXI of the Leases prior to the Closing.

Notwithstanding anything to the contrary set forth herein, no Claim
under Section 3.3(d) may be brought to the extent such Claim arises by reason of
--------------
a breach of Buyer's obligations under Section 4.2(d) or a breach of Buyer's
--------------
representation and warranty under Section 4.1(f).
--------------

The provisions of this Section 3.3 and Section 3.6 below shall survive
-----------     -----------
the Closing until the expiration of any statute of limitations; provided,
--------
however, the provisions of Section 3.3(a) and the provisions of clauses (i) and
-------                    --------------                       -----------
(iii) of Section 3.6 (regarding the "Joint and Several Representations" and the
-----    -----------
"Joint and Several Indemnity") shall automatically expire with respect to
indemnification for breach of any of the representations and warranties of
Seller on the same respective dates that such representations and warranties
shall expire as set forth in Section 3.5 below.
-----------

3.4  Distributions. Nothing contained herein shall prevent or impair
-------------
Seller's rights to cause the Companies to make distributions to Seller of any
rental or other income received by the Companies from and after the date of this
Agreement until Closing. Seller shall have no obligation to remit any such
distributions to Buyer after the Closing. Seller agrees to cause the Companies
to close at or before the Closing Date any bank accounts or other accounts with
financial institutions opened in the name of the Companies prior to the Closing.

3.5  Survival. The representations and warranties of Seller set forth
--------
in Sections 3.1 (a) through (f), 3.1(j), 3.1(k), 3.1(l), 3.1(s) and 3.1(z) shall
----------------         ---  ------  ------  ------  ------     ------
survive the Closing until the expiration of any applicable statute of
limitations. All other representations and warranties of Seller shall survive
the Closing for a period of twelve (12) months following the Closing, except to
the extent that a written notice of breach of any such representation or
warranty has been given by Buyer to Seller prior to the expiration of such
twelve (12) month period and any action to be brought in connection with such
claimed breach is commenced on or prior to the date that is eighteen (18) months
after the Closing Date.

3.6  Joinder of GECC. GECC hereby agrees to be jointly and severally
---------------
liable with Seller for (i) Seller's breach of the Joint and Several
Representations (as hereinafter defined), (ii) Claims with respect to any breach
by Seller of any of the Joint and Several Covenants (as hereinafter defined),
and (iii) the Joint and Several Indemnity (as hereinafter defined).

(a)  Joint and Several Representations. The term "Joint and Several
---------------------------------
Representations" as used herein shall mean the representations and warranties of
Seller set forth in Sections 3.1 (a) through (l), 3.1(o), 3.1(q), 3.1(s), 3.1(x)
----------------         ---  ------  ------  ------  ------
through (aa), 3.1(bb)(ii), 3.1(bb)(iii), 3.1(bb)(v), 3.1(cc), 3.1(dd); provided,
----  -----------  ------------  ----------  -------  ------- ---------
however, that for purposes of the joinder of GECC under this Section 3.6, the
-------                                                      -----------
representations set forth in Sections 3.1(i) and 3.1(o) shall be deemed deleted
---------------     ------
in their entirety and replaced with the following:

17

"(i) Title Policies. No claims have been made by Seller or the
--------------
Companies under either of the Title Policies, and to Seller's knowledge,
neither Seller nor the Companies have acted or failed to act in any manner
that would impair the coverage under the Title Policies."

"(o) Leases and Tenants. Seller has delivered to Buyer true and
------------------
complete copies of the Leases. Except for the Leases, the Companies have
not entered into and, to Seller's knowledge, there exist no other occupancy
agreements, leases, lettings or tenancies entered into by the Companies in
effect which will affect the Properties after Closing. None of the
Companies' interest in the Leases or of the Companies' right to receive
rent payable by Lessee has been assigned, conveyed, pledged or in any
manner encumbered by the Companies."

(b)  Joint and Several Covenants. The term "Joint and Several
---------------------------
Covenants" as used herein shall mean the covenants of Seller set forth in
Sections 3.2(a) through (c), 3.2(e) through (h) and 3.2(j).
---------------------------  ------------------     ------

(c)  Joint and Several Indemnity. The term "Joint and Several
---------------------------
ndemnity" as used herein shall mean the indemnity obligations of Seller set
forth in Section 3.3; provided, however, that for purposes of the joinder of
-----------  -----------------
GECC under this Section 3.6, the indemnity obligation set forth in Sections
-----------                                        --------
3.3(a) shall: (i) be limited to those representations and warranties defined as
------
the Joint and Several Representations above and (ii) be deemed deleted in its
entirety and replaced with the following:

"(a) any breach by Seller of its representations or warranties
set forth herein;"

(d)  Limitation of Liability. Notwithstanding anything to the
-----------------------
contrary set forth herein, GECC's liability under this Section 3.6 shall be
-----------
limited to the amount of the Purchase Price. This Section 3.6 shall not affect
-----------
the survival periods for the representations and warranties of Seller set forth
in Section 3.5 hereof or the survival period set forth in Section 3.3 hereof.
-----------                                            -----------

(e)  Acknowledgement of Consideration. GECC hereby acknowledges
--------------------------------
and agrees that the sale of the Membership Interests to Buyer in accordance with
this Agreement will benefit GECC, and GECC has joined in this Agreement for the
purposes set forth in this Section 3.6 for good and valuable consideration, the
-----------
receipt and sufficiency of which are hereby acknowledged. GECC hereby consents
to the sale and assignment of the Membership Interests to Buyer or its permitted
assigns.

SECTION 4

REPRESENTATIONS AND WARRANTIES AND COVENANTS OF BUYER
-----------------------------------------------------

4.1  Representations and Warranties of Buyer. Buyer hereby
---------------------------------------
represents and warrants to Seller as of the date of this Agreement as follows:

18

(a) Organization and Good Standing. Buyer is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the State of
Maryland.

(b) Validity.  Buyer has the power, capacity and authority to
--------
enter into this Agreement, the Membership Assignment and the Lessor Parent
Assignment and to purchase the Membership Interests in accordance with the terms
hereof and to perform Buyer's obligations hereunder and thereunder. This
Agreement has been (and each of the Membership Assignment and the Lessor Parent
Assignment, upon the Closing, will be) duly executed and delivered by Buyer and
constitutes (or will constitute, as the case may be) the legal, valid and
binding obligation of Buyer enforceable against Buyer in accordance with its
terms except as the enforceability thereof may be limited by (i) bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally or (ii) by general equitable principles regardless
of whether considered in a proceeding in equity or at law.

(c) Consents. No consent, approval, order or authorization of, or
--------
registration, qualification, or filing with any Person or governmental entity is
required that has not been made or obtained in connection with the consummation
of the transactions contemplated by this Agreement.

(d) No Conflict. The execution, delivery and performance of this
-----------
Agreement, and the consummation of the transactions contemplated hereby, will
not result in (a) any violation or be in conflict with or constitute, with or
without the passage of time or giving of notice, either a default under, (i) any
provision of the certificate of formation or operating agreement of Buyer, (ii)
any instrument, judgment, order, writ, decree or agreement to which Buyer is a
party or by which it is bound, or (iii) to the knowledge of Buyer, any provision
of any federal or state statute, rule or regulation applicable to Buyer or (b)
an event that results in the creation of any lien upon any assets of Buyer
except, in each case, as would not result in a material adverse effect.

(e) Investment. Buyer is not acquiring the Membership Interests
----------
with a view to or for sale in connection with any distribution thereof within
the meaning of the Securities Act of 1933, as amended (the "Securities Act").
Buyer acknowledges that the transfer of the Membership Interests may be
restricted under the Securities Act and various state securities laws.

(f) Buyer Location; Compliance with Article XXI of Lease. Buyer's
----------------------------------------------------
chief executive office is located in the State of Georgia. Buyer is a U.S.
Person, as defined in the Leases, and otherwise meets the requirements of each
of paragraph (3) and paragraph (5) of Section 21.1(d) of the Leases.

(g) No Representations. BUYER ACKNOWLEDGES THAT EXCEPT AS
------------------
EXPRESSLY SET FORTH IN THIS AGREEMENT AND IN THE DOCUMENTS DELIVERED BY SELLER
AT THE CLOSING, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES, NOR SHALL IT BE
DEEMED TO HAVE MADE, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO
THE VALUE, CONDITION, MERCHANTABILITY OR

19

FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE MEMBERSHIP INTERESTS OR OF ANY
ASSET OF THE COMPANIES (INCLUDING, WITHOUT LIMITATION, THE PROPERTIES), AND
BUYER IS PURCHASING THE MEMBERSHIP INTERESTS ON AN "AS IS," "WHERE IS" BASIS.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND IN THE DOCUMENTS DELIVERED
BY SELLER AT THE CLOSING SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY
NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS,
AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER WITH RESPECT TO THE
PROPERTIES, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR
FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (i) THE VALUE, NATURE, QUALITY
OR CONDITION OF THE PROPERTIES, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL
AND GEOLOGY, (ii) ANY INCOME TO BE DERIVED FROM THE PROPERTIES, INCLUDING,
WITHOUT LIMITATION, THE ECONOMICS OF THE LEASES, (iii) THE SUITABILITY OF THE
PROPERTIES FOR ANY AND ALL ACTIVITIES AND USES WHICH BUYER MAY CONDUCT THEREON,
(iv) THE COMPLIANCE OF OR BY THE PROPERTIES OR ITS OPERATION WITH ANY LAWS,
RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR
BODY, (v) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS INCORPORATED
INTO THE PROPERTIES, (vi) THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR
OF THE PROPERTIES, (vii) COMPLIANCE WITH ANY ENVIRONMENTAL REQUIREMENTS (AS
DEFINED BELOW), INCLUDING THE EXISTENCE IN, ON, UNDER, OR IN THE VICINITY OF THE
PROPERTIES OF HAZARDOUS MATERIALS (AS DEFINED BELOW), (viii) ZONING TO WHICH THE
PROPERTIES OR ANY PORTION THEREOF MAY BE SUBJECT, (ix) THE AVAILABILITY OF ANY
UTILITIES TO THE PROPERTIES OR ANY PORTION THEREOF INCLUDING, WITHOUT
LIMITATION, WATER, SEWAGE, GAS AND ELECTRIC, (x) USAGES OF ANY ADJOINING
PROPERTIES, (xi) ACCESS TO THE PROPERTIES OR ANY PORTION THEREOF, (xii) THE
VALUE, COMPLIANCE WITH THE PLANS AND SPECIFICATIONS, SIZE, LOCATION, AGE, USE,
DESIGN, QUALITY, DESCRIPTION, DURABILITY, STRUCTURAL INTEGRITY, OPERATION, TITLE
TO, OR PHYSICAL OR FINANCIAL CONDITION OF THE PROPERTIES OR ANY PORTION THEREOF,
OR ANY INCOME, EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS OF CLAIMS ON OR
AFFECTING OR PERTAINING TO THE PROPERTIES OR ANY PART THEREOF, (xiii) THE
CONDITION OR USE OF THE PROPERTIES OR COMPLIANCE OF THE PROPERTIES WITH ANY OR
ALL PAST, PRESENT OR FUTURE FEDERAL, STATE OR LOCAL ORDINANCES, RULES,
REGULATIONS OR LAWS, BUILDING, FIRE OR ZONING ORDINANCES, CODES OR OTHER SIMILAR
LAWS, (xiv) THE EXISTENCE OR NON-EXISTENCE OF UNDERGROUND STORAGE TANKS OR THE
CONDITION THEREOF OR THE EXISTENCE OR STATUS OF ANY PERMITS THEREFOR,

20

(xv) ANY OTHER MATTER AFFECTING THE STABILITY OR INTEGRITY OF THE LAND OR
IMPROVEMENTS, (xvi) THE POTENTIAL FOR FURTHER DEVELOPMENT OF THE PROPERTIES,
(xvii) THE EXISTENCE OF VESTED LAND USE, ZONING OR BUILDING ENTITLEMENTS
AFFECTING THE PROPERTIES, OR (xviii) ANY OTHER MATTER WITH RESPECT TO THE
PROPERTIES. ADDITIONALLY, NO PERSON ACTING ON BEHALF OF SELLER IS AUTHORIZED TO
MAKE, AND BY EXECUTION HEREOF OF BUYER ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY
SET FORTH HEREIN AND THE DOCUMENTS DELIVERED BY SELLER AT THE CLOSING, NO PERSON
HAS MADE, ANY REPRESENTATION, AGREEMENT, STATEMENT, WARRANTY, GUARANTY OR
PROMISE REGARDING THE PROPERTIES OR THE TRANSACTION CONTEMPLATED HEREIN; AND NO
SUCH REPRESENTATION, WARRANTY, AGREEMENT, GUARANTY, STATEMENT OR PROMISE IF ANY,
MADE BY ANY PERSON ACTING ON BEHALF OF SELLER SHALL BE VALID OR BINDING UPON
SELLER UNLESS EXPRESSLY SET FORTH HEREIN OR IN THE DOCUMENTS TO BE DELIVERED BY
SELLER AT THE CLOSING. EXCEPT FOR THE EXPRESS REPRESENTATIONS, WARRANTIES AND
COVENANTS OF SELLER SET FORTH HEREIN OR IN THE DOCUMENTS TO BE DELIVERED BY
SELLER AT THE CLOSING, BUYER FURTHER ACKNOWLEDGES AND AGREES THAT BUYER IS NOT
RELYING ON ANY INFORMATION PROVIDED BY SELLER, INCLUDING, WITHOUT LIMITATION,
THE REPORTS, AND AGREES TO ACCEPT THE MEMBERSHIP INTERESTS AT THE CLOSING AND
WAIVE ALL OBJECTIONS OR CLAIMS AGAINST SELLER (INCLUDING, BUT NOT LIMITED TO,
ANY RIGHT OR CLAIM OF CONTRIBUTION) ARISING FROM OR RELATED TO THE PROPERTIES OR
TO ANY HAZARDOUS MATERIALS ON THE PROPERTIES OTHER THAN CLAIMS BASED UPON BREACH
OF AN EXPRESS REPRESENTATION BY SELLER OR DEFAULT OF AN EXPRESS COVENANT OF
SELLER SET FORTH HEREIN OR IN THE DOCUMENTS TO BE DELIVERED BY SELLER AT
CLOSING. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION IN BUYER'S
POSSESSION OR OTHERWISE PROVIDED TO BUYER WITH RESPECT TO THE PROPERTIES WAS
OBTAINED FROM A VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT
INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS
AS TO THE ACCURACY, TRUTHFULNESS OR COMPLETENESS OF SUCH INFORMATION EXCEPT AS
EXPRESSLY SET FORTH HEREIN AND IN THE DOCUMENTS TO BE DELIVERED BY SELLER AT THE
CLOSING. SELLER SHALL NOT BE LIABLE FOR ANY VERBAL OR WRITTEN STATEMENT,
REPRESENTATION OR INFORMATION PERTAINING TO THE PROPERTIES, OR THE OPERATION
THEREOF, FURNISHED BY SELLER OR ANY REAL ESTATE BROKER, CONTRACTOR, AGENT,
EMPLOYEE, SERVANT OR OTHER PERSON AND NOT SET FORTH HEREIN OR IN THE DOCUMENTS
TO BE DELIVERED BY SELLER AT THE CLOSING. BUYER FURTHER ACKNOWLEDGES AND

21

AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE MEMBERSHIP
INTERESTS AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS, WHERE IS" CONDITION AND
BASIS WITH ALL FAULTS EXCEPT AS EXPRESSLY PROVIDED HEREIN OR IN THE DOCUMENTS TO
BE DELIVERED BY SELLER AT CLOSING. IT IS UNDERSTOOD AND AGREED THAT THE
MEMBERSHIP INTERESTS ARE SOLD BY SELLER AND PURCHASED BY BUYER SUBJECT TO THE
FOREGOING AND THAT THE PURCHASE PRICE HAS BEEN ADJUSTED BY PRIOR NEGOTIATION TO
REFLECT THAT THE MEMBERSHIP INTERESTS ARE SOLD BY SELLER AND PURCHASED BY BUYER
SUBJECT TO THE FOREGOING. THE PROVISIONS OF THIS SECTION 4.1(g) SHALL SURVIVE
--------------
THE CLOSING OR ANY TERMINATION HEREOF.

(h)  Hazardous Materials. "Hazardous Materials" shall mean any
-------------------   -------------------
substance which is or contains (i) any "hazardous substance" as now or hereafter
defined in Section 101(14) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. (S)9601 et seq.) ("CERCLA")
or any regulations promulgated under CERCLA; (ii) any "hazardous waste" as now
or hereafter defined in the Resource Conservation and Recovery Act (42 U.S.C.
(S)6901 et seq.) ("RCRA") or regulations promulgated under RCRA; (iii) any
substance regulated by the Toxic Substances Control Act (15 U.S.C. (S)2601 et
seq.); (iv) gasoline, diesel fuel, or other petroleum hydrocarbons; (v) asbestos
and asbestos containing materials, in any form, whether friable or non-friable;
(vi) polychlorinated biphenyls; (vii) radon gas; and (viii) any additional
substances or materials which are now or hereafter classified or considered to
be hazardous or toxic under Environmental Requirements (as hereinafter defined)
or the common law, or any other applicable laws relating to the Properties.
Hazardous Materials shall include, without limitation, any substance, the
presence of which on the Properties, (A) requires reporting, investigation or
remediation under Environmental Requirements; (B) causes or threatens to cause a
nuisance on the Properties or adjacent property or poses or threatens to pose a
hazard to the health or safety of persons on the Properties or adjacent
property; or (C) which, if it emanated or migrated from the Properties, could
constitute a trespass.

(i)  Environmental Requirements. "Environmental Requirements" shall
--------------------------   --------------------------
mean all laws, ordinances, statutes, codes, rules, regulations, agreements,
judgments, orders, and decrees, now or hereafter enacted, promulgated, or
amended, of the United States, the states, the counties, the cities, or any
other political subdivisions in which the Properties are located, and any other
political subdivision, agency or instrumentality exercising jurisdiction over
the owner of the Properties, the Properties, or the use of the Properties,
relating to pollution, the protection or regulation of human health, natural
resources, or the environment, or the emission, discharge, release or threatened
release of pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or waste or Hazardous Materials into the environment
(including, without limitation, ambient air, surface water, ground water or land
or soil).

4.2  Covenants of Buyer. Buyer hereby agrees to indemnify, protect,
------------------
defend, save and hold harmless Seller from and against any and all Claims in any
way

22

relating to, or in connection with or arising out of (i) Buyer's occupation,
ownership, leasing, use, operation, maintenance and management of the
Properties, the Companies or the Membership Interests arising after the Closing
(including, without limitation, (A) any breach by the Companies of any of their
obligations under the Certificates, the Operating Agreements or the Leases after
the Closing, (B) any breach by Buyer of the Certificates or the Operating
Agreements, (C) any act or omission of the Companies or Buyer after the Closing,
or (D) any breach by the Buyer of its obligations as "Lessor Parent" under
Article XXI of the Leases after the Closing), except to the extent any such
Claim is due to Seller's acts or negligence occurring during Seller's period of
ownership of the Membership Interests, or (ii) any breach by Buyer of any of its
representations, warranties or covenants set forth herein. Buyer acknowledges
and agrees that Buyer shall be responsible for (y) the payment of all Taxes of
the Companies attributable to Buyer's period of ownership of the Membership
Interests (other than any such Taxes that are the responsibility of Lessee under
the Leases) and (z) the filing of all Tax Returns related to the Taxes described
in the preceding clause (y) for any period after the Closing as to which the Tax
----------
Returns are required to be filed. The provisions of this Section 4.2 shall
-----------
survive the Closing or any termination hereof.

4.3   BUYER'S WAIVER AND RELEASE. EXCEPT FOR THE EXPRESS
--------------------------
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AND GECC SET FORTH HEREIN OR
IN THE DOCUMENTS DELIVERED AT CLOSING, AS PART OF BUYER'S AGREEMENT TO PURCHASE
AND ACCEPT THE MEMBERSHIP INTERESTS "AS-IS WHERE-IS", AND NOT AS A LIMITATION ON
SUCH AGREEMENT, BUYER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY AND ALL
ACTUAL OR POTENTIAL RIGHTS BUYER MIGHT HAVE AGAINST SELLER REGARDING ANY FORM OF
WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND OR TYPE, RELATING TO THE MEMBERSHIP
INTERESTS AND THE PROPERTIES OR ANY OF THE MATTERS REFERRED TO IN SECTION
-------
4.1(h). SUCH WAIVER IS ABSOLUTE, COMPLETE, TOTAL AND UNLIMITED IN ANY WAY,
------
EXCEPT WITH RESPECT TO THE RIGHTS OF BUYER UNDER THIS AGREEMENT FOR THE BREACH
BY SELLER OF ANY OF THE REPRESENTATIONS, WARRANTIES OR COVENANTS OF SELLER SET
FORTH HEREIN OR IN THE DOCUMENTS DELIVERED AT CLOSING BY SELLER. SUCH WAIVER
INCLUDES, BUT IS NOT LIMITED TO, A WAIVER OF EXPRESS WARRANTIES, (EXCEPT FOR THE
EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER SET FORTH HEREIN OR
IN THE DOCUMENTS DELIVERED AT CLOSING BY SELLER) IMPLIED WARRANTIES, WARRANTIES
OF FITNESS FOR A PARTICULAR USE, WARRANTIES OF MERCHANTABILITY, WARRANTIES OF
HABITABILITY, STRICT LIABILITY RIGHTS, AND CLAIMS, LIABILITIES, DEMANDS OR
CAUSES OF ACTION OF EVERY KIND AND TYPE, WHETHER STATUTORY, CONTRACTUAL OR UNDER
TORT PRINCIPLES, AT LAW OR IN EQUITY, INCLUDING, BUT NOT LIMITED TO, CLAIMS
REGARDING DEFECTS WHICH MIGHT HAVE BEEN DISCOVERABLE, CLAIMS REGARDING DEFECTS
WHICH WERE NOT OR ARE NOT DISCOVERABLE, PRODUCT LIABILITY CLAIMS, PRODUCT

23

LIABILITY TYPE CLAIMS, ALL OTHER EXTANT OR LATER CREATED OR CONCEIVED OF STRICT
LIABILITY OR STRICT LIABILITY TYPE CLAIMS AND RIGHTS, AND ANY CLAIMS UNDER
CERCLA; PROVIDED, HOWEVER, THAT SUCH WAIVER DOES NOT INCLUDE A WAIVER FOR THE
--------  -------
BREACH BY SELLER OF ANY OF SELLER'S EXPRESS REPRESENTATIONS, WARRANTIES OR
COVENANTS SET FORTH HEREIN OR IN THE DOCUMENTS DELIVERED AT CLOSING BY SELLER.
EFFECTIVE UPON THE CLOSING DATE, AND TO THE FULLEST EXTENT PERMITTED BY LAW,
BUYER HEREBY RELEASES, DISCHARGES AND FOREVER ACQUITS SELLER AND EVERY ENTITY
AFFILIATED WITH SELLER, ITS SHAREHOLDERS, MEMBERS, OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, ATTORNEYS, ACCOUNTANTS, PARTNERS AND INDEPENDENT CONTRACTORS
AND THE SUCCESSOR OF EACH AND EVERY ONE OF THEM (COLLECTIVELY, THE "SELLER
PARTIES") FROM ALL CAUSES OF ACTION, CLAIMS, DEMANDS, DEBTS, CONTROVERSIES,
DAMAGES, LIABILITIES, OBLIGATIONS, COSTS, LOSSES AND EXPENSES WHICH BUYER HAS
SUFFERED OR MAY SUFFER OR INCUR RELATING TO THE MEMBERSHIP INTERESTS OR THE
PROPERTIES EXCEPT TO THE EXTENT ARISING UNDER OR PURSUANT TO THIS AGREEMENT OR
UNDER OR PURSUANT TO THE DOCUMENTS DELIVERED AT CLOSING BY SELLER. AS PART OF
THE PROVISIONS OF THIS SECTION 4.3, BUT NOT AS A LIMITATION THEREON, BUYER
-----------
HEREBY AGREES THAT THE MATTERS RELEASED HEREIN ARE NOT LIMITED TO MATTERS WHICH
ARE KNOWN OR DISCLOSED AND INCLUDES UNKNOWN CAUSES OF ACTION, CLAIMS,
CONTROVERSIES, DAMAGES, LIABILITIES, COSTS, LOSSES AND EXPENSES AND BUYER HEREBY
WAIVES ANY AND ALL RIGHTS AND BENEFITS WHICH IT NOW HAS, OR IN THE FUTURE MAY
HAVE CONFERRED UPON IT, BY VIRTUE OF THE PROVISIONS OF FEDERAL, STATE OR LOCAL
LAW, RULES OR REGULATIONS. THE PROVISIONS OF THIS SECTION 4.3 ARE MATERIAL AND
-----------
INCLUDED AS A MATERIAL PORTION OF THE CONSIDERATION GIVEN TO SELLER BY BUYER IN
EXCHANGE FOR SELLER'S PERFORMANCE HEREUNDER. THE PROVISIONS OF THIS SECTION 4.3
-----------
SHALL SURVIVE THE CLOSING OR ANY TERMINATION HEREOF.

SELLER AND BUYER HAVE EACH INITIALED THIS SECTION 4.3 TO FURTHER
-----------
INDICATE THEIR AWARENESS AND ACCEPTANCE OF EACH AND EVERY PROVISION HEREOF.

BUYER'S INITIALS:[ILLEGIBLE]                      SELLER'S INITIALS:[ILLEGIBLE]
-----------                                        -----------

SECTION 5

CLOSING CONDITIONS
------------------

The Closing of the purchase and sale of the Membership Interests is
subject to the following conditions:

24

5.1   Buyer's Closing Conditions. Buyer's obligation to acquire the
--------------------------
Membership Interests is subject to the satisfaction of the following conditions
or waiver thereof in writing by Buyer:

(a)   The representations and warranties of Seller under this
Agreement shall be true and correct in all material respects as of the date of
the Closing, as if made thereon.

(b)   The performance by Seller of its covenants and obligations
under this Agreement.

(c)   The delivery to Buyer of tenant estoppel certificates
executed by Lessee in the form of Exhibit B attached hereto without any material
---------
deviations. Seller agrees to use commercially reasonable, good faith efforts to
obtain such tenant estoppel certificates.

(d)   The delivery to Buyer of resignation letters and releases as
contemplated herein from any Person nominated by Seller who serves as an
officer, manager, director or in any other similar capacity of either Company
and releases from the Seller as to its indemnification by the Companies pursuant
to the Operating Agreements.

(e)   The delivery to Buyer of the Non-Foreign Affidavit.

(f)   The condition of title to the Properties shall not be
impaired relative to its state as of the date of execution of this Agreement.

(g)   Execution, concurrently with the Closing, of amendments to
the Leases (the "Amendments") that, inter alia, modify the rent structure during
----- ----
the extended terms of the Leases. The Amendments shall be otherwise in form and
substance reasonably satisfactory to Buyer and Lessee; provided, however, that
-----------------
Buyer shall use good faith, diligent efforts to negotiate the Amendments with
Lessee and to complete negotiations and cause fully executed originals of the
Amendments to be delivered into escrow no later than March 29, 2002; provided,
--------
further, that the Amendments shall expressly provide that they will not be
-------
effective unless and until the transactions contemplated by this Agreement have
been consummated. Seller shall have the right to participate in any negotiations
between Buyer and Lessee with respect to the Amendments.

(h)   No action by any authority shall have been instituted or
threatened (other than any such action instituted or threatened by Buyer or at
the request of Buyer) for the purpose of enjoining or preventing the
transactions contemplated by this Agreement or that questions the legality or
validity of the transactions contemplated hereby.

5.2   Seller's Closing Conditions. Seller's obligation to sell the
---------------------------
Membership Interests is subject to the satisfaction of the following conditions
or waiver thereof by Seller:

25

(a)   The representations and warranties of Buyer under this
Agreement shall be true and correct in all material respects as of the date of
the Closing, as if made thereon.

(b)   The performance by Buyer of its covenants and obligations
under this Agreement.

(c)   A certificate evidencing the reaffirmation of the truth and
accuracy of Buyer's representations and warranties set forth in Section 4.1
-----------
hereof.

(d)   No action by any authority shall have been instituted or
threatened (other than any such action instituted or threatened by Seller or at
the request of Seller) for the purpose of enjoining or preventing the
transactions contemplated by this Agreement or that questions the legality or
validity of the transactions contemplated hereby.

5.3   Termination. If the Closing has not occurred by the Closing
-----------
Date due to the failure of any of the conditions set forth in Section 5.1 or
-----------
Section 5.2 above (other than the failure of any such condition due to a breach
-----------
or default hereunder by Buyer or Seller, in which case the provisions of
Sections 6.1 or 6.2 hereof, as applicable, shall control), to be satisfied, or
------------    ---
waived by the applicable Party, then either Buyer (as to the conditions set
forth in Section 5.1) or Seller (as to the conditions set forth in Section 5.2)
-----------                                               -----------
shall have the right to terminate this Agreement upon notice to the other Party,
in which event Escrowee shall return all documents and all funds deposited with
Escrowee by the depositor thereof. Any such termination shall not relieve any
Party from its breach of any covenant under this Agreement.

SECTION 6

DEFAULT
-------

6.1   Breach by Buyer. IN THE EVENT OF THE BREACH BY BUYER OF ANY
---------------
REPRESENTATION OR COVENANT UNDER THIS AGREEMENT AND THE FAILURE TO CURE SUCH
BREACH WITHIN THE LATER OF (a) FIVE (5) DAYS OF NOTICE THEREOF OR (b) EXPIRATION
OF THE INSPECTION PERIOD, OR IN THE EVENT OF THE FAILURE OF BUYER TO CLOSE ON OR
BEFORE THE CLOSING DATE (SO LONG AS BUYER'S CLOSING CONDITIONS SET FORTH IN
SECTION 5.1 HEREOF HAVE BEEN SATISFIED), SELLER, AT ITS OPTION, MAY TERMINATE
THIS AGREEMENT AND THEREUPON SELLER SHALL BE ENTITLED TO THE AMOUNT OF THE
DEPOSIT AS LIQUIDATED DAMAGES (AND NOT AS A PENALTY) AND AS SELLER'S SOLE REMEDY
AND RELIEF WITH RESPECT THERETO UNDER THIS AGREEMENT (EXCEPT FOR THE OBLIGATIONS
OF BUYER THAT SURVIVE THE TERMINATION OF THIS AGREEMENT). IN SUCH EVENT (AND
PROVIDED THAT THE ESCROWEE HOLDS THE DEPOSIT IN ACCORDANCE WITH SECTION 1), THE
---------
ESCROWEE, IF IT HAS NOT PREVIOUSLY DONE SO, SHALL IMMEDIATELY DELIVER THE AMOUNT
OF THE DEPOSIT (I.E., $500,000.00

26

PLUS ALL ACCRUED INTEREST THEREON) TO SELLER AS LIQUIDATED DAMAGES UNDER AND IN
CONNECTION WITH THIS AGREEMENT. SELLER AND BUYER HAVE MADE THIS PROVISION FOR
LIQUIDATED DAMAGES BECAUSE IT WOULD BE EXTREMELY DIFFICULT AND IMPRACTICABLE TO
ASCERTAIN AND CALCULATE, ON THE DATE HEREOF, THE AMOUNT OF ACTUAL DAMAGES
SUSTAINED BY SELLER FOR THE BREACH BY BUYER OF ITS OBLIGATION TO PURCHASE THE
MEMBERSHIP INTEREST, AND THE FAILURE OF THE CONSUMMATION OF THE TRANSACTIONS,
CONTEMPLATED BY THIS AGREEMENT OR THE AMOUNT OF COMPENSATION SELLER SHOULD
RECEIVE AS A RESULT OF BUYER'S BREACH OR DEFAULT, AND SELLER AND BUYER AGREE
THAT SUCH SUM REPRESENTS REASONABLE COMPENSATION TO SELLER FOR SUCH BREACH.
NOTWITHSTANDING THE FOREGOING, THE PROVISIONS OF THIS SECTION 6.1 SHALL NOT
-----------
LIMIT OR AFFECT ANY OF BUYER'S INDEMNITIES AS PROVIDED IN OTHER SECTIONS OF THIS
AGREEMENT, OR SELLER'S RIGHT TO RECEIVE REIMBURSEMENT OF ATTORNEYS' FEES, COSTS
AND EXPENSES IN ACCORDANCE WITH OTHER PROVISIONS OF THIS AGREEMENT.

BUYER'S INITIALS: [ILLEGIBLE]                     SELLER'S INITIALS: [ILLEGIBLE]
------------                                       ------------

6.2   Breach by Seller. In the event of the breach by Seller of any
----------------
representation or covenant under this Agreement and the failure to cure such
breach within five (5) days after written notice thereof from Buyer or the
failure of Seller to close on or before the Closing Date (so long as Seller's
Closing conditions set forth in Section 5.2 hereof have been satisfied), Buyer,
-----------
at its option, may: (a) terminate its obligations under this Agreement by
further written notice thereof to Seller and receive the return of the Deposit
from Escrowee; (b) specifically enforce the terms and provisions of this
Agreement against Seller; (c) avail itself of any other rights and remedies
available to Buyer at law or in equity as a result of such failure by Seller; or
(d) avail itself of any combination of the foregoing.

SECTION 7

RISK OF LOSS
------------

7.1   Condemnation. If, prior to the Closing, action is initiated
------------
to take any of the Properties by eminent domain proceedings or by deed in lieu
thereof, Buyer may either at or prior to Closing (a) terminate this Agreement,
whereupon the Deposit shall be immediately returned to Buyer and neither party
shall have any further obligation hereunder except the indemnity obligations of
the Parties that expressly survive the termination of the Agreement, or (b)
consummate the transactions contemplated in this Agreement, in which latter
event there shall be no reduction in the Purchase Price, but Buyer shall receive
at Closing a credit against the Purchase Price in the amount of any award of the
condemning authority received prior to or at Closing by the Companies.

7.2   Casualty. Except as provided in Section 3.1 of this
--------                        -----------
Agreement, Seller assumes all risks and liability for damage to or injury
occurring to the Properties

27

by fire, storm, accident, or any other casualty or cause until the Closing has
been consummated. If any of the Kalamazoo Improvements or the Farmington
Improvements shall be destroyed or damaged prior to the Closing, and if either
the estimated cost of repair or replacement exceeds One Million Dollars
($1,000,000.00) or the damage results in the termination of either of the
Leases, Buyer may, by written notice given to Seller within twenty (20) days
after receipt of written notice from Seller of such damage or destruction, elect
to terminate this Agreement, in which event the Deposit shall immediately be
returned to Buyer and the rights, duties, obligations, and liabilities of all
Parties hereunder shall immediately terminate and be of no further force or
effect, except for the indemnity obligations of the Parties that expressly
survive the termination of this Agreement. If Buyer does not elect to terminate
this Agreement pursuant to this Section 7.2, or has no right to terminate this
-----------
Agreement (because the damage or destruction does not exceed $1,000,000.00 and
has not resulted in the termination of either of the Leases), and the sale of
the Property is consummated, Buyer shall be entitled to receive all insurance
proceeds (subject to any rights of Lessee under the Leases to such proceeds)
paid or payable to Seller or the Companies by reason of such destruction or
damage under the insurance (less amounts of insurance theretofore received and
applied by Seller or the Companies to costs actually incurred for restoration).
Neither Seller nor the Companies shall settle or release any damage or
destruction claims without obtaining Buyer's prior written consent in each case.
All said insurance proceeds received by Seller or the Companies by the date of
Closing shall be paid by Seller to Buyer at Closing, together with the amount
necessary to cover any difference between the amount of such proceeds and the
estimated cost of repair or replacement to the extent such amount is not paid or
obligated to be paid by Lessee under the applicable Lease. In addition, at
Closing, Seller shall pay over to Buyer, and assign to Buyer, all proceeds of
any rent loss insurance for the period of time commencing on the date of
Closing. If the amount of said casualty or rent loss insurance proceeds is not
settled by the date of Closing, Seller shall cooperate with Buyer in order that
Buyer shall receive all of Seller's or the Companies' right, title, and interest
in and under such insurance proceeds.

SECTION 8

MISCELLANEOUS
-------------

8.1  Expenses. Each Party will bear its own costs and expenses
--------
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby. Seller shall pay any State of
Michigan, county or city transfer tax due and payable in connection with the
assignment of the Membership Interests to Buyer. Seller shall pay for the first
$8,000.00 of the premium for the issuance of the endorsements to the Existing
Title Policies changing the effective dates thereof to the Closing Date and
increasing the amount of the insurance thereunder to the Purchase Price (as
allocated as provided in Section 2.2 hereof) and "non-imputation" endorsements
to the Existing Title Policies; provided, that Buyer shall pay for the costs
associated with such endorsements in excess of $8,000.00. Seller and Buyer shall
each pay one-half of the fees of Escrowee. In the event it becomes necessary for
either party hereto to file suit to enforce this Agreement or any provision
contained herein, the party prevailing in such

28

suit shall be entitled to recover, in addition to all other remedies or damages,
as provided herein, reasonable attorneys' fees, costs and expenses incurred in
such suit.

8.2 Broker. Each Party represents to the other Party that no
------
Person, corporation, or partnership acting as real estate broker, finder or real
estate agent (collectively, "broker") brought about this Agreement other than
------
Farragut Investments, Inc. and First Fidelity Companies. Seller agrees to pay
all commissions and fees due and payable to Farragut Investments, Inc. Buyer
agrees to pay all commissions and fees due and payable to First Fidelity
Companies. Seller agrees to and does hereby indemnify Buyer from all loss,
damage, cost, or expense (including reasonable attorneys' fees) that Buyer may
suffer as a result of any claim or action brought by any broker, other than
Farragut Investments, Inc., acting or allegedly acting on behalf of Seller in
connection with this transaction, and Buyer agrees to and does hereby indemnify
and hold Seller harmless from all loss, damage, cost, or expense (including
reasonable attorneys' fees) that Seller may suffer as a result of any claim or
action brought by any broker, other than First Fidelity Companies, acting or
allegedly acting on behalf of Buyer in connection with this transaction. The
obligations of the Parties under this Section 8.2 shall survive the termination
-----------
of this Agreement and/or the Closing.

8.3 Notices. All notices, requests, demands, claims, and other
-------
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:

If to Seller:   GEBAM, Inc.
c/o GE Capital Asset Management
Attention: Robert Nowicki Dana Sale/Leaseback Asset
Manager
GE Capital Real Estate
1528 Walnut Street
Philadelphia, PA 19102
Fax: (215) 772-0361

with a copy, which shall not constitute notice, to:

U.S. Realty Advisors, LLC
Attention: David M. Ledy
1370 Avenue of the Americas
New York, NY 10019
Fax: (212) 581-4950

29

with a copy, which shall not constitute notice, to:

GE Capital Real Estate
292 Long Ridge Road
Stamford, CT 06927
Attention: General Counsel/Dana Portfolio
Fax: 203-357-6768

with a copy, which shall not constitute notice, to:

Paul R. Walker, Esq.
Dewey Ballantine LLP
333 South Grand Avenue
Suite 2600
Los Angeles, CA 90071-1530
Fax: 213-621-6100

If to Buyer:               Wells Real Estate Investment Trust, Inc.
c/o Wells Capital, Inc.
6200 The Corners Parkway
Suite 250
Norcross, GA 30092
Attention:  Michael C. Berndt
Fax: 770-200-8199

with a copy, which shall not constitute notice, to:

Mr. John Kerby
The First Fidelity Companies
Two Ravinia Drive, Suite 1600
Atlanta, Georgia  30346
Fax:  678-287-3023

with a copy, which shall not constitute notice, to:

John W. Griffin, Esq.
Troutman Sanders LLP
Bank of America Plaza
600 Peachtree Street, N.E., Suite 5200
Atlanta, Georgia 30308-2216
Fax: 404-962-6577

Either Party may send any notice, request, demand, claim, or
other communication hereunder to the intended recipient at the address set forth
above using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until

30

it actually is received by the intended recipient. Either Party may change the
address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Party notice in the manner
herein set forth.

8.4  Entire Agreement. This Agreement constitutes the entire
----------------
agreement between Seller and Buyer with respect to the transactions that are the
subject matter hereof and supercedes in its entirety any prior agreements, prior
representations, alleged warranties, statements, negotiations, undertakings,
letters, acceptances, understandings, contracts and communications, whether
written or oral, among the Parties hereto with respect to or in connection with
the subject matter hereof.

8.5  Headings, Etc. The headings contained in this Agreement are
-------------
intended solely for convenience and shall not affect the rights of the Parties
to this Agreement. When used in this Agreement: (a) "or" is not exclusive; (b)
"including" is not limiting; (c) a reference to any law, rule or regulation
includes any amendment or modification thereto or thereof, as well as any
replacement therefor; and (d) unless otherwise provided for in this Agreement, a
reference to any other agreement, instrument or document shall include such
other agreement, instrument or document, as it may be amended, restated,
supplemented or otherwise modified from time to time in accordance with its
terms. References herein to Sections, paragraphs, Exhibits and the like, unless
otherwise stated, are references to Sections or paragraphs of, or Exhibits to,
this Agreement. Terms such as "herein", "hereof", or "hereunder" refer to this
Agreement as a whole, and not to any particular provision hereof.

8.6  Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.

8.7  General Provisions Regarding Indemnities. All of the
----------------------------------------
indemnification obligations under this Agreement shall be subject to the
following provisions:

(a)  Should the indemnitor fail to discharge or undertake to
defend the indemnitee against the applicable Claim (with counsel approved by the
indemnitee), within ten (10) days after the indemnitee gives the indemnitor
written notice of the same, then the indemnitee may settle such Claim, and the
indemnitor's liability to the indemnitee shall be conclusively established by
such settlement, the amount of such liability to include both the settlement
consideration and the reasonable costs and expenses, including attorneys' fees,
incurred by the indemnitee in effecting such settlement.

(b)  The indemnitor's indemnification obligations under this
Agreement shall cover the costs and expenses of the indemnitee, including
reasonable attorneys' fees, related to any actions, suits or judgments incident
to any of the matters covered by such indemnities.

31

(c)  The indemnitor's indemnification obligations under this
Agreement shall also extend to any present or future advisor, trustee, director,
member, officer, partner, employee, beneficiary, shareholder, participant or
agent of or in the indemnitee or any entity now or hereafter having a direct or
indirect ownership interest in the indemnitee.

8.8  Choice of Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the internal laws of the State of Michigan without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Michigan or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Michigan.

8.9  Amendments. No amendment or modification of any provision of
----------
this Agreement shall be valid unless the same shall be in writing and signed by
Seller and Buyer.

8.10 Counterparts. This Agreement may be signed in two or more
------------
counterparts with the same effect as if the signatures to each counterpart were
upon a single instrument, and all such counterparts together shall be deemed an
original of this Agreement. For purposes of this Agreement, a facsimile copy of
a Party's signature shall be sufficient to bind such Party.

8.11 Successors and Assigns. Neither this Agreement nor any of
----------------------
the rights, interests or obligations hereunder shall be assigned by any of the
Parties hereto (whether by operation or otherwise) without the prior written
consent of the other Party, provided, however, that Buyer may assign its rights
under this Agreement to an affiliate without the consent of Seller. For purposes
hereof an "affiliate" shall mean an entity controlled by, controlling or under
common control with Buyer. Subject to the foregoing, the Agreement will be
binding upon, inure to the benefit of and be enforceable by the Parties and
their respective successors and permitted assigns.

8.12 Time of the Essence. Time is of the essence in this
-------------------
Agreement.

8.13 Third Party Beneficiary. This Agreement is for the sole and
-----------------------
exclusive use of Seller and Buyer and may not be enforced, nor relied upon, by
any Person other than Seller and Buyer.

8.14 Binding Agreement. Neither the delivery of an unsigned copy
-----------------
of this Agreement by Seller, nor any negotiations by Seller shall constitute an
offer to sell the Membership Interests upon the terms and conditions set forth
in this Agreement or upon any other terms or conditions. Any such delivery or
negotiations shall be deemed solely to solicit offers from potential buyers.
Seller shall have the right at all times until this Agreement is executed and
delivered by both Seller and Buyer to negotiate the sale of the Membership
Interests with Buyer or any other Person upon the terms and conditions set forth
herein or upon any other terms and conditions desired by Seller in its sole
discretion and to cease negotiations with Buyer or any other Person at any time
for

32

any or no reason. Only the fully executed Agreement signed by both Buyer and
Seller shall bind Seller and Buyer.

* * *

33

IN WITNESS WHEREOF, Seller and Buyer have executed this
Agreement as of the date set forth above.

GEBAM, INC.,
a Delaware corporation

By:           /s/ Stephen Benko
-----------------------------------
Name:    Stephen Benko
------------------------------
Title:  Authorized Signatory
-----------------------------

WELLS REAL ESTATE INVESTMENT TRUST, INC.,
a Maryland corporation

By:        /s/ Douglas P. Williams
-----------------------------------
Name:   Douglas P. Williams
------------------------------
Title:   Executive Vice President
-----------------------------

The undersigned joins in this Agreement solely for the purposes set forth in
Section 3.6 hereof:

General Electric Capital Corporation,
a Delaware corporation

By:    /s/ Stephen Benko
-------------------------------
Name:  Stephen Benko
-------------------------
Title:  Authorized Signatory
-------------------------

S-1

EXHIBIT 10.129

LEASE AGREEMENT FOR THE DANA DETROIT BUILDING

LEASE AGREEMENT

Dated as of October 26, 2001

by and between

DANACQ FARMINGTON HILLS LLC, as Lessor

and

DANA CORPORATION, a Virginia corporation, as Lessee

Lease of Office and Research and Development Facility located in
Farmington Hills, Michigan

TABLE OF CONTENTS

Page
----

ARTICLE I DEFINITIONS........................................................................   1

ARTICLE II LEASE OF PROPERTY.................................................................   1

ARTICLE III RENT.............................................................................   1

Section 3.1     Basic Rent.................................................................   1
----------
Section 3.2     Additional Rent............................................................   2
---------------
Section 3.3     Method of Payment..........................................................   2
-----------------
Section 3.4     Late Payment...............................................................   2
------------
Section 3.5     Net Lease; No Setoff; Etc..................................................   3
-------------------------
Section 3.6     Rent after Failure to Vacate Property......................................   4
-------------------------------------

ARTICLE IV GENERAL TAX INDEMNITY.............................................................   5

Section 4.1     Indemnity..................................................................   5
---------
Section 4.2     Excluded Taxes.............................................................   5
--------------
Section 4.3     Payment....................................................................   8
-------
Section 4.4     Independent Examination....................................................   8
-----------------------
Section 4.5     Tax Benefit................................................................   9
-----------
Section 4.6     Refund.....................................................................   9
------
Section 4.7     Contest....................................................................  10
-------
Section 4.8     Reports....................................................................  12
-------
Section 4.9     Non-Parties................................................................  13
-----------

ARTICLE V RENEWAL OPTIONS....................................................................  13

Section 5.1     Fixed Rate Renewal Term....................................................  13
-----------------------
Section 5.2     FMV Renewal Terms..........................................................  13
-----------------
Section 5.3     Conditions to Renewal Terms................................................  13
---------------------------
Section 5.4     Rent During Renewal Terms..................................................  14
-------------------------

ARTICLE VI EARLY TERMINATION.................................................................  14

Section 6.1     Obsolescence Termination...................................................  14
------------------------

ARTICLE VII CONDITION OF PROPERTY............................................................  16

Section 7.1     Disclaimers................................................................  16
-----------

ARTICLE

VIII LIENS...........................................................................  17

ARTICLE IX MAINTENANCE AND REPAIR; ALTERATIONS, MODIFICATIONS AND ADDITIONS..................  18

Section 9.1     Maintenance and Repair.....................................................  18
----------------------
Section 9.2     Alterations; Additions.....................................................  18
----------------------
Section 9.3     Permanent and Non-Severable................................................  20
---------------------------
Section 9.4     Cooperation................................................................  21
-----------
Section 9.5     Obligations with Respect to Alterations and Additions at End of Term.......  21
--------------------------------------------------------------------

i

Section 9.6    [Intentionally omitted.]................................................  21
Section 9.7    Compliance with Applicable Laws and Regulations.........................  21
-----------------------------------------------
Section 9.8    Environmental Covenants.................................................  21
-----------------------
Section 9.9    Contests................................................................  23
--------

ARTICLE X LOCATION AND USE................................................................  24

Section 10.1   Location................................................................  24
--------
Section 10.2   Use.....................................................................  24
---

ARTICLE XI INSURANCE......................................................................  24

Section 11.1   Coverage................................................................  24
--------
Section 11.2   Policy Provisions.......................................................  26
-----------------
Section 11.3   Certificates of Insurance; Performance by Lessor........................  27
------------------------------------------------
Section 11.4   General.................................................................  28
-------
Section 11.5   Proceeds................................................................  28
--------
Section 11.6   Separate Insurance......................................................  28
------------------

ARTICLE XII RETURN OF PROPERTY............................................................  29

Section 12.1   Surrender; Environmental Compliance.....................................  29
-----------------------------------

ARTICLE XIII ASSIGNMENT, SUBLEASING AND MERGER............................................  29

Section 13.1   Subletting of Portions of the Property Without Lessor's Consent.........  29
---------------------------------------------------------------
Section 13.2   Delivery of Non-Disturbance Agreements by Lessor........................  30
------------------------------------------------
Section 13.3   Assignment of Lease.....................................................  30
-------------------
Section 13.4   Merger..................................................................  31
------
Section 13.5   Affiliates..............................................................  31
----------

ARTICLE XIV LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE.....................................  31

Section 14.1   Payment of Stipulated Loss Value on an Event of Loss....................  31
----------------------------------------------------
Section 14.2   Restoration; Application of Payments....................................  33
------------------------------------
Section 14.3   Event of Taking.........................................................  35
---------------
Section 14.4   Application of Certain Payments Not Relating to an Event of Taking......  36
------------------------------------------------------------------
Section 14.5   Dispositions of Proceeds during Default.................................  36
---------------------------------------
Section 14.6   Negotiations............................................................  36
------------
Section 14.7   No Rent Abatement.......................................................  37
-----------------
Section 14.8   Investment..............................................................  37
----------

ARTICLE XV INSPECTION.....................................................................  37

Section 15.1   Entry on Property.......................................................  37
-----------------

ARTICLE XVI EVENTS OF DEFAULT.............................................................  38

Section 16.1   Events of Default.......................................................  38
-----------------

ARTICLE XVII ENFORCEMENT..................................................................  39

Section 17.1   Remedies................................................................  39
--------
Section 17.2   Survival of Lessee's Obligations........................................  42
--------------------------------
Section 17.3   Remedies Cumulative; No Waiver; Consents................................  42
----------------------------------------

ii

ARTICLE XVIII RIGHT TO PERFORM FOR LESSEE........................................  43

ARTICLE XIX [Intentionally Omitted]..............................................  43

ARTICLE XX INDEMNIFICATION.......................................................  43

Section 20.1   General Indemnification........................................  43
-----------------------
Section 20.2   Survival.......................................................  45
--------

ARTICLE XXI TRANSFERS OF INTERESTS...............................................  46

Section 21.1   Transfers of Interests.........................................  46
----------------------

ARTICLE XXII [Intentionally omitted].............................................  48

ARTICLE XXIII MISCELLANEOUS......................................................  48

Section 23.1   Binding Effect; Successors and Assigns; Survival...............  48
------------------------------------------------
Section 23.2   Quiet Enjoyment................................................  48
---------------
Section 23.3   Notices........................................................  48
-------
Section 23.4   Severability...................................................  49
------------
Section 23.5   Amendment; Complete Agreements.................................  49
------------------------------
Section 23.6   Headings.......................................................  49
--------
Section 23.7   Counterparts...................................................  49
------------
Section 23.8   Governing Law; WAIVER OF JURY TRIAL............................  49
-----------------------------------
Section 23.9   Security Funds.................................................  50
--------------
Section 23.10  Discharge of Lessee's Obligations by its Affiliates............  51
---------------------------------------------------
Section 23.11  Estoppel Certificates..........................................  51
---------------------
Section 23.12  Miscellaneous Matters Affecting the Property...................  51
--------------------------------------------
Section 23.13  Lessor Bankruptcy..............................................  53
-----------------
Section 23.14  No Joint Venture...............................................  54
----------------
Section 23.15  No Accord and Satisfaction.....................................  54
--------------------------
Section 23.16  No Merger......................................................  54
---------
Section 23.17  Further Assurances.............................................  54
------------------
Section 23.18  Memorandum of Lease............................................  54
-------------------
Section 23.19  Interest Conveyed..............................................  54
-----------------
Section 23.20  Computation of Stipulated Loss Value and Termination Value.....  54
----------------------------------------------------------
Section 23.21  Subordination and Nondisturbance...............................  55
--------------------------------
Section 23.22  True Lease.....................................................  55
----------
Section 23.23  Financial Reporting............................................  56
-------------------
Section 23.24  Notice of Certain Changes......................................  56
-------------------------

SCHEDULE 1 BASIC RENT SCHEDULE...................................................  54
SCHEDULE 2A STIPULATED LOSS VALUES...............................................  55
SCHEDULE 2B TERMINATION VALUES...................................................  56
SCHEDULE X LESSEE'S EQUIPMENT AND SYSTEMS........................................  57
SCHEDULE Y ENGINEERING REPORT....................................................
EXHIBIT A LEGAL DESCRIPTION OF LAND..............................................  58
EXHIBIT B FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT........  59

iii

EXHIBIT C MEMORANDUM OF LEASE....................................................  60
APPENDIX A DEFINITIONS...........................................................
EXHIBIT D COMPETITORS............................................................  63

iv

LEASE AGREEMENT dated as of October 26, 2001, by and between DANACQ
FARMINGTON HILLS LLC, a Delaware limited liability company, as Lessor, and DANA
CORPORATION, a Virginia corporation, as Lessee.

In consideration of the mutual agreements herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS
-----------

The capitalized terms used herein and not otherwise defined shall have
the meanings assigned thereto in Appendix A for all purposes hereof.

ARTICLE II

LEASE OF PROPERTY
-----------------

On the Lease Term Commencement Date, the Lessor shall demise and
lease, and hereby as of the Lease Term Commencement Date does demise and lease,
the Property to the Lessee, and the Lessee shall rent and lease, and hereby as
of the Lease Term Commencement Date, does rent and lease, the Property from the
Lessor, for the Basic Term and, subject to the exercise by the Lessee of its
renewal options as provided in Article V hereof, for the Renewal Terms. The
Lessee may from time to time own or hold under lease from Persons other than the
Lessor, furniture, trade fixtures and equipment located on or about the Property
(including the equipment and systems described on Schedule X attached hereto and
----------
made a part hereof, but excluding HVAC equipment, building systems or other
equipment integral to or necessary for the operation of the Improvements for
general office and research and development purposes and not integral to or
necessary in connection with the business conducted by Lessee) that is not
subject to this Lease. The Lessor shall from time to time, upon the reasonable
request of the Lessee, promptly acknowledge in writing to the Lessee or other
Persons that the Lessor does not own or have any other right or interest in or
to such furniture, trade fixtures and equipment. The demise and lease of the
Property pursuant to this Article II shall include any additional right, title
or interest in the Property which may at any time be acquired by the Lessor, the
intent being that all right, title and interest of Lessor in and to the Property
shall at all times be demised and leased to the Lessee hereunder.

ARTICLE III

RENT
----

Section 3.1  Basic Rent. During the Basic Term, Lessee shall pay to
----------
Lessor rent, in advance, for the periods occurring during the Basic Term as set
forth in Schedule 1 hereto on the dates as specified on Schedule 1 under the
----------                                     ----------
caption "Rent Payment Date" and in the amounts

1

as specified on Schedule 1 under the caption "Basic Rent Payment". Basic Rent
----------
shall be allocable to the month in which the Rent Payment Date occurs. It is the
intent of the parties that such allocation shall be an allocation of fixed rent
within the meaning of Treas. Reg. (S)1.467-1(c)(2)(ii). If, with respect to any
month, the Basic Rent due and allocable with respect to such month is for a
period of days less than the full number of days in such month, the Basic Rent
due for such month shall be pro rated to an amount equal to the Basic Rent
specified for such month multiplied by a fraction the numerator of which is the
number of days this Lease is in effect for such month and the denominator of
which is the number of days in such month.

Section 3.2  Additional Rent. Basic Rent shall be absolutely net to
---------------
Lessor so that this Lease shall yield, net to Lessor, the Basic Rent specified
in Section 3.1 in each year of the Lease Term and that all ad valorem real
estate taxes, impositions, insurance premiums, utility charges, maintenance,
repair and replacement expenses, all expenses relating to compliance with
Applicable Laws and Regulations, and all other costs, fees, charges, expenses,
reimbursements and obligations of every kind and nature whatsoever relating to
the Property which may arise or become due during the Lease Term shall be paid
or discharged by Lessee, subject to the rights of Lessee set forth in Section
9.9 hereof. In the event Lessee fails to pay or discharge any imposition, ad
valorem real estate taxes, insurance premium, utility charge, maintenance,
repair or replacement expense or any expense related to compliance with
Applicable Laws and Regulations which it is obligated to pay or discharge,
Lessor may, but shall not be obligated to, pay the same, and in that event
Lessee shall promptly reimburse Lessor therefor and pay the same, together with
interest thereon at the Overdue Rate computed from the date of payment of such
cost to the date of reimbursement, as additional rent (all such items, together
with any other amounts that the Lessee agrees to pay or discharge hereunder,
being sometimes hereinafter collectively referred to as "Additional Rent").
---------------

Section 3.3  Method of Payment. Basic Rent shall be paid to the Lessor
-----------------
at such place as Lessor shall specify in writing to the Lessee from time to time
(but in any event not less than five (5) Business Days prior to the due date
therefor). Each payment of Basic Rent shall be made by the Lessee by wire
transfer of funds consisting of lawful currency of the United States of America
which funds shall be immediately available prior to 1:00 p.m., local time, at
the place of payment on the scheduled date when such payment shall be due,
unless such scheduled date shall not be a Business Day, in which case such
payment shall be made on the next succeeding Business Day, with the same force
and effect as though made on such scheduled date and (provided such payment is
made by 1:00 p.m., local time, on such next succeeding Business Day) no interest
shall accrue on the amount of such payment from and after such scheduled date to
the time of such payment on such next succeeding Business Day.

Section 3.4  Late Payment. If any Basic Rent shall not be paid when
------------
due, the Lessee shall pay to the Lessor as Additional Rent, interest (to the
maximum extent permitted by law) on such overdue amount from and including the
due date thereof to but excluding the Business Day of payment thereof (unless
such payment shall be made after 1:00 p.m., local time, on such date of payment,
in which case such date of payment shall be included) at the Overdue Rate, plus
any penalty or late charge payable to Lender (or that would have been payable to
Lender but for an advance of funds by the Lessor) under the Loan, plus interest
(to the maximum extent permitted by law) thereon at the Overdue Rate. If any
Basic Rent shall be paid on the date when due, but after

2

1:00 p.m., local time, at the place of payment, interest shall be payable as
aforesaid for one day at the Overdue Rate.

Section 3.5  Net Lease; No Setoff; Etc. This Lease is a net lease and,
-------------------------
notwithstanding any other provision of this Lease, it is intended that Basic
Rent shall be paid without counterclaim, setoff, deduction or defense and
without abatement, suspension, deferment, diminution or reduction, and Lessee's
obligation to pay all such amounts, throughout the Basic Term and all applicable
Renewal Terms, is absolute and unconditional. Except to the extent otherwise
expressly specified in Articles VI and XIV of this Lease, the obligations and
liabilities of the Lessee hereunder shall in no way be released, discharged or
otherwise affected for any reason, including without limitation: (a) any defect
in the condition, merchantability, design, quality or fitness for use of the
Property or any part thereof, or the failure of the Property to comply with all
Applicable Laws and Regulations, including any inability to occupy or use the
Property by reason of such non-compliance; (b) any damage to, removal,
abandonment, salvage, loss, contamination of or Release at or from, destruction
of or any requisition or taking of the Property or any part thereof; (c) any
restriction, prevention or curtailment of or interference with any use of the
Property or any part thereof including eviction; (d) any defect in title to or
rights to the Property or any Lien on such title or rights on the Property; (e)
any change, waiver, extension, indulgence or other action or omission or breach
in respect of any obligation or liability of or by the Lessor; (f) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceedings relating to the Lessee, the Lessor, or any
other Person, or any action taken with respect to this Lease by any trustee or
receiver of the Lessee, the Lessor or any other Person, or by any court, in any
such proceeding; (g) any claim that the Lessee has or might have against any
Person, including without limitation the Lessor, any vendor, manufacturer,
contractor of or for the Property or any Improvements; (h) any invalidity or
unenforceability or disaffirmance of this Lease against or by the Lessee or any
provision hereof or any of the other Operative Documents or any provision of any
thereof; (i) the impossibility of performance by Lessor, the Lessee or both; (j)
any action by any court, administrative agency or other Governmental Authority;
(k) any environmental condition affecting the Property; or (l) any other
occurrence whatsoever, whether similar or dissimilar to the foregoing, whether
or not the Lessee shall have notice or knowledge of any of the foregoing. Except
as specifically set forth herein, this Lease shall be noncancellable by the
Lessee for any reason whatsoever and, except as expressly provided in this
Lease, the Lessee, to the extent permitted by Applicable Laws and Regulations,
waives all rights now or hereafter conferred by statute or otherwise to quit,
terminate or surrender this Lease, or to any diminution, abatement or reduction
of Rent payable by the Lessee hereunder. If for any reason whatsoever this Lease
shall be terminated in whole or in part by operation of law or otherwise, except
as expressly provided in this Lease, the Lessee shall, unless prohibited by
Applicable Laws and Regulations, nonetheless pay to the Lessor an amount equal
to each Basic Rent and Additional Rent payment at the time and in the manner
that such payment would have become due and payable under the terms of this
Lease if it had not been terminated in whole or in part, and in such case, so
long as such payments are made and no Lease Event of Default shall have occurred
and be continuing the Lessor will deem this Lease to have remained in effect.
The Lessee assumes the sole responsibility for the condition, use, operation,
maintenance and management of the Property, and the Lessor shall have no
responsibility in respect thereof and shall have no liability for damage to the
Property to the Lessee or any subtenant of the Lessee on any account or for any
reason whatsoever other than by reason of the Lessor's willful misconduct or
gross negligence or breach of any of its obligations under any Operative
Document.

3

Section 3.6  Rent after Failure to Vacate Property. In the event that
-------------------------------------
the Lessee remains in possession of the Property after the expiration or earlier
termination of this Lease, and without the Lessor's consent (unless the Property
has been acquired by the Lessee and the Lessee has fully paid for the same in
accordance with the provisions hereof), the Lessee shall be deemed to be
occupying the Property as a tenant at sufferance. Any such occupancy by the
Lessee shall be subject to all of the terms, covenants and conditions of this
Lease, including without limitation the obligation to pay Additional Rent,
insofar as the same are applicable to such a tenancy, except that (i) the Lessee
shall pay Basic Rent to the Lessor, payable in arrears on the last Business Day
of each month, for each day (or any portion thereof) that such occupancy shall
continue, in an amount per diem equal to 150% of the average daily Basic Rent
payable during the 12 months ending on the last day of the Lease Term and (ii)
the Lessee shall not have the right to make any Alterations unless required by
Applicable Laws and Regulations. Basic Rent shall be payable in the manner
provided in Section 3.3 for payments of Basic Rent. The provisions of this
Section shall not be deemed to grant to the Lessee the right to, or otherwise be
deemed to, extend the Lease Term beyond the expiration or earlier termination of
this Lease. Neither the payment by the Lessee to the Lessor nor the acceptance
by the Lessor from the Lessee of any amount in payment for the Lessee's
occupancy of the Property beyond the expiration or earlier termination of this
Lease shall (a) be deemed to convert the Lessee's occupancy into any interest
other than a tenancy at sufferance, (b) revoke or otherwise impair the validity
of any notice to quit or ejectment notice or proceeding or similar proceeding
terminating this Lease and Lessee's rights of possession hereunder that the
Lessor may have served or commenced, or (c) prohibit or otherwise impair the
Lessor's right to immediately obtain an order of ejectment or possession against
the Lessee. The Lessee irrevocably waives the benefit of Applicable Laws and
Regulations that may grant to the Lessee any rights inconsistent with the
provisions of this Section. The provisions of this Section do not waive Lessor's
right of re-entry or right to regain possession by actions at law or in equity
or any other rights hereunder, and any receipt of payment by Lessor shall not be
deemed a consent by Lessor to the Lessee's remaining in possession or be
construed as creating or renewing any lease or right of tenancy between Lessor
and Lessee.

ARTICLE IV

GENERAL TAX INDEMNITY
---------------------

Section 4.1  Indemnity. Except as provided in Section 4.2 below, the
---------
Lessee agrees (but, in all events, without duplication of indemnities) to
indemnify on an After-Tax Basis each of the Lessor, the Lessor Parent, their
successors and assigns, the agents, directors, officers and employees of the
foregoing, (each, together with any Affiliate thereof, a "Tax Indemnitee"), and
to hold each Tax Indemnitee harmless from and to defend each Tax Indemnitee
against all Taxes that are actually imposed upon any Tax Indemnitee, the
Property or any portion thereof or any interest therein, or upon any Operative
Document or interest therein, or otherwise arising out of, in connection with or
relating to, any of the following:

4

(i)    the acceptance, rejection, delivery, construction,
financing, refinancing, acquisition, operation, warranty, ownership,
possession, maintenance, repair, lease, condition, alteration,
modification, restoration, refurbishing, rebuilding, return,
repossession, servicing, abandonment, retirement, preparation,
replacement, purchase, sale or other disposition, insuring, sublease,
any other use or non-use of, or the imposition of any lien (or the
incurrence of any liability to refund or pay over any amount as a
result of any lien) on, the Property or any portion thereof or any
interest therein;

(ii)   the conduct of the business or affairs of the Lessee or
any other operator at or in connection with the Property;

(iii)  the Property or any portion thereof or interest therein or
the applicability of the Lease to the Property;

(iv)   the manufacture, design, purchase, acceptance, rejection,
delivery, non-delivery or redelivery or condition of, or improvement
to, the Property, or any portion thereof, or any interest therein;

(v)    the Lease or any other Operative Document, the execution
or delivery thereof, any other documents contemplated thereby or the
performance, enforcement or amendment of any terms thereof;

(vi)   the payment or receipt of Basic Rent, Additional Rent or
any other payment under the Lease or the other Operative Documents

(vii)  the conveyance of title to the Property; or

(viii) otherwise relating to the transactions contemplated by the
Operative Documents;

Section 4.2  Excluded Taxes. The indemnity provided for in Section 4.1
--------------
above shall be subject to exclusion for Taxes that are attributable to or arise
as a result of any of the following (the "Excluded Taxes"):

(i)    Taxes imposed on, based on or measured by gross or net
income or receipts, capital, franchise, net worth or "doing business"
taxes, in each case whether paid directly or by means of withholding,
other than, in each case, (x) Taxes that are or are in the nature of
sales, use, rental, value added, ad valorem, property, or similar
taxes and (y) the Michigan Single Business Tax for any taxable year
beginning after the sixth anniversary of the Closing Date but only up
to a maximum of $26,927 for any such taxable year;

(ii)   Taxes attributable to any period after expiration or other
termination of the Lease Term and the payment in full of all amounts
payable by the Lessee under the Operative Documents;

5

(iii)  Taxes imposed on a Tax Indemnitee attributable to the
gross negligence or willful misconduct of such Tax Indemnitee or any
Affiliate thereof unless such negligence or misconduct is imputed to
such Tax Indemnitee or Affiliate solely as a result of its
participation in the transactions contemplated by the Operative
Documents and not as a result of any action or inaction by such Tax
Indemnitee or Affiliate;

(iv)   Taxes in the nature of capital gain, accumulated earnings,
personal holding company, excess profits, succession or estate,
minimum, alternative minimum, preference, franchise, conduct of
business and other similar taxes, other than, in each case, Taxes that
are or are in the nature of sales, use, rental, value added, ad
valorem, property or similar taxes;

(v)    Taxes imposed on a Tax Indemnitee that arise out of, or
are caused by, any act or omission of such Tax Indemnitee (or any
Affiliate thereof) that is expressly prohibited by the Operative
Documents or by a breach by such Tax Indemnitee (or any Affiliate
thereof) of any of its representations, warranties or covenants under
any Operative Document except to the extent attributable to any breach
by the Lessee of any covenant, representation or warranty contained in
any Operative Document;

(vi)   Taxes arising out of, or caused by, (i) any voluntary
assignment, sale, transfer or other disposition (except incremental ad
valorem, property, or similar taxes that arise due to the price or
terms of an assignment or transfer itself) or (ii) any involuntary
assignment, sale, transfer or other disposition resulting from a
bankruptcy or similar proceeding for relief of debtors in which such
Tax Indemnitee is a debtor or a foreclosure by a creditor of the Tax
Indemnitee of (A) the Lessor Parent of any of its interest in the
Lessor or (B) the Lessor of all or any of its interest in the Property
unless, in each case, such assignment, sale, transfer or other
disposition (1) occurs during the continuance of a Lease Event of
Default, (2) occurs pursuant to a casualty, or the Lessee's exercise
of a right under the Operative Documents, (3) results from any merger
or consolidation of the Lessee or (4) results from any sublease,
assignment, rebuilding, modification, substitution, improvement,
replacement or addition of or to the Property by the Lessee but only
if the Lessor has not consented to such action under the relevant
provision of the Lease, if such consent is required.

(vii)  Taxes that would not have arose but for the creation of or
the existence of Lessor Parent's Liens or Lessor's Liens;

(viii) Taxes imposed on any assignee or successor-in-interest to
a Tax Indemnitee to the extent any such Taxes exceed the Taxes that
would have been imposed had no assignment or transfer taken place
determined under the law as in effect on the date of transfer
(excluding however, any such incremental ad valorem, property or
similar taxes that arise due to the price or terms of the assignment
or transfer itself);

6

(ix)   Taxes that are included as a part of the Lessor's Purchase
Price;

(x)    With respect to the Lessor Parent, Taxes for which the
Lessee is obligated to indemnify the Lessor Parent under the Tax
Indemnity Agreement (or which are expressly excluded from
indemnification thereunder);

(xi)   Taxes attributable to the failure of the Tax Indemnitee to
comply with certification, information, documentation, reporting or
other similar requirements concerning the nationality, residence,
identity, connection with the jurisdiction imposing such Taxes or
other similar matters, provided that the foregoing exclusion shall
--------
apply only such Tax Indemnitee is eligible to comply with such
requirement, the Lessee shall have given such Tax Indemnitee timely
written notice of such requirement and the Tax Indemnitee shall have
determined in good faith that compliance with any such requirement
shall not result in any identified non-immaterial adverse effect to
its interests or to those of its Affiliates provided further, however
-------------------------
that the immediately preceding proviso shall not apply if such
certification, information, documentation, reporting or other similar
requirements are required by law or regulation;

(xii)  Taxes imposed on a Tax Indemnitee where the Tax
Indemnitee's breach of its contest obligations under Section 4.7
hereof effectively precludes the Lessee's ability to contest the
Taxes;

(xiii) Taxes to the extent imposed on any Tax Indemnitee
resulting from an amendment, modification, supplement or waiver to any
Operative Document which was not requested by the Lessee and as to
which the Lessee is not a party and the Tax Indemnitee (or any
Affiliate thereof) is a party unless such amendment, modification,
supplement or waiver (A) was required by Applicable Law or the
Operative Documents, (B) may be necessary or appropriate to, and is in
conformity with, any amendment to any Operative Document requested by
the Lessee in writing or required by Applicable Law, (C) is made while
a Lease Event of Default shall have occurred and be continuing or (D)
was expressly consented to by the Lessee or any of its Affiliates in
writing; and

(xiv)  Taxes imposed under Section 4975 of the Code or under
subtitle B of Title I of ERISA.

Section 4.3  Payment. Each payment required to be made by the Lessee
-------
to a Tax Indemnitee pursuant to this Section 4 shall be paid either (i) when due
directly to the applicable taxing authority by the Lessee if it is permitted to
do so, or (ii) where direct payment is not permitted and with respect to gross
up amounts, in immediately available funds to such Tax Indemnitee by the later
of (A) 30 days following the Lessee's receipt of the Tax Indemnitee's written
demand for the payment (which demand shall be accompanied by a statement of the
Tax Indemnitee describing in reasonable detail the Taxes for which the Tax
Indemnitee is demanding indemnity and the computation of such Taxes), (B)
subject to Section 4.7 below, in the case of amounts which are being contested
pursuant to such Section 4.7, at the time and in accordance with a Final
Determination of such contest or (C) in the case of any indemnity demand for
which the

7

Lessee has requested review and determination pursuant to Section 4.4 below, the
completion of such review and determination; provided, however, in no event
later than the date which is five Business Days prior to the date on which such
Taxes are required to be paid to the applicable taxing authority. Any amount
payable to the Lessee pursuant to Section 4.5 or Section 4.6 below shall be paid
promptly after the Tax Indemnitee realizes (or is deemed to realize) a Tax
Benefit giving rise to a payment under Section 4.5 or receives a refund or
credit giving rise to a payment under Section 4.6, as the case may be, and shall
be accompanied by a statement of the Tax Indemnitee computing in reasonable
detail the amount of such payment. Any amount that would be payable to the
Lessee pursuant to Section 4.5 or Section 4.6 below but for the fact that such
amount would be in excess of the amount of indemnity(ies) previously paid to the
Tax Indemnitee by the Lessee may be used as an offset against any future general
tax indemnity payments owed by the Lessee to such Tax Indemnitee. Upon the Final
Determination of any contest pursuant to Section 4.7 below in respect of any
Taxes for which the Lessee has made a Tax Advance (as defined in Section 4.7
below), the amount of the Lessee's obligation under Section 4.1 above shall be
determined as if such Tax Advance had not been made. Any obligation of the
Lessee under this Section 4 and the Tax Indemnitee's obligation to repay the Tax
Advance will be satisfied first by set off against each other, and any
difference owing by either party will be paid within 10 days of such Final
Determination.

Section 4.4  Independent Examination. Within 15 days after the Lessee
-----------------------
receives any computation from a Tax Indemnitee (pursuant to Section 4.3 above),
the Lessee may request in writing that an independent public accounting firm
selected jointly by the Lessee and the Tax Indemnitee review and determine on a
confidential basis the amount of any indemnity payment by the Lessee to the Tax
Indemnitee pursuant to this Section 4 or any payment by a Tax Indemnitee to the
Lessee pursuant to Section 4.5 or Section 4.6 below. The Tax Indemnitee shall
cooperate with such accounting firm and supply it with all information (other
than income tax returns) reasonably necessary for the accounting firm to conduct
such review and determination provided, that such accounting firm shall agree in
writing in a manner satisfactory to the Tax Indemnitee to maintain the
confidentiality of such information. The parties hereto agree that the
independent public accounting firm's sole responsibility shall be to verify the
computation of any payment pursuant to this Section 4 and that matters of
interpretation of law or of this Lease or any other Operative Document are not
within the scope of the independent accountant's responsibility. The fees and
disbursements of such accounting firm will be paid by the Lessee; provided that
such fees and disbursements will be paid by the Tax Indemnitee if the
verification results in an adjustment in the Lessee's favor of five percent or
more of the indemnity payment or payments computed by the Tax Indemnitee
(calculated using a discount rate of seven percent). The determination of the
accounting firm shall be final, binding and conclusive on both the Tax
Indemnitee and the Lessee. Such accounting firm shall be requested to make its
determination within 20 days.

Section 4.5  Tax Benefit. If, as the result of any Taxes paid or
-----------
indemnified against by the Lessee under this Section 4, the aggregate Taxes
payable by the Tax Indemnitee in connection with such payment for any taxable
period are less (whether by reason of a deduction, credit, allocation or
apportionment of income or otherwise and computed on the basis of the highest
generally applicable Tax rates applicable) than the amount of such Taxes that
otherwise would have been payable by such Tax Indemnitee (a "Tax Benefit"), then
-----------
to the extent such Tax Benefit was not taken into account in determining the
amount of indemnification payable under Section 4.1 above and provided no Lease
Event of Default shall have occurred and be continuing (in which

8

event the payment provided under this Section 4.5 shall be deferred until the
Lease Event of Default has been cured), such Tax Indemnitee shall pay to the
Lessee the lesser of (A) (y) the amount of such Tax Benefit, plus (z) an amount
equal to any United States Tax benefit actually realized by such Tax Indemnitee
as a result of the payment under clause (y) above and this clause (z) (such
benefit to be determined on the basis of the highest generally applicable Tax
rates applicable) and (B) the amount of the indemnity(ies) paid pursuant to this
Section 4 giving rise to such Tax Benefit. If it is subsequently determined that
the Tax Indemnitee was not entitled to such Tax Benefit, the portion of such Tax
Benefit that is required to be repaid or recaptured will be treated as Taxes for
which the Lessee shall indemnify the Tax Indemnitee pursuant to this Section 4
without regard to Section 4.2 (except Section 4.2(iii)).

Section 4.6  Refund. If a Tax Indemnitee obtains a refund or credit of
------
all or part of any Taxes paid, reimbursed or advanced by the Lessee pursuant to
this Section 4, the Tax Indemnitee promptly shall pay to the Lessee (x) the
amount of such refund or credit plus (y) an amount equal to any Tax benefit
actually realized by such Tax Indemnitee as a result of the payments to the
Lessee under clause (x) above and this clause (y) (such amounts to be determined
on the basis of the highest generally applicable Tax rates applicable), provided
that (A) if at the time such payment is due to the Lessee a Lease Event of
Default shall have occurred and be continuing, such amount shall not be payable
until such Lease Event of Default has been cured and (B) the aggregate amount
payable to the Lessee pursuant to this sentence shall not exceed the aggregate
amount of the indemnity(ies) paid pursuant to Section 4.3. If it is subsequently
determined that the Tax Indemnitee was not entitled to such refund or credit,
the portion of such refund or credit that is required to be repaid or recaptured
will be treated as Taxes for which the Lessee shall indemnify the Tax Indemnitee
pursuant to this Section 4 without regard to Section 4.2 (except Section
4.2(iii)). If, in connection with a refund or credit of all or part of any Taxes
paid, reimbursed or advanced by the Lessee pursuant to this Section 4, a Tax
Indemnitee receives an amount representing interest on such refund or credit,
the Tax Indemnitee promptly shall pay to the Lessee (1) the amount of such
interest that shall be fairly attributable to such Taxes paid, reimbursed or
advanced by the Lessee prior to the receipt of such refund or credit net of any
Taxes incurred on such interest and (2) any Tax savings realized by such Tax
Indemnitee as a result of the payments made by the Tax Indemnitee under (1) and
(2) (such benefit to be determined on the basis of the highest generally
applicable Tax rates applicable).

Section 4.7  Contest.
-------

(i)  Notice of Contest. If a written claim for payment is made by
any taxing authority against a Tax Indemnitee for any Taxes with
respect to which the Lessee may be liable for indemnity hereunder (a
"Tax Claim"), such Tax Indemnitee shall give the Lessee written notice
of such Tax Claim promptly after its receipt, and shall furnish the
Lessee with copies of such Tax Claim and all other writings received
from the taxing authority to the extent relating to such claim,
provided that failure so to notify the Lessee shall not relieve the
--------
Lessee of any obligation to indemnify the Tax Indemnitee hereunder
except to the extent that such failure effectively precludes the
ability to conduct a contest hereunder. The Tax Indemnitee shall not
pay such Tax Claim until at least 30 days after providing the Lessee
with such written notice, unless required to do so by law or
regulation.

9

(ii)  Control of Contest. Subject to Section 4.7(iii) below, the
Lessee will be entitled to contest (acting through counsel selected by
the Lessee and reasonably acceptable to the Tax Indemnitee), and
control the contest of, any Tax Claim if (i) the contest of the Tax
Claim may be pursued in the name of the Lessee; (ii) the contest of
the Tax Claim must be pursued in the name of the Tax Indemnitee but
can be pursued independently from any other proceeding involving a tax
liability of such Tax Indemnitee for which the Lessee is not
responsible (with the Tax Indemnitee agreeing to use reasonable
efforts to sever the contest of any indemnified Tax from the contest
of any unindemnified Tax so that the Lessee can control the contest of
the indemnified Tax), or (iii) the Tax Indemnitee requests that the
Lessee control such contest. In the case of all other Tax Claims,
subject to Section 4.7(iii) below, the Tax Indemnitee will contest the
Tax Claim if the Lessee shall request that the Tax be contested, and
the following rules shall apply with respect to such contest:

(1) the Tax Indemnitee will control the contest of such Tax
Claim in good faith (acting through counsel selected by the Tax
Indemnitee and reasonably acceptable to the Lessee),

(2) at the Lessee's written request, if payment is made to
the applicable taxing authority, the Tax Indemnitee shall use all
reasonable efforts to obtain a refund thereof in appropriate
administrative or judicial proceedings, and

(3) the Tax Indemnitee shall not otherwise settle,
compromise or abandon such contest without the Lessee's prior written
consent except as provided in Section 4.7(iv) below.

In either case, the party conducting such contest shall consult with and keep
reasonably informed the other party and its designated counsel with respect to
such Tax Claim, shall provide the other party with copies of any reports or
claims issued by the relevant auditing agents or taxing authority as well as
redacted portions of tax returns, and shall consider and consult in good faith
with the other party regarding any request (a) to resist payment of Taxes if
practical and (b) not to pay such Taxes except under protest if protest is
necessary and proper (but the decision regarding what actions are to be taken
shall be made by the controlling party in its sole judgment; provided, however,
--------  -------
that (subject to Section 4.7(iv) below) if the Tax Indemnitee is the controlling
party, such Tax Indemnitee may not settle the contest without the consent of the
Lessee).

(iii) Conditions of Contest. Notwithstanding the foregoing, in no
event shall the Lessee be permitted or a Tax Indemnitee be required to
contest (or to continue the contest of) any Tax Claim, unless:

(1) within 30 days after notice by the Tax Indemnitee to
the Lessee of such Tax Claim, the Lessee shall request in writing to
the Tax Indemnitee that such Tax Claim be contested; provided that if
a shorter period is required for taking action with respect to such
Tax Claim and the Tax Indemnitee notifies the Lessee of such
requirement, the Lessee shall use reasonable efforts to request such
contest within such shorter period,

10

(2) no Lease Default or Lease Event of Default has occurred
and is continuing,

(3) there is (i) no realistic risk of sale, forfeiture or
loss of, or the creation of a Lien on the Lessor's or Lessor Parent's
interest in the Property or any material portion thereof or any
interest therein (other than a Permitted Lien) and (ii) no risk of the
imposition of criminal penalties as a result of such Tax Claim;
provided that clause (3)(i) shall not apply if the Tax is fully paid
in either manner specified in clause (4) below or the Lessee posts
security satisfactory to the Tax Indemnitee,

(4) if such contest involves payment of such Tax, the
Lessee will either advance to the Tax Indemnitee on an interest-free
basis and at no after tax cost to such Tax Indemnitee (a "Tax
---
Advance") or pay such Tax Indemnitee the amount payable by the Lessee
-------
pursuant to Section 4.1 above with respect to such Tax,

(5) the Lessee agrees to pay (and pay on demand) and at no
after tax cost to such Tax Indemnitee all reasonable costs and
expenses incurred by the Tax Indemnitee in connection with the contest
of such claim (including all reasonable legal fees and disbursements),

(6) the Tax Indemnitee has been provided at the Lessee's
sole expense with an opinion of independent tax counsel selected by
the Lessee and reasonably acceptable to the Tax Indemnitee to the
effect that there is a Reasonable Basis for contesting such Tax Claim,

(7) the amount of Taxes in controversy, taking into account
the amount of all similar and logically related Taxes with respect to
the transactions contemplated by the Operative Documents that could be
raised in any other year (including any future year) not barred by the
statute of limitations, exceeds $30,000,

(8) the Lessee shall acknowledge in writing its liability
to indemnify the Tax Indemnitee hereunder in respect of such claim if
the contest is not successful, provided that such acknowledgment of
--------
liability shall not be binding if the contest is resolved on a basis
from which it can be established that the Lessee would not be required
to indemnify the Tax Indemnitee under this Section 4 in the absence of
such acknowledgment, and

(9) in the case of a judicial appeal, no appeal to the U.S.
Supreme Court shall be required of the Tax Indemnitee or shall be
permitted by the Lessee.

(iv)  Waiver of Indemnification. Notwithstanding anything to the
contrary contained in this Section 4, the Tax Indemnitee at any time
may elect to decline to take any action or any further action with
respect to a Tax Claim and may in its sole discretion settle or
compromise any contest with respect to such Tax Claim without the
Lessee's consent if the Tax Indemnitee:

11

(1) waives its right to any indemnity payment by the Lessee
pursuant to this Section 4 in respect of such Tax Claim (and any other
claim for Taxes with respect to any other taxable year the contest of
which is effectively precluded by the Tax Indemnitee's decision not to
take (or not to take any further) action with respect to the Tax
Claim), and

(2) promptly repays to the Lessee any Tax Advance and any
amount paid to such Tax Indemnitee under Section 4.1 above in respect
of such Taxes, but not any costs or expenses with respect to any such
contest.

Except as provided in the preceding sentence, any such waiver shall be without
prejudice to the rights of the Tax Indemnitee with respect to any other Tax
Claim.

Section 4.8  Reports. If any report, statement or return is required
-------
to be filed by a Tax Indemnitee with respect to any Tax that is subject to
indemnification under this Section 4, the Lessee will (1) notify the Tax
Indemnitee in writing of such requirement not later than 30 days prior to the
date such report, statement or return is required to be filed (determined
without regard to extensions) and (2) if so directed by the Tax Indemnitee and
if the return to be filed reflects only information in respect of the
transactions contemplated by the Operative Documents, prepare and furnish to
such Tax Indemnitee not later than 30 days prior to the date such report,
statement or return is required to be filed (determined without regard to
extensions) a proposed form of such report, statement or return for filing by
the Tax Indemnitee. Each Tax Indemnitee and the Lessee will timely provide the
other with all information in its possession that the other party may reasonably
require and request to satisfy its obligations under this Section 4.

Section 4.9  Non-Parties. If a Tax Indemnitee is not a party to this
-----------
Agreement, the Lessee may require such Tax Indemnitee to agree in writing, in a
form reasonably acceptable to the Lessee, to the terms of this Section 4 prior
to making any payment to such Tax Indemnitee under this Section. Subject to the
preceding sentence, the Lessee's obligations under this Section 4 shall inure to
the benefit of each and every Tax Indemnitee without regard to whether such Tax
Indemnitee is a party to this Agreement.

ARTICLE V

RENEWAL OPTIONS
---------------

Section 5.1  Fixed Rate Renewal Term. Upon the expiration of the Basic
-----------------------
Term, Lessee shall have the right and option, subject to the terms of this
Article 5, to extend the Lease Term for five (5) successive fixed rate renewal
terms (each such renewal term, a "Fixed Rate Renewal Term") of five (5) years
-----------------------
each commencing immediately following the expiration of the Basic Term or the
previous Fixed Rate Renewal Term, as the case may be.

Section 5.2  FMV Renewal Terms. Upon the expiration of the Basic Term
-----------------
and the last Fixed Rate Renewal Term, Lessee shall have the right and option,
subject to the terms of this Article 5, to extend the Lease Term for one (1)
successive fair market value renewal period of five (5) years (the "FMV Renewal
-----------
Term"; each Fixed Rate Renewal Term and the FMV Renewal Term shall be
----
collectively referred to as the "Renewal Terms").
-------------

12

Section 5.3  Conditions to Renewal Terms. The right and option of
---------------------------
Lessee to extend this Lease for any of the Renewal Terms shall be subject to the
following terms:

(i)   At the commencement of any of the Renewal Terms, this Lease
shall be in full force and effect and no Material Lease Default or
Lease Event of Default shall have occurred and be continuing;

(ii)  Lessee shall have exercised its right to each Fixed Rate
Renewal Term by giving irrevocable written notice to the Lessor no
later than twelve (12) months prior to the expiration of the Basic
Term or the previous Fixed Rate Renewal Term; and

(iii) Lessee shall have exercised its right to each FMV Renewal
Term by giving irrevocable written notice to Lessor no later than
fifteen (15) months prior to the expiration of the Basic Term or the
then current Renewal Term; and

(iv)  Each Renewal Term shall be on the same terms, covenants and
conditions set forth in this Lease; provided, however, that Basic Rent
--------  -------
shall be determined in the manner set forth in Section 5.4 hereof.

Section 5.4  Rent During Renewal Terms. (a) (a) Basic Rent for each
-------------------------
Rent Payment Date during the first two (2) Fixed Rate Renewal Terms shall be
payable monthly in advance and in the amounts and on the day of each month that
Basic Rent was due during the last year of the Basic Term. Basic Rent for each
Rent Payment Date during each Fixed Rate Renewal Term after the first two (2)
Fixed Rate Renewal Terms shall be payable monthly in advance on the day of each
month that Basic Rent was due during the last year of the Basic Term and in the
amount of 105% of Basic Rent that was due during the last year of the
immediately preceding Fixed Rate Renewal Term.

(b)  Basic Rent for each FMV Renewal Term shall be the Fair Market
Rental Value of the Property as of the date of commencement of such FMV Renewal
Term, determined in accordance with the Appraisal Procedure not more than two
hundred seventy (270) days prior to the commencement of such FMV Renewal Term
payable monthly in advance on the day of each month that Basic Rent was due
during the last year of the Basic Term or of the preceding Renewal Term, as the
case may be.

ARTICLE VI

EARLY TERMINATION
-----------------

Section 6.1  Obsolescence Termination. So long as no Lease Event of
------------------------
Default has occurred and is continuing, the Lessee shall have the right, on the
terms and subject to the conditions contained in this Section 6.1, at its option
at any time during the period commencing on the date which is the first day of
the eleventh (11th) lease year and ending on the date that is at least fifteen
(15) months prior to expiration of the Basic Term, on at least one hundred
twenty (120) days' irrevocable (subject to the second succeeding paragraph)
prior written notice (a "Notice of Termination") to the Lessor, to terminate
---------------------
this Lease on any Rent Payment Date (the "Termination
-----------

13

Date"), if the Property shall have become Obsolete or if Lessee shall have made
----
a good faith determination, such good faith determination to be evidenced by an
Officer's Certificate delivered to the Lessor, to the effect that disposition of
the Property is necessary or advisable for purposes of complying with Applicable
Laws and Regulations. In connection with and at the time of delivery of any
Notice of Termination, Lessee shall notify Lessor of its election to (x) make a
rejectable offer to cause the Property to be sold as hereinafter provided or (y)
make a termination payment equal to an amount equal to the sum of the remaining
Basic Rent Payments that would have been due to the Lessor through the Basic
Term had this lease continued in full force and effect from the Termination Date
to the end of such Basic Term (the "Basic Term Rent Amount").

If the Lessee shall have chosen the option described in clause (x)
above, in connection with and at the time of delivery of any Notice of
Termination, Lessee shall deliver to Lessor an appraisal of the then-current
Fair Market Sales Value of the Property free and clear of the Lease (the
"Appraisal") determined in accordance with the Appraisal Procedure. During the
period commencing on the date of receipt by Lessor of the Notice of Termination
and ending on the date on which Lessor is no longer entitled to provide a
Retention Election, the Lessor, but not the Lessee, shall be entitled, directly
or through one or more agents, to seek bids for the sale of the Property. During
the period commencing with the date on which the Lessor is no longer entitled to
provide a Retention Election until the Termination Date, the Lessee, as
non-exclusive agent for the Lessor, shall undertake on behalf of the Lessor to
obtain cash bids for the purchase of the Property. Prior to solicitation of any
such bids, the Lessee and the Lessor shall agree on a form of contract of
purchase relating to the Property acceptable to the Lessor. The Lessee may use a
third party as its agent in connection with any such sale. In connection with so
acting as Lessor's agent, Lessee may, by written notice to Lessor delivered no
less than fifteen (15) days after expiration of the period during which Lessor
is entitled to provide a Retention Election, extend the Termination Date to any
Rent Payment Date not more than two hundred seventy (270) days from the
Termination Date initially designated in the Notice of Termination. The Lessee
shall certify to the Lessor in writing the amount and terms of each bid received
by the Lessee and the name and address of the Person submitting a bid (which
Person shall not be the Lessee, any Affiliate of the Lessee, or any Person with
an agreement to allow Lessee or any Affiliate of Lessee to use the Property at
any time during the three (3) year period following any such termination but may
be the Lessor). Unless Lessor should have delivered a Retention Election, on the
Termination Date (subject to receipt of the net sales price and all additional
payments and instruments specified in the next succeeding sentence), (i) the
Lessee shall deliver possession of the Property to such highest bidder, and (ii)
the Lessor shall, on an "as is, where is" basis and without recourse to or
warranty by the Lessor, except as to the absence of Lessor Liens and subject to
the same disclaimers as set forth in Section 7.1, simultaneously therewith sell
the Property to such highest bidder, the total net selling price realized at
such sale to be retained by the Lessor. In addition, on the Termination Date,
the Lessee shall deliver to Lessor an instrument in which Lessee agrees not to,
and not to permit any Affiliate to, directly or indirectly use the Property
during the three (3) year period following the Termination Date and shall pay to
the Lessor the sum of (A) the excess, if any, of the Termination Value
determined as of the Termination Date over the net sales price of the Property
paid to the Lessor pursuant to the preceding sentence, plus (B) all accrued and
unpaid Basic Rent as of the Termination Date, if any, plus (C) any Make-Whole
Amount, plus (D) any Additional Rent then accrued and unpaid as of the
Termination Date.

14

Notwithstanding the foregoing, the Lessor may elect to retain, rather
than sell, its interest in the Property by giving irrevocable notice to that
effect to the Lessee provided that such irrevocable notice (a "Retention
--------                                  ---------
Election") is given no later than one hundred twenty (120) days after the
--------
receipt of the Notice of Termination. If the Lessor elects to retain its
interest in the Property pursuant to this paragraph, on the Termination Date the
Lessee shall deliver possession of the Property to Lessor or Lessor's designee
and the Lessee shall pay to the Lessor or to whoever is entitled thereto, on the
scheduled Termination Date, the amount set forth in clauses (B) and (D) of the
preceding paragraph.

If the Lessee shall have chosen the option described in clause (y) of
the first paragraph of this Section 6.1, on the Termination Date (i) the Lessee
shall deliver possession of the Property to the Lessor, (ii) the Lessee shall
pay to the Lessor the Basic Term Rent Amount, plus all accrued and unpaid Basic
Rent as of the Termination Date, if any, plus any Additional Rent accrued and
unpaid as of the Termination Date and (iii) upon delivery of the Property to the
Lessor and payment of the amount set forth in clause (ii) above, this Lease
shall terminate.

Anything in this Section 6.1 to the contrary notwithstanding, the
Lessee shall have the right to revoke any Notice of Termination in which the
Lessee chose the option described in clause (x) of the first paragraph of this
Section 6.1 on not more than two (2) occasions during the Lease Term if, with
respect to each such occasion, during the period in which the Lessee had the
right to serve as agent for the Lessor to obtain cash bids either (i) there were
no cash bids or (ii) all such cash bids were for an amount less than 90% of the
Fair Market Sales Value of the Property as set forth in the Appraisal. Lessee
shall pay the Lessor's reasonable expenses incurred in connection with the
rescinded termination or incurred in connection with the completed termination.

If, in connection with any occasion on which the Lessee shall have
chosen the option described in clause (x) of the first paragraph of this Section
6.1, an acceptable bid for the Property shall not have been obtained or if a
sale shall not have occurred on or as of the Termination Date, then this Lease
shall continue in full force and effect until an acceptable bid is obtained and
a sale shall have occurred. If the Lessee shall fail to pay all amounts due
under and pursuant to this Section 6.1 on the scheduled Termination Date, no
sale shall be consummated, this Lease shall continue in full force and effect
and it shall be deemed that Lessee has revoked its Notice of Termination.

Upon compliance by the Lessee with the provisions of this Section 6.1,
the obligation of the Lessee to pay Basic Rent after the Termination Date shall
cease, the Lease Term shall end and the obligations of the Lessee hereunder
(other than any such obligations expressly surviving termination of this Lease)
shall terminate as of the Termination Date. The Lessor shall be under no duty to
solicit bids, to inquire into the efforts of the Lessee to obtain bids or
otherwise to take any action in connection with any such sale other than to sell
its interest in the Property as provided above.

15

ARTICLE VII

CONDITION OF PROPERTY
---------------------

Section 7.1  Disclaimers. The Property is demised and let by the
-----------
Lessor "AS IS" in its present condition, subject to (a) the rights of any
parties in possession thereof, (b) the state of the title thereto existing at
the time the Lessor acquired title to its interest in the Property, (c) any
state of facts which an accurate survey or physical inspection might show
(including the survey delivered on the Lease Term Commencement Date), (d) all
Applicable Laws and Regulations and (e) any violations of Applicable Laws and
Regulations which may exist on the Lease Term Commencement Date. The Lessee has
examined the Property and (insofar as the Lessee is concerned) has found the
same to be satisfactory. THE LESSOR HAS NOT MADE NOR SHALL BE DEEMED TO HAVE
MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, NOR SHALL BE DEEMED TO
HAVE ANY LIABILITY WHATSOEVER AS TO THE VALUE, HABITABILITY, CONDITION, DESIGN,
OPERATION, OR FITNESS FOR USE OF THE PROPERTY (OR ANY PART THEREOF), OR ANY
OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO
THE PROPERTY (OR ANY PART THEREOF) AND THE LESSOR SHALL NOT BE LIABLE FOR ANY
LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR THE FAILURE OF THE PROPERTY, OR ANY
PART THEREOF, TO COMPLY WITH ANY APPLICABLE LAWS AND REGULATIONS except that the
Lessor hereby represents and warrants that the Property is and shall be free of
Lessor Liens attributable to Lessor. It is agreed that the Lessee has been
afforded full opportunity to inspect the Property, is satisfied with the results
of its inspections of the Property and is entering into this Lease solely on the
basis of the results of its own inspections and all risks incident to the
matters discussed in the preceding sentence, as between the Lessor, on the one
hand, and the Lessee, on the other, are to be borne by the Lessee. The Lessee
acknowledges that the Property has been subject to a sale-leaseback transaction
among the Lessee, the Seller and the Lessor and, therefore, the Lessee is fully
familiar with the condition of the Property and is not looking to any other
Person as to any warranty with respect thereto. The provisions of this Article
VII have been negotiated, and, except to the extent otherwise expressly stated,
the foregoing provisions are intended to be a complete exclusion and negation of
any representations or warranties by the Lessor, express or implied, with
respect to the Property, that may arise pursuant to any law now or hereafter in
effect, or otherwise.

ARTICLE VIII

LIENS
-----

The Lessee shall not directly or indirectly create, incur, assume or
suffer to exist any Lien on or with respect to the Property, any Basic Rent,
title thereto or any interest therein, except in all cases Permitted Liens. The
Lessee shall promptly, but not later than thirty (30) days after the filing
thereof, at its own expense, take such action as may be necessary duly to
discharge or eliminate or bond in a manner reasonably satisfactory to the Lessor
any such Lien (other than Permitted Liens) and provide title endorsement
coverage as Lessor may reasonably request if the same shall arise at any time.

16

Nothing contained in this Lease shall be construed as constituting the
consent or request of the Lessor, express or implied, to or for the performance
by any contractor, laborer, materialman, or vendor of any labor or services or
for the furnishing of any materials for any construction, alteration, addition,
repair or demolition of or to the Property or any part thereof, which would
result in any liability of the Lessor for payment therefor. NOTICE IS HEREBY
GIVEN THAT THE LESSOR WILL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS
FURNISHED OR TO BE FURNISHED TO THE LESSEE, OR TO ANYONE HOLDING AN INTEREST IN
THE PROPERTY OR ANY PART THEREOF THROUGH OR UNDER THE LESSEE, AND THAT NO
MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH
TO OR AFFECT THE INTEREST OF THE LESSOR IN AND TO THE PROPERTY.

ARTICLE IX

MAINTENANCE AND REPAIR; ALTERATIONS,
------------------------------------
MODIFICATIONS AND ADDITIONS
---------------------------

Section 9.1  Maintenance and Repair. The Lessee, at its own expense,
----------------------
shall at all times, (a) maintain the Property in good order and repair, subject
to ordinary wear and tear, provided, however, the Lessee shall make such
--------  -------
additions, improvements and updates to the Property as may be necessary to
maintain the Property consistent with the standards then applicable to other
similar properties owned and operated by the Lessee and its Affiliates, but in
no event less than the standards of other prudent owners of similar office and
research and development facilities; provided, further, however, the Lessee
--------  -------  -------
shall satisfy the recommendations with respect to the Property set forth in
Schedule Y attached hereto no later than November 30, 2001; (b) maintain the
Property in accordance with all Applicable Laws and Regulations; (c) comply with
the standards imposed by any insurance policies required to be maintained
hereunder which are in effect at any time with respect to the Property or any
part thereof; and (d) make all necessary or appropriate repairs, replacements
and renewals of the Property which may be required to keep the Property in the
condition required by the preceding clause (a), whether interior or exterior,
structural or nonstructural, ordinary or extraordinary, foreseen or unforeseen,
and including, without limitation, repairs, replacements and renewals that would
constitute capital expenditures under GAAP if incurred by an owner of property.
The Lessee waives any right that it may now have or hereafter acquire to (i)
require the Lessor to maintain, repair, replace, alter, remove or rebuild all or
any part of the Property or (ii) make repairs at the expense of the Lessor. All
such repairs, restorations and replacements shall be constructed and installed
in a good and workmanlike manner in compliance with Applicable Laws and
Regulations. In carrying out its obligations under this Section 9.1, the Lessee
shall not discriminate in any way in the maintenance of the Property as compared
with other similar properties owned, managed or leased by the Lessee.

Section 9.2  Alterations; Additions.
----------------------

(a)  (i)  Lessee shall make all alterations, renovations,
modifications or improvements to the Improvements, including, without
limitation, construction of new facilities with respect thereto and
expansion and re-arrangement of the Improvements, destruction or
demolition of existing Improvements (provided that

17

such destruction or demolition does not reduce the number of rentable square
feet of the Improvements) and complete re-construction of a facility or any part
thereof which is included as part of the Property (collectively, "Alterations"),
-----------
which are required by Applicable Laws and Regulations.

(ii)  Provided Lessee at the time of an Alteration maintains a
Credit Rating of Investment Grade or higher, Lessee may make any
Alteration not required by Applicable Laws and Regulations, the cost
of which is ten percent (10%) or less of the Purchase Price of the
Property, without Lessor's and Lender's consent;

(iii) Provided Lessee at the time of an Alteration maintains a
Credit Rating of Investment Grade or higher, Lessee may make any
Alteration not required by Applicable Laws and Regulations, the cost
of which is more than ten percent (10%) of the Purchase Price of the
Property, with Lessor's and Lender's prior consent, which consent
shall not be unreasonably withheld;

(iv)  In the event Lessee shall not then maintain a Credit Rating
of Investment Grade or higher, Lessee shall not have the right to make
any Alteration not required by Applicable Laws or Regulations the cost
of which exceeds $250,000 unless Lessee shall have received the prior
written consent of Lessor, not to be unreasonably withheld or delayed,
and Lessee shall have delivered to Lessor security for the benefit of
the Lessor and the Lender in form and substance reasonably
satisfactory to the Lessor, and in amounts at all times sufficient
(and which may be applied, with the consent of Lessor and Lender) to
complete such Alteration.

Lessee's right to make Alterations is subject to the conditions that:

(x)   such Alterations do not decrease (other than to a de
minimis extent) the Fair Market Sales Value, Residual Value,
condition, utility or Remaining Life of the Property below the Fair
Market Sales Value, Residual Value, condition, utility or Remaining
Life of the Property immediately prior to the Alterations (assuming
the Property was in the condition required by this Lease) and such
Alterations do not cause the Property to be characterized as
"limited-use property" (as defined in Revenue Procedure 2001-28); and

(y)   Lessee has delivered to Lessor and Lender the plans and
specifications relating to the proposed Alteration which, in cases
where Lessor's and Lender's consent to an Alteration is required,
shall be subject to Lessor's and Lender's approval, not to be
unreasonably withheld or delayed. With respect to any Alteration,
Lessee shall certify that: (x) any new structures, and any structural
alterations, additions or additional buildings or structures, shall be
built under the supervision of a certified architect, (y) the
structural integrity of the existing buildings will not be impaired by
such work, and (z) such new structures, structural alterations,
additions or additional buildings or structures or the results of such
demolition will not encroach upon (or with respect to demolitions,
cause any damage to) any adjacent premises. With respect to
demolitions, Lessee shall certify,

18

with respect to buildings not demolished, the substance of subclause
(y) of the immediately preceding sentence, and with respect to
buildings being demolished, the substance of subclause (z) of the
immediately preceding sentence.

(b) It is understood and agreed that, so long as no Material Lease
Default or Lease Event of Default shall have occurred and be continuing, Lessee
shall have the right to construct on the Land, with the consent of Lessor and
Lender (such consent not to be unreasonably withheld or delayed), additional
buildings and other facilities which are not an integral part of the
Improvements ("Additions") so long as such Additions and the impact of such
---------
Additions on the Property meet the conditions set forth in Sections 9.2(a)(i)
and 9.2(a)(ii) above. In addition, the Lessor and Lender agree pursuant to
Section 23.12 below, to provide such easements as may be reasonably requested by
the Lessee in connection with such Additions, provided that such easements do
--------
not cause the Property and Alterations to fail to meet the conditions set forth
in Section 9.2(a)(i) above.

(c) If Lessee shall make or cause to be made any Alterations or
Additions, it shall do so in a good and workmanlike manner and, subject to
Section 9.9 hereof, in compliance with Applicable Laws and Regulations, and such
Alterations or Additions, as the case may be, shall be free of Liens other than
Permitted Liens. Whenever Lessee is making Alterations or Additions, Lessee
shall commence such Alterations or Additions promptly and, once commenced, shall
diligently pursue the completion of such Alterations or Additions and, in any
event, shall complete such Alterations within the lesser of three (3) years
after commencement of such Alterations or Additions or the then remaining term
of this Lease. If any such Alterations or Additions shall not have been
completed prior to the expiration of this Lease, Lessee shall be deemed to
remain in possession of the Property and Section 3.6 hereof shall apply.

(d) For the purpose of confirming that Lessee is not required to
remove any specified Alteration or Addition as required by Section 9.5, the
Lessee shall have the right to request the consent of the Lessor as to any
Alteration or Addition to the Property pursuant to this Section 9.2 as to which
consent is not otherwise required hereunder, which consent shall not be
unreasonably withheld. The reasonable cost and expense of Lessor's (i) review of
any plans and specifications or other documents required to be furnished
pursuant to this Lease or (ii) review/supervision of any such Alterations or
Additions shall be paid by Lessee to Lessor, within thirty (30) days after
demand, as Additional Rent.

Section 9.3  Permanent and Non-Severable. All Alterations not required
---------------------------
by Applicable Laws and Regulations, which are severable from the Property, which
have not been financed by the Lessor, and which may be removed therefrom without
(a) decreasing (other than to a de minimis extent) the Fair Market Sales Value,
Residual Value or Remaining Life of the Property from the Fair Market Sales
Value, Residual Value and Remaining Life that the Property would have had if
such Alterations had never been made and (b) causing material damage to the
Property (after taking into account the repairs which would be required to
return the Property to its condition prior to the time that such Alterations
were made (provided that Lessee makes all such repairs)) ("Severable
--------                                        ---------
Alterations") shall remain the property of Lessee. Not earlier than sixty (60)
-----------
days prior to the surrender of the Property, the Lessor may elect to purchase on
the Lease Termination Date from the Lessee any Severable Alterations (if not
already owned by the Lessor, previously removed by the Lessee or previously
identified for removal by Lessee) which purchase

19

shall be at the Fair Market Sales Value of such Alterations. Any such Severable
Alterations which Lessor has not purchased or requested be removed and which
Lessee elects to leave in place at the end of the Lease Term and all Additions
shall, at such time, become Lessor's property and title thereto shall vest in
Lessor without compensation to Lessee. All Alterations which are not Severable
Alterations will become part of the Property and title thereto will
automatically vest in Lessor when made without compensation to Lessee, and will
thereupon become part of the Property subject to this Lease. On the Lease
Termination Date at the request of Lessor, Lessee shall deliver a deed or bill
of sale on an "as is, where is" basis to Lessor covering all Alterations which
are not Severable Alterations and all other Alterations and Additions which
Lessee is not removing from the Property, in each case, appropriate to transfer
title to Lessor, free and clear of all Liens other than Permitted Liens.

Section 9.4  Cooperation. If any Applicable Laws and Regulations
-----------
require that Lessor submit a request for governmental approvals and permits in
connection with any Alterations or Additions, Lessor shall, subject to the terms
and conditions of Section 23.12, cooperate in obtaining all necessary
governmental permits and approvals to complete any such Alterations or Additions
without any cost or expense to Lessor.

Section 9.5  Obligations with Respect to Alterations and Additions at
--------------------------------------------------------
End of Term. At the end of the Lease Term, if requested by Lessor, Lessee shall
-----------
(at its expense) remove all Additions and all Alterations as to which the Lessor
has not consented to their construction or installation on the Property. Lessee
shall, at Lessee's sole cost and expense, diligently complete the removal of
such Additions and Alterations (including any portion thereof below ground
level) in a good and workmanlike manner in compliance with Applicable Laws and
Regulations, and shall restore the Land on which such Alterations or Additions
were constructed to its condition prior to the making of such Alterations or
Additions.

Section 9.6  [Intentionally omitted.]

Section 9.7  Compliance with Applicable Laws and Regulations. During
-----------------------------------------------
the Lease Term, at Lessee's expense and without expense to the Lessor, Lessee
will comply in all material respects with the provisions of all Applicable Laws
and Regulations governing the use, operation, condition or maintenance of, or
otherwise affecting, the Property; provided, however, that this Section 9.7
--------  -------
shall not apply to compliance with Environmental Laws, which compliance shall be
governed solely by Section 9.8.

Section 9.8  Environmental Covenants. In order to induce Lessor to
-----------------------
enter into this Lease, Lessee covenants and agrees during the term of this
Lease:

(a)  to comply and to cause all assignees, tenants, sub-tenants and
other Persons occupying or conducting business on the Property to comply with
all Environmental Laws applicable to the Property or any operation thereon or to
Lessee or its subtenants, assignees, tenants as occupants of the Property or
other Persons occupying or conducting business on the Property;

(b)  to have sole responsibility for any and all costs and expenses of
compliance with applicable Environmental Laws, including any such compliance
directed to the Lessor or to

20

which any of Lessor, or Lessee or its subtenants, assignees, tenants or other
Persons occupying or conducting business on the Property may become subject;

(c) not to generate, use, treat, store, handle, Release or dispose
of, or permit the generation, use, treatment, storage, handling, Release or
disposal of Hazardous Materials on the Property, or transport or permit the
transportation of Hazardous Materials to or from the Property in any quantity or
manner which would violate, or give rise to liability under, any applicable
Environmental Laws;

(d) to conduct or cause to be conducted any investigation, study,
sampling and testing and undertake any Remedial Action with respect to Hazardous
Materials on or from the Property (including, for the avoidance of doubt, with
respect to Hazardous Materials on or from the Property prior to commencement of
the Lease Term) as required by and in accordance with the requirements of the
applicable Environmental Laws;

(e) (i)   Lessee shall promptly notify Lessor of (A) any fact,
circumstance, condition, occurrence or Release of Hazardous Materials occurring
at or from the Property relating to any underground storage tank or otherwise
that may be reasonably expected to result in an expense in excess of $500,000
relating to or as a result of noncompliance with any applicable Environmental
Law, such notice to be given no later than fifteen (15) Business Days after the
condition is discovered by Lessee or such Release or occurrence takes place,
whichever is later, and (B) any pending or threatened Environmental Claim that
may reasonably be expected to result in an expense in excess of $500,000 against
Lessee relating to the Property, such notice to be given no later than fifteen
(15) Business Days after Lessee receives written notice that such Environmental
Claim is commenced or threatened. To the extent possible, all such notices shall
describe in reasonable detail the nature of the Environmental Claim, fact,
circumstance, condition, occurrence or Release and Lessee's response thereto.

(ii)  Upon the written request of Lessor, Lessee shall provide
Lessor with copies of all written communications with any
Governmental Authority or third party (other than any privileged
written communication with counsel), and all other documents
reasonably requested by the foregoing Persons relating to the subject
of any notice required under Section 9.8(e)(i).

(iii) Lessee shall provide reports relating to any Environmental
Claim in such detail as may reasonably be requested by Lessor. In
addition, if any fact, circumstance, condition, occurrence or Release
occurs at or from the Property that relates to any underground
storage tank or otherwise that may reasonably be expected to result
in an expense in excess of $500,000 relating to or as a result of
noncompliance with any applicable Environmental Law or Environmental
Claim, Lessor may require with respect to the Property that is the
subject of the claim, at Lessee's sole cost and expense, the
undertaking of a Phase I environmental audit and, if such Phase I
environmental audit discloses any environmental condition or
conditions that reasonably require a Phase II environmental audit, a
Phase II environmental audit for the Property. All audits pursuant to
this provision shall be prepared by a consultant that is, and the
scope of the audit shall be, reasonably acceptable to Lessor.

21

(iv)  Subject to the terms of Article XV, Lessor, Lender and
their respective agents, employees, contractors and representatives
shall have the right, but not the duty, at Lessor's cost and expense
(unless a Lease Event of Default is continuing, in which case such
inspection will be at Lessee's cost and expense), to enter upon the
Property during reasonable times and upon reasonable notice to
monitor and inspect any fact, circumstance, condition, occurrence or
Release of Hazardous Materials thereon that relates to an underground
storage tank or otherwise that may result in an expense in excess of
$500,000 relating to or as a result of non-compliance with any
applicable Environmental Law. In exercising its rights herein, each
such party shall use reasonable efforts to minimize interference with
the Lessee's business but any such entry shall not constitute an
eviction of Lessee, in whole or in part. If any Governmental
Authority shall ever require testing to ascertain whether there has
been a Release or violation of applicable Environmental Laws, then
the costs thereof shall be paid by Lessee; and

(f) Lessee shall maintain the Property and cause alterations to be
performed to the Property in compliance with Environmental Laws applicable to
asbestos.

Section 9.9 Contests. (a) Subject to the terms of Section 9.9(b) of
--------
this Lease, during the Lease Term, Lessee may contest the validity or
application of any Applicable Laws and Regulations (other than with respect to
any matters described in the Tax Indemnity Agreement, as to which the Tax
Indemnity Agreement shall control) or the validity or amount of any Impositions
or Liens by appropriate proceedings diligently conducted in good faith in the
name of Lessee, or, if the provisions of any Applicable Laws and Regulations
require that such proceeding be brought by or in the name of Lessor, with
Lessor, in the name of Lessor, or both, without any cost or expense to Lessor so
long as such proceedings shall not interfere with the disposition of the
Property or any part thereof or involve (i) any material risk of the sale,
forfeiture or loss of the Property or any part thereof or title thereto or any
interest therein, (ii) a material risk of extending the ultimate imposition of
such Applicable Laws and Regulations beyond the termination of the Lease Term,
(iii) any risk of criminal liability being imposed on the Lessor, or (iv) a
material risk of reduction of the value, utility or remaining useful life
(except to an insignificant extent) of the Property.

(b) Subject to Section 9.9(a) and satisfaction of the following
conditions, Lessee, at its sole cost and expense, may contest the assertion by
any Governmental Authority or any other Person of any Applicable Laws and
Regulations affecting all or a portion of the Property:

(i)   no Lease Event of Default has occurred and is continuing;

(ii)  such contest shall not present (A) any material danger of
the sale, forfeiture or loss of any part of the Property, title
thereto or interest therein, material interference with the use,
value or disposition of the Property or the payment of Rent relating
to the Property, or (B) any danger of criminal liability or material
danger of any civil sanctions being imposed on the Lessor;

(iii) such contest shall not result, or be reasonably likely to
result, in any Lien against the Property or any Rent payable
hereunder or, if such contest shall, or

22

shall be reasonably likely to, result in any such Lien, and if the
Lessee shall not then maintain a Credit Rating of Investment Grade,
Lessee shall have provided additional security for the benefit of the
Lessor and the Lender in form and substance, and in amounts,
reasonably satisfactory to the Lessor;

(iv) any such contests, once instituted, unless discontinued,
settled or compromised, shall be prosecuted diligently until a final
judgment is obtained; and

(v)  Lessee may only delay compliance with the subject
Applicable Laws and Regulations until the earliest to occur of: (A) a
determination by the applicable judicial or Governmental Authority
that the contest is unsuccessful, which determination is not, or
ceases to be, subject to further appeal, (B) the discontinuance,
settlement or compromise of such judicial proceeding or proceeding
involving or heard by a Governmental Authority or (C) the last day of
the Basic Term or any Renewal Term then in effect.

ARTICLE X

LOCATION AND USE
----------------

Section 10.1 Location. Lessee shall not remove, or permit to be
--------
removed, the Improvements or any part thereof from the Property without the
prior written consent of the Lessor, except that the Lessee or any other Person
may remove (a) any Severable Alteration with respect to which title has passed
to or remained with the Lessee in accordance with the provisions of Section 9.3,
(b) any part of the Improvements on a temporary basis for the purpose of repair
or maintenance thereof or (c) any part of an Improvement which has been replaced
by another part pursuant to Section 9.2 and which has become subject to this
Lease.

Section 10.2 Use. Lessee may use the Property for any lawful purpose,
---
provided such use involves general office, research and development or
distribution purposes, and does not increase the risk of an Environmental Claim
("Permitted Uses"). Lessor shall not unreasonably withhold its consent to any
--------------
other use of the Property by Lessee, so long as such use relates to the business
of manufacturing, distributing, assembling and designing automobile, truck and
off-highway vehicle parts. Lessee shall have the right not to utilize the
Property or any part thereof at any time and from time to time, subject to
compliance with all other terms of this Lease.

ARTICLE XI

INSURANCE
---------

Section 11.1 Coverage. Subject to Lessee's rights of self-insurance
--------
set forth in this Section 11.1, Lessee shall maintain or cause to be maintained:

(a) (i) all-risk property insurance covering each and every component
of the Property against physical loss or damage, including, but not limited to
fire and extended coverage, collapse, flood and earth movement in an amount at
least equal to the replacement value. Such

23

insurance policy shall contain an agreed amount endorsement waiving any
coinsurance penalty; (ii) loss of rental income insurance in an amount
sufficient to provide proceeds which will cover the actual loss of Basic Rent
during restoration, not to exceed a period of twelve (12) months.

(b) "boiler and machinery" insurance with respect to damage (not
insured against pursuant to Section 11.1(a) hereof) to the boilers, pressure
vessels or similar apparatus located on the Property for risks normally insured
against under boiler and machinery policies;

(c) commercial general liability insurance with respect to the
Property written on an occurrence basis (not claims made basis) with a limit of
not less than $1,000,000 per occurrence. Such coverage shall include, but shall
not be limited to, premises/operations, explosion, collapse, underground
hazards, hostile fire and limited sudden and accidental pollution, contractual
liability, independent contractors, property damage, bodily injury, advertising
injury and personal injury liability. Such insurance shall not contain an
exclusion for punitive or exemplary damages when insurable by law;

(d) (i) Workers' Compensation insurance in accordance with statutory
provisions or qualified self-insurance covering accidental injury, illness or
death of an employee of Lessee while at work or in the scope of his employment
with Lessee and (ii) Employer's Liability in an amount not less than $1,000,000
or such greater amount as may be required by law. Such coverage shall not
contain any occupational disease exclusion; and

(e) excess or umbrella liability insurance in an amount not less than
$10,000,000 written on an occurrence basis (i.e., not claims made basis)
----
providing coverage limits in excess of the insurance limits in (c) and (d)(ii)
above for all operations of the Lessee. Such insurance shall follow the form of
the primary insurance and drop down in case of exhaustion of underlying limits.
Such insurance shall not contain an exclusion for punitive or exemplary damages
where insurable under law.

The insurance required to be maintained pursuant to this Lease shall
be no less favorable, except for limits of liability, than that generally
maintained by Lessee and its Affiliates on properties which are owned or
operated by them and all insurance carried pursuant to Sections 11.1(a) (i) and
11.1(a)(ii) or 11.1(c) shall be placed with such insurer having a minimum
Standard & Poor's rating of A and insurance carried pursuant to Sections 11.1(b)
and 11.1(e) shall be placed with such insurer having a minimum A.M. Best rating
of A.IX (or such other rating as Lessor and Lender may reasonably agree)
authorized to do business in the State in which the Property is located, and be
in such form, with terms, conditions, limits and deductibles as shall be
reasonably acceptable to the Lessor; provided that such insurance may be
reinsured by insurers in which Lessee or any of its Affiliates has an interest.

To the extent that any of the levels of insurance specified above are
not available in the commercial market or not available at commercially
reasonable rates, the Lessee shall be entitled to maintain insurance at lower
levels or different terms and conditions so long as the coverage is consistent
with the practice of the Lessee.

Any of the foregoing insurance coverages may be carried as a part of
blanket policies, provided that (i) amounts shall not be less than those
--------
required by this Section 11.1; (ii) any

24

such policy(ies) shall otherwise comply with the requirements of this Article
XI; (iii) the protection afforded, except for the limits of liability or the
exhaustion of aggregate limits, under any such policy(ies) shall be no less than
that which would have been afforded under a separate policy or policies relating
only to the Property; and (iv) each certificate of insurance shall explicitly
specify replacement value with respect to the Property coverage.

Notwithstanding the preceding provisions of this Section 11.1, at any
time that the Lessee shall maintain a Credit Rating of BBB from Standard &
Poor's and Baa2 from Moody's, or higher, Lessee shall be entitled to self-insure
and/or have deductibles against any risks described in Section 11.1(a)-(d) so
long as such risks retained do not exceed $10,000,000 (as adjusted upwards
annually by the consumer price index) in any single occurrence and no Lease
Event of Default shall have occurred and be continuing for thirty (30) days. At
any time that the Lessee is not entitled to self-insure as described in the
immediately preceding sentence, (i) if the Lessee shall then maintain a Credit
Rating of Investment Grade or higher, the amount of any deductible with respect
to any property insurance policy required by this Lease shall be $250,000 or
less and with respect to any general liability insurance policy required by this
Lease shall be $1,500,000 or less or (ii) if the Lessee shall not then maintain
a Credit Rating of Investment Grade or higher, then within thirty (30) days of
the downgrade below Investment Grade, the amount of any deductible with respect
to any property or general liability insurance policy required by this Lease
shall not be greater than five percent 5% of annual Basic Rent. The Lessee may,
from time to time, increase the amount of self-insurance and/or deductibles from
the amounts set forth herein with the Lessor's prior written consent, such
consent not to be unreasonably withheld. In addition, with respect to insurance
required by Section 11.1(e), at the written request of the Lessor delivered not
less than sixty (60) days prior to the proposed effective date thereof, all
minimum amounts of policies (but not deductibles) shall be increased (but not
decreased) on or after the tenth (10th) anniversary of the Lease Term
Commencement Date and every five (5) years thereafter to the level that a
prudent lessee of comparable property would carry.

Section 11.2 Policy Provisions. Any insurance policy required to be
-----------------
maintained by Lessee pursuant to Section 11.1 shall:

(a) specify Lessee as the insured, Lessor as loss payee and Lender as
mortgagee and loss payee with respect to all property insurance, including
rental income insurance, and, except in the case of the insurance described in
Section 11.1(d), Lessor and Lender as additional insured in respect of claims or
suits for bodily injury or property damage arising from the use, ownership,
occupancy, lease or sublease of the Property as to all such insurances. It shall
be understood that any obligation imposed upon the Lessee, including but not
limited to the obligation to pay premiums, shall be the sole obligation of
Lessee and not of Lessor;

(b) provide, in the case of insurance carried pursuant to Section
11.1(a) and (b), that all insurance proceeds in respect of any loss or
occurrence with respect to the Property (i) shall be adjusted with Lessee,
unless a (and only for so long as no) Lease Event of Default shall be
continuing, in which case such proceeds shall be adjusted solely with Lessor (or
Lender, if Lessor has assigned such right to Lender) and (ii) shall be payable
(x) to Lessee in accordance with Article XIV, and (y) in all other circumstances
to Lessor or the Depository or otherwise as Lessor may direct;

25

(c)  provide that, in respect of the interests of Lessor and Lender,
such policies shall not be invalidated by any action or inaction of Lessee or
any other Person (other than the Person making the claim thereunder) and shall
insure Lessor and Lender regardless of, and any claims for losses shall be
payable notwithstanding:

(i)   any act of negligence, including any breach of any
condition or warranty in any policy of insurance, of Lessee or any
other Person (other than the Person making the claim thereunder);

(ii)  the occupation or use of the Property for purposes more
hazardous than permitted by the terms of the policies;

(iii) any foreclosure or other similar proceeding or notice of
sale relating to any of the Property; and

(iv)  any change in the title to or ownership of the Property
after Lessee and its insurance underwriter has notice of such change
in title or ownership;

(d)  provide that such insurance shall be primary insurance and that
the insurers under such insurance policies shall be liable under such policies
without right of contribution from any other insurance coverage effected by or
on behalf of Lessor under any other insurance policies covering a loss that is
also covered under the insurance policies maintained or arranged by Lessee
pursuant to this Article XI and shall expressly provide that all provisions
thereof, except the limits of liability (which shall be applicable to all
insureds as a group) and liability for premiums (which shall be solely a
liability of Lessee), shall operate in the same manner as if there were a
separate policy covering each insured;

(e)  provide that any cancellation thereof shall not be effective as
to Lessee, Lessor or Lender until at least thirty (30) days after receipt by
Lessee or Lessor, as applicable, of written notice thereof (except for the
nonpayment of premium for which ten (10) days notice shall be given); provided
--------
that such delayed effectiveness shall not be required where the insurance
proposed to be canceled has been replaced with other insurance, or Lessee has
self-insured, in either case in accordance with the terms hereof; and

(f)  waive any right of subrogation of the insurers against Lessor
and Lender and waive any right of the insurers to any setoff or counterclaim or
any other deduction, whether by attachment or otherwise, in respect of any
liability of Lessor or Lender.

So long as no Lease Event of Default shall have occurred and be
continuing, the Lessee shall have the right to settle all claims with the
insurers.

Section 11.3 Certificates of Insurance; Performance by Lessor. On or
------------------------------------------------
prior to the Closing Date and on or before the fifteenth (15th) day prior to the
expiration of any policy maintained pursuant to this Article XI and not less
than five (5) days prior to any assignment of Lessee's interest in this Lease
permitted under Section 13.3 of this Lease or any sale or replacement of the
Property or any refinancing permitted under this Lease, Lessee shall deliver to
Lessor certificates of insurance issued by the insurers evidencing the insurance
maintained pursuant to this Article XI or, to the extent Lessee is permitted to
self-insure under the requirements established in

26

Section 11.1 of this Lease and Lessee has elected to do so, an Officer's
Certificate that self-insurance is permitted under Section 11.1 of this Lease
and that self-insurance is in place for any insurance coverage required under
this Article XI that is not otherwise evidenced by the insurers' certificates of
insurance. In the event that Lessee shall fail to maintain insurance or provide
notice of self-insurance as herein provided, Lessor and/or its successors,
designees, or assigns may at their respective option, but without obligation,
provide such insurance and, in such event, Lessee shall, within ten (10) days
after receipt of demand from time to time, reimburse Lessor and/or its
successors, designees, or assigns for the cost thereof, together with interest
on such cost at the Overdue Rate computed from the date of payment of such cost
to the date of reimbursement. Lessor and/or its successors, designees, or
assigns shall give prompt written notice to Lessee of any such insurance.

Section 11.4 General. Notwithstanding anything to the contrary
-------
herein, no provision of this Article XI or any provision of this Lease shall
impose on Lessor any duty or obligation to verify the existence or adequacy of
the insurance coverage maintained by Lessee, nor shall Lessor be responsible for
any representations or warranties made by or on behalf of Lessee to any
insurance broker, company or underwriter.

Section 11.5 Proceeds. All proceeds of property insurance policies or
--------
self-insurance maintained pursuant to this Article XI and the amount of any
deductible shall be paid in the manner set forth in Article XIV of this Lease;
provided, however, that, if the applicable Section of this Lease requires that
--------  -------
the proceeds of property insurance be retained by the Depository, and Lessee was
self-insured with respect to the occurrence which would have generated such
proceeds, then Lessee shall, within seven (7) days after receipt of written
notice from Lessor, pay a sum equal to the proceeds which would have been paid
by the insurance policies required under Section 11.1(a) (assuming that there
was no deductible allowed and no self-insurance in place), to the Depository as
though there were an actual policy of insurance in place.

Section 11.6 Separate Insurance. Nothing in this Article XI shall be
------------------
construed to prohibit Lessor from insuring at its own expense the Property or
its interest therein, provided any insurance so maintained shall not provide for
or result in a reduction of the coverage or the amounts payable under any of the
insurance required to be maintained by Lessee under this Article XI.

ARTICLE XII

RETURN OF PROPERTY
------------------

Section 12.1 Surrender; Environmental Compliance. On the Lease
-----------------------------------
Termination Date, Lessee shall surrender the Property in good order and
condition, ordinary wear and tear and loss by casualty covered by insurance (to
the extent the proceeds have been received by the Lessor) excepted, free and
clear of all Liens other than Lessor Liens and Liens described in clause (vi) of
the definition of Permitted Liens, in the condition required by Section 9.1 of
this Lease. In the event Lessee elects, at its option, to remove any of the
equipment described on Schedule X, or any other property or equipment not
----------
subject to this Lease, Lessee shall repair any damages caused by such removal
and restore the Property to the condition it was in prior to the installation of
such

27

equipment or property. Upon surrender, the Lessee shall deliver an Environmental
Report to the Lessor showing that the Property is in compliance with
Environmental Laws, which Environmental Report shall be dated within one hundred
twenty (120) days of the date of such surrender. The delivery of such
Environmental Report shall not relieve the Lessee of any indemnification
obligation or liability with respect to any Release, violation of Environmental
Law, Environmental Claim or other loss of or damage to any property or the
environment. Simultaneously with such surrender, Lessee shall deliver to Lessor:

(i)   to the extent maintained by Lessee in the ordinary course
of its business, originals of all transferable operating licenses,
other licenses, certificates of occupancy, other certificates,
permits, authorizations and approvals relating to the use and
occupancy of the Property;

(ii)  to the extent in the possession or control of Lessee (x)
plans and specifications for all mechanical, electrical and HVAC
systems pertaining to the Property and (y) as-built drawings,
blueprints, operating and repair manuals, engineering logs and
preventative maintenance records relating to the Property or any
Alteration or Addition;

(iii) maintenance contracts, warranties or claims related to the
Property or any Alteration or Addition;

(iv)  keys to the Property and all locks located therein in the
possession or control of Lessee; and

(v)   such other papers and documents in the possession and
control of Lessee which may be necessary for the ownership or the
proper operation of the Property.

ARTICLE XIII

ASSIGNMENT, SUBLEASING AND MERGER
---------------------------------

Section 13.1 Subletting of Portions of the Property Without Lessor's
-------------------------------------------------------
Consent. The Lessee may sublease all or any part of the Property to any Person
-------
at any time on such terms and conditions as Lessee may desire in its sole
discretion, without the consent of Lessor; provided, however, that (i) any such
--------  -------
sublease shall be expressly subject and subordinate to this Lease and shall not
release Lessee from any of its obligations or liabilities under this Lease or
under any other Operative Document; (ii) no such sublease may be entered into if
a Lease Event of Default has occurred and is continuing; (iii) any sublessee
shall not be bankrupt or insolvent at the inception of the sublease and shall be
permitted to use the Property only for Permitted Uses; (iv) any such sublease
shall be for a term that does not extend beyond the Basic Term or any Renewal
Term that has been irrevocably elected; (v) the sublease shall not contain any
purchase options; and (vi) no sublease shall cause any portion of the Property
to be tax-exempt use property within the meaning of Section 168(h) of the Code.

28

Section 13.2 Delivery of Non-Disturbance Agreements by Lessor. Upon
------------------------------------------------
the request of Lessee, Lessor and Lender shall execute and deliver a
subordination, non-disturbance and attornment agreement in the form attached to
this Lease as Exhibit B (a "Non-Disturbance Agreement"), in connection with a
-------------------------
sublease by Lessee complying with Section 13.1, provided such sublease is (i) to
a sublessee with a Credit Rating of at least Baa by Moody's and BBB by Standard
& Poor's, (ii) at a rental rate equal to the greater of the Basic Rent payable
under this Lease on a per square foot basis and the Fair Market Rental Value of
the Property, (iii) for not less than fifty percent (50%) of the usable square
footage of the Improvements which space is physically contiguous to the space
which is not subleased and is accessible by a separate entrance or a common
lobby, (iv) for a term of not less than five (5) years and not more than ten
(10) years, and provided that the Improvements are readily convertible to
--------
multi-tenant use without material expenditure of funds so that the space
remaining after the subletting is contiguous and is accessible by a separate
entrance or a common lobby and is a self-contained and readily marketable unit
of space. Lessor and Lender shall execute and deliver the Non-Disturbance
Agreement with respect to such sublease within twenty (20) Business Days after
request by Lessee so long as (x) Lessee pays all reasonable costs and expenses
(including reasonable attorneys' fees and expenses) in connection therewith, (y)
no Lease Event of Default has then occurred and is continuing and (z) the Lessee
shall have delivered a certificate to the Lessor and the Lender confirming
compliance with Section 13.1 and this 13.2.

Section 13.3 Assignment of Lease. So long as no Lease Event of
-------------------
Default has occurred and is continuing, Lessee may assign its interest in this
Lease without the consent or approval of Lessor. No assignment permitted
hereunder shall (a) relieve Lessee of any of its obligations, liabilities or
duties hereunder and under the other Operative Documents, which shall be and
remain those of a principal and not a guarantor, (b) cause any portion of the
Property to be tax-exempt use property within the meaning of Section 168(h) of
the Code or (c) be to an assignee that is bankrupt or insolvent as of the
effective date of such assignment. Notwithstanding clause (a) of the immediately
preceding sentence, Lessee may assign its interest in this Lease and the Lessee
shall be relieved of all its obligation, liabilities or duties hereunder so long
as (i) (A) the assignee of this Lease has a Credit Rating of not less than A3 by
Moody's and A- by Standard & Poor's or (B) the obligations of the assignee of
this Lease are guaranteed by an entity which has a Credit Rating of not less
than A3 by Moody's and A- by Standard & Poor's, (ii) the assignee and such
guarantor shall have assumed the due and punctual performance of all of the
obligations of Lessee under this Lease pursuant to an assignment and assumption
agreement and guarantee in form and substance, and supported by opinions in form
and substance and from counsel, satisfactory to the Lessor and Lender and (iii)
Lessor shall have consented thereto (which consent shall not be unreasonably
withheld).

Section 13.4 Merger. The Lessee agrees that it will not consolidate
------
with or merge with any other Person or sell, convey, transfer or lease its
assets as an entirety or substantially as an entirety, unless: (a) the surviving
entity (if other than the Lessee) or the Person that shall acquire by sale,
conveyance, transfer or lease the assets of the Lessee as an entirety or
substantially as an entirety shall execute and deliver to the Lessor an
assumption by such successor entity of the due and punctual performance of each
covenant and condition of this Lease to be performed or observed by the Lessee
and (b) no Material Lease Default or Lease Event of Default shall have occurred
and be continuing after giving effect to such consolidation, merger or sale,
conveyance, transfer or lease of assets of the Lessee as an entirety or
substantially as an entirety.

29

Upon any such consolidation or merger, or any sale, conveyance, transfer or
lease of the assets of the Lessee as an entirety or substantially as an entirety
in accordance with this Section 13.4, the surviving Person or the Person to
which such sale, conveyance, transfer or lease shall be made shall succeed to,
and be substituted for, and may exercise every right and power of, the Lessee
under this Lease.

Section 13.5 Affiliates. Subject to Section 13.1, the Lessee shall
----------
have the right, without the consent of Lessor, to sublease the Property or
portions thereof to, or share occupancy with Affiliates of Lessee (or entities
which are joint ventures of Lessee, its Affiliates and third parties), provided
Lessee shall remain liable under this Lease as a principal and not as a
guarantor.

ARTICLE XIV

LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE
-----------------------------------------

Section 14.1 Payment of Stipulated Loss Value on an Event of Loss.
----------------------------------------------------
Upon the occurrence of an Event of Loss, the Lessee shall promptly (and, in any
event, within thirty (30) days after such occurrence) give the Lessor written
notice of such Event of Loss and shall, within ninety (90) days after such
occurrence give the Lessor written notice stating whether Lessee elects to (i)
comply with the provisions of Section 14.2 hereof relating to restoration and
rebuilding of the Property affected by such damage, destruction or taking, or
(ii) terminate this Lease on a Rent Payment Date occurring not less than one
hundred twenty (120) days from the delivery of such notice and, if such election
shall occur during the Basic Term, making a rejectable offer to purchase the
Property in accordance with this Section 14.1. Unless the Lessor rejects the
Lessee's offer to purchase the Property in accordance with the last paragraph of
this Section 14.1, on the first Stipulated Loss Value Date at least one hundred
twenty (120) days after the date of such notice the Lessee shall, without regard
to the adequacy of any Net Casualty Proceeds or Net Condemnation Proceeds, pay
to the Lessor an amount equal to the sum of the Stipulated Loss Value as of such
payment date and other amounts, if any, then due hereunder or under any of the
other Operative Documents (collectively, the "Termination Amount"). If an Event
------------------
of Loss shall occur during a Renewal Term, Lessee shall, within ninety (90) days
after such occurrence, give Lessor written notice whether Lessee elects to (i)
comply with the provisions of Section 14.2 hereof relating to restoration or
rebuilding of the Property, or (ii) terminate this Lease. In the event Lessee
elects to terminate this Lease, this Lease shall terminate on a Rent Payment
Date selected by Lessee which is not less than sixty (60) days after the date of
Lessee's notice, upon payment by Lessee of the sums described in Section 14.1(d)
hereof.

(a) If the Lessor fails to expressly reject Lessee's offer to
purchase pursuant to this Section 14.1 in writing within ninety (90) days from
the date of Lessee's offer, the Lessee shall pay the Termination Amount
specified in Section 14.1 to the Lessor on such purchase date; provided that (i)
--------
any Net Casualty Proceeds derived from insurance required to be maintained by
the Lessee pursuant to Section 11.1 of this Lease then held by the Lessor shall
be credited against such Termination Amount, if not already paid by the Lessee,
and any Net Casualty Proceeds derived from insurance required to be maintained
by the Lessee pursuant to Section 11.1 of this Lease remaining thereafter shall
be paid to, or retained by, the Lessee or as it may direct or, if such
Termination Amount has already been paid by the Lessee, any such Net Casualty
Proceeds shall be

30

paid over to, or retained by, the Lessee or as it may direct and (ii) the
Lessee's interest in the Net Condemnation Proceeds (to the extent that proceeds
have been received by the Lessor) shall be credited against such Termination
Amount, if not already paid by the Lessee, and any such Net Condemnation
Proceeds remaining thereafter shall be paid over to, or retained by, the Lessee
or as it may direct or, if such Termination Amount has already been paid by the
Lessee, such Net Condemnation Proceeds (to the extent that proceeds have been
received by the Lessor) shall be paid over to, or retained by, the Lessee or as
it may direct. Upon payment in full of the Termination Amount payable pursuant
to this Section 14.1, (x) the Lease Term shall end, (y) the obligations of the
Lessee hereunder (other than any obligations expressed herein as surviving
termination of this Lease) shall terminate as of the date of such payment and
(z) with respect to an Event of Loss not constituting an Event of Taking of 100%
of the Property, the Lessor shall transfer to the Lessee, or if the Lessee shall
so designate, to the property damage insurer, as-is, where-is, without recourse
or warranty but free and clear of Lessor Liens, and subject to the same
disclaimers as set forth in Section 7.1, all right, title and interest of the
Lessor in, to and under the Property.

(b) Anything herein to the contrary notwithstanding, if the Lessee
shall fail to pay all amounts due under and pursuant to this Section 14.1, no
sale shall be consummated and this Lease shall continue in full force and
effect.

(c) In the event that the Lessor expressly rejects in writing the
offer of the Lessee to purchase the Property as provided in this Section 14.1 at
the purchase price stated therein, the Lessee shall pay the following amount to
the Lessor or such amount shall be retained (in the case of the Net Casualty
Proceeds) by the Lessor on the date that would otherwise have been the purchase
date pursuant to Section 14.1(i) hereof: the sum of (A) Net Casualty Proceeds or
Net Condemnation Proceeds, as the case may be, plus (B) with respect to an Event
of Loss not constituting an Event of Taking, an amount equal to the deductible
under the policy or policies represented by such Net Casualty Proceeds, plus (C)
with respect to an Event of Loss not constituting an Event of Taking, any
amounts Lessee has chosen to self-insure (the amounts described in clauses (A),
(B) and (C) being collectively referred to as the "Loss Proceeds" for the
-------------
Property. Upon payment in full of such amount, plus any Basic Rent then accrued
and unpaid and any Additional Rent, (1) the Lease Term shall end and (2) the
obligations of the Lessee hereunder (other than any obligations expressed herein
as surviving termination of this Lease) shall terminate as of the date of such
payment. Upon payment to Lessor of all amounts owing under this paragraph, all
Loss Proceeds remaining shall be paid to or retained by the Lessee.

Section 14.2 Restoration; Application of Payments. All Net Proceeds
------------------------------------
(except for payments under insurance policies maintained other than pursuant to
Article XI of this Lease) received at any time by the Lessor or the Lessee from
any Governmental Authority or other Person with respect to any Condemnation,
Casualty or Event of Loss to the Property or any part thereof, shall (except to
the extent Section 14.4 applies) be applied as set forth below in this Section
14.2. Unless the Lessee shall have offered to purchase the Property in
accordance with Section 14.1 hereof and the Lessor shall have agreed to accept
such offer, the repair, rebuilding, replacement and restoration of the Property
shall be commenced by Lessee within one hundred twenty (120) days after any
Condemnation, Casualty or Event of Loss (and in any event, Lessee shall promptly
effect such repair, rebuilding, replacement or restoration as shall be necessary
to stabilize the Improvements and render the Improvements safe), and such
repair, rebuilding, replacement or

31

restoration shall be completed promptly, but in any event prior to the end of
the Lease Term. Subject to the provisions of this Section 14.2, so long as there
is not continuing any Material Lease Default or Lease Event of Default, the
Lessee shall control all aspects of any repair, rebuilding, replacement and
restoration of the Property so as to (i) restore the same to at least the value,
utility and remaining useful life and (ii) to the extent possible, to
substantially the same condition as existed immediately prior to the occurrence
of such Condemnation, Casualty or Event of Loss (other than the restoration of
Improvements made after the Closing Date to which the Lessee retains title) and,
except to the extent permitted by Section 9.9, in accordance with Applicable
Laws and Regulations. In addition to its rights under Section 15.1 hereof,
Lessor shall have the right to review plans and specifications and inspect the
Property, at Lessee's sole cost and expense, at any time upon not less than
three (3) Business Days' prior notice in connection with any such repair,
rebuilding, replacement or restoration.

(a) If the Lessee shall have elected or be required to repair or
restore the Property and (i) no Material Lease Default or Lease Event of Default
has occurred and is continuing, (ii) Lessee shall then maintain a Credit Rating
of Investment Grade and (iii) the Net Proceeds (including amounts with respect
to which Lessee is self-insured as provided in Section 11.5 hereof) payable are
ten percent (10%) of the Purchase Price or less, all such Net Proceeds shall,
subject to Section 11.2(b), be paid to the Lessee immediately upon demand, and
in any event shall be applied, as necessary, for the repair or restoration of
the Property;

(b) If (i) a Material Lease Default or Lease Event of Default has
occurred and is continuing at the time of the subject Casualty, Condemnation or
Event of Loss, or thereafter during the repair or restoration period or (ii)
Lessee shall then not maintain a Credit Rating of Investment Grade or (iii) the
Net Proceeds with respect to the Property exceed ten percent (10%) of the
Purchase Price, the full amount of such Net Proceeds, or the amount of such
excess, as applicable shall be paid to the Depository. The Depository shall have
no affirmative obligation to prosecute a determination of the amount of, or to
effect the collection of, any Net Proceeds unless the Depository shall have been
given an express written undertaking to do so. Moneys received by the Depository
pursuant to the provisions of this Lease shall not be commingled with the
Depository's own funds and shall be held by the Depository in trust, either
separately or with other trust funds, for the uses and purposes provided in this
Lease. The Depository shall invest any moneys held by it in Permitted
Investments and the interest paid or received by the Depository on the moneys so
held in trust shall be added to the moneys so held in trust. The Depository
shall not be liable or accountable for any action taken or suffered by the
Depository or for any disbursement of moneys made by the Depository in good
faith in reliance on advice of legal counsel. In disbursing monies pursuant to
this Section, the Depository may rely conclusively on the information contained
in any notice given to the Depository by the Lessee (a copy of which shall be
sent to the Lessor) in accordance with the provisions hereof unless the Lessor
notifies the Depository in writing within ten (10) Business Days after the
giving of any such notice by the Lessee that (i) the Lessor intends to dispute
such information, in which case the disputed amount shall not be disbursed but
shall continue to be held by the Depository until such dispute shall have been
resolved or (ii) a Lease Event of Default is continuing, in which case the
proceeds shall be held in accordance with Section 23.9 hereof;

(c) If such excess proceeds or the full amount of such Net Proceeds,
as applicable, are being held pursuant to clause (b) above, from time to time,
but not more often than

32

once in any thirty (30) day period and provided that the Lessee has first paid
--------
any amounts required to be paid by the Lessee out of its own funds hereunder,
the Lessee may (i) request reimbursement out of such excess proceeds or Net
Proceeds, as applicable, for the actual costs and expenses incurred by the
Lessee in connection with such repair and rebuilding; or (ii) request the
Depository to pay such costs and expenses directly to contractors and suppliers.
Such requests shall be made by written notice to the Depository, setting forth
in reasonable detail all of such costs and expenses incurred by the Lessee and
certifying that (1) all of such costs and expenses are due and owing (or will be
due and owing within the next seven (7) days) and (2) such costs and expenses
were not the subject of a previous certificate delivered pursuant to this clause
(c) and (3) such other matters as are customary in accordance with prudent
practice for periodic construction draws. Any request by the Lessee for the
payment of such excess proceeds or such Net Proceeds, as applicable, shall also
be accompanied by:

(I)  a certificate of a licensed architect certifying:

(A) that the restoration has been completed to the extent set
forth in the request for work completed to such date by the Lessee in
compliance in all material respects with the approved plans for such
restoration; and

(B) the cost, as reasonably estimated by such certifying party,
of the restoration to be completed subsequent to the date of such
certificate; and

(II) an Officer's Certificate of the Lessee certifying that:

(A) the amount of Net Proceeds then held by the Depository and
the Lessee, as the case may be, are sufficient to complete the restoration
to be completed subsequent to the date of such certificate or if not, that
Lessee has delivered to the Depository available funds (and Lessee hereby
agrees to deposit such funds with the Depository) which, together with the
undisbursed Net Proceeds, are sufficient to complete the restoration;

(B) no Material Lease Default or Lease Event of Default is
continuing; and

(C) no Liens other than Permitted Liens have arisen out or any
labor performed in connection with such repair and restoration.

If the Lessor shall in good faith desire to dispute the information
contained in any notice given by the Lessee, the Lessor shall so notify the
Lessee and the Depository in writing within five (5) Business Days after the
giving of such notice, specifying the amount intended to be disputed and the
nature of the dispute. After such five (5) Business Days period has elapsed, if
the Lessor has not disputed the information contained in the Lessee's notice,
the Depository shall promptly disburse to the Lessee out of such excess proceeds
or Net Proceeds, as the case may be, the amount of such costs and expenses;

(d) Subject to Section 14.5, and once such repair and restoration is
completed in accordance with the plans and specifications approved by Lessor, as
certified by an independent architect engaged by Lessee, and fully paid for, any
Net Casualty Proceeds under insurance paid for

33

or provided by the Lessee in excess of amounts necessary for the repair or
restoration of the affected Improvements, or amounts necessary for the payments
required to be paid pursuant to Section 14.1, shall be paid to the Lessee upon
payment of the amounts required to be paid under Section 14.1 or to be paid
because of the Lessor's rejection of the Lessee's offer to purchase the
Property; and

(e)  Any Net Condemnation Proceeds shall be divided between the Lessor
and the Lessee as their interests appear in accordance with Applicable Laws and
Regulations. Any such Net Condemnation Proceeds attributable to the Lessee's
interest in the affected Property(s) shall be applied first to the payment of
amounts required to be paid under Section 14.1, if applicable, and all other Net
Condemnation Proceeds attributable to the Lessee's interest shall be paid to the
Lessee. Any Net Condemnation Proceeds attributable to the Lessor's interest in
the Property shall be distributed to the Lessor.

During any period of repair or rebuilding pursuant to this Article
XIV, this Lease will remain in full force and effect and Basic Rent allocable to
the Property shall continue to accrue and be payable without abatement or
reduction. The Lessee shall maintain records setting forth information relating
to the receipt and application of payments in accordance with this Section 14.2.
Such records shall be kept on file by the Lessee at its offices and shall be
made available at their then current location to the Lessor during normal
business hours upon request. All repair and rebuilding pursuant to this Article
XIV shall be done in compliance with the requirements of Section 9.2(a) (as if
references therein to "Alterations" were to such repair and rebuilding).

Section 14.3  Event of Taking. If an Event of Taking shall occur for
---------------
the Property, prior to the date title to the Property shall have been conveyed
to the condemning authority having jurisdiction thereof, the Lessee shall give
the Lessor prompt written notice of such occurrence and the date thereof.

Section 14.4  Application of Certain Payments Not Relating to an Event
--------------------------------------------------------
of Taking.  (a) In case of a requisition for temporary use of all or a
---------
portion of the Property which is not an Event of Taking for the Property, this
Lease shall remain in full force and effect, without any abatement or reduction
of Basic Rent, and the Net Condemnation Proceeds for the Property shall, unless
a Material Lease Default or Lease Event of Default has occurred and is
continuing, be paid to the Lessee, except that any portion of such Net
Condemnation Proceeds that was awarded with respect to the time period after the
expiration or termination of the Lease Term shall be allocated between the
Lessor and the Lessee as their respective interests shall appear. Following the
occurrence of any Condemnation which is not an Event of Taking at the Property
(so long as this Lease shall not have been terminated with respect to the
Property as provided in this Article XIV), Lessee shall to the extent possible
restore the Property to the condition existing prior to the date of such
Condemnation not constituting an Event of Taking.

(b)  In case of a Condemnation not resulting in an Event of Taking and
which is not a case of a requisition for temporary use of all or a portion of
the Property, to the extent the Condemnation relates to an Improvement included
in the Property, the Lessee shall (i) construct a building or improvement of
equal remaining economic useful life and expected residual value or repair,
rebuild, replace or restore the Property to the fullest possible extent. In
connection therewith this Lease shall continue in full force and effect, without
any abatement or reduction in

34

Basic Rent and the Net Condemnation Proceeds for the Property shall be paid to
the Lessor and the Lessee as their interests may appear.

Section 14.5  Dispositions of Proceeds during Default. Subject to the
---------------------------------------
provisions of Sections 14.2(b) hereof, so long as a Material Lease Default or
Lease Event of Default shall have occurred and be continuing, any amount that
would otherwise be payable to or for the account of, or that would otherwise be
retained by, the Lessee pursuant to this Article XIV shall be paid to the Lessor
and applied by Lessor to the payment of Lessee's obligations under this Lease
and the other Operative Documents or held as security for the obligations of the
Lessee under this Lease pursuant to Section 23.9 hereof, as Lessor may elect.

Section 14.6  Negotiations. In the event any part of the Property
------------
becomes subject to condemnation or requisition proceedings, the Lessee shall
give notice thereof to the Lessor promptly after the Lessee has knowledge
thereof and so long as this Lease has not been terminated the Lessee shall
control the negotiations with the relevant Governmental Authority; provided that
no settlement will be made without Lessor's prior consent, not to be
unreasonably withheld unless a Material Lease Default or Lease Event of Default
is continuing in which case Lessor shall assume control of such negotiations and
Lessor may agree to such settlement without the consent of the Lessee in its
sole discretion. The Lessee and the Lessor shall give to the other such
information, and copies of such documents, which relate to such proceedings, or
which relate to the settlement of amounts due under insurance policies required
by Article XI, and are in the possession of the Lessee or the Lessor, as the
case may be, as are reasonably requested by the other.

Section 14.7  No Rent Abatement. Rent shall not abate hereunder by
-----------------
reason of any Casualty, any Condemnation or any Event of Loss when this Lease
does not terminate in accordance with the provisions of this Article XIV, and
the Lessee shall continue to perform and fulfill all of the Lessee's
obligations, covenants and agreements hereunder to the extent reasonably
practicable given such Casualty, Condemnation or Event of Loss. Without limiting
the foregoing, the Lessee expressly waives the provisions and benefits of any
present or future law relating to damage or destruction (including, without
limitation, any statutes now or hereafter in effect in any jurisdiction where
the Property is located) and agrees that the provisions of this Lease shall
control the rights of the Lessor and the Lessee with respect to damage or
destruction or any condemnation.

Section 14.8  Investment. Provided that no Lease Event of Default is
----------  --------
continuing, the Lessor agrees that the Lessee may direct the investment of
amounts held by the Lessor or the Depository pursuant to this Article XIV and
not applied to the payment of Lessee's obligations under this Lease and the
other Operative Documents in Permitted Investments. Any losses attributable to
such investment shall be promptly reimbursed by the Lessee. During the
continuance of a Material Lease Default or Lease Event of Default, the Lessor
shall cause all such funds to be invested in Permitted Investments.

35

ARTICLE XV

INSPECTION
----------

Section 15.1  Entry on Property. Lessor, its agents, employees and
-----------------
contractors, at their own expense, or after a Lease Event of Default has
occurred and is continuing at Lessee's expense, may enter the Property (to be
accompanied by a designated representative of Lessee) during normal business
hours and upon not less than five (5) Business Days' prior written notice (or,
in the case of an emergency, two (2) Business Day' prior written notice;
provided that if Lessor reasonably believes that irreparable damage to the
--------
Property will occur by not inspecting sooner than after such two (2) Business
Day period, upon such shorter notice as is reasonable in light of the
circumstances) to conduct inspections of the Property, or exhibit the Property
to bona fide prospective purchasers or lenders, excluding designated secured
areas. Other than in connection with a proposed sale of the Property or
refinancing of any loan secured thereby or during a period when a Lease Event of
Default shall have occurred and be continuing or during the twelve (12) month
period prior to the expiration of the Lease Term, such inspections shall be
limited to no greater than twice per calendar year.

Lessee waives any claim for damages for any injury or inconvenience to
or interference with Lessee's business or any loss of occupancy or quiet
enjoyment of the Property occasioned by such entry; except if the claim arises
out of the gross negligence or willful misconduct of such parties or their
respective agents or contractors in connection with such entry. In the exercise
of its right of entry hereunder, such parties shall use all reasonable efforts
not to interfere with the business operations of Lessee or any other Person at
the Property. In addition, subject to such confidentiality requirements with
respect to trade secrets or information relating to the proprietary business of
Lessee as Lessee shall reasonably deem necessary or appropriate, and upon
reasonable prior notice, Lessor and its agents, employees and contractors shall
be entitled to inspect the books and records relating to the condition,
maintenance and operation of the Property (other than in respect of any
businesses operated thereon) at the offices of Lessee or any Affiliate of Lessee
that may be subleasing or managing the Property and to meet with representatives
of Lessee regarding the same, in each case during normal business hours.

ARTICLE XVI

EVENTS OF DEFAULT
-----------------

Section 16.1  Events of Default. The following events shall constitute
-----------------
Lease Events of Default:

(a)  the Lessee shall fail to make any payment of Basic Rent within
five (5) days after the due date thereof or shall fail to make any payment of
Stipulated Loss Value or Termination Value within ten (10) Business Days after
the receipt of written notice of such failure to the Lessee from the Lessor;

36

(b) the Lessee shall fail to make any payment of Additional Rent or
any other amount payable hereunder and such failure shall continue for a period
of twenty (20) Business Days after written notice of such failure to the Lessee
from the Lessor or the payee thereof;

(c) the Lessee shall sublease, assign or otherwise transfer its
interest in this Lease in violation of the terms hereof, violate the provisions
of Section 13.4 hereof or abandon the Property;

(d) the Lessee shall fail to perform in any material respect any
covenant, condition or agreement (not included in clauses (a), (b), (c) or (g)
of this Section 16.1) to be performed by it hereunder or under any other
Operative Document and such failure shall continue for a period of thirty (30)
days after written notice thereof to the Lessee from the Lessor; provided, that
if such default is capable of being cured but cannot be cured within such 30-day
period, the cure period shall be extended, for as long as is necessary to
effectuate a cure, so long as the Lessee is diligently pursuing such cure (but
in no event in excess of one hundred eighty (180) days from the date of Lessor's
notice of default);

(e) the filing by Lessee of any petition for dissolution or
liquidation of Lessee, or the commencement by Lessee of a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or Lessee shall have consented to the entry of an order for relief in an
involuntary case under any such law, or the failure of Lessee generally to pay
its debts as such debts become due (within the meaning of the Bankruptcy Code or
any other applicable bankruptcy laws), or the failure by Lessee promptly to
satisfy or discharge any execution, garnishment or attachment of such
consequence as will impair its ability to carry out its obligations under this
Lease, or the appointment of or taking possession by a receiver, custodian or
trustee (or other similar official) for Lessee or any substantial part of its
property, or a general assignment by Lessee for the benefit of its creditors, or
the entry by Lessee into an agreement of composition with its creditors, or
Lessee shall have taken any corporate action in furtherance of any of the
foregoing; or the filing against Lessee of an involuntary petition in bankruptcy
which results in an order for relief being entered or, notwithstanding that an
order for relief has not been entered, the petition is not dismissed within
ninety (90) days of the date of the filing of the petition, or the filing under
any law relating to bankruptcy, insolvency or relief of debtors of any petition
against Lessee for reorganization, composition, extension or arrangement with
creditors which either (i) results in a finding or adjudication of insolvency of
Lessee or (ii) is not dismissed within ninety (90) days of the date of the
filing of such petition (the term "dissolution or liquidation" of Lessee, as
used in this paragraph (e), shall not be construed to include the cessation of
the corporate existence of Lessee resulting either from a merger or
consolidation of Lessee into or with another corporation or a dissolution or
liquidation of Lessee following a transfer of all or substantially all of its
assets as an entirety as permitted by the express terms of the Operative
Documents);

(f) any representation or warranty by Lessee in any Operative Document
or in any certificate or document delivered pursuant to any Operative Document
shall have been materially incorrect when made, shall remain material when
discovered and, if capable of cure, shall not have been cured within thirty (30)
days after receipt of written notice by Lessee from Lessor, unless the default
is not curable within such thirty (30) days but is capable of being cured within
one hundred eighty (180) days and the Lessee shall be diligently proceeding to
correct such

37

failure and such failure shall not be corrected within one hundred eighty (180)
days from the date of Lessor's notice of default; or

(g) the failure by the Lessee to maintain the insurance required by
Article XI hereof.

ARTICLE XVII

ENFORCEMENT
-----------

Section 17.1  Remedies. Upon the occurrence of any Lease Event of
--------
Default and at any time thereafter so long as the same shall be continuing, the
Lessor may, at its option, by notice to the Lessee declare this Lease to be in
default, and subject to Applicable Laws and Regulations, at any time thereafter
the Lessor may, so long as such Lease Event of Default is continuing, do one or
more of the following as the Lessor, in its sole discretion shall determine:

(a) the Lessor may, by notice to the Lessee terminate this Lease as of
the date specified in such notice, and as of the date specified in such notice
the term of this Lease shall expire and terminate as fully and completely as if
such date had been fixed for the expiration of the term of this Lease, and all
rights of Lessee hereunder shall expire and terminate, but Lessee shall remain
liable as hereinafter provided; however, (A) no reletting, reentry or taking of
possession of the Property by the Lessor will be construed as an election on the
Lessor's part to terminate this Lease unless a written notice of such intention
is given to the Lessee, (B) notwithstanding any reletting, reentry or taking of
possession, the Lessor may at any time thereafter elect to terminate this Lease
for a continuing Lease Event of Default, and (C) no act or thing done by the
Lessor or any of its agents, representatives or employees and no agreement
accepting a surrender of the Property shall be valid unless the same be made in
writing and executed by the Lessor;

(b) the Lessor may (i) demand that the Lessee, and the Lessee shall
upon the written demand of the Lessor, return the Property promptly to the
Lessor in the manner and condition required by, and otherwise in accordance with
all of the provisions of, Articles IX and XII hereof as if the Property were
being returned at the end of the Lease Term, and the Lessor shall not be liable
for the reimbursement of the Lessee for any costs and expenses incurred by the
Lessee in connection therewith and (ii) without prejudice to any other remedy
which the Lessor may have for possession of the Property, enter upon the
Property and take immediate possession of (to the exclusion of the Lessee) the
Property and expel or remove the Lessee and any other Person who may be
occupying the Property, but if such other Person shall have entered into a
non-disturbance and attornment agreement with the Lessor only to the extent
permitted therein, by summary proceedings, all without liability to the Lessor
for or by reason of such entry or taking of possession, whether for the
restoration of damage to the Property caused by such taking or otherwise and, in
addition to Lessor's other damages, Lessee shall be responsible for the
reasonably necessary costs and expenses of reletting, including, without
limitation, brokers' fees and the costs of any alterations (but only for use of
the Improvements as then constituted) or repairs made by Lessor;

38

(c)  the Lessor may sell the Property at public or private sale, as
the Lessor may determine, free and clear of any rights of the Lessee in which
event the Lessee's obligation to pay Basic Rent hereunder for periods commencing
after the date of such sale shall be terminated (except to the extent that Basic
Rent is to be included in computations under paragraph (e) or (f) below if the
Lessor shall elect to exercise its rights thereunder);

(d)  the Lessor may hold, keep idle or lease to others all or any part
of the Property as the Lessor in its sole discretion may determine, free and
clear of any rights of the Lessee and without any duty to account to the Lessee
with respect to such action or inaction or for any proceeds with respect to such
action or inaction, except that the Lessee's obligation to pay Basic Rent from
and after the occurrence of a Lease Event of Default shall be reduced by the net
proceeds, if any, received by the Lessor from leasing the Property to any Person
other than the Lessee for the same periods or any portion thereof after
deductions for all costs of reletting the Property, including without limitation
all repossession costs, brokerage commissions, reasonable attorneys fees
(including fees and expenses of appellate proceedings), employee expenses,
alteration costs and expenses of preparation for such reletting;

(e)  The Lessor may, whether or not the Lessor shall have exercised or
shall thereafter at any time exercise any of its rights under paragraph (a),
(b), (c) or (d) of this Article XVII with respect to the Property, demand, by
written notice to the Lessee specifying a date (the "Final Payment Date") not
------------------
earlier than ten (10) days after the date of such notice, that the Lessee pay to
the Lessor, and the Lessee shall pay to the Lessor, on the Final Payment Date,
as liquidated damages for loss of a bargain and not as a penalty (the parties
agreeing that the Lessor's actual damages would be difficult to predict, but the
aforementioned liquidated damages represent a reasonable approximation of such
amount) pursuant to clause (iii) below, as consideration for the transfer of the
Property, an amount equal to the sum of (A) all accrued and unpaid Basic Rent
due and unpaid as of the Final Payment Date (it being understood that the Lessee
shall pay when due any Basic Rent due on a Rent Payment Date which occurs on or
after the Lease Event of Default but prior to the Final Payment Date), plus (B)
whichever of the following amounts the Lessor, in its sole discretion, shall
specify in such notice (together with interest on such amount at the Overdue
Rate from the Final Payment Date specified in such notice to the date of actual
payment):

(i)  if the Property or any part thereof has not been sold, an
amount equal to the excess, if any, of the Stipulated Loss Value or
Termination Value for that portion of the Property not so sold,
computed as of the Final Payment Date, over the Fair Market Sales
Value of the Property as of the Final Payment Date (such Fair Market
Sales Value to be determined by mutual agreement of the Lessor and the
Lessee or if they cannot agree within ten (10) days after such notice
by the Appraisal Procedure); or

(ii) if the Property or any part thereof has not been sold, an
amount equal to the excess, if any, of the Stipulated Loss Value or
Termination Value for the portion of the Property not so sold computed
as of the Final Payment Date over the present value of the Fair Market
Rental Value for the portion of the Property not so sold for the
balance of the Lease Term discounted monthly at an annual rate of
eight percent (8%) (such Fair Market Rental Value to be determined by
mutual agreement

39

of the Lessor and the Lessee or if they cannot agree within ten (10)
days of such notice by the Appraisal Procedure);

(f)  if the Lessor shall have sold the Property or any part thereof
pursuant to paragraph (c) above, the Lessor may, if it shall so elect, demand
that the Lessee pay to the Lessor, and the Lessee shall pay to the Lessor, on
the date of such sale, as liquidated damages for loss of a bargain and not as a
penalty (the parties agreeing that the Lessor's actual damages would be
difficult to predict, but the aforementioned liquidated damages represent a
reasonable approximation of such amount) (in lieu of Basic Rent for the Property
due for periods commencing on or after the Stipulated Loss Value Date or
Termination Value coinciding with such date of sale (or, if the sale date is not
a Stipulated Loss Value Date, the Stipulated Loss Value or Termination Value
date next preceding the date of such sale)), an amount equal to the sum of (A)
all accrued and unpaid Basic Rent due and unpaid as of such sale date (it being
understood that the Lessee shall pay when due any Basic Rent due on a Rent
Payment Date which occurs on or after the Lease Event of Default but prior to
such sale date), plus (B) the amount of any excess of the Stipulated Loss Value
or Termination Value for the Property so sold, computed as of such Stipulated
Loss Value Date, over the net proceeds of such sale, together with interest at
the interest rate on any debt secured by an interest in the Lease and the
Property on such excess from such Stipulated Loss Value Date to the date of
sale, plus (C) interest at the Overdue Rate on all of the foregoing amounts from
the date of such sale until the date of payment; provided, however, to the
--------  -------
extent that the Lessee shall have paid Basic Rent in advance on or after the
date the Lease Event of Default occurred but prior to such sale date, the amount
payable by the Lessee hereunder shall be reduced by an amount equal to the
advance Basic Rent so paid multiplied by a fraction, the numerator of which
shall be the number of days in the Lease Period with respect to such advance
Basic Rent payment before such sale date and the denominator of which shall be
the actual number of days in such Lease Period.

(g)  The Lessor may exercise any other right or remedy that may be
available to it under Applicable Laws and Regulations or in equity, or proceed
by appropriate court action (legal or equitable) to enforce the terms hereof or
to recover damages for the breach hereof. Separate suits may be brought to
collect any such damages for any Lease Period(s), and such suits shall not in
any manner prejudice the Lessor's right to collect any such damages for any
subsequent Lease Period(s).

(h)  The Lessor may retain and apply against the Lessor's damages all
sums which the Lessor would, absent such Lease Event of Default, be required to
pay to, or turn over to, the Lessee pursuant to the terms of this Lease,
including, without limitation, any sums which the Lessor may be required to pay
to Lessee under Section 14.5.

Section 17.2   Survival of Lessee's Obligations. No termination of
--------------------------------
this Lease, in whole or in part, or repossession of any of the Property or
exercise of any remedy under Section 17.1 shall, except as specifically provided
therein, relieve the Lessee of any of its liabilities and obligations hereunder.
In addition, except as specifically provided therein, the Lessee shall be
liable, except as otherwise provided above, for any and all unpaid Rent,
including Additional Rent, due hereunder before, after or during the exercise of
any of the foregoing remedies, including all reasonable legal fees and other
costs and expenses incurred by the Lessor by reason of the occurrence of any
Lease Event of Default or the exercise of the Lessor's remedies with respect

40

thereto, and including all costs and expenses incurred in connection with (x)
the return of the Property in the manner and condition required by, and
otherwise in accordance with the provisions of, Articles IX and XII hereof as if
the Property were being returned at the end of the Lease Term or (y) making any
Alterations the Lessor deems reasonably necessary for purposes of reletting the
Property as then constituted. At any sale of the Property or any part thereof or
any other rights pursuant to Section 17.1, the Lessor may bid for and purchase
the Property.

Section 17.3   Remedies Cumulative; No Waiver; Consents. To the extent
----------------------------------------
permitted by, and subject to the mandatory requirements of Applicable Laws and
Regulations, each and every right, power and remedy herein specifically given to
the Lessor or otherwise in this Lease shall be cumulative and shall be in
addition to every other right, power and remedy herein specifically given or now
or hereafter existing at law, in equity or by statute, and each and every right,
power and remedy whether specifically herein given or otherwise existing may be
exercised from time to time and as often and in such order as may be deemed
expedient by the Lessor, and the exercise or the beginning of the exercise of
any power or remedy shall not be construed to be a waiver of the right to
exercise at the same time or thereafter any right, power or remedy. No delay or
omission by the Lessor in the exercise of any right, power or remedy or in the
pursuit of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Lessee or to be an
acquiescence therein. The Lessor's consent to any request made by the Lessee
shall not be deemed to constitute or preclude the necessity for obtaining the
Lessor's consent, in the future, to all similar requests. No waiver by the
Lessor of any Lease Event of Default shall in any way be, or be construed to be,
a waiver of any future or subsequent Lease Event of Default.

ARTICLE XVIII

RIGHT TO PERFORM FOR LESSEE
---------------------------

If the Lessee shall fail to perform or comply with any of its
agreements contained herein, the Lessor may, on five Business Days' prior
written notice to the Lessee (except in the event of an emergency, in which case
only such prior notice, if any, as is reasonable under the circumstances shall
be required), perform or comply with such agreement, and the Lessor shall not
thereby be deemed to have waived any default caused by such failure and such
performance or compliance shall not relieve the Lessee from any default
hereunder, and the amount of such payment and the amount of the expenses of the
Lessor (including reasonable attorney's fees and expenses) incurred in
connection with such payment or the performance of or compliance with such
agreement, as the case may be, together with interest thereon at the Overdue
Rate, shall be deemed Additional Rent, payable by the Lessee to the Lessor upon
demand.

41

ARTICLE XIX

[Intentionally Omitted]
-----------------------

ARTICLE XX

INDEMNIFICATION
---------------

Section 20.1   General Indemnification. The Lessee agrees to assume
-----------------------
liability for, and to indemnify, protect, defend, save and keep harmless each
Indemnitee, on an After-Tax Basis, from and against, any and all Claims that may
be imposed on, incurred by or asserted against any Indemnitee, whether or not
such Indemnitee shall also be indemnified as to any such Claim by any other
Person, in any way relating to or arising out of (a) the ownership, operation,
possession, use, improvement, leasing, subleasing, disposition or maintenance of
all or any part of the Property (or any Replacement Property), (b) the
construction, design, purchase, acceptance, rejection, modification,
substitution or condition of the Property (or any Replacement Property),
including without limitation claims or penalties arising from any violation of
Applicable Laws and Regulations, without regard to whether compliance therewith
is required by the terms of this Lease or liability in tort (strict or
otherwise), (c) any Release, violation of Environmental Laws, Environmental
Claim or other loss of or damage to any property or the environment relating to
the Property (or any Replacement Property) or the Lessee (including, without
limitation, all expenses associated with remediation, response, removal,
corrective action, financial assurance, natural resource damages and the
protection of wildlife, aquatic species, vegetation, flora and fauna, and any
mitigative action required under applicable Environmental Laws), (d) the
Operative Documents, or the transaction contemplated thereby, including, without
limitation, the transfer of title to the Land, the Improvements and the Fixtures
(and any Replacement Property) to the Lessor or (e) any breach by the Lessee or
the Seller of any of their representations or warranties under the Operative
Documents (including, without limitation, any such breach of representations
relating to the Lessor's title to any portion of the Property (or any
Replacement Property)) or failure by the Lessee or the Seller to perform or
observe any covenant or agreement to be performed by it under any of the
Operative Documents; provided, however, that the Lessee shall not be required to
--------  -------
indemnify an Indemnitee under this Section 20.1 for any of the following: (1)
with respect to the Lease, any Claim to the extent attributable to acts or
events which occur after the later of (A) the expiration of the Lease Term or
earlier termination of the Lease (and, if required by the terms of the Lease,
the surrender of the Property (or any Replacement Property) by the Lessee to the
Lessor or its assigns) (except to the extent fairly attributable to acts or
events occurring or accruing prior thereto) and (B) the surrender of possession
of the Property to the Lessor, (2) any Claim to the extent resulting from the
willful misconduct or gross negligence of such Indemnitee or any of its
Indemnitee Group (other than willful misconduct or gross negligence which is
imputed as a matter of law to such Indemnitee by virtue of a Lessor's ownership
of the Property or any Replacement Property), (3) any cost or expense expressly
provided under the Operative Documents to be paid or borne by a party other than
the Seller or the Lessee, (4) any Claim resulting from a transfer by any
Indemnitee of all or part of its interest in a Lease, the other Operative
Documents or any Property, other than (w) while a Lease Event of Default shall
have occurred and be continuing, (x) a transfer as a result of an Event of Loss
or Event of Taking pursuant to the Lease, (y) a transfer resulting from Lessee's
election to terminate the Lease pursuant to Section 6.1 or to cause a
substitution

42

pursuant to Section 6.2 of the Lease, or (z) any other transfer required by the
terms of the Lease, (5) any Claim resulting from a breach or violation by such
Indemnitee of any of its or by Indemnitee Group of any of their respective
representations, warranties or covenants in any of the Operative Documents or
from a violation of Applicable Laws and Regulations by an Indemnitee or by any
of its Indemnitee Group other than any such violation (x) imputed to any such
Person as a matter of law by reason of their participation in the Overall
Transaction or (y) otherwise related to the business or activities of the Lessee
or the nature, design, engineering, construction, location, maintenance, repair
or use of the Property (or any Replacement Property) by the Lessee, (6) any
Claim resulting from Lessor Liens attributable to such Indemnitee or any of its
Indemnitee Group and (7) any Claim in respect of Taxes (as to which the Tax
Indemnity Agreement and the provisions of Article IV hereof shall govern), other
than a payment necessary to make a payment under this Section 20.1 on an
After-Tax Basis. The Lessee shall be entitled to credit against any payments due
under this Section 20.1 any insurance recoveries received by the Indemnitee in
respect of the related Claim under or from insurance paid for by the Lessee or
assigned to the Lessor by the Lessee.

If the Lessee shall obtain knowledge of any Claim indemnified against
under this Section 20.1, the Lessee shall give prompt notice thereof to the
appropriate Indemnitee or Indemnitees, and if any Indemnitee shall obtain any
such knowledge, such Indemnitee shall give prompt notice thereof to the Lessee,
provided that failure so to notify the Lessee shall not release the Lessee from
--------
any of its obligations to indemnify hereunder except to the extent such failure
shall have precluded the Lessee from contesting such Claim or such failure shall
result in an increased Claim, but only to the extent of such increase. With
respect to any amount that the Lessee is requested by an Indemnitee to pay by
reason of this Section 20.1, such Indemnitee shall, if so requested by the
Lessee and prior to any payment and at Lessee's expense, submit such additional
information to the Lessee as the Lessee may reasonably request and which is
reasonably available to such Indemnitee to substantiate properly the requested
payment.

In case any action, suit or proceeding shall be brought against any
Indemnitee, such Indemnitee shall notify the Lessee of the commencement thereof,
and the Lessee shall be entitled, at its expense, acting through counsel
reasonably acceptable to such Indemnitee, to participate in, and, to the extent
that the Lessee desires to, assume and control the defense thereof; provided,
--------
however, that the Lessee shall not be entitled to assume and control the defense
-------
of any such action, suit or proceeding if and to the extent that, (A) in the
reasonable opinion of such Indemnitee, (x) such action, suit or proceeding
involves the potential imposition of criminal liability or civil sanctions on
such Indemnitee or (y) the control of such action, suit or proceeding would
involve the Lessee in a potential conflict of interest which under applicable
rules of professional conduct would prohibit representation of both such
parties, (B) a Material Lease Default or Lease Event of Default has occurred and
is continuing and the Indemnitee notifies the Lessee that it is no longer
permitted to control the defense of such Claim, (C) the proceeding involves any
material danger of the sale, forfeiture or loss of, or the creation of any Lien
(other than any Permitted Lien) on the Property, or (D) the amounts involved, in
the good faith opinion of the Indemnitee, are likely to have a material adverse
effect on the business of such Indemnitee, in which case the Indemnitee will be
entitled to assume and take control of the defense thereof at Lessee's expense.
The Indemnitee may participate in a reasonable manner at its own expense and
with its own counsel in any proceeding conducted by the Lessee in accordance
with the foregoing. The Lessee shall not settle or

43

compromise any such action, suit or proceeding unless in connection therewith
Lessee shall obtain a full release against any Claim involved therein in favor
of each Indemnitee.

Each Indemnitee shall at the Lessee's expense supply the Lessee with
such information and documents reasonably requested by the Lessee as are
necessary or advisable for the Lessee to participate in any action, suit or
proceeding to the extent permitted by this Section 20.1. No Indemnitee shall
enter into any settlement or other compromise with respect to any Claim which is
entitled to be indemnified under this Section 20.1 without the prior written
consent of the Lessee, which consent shall not be unreasonably withheld, unless
such Indemnitee waives its right to be indemnified under this Section 20.1 with
respect to such Claim.

Upon payment in full of any Claim by the Lessee pursuant to this
Section 20.1 to or on behalf of an Indemnitee, the Lessee, without any further
action, shall be subrogated to any and all claims that such Indemnitee may have
relating thereto (other than claims in respect of insurance policies maintained
by such Indemnitee at its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be necessary to preserve
any such claims and otherwise cooperate with the Lessee and give such further
assurances as are necessary or advisable to enable the Lessee vigorously to
pursue such claims.

Nothing in this Section 20.1 shall be construed as a guaranty by the
Lessee of any residual value in the Property.

The Lender shall be a third party beneficiary of this Article XX
entitled to enforce the provisions hereof directly against the Lessee.

Section 20.2   Survival. The obligations of Lessee under this Article
--------
XX shall survive expiration or earlier termination of this Lease. No Indemnitee
shall be entitled to payment of any amount hereunder to the extent of any prior
payment with respect to the same Claim under any other indemnity from the
Lessee.

ARTICLE XXI

TRANSFERS OF INTERESTS
----------------------

Section 21.1   Transfers of Interests. (a) (a) (i) Other than as
----------------------
expressly permitted by this Section 21.1, Lessor shall not, without the prior
written consent of the Lessee, assign, convey or otherwise transfer (other than
to a lender in connection with a financing or mortgaging with respect to the
Property) all or any part of the Lessor's right, title or interest in, to and
under this Lease or any other Operative Documents or the Property (the "Lessor
------
Interest") and (ii) other than as expressly permitted by this Section 21.1, the
--------
Lessor Parent, which is the sole member of the Lessor, shall not assign, convey
or otherwise transfer all or any part of its membership interest with respect to
the Lessor (the "Member Interest").
---------------

(b)  If Lessor desires to sell or offer for sale the Lessor Interest,
or Lessor Parent desires to sell or offer for sale the Member Interest, the
Lessor or Lessor Parent, as the case may be, shall first provide Lessee in
writing all of the material economic terms and conditions of the

44

proposed sale, including, without limitation, the price (the "Offered Terms")
-------------
and the requirements for compliance with or satisfaction of any transfer,
assignment and assumption obligations under any Loan then outstanding, and shall
offer Lessee the opportunity to purchase the Lessor Interest or Member Interest,
as the case may be, for the same purchase price and otherwise on substantially
the same terms and conditions as such Offered Terms (other than representations
and warranties that may be offered as an inducement to certain third parties).
Lessee shall have the right to accept the Offered Terms by written notice to the
Lessor given within thirty (30) Days after Lessee's receipt of the Offered
Terms; provided, however, that the Lessee shall have satisfied any transfer,
assignment and assumption obligations and any other requirements of Lessor in
connection therewith under any Loan then outstanding. If Lessee does not accept
the Offered Terms within thirty (30) Days after receipt of the Offered Terms
from the Lessor, Lessee shall be deemed to have rejected the Offered Terms and
the Lessor may enter into a contract to sell the Lessor Interest or the Lessor
Parent may enter into a contract to sell the Member Interest during the fifteen
(15) month period beginning on the date of the expiration of the applicable
period, provided that a sale resulting from such offer shall be consummated on
--------
substantially the same terms as the Offered Terms (other than representations
and warranties that may be offered as an inducement to certain third parties)
(it being agreed that any sale at a price that is equal to or greater than 95%
of the purchase price contained in the Offered Terms shall be considered to be
substantially the same terms as to price). If such sale is not consummated
within a reasonable period after a contract for sale has been executed within
such fifteen (15) month period, the provisions of this Section 21.1(b) shall
again apply in respect of any proposed offer of the Lessor Interest or Member
Interest whether made during such fifteen (15) month period or thereafter.

(c)  Notwithstanding anything contained to the contrary in this
Section 21.1, Lessee shall not have the right of first offer under Section
21.1(b) with respect to the Lessor Interest or Member Interest; (i) while a
Lease Event of Default has occurred and is continuing; (ii) following a
retention of the Property by the Lessor in connection with a termination under
Section 6.1; (iii) at any time after the expiration or earlier termination of
this Lease; (iv) in connection with a termination of this Lease or a sale of the
Property pursuant to Section 6.1; or (v) the first transfer occurring in the
first twenty-four (24) months of the Basic Term.

(d)  Neither Lessor nor Lessor Parent shall, directly or indirectly
assign, convey or otherwise transfer all or any part of the Lessor Interest or
Member Interest to a transferee, respectively, without the prior written consent
of Lessee, unless:

(1)  Lessor and Lessor Parent shall have complied with their
respective obligations under Section 21.1(b) above;

(2)  Lessee shall have received at least two (2) Business
Days prior notice for the first transfer and fifteen (15) Business
Days prior notice for transfers thereafter, which notice shall specify
the name and address of the proposed transferee, whether such proposed
transferee meets the requirements of paragraph (5) of this Section
21.1(d) and a certification to the effect that the Lessor has complied
with the provisions of Section 21.1(b);

(3)  the transferee shall have the requisite power and
authority to enter into and carry out the transactions contemplated
hereby and by the other

45

related Operative Documents, such transfer does not and will not
involve, either directly or indirectly, the assets of any employee
benefit plan or plan that would cause a violation of any provision of
ERISA or the imposition of an excise tax under the Code, and such
transfer will not violate any Applicable Laws and Regulations or
create a relationship which would be in violation of any Applicable
Laws and Regulations;

(4)  the transferee shall agree in writing to be bound by
all the terms of, and to undertake all the obligations of Lessor and
Lessor Parent, respectively, contained in this Lease and the Operative
Documents pursuant to an assignment and assumption agreement in a form
reasonably acceptable to Lessee;

(5)  the transferee (x) is a U.S. Person or, if not, Lessee
receives, at Lessor's cost and expense, satisfactory legal opinions
that Lessee is not subject to any material increased tax indemnity or
withholding tax risk, and such other corporate, tax and regulatory
opinions as Lessee may reasonably request, (y) is not a Competitor;
and (z) has a tangible net worth equal to or greater than $1,000,000;
and

(6)  the Lessor Parent and Lessee shall have received an
opinion of counsel to the transferee (prepared at no expense to
Lessee) as to compliance with paragraph (3) and due authorization,
execution, delivery, validity and enforceability of the assumption
agreement referred to in paragraph (4) of this Section 21.1(d).

(e)  Each party hereto agrees that, upon any transfer by the Lessor or
the Lessor Parent of the Lessor Interest or the Member Interest, as the case may
be, in accordance with the provisions of Section 21.1 hereof, the transferee
shall, with respect to the interest transferred, succeed to, and be substituted
for, and may exercise every right and power of, the Lessor or the Lessor Parent,
as the case may be, under this Lease and each other Operative Document to which
the Lessor or the Lessor Parent is a party with the same effect as if such
transferee had been named as the Lessor or the Lessor Parent herein and therein,
and the transferor (and the Lessor Parent to the extent the transferor is the
Lessor) shall, subject to the provisions of Section 21.1(d)(4) hereof, be
released from all of its obligations under such Operative Documents to the
extent of the interest transferred; provided, however, that the transferor shall
--------  -------
not be released from any obligation arising, accruing or relating to any period
prior to such transfer unless such new transferee expressly agrees to assume
such obligations.

(f)  Notwithstanding anything to the contrary contained herein, the
provisions of this Article XXI, except clauses (d)(5)(x) and (d)(5)(y) of
Section 21.1, shall not apply to transfers to Affiliates of General Electric
Capital Corporation, a Delaware corporation, or during the continuance of an
Event of Default under this Lease.

46

ARTICLE XXII

[Intentionally omitted]
-----------------------

ARTICLE XXIII

MISCELLANEOUS
-------------

Section 23.1   Binding Effect; Successors and Assigns; Survival. The
------------------------------------------------
terms and provisions of this Lease, and the respective rights and obligations
hereunder of the Lessor and the Lessee, shall be binding upon their respective
permitted successors, legal representatives and assigns, and inure to the
benefit of their respective permitted successors, legal representatives and
assigns.

Section 23.2   Quiet Enjoyment. The Lessor covenants that it will not
---------------
and it will not cause or permit anyone claiming by or through Lessor to
interfere in the Lessee's or any of its sublessees' quiet enjoyment of the
Property hereunder during the Lease Term, so long as no Lease Event of Default
has occurred and is continuing.

Section 23.3   Notices. Unless otherwise specifically provided herein,
-------
all notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be in writing by United States mail, by nationally recognized
courier service or by hand and any such notice shall become effective when
received or, if sent by nationally recognized courier service for next day
delivery, on the next day after delivery of such notice to such courier service,
and shall be directed to the Address of such Person. From time to time any party
may designate a new Address for purposes of notice hereunder by notice to each
of the other parties hereto. The Lessee shall deliver copies to the Lender of
all notices delivered to the Lessor at the time, and in the manner, delivered to
the Lessor; provided, however, that the failure to deliver such notice shall not
--------  -------
constitute a default hereunder or a breach hereof.

Section 23.4   Severability. Any provision of this Lease that shall be
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction, and Lessee shall remain
liable to perform its obligations hereunder except to the extent of such
unenforceability.

Section 23.5   Amendment; Complete Agreements. Neither this Lease nor
------------------------------
any of the terms hereof may be terminated, amended, supplemented, waived or
modified orally, but only by an instrument in writing signed by the Lessee and
the Lessor. This Lease, together with the other Operative Documents, is intended
by the parties as a final expression of their agreement and as a complete and
exclusive statement of the terms thereof, all negotiations, considerations and
representations between the parties having been incorporated herein and therein.
No course of prior dealings between the parties or their officers, employees,
agents or Affiliates shall be relevant or admissible to supplement, explain, or
vary any of the terms of this Lease or any other Operative

47

Document. Acceptance of, or acquiescence in, a course of performance rendered
under this or any prior agreement between the parties or their Affiliates shall
not be relevant or admissible to determine the meaning of any of the terms of
this Lease or any other Operative Document. No representations, undertakings, or
agreements have been made or relied upon in the making of this Lease other than
those specifically set forth in the Operative Documents.

Section 23.6   Headings. The Table of Contents and headings of the
--------
various Articles and Sections of this Lease are for convenience of reference
only and shall not modify, define or limit any of the terms or provisions
hereof.

Section 23.7   Counterparts. This Lease may be executed by the parties
------------
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.

Section 23.8   Governing Law; WAIVER OF JURY TRIAL. This Lease shall
-----------------------------------
be governed by and construed in accordance with the internal laws (and not the
conflict laws) of the State of New York; provided, however, that if the law of
the State in which the Property is located is required to be applicable to any
provisions hereof, then the State law shall be applicable with respect to such
provisions.

(a)  Jurisdiction. Any action or proceeding against any of the parties
------------
hereto relating in any way to this Lease or any other Operative Document may be
brought and enforced in the courts of the State of New York or of the United
States for the Southern District of New York, and the parties hereto irrevocably
consent to the jurisdiction of each such court in respect of any such action or
proceeding. Each of the parties hereto further irrevocably consents to the
service of process in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, return receipt
requested, to the Address of such party as provided for notices under Section
23.3 hereof. The foregoing shall not limit the right of any party to serve
process in any other manner permitted by law or to bring any action or
proceeding, or to obtain execution of any judgment, in any other jurisdiction,
including without limitation the State in which the Property is located.

(b)  Venue. Each of the parties hereto hereby irrevocably waives any
-----
objection that it may now or hereafter have to the laying of venue of any action
or proceeding arising under or relating to this Lease or any other Operative
Document in any court located in the Borough of Manhattan, City and State of New
York, and hereby further irrevocably waives any claim that a court located in
the Borough of Manhattan, City and State of New York is not a convenient forum
for any such action or proceeding.

(c)  WAIVER OF JURY TRIAL. LESSEE AND LESSOR HEREBY WAIVE TRIAL BY
--------------------
JURY IN ANY ACTION OR PROCEEDING TO WHICH LESSEE AND LESSOR MAY BE PARTIES
ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS LEASE. IT IS HEREBY AGREED AND
UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS
AGAINST PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES
WHO ARE NOT PARTIES TO THIS LEASE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND
VOLUNTARILY MADE BY LESSEE AND LESSOR, AND LESSEE AND LESSOR HEREBY ACKNOWLEDGE

48

THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO
INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS
EFFECT. LESSEE AND LESSOR FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED IN
THE SIGNING OF THIS LEASE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, SELECTED OF THEIR OWN FREE WILL, AND THAT THEY HAVE HAD THE OPPORTUNITY
TO DISCUSS THIS WAIVER WITH COUNSEL.

Section 23.9   Security Funds. Any amounts otherwise payable to Lessee
--------------
under this Lease or any other Operative Document but which shall be paid to or
retained by Lessor pursuant to the terms hereof as a result of any Lease Default
or Lease Event of Default shall be held by the Lessor, as security for the
obligations of Lessee under this Lease and the other Operative Documents and, at
such time as there shall not be continuing any such Lease Default or Lease Event
of Default, such amounts, net of any amounts theretofore applied to Lessee's
obligations hereunder or under any other Operative Document, shall be paid to
Lessee. Any such amounts which are held by the Lessor pending payment to Lessee
shall, until paid to Lessee as provided herein or until applied against Lessee's
obligations hereunder, under any other Operative Document in connection with any
exercise of remedies hereunder, be invested in Permitted Investments by the
Lessor as directed from time to time by Lessor for the benefit and at the risk
and expense of the Lessee.

Section 23.10  Discharge of Lessee's Obligations by its Affiliates.
---------------------------------------------------
The Lessor agrees that performance of any of the Lessee's obligations hereunder
by one or more of its Affiliates or one or more sublessees of the Property or
any part thereof shall constitute performance by the Lessee of such obligations
to the same extent and with the same effect hereunder as if such obligations
were performed by the Lessee.

Section 23.11  Estoppel Certificates. Each party hereto agrees that at
---------------------
any time and from time to time during the Lease Term, it will promptly, but in
no event later than fifteen (15) Business Days after request by the other party
hereto, execute, acknowledge and deliver to such other party or to any
prospective purchaser (if such prospective purchaser has signed a commitment or
letter of intent to purchase the Property or any part thereof), assignee or
mortgagee or third party designated by such other party, a certificate stating
(a) that this Lease is unmodified and in force and effect (or if there have been
modifications, that this Lease is in force and effect as modified, and
identifying the modification agreements); (b) the date to which Basic Rent has
been paid; (c) whether or not there is any existing default by the Lessee in the
payment of Basic Rent or any other sum of money hereunder, and whether or not
there is any other existing default by either party with respect to which a
notice of default has been served, and, if there is any such default, specifying
the nature and extent thereof; (d) whether or not, to the knowledge of the
signer, there are any setoffs, defenses or counterclaims against enforcement of
the obligations to be performed hereunder existing in favor of the party
executing such certificate and (e) other items that may be reasonably requested;
provided that no such certificate may be requested unless the requesting party
--------
has a good faith reason for such request.

Section 23.12  Miscellaneous Matters Affecting the Property.
--------------------------------------------

49

(1)  If no Material Lease Default or Lease Event of Default shall
occur and be continuing (other than any Material Lease Default or Lease Event of
Default which will be cured by the action which Lessee requests pursuant to this
Section 23.12(1)), the Lessor shall (within thirty (30) days after its receipt
of (x) the written request of Lessee, and (y) the materials requested by the
party in question pursuant to Section 23.12(2) hereof (such request to be made
within fifteen (15) days of receipt of Lessee's notice under clause (x)
hereof)), subject to the requirements of Section 23.12(2) hereof, join in any
(i) grant of easements, licenses, rights of way, party wall rights and other
rights in the nature of easements, with or without consideration, (ii) release
of easements, licenses, rights of way, party wall rights or other rights in the
nature of easements which are for the benefit of the Land or Property or any
portion thereof, with or without consideration, (iii) dedication or transfer of
portions of the Land, not improved with a building, for road, highway or other
public purposes, with or without consideration, (iv) execution of petitions to
have the Land or any portion thereof annexed to any municipal corporation or
utility district, (v) to the extent necessary to use of the Property, execution
of agreements for the use and maintenance of common areas, for reciprocal rights
of parking, ingress and egress and amendments to any covenants and restrictions
affecting the Land or Property or any portion thereof, with or without
consideration, (vi) request to any Governmental Authority for platting or
subdivision or replatting or resubdivision approval with respect to the Land or
any portion thereof or any parcel of land of which the Land or any portion
thereof forms a part or a request for any variance from zoning or other
governmental requirements, with or without consideration, (vii) creation of a
governmental special benefit district for public improvements and payments of
special assessments in connection therewith, in lump sum or installments, and
(viii) execution and delivery to such Person of any instrument appropriate to
confirm or effect such grant, release, dedication, transfer, request or such
other matter, document or proceeding (to the extent of their respective
interests in the Land, Property or the applicable portion thereof).

(2)  The Lessor's obligations pursuant to Section 23.12 (1)
hereto shall be subject to the requirements that:

(i)  any action taken pursuant to Section 23.12(1) hereof (an
"Action") shall be at the sole cost and expense of Lessee, and,
------
whether or not any proposed Action is consummated, Lessee shall pay
all reasonable out-of-pocket costs of the Lessor and the Lender in
connection therewith (including, without limitation, the reasonable
fees of attorneys, architects, engineers, planners, appraisers and
other professionals retained by the Lessor or the Lender in connection
with any proposed Action);

(ii) the requested Action will not interfere with and is not
detrimental to the continued use and operation of the Property and
will not cause the Property or any portion thereof to fail to comply
in all respects with the provisions of this Lease or any other
Operative Documents and all Applicable Laws and Regulations and
applicable Permitted Liens (including, without limitation, all
applicable zoning, planning, building, and subdivision ordinances, all
applicable setback and parking requirements, all applicable
restrictive covenants and all applicable architectural approval
requirements) and will not cause a breach of or a default under any
mortgages secured by or other loan document evidencing indebtedness
secured by the Property;

50

(iii)   all Governmental Actions required prior to the requested
Action shall have been applied for or obtained, and all filings
required prior to the requested Action shall have been made;

(iv)    no such Action shall result in any material down-zoning
of the related Land or any portion thereof or a material reduction in
the maximum density or development rights available to the Land under
all Applicable Laws and Regulations;

(v)     all consideration received in connection with any Action
(net of all expenses paid by Lessee under clause (i) above) shall be
paid to Lessee and any portion thereof (to the extent received by
Lessee) which is allocable to the interests of the Lessor shall be paid
by Lessee over to such party as its interest may appear promptly
following receipt thereof;

(vi)    all documents executed in connection with any Action
shall be reasonably satisfactory in form and substance to the Lessor
and the Lender;

(vii)   Lender's consent, if and to the extent required under any
document evidencing the Loan, shall have been obtained;

(viii)  the Lessor and the Lender shall have received the items,
if any, requested pursuant to Section 23.12(2) hereof;

(ix)    this Lease and Lessee's obligations hereunder shall
continue in full force and effect, without abatement, suspension,
deferment, diminution, reduction, counterclaim, setoff, relevant
defense or deduction, notwithstanding the taking of any requested
Action or the refusal of the Lessor or the Lender to take any requested
Action;

(x)     to the extent any agreement entered into in connection
with such Action provides any party a right to a Lien on any portion of
the Property, such agreement shall expressly provide that such Lien
shall be subject and subordinate to any mortgage on the Property;

(xi)    no such requested Action shall reduce the Fair Market
Sales Value, Residual Value, condition, utility or Remaining Life of
the Property other than to a de minimis extent or otherwise cause any
adverse tax consequences to Lessor;

(xii)   Lessor shall have received at Lessee's sole cost and
expense any title endorsement to its Owner's Title Insurance Policy as
Lessor reasonably requests in connection therewith;

(xiii)  Lender shall have received at Lessee's sole cost and
expense any title endorsement to the Mortgage Title Policy as Lender
reasonably requests in connection therewith; and

51

(xiv)   Lessee shall have paid, or reimbursed Lessor and Lender
for, all costs and expenses incurred in connection therewith.

(3)  In connection with any request by Lessee pursuant to this Section
23.12, Lessee shall deliver to the Lessor (each in form and substance reasonably
satisfactory to the Lessor), a written report that describes (1) the nature of
the Action and (2) the form and amount of consideration to be paid or received,
copies of all Governmental Actions required in connection with such Action,
copies of all governmental filings required in connection with such Action and
other reasonable evidence (including an Officer's Certificate certifying as to
the satisfaction of the requirements of Section 23.12(2) hereof), surveys, plans
and specifications and the like containing satisfaction of the requirements of
Section 23.12(2) herein with respect to such Action.

Section 23.13 Lessor Bankruptcy. The parties hereto agree that the
-----------------
benefits to the Lessee of Section 365(h) of the Bankruptcy Code shall include
any Renewal Terms even if the Lessor becomes subject to the Bankruptcy Code
prior to the commencement of any Renewal Term.

Section 23.14 No Joint Venture. There is no intention to create a joint
----------------
venture or partnership relation between the Lessor and the Lessee and any such
implication is hereby expressly disclaimed.

Section 23.15 No Accord and Satisfaction. The acceptance by the Lessor
--------------------------
of any sums from the Lessee (whether as Basic Rent or otherwise) in amounts
which are less than the amounts due and payable by the Lessee hereunder is not
intended, nor shall be construed, to constitute an accord and satisfaction of
any dispute between the Lessor and the Lessee regarding sums due and payable by
the Lessee hereunder, unless the Lessor specifically deems it as such in
writing.

Section 23.16 No Merger. In no event shall the leasehold interests,
---------
estates or rights of the Lessee hereunder merge with any interests, estates or
rights of the Lessor in or to the Property, it being understood that such
leasehold interests, estates and rights of the Lessee hereunder shall be deemed
to be separate and distinct from the Lessor's interests, estates and rights in
or to the Property, notwithstanding that any such interests, estates or rights
shall at any time or times be held by or vested in the same person, corporation
or other entity.

Section 23.17 Further Assurances. The Lessee, at its own cost and
------------------
expense, will cause to be promptly and duly taken, executed, acknowledged and
delivered all such further acts, documents and assurances as the Lessor
reasonably may request from time to time in order to carry out more effectively
the intent and purposes of this Lease and the other Operative Documents.

Section 23.18 Memorandum of Lease. Concurrently with execution and
-------------------
delivery hereof, the parties shall execute and deliver a short form memorandum
of lease in substantially the form of Exhibit C attached hereto and made a part
hereof to be recorded (or if required, the Lease shall be so recorded) in the
Register of Deeds office of the county in which the Property is situated.

Section 23.19 Interest Conveyed. This Lease is an agreement of lease
-----------------
and the Lessor does not convey to the Lessee any right, title or interest in or
to the Property except as a lessee.

52

Section 23.20 Computation of Stipulated Loss Value and Termination
----------------------------------------------------
Value. Stipulated Loss Value as of any Stipulated Loss Value Date shall be
-----
computed by multiplying the Purchase Price of the Property by the percentage set
forth opposite the applicable Stipulated Loss Value Date on Schedule 2A hereto.
-----------
Termination Value as of any Termination Date shall be computed by multiplying
the Purchase Price of the Property by the percentage set forth opposite the
applicable Termination Date on Schedule 2B hereto.
-----------

Section 23.21 Subordination and Nondisturbance. Upon the Lessor's
--------------------------------
request from time to time, the Lessee shall execute an agreement subordinating
the Lessee's right, title and interest in and to the Property under this Lease
to the Lien of mortgages or deeds of trust encumbering the Lessor's right, title
and interest in and to the Property, and to all renewals, modifications,
consolidations, replacements and extensions thereof; provided, however, that the
--------  -------
mortgagee of such mortgage or beneficiary of such deed of trust shall have
executed an agreement in form and substance reasonably satisfactory to the
Lessee providing that, so long as no Lease Event of Default shall have occurred
and then be continuing, no foreclosure or other proceedings for the enforcement
of such mortgage or deed of trust shall terminate this Lease or otherwise
adversely affect the Lessee's quiet and peaceful use and possession of the
Property for the uses and purposes permitted under this Lease, nor shall the
leasehold estate granted by this Lease be affected in any other manner, Lessee
shall not (except to the extent required by Applicable Laws and Regulations) be
named in any such proceedings and upon completion thereof the successor in title
to the Lessor shall be bound to this Lease as a direct obligation between the
Lessee and such successor, except that no such successor shall be (A) liable for
any act or omission of any prior Lessor, (B) bound by any payment of Rent which
the Lessee might have paid more than one month prior to its due date hereunder,
or (C) bound by any amendment or modification (made subsequent to the date of
such mortgage or deed of trust) or cancellation of this Lease or surrender of
the Property (except surrenders and cancellations expressly provided for herein)
made without the prior written consent of the mortgagee of such mortgage or the
beneficiary of such deed of trust. Lessee shall attorn to and recognize any such
mortgagee or beneficiary, in the event such mortgagee or beneficiary becomes the
owner of the Property by foreclosure, conveyance in lieu of foreclosure or
otherwise, or any other successor or assignee of Lessor permitted under the
terms of this Lease, as the landlord and lessor under this Lease for the
remainder of the term hereof, and Lessee shall perform and observe its
obligations hereunder, subject only to the terms and conditions of this Lease.
Lessee further covenants and agrees to execute and deliver upon the request of
such mortgagee or beneficiary or successor or assignee of Lessor an appropriate
agreement of attornment to such person or entity and any subsequent titleholder
of the Property in accordance with the terms of this Section 23.21.

Lessee agrees to enter into agreements that are reasonably required for
Lessor to obtain financing, upon the request and at the expense of Lessor;
provided, however, that no such agreement shall adversely affect the rights or
--------  -------
interests of the Lessee, including without limitation, the rights of Lessee
under this Lease or any other Operative Document.

Section 23.22 True Lease. Lessor and Lessee agree that this Lease is a
----------
true lease and as such the lessor shall be treated as the owner and Lessor of
the Property and the Lessee as the lessee thereof and that this Lease does not
represent a financing arrangement. Each party shall

53

reflect the transaction represented hereby in all applicable books, records and
reports (including tax filings) in a manner consistent with "true lease"
treatment rather than "financing" treatment.

Section 23.23  Financial Reporting. So long as the Lessee is subject to
-------------------
the reporting requirements of Sections 13 and 15(d) of the Securities Exchange
Act of 1934, as amended, Lessee will deliver to Lessor and to any Lender (a)
copies of all of Lessee's Annual Reports on Form 10-K within ninety (90) days
after filing the same with the Securities and Exchange Commission ("SEC"), (b)
Quarterly Reports on Form 10-Q within sixty (60) days after filing the same with
the SEC, and (c) with reasonable promptness, such additional information
(including copies of public reports filed by Lessee) regarding the business
affairs and financial condition of Lessee as Lessor or any Lender may reasonably
request. If Lessee is no longer subject to such reporting requirements, Lessee
will deliver to Lessor and to any Lender within 90 days after the end of each
fiscal year of Lessee, a balance sheet of Lessee and its consolidated
subsidiaries as at the end of such year and a statement of profits and losses of
Lessee and its consolidated subsidiaries for such year setting forth in each
case, in comparative form, the corresponding figures for the preceding fiscal
year, and certified by independent certified public accountants of recognized
national (in the United States) standing selected by Lessee and within 60 days
after the end of each fiscal quarter of Lessee a balance sheet of Lessee and its
consolidated subsidiaries as at the end of such quarter and statements of profit
and losses of Lessee and its consolidated subsidiaries for such quarter setting
forth in each case, in comparative form, the corresponding figures for the
similar quarter of the preceding year, and certified by the chief financial
officer of Lessee, the foregoing financial statements all being prepared in
accordance with generally accepted accounting principles, consistently applied.

Section 23.24  Notice of Certain Changes. Lessee shall provide Landlord
-------------------------
and, so long as the Lien of any loan secured by the Property has not been
terminated or discharged, the Lender, prompt written notice of any change in its
chief executive office, principal place of business, or name, jurisdiction of
incorporation or the place where it maintains its business records concerning
the Property or the Overall Transaction, which notice shall, in any event, be
provided no later than 30 days after such change.

Section 23.25  Non-Recourse. Notwithstanding anything in this Lease to
------------
the contrary, the obligations of Lessor under this Lease (except the obligations
of the sole member of Lessor described in Article XXI of this Lease) are not
personal obligations of the members, managers, directors, officers,
shareholders, agents or employees of Lessor and Lessor shall have no obligation,
nor incur any liability, beyond Lessor's interest in the Property and Lessee
shall look exclusively to such interest of Lessee in the Property for the
payment and discharge of any obligation imposed upon Lessor under this Lease.
Lessee agrees that, with respect to any judgment which may be obtained by Lessee
against Lessor, Lessee shall look solely to the estate or interest owned by
Lessor in the Property, and Lessee will not collect or attempt to collect any
such judgment out of any other assets of Lessor or seek recourse against the
assets of the members, managers, directors, officers, shareholders, agents or
employees of Lessor.

54

[signature page follows]

55

IN WITNESS WHEREOF, the undersigned have each caused this Lease
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above written.

LESSOR:

In the presence of:                    DANACQ FARMINGTON HILLS LLC, a Delaware
limited liability company

/s/ Elizabeth M. Curley                By:  General Electric Capital Corporation
-----------------------------------         ------------------------------------
Name: Elizabeth M. Curley              Its: Manager

/s/ Margaret H. Pease                  By:  /s/ Stephen Benko
-----------------------------------         -----------------------------------
Name: Margaret H. Pease                     Stephen Benko

Its: Authorized Signatory
-----------------------------------

LESSEE:

DANA CORPORATION, a Virginia corporation

___________________________________    By:_____________________________________
Name:
___________________________________    Its:____________________________________
Name:

Acknowledged and agreed to for the sole
purpose of Article XXI hereof:

Lessor Parent--GEBAM, Inc., the sole member of Lessor,
will agree to the of Article XXI

By:  /s/ Stephen Benko
---------------------------------------
Stephen Benko

Its: Authorized Signatory
--------------------------------------

IN WITNESS WHEREOF, the undersigned have each caused this
Lease Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above written.

LESSOR:

In the presence of:                    DANACQ FARMINGTON HILLS LLC, a Delaware
limited liability company

___________________________________    By:  General Electric Capital Corporation
------------------------------------
Name:                                  Its: Manager

___________________________________    By:  ___________________________________
Name:

Its: ___________________________________

LESSEE:

DANA CORPORATION, a Virginia corporation

/s/ Theresa S. Whetro                  By: /s/ A. Glenn Paton
-----------------------------------       -------------------------------------
Name: Theresa S. Whetro

/s/ Deborah A. Vankirk                 Its: A. Glenn Paton, Viece Prsident-
-----------------------------------         Treasurer
Name: DEBORAH A. VANKIRK

Acknowledged and agreed to for the sole
purpose of Article XXI hereof:

Lessor Parent--GEBAM, Inc., the sole member of Lessor,
will agree to the of Article XXI

By:_______________________________________

Its:______________________________________

DANA CORP
Schedule 1 to Lease Agreement
Primary Term Rent Payment Schedule
Farmington Hills, MI

Rent Payment Dates                   Monthly Rental Payment & Allocation Thereof
------------------                   -------------------------------------------
November 1, 2001 - October 1, 2011          $                  194,216.67
November 1, 2011 - October 1, 2021          $                  213,638.33

EXHIBIT 10.130

SECOND AMENDMENT TO LEASE AGREEMENT FOR THE DANA DETROIT BUILDING

SECOND AMENDMENT TO LEASE AGREEMENT
(Farmington Hills, Michigan)

--------------------------------------------------------------------------------

THIS SECOND AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and
entered into as of March 29, 2002, by and between DANACQ FARMINGTON HILLS, LLC,
a Delaware limited liability company ("Lessor"), and DANA CORPORATION, a
Virginia corporation ("Lessee").

W I T N E S S E T H:

WHEREAS, Lessor and Lessee previously entered into that certain Lease
Agreement, dated as of October 26, 2001 (the "Original Lease"), as amended by
that certain First Amendment to Lease Agreement between Lessor and Lessee dated
as of December 6, 2001 (the "First Amendment;" and the Original Lease, as so
previously amended, is herein referred to as the "Lease"), pursuant to the terms
of which Lessee has leased that certain "Property" (as defined in the Original
Lease) located at 27404 Drake Road, Farmington Hills, Oakland County, Michigan;
and

WHEREAS, Danacq Kalamazoo LLC, a Delaware limited liability company and
an affiliate of Lessor (the "Kalamazoo Lessor") and Lessee also previously
entered into that certain Lease Agreement dated as of October 26, 2001 (the
"Original Kalamazoo Lease"), as amended by that certain First Amendment to Lease
Agreement between the Kalamazoo Lessor and Lessee dated as of December 6, 2001
(the "First Kalamazoo Amendment;" and the Original Kalamazoo Lease, as so
previously amended, is herein referred to as the "Kalamazoo Lease"), pursuant to
the terms of which Lessee has leased certain improved real property more
particularly described in the Original Kalamazoo Lease which is located at 6938
Elm Valley Drive, Kalamazoo, Michigan (the "Kalamazoo Property"); and

WHEREAS, to facilitate the sale by GEBAM, Inc., a Delaware corporation
(the "Lessor Parent" as defined in the Lease and the Kalamazoo Lease and
referred to in this Amendment as "GEBAM") of all of its "Member Interest" (as
also defined in each of said leases) in Lessor and in the Kalamazoo Lessor to
Wells Operating Partnership, L.P., a Delaware limited partnership ("Wells")
contemporaneously with, and immediately following, the execution and delivery of
this Amendment, Lessor and Wells have requested that Lessee agree to modify and
amend the Lease and the Kalamazoo Lease on the terms set forth, respectively, in
this Amendment and that certain Second Amendment to Lease Agreement of even date
herewith between the Kalamazoo Lessor and Lessee relating to the Kalamazoo Lease
(the "Second Kalamazoo Lease Amendment"), and Lessee is willing to do so on the
terms and conditions set forth in this Amendment and the Second Kalamazoo Lease
Amendment;

NOW, THEREFORE, for and in consideration of the sum of Ten and No/100
Dollars, the mutual premises contained herein and in the Second Kalamazoo Lease
Amendment, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Lessor and Lessee do hereby
covenant and agree as follows:

1.   Defined Terms. Terms used herein and denoted by their initial
-------------
capitalization shall have the meanings set forth in the Lease unless
specifically provided herein to the contrary. In the event of any conflict or
inconsistency between the terms and conditions of this Amendment and of the
Lease, the terms and conditions of this Amendment shall govern and control.

2.   Renewal Options. Article V of the Lease is hereby deleted in its
---------------
entirety, and the following Article V is hereby substituted in lieu thereof:

ARTICLE V

RENEWAL OPTIONS

Section 5.1. FMV Renewal Terms. Upon the expiration of the Basic
-----------------
Term, Lessee shall have the right and option, subject to the terms of
this Article V, to extend the Lease Term for up to six (6) successive
fair market value renewal terms (each such renewal term, a "Renewal
Term") of five (5) years commencing on the day following the
expiration of the Basic Term or the immediately preceding Renewal
Term, as the case may be.

Section 5.2. Conditions to Renewal Terms. The right and option of
---------------------------
Lessee to extend this Lease for any of the Renewal Terms shall be
subject to the following terms:

(i)     At the commencement of any of the Renewal Terms,
this Lease shall be in full force and effect and no Material
Lease Default or Lease Event of Default shall have occurred and
be continuing;

(ii)    Lessee shall have exercised its right to each
Renewal Term by giving irrevocable written notice to the Lessor
no later than fifteen (15) months prior to the expiration of the
Basic Term or the previous Renewal Term; and

(iii)   Each Renewal Term shall be on the same terms,
covenants and conditions set forth in this Lease; provided,
--------
however, that Basic Rent shall be determined in the manner set
-------
forth in Section 5.3 hereof.

Section 5.3. Rent During Renewal Terms. Basic Rent for each
-------------------------
Renewal Term shall be the Fair Market Rental Value of the Property as
of the date of commencement of such Renewal Term, determined in
accordance with the Appraisal Procedure not more

2

than two hundred seventy (270) days prior to the commencement of such
Renewal Term payable monthly in advance on the day of each month that
Basic Rent was due during the last year of the Basic Term or of the
preceding Renewal Term, as the case may be.

3.   Early Termination.
-----------------

(a)  Clause (ii) of the second (2nd) full paragraph of Section 6.1,
appearing on page 14 of the Lease, and continuing through the end of the
sentence in which said clause (ii) is contained, is hereby deleted in its
entirety, and the following clause (ii) is hereby inserted in lieu thereof:

(ii) the Lessor shall, on an "as is, where is" basis and without
recourse to or warranty by the Lessor, except as to the absence of
Lessor Liens (other than any Lien arising out of a sublease for which
the Lessor has provided a non-disturbance agreement in accordance with
the terms of this Lease) and subject to the same disclaimers as set
forth in Section 7.1, simultaneously therewith sell the Property to
the highest bidder, the total net selling price realized at such sale
to be retained by the Lessor.

(b)  The last sentence of the fifth (5/th/) full paragraph of Section 6.1,
appearing as the third (3/rd/) full paragraph on page 15 of the Lease, is hereby
deleted in its entirety, and the following sentence is hereby inserted in lieu
thereof:

Lessee shall pay, as Additional Rent, on demand and no later than the
Termination Date, all of the Lessor's reasonable costs and expenses of
whatever kind or nature paid or incurred in connection with the
rescinded termination or in connection with the completed termination
of this Lease, including, but not limited to reasonable attorneys'
fees.

4.   Loss, Destruction, Condemnation or Damage. The reference "Section
-----------------------------------------
14.1(d)" contained in the last sentence and last line of Section 14.1 of the
Lease, appearing on page 30 thereof, is hereby deleted, and the reference
"Section 14.1(c)" is hereby inserted in lieu thereof.

5.   Transfer of Interests. Section 21.1(f) of the Lease, appearing on page
---------------------
46 thereof, is hereby modified and amended by adding the following sentence
thereto:

Notwithstanding anything to the contrary contained herein, the
provisions of this Article XXI shall not apply to a transfer or sale
of the Property pursuant to Section 6.1 of this Lease.

6.   Termination Value Schedule. Schedule 2B to the Lease is hereby deleted
--------------------------
in its entirety, and Schedule 2B attached to this Amendment is hereby
substituted in lieu thereof.

3

7.  Amendment of Appendix A. Appendix A of the Lease shall be modified and
-----------------------
amended as follows:

(a)  by deleting the "Address" of Lessor contained in clause "(i)" on
page 2 of Appendix A, and substituting in lieu thereof the following:

(i)      With respect to the Lessor:

Wells Operating Partnership, L.P.
c/o Wells Capital, Inc.
6200 The Corners Parkway
Suite 250
Atlanta, Georgia 30092
Attention:   Michael C. Berndt
Fax:         (770) 200-8199

with a copy to:

Troutman Sanders LLP
Bank of America Plaza
Suite 5200
600 Peachtree Street, N.E.
Atlanta, Georgia 30308-2216
Attention:   John W. Griffin or
Managing Partner
Fax:         (404) 962-6577;

(b)  By deleting the definition of "Appraiser" appearing on page 5 of
Appendix A in its entirety;

(c)  By deleting the definition of "Fixed Rate Renewal Term" appearing
on page 9 of Appendix A in its entirety;

(d)  By deleting the definition of "FMV Renewal Term" also appearing on
page 9 of Appendix A in its entirety;

(e)  By deleting the words "or 5.2" appearing in the second (2nd) line
of the definition of "Lease Term" on page 10 of Appendix A;

(f)  By deleting the definition of "Mortgage Title Policy" appearing on
page 14 of Appendix A and by substituting in lieu thereof the following
definition:

4

"Mortgage  Title Policy" shall mean the mortgagee  title  insurance
----------------------
policy issued in favor of any Lender in connection with a Loan."; and

(g) By deleting the definition of "Title Company" appearing on page 18
of Appendix A in its entirety.

8.  Compliance with Transfer Requirements. By its execution and delivery
-------------------------------------
hereof, Lessee hereby acknowledges and agrees for the benefit of GEBAM and Wells
that all of requirements to be satisfied by Lessor and the Lessor Parent in
connection with the consummation contemporaneously herewith of the sale and
conveyance of the "Member Interest" by GEBAM to Wells pursuant to Article XXI of
the Lease have been satisfied in full.

9.  Condition to Amendment. This Amendment shall be of no force or effect
----------------------
in its entirety unless and until the following conditions are satisfied, and the
date on which both of said conditions have been satisfied shall be the effective
date of this Amendment:

(a) The consummation of the purchase and sale of the Member Interest in
Lessor by and between GEBAM and Wells; and

(b) The concurrent consummation of the purchase and sale of the Member
Interest in the Kalamazoo Lessor by and between GEBAM and Wells.

10. Ratification and Binding Effect. Except to the extent expressly
-------------------------------
modified by this Amendment, all terms of the Lease shall remain in full force
and effect; and the Lease, as so modified and amended by this Amendment, is
expressly ratified and confirmed by the parties hereto. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. This Amendment may be executed in multiple
counterparts, each of which shall be deemed an original.

[SIGNATURES BEGIN ON NEXT PAGE]

5

IN WITNESS WHEREOF, Lessee and Lessor have caused this Amendment to be
duly authorized, executed and delivered as of the day and year first above
written.

LANDLORD:
---------

DANACQ FARMINGTON HILLS LLC,
a Delaware limited liability company

By:   General Electric Capital Corporation
a Delaware corporation, its Manager

By: /s/ Stephen Benko
----------------------------------
Name: Stephen Benko
--------------------------------
Title: Authorized Signatory
-------------------------------

(SIGNATURES CONTINUED ON NEXT PAGE)

6

(SIGNATURES CONTINUED FROM PREVIOUS PAGE)

TENANT:
-------

DANA CORPORATION,
a Virginia corporation

By: /s/ A. Glenn Paton
----------------------------------------
Name: A. Glenn Paton
--------------------------------------
Title: Vice President-Treasurer
-------------------------------------

7

EXHIBIT 10.131

LEASE AGREEMENT FOR THE DANA KALAMAZOO BUILDING

LEASE AGREEMENT

Dated as of October 26, 2001

by and between

DANACQ KALAMAZOO LLC, as Lessor

and

DANA CORPORATION, a Virginia corporation, as Lessee

Lease of Office and Research and Development Facility located in
Kalamazoo, Michigan

TABLE OF CONTENTS

Page
----

ARTICLE I DEFINITIONS ...........................................................................        1

ARTICLE II LEASE OF PROPERTY ....................................................................        1

ARTICLE III RENT ................................................................................        1

Section 3.1  Basic Rent .......................................................................        1
Section 3.2  Additional Rent ..................................................................        2
Section 3.3  Method of Payment.................................................................        2
Section 3.4  Late Payment .....................................................................        2
Section 3.5  Net Lease; No Setoff; Etc.........................................................        3
Section 3.6  Rent after Failure to Vacate Property ............................................        4

ARTICLE IV GENERAL TAX INDEMNITY.................................................................        4

Section 4.1  Indemnity ........................................................................        4
Section 4.2  Excluded Taxes ...................................................................        5
Section 4.3  Payment ..........................................................................        7
Section 4.4  Independent Examination ..........................................................        8
Section 4.5  Tax Benefit ......................................................................        8
Section 4.6  Refund ...........................................................................        9
Section 4.7  Contest ..........................................................................        9
Section 4.8  Reports ..........................................................................       12
Section 4.9  Non-Parties ......................................................................       12

ARTICLE V RENEWAL OPTIONS .......................................................................       12

Section 5.1  Fixed Rate Renewal Term ..........................................................       12
Section 5.2  FMV Renewal Terms ................................................................       12
Section 5.3  Conditions to Renewal Terms ......................................................       13
Section 5.4  Rent During Renewal Terms ........................................................       13

ARTICLE VI EARLY TERMINATION ....................................................................       13

Section 6.1  Obsolescence Termination .........................................................       13

ARTICLE VII CONDITION OF PROPERTY ...............................................................       15

Section 7.1  Disclaimers ......................................................................       15

ARTICLE VIII LIENS

..............................................................................       16

ARTICLE IX MAINTENANCE AND REPAIR; ALTERATIONS, MODIFICATIONS AND
ADDITIONS ............................................................................       17

Section 9.1  Maintenance and Repair ...........................................................       17
Section 9.2  Alterations; Additions ...........................................................       17
Section 9.3  Permanent and Non-Severable ......................................................       19
Section 9.4  Cooperation ......................................................................       20
Section 9.5  Obligations with Respect to Alterations and Additions at End of Lease Term .......       20

i

Section 9.6   [Intentionally Omitted.] ........................................................          20
Section 9.7   Compliance with Applicable Laws and Regulations .................................          20
Section 9.8   Environmental Covenants .........................................................          20
Section 9.9   Contests ........................................................................          22

ARTICLE X LOCATION AND USE ......................................................................          23

Section 10.1  Location ........................................................................          23
Section 10.2  Use .............................................................................          23

ARTICLE XI INSURANCE ............................................................................          23

Section 11.1  Coverage ........................................................................          23
Section 11.2  Policy Provisions ...............................................................          25
Section 11.3  Certificates of Insurance; Performance by Lessor ................................          26
Section 11.4  General .........................................................................          26
Section 11.5  Proceeds ........................................................................          27
Section 11.6  Separate Insurance ..............................................................          27

ARTICLE XII RETURN OF PROPERTY
................................................................................................          27
Section 12.1  Surrender; Environmental Compliance .............................................          27

ARTICLE XIII ASSIGNMENT, SUBLEASING AND MERGER ..................................................          28

Section 13.1  Subletting of Portions of the Property Without Lessor's Consent .................          28
Section 13.2  Delivery of Non-Disturbance Agreements by Lessor ................................          28
Section 13.3  Assignment of Lease .............................................................          29
Section 13.4  Merger ..........................................................................          29
Section 13.5  Affiliates ......................................................................          29

ARTICLE XIV LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE ...........................................          29

Section 14.1  Payment of Stipulated Loss Value on an Event of Loss ............................          29
Section 14.2  Restoration; Application of Payments ............................................          31
Section 14.3  Event of Taking .................................................................          34
Section 14.4  Application of Certain Payments Not Relating to an Event of Taking ..............          34
Section 14.5  Dispositions of Proceeds during Default .........................................          34
Section 14.6  Negotiations ....................................................................          34
Section 14.7  No Rent Abatement ...............................................................          35
Section 14.8  Investment ......................................................................          35

ARTICLE XV INSPECTION ...........................................................................          35

Section 15.1  Entry on Property ...............................................................          35

ARTICLE XVI EVENTS OF DEFAULT ...................................................................          36

Section 16.1  Events of Default ...............................................................          36

ARTICLE XVII ENFORCEMENT ........................................................................          37

Section 17.1  Remedies ........................................................................          37
Section 17.2  Survival of Lessee's Obligations ................................................          40
Section 17.3  Remedies Cumulative; No Waiver; Consents ........................................          40

ii

ARTICLE XVIII RIGHT TO PERFORM FOR LESSEE .......................................................       41

ARTICLE XIX [Intentionally Omitted] .............................................................       41

ARTICLE XX INDEMNIFICATION ......................................................................       41

Section 20.1    General Indemnification .......................................................       41
Section 20.2    Survival ......................................................................       43

ARTICLE XXI TRANSFERS OF INTERESTS ..............................................................       44

Section 21.1  Transfers of Interests ..........................................................       44

ARTICLE XXII [Intentionally Omitted] ............................................................       46

ARTICLE XXIII MISCELLANEOUS                                                                             46
Section 23.1    Binding Effect; Successors and Assigns; Survival ..............................       46
Section 23.2    Quiet Enjoyment ...............................................................       46
Section 23.3    Notices .......................................................................       46
Section 23.4    Severability ..................................................................       46
Section 23.5    Amendment; Complete Agreements ................................................       47
Section 23.6    Headings ......................................................................       47
Section 23.7    Counterparts ..................................................................       47
Section 23.8    Governing Law; WAIVER OF JURY TRIAL ...........................................       47
Section 23.9    Security Funds ................................................................       48
Section 23.10   Discharge of Lessee's Obligations by its Affiliates ...........................       48
Section 23.11   Estoppel Certificates .........................................................       48
Section 23.12   Miscellaneous Matters Affecting the Property ..................................       49
Section 23.13   Lessor Bankruptcy                                                                     51
Section 23.14   No Joint Venture ..............................................................       51
Section 23.15   No Accord and Satisfaction                                                            51
Section 23.16   No Merger .....................................................................       51
Section 23.17   Further Assurances ............................................................       51
Section 23.18   Memorandum of Lease ...........................................................       52
Section 23.19   Interest Conveyed                                                                     52
Section 23.20   Computation of Stipulated Loss Value and Termination Value ....................       52
Section 23.21   Subordination and Nondisturbance ..............................................       52
Section 23.22   True Lease ....................................................................       53
Section 23.23   Financial Reporting ...........................................................       53
Section 23.24   Notice of Certain Changes .....................................................       53

SCHEDULE 1 BASIC RENT SCHEDULE ..................................................................       56
SCHEDULE 2A STIPULATED LOSS VALUES ..............................................................       58
SCHEDULE 2B TERMINATION VALUES ..................................................................       65
SCHEDULE X LESSEE'S EQUIPMENT AND SYSTEMS .......................................................       73
SCHEDULE Y ENGINEERING REPORT ...................................................................       74
XHIBIT A LEGAL DESCRIPTION OF LAND ..............................................................       75
EXHIBIT B  FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT .......................................................................................       77

iii

EXHIBIT C MEMORANDUM OF LEASE ...................................................................          60
APPENDIX A DEFINITIONS ..........................................................................
EXHIBIT D COMPETITORS ...........................................................................          63

iv

LEASE AGREEMENT dated as of October 26, 2001, by and between DANACQ
KALAMAZOO LLC, a Delaware limited liability company, as Lessor, and DANA
CORPORATION, a Virginia corporation, as Lessee.

In consideration of the mutual agreements herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS
-----------

The capitalized terms used herein and not otherwise defined shall have
the meanings assigned thereto in Appendix A for all purposes hereof.

ARTICLE II

LEASE OF PROPERTY
-----------------

On the Lease Term Commencement Date, the Lessor shall demise and lease,
and hereby as of the Lease Term Commencement Date does demise and lease, the
Property to the Lessee, and the Lessee shall rent and lease, and hereby as of
the Lease Term Commencement Date, does rent and lease, the Property from the
Lessor, for the Basic Term and, subject to the exercise by the Lessee of its
renewal options as provided in Article V hereof, for the Renewal Terms. The
Lessee may from time to time own or hold under lease from Persons other than the
Lessor, furniture, trade fixtures and equipment located on or about the Property
(including the equipment and systems described on Schedule X attached hereto and
----------
made a part hereof, but excluding HVAC equipment, building systems or other
equipment integral to or necessary for the operation of the Improvements for
general office and research and development purposes and not integral to or
necessary in connection with the business conducted by Lessee) that is not
subject to this Lease. The Lessor shall from time to time, upon the reasonable
request of the Lessee, promptly acknowledge in writing to the Lessee or other
Persons that the Lessor does not own or have any other right or interest in or
to such furniture, trade fixtures and equipment. The demise and lease of the
Property pursuant to this Article II shall include any additional right, title
or interest in the Property which may at any time be acquired by the Lessor, the
intent being that all right, title and interest of Lessor in and to the Property
shall at all times be demised and leased to the Lessee hereunder.

ARTICLE III

RENT
----

Section 3.1   Basic Rent. During the Basic Term, Lessee shall pay to
----------
Lessor rent, in advance, for the periods occurring during the Basic Term as set
forth in Schedule 1 hereto on the dates as specified on Schedule 1 under the
----------                                     ----------
caption "Rent Payment Date" and in the amounts

1

as specified on Schedule 1 under the caption "Basic Rent Payment". Basic Rent
---------
shall be allocable to the month in which the Rent Payment Date occurs. It is the
intent of the parties that such allocation shall be an allocation of fixed rent
within the meaning of Treas. Reg. ss.1.467-1(c)(2)(ii). If, with respect to any
month, the Basic Rent due and allocable with respect to such month is for a
period of days less than the full number of days in such month, the Basic Rent
due for such month shall be pro rated to an amount equal to the Basic Rent
specified for such month multiplied by a fraction the numerator of which is the
number of days this Lease is in effect for such month and the denominator of
which is the number of days in such month.

Section 3.2   Additional Rent. Basic Rent shall be absolutely net to
---------------
Lessor so that this Lease shall yield, net to Lessor, the Basic Rent specified
in Section 3.1 in each year of the Lease Term and that all ad valorem real
estate taxes, impositions, insurance premiums, utility charges, maintenance,
repair and replacement expenses, all expenses relating to compliance with
Applicable Laws and Regulations, and all other costs, fees, charges, expenses,
reimbursements and obligations of every kind and nature whatsoever relating to
the Property which may arise or become due during the Lease Term shall be paid
or discharged by Lessee, subject to the rights of Lessee set forth in Section
9.9 hereof. In the event Lessee fails to pay or discharge any imposition, ad
valorem real estate taxes, insurance premium, utility charge, maintenance,
repair or replacement expense or any expense related to compliance with
Applicable Laws and Regulations which it is obligated to pay or discharge,
Lessor may, but shall not be obligated to, pay the same, and in that event
Lessee shall promptly reimburse Lessor therefor and pay the same, together with
interest thereon at the Overdue Rate computed from the date of payment of such
cost to the date of reimbursement, as additional rent (all such items, together
with any other amounts that the Lessee agrees to pay or discharge hereunder,
being sometimes hereinafter collectively referred to as "Additional Rent").
---------------

Section 3.3   Method of Payment. Basic Rent shall be paid to the Lessor
-----------------
at such place as Lessor shall specify in writing to the Lessee from time to time
(but in any event not less than five (5) Business Days prior to the due date
therefor). Each payment of Basic Rent shall be made by the Lessee by wire
transfer of funds consisting of lawful currency of the United States of America
which funds shall be immediately available prior to 1:00 p.m., local time, at
the place of payment on the scheduled date when such payment shall be due,
unless such scheduled date shall not be a Business Day, in which case such
payment shall be made on the next succeeding Business Day, with the same force
and effect as though made on such scheduled date and (provided such payment is
made by 1:00 p.m., local time, on such next succeeding Business Day) no interest
shall accrue on the amount of such payment from and after such scheduled date to
the time of such payment on such next succeeding Business Day.

Section 3.4   Late Payment. If any Basic Rent shall not be paid when
------------
due, the Lessee shall pay to the Lessor as Additional Rent, interest (to the
maximum extent permitted by law) on such overdue amount from and including the
due date thereof to but excluding the Business Day of payment thereof (unless
such payment shall be made after 1:00 p.m., local time, on such date of payment,
in which case such date of payment shall be included) at the Overdue Rate, plus
any penalty or late charge payable to Lender (or that would have been payable to
Lender but for an advance of funds by the Lessor) under the Loan, plus interest
(to the maximum extent permitted by law) thereon at the Overdue Rate. If any
Basic Rent shall be paid on the date when due, but after

2

1:00 p.m., local time, at the place of payment, interest shall be payable as
aforesaid for one day at the Overdue Rate.

Section 3.5   Net Lease; No Setoff; Etc. This Lease is a net lease and,
-------------------------
notwithstanding any other provision of this Lease, it is intended that Basic
Rent shall be paid without counterclaim, setoff, deduction or defense and
without abatement, suspension, deferment, diminution or reduction, and Lessee's
obligation to pay all such amounts, throughout the Basic Term and all applicable
Renewal Terms, is absolute and unconditional. Except to the extent otherwise
expressly specified in Articles VI and XIV of this Lease, the obligations and
liabilities of the Lessee hereunder shall in no way be released, discharged or
otherwise affected for any reason, including without limitation: (a) any defect
in the condition, merchantability, design, quality or fitness for use of the
Property or any part thereof, or the failure of the Property to comply with all
Applicable Laws and Regulations, including any inability to occupy or use the
Property by reason of such non-compliance; (b) any damage to, removal,
abandonment, salvage, loss, contamination of or Release at or from, destruction
of or any requisition or taking of the Property or any part thereof; (c) any
restriction, prevention or curtailment of or interference with any use of the
Property or any part thereof including eviction; (d) any defect in title to or
rights to the Property or any Lien on such title or rights on the Property; (e)
any change, waiver, extension, indulgence or other action or omission or breach
in respect of any obligation or liability of or by the Lessor; (f) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceedings relating to the Lessee, the Lessor, or any
other Person, or any action taken with respect to this Lease by any trustee or
receiver of the Lessee, the Lessor or any other Person, or by any court, in any
such proceeding; (g) any claim that the Lessee has or might have against any
Person, including without limitation the Lessor, any vendor, manufacturer,
contractor of or for the Property or any Improvements; (h) any invalidity or
unenforceability or disaffirmance of this Lease against or by the Lessee or any
provision hereof or any of the other Operative Documents or any provision of any
thereof; (i) the impossibility of performance by Lessor, the Lessee or both; (j)
any action by any court, administrative agency or other Governmental Authority;
(k) any environmental condition affecting the Property; or (l) any other
occurrence whatsoever, whether similar or dissimilar to the foregoing, whether
or not the Lessee shall have notice or knowledge of any of the foregoing. Except
as specifically set forth herein, this Lease shall be noncancellable by the
Lessee for any reason whatsoever and, except as expressly provided in this
Lease, the Lessee, to the extent permitted by Applicable Laws and Regulations,
waives all rights now or hereafter conferred by statute or otherwise to quit,
terminate or surrender this Lease, or to any diminution, abatement or reduction
of Rent payable by the Lessee hereunder. If for any reason whatsoever this Lease
shall be terminated in whole or in part by operation of law or otherwise, except
as expressly provided in this Lease, the Lessee shall, unless prohibited by
Applicable Laws and Regulations, nonetheless pay to the Lessor an amount equal
to each Basic Rent and Additional Rent payment at the time and in the manner
that such payment would have become due and payable under the terms of this
Lease if it had not been terminated in whole or in part, and in such case, so
long as such payments are made and no Lease Event of Default shall have occurred
and be continuing the Lessor will deem this Lease to have remained in effect.
The Lessee assumes the sole responsibility for the condition, use, operation,
maintenance and management of the Property, and the Lessor shall have no
responsibility in respect thereof and shall have no liability for damage to the
Property to the Lessee or any subtenant of the Lessee on any account or for any
reason whatsoever other than by reason of the Lessor's willful misconduct or
gross negligence or breach of any of its obligations under any Operative
Document.

3

Section 3.6   Rent after Failure to Vacate Property. In the event that
-------------------------------------
the Lessee remains in possession of the Property after the expiration or earlier
termination of this Lease, and without the Lessor's consent (unless the Property
has been acquired by the Lessee and the Lessee has fully paid for the same in
accordance with the provisions hereof), the Lessee shall be deemed to be
occupying the Property as a tenant at sufferance. Any such occupancy by the
Lessee shall be subject to all of the terms, covenants and conditions of this
Lease, including without limitation the obligation to pay Additional Rent,
insofar as the same are applicable to such a tenancy, except that (i) the Lessee
shall pay Basic Rent to the Lessor, payable in arrears on the last Business Day
of each month, for each day (or any portion thereof) that such occupancy shall
continue, in an amount per diem equal to 150% of the average daily Basic Rent
payable during the 12 months ending on the last day of the Lease Term and (ii)
the Lessee shall not have the right to make any Alterations unless required by
Applicable Laws and Regulations. Basic Rent shall be payable in the manner
provided in Section 3.3 for payments of Basic Rent. The provisions of this
Section shall not be deemed to grant to the Lessee the right to, or otherwise be
deemed to, extend the Lease Term beyond the expiration or earlier termination of
this Lease. Neither the payment by the Lessee to the Lessor nor the acceptance
by the Lessor from the Lessee of any amount in payment for the Lessee's
occupancy of the Property beyond the expiration or earlier termination of this
Lease shall (a) be deemed to convert the Lessee's occupancy into any interest
other than a tenancy at sufferance, (b) revoke or otherwise impair the validity
of any notice to quit or ejectment notice or proceeding or similar proceeding
terminating this Lease and Lessee's rights of possession hereunder that the
Lessor may have served or commenced, or (c) prohibit or otherwise impair the
Lessor's right to immediately obtain an order of ejectment or possession against
the Lessee. The Lessee irrevocably waives the benefit of Applicable Laws and
Regulations that may grant to the Lessee any rights inconsistent with the
provisions of this Section. The provisions of this Section do not waive Lessor's
right of re-entry or right to regain possession by actions at law or in equity
or any other rights hereunder, and any receipt of payment by Lessor shall not be
deemed a consent by Lessor to the Lessee's remaining in possession or be
construed as creating or renewing any lease or right of tenancy between Lessor
and Lessee.

ARTICLE IV

GENERAL TAX INDEMNITY
---------------------

Section 4.1   Indemnity. Except as provided in Section 4.2 below, the
---------
Lessee agrees (but, in all events, without duplication of indemnities) to
indemnify on an After-Tax Basis each of the Lessor, the Lessor Parent, their
successors and assigns, the agents, directors, officers and employees of the
foregoing, (each, together with any Affiliate thereof, a "Tax Indemnitee"), and
to hold each Tax Indemnitee harmless from and to defend each Tax Indemnitee
against all Taxes that are actually imposed upon any Tax Indemnitee, the
Property or any portion thereof or any interest therein, or upon any Operative
Document or interest therein, or otherwise arising out of, in connection with or
relating to, any of the following:

4

(i)    the acceptance, rejection, delivery, construction,
financing, refinancing, acquisition, operation, warranty, ownership,
possession, maintenance, repair, lease, condition, alteration,
modification, restoration, refurbishing, rebuilding, return,
repossession, servicing, abandonment, retirement, preparation,
replacement, purchase, sale or other disposition, insuring, sublease,
any other use or non-use of, or the imposition of any lien (or the
incurrence of any liability to refund or pay over any amount as a
result of any lien) on, the Property or any portion thereof or any
interest therein;

(ii)   the conduct of the business or affairs of the Lessee or
any other operator at or in connection with the Property;

(iii)  the Property or any portion thereof or interest therein
or the applicability of the Lease to the Property;

(iv)   the manufacture, design, purchase, acceptance, rejection,
delivery, non-delivery or redelivery or condition of, or improvement
to, the Property, or any portion thereof, or any interest therein;

(v)    the Lease or any other Operative Document, the execution
or delivery thereof, any other documents contemplated thereby or the
performance, enforcement or amendment of any terms thereof;

(vi)   the payment or receipt of Basic Rent, Additional Rent or
any other payment under the Lease or the other Operative Documents

(vii)  the conveyance of title to the Property; or

(viii) otherwise relating to the transactions contemplated by
the Operative Documents;

Section 4.2   Excluded Taxes. The indemnity provided for in Section
--------------
4.1 above shall be subject to exclusion for Taxes that are attributable to or
arise as a result of any of the following (the "Excluded Taxes"):

(i)    Taxes imposed on, based on or measured by gross or net
income or receipts, capital, franchise, net worth or "doing
business" taxes, in each case whether paid directly or by means
of withholding, other than, in each case, (x) Taxes that are or
are in the nature of sales, use, rental, value added, ad
valorem, property, or similar taxes and (y) the Michigan Single
Business Tax for any taxable year beginning after the sixth
anniversary of the Closing Date but only up to a maximum of
$21,290 for any such taxable year;

(ii)    Taxes attributable to any period after expiration or
other termination of the Lease Term and the payment in full of
all amounts payable by the Lessee under the Operative Documents;

5

(iii)  Taxes imposed on a Tax Indemnitee attributable to the
gross negligence or willful misconduct of such Tax Indemnitee or any
Affiliate thereof unless such negligence or misconduct is imputed to
such Tax Indemnitee or Affiliate solely as a result of its
participation in the transactions contemplated by the Operative
Documents and not as a result of any action or inaction by such Tax
Indemnitee or Affiliate;

(iv)   Taxes in the nature of capital gain, accumulated
earnings, personal holding company, excess profits, succession or
estate, minimum, alternative minimum, preference, franchise, conduct of
business and other similar taxes, other than, in each case, Taxes that
are or are in the nature of sales, use, rental, value added, ad
valorem, property or similar taxes;

(v)    Taxes imposed on a Tax Indemnitee that arise out of, or
are caused by, any act or omission of such Tax Indemnitee (or any
Affiliate thereof) that is expressly prohibited by the Operative
Documents or by a breach by such Tax Indemnitee (or any Affiliate
thereof) of any of its representations, warranties or covenants under
any Operative Document except to the extent attributable to any breach
by the Lessee of any covenant, representation or warranty contained in
any Operative Document;

(vi)   Taxes arising out of, or caused by, (i) any voluntary
assignment, sale, transfer or other disposition (except incremental ad
valorem, property, or similar taxes that arise due to the price or
terms of an assignment or transfer itself) or (ii) any involuntary
assignment, sale, transfer or other disposition resulting from a
bankruptcy or similar proceeding for relief of debtors in which such
Tax Indemnitee is a debtor or a foreclosure by a creditor of the Tax
Indemnitee of (A) the Lessor Parent of any of its interest in the
Lessor or (B) the Lessor of all or any of its interest in the Property
unless, in each case, such assignment, sale, transfer or other
disposition (1) occurs during the continuance of a Lease Event of
Default, (2) occurs pursuant to a casualty, or the Lessee's exercise of
a right under the Operative Documents, (3) results from any merger or
consolidation of the Lessee or (4) results from any sublease,
assignment, rebuilding, modification, substitution, improvement,
replacement or addition of or to the Property by the Lessee but only if
the Lessor has not consented to such action under the relevant
provision of the Lease, if such consent is required.

(vii)  Taxes that would not have arose but for the creation of
or the existence of Lessor Parent's Liens or Lessor's Liens;

(viii) Taxes imposed on any assignee or successor-in-interest to
a Tax Indemnitee to the extent any such Taxes exceed the Taxes that
would have been imposed had no assignment or transfer taken place
determined under the law as in effect on the date of transfer
(excluding however, any such incremental ad valorem, property or
similar taxes that arise due to the price or terms of the assignment or
transfer itself);

6

(ix)   Taxes that are included as a part of the Lessor's
Purchase Price;

(x)   With respect to the Lessor Parent, Taxes for which the
Lessee is is obligated to indemnify the Lessor Parent under the Tax
Indemnity Agreement (or which are expressly excluded from
indemnification thereunder);

(xi)   Taxes attributable to the failure of the Tax
Indemnitee to comply with certification, information, documentation,
reporting or other similar requirements concerning the nationality,
residence, identity, connection with the jurisdiction imposing such
Taxes or other similar matters, provided that the foregoing exclusion
--------
shall apply only such Tax Indemnitee is eligible to comply with such
requirement, the Lessee shall have given such Tax Indemnitee timely
written notice of such requirement and the Tax Indemnitee shall have
determined in good faith that compliance with any such requirement
shall not result in any identified non-immaterial adverse effect to its
interests or to those of its Affiliates provided further, however that
-------- ----------------
the immediately preceding proviso shall not apply if such
certification, information, documentation, reporting or other similar
requirements are required by law or regulation;

(xii)   Taxes imposed on a Tax Indemnitee where the Tax
Indemnitee's breach of its contest obligations under Section 4.7 hereof
effectively precludes the Lessee's ability to contest the Taxes;

(xiii)   Taxes to the extent imposed on any Tax Indemnitee
resulting from an amendment, modification, supplement or waiver to any
Operative Document which was not requested by the Lessee and as to
which the Lessee is not a party and the Tax Indemnitee (or any
Affiliate thereof) is a party unless such amendment, modification,
supplement or waiver (A) was required by Applicable Law or the
Operative Documents, (B) may be necessary or appropriate to, and is in
conformity with, any amendment to any Operative Document requested by
the Lessee in writing or required by Applicable Law, (C) is made while
a Lease Event of Default shall have occurred and be continuing or (D)
was expressly consented to by the Lessee or any of its Affiliates in
writing; and

(xiv)   Taxes imposed under Section 4975 of the Code or under
subtitle B of Title I of ERISA.

Section 4.3      Payment. Each payment required to be made by the
-------
Lessee to a Tax Indemnitee pursuant to this Section 4 shall be paid either (i)
when due directly to the applicable taxing authority by the Lessee if it is
permitted to do so, or (ii) where direct payment is not permitted and with
respect to gross up amounts, in immediately available funds to such Tax
Indemnitee by the later of (A) 30 days following the Lessee's receipt of the Tax
Indemnitee's written demand for the payment (which demand shall be accompanied
by a statement of the Tax Indemnitee describing in reasonable detail the Taxes
for which the Tax Indemnitee is demanding indemnity and the computation of such
Taxes), (B) subject to Section 4.7 below, in the case of amounts which are being
contested pursuant to such Section 4.7, at the time and in accordance with a
Final Determination of such contest or (C) in the case of any indemnity demand
for which the

7

Lessee has requested review and determination pursuant to Section 4.4 below, the
completion of such review and determination; provided, however, in no event
later than the date which is five Business Days prior to the date on which such
Taxes are required to be paid to the applicable taxing authority. Any amount
payable to the Lessee pursuant to Section 4.5 or Section 4.6 below shall be paid
promptly after the Tax Indemnitee realizes (or is deemed to realize) a Tax
Benefit giving rise to a payment under Section 4.5 or receives a refund or
credit giving rise to a payment under Section 4.6, as the case may be, and shall
be accompanied by a statement of the Tax Indemnitee computing in reasonable
detail the amount of such payment. Any amount that would be payable to the
Lessee pursuant to Section 4.5 or Section 4.6 below but for the fact that such
amount would be in excess of the amount of indemnity(ies) previously paid to the
Tax Indemnitee by the Lessee may be used as an offset against any future general
tax indemnity payments owed by the Lessee to such Tax Indemnitee. Upon the Final
Determination of any contest pursuant to Section 4.7 below in respect of any
Taxes for which the Lessee has made a Tax Advance (as defined in Section 4.7
below), the amount of the Lessee's obligation under Section 4.1 above shall be
determined as if such Tax Advance had not been made. Any obligation of the
Lessee under this Section 4 and the Tax Indemnitee's obligation to repay the Tax
Advance will be satisfied first by set off against each other, and any
difference owing by either party will be paid within 10 days of such Final
Determination.

Section 4.4   Independent Examination. Within 15 days after the Lessee
-----------------------
receives any computation from a Tax Indemnitee (pursuant to Section 4.3 above),
the Lessee may request in writing that an independent public accounting firm
selected jointly by the Lessee and the Tax Indemnitee review and determine on a
confidential basis the amount of any indemnity payment by the Lessee to the Tax
Indemnitee pursuant to this Section 4 or any payment by a Tax Indemnitee to the
Lessee pursuant to Section 4.5 or Section 4.6 below. The Tax Indemnitee shall
cooperate with such accounting firm and supply it with all information (other
than income tax returns) reasonably necessary for the accounting firm to conduct
such review and determination provided, that such accounting firm shall agree in
writing in a manner satisfactory to the Tax Indemnitee to maintain the
confidentiality of such information. The parties hereto agree that the
independent public accounting firm's sole responsibility shall be to verify the
computation of any payment pursuant to this Section 4 and that matters of
interpretation of law or of this Lease or any other Operative Document are not
within the scope of the independent accountant's responsibility. The fees and
disbursements of such accounting firm will be paid by the Lessee; provided that
such fees and disbursements will be paid by the Tax Indemnitee if the
verification results in an adjustment in the Lessee's favor of five percent or
more of the indemnity payment or payments computed by the Tax Indemnitee
(calculated using a discount rate of seven percent). The determination of the
accounting firm shall be final, binding and conclusive on both the Tax
Indemnitee and the Lessee. Such accounting firm shall be requested to make its
determination within 20 days.

Section 4.5   Tax Benefit. If, as the result of any Taxes paid or
-----------
indemnified against by the Lessee under this Section 4, the aggregate Taxes
payable by the Tax Indemnitee in connection with such payment for any taxable
period are less (whether by reason of a deduction, credit, allocation or
apportionment of income or otherwise and computed on the basis of the highest
generally applicable Tax rates applicable) than the amount of such Taxes that
otherwise would have been payable by such Tax Indemnitee (a "Tax Benefit"), then
-----------
to the extent such Tax Benefit was not taken into account in determining the
amount of indemnification payable under Section 4.1 above and provided no Lease
Event of Default shall have occurred and be continuing (in which

8

event the payment provided under this Section 4.5 shall be deferred until the
Lease Event of Default has been cured), such Tax Indemnitee shall pay to the
Lessee the lesser of (A) (y) the amount of such Tax Benefit, plus (z) an amount
equal to any United States Tax benefit actually realized by such Tax Indemnitee
as a result of the payment under clause (y) above and this clause (z) (such
benefit to be determined on the basis of the highest generally applicable Tax
rates applicable) and (B) the amount of the indemnity(ies) paid pursuant to this
Section 4 giving rise to such Tax Benefit. If it is subsequently determined that
the Tax Indemnitee was not entitled to such Tax Benefit, the portion of such Tax
Benefit that is required to be repaid or recaptured will be treated as Taxes for
which the Lessee shall indemnify the Tax Indemnitee pursuant to this Section 4
without regard to Section 4.2 (except Section 4.2(iii)).

Section 4.6  Refund. If a Tax Indemnitee obtains a refund or credit of
------
all or part of any Taxes paid, reimbursed or advanced by the Lessee pursuant to
this Section 4, the Tax Indemnitee promptly shall pay to the Lessee (x) the
amount of such refund or credit plus (y) an amount equal to any Tax benefit
actually realized by such Tax Indemnitee as a result of the payments to the
Lessee under clause (x) above and this clause (y) (such amounts to be determined
on the basis of the highest generally applicable Tax rates applicable), provided
that (A) if at the time such payment is due to the Lessee a Lease Event of
Default shall have occurred and be continuing, such amount shall not be payable
until such Lease Event of Default has been cured and (B) the aggregate amount
payable to the Lessee pursuant to this sentence shall not exceed the aggregate
amount of the indemnity(ies) paid pursuant to Section 4.3. If it is subsequently
determined that the Tax Indemnitee was not entitled to such refund or credit,
the portion of such refund or credit that is required to be repaid or recaptured
will be treated as Taxes for which the Lessee shall indemnify the Tax Indemnitee
pursuant to this Section 4 without regard to Section 4.2 (except Section
4.2(iii)). If, in connection with a refund or credit of all or part of any Taxes
paid, reimbursed or advanced by the Lessee pursuant to this Section 4, a Tax
Indemnitee receives an amount representing interest on such refund or credit,
the Tax Indemnitee promptly shall pay to the Lessee (1) the amount of such
interest that shall be fairly attributable to such Taxes paid, reimbursed or
advanced by the Lessee prior to the receipt of such refund or credit net of any
Taxes incurred on such interest and (2) any Tax savings realized by such Tax
Indemnitee as a result of the payments made by the Tax Indemnitee under (1) and
(2) (such benefit to be determined on the basis of the highest generally
applicable Tax rates applicable).

Section 4.7  Contest.
-------

(i)   Notice of Contest.  If a written claim for payment is
made by any taxing authority against a Tax Indemnitee for any Taxes
with respect to which the Lessee may be liable for indemnity hereunder
(a "Tax Claim"), such Tax Indemnitee shall give the Lessee written
notice of such Tax Claim promptly after its receipt, and shall furnish
the Lessee with copies of such Tax Claim and all other writings
received from the taxing authority to the extent relating to such
claim, provided that failure so to notify the Lessee shall not relieve
--------
the Lessee of any obligation to indemnify the Tax Indemnitee hereunder
except to the extent that such failure effectively precludes the
ability to conduct a contest hereunder. The Tax Indemnitee shall not
pay such Tax Claim until at least 30 days after providing the Lessee
with such written notice, unless required to do so by law or
regulation.

9

(ii)  Control of Contest. Subject to Section 4.7(iii) below,
the Lessee will be entitled to contest (acting through counsel
selected by the Lessee and reasonably acceptable to the Tax
Indemnitee), and control the contest of, any Tax Claim if (i) the
contest of the Tax Claim may be pursued in the name of the Lessee;
(ii) the contest of the Tax Claim must be pursued in the name of the
Tax Indemnitee but can be pursued independently from any other
proceeding involving a tax liability of such Tax Indemnitee for which
the Lessee is not responsible (with the Tax Indemnitee agreeing to use
reasonable efforts to sever the contest of any indemnified Tax from
the contest of any unindemnified Tax so that the Lessee can control
the contest of the indemnified Tax), or (iii) the Tax Indemnitee
requests that the Lessee control such contest. In the case of all
other Tax Claims, subject to Section 4.7(iii) below, the Tax
Indemnitee will contest the Tax Claim if the Lessee shall request that
the Tax be contested, and the following rules shall apply with respect
to such contest:

(1)   the Tax Indemnitee will control the contest of such
Tax Claim in good faith (acting through counsel selected by the Tax
Indemnitee and reasonably acceptable to the Lessee),

(2)   at the Lessee's written request, if payment is made
to the applicable taxing authority, the Tax Indemnitee shall use all
reasonable efforts to obtain a refund thereof in appropriate
administrative or judicial proceedings, and

(3)   the Tax Indemnitee shall not otherwise settle,
compromise or abandon such contest without the Lessee's prior written
consent except as provided in Section 4.7(iv) below.

In either case, the party conducting such contest shall consult with and keep
reasonably informed the other party and its designated counsel with respect to
such Tax Claim, shall provide the other party with copies of any reports or
claims issued by the relevant auditing agents or taxing authority as well as
redacted portions of tax returns, and shall consider and consult in good faith
with the other party regarding any request (a) to resist payment of Taxes if
practical and (b) not to pay such Taxes except under protest if protest is
necessary and proper (but the decision regarding what actions are to be taken
shall be made by the controlling party in its sole judgment; provided, however,
--------  -------
that (subject to Section 4.7(iv) below) if the Tax Indemnitee is the controlling
party, such Tax Indemnitee may not settle the contest without the consent of the
Lessee).

(iii) Conditions of Contest. Notwithstanding the foregoing, in
no event shall the Lessee be permitted or a Tax Indemnitee be required
to contest (or to continue the contest of) any Tax Claim, unless:

(1)   within 30 days after notice by the Tax Indemnitee
to the Lessee of such Tax Claim, the Lessee shall request in writing
to the Tax Indemnitee that such Tax Claim be contested; provided that
if a shorter period is required for taking action with respect to such
Tax Claim and the Tax Indemnitee notifies the Lessee of such
requirement, the Lessee shall use reasonable efforts to request such
contest within such shorter period,

10

(2)  no Lease Default or Lease Event of Default has
occurred and is continuing,

(3)  there is (i) no realistic risk of sale, forfeiture
or loss of, or the creation of a Lien on the Lessor's or Lessor
Parent's interest in the Property or any material portion thereof or
any interest therein (other than a Permitted Lien) and (ii) no risk of
the imposition of criminal penalties as a result of such Tax Claim;
provided that clause (3)(i) shall not apply if the Tax is fully paid
in either manner specified in clause (4) below or the Lessee posts
security satisfactory to the Tax Indemnitee,

(4)  if such contest involves payment of such Tax, the
Lessee will either advance to the Tax Indemnitee on an interest-free
basis and at no after tax cost to such Tax Indemnitee (a "Tax
---
Advance") or pay such Tax Indemnitee the amount payable by the Lessee
-------
pursuant to Section 4.1 above with respect to such Tax,

(5)  the Lessee agrees to pay (and pay on demand) and at
no after tax cost to such Tax Indemnitee all reasonable costs and
expenses incurred by the Tax Indemnitee in connection with the contest
of such claim (including all reasonable legal fees and disbursements),

(6)  the Tax Indemnitee has been provided at the Lessee's
sole expense with an opinion of independent tax counsel selected by
the Lessee and reasonably acceptable to the Tax Indemnitee to the
effect that there is a Reasonable Basis for contesting such Tax Claim,

(7)  the amount of Taxes in controversy, taking into
account the amount of all similar and logically related Taxes with
respect to the transactions contemplated by the Operative Documents
that could be raised in any other year (including any future year) not
barred by the statute of limitations, exceeds $30,000,

(8)  the Lessee shall acknowledge in writing its
liability to indemnify the Tax Indemnitee hereunder in respect of such
claim if the contest is not successful, provided that such
--------
acknowledgment of liability shall not be binding if the contest is
resolved on a basis from which it can be established that the Lessee
would not be required to indemnify the Tax Indemnitee under this
Section 4 in the absence of such acknowledgment, and

(9)  in the case of a judicial appeal, no appeal to the
U.S. Supreme Court shall be required of the Tax Indemnitee or shall be
permitted by the Lessee.

(iv)  Waiver of Indemnification. Notwithstanding anything to
the contrary contained in this Section 4, the Tax Indemnitee at any
time may elect to decline to take any action or any further action
with respect to a Tax Claim and may in its sole discretion settle or
compromise any contest with respect to such Tax Claim without the
Lessee's consent if the Tax Indemnitee:

11

(1)   waives its right to any indemnity payment by the
Lessee pursuant to this Section 4 in respect of such Tax Claim (and
any other claim for Taxes with respect to any other taxable year the
contest of which is effectively precluded by the Tax Indemnitee's
decision not to take (or not to take any further) action with respect
to the Tax Claim), and

(2)   promptly repays to the Lessee any Tax Advance and
any amount paid to such Tax Indemnitee under Section 4.1 above in
respect of such Taxes, but not any costs or expenses with respect to
any such contest.

Except as provided in the preceding sentence, any such waiver shall be without
prejudice to the rights of the Tax Indemnitee with respect to any other Tax
Claim.

Section 4.8  Reports. If any report, statement or return is required
-------
to be filed by a Tax Indemnitee with respect to any Tax that is subject to
indemnification under this Section 4, the Lessee will (1) notify the Tax
Indemnitee in writing of such requirement not later than 30 days prior to the
date such report, statement or return is required to be filed (determined
without regard to extensions) and (2) if so directed by the Tax Indemnitee and
if the return to be filed reflects only information in respect of the
transactions contemplated by the Operative Documents, prepare and furnish to
such Tax Indemnitee not later than 30 days prior to the date such report,
statement or return is required to be filed (determined without regard to
extensions) a proposed form of such report, statement or return for filing by
the Tax Indemnitee. Each Tax Indemnitee and the Lessee will timely provide the
other with all information in its possession that the other party may reasonably
require and request to satisfy its obligations under this Section 4.

Section 4.9  Non-Parties. If a Tax Indemnitee is not a party to this
-----------
Agreement, the Lessee may require such Tax Indemnitee to agree in writing, in a
form reasonably acceptable to the Lessee, to the terms of this Section 4 prior
to making any payment to such Tax Indemnitee under this Section. Subject to the
preceding sentence, the Lessee's obligations under this Section 4 shall inure to
the benefit of each and every Tax Indemnitee without regard to whether such Tax
Indemnitee is a party to this Agreement.

ARTICLE V

RENEWAL OPTIONS
---------------

Section 5.1  Fixed Rate Renewal Term. Upon the expiration of the Basic
-----------------------
Term, Lessee shall have the right and option, subject to the terms of this
Article 5, to extend the Lease Term for five (5) successive fixed rate renewal
terms (each such renewal term, a "Fixed Rate Renewal Term") of five (5) years
-----------------------
each commencing immediately following the expiration of the Basic Term or the
previous Fixed Rate Renewal Term, as the case may be.

Section 5.2  FMV Renewal Terms. Upon the expiration of the Basic Term
-----------------
and the last Fixed Rate Renewal Term, Lessee shall have the right and option,
subject to the terms of this Article 5, to extend the Lease Term for one (1)
successive fair market value renewal period of five (5) years (the "FMV Renewal
-----------
Term"; each Fixed Rate Renewal Term and the FMV Renewal Term shall be
----
collectively referred to as the "Renewal Terms").
-------------

12

Section 5.3   Conditions to Renewal Terms. The right and option of
---------------------------
Lessee to extend this Lease for any of the Renewal Terms shall be subject to the
following terms:

(i)   At the commencement of any of the Renewal Terms, this
Lease shall be in full force and effect and no Material Lease Default
or Lease Event of Default shall have occurred and be continuing;

(ii)  Lessee shall have exercised its right to each Fixed Rate
Renewal Term by giving irrevocable written notice to the Lessor no
later than twelve (12) months prior to the expiration of the Basic
Term or the previous Fixed Rate Renewal Term; and

(iii) Lessee shall have exercised its right to each FMV Renewal
Term by giving irrevocable written notice to Lessor no later than
fifteen (15) months prior to the expiration of the Basic Term or the
then current Renewal Term; and

(iv)  Each Renewal Term shall be on the same terms, covenants
and conditions set forth in this Lease; provided, however, that Basic
--------  -------
Rent shall be determined in the manner set forth in Section 5.4
hereof.

Section 5.4   Rent During Renewal Terms. (a) (a) Basic Rent for each
-------------------------
Rent Payment Date during the first two (2) Fixed Rate Renewal Terms shall be
payable monthly in advance and in the amounts and on the day of each month that
Basic Rent was due during the last year of the Basic Term. Basic Rent for each
Rent Payment Date during each Fixed Rate Renewal Term after the first two (2)
Fixed Rate Renewal Terms shall be payable monthly in advance on the day of each
month that Basic Rent was due during the last year of the Basic Term and in the
amount of 105% of Basic Rent that was due during the last year of the
immediately preceding Fixed Rate Renewal Term.

(b)   Basic Rent for each FMV Renewal Term shall be the Fair Market
Rental Value of the Property as of the date of commencement of such FMV Renewal
Term, determined in accordance with the Appraisal Procedure not more than two
hundred seventy (270) days prior to the commencement of such FMV Renewal Term
payable monthly in advance on the day of each month that Basic Rent was due
during the last year of the Basic Term or of the preceding Renewal Term, as the
case may be.

ARTICLE VI

EARLY TERMINATION
-----------------

Section 6.1   Obsolescence Termination. So long as no Lease Event of
------------------------
Default has occurred and is continuing, the Lessee shall have the right, on the
terms and subject to the conditions contained in this Section 6.1, at its option
(i) at any time during the period commencing on the date which is the first day
of the sixth (6th) lease year and ending on the last day of the tenth (10th)
lease year, and (ii) at any time during the period commencing on the date which
is the first day of the eleventh (11th) lease year and ending on the last day of
the eighteenth (18th) lease year so long as such exercise under this clause (ii)
shall not have caused the Lessee to have terminated

13

for obsolescence more than three (3) of the properties subject to this Lease and
the Other Leases, in each case on at least one hundred twenty (120) days'
irrevocable (subject to the second succeeding paragraph) prior written notice (a
"Notice of Termination") to the Lessor, to terminate this Lease on any Rent
---------------------
Payment Date (the "Termination Date"), if the Property shall have become
----------------
Obsolete or if Lessee shall have made a good faith determination, such good
faith determination to be evidenced by an Officer's Certificate delivered to the
Lessor, to the effect that disposition of the Property is necessary or advisable
for purposes of complying with Applicable Laws and Regulations. In connection
with and at the time of delivery of any Notice of Termination, Lessee shall
deliver to Lessor an appraisal of the then-current Fair Market Sales Value of
the Property free and clear of the Lease (the "Appraisal") determined in
accordance with the Appraisal Procedure. During the period commencing on the
date of receipt by Lessor of the Notice of Termination and ending on the date on
which Lessor is no longer entitled to provide a Retention Election, the Lessor,
but not the Lessee, shall be entitled, directly or through one or more agents,
to seek bids for the sale of the Property. During the period commencing with the
date on which the Lessor is no longer entitled to provide a Retention Election
until the Termination Date, the Lessee, as non-exclusive agent for the Lessor,
shall undertake on behalf of the Lessor to obtain cash bids for the purchase of
the Property. Prior to solicitation of any such bids, the Lessee and the Lessor
shall agree on a form of contract of purchase relating to the Property
acceptable to the Lessor. The Lessee may use a third party as its agent in
connection with any such sale. In connection with so acting as Lessor's agent,
Lessee may, by written notice to Lessor delivered no less than fifteen (15) days
after expiration of the period during which Lessor is entitled to provide a
Retention Election, extend the Termination Date to any Rent Payment Date not
more than two hundred seventy (270) days from the Termination Date initially
designated in the Notice of Termination. The Lessee shall certify to the Lessor
in writing the amount and terms of each bid received by the Lessee and the name
and address of the Person submitting a bid (which Person shall not be the
Lessee, any Affiliate of the Lessee, or any Person with an agreement to allow
Lessee or any Affiliate of Lessee to use the Property at any time during the
three (3) year period following any such termination but may be the Lessor).
Unless Lessor should have delivered a Retention Election, on the Termination
Date (subject to receipt of the net sales price and all additional payments and
instruments specified in the next succeeding sentence), (i) the Lessee shall
deliver possession of the Property to such highest bidder, and (ii) the Lessor
shall, on an "as is, where is" basis and without recourse to or warranty by the
Lessor, except as to the absence of Lessor Liens and subject to the same
disclaimers as set forth in Section 7.1, simultaneously therewith sell the
Property to such highest bidder, the total net selling price realized at such
sale to be retained by the Lessor. In addition, on the Termination Date, the
Lessee shall deliver to Lessor an instrument in which Lessee agrees not to, and
not to permit any Affiliate to, directly or indirectly use the Property during
the three (3) year period following the Termination Date and shall pay to the
Lessor the sum of (A) the excess, if any, of the Termination Value determined as
of the Termination Date over the net sales price of the Property paid to the
Lessor pursuant to the preceding sentence, plus (B) all accrued and unpaid Basic
Rent as of the Termination Date, if any, plus (C) any Make-Whole Amount, plus
(D) any Additional Rent then due.

Notwithstanding the foregoing, the Lessor may elect to retain, rather
than sell, its interest in the Property by giving irrevocable notice to that
effect to the Lessee provided that such irrevocable notice (a "Retention
--------                                  ---------
Election") is given no later than one hundred twenty (120) days after the
--------
receipt of the Notice of Termination. If the Lessor elects to retain its
interest in the Property pursuant to this paragraph, on the Termination Date the
Lessee shall deliver possession of

14

the Property to Lessor or Lessor's designee and the Lessee shall pay to the
Lessor or to whoever is entitled thereto, on the scheduled Termination Date, the
amount set forth in clauses (B) and (D) of the preceding paragraph.

Anything in this Section 6.1 to the contrary notwithstanding, the
Lessee shall have the right to revoke any Notice of Termination on not more than
two (2) occasions during the Lease Term if, with respect to each such occasion,
during the period in which the Lessee had the right to serve as agent for the
Lessor to obtain cash bids either (i) there were no cash bids or (ii) all such
cash bids were for an amount less than 90% of the Fair Market Sales Value of the
Property as set forth in the Appraisal. Lessee shall pay the Lessor's reasonable
expenses incurred in connection with the rescinded termination or incurred in
connection with the completed termination.

If an acceptable bid for the Property shall not have been obtained or
if a sale shall not have occurred on or as of the Termination Date, then this
Lease shall continue in full force and effect until an acceptable bid is
obtained and a sale shall have occurred. If the Lessee shall fail to pay all
amounts due under and pursuant to this Section 6.1 on the scheduled Termination
Date, no sale shall be consummated, this Lease shall continue in full force and
effect and it shall be deemed that Lessee has revoked its Notice of Termination.

Upon compliance by the Lessee with the provisions of this Section 6.1,
the obligation of the Lessee to pay Basic Rent after the Termination Date shall
cease, the Lease Term shall end and the obligations of the Lessee hereunder
(other than any such obligations expressly surviving termination of this Lease)
shall terminate as of the Termination Date. The Lessor shall be under no duty to
solicit bids, to inquire into the efforts of the Lessee to obtain bids or
otherwise to take any action in connection with any such sale other than to sell
its interest in the Property as provided above.

ARTICLE VII

CONDITION OF PROPERTY
---------------------

Section 7.1   Disclaimers. The Property is demised and let by the
-----------
Lessor "AS IS" in its present condition, subject to (a) the rights of any
parties in possession thereof, (b) the state of the title thereto existing at
the time the Lessor acquired title to its interest in the Property, (c) any
state of facts which an accurate survey or physical inspection might show
(including the survey delivered on the Lease Term Commencement Date), (d) all
Applicable Laws and Regulations and (e) any violations of Applicable Laws and
Regulations which may exist on the Lease Term Commencement Date. The Lessee has
examined the Property and (insofar as the Lessee is concerned) has found the
same to be satisfactory. THE LESSOR HAS NOT MADE NOR SHALL BE DEEMED TO HAVE
MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, NOR SHALL BE DEEMED TO
HAVE ANY LIABILITY WHATSOEVER AS TO THE VALUE, HABITABILITY, CONDITION, DESIGN,
OPERATION, OR FITNESS FOR USE OF THE PROPERTY (OR ANY PART THEREOF), OR ANY
OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO
THE

15

PROPERTY (OR ANY PART THEREOF) AND THE LESSOR SHALL NOT BE LIABLE FOR ANY
LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR THE FAILURE OF THE PROPERTY, OR ANY
PART THEREOF, TO COMPLY WITH ANY APPLICABLE LAWS AND REGULATIONS except that the
Lessor hereby represents and warrants that the Property is and shall be free of
Lessor Liens attributable to Lessor. It is agreed that the Lessee has been
afforded full opportunity to inspect the Property, is satisfied with the results
of its inspections of the Property and is entering into this Lease solely on the
basis of the results of its own inspections and all risks incident to the
matters discussed in the preceding sentence, as between the Lessor, on the one
hand, and the Lessee, on the other, are to be borne by the Lessee. The Lessee
acknowledges that the Property has been subject to a sale-leaseback transaction
among the Lessee, the Seller and the Lessor and, therefore, the Lessee is fully
familiar with the condition of the Property and is not looking to any other
Person as to any warranty with respect thereto. The provisions of this Article
VII have been negotiated, and, except to the extent otherwise expressly stated,
the foregoing provisions are intended to be a complete exclusion and negation of
any representations or warranties by the Lessor, express or implied, with
respect to the Property, that may arise pursuant to any law now or hereafter in
effect, or otherwise.

ARTICLE VIII

LIENS
-----

The Lessee shall not directly or indirectly create, incur, assume
or suffer to exist any Lien on or with respect to the Property, any Basic Rent,
title thereto or any interest therein, except in all cases Permitted Liens. The
Lessee shall promptly, but not later than thirty (30) days after the filing
thereof, at its own expense, take such action as may be necessary duly to
discharge or eliminate or bond in a manner reasonably satisfactory to the Lessor
any such Lien (other than Permitted Liens) and provide title endorsement
coverage as Lessor may reasonably request if the same shall arise at any time.

Nothing contained in this Lease shall be construed as
constituting the consent or request of the Lessor, express or implied, to or for
the performance by any contractor, laborer, materialman, or vendor of any labor
or services or for the furnishing of any materials for any construction,
alteration, addition, repair or demolition of or to the Property or any part
thereof, which would result in any liability of the Lessor for payment therefor.
NOTICE IS HEREBY GIVEN THAT THE LESSOR WILL NOT BE LIABLE FOR ANY LABOR,
SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO THE LESSEE, OR TO ANYONE
HOLDING AN INTEREST IN THE PROPERTY OR ANY PART THEREOF THROUGH OR UNDER THE
LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR
MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF THE LESSOR IN AND TO THE
PROPERTY.

16

ARTICLE IX

MAINTENANCE AND REPAIR; ALTERATIONS,
------------------------------------
MODIFICATIONS AND ADDITIONS
---------------------------

Section 9.1  Maintenance and Repair. The Lessee, at its own
----------------------
expense, shall at all times, (a) maintain the Property in good order and repair,
subject to ordinary wear and tear, provided, however, the Lessee shall make such
--------  -------
additions, improvements and updates to the Property as may be necessary to
maintain the Property consistent with the standards then applicable to other
similar properties owned and operated by the Lessee and its Affiliates, but in
no event less than the standards of other prudent owners of similar office and
research and development facilities; provided, further, however, the Lessee
--------  -------  -------
shall satisfy the recommendations with respect to the Property set forth in
Schedule Y attached hereto no later than November 30, 2001; (b) maintain the
Property in accordance with all Applicable Laws and Regulations; (c) comply with
the standards imposed by any insurance policies required to be maintained
hereunder which are in effect at any time with respect to the Property or any
part thereof; and (d) make all necessary or appropriate repairs, replacements
and renewals of the Property which may be required to keep the Property in the
condition required by the preceding clause (a), whether interior or exterior,
structural or nonstructural, ordinary or extraordinary, foreseen or unforeseen,
and including, without limitation, repairs, replacements and renewals that would
constitute capital expenditures under GAAP if incurred by an owner of property.
The Lessee waives any right that it may now have or hereafter acquire to (i)
require the Lessor to maintain, repair, replace, alter, remove or rebuild all or
any part of the Property or (ii) make repairs at the expense of the Lessor. All
such repairs, restorations and replacements shall be constructed and installed
in a good and workmanlike manner in compliance with Applicable Laws and
Regulations. In carrying out its obligations under this Section 9.1, the Lessee
shall not discriminate in any way in the maintenance of the Property as compared
with other similar properties owned, managed or leased by the Lessee.

Section 9.2  Alterations; Additions.
----------------------

(a)  (i)   Lessee shall make all alterations, renovations,
modifications or improvements to the Improvements, including,
without limitation, construction of new facilities with respect
thereto and expansion and re-arrangement of the Improvements,
destruction or demolition of existing Improvements (provided that
such destruction or demolition does not reduce the number of
rentable square feet of the Improvements) and complete
re-construction of a facility or any part thereof which is
included as part of the Property (collectively, "Alterations"),
-----------
which are required by Applicable Laws and Regulations.

(ii)  Provided Lessee at the time of an Alteration maintains
a Credit Rating of Investment Grade or higher, Lessee may make
any Alteration not required by Applicable Laws and Regulations,
the cost of which is ten percent (10%) or less of the Purchase
Price of the Property, without Lessor's and Lender's consent;

(iii) Provided Lessee at the time of an Alteration maintains
a Credit Rating of Investment Grade or higher, Lessee may make
any Alteration not required by Applicable Laws and Regulations,
the cost of which is more than ten percent

17

(10%) of the Purchase Price of the Property, with Lessor's and
Lender's prior consent, which consent shall not be unreasonably
withheld;

(iv)  In the event Lessee shall not then maintain a Credit
Rating of Investment Grade or higher, Lessee shall not have the
right to make any Alteration not required by Applicable Laws or
Regulations the cost of which exceeds $250,000 unless Lessee
shall have received the prior written consent of Lessor, not to
be unreasonably withheld or delayed, and Lessee shall have
delivered to Lessor security for the benefit of the Lessor and
the Lender in form and substance reasonably satisfactory to the
Lessor, and in amounts at all times sufficient (and which may be
applied, with the consent of Lessor and Lender) to complete such
Alteration.

Lessee's right to make Alterations is subject to the conditions that:

(x)   such Alterations do not decrease (other than to a de
minimis extent) the Fair Market Sales Value, Residual Value,
condition, utility or Remaining Life of the Property below the
Fair Market Sales Value, Residual Value, condition, utility or
Remaining Life of the Property immediately prior to the
Alterations (assuming the Property was in the condition required
by this Lease) and such Alterations do not cause the Property to
be characterized as "limited-use property" (as defined in Revenue
Procedure 2001-28); and

(y)   Lessee has delivered to Lessor and Lender the plans
and specifications relating to the proposed Alteration which, in
cases where Lessor's and Lender's consent to an Alteration is
required, shall be subject to Lessor's and Lender's approval, not
to be unreasonably withheld or delayed. With respect to any
Alteration, Lessee shall certify that: (x) any new structures,
and any structural alterations, additions or additional buildings
or structures, shall be built under the supervision of a
certified architect, (y) the structural integrity of the existing
buildings will not be impaired by such work, and (z) such new
structures, structural alterations, additions or additional
buildings or structures or the results of such demolition will
not encroach upon (or with respect to demolitions, cause any
damage to) any adjacent premises. With respect to demolitions,
Lessee shall certify, with respect to buildings not demolished,
the substance of subclause (y) of the immediately preceding
sentence, and with respect to buildings being demolished, the
substance of subclause (z) of the immediately preceding sentence.

(b)  It is understood and agreed that, so long as no Material
Lease Default or Lease Event of Default shall have occurred and be continuing,
Lessee shall have the right to construct on the Land, with the consent of Lessor
and Lender (such consent not to be unreasonably withheld or delayed), additional
buildings and other facilities which are not an integral part of the
Improvements ("Additions") so long as such Additions and the impact of such
---------
Additions on the Property meet the conditions set forth in Sections 9.2(a)(i)
and 9.2(a)(ii) above. In addition, the Lessor and Lender agree pursuant to
Section 23.12 below, to provide such easements as may be reasonably requested by
the Lessee in connection with such Additions, provided that such
--------

18

easements do not cause the Property and Alterations to fail to meet the
conditions set forth in Section 9.2(a)(i) above.

(c)  If Lessee shall make or cause to be made any Alterations or
Additions, it shall do so in a good and workmanlike manner and, subject to
Section 9.9 hereof, in compliance with Applicable Laws and Regulations, and such
Alterations or Additions, as the case may be, shall be free of Liens other than
Permitted Liens. Whenever Lessee is making Alterations or Additions, Lessee
shall commence such Alterations or Additions promptly and, once commenced, shall
diligently pursue the completion of such Alterations or Additions and, in any
event, shall complete such Alterations within the lesser of three (3) years
after commencement of such Alterations or Additions or the then remaining term
of this Lease. If any such Alterations or Additions shall not have been
completed prior to the expiration of this Lease, Lessee shall be deemed to
remain in possession of the Property and Section 3.6 hereof shall apply.

(d)  For the purpose of confirming that Lessee is not required to
remove any specified Alteration or Addition as required by Section 9.5, the
Lessee shall have the right to request the consent of the Lessor as to any
Alteration or Addition to the Property pursuant to this Section 9.2 as to which
consent is not otherwise required hereunder, which consent shall not be
unreasonably withheld. The reasonable cost and expense of Lessor's (i) review of
any plans and specifications or other documents required to be furnished
pursuant to this Lease or (ii) review/supervision of any such Alterations or
Additions shall be paid by Lessee to Lessor, within thirty (30) days after
demand, as Additional Rent.

Section 9.3  Permanent and Non-Severable. All Alterations not
---------------------------
required by Applicable Laws and Regulations, which are severable from the
Property, which have not been financed by the Lessor, and which may be removed
therefrom without (a) decreasing (other than to a de minimis extent) the Fair
Market Sales Value, Residual Value or Remaining Life of the Property from the
Fair Market Sales Value, Residual Value and Remaining Life that the Property
would have had if such Alterations had never been made and (b) causing material
damage to the Property (after taking into account the repairs which would be
required to return the Property to its condition prior to the time that such
Alterations were made (provided that Lessee makes all such repairs)) ("Severable
--------                                        ---------
Alterations") shall remain the property of Lessee. Not earlier than sixty (60)
-----------
days prior to the surrender of the Property, the Lessor may elect to purchase on
the Lease Termination Date from the Lessee any Severable Alterations (if not
already owned by the Lessor, previously removed by the Lessee or previously
identified for removal by Lessee) which purchase shall be at the Fair Market
Sales Value of such Alterations. Any such Severable Alterations which Lessor has
not purchased or requested be removed and which Lessee elects to leave in place
at the end of the Lease Term and all Additions shall, at such time, become
Lessor's property and title thereto shall vest in Lessor without compensation to
Lessee. All Alterations which are not Severable Alterations will become part of
the Property and title thereto will automatically vest in Lessor when made
without compensation to Lessee, and will thereupon become part of the Property
subject to this Lease. On the Lease Termination Date at the request of Lessor,
Lessee shall deliver a deed or bill of sale on an "as is, where is" basis to
Lessor covering all Alterations which are not Severable Alterations and all
other Alterations and Additions which Lessee is not removing from the Property,
in each case, appropriate to transfer title to Lessor, free and clear of all
Liens other than Permitted Liens.

19

Section 9.4   Cooperation. If any Applicable Laws and Regulations
-----------
require that Lessor submit a request for governmental approvals and permits in
connection with any Alterations or Additions, Lessor shall, subject to the terms
and conditions of Section 23.12, cooperate in obtaining all necessary
governmental permits and approvals to complete any such Alterations or Additions
without any cost or expense to Lessor.

Section 9.5   Obligations with Respect to Alterations and
-------------------------------------------
Additions at End of Lease Term. At the end of the Lease Term, if requested by
------------------------------
Lessor, Lessee shall (at its expense) remove all Additions and all Alterations
as to which the Lessor has not consented to their construction or installation
on the Property. Lessee shall, at Lessee's sole cost and expense, diligently
complete the removal of such Additions and Alterations (including any portion
thereof below ground level) in a good and workmanlike manner in compliance with
Applicable Laws and Regulations, and shall restore the Land on which such
Alterations or Additions were constructed to its condition prior to the making
of such Alterations or Additions.

Section 9.6   [Intentionally Omitted.]

Section 9.7   Compliance with Applicable Laws and Regulations.
-----------------------------------------------
During the Lease Term, at Lessee's expense and without expense to the Lessor,
Lessee will comply in all material respects with the provisions of all
Applicable Laws and Regulations governing the use, operation, condition or
maintenance of, or otherwise affecting, the Property; provided, however, that
--------  -------
this Section 9.7 shall not apply to compliance with Environmental Laws, which
compliance shall be governed solely by Section 9.8.

Section 9.8   Environmental Covenants. In order to induce Lessor
-----------------------
to enter into this Lease, Lessee covenants and agrees during the term of this
Lease:

(a)  to comply and to cause all assignees, tenants, sub-tenants
and other Persons occupying or conducting business on the Property to comply
with all Environmental Laws applicable to the Property or any operation thereon
or to Lessee or its subtenants, assignees, tenants as occupants of the Property
or other Persons occupying or conducting business on the Property;

(b)  to have sole responsibility for any and all costs and
expenses of compliance with applicable Environmental Laws, including any such
compliance directed to the Lessor or to which any of Lessor, or Lessee or its
subtenants, assignees, tenants or other Persons occupying or conducting business
on the Property may become subject;

(c)  not to generate, use, treat, store, handle, Release or
dispose of, or permit the generation, use, treatment, storage, handling, Release
or disposal of Hazardous Materials on the Property, or transport or permit the
transportation of Hazardous Materials to or from the Property in any quantity or
manner which would violate, or give rise to liability under, any applicable
Environmental Laws;

(d)  to conduct or cause to be conducted any investigation,
study, sampling and testing and undertake any Remedial Action with respect to
Hazardous Materials on or from the Property (including, for the avoidance of
doubt, with respect to Hazardous Materials on or from the Property prior to
commencement of the Lease Term) as required by and in accordance with the
requirements of the applicable Environmental Laws;

20

(e)  (i) Lessee shall promptly notify Lessor of (A) any fact,
circumstance, condition, occurrence or Release of Hazardous Materials occurring
at or from the Property relating to any underground storage tank or otherwise
that may be reasonably expected to result in an expense in excess of $500,000
relating to or as a result of noncompliance with any applicable Environmental
Law, such notice to be given no later than fifteen (15) Business Days after the
condition is discovered by Lessee or such Release or occurrence takes place,
whichever is later, and (B) any pending or threatened Environmental Claim that
may reasonably be expected to result in an expense in excess of $500,000 against
Lessee relating to the Property, such notice to be given no later than fifteen
(15) Business Days after Lessee receives written notice that such Environmental
Claim is commenced or threatened. To the extent possible, all such notices shall
describe in reasonable detail the nature of the Environmental Claim, fact,
circumstance, condition, occurrence or Release and Lessee's response thereto.

(ii)   Upon the written request of Lessor, Lessee shall
provide Lessor with copies of all written communications with any
Governmental Authority or third party (other than any privileged
written communication with counsel), and all other documents
reasonably requested by the foregoing Persons relating to the
subject of any notice required under Section 9.8(e)(i).

(iii)  Lessee shall provide reports relating to any
Environmental Claim in such detail as may reasonably be requested
by Lessor. In addition, if any fact, circumstance, condition,
occurrence or Release occurs at or from the Property that relates
to any underground storage tank or otherwise that may reasonably
be expected to result in an expense in excess of $500,000
relating to or as a result of noncompliance with any applicable
Environmental Law or Environmental Claim, Lessor may require with
respect to the Property that is the subject of the claim, at
Lessee's sole cost and expense, the undertaking of a Phase I
environmental audit and, if such Phase I environmental audit
discloses any environmental condition or conditions that
reasonably require a Phase II environmental audit, a Phase II
environmental audit for the Property. All audits pursuant to this
provision shall be prepared by a consultant that is, and the
scope of the audit shall be, reasonably acceptable to Lessor.

(iv)   Subject to the terms of Article XV, Lessor, Lender
and their respective agents, employees, contractors and
representatives shall have the right, but not the duty, at their
cost and expense (unless a Lease Event of Default is continuing,
in which case such inspection will be at Lessee's cost and
expense), to enter upon the Property during reasonable times and
upon reasonable notice to monitor and inspect any fact,
circumstance, condition, occurrence or Release of Hazardous
Materials thereon that relates to an underground storage tank or
otherwise that may result in an expense in excess of $500,000
relating to or as a result of non-compliance with any applicable
Environmental Law. In exercising its rights herein, each such
party shall use reasonable efforts to minimize interference with
the Lessee's business but any such entry shall not constitute an
eviction of Lessee, in whole or in part. If any Governmental
Authority shall ever require testing to ascertain whether there
has been a Release or violation of applicable Environmental Laws,
then the costs thereof shall be paid by Lessee; and

21

(f)  Lessee shall maintain the Property and cause alterations to
be performed to the Property in compliance with Environmental Laws applicable to
asbestos.

Section 9.9  Contests. (a) (a) Subject to the terms of Section
--------
9.9(b) of this Lease, during the Lease Term, Lessee may contest the validity or
application of any Applicable Laws and Regulations (other than with respect to
any matters described in the Tax Indemnity Agreement, as to which the Tax
Indemnity Agreement shall control) or the validity or amount of any Impositions
or Liens by appropriate proceedings diligently conducted in good faith in the
name of Lessee, or, if the provisions of any Applicable Laws and Regulations
require that such proceeding be brought by or in the name of Lessor, with
Lessor, in the name of Lessor, or both, without any cost or expense to Lessor so
long as such proceedings shall not interfere with the disposition of the
Property or any part thereof or involve (i) any material risk of the sale,
forfeiture or loss of the Property or any part thereof or title thereto or any
interest therein, (ii) a material risk of extending the ultimate imposition of
such Applicable Laws and Regulations beyond the termination of the Lease Term,
(iii) any risk of criminal liability being imposed on the Lessor, or (iv) a
material risk of reduction of the value, utility or remaining useful life
(except to an insignificant extent) of the Property.

(b)  Subject to Section 9.9(a) and satisfaction of the following
conditions, Lessee, at its sole cost and expense, may contest the assertion by
any Governmental Authority or any other Person of any Applicable Laws and
Regulations affecting all or a portion of the Property:

(i)   no Lease Event of Default has occurred and is
continuing;

(ii)  such contest shall not present (A) any material danger
of the sale, forfeiture or loss of any part of the Property,
title thereto or interest therein, material interference with the
use, value or disposition of the Property or the payment of Rent
relating to the Property, or (B) any danger of criminal liability
or material danger of any civil sanctions being imposed on the
Lessor;

(iii) such contest shall not result, or be reasonably likely
to result, in any Lien against the Property or any Rent payable
hereunder or, if such contest shall, or shall be reasonably
likely to, result in any such Lien, and if the Lessee shall not
then maintain a Credit Rating of Investment Grade, Lessee shall
have provided additional security for the benefit of the Lessor
and the Lender in form and substance, and in amounts, reasonably
satisfactory to the Lessor;

(iv)  any such contests, once instituted, unless
discontinued, settled or compromised, shall be prosecuted
diligently until a final judgment is obtained; and

(v)   Lessee may only delay compliance with the subject
Applicable Laws and Regulations until the earliest to occur of:
(A) a determination by the applicable judicial or Governmental
Authority that the contest is unsuccessful, which determination
is not, or ceases to be, subject to further appeal, (B) the
discontinuance, settlement or compromise of such judicial
proceeding or proceeding involving or heard by a Governmental
Authority or (C) the last day of the Basic Term or any Renewal
Term then in effect.

22

ARTICLE X

LOCATION AND USE
----------------

Section 10.1  Location. Lessee shall not remove, or permit to be
--------
removed, the Improvements or any part thereof from the Property without the
prior written consent of the Lessor, except that the Lessee or any other Person
may remove (a) any Severable Alteration with respect to which title has passed
to or remained with the Lessee in accordance with the provisions of Section 9.3,
(b) any part of the Improvements on a temporary basis for the purpose of repair
or maintenance thereof or (c) any part of an Improvement which has been replaced
by another part pursuant to Section 9.2 and which has become subject to this
Lease.

Section 10.2  Use. Lessee may use the Property for any lawful
---
purpose, provided such use involves general office, research and development or
distribution purposes, and does not increase the risk of an Environmental Claim
("Permitted Uses"). Lessor shall not unreasonably withhold its consent to any
--------------
other use of the Property by Lessee, so long as such use relates to the business
of manufacturing, distributing, assembling and designing automobile, truck and
off-highway vehicle parts. Lessee shall have the right not to utilize the
Property or any part thereof at any time and from time to time, subject to
compliance with all other terms of this Lease.

ARTICLE XI

INSURANCE
---------

Section 11.1  Coverage. Subject to Lessee's rights of
--------
self-insurance set forth in this Section 11.1, Lessee shall maintain or cause to
be maintained:

(a)  (i) all-risk property insurance covering each and every
component of the Property against physical loss or damage, including, but not
limited to fire and extended coverage, collapse, flood and earth movement in an
amount at least equal to the replacement value. Such insurance policy shall
contain an agreed amount endorsement waiving any coinsurance penalty; (ii) loss
of rental income insurance in an amount sufficient to provide proceeds which
will cover the actual loss of Basic Rent during restoration, not to exceed a
period of twelve (12) months.

(b)  "boiler and machinery" insurance with respect to damage (not
insured against pursuant to Section 11.1(a) hereof) to the boilers, pressure
vessels or similar apparatus located on the Property for risks normally insured
against under boiler and machinery policies;

(c)  commercial general liability insurance with respect to the
Property written on an occurrence basis (not claims made basis) with a limit of
not less than $1,000,000 per occurrence. Such coverage shall include, but shall
not be limited to, premises/operations, explosion, collapse, underground
hazards, hostile fire and limited sudden and accidental pollution, contractual
liability, independent contractors, property damage, bodily injury, advertising
injury and personal injury liability. Such insurance shall not contain an
exclusion for punitive or exemplary damages when insurable by law;

23

(d)  (i) Workers' Compensation insurance in accordance with
statutory provisions or qualified self-insurance covering accidental injury,
illness or death of an employee of Lessee while at work or in the scope of his
employment with Lessee and (ii) Employer's Liability in an amount not less than
$1,000,000 or such greater amount as may be required by law. Such coverage shall
not contain any occupational disease exclusion; and

(e)  excess or umbrella liability insurance in an amount not less
than $10,000,000 written on an occurrence basis (i.e., not claims made basis)
----
providing coverage limits in excess of the insurance limits in (c) and (d)(ii)
above for all operations of the Lessee. Such insurance shall follow the form of
the primary insurance and drop down in case of exhaustion of underlying limits.
Such insurance shall not contain an exclusion for punitive or exemplary damages
where insurable under law.

The insurance required to be maintained pursuant to this Lease
shall be no less favorable, except for limits of liability, than that generally
maintained by Lessee and its Affiliates on properties which are owned or
operated by them and all insurance carried pursuant to Sections 11.1(a) (i) and
11.1(a)(ii) or 11.1(c) shall be placed with such insurer having a minimum
Standard & Poor's rating of A and insurance carried pursuant to Sections 11.1(b)
and 11.1(e) shall be placed with such insurer having a minimum A.M. Best rating
of A.IX (or such other rating as Lessor and Lender may reasonably agree)
authorized to do business in the State in which the Property is located, and be
in such form, with terms, conditions, limits and deductibles as shall be
reasonably acceptable to the Lessor; provided that such insurance may be
reinsured by insurers in which Lessee or any of its Affiliates has an interest.

To the extent that any of the levels of insurance specified above
are not available in the commercial market or not available at commercially
reasonable rates, the Lessee shall be entitled to maintain insurance at lower
levels or different terms and conditions so long as the coverage is consistent
with the practice of the Lessee.

Any of the foregoing insurance coverages may be carried as a part
of blanket policies, provided that (i) amounts shall not be less than those
--------
required by this Section 11.1; (ii) any such policy(ies) shall otherwise comply
with the requirements of this Article XI; (iii) the protection afforded, except
for the limits of liability or the exhaustion of aggregate limits, under any
such policy(ies) shall be no less than that which would have been afforded under
a separate policy or policies relating only to the Property; and (iv) each
certificate of insurance shall explicitly specify replacement value with respect
to the Property coverage.

Notwithstanding the preceding provisions of this Section 11.1, at
any time that the Lessee shall maintain a Credit Rating of BBB from Standard &
Poor's and Baa2 from Moody's, or higher, Lessee shall be entitled to self-insure
and/or have deductibles against any risks described in Section 11.1(a)-(d) so
long as such risks retained do not exceed $10,000,000 (as adjusted upwards
annually by the consumer price index) in any single occurrence and no Lease
Event of Default shall have occurred and be continuing for thirty (30) days. At
any time that the Lessee is not entitled to self-insure as described in the
immediately preceding sentence, (i) if the Lessee shall then maintain a Credit
Rating of Investment Grade or higher, the amount of any deductible with respect
to any property insurance policy required by this Lease shall be $250,000 or
less and with respect to any general liability insurance policy required by this
Lease shall be $1,500,000 or less or (ii) if the

24

Lessee shall not then maintain a Credit Rating of Investment Grade or higher,
then within thirty (30) days of the downgrade below Investment Grade, the amount
of any deductible with respect to any property or general liability insurance
policy required by this Lease shall not be greater than five percent 5% of
annual Basic Rent. The Lessee may, from time to time, increase the amount of
self-insurance and/or deductibles from the amounts set forth herein with the
Lessor's prior written consent, such consent not to be unreasonably withheld. In
addition, with respect to insurance required by Section 11.1(e), at the written
request of the Lessor delivered not less than sixty (60) days prior to the
proposed effective date thereof, all minimum amounts of policies (but not
deductibles) shall be increased (but not decreased) on or after the tenth (10th)
anniversary of the Lease Term Commencement Date and every five (5) years
thereafter to the level that a prudent lessee of comparable property would
carry.

Section 11.2  Policy Provisions. Any insurance policy required to
-----------------
be maintained by Lessee pursuant to Section 11.1 shall:

(a)  specify Lessee as the insured, Lessor as loss payee and
Lender as mortgagee and loss payee with respect to all property insurance,
including rental income insurance, and, except in the case of the insurance
described in Section 11.1(d), Lessor and Lender as additional insured in respect
of claims or suits for bodily injury or property damage arising from the use,
ownership, occupancy, lease or sublease of the Property as to all such
insurances. It shall be understood that any obligation imposed upon the Lessee,
including but not limited to the obligation to pay premiums, shall be the sole
obligation of Lessee and not of Lessor;

(b)  provide, in the case of insurance carried pursuant to
Section 11.1(a) and (b), that all insurance proceeds in respect of any loss or
occurrence with respect to the Property (i) shall be adjusted with Lessee,
unless a (and only for so long as no) Lease Event of Default shall be
continuing, in which case such proceeds shall be adjusted solely with Lessor (or
Lender, if Lessor has assigned such right to Lender) and (ii) shall be payable
(x) to Lessee in accordance with Article XIV, and (y) in all other circumstances
to Lessor or the Depository or otherwise as Lessor may direct;

(c)  provide that, in respect of the interests of Lessor and
Lender, such policies shall not be invalidated by any action or inaction of
Lessee or any other Person (other than the Person making the claim thereunder)
and shall insure Lessor and Lender regardless of, and any claims for losses
shall be payable notwithstanding:

(i)   any act of negligence, including any breach of any
condition or warranty in any policy of insurance, of Lessee or
any other Person (other than the Person making the claim
thereunder);

(ii)  the occupation or use of the Property for purposes
more hazardous than permitted by the terms of the policies;

(iii) any foreclosure or other similar proceeding or notice
of sale relating to any of the Property; and

(iv)  any change in the title to or ownership of the
Property after Lessee and its insurance underwriter has notice of
such change in title or ownership;

25

(d) provide that such insurance shall be primary insurance and that
the insurers under such insurance policies shall be liable under such policies
without right of contribution from any other insurance coverage effected by or
on behalf of Lessor under any other insurance policies covering a loss that is
also covered under the insurance policies maintained or arranged by Lessee
pursuant to this Article XI and shall expressly provide that all provisions
thereof, except the limits of liability (which shall be applicable to all
insureds as a group) and liability for premiums (which shall be solely a
liability of Lessee), shall operate in the same manner as if there were a
separate policy covering each insured;

(e) provide that any cancellation thereof shall not be effective as
to Lessee, Lessor or Lender until at least thirty (30) days after receipt by
Lessee or Lessor, as applicable, of written notice thereof (except for the
nonpayment of premium for which ten (10) days notice shall be given); provided
--------
that such delayed effectiveness shall not be required where the insurance
proposed to be canceled has been replaced with other insurance, or Lessee has
self-insured, in either case in accordance with the terms hereof; and

(f) waive any right of subrogation of the insurers against Lessor
and Lender and waive any right of the insurers to any setoff or counterclaim or
any other deduction, whether by attachment or otherwise, in respect of any
liability of Lessor or Lender.

So long as no Lease Event of Default shall have occurred and be
continuing, the Lessee shall have the right to settle all claims with the
insurers.

Section 11.3 Certificates of Insurance; Performance by Lessor. On or
------------------------------------------------
prior to the Closing Date and on or before the fifteenth (15th) day prior to the
expiration of any policy maintained pursuant to this Article XI and not less
than five (5) days prior to any assignment of Lessee's interest in this Lease
permitted under Section 13.3 of this Lease or any sale or replacement of the
Property or any refinancing permitted under this Lease, Lessee shall deliver to
Lessor certificates of insurance issued by the insurers evidencing the insurance
maintained pursuant to this Article XI or, to the extent Lessee is permitted to
self-insure under the requirements established in Section 11.1 of this Lease and
Lessee has elected to do so, an Officer's Certificate that self-insurance is
permitted under Section 11.1 of this Lease and that self-insurance is in place
for any insurance coverage required under this Article XI that is not otherwise
evidenced by the insurers' certificates of insurance. In the event that Lessee
shall fail to maintain insurance or provide notice of self-insurance as herein
provided, Lessor and/or its successors, designees, or assigns may at their
respective option, but without obligation, provide such insurance and, in such
event, Lessee shall, within ten (10) days after receipt of demand from time to
time, reimburse Lessor and/or its successors, designees, or assigns for the cost
thereof, together with interest on such cost at the Overdue Rate computed from
the date of payment of such cost to the date of reimbursement. Lessor and/or its
successors, designees, or assigns shall give prompt written notice to Lessee of
any such insurance.

Section 11.4 General. Notwithstanding anything to the contrary
-------
herein, no provision of this Article XI or any provision of this Lease shall
impose on Lessor any duty or obligation to verify the existence or adequacy of
the insurance coverage maintained by Lessee, nor shall Lessor be responsible for
any representations or warranties made by or on behalf of Lessee to any
insurance broker, company or underwriter.

26

Section 11.5 Proceeds. All proceeds of property insurance policies
--------
or self-insurance maintained pursuant to this Article XI and the amount of any
deductible shall be paid in the manner set forth in Article XIV of this Lease;
provided, however, that, if the applicable Section of this Lease requires that
--------  -------
the proceeds of property insurance be retained by the Depository, and Lessee was
self-insured with respect to the occurrence which would have generated such
proceeds, then Lessee shall, within seven (7) days after receipt of written
notice from Lessor, pay a sum equal to the proceeds which would have been paid
by the insurance policies required under Section 11.1(a) (assuming that there
was no deductible allowed and no self-insurance in place), to the Depository as
though there were an actual policy of insurance in place.

Section 11.6 Separate Insurance. Nothing in this Article XI shall be
------------------
construed to prohibit Lessor from insuring at its own expense the Property or
its interest therein, provided any insurance so maintained shall not provide for
or result in a reduction of the coverage or the amounts payable under any of the
insurance required to be maintained by Lessee under this Article XI.

ARTICLE XII

RETURN OF PROPERTY
------------------

Section 12.1 Surrender; Environmental Compliance. On the Lease
-----------------------------------
Termination Date, Lessee shall surrender the Property in good order and
condition, ordinary wear and tear and loss by casualty covered by insurance (to
the extent the proceeds have been received by the Lessor) excepted, free and
clear of all Liens other than Lessor Liens and Liens described in clause (vi) of
the definition of Permitted Liens, in the condition required by Section 9.1 of
this Lease. In the event Lessee elects, at its option, to remove any of the
equipment described on Schedule X, or any other property or equipment not
----------
subject to this Lease, Lessee shall repair any damages caused by such removal
and restore the Property to the condition it was in prior to the installation of
such equipment or property. Upon surrender, the Lessee shall deliver an
Environmental Report to the Lessor showing that the Property is in compliance
with Environmental Laws, which Environmental Report shall be dated within one
hundred twenty (120) days of the date of such surrender. The delivery of such
Environmental Report shall not relieve the Lessee of any indemnification
obligation or liability with respect to any Release, violation of Environmental
Law, Environmental Claim or other loss of or damage to any property or the
environment. Simultaneously with such surrender, Lessee shall deliver to Lessor:

(i)  to the extent maintained by Lessee in the ordinary course
of its business, originals of all transferable operating licenses,
other licenses, certificates of occupancy, other certificates,
permits, authorizations and approvals relating to the use and
occupancy of the Property;

(ii) to the extent in the possession or control of Lessee (x)
plans and specifications for all mechanical, electrical and HVAC
systems pertaining to the Property and (y) as-built drawings,
blueprints, operating and repair manuals, engineering logs and
preventative maintenance records relating to the Property or any
Alteration or Addition;

27

(iii)   maintenance contracts, warranties or claims related to the
Property or any Alteration or Addition;

(iv)    keys to the Property and all locks located therein in the
possession or control of Lessee; and

(v)     such other papers and documents in the possession and control
of Lessee which may be necessary for the ownership or the
proper operation of the Property.

ARTICLE XIII

ASSIGNMENT, SUBLEASING AND MERGER
---------------------------------

Section 13.1 Subletting of Portions of the Property Without Lessor's
-------------------------------------------------------
Consent. The Lessee may sublease all or any part of the Property to any Person
-------
at any time on such terms and conditions as Lessee may desire in its sole
discretion, without the consent of Lessor; provided, however, that (i) any such
--------  -------
sublease shall be expressly subject and subordinate to this Lease and shall not
release Lessee from any of its obligations or liabilities under this Lease or
under any other Operative Document; (ii) no such sublease may be entered into if
a Lease Event of Default has occurred and is continuing; (iii) any sublessee
shall not be bankrupt or insolvent at the inception of the sublease and shall be
permitted to use the Property only for Permitted Uses; (iv) any such sublease
shall be for a term that does not extend beyond the Basic Term or any Renewal
Term that has been irrevocably elected; (v) the sublease shall not contain any
purchase options; and (vi) no sublease shall cause any portion of the Property
to be tax-exempt use property within the meaning of Section 168(h) of the Code.

Section 13.2 Delivery of Non-Disturbance Agreements by Lessor. Upon
------------------------------------------------
the request of Lessee, Lessor and Lender shall execute and deliver a
subordination, non-disturbance and attornment agreement in the form attached to
this Lease as Exhibit B (a "Non-Disturbance Agreement"), in connection with a
-------------------------
sublease by Lessee complying with Section 13.1, provided such sublease is (i) to
a sublessee with a Credit Rating of at least Baa by Moody's and BBB by Standard
& Poor's, (ii) at a rental rate equal to the greater of the Basic Rent payable
under this Lease on a per square foot basis and the Fair Market Rental Value of
the Property, (iii) for not less than fifty percent (50%) of the usable square
footage of the Improvements which space is physically contiguous to the space
which is not subleased and is accessible by a separate entrance or a common
lobby, (iv) for a term of not less than five (5) years and not more than ten
(10) years, and provided that the Improvements are readily convertible to
--------
multi-tenant use without material expenditure of funds so that the space
remaining after the subletting is contiguous and is accessible by a separate
entrance or a common lobby and is a self-contained and readily marketable unit
of space. Lessor and Lender shall execute and deliver the Non-Disturbance
Agreement with respect to such sublease within twenty (20) Business Days after
request by Lessee so long as (x) Lessee pays all reasonable costs and expenses
(including reasonable attorneys' fees and expenses) in connection therewith, (y)
no Lease Event of Default has then occurred and is continuing and (z) the Lessee
shall have delivered a certificate to the Lessor and the Lender confirming
compliance with Section 13.1 and this 13.2.

28

Section 13.3 Assignment of Lease. So long as no Lease Event of
-------------------
Default has occurred and is continuing, Lessee may assign its interest in this
Lease without the consent or approval of Lessor. No assignment permitted
hereunder shall (a) relieve Lessee of any of its obligations, liabilities or
duties hereunder and under the other Operative Documents, which shall be and
remain those of a principal and not a guarantor, (b) cause any portion of the
Property to be tax-exempt use property within the meaning of Section 168(h) of
the Code or (c) be to an assignee that is bankrupt or insolvent as of the
effective date of such assignment. Notwithstanding clause (a) of the immediately
preceding sentence, Lessee may assign its interest in this Lease and the Lessee
shall be relieved of all its obligation, liabilities or duties hereunder so long
as (i) (A) the assignee of this Lease has a Credit Rating of not less than A3 by
Moody's and A- by Standard & Poor's or (B) the obligations of the assignee of
this Lease are guaranteed by an entity which has a Credit Rating of not less
than A3 by Moody's and A- by Standard & Poor's, (ii) the assignee and such
guarantor shall have assumed the due and punctual performance of all of the
obligations of Lessee under this Lease pursuant to an assignment and assumption
agreement and guarantee in form and substance, and supported by opinions in form
and substance and from counsel, satisfactory to the Lessor and Lender and (iii)
Lessor shall have consented thereto (which consent shall not be unreasonably
withheld).

Section 13.4 Merger. The Lessee agrees that it will not consolidate
------
with or merge with any other Person or sell, convey, transfer or lease its
assets as an entirety or substantially as an entirety, unless: (a) the surviving
entity (if other than the Lessee) or the Person that shall acquire by sale,
conveyance, transfer or lease the assets of the Lessee as an entirety or
substantially as an entirety shall execute and deliver to the Lessor an
assumption by such successor entity of the due and punctual performance of each
covenant and condition of this Lease to be performed or observed by the Lessee
and (b) no Material Lease Default or Lease Event of Default shall have occurred
and be continuing after giving effect to such consolidation, merger or sale,
conveyance, transfer or lease of assets of the Lessee as an entirety or
substantially as an entirety. Upon any such consolidation or merger, or any
sale, conveyance, transfer or lease of the assets of the Lessee as an entirety
or substantially as an entirety in accordance with this Section 13.4, the
surviving Person or the Person to which such sale, conveyance, transfer or lease
shall be made shall succeed to, and be substituted for, and may exercise every
right and power of, the Lessee under this Lease.

Section 13.5 Affiliates. Subject to Section 13.1, the Lessee shall
----------
have the right, without the consent of Lessor, to sublease the Property or
portions thereof to, or share occupancy with Affiliates of Lessee (or entities
which are joint ventures of Lessee, its Affiliates and third parties), provided
Lessee shall remain liable under this Lease as a principal and not as a
guarantor.

ARTICLE XIV

LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE
-----------------------------------------

Section 14.1 Payment of Stipulated Loss Value on an Event of Loss.
----------------------------------------------------
Upon the occurrence of an Event of Loss, the Lessee shall promptly (and, in any
event, within thirty (30) days after such occurrence) give the Lessor written
notice of such Event of Loss and shall, within ninety (90) days after such
occurrence give the Lessor written notice stating whether Lessee elects

29

to (i) comply with the provisions of Section 14.2 hereof relating to restoration
and rebuilding of the Property affected by such damage, destruction or taking,
or (ii) terminate this Lease on a Rent Payment Date occurring not less than one
hundred twenty (120) days from the delivery of such notice and, if such election
shall occur during the Basic Term, making a rejectable offer to purchase the
Property in accordance with this Section 14.1. Unless the Lessor rejects the
Lessee's offer to purchase the Property in accordance with the last paragraph of
this Section 14.1, on the first Stipulated Loss Value Date at least one hundred
twenty (120) days after the date of such notice the Lessee shall, without regard
to the adequacy of any Net Casualty Proceeds or Net Condemnation Proceeds, pay
to the Lessor an amount equal to the sum of the Stipulated Loss Value as of such
payment date and other amounts, if any, then due hereunder or under any of the
other Operative Documents (collectively, the "Termination Amount"). If an Event
-----------------
of Loss shall occur during a Renewal Term, Lessee shall, within ninety (90) days
after such occurrence, give Lessor written notice whether Lessee elects to (i)
comply with the provisions of Section 14.2 hereof relating to restoration or
rebuilding of the Property, or (ii) terminate this Lease. In the event Lessee
elects to terminate this Lease, this Lease shall terminate on a Rent Payment
Date selected by Lessee which is not less than sixty (60) days after the date of
Lessee's notice, upon payment by Lessee of the sums described in Section 14.1(d)
hereof.

(a) If the Lessor fails to expressly reject Lessee's offer to
purchase pursuant to this Section 14.1 in writing within ninety (90) days from
the date of Lessee's offer, the Lessee shall pay the Termination Amount
specified in Section 14.1 to the Lessor on such purchase date; provided that (i)
--------
any Net Casualty Proceeds derived from insurance required to be maintained by
the Lessee pursuant to Section 11.1 of this Lease then held by the Lessor shall
be credited against such Termination Amount, if not already paid by the Lessee,
and any Net Casualty Proceeds derived from insurance required to be maintained
by the Lessee pursuant to Section 11.1 of this Lease remaining thereafter shall
be paid to, or retained by, the Lessee or as it may direct or, if such
Termination Amount has already been paid by the Lessee, any such Net Casualty
Proceeds shall be paid over to, or retained by, the Lessee or as it may direct
and (ii) the Lessee's interest in the Net Condemnation Proceeds (to the extent
that proceeds have been received by the Lessor) shall be credited against such
Termination Amount, if not already paid by the Lessee, and any such Net
Condemnation Proceeds remaining thereafter shall be paid over to, or retained
by, the Lessee or as it may direct or, if such Termination Amount has already
been paid by the Lessee, such Net Condemnation Proceeds (to the extent that
proceeds have been received by the Lessor) shall be paid over to, or retained
by, the Lessee or as it may direct. Upon payment in full of the Termination
Amount payable pursuant to this Section 14.1, (x) the Lease Term shall end, (y)
the obligations of the Lessee hereunder (other than any obligations expressed
herein as surviving termination of this Lease) shall terminate as of the date of
such payment and (z) with respect to an Event of Loss not constituting an Event
of Taking of 100% of the Property, the Lessor shall transfer to the Lessee, or
if the Lessee shall so designate, to the property damage insurer, as-is,
where-is, without recourse or warranty but free and clear of Lessor Liens, and
subject to the same disclaimers as set forth in Section 7.1, all right, title
and interest of the Lessor in, to and under the Property.

(b) Anything herein to the contrary notwithstanding, if the Lessee
shall fail to pay all amounts due under and pursuant to this Section 14.1, no
sale shall be consummated and this Lease shall continue in full force and
effect.

30

(c)  In the event that the Lessor expressly rejects in writing the
offer of the Lessee to purchase the Property as provided in this Section 14.1 at
the purchase price stated therein, the Lessee shall pay the following amount to
the Lessor or such amount shall be retained (in the case of the Net Casualty
Proceeds) by the Lessor on the date that would otherwise have been the purchase
date pursuant to Section 14.1(i) hereof: the sum of (A) Net Casualty Proceeds or
Net Condemnation Proceeds, as the case may be, plus (B) with respect to an Event
of Loss not constituting an Event of Taking, an amount equal to the deductible
under the policy or policies represented by such Net Casualty Proceeds, plus (C)
with respect to an Event of Loss not constituting an Event of Taking, any
amounts Lessee has chosen to self-insure (the amounts described in clauses (A),
(B) and (C) being collectively referred to as the "Loss Proceeds" for the
-------------
Property. Upon payment in full of such amount, plus any Basic Rent then accrued
and unpaid and any Additional Rent, (1) the Lease Term shall end and (2) the
obligations of the Lessee hereunder (other than any obligations expressed herein
as surviving termination of this Lease) shall terminate as of the date of such
payment. Upon payment to Lessor of all amounts owing under this paragraph, all
Loss Proceeds remaining shall be paid to or retained by the Lessee.

Section 14.2   Restoration; Application of Payments. All Net Proceeds
------------------------------------
(except for payments under insurance policies maintained other than pursuant to
Article XI of this Lease) received at any time by the Lessor or the Lessee from
any Governmental Authority or other Person with respect to any Condemnation,
Casualty or Event of Loss to the Property or any part thereof, shall (except to
the extent Section 14.4 applies) be applied as set forth below in this Section
14.2. Unless the Lessee shall have offered to purchase the Property in
accordance with Section 14.1 hereof and the Lessor shall have agreed to accept
such offer, the repair, rebuilding, replacement and restoration of the Property
shall be commenced by Lessee within one hundred twenty (120) days after any
Condemnation, Casualty or Event of Loss (and in any event, Lessee shall promptly
effect such repair, rebuilding, replacement or restoration as shall be necessary
to stabilize the Improvements and render the Improvements safe), and such
repair, rebuilding, replacement or restoration shall be completed promptly, but
in any event prior to the end of the Lease Term. Subject to the provisions of
this Section 14.2, so long as there is not continuing any Material Lease Default
or Lease Event of Default, the Lessee shall control all aspects of any repair,
rebuilding, replacement and restoration of the Property so as to (i) restore the
same to at least the value, utility and remaining useful life and (ii) to the
extent possible, to substantially the same condition as existed immediately
prior to the occurrence of such Condemnation, Casualty or Event of Loss (other
than the restoration of Improvements made after the Closing Date to which the
Lessee retains title) and, except to the extent permitted by Section 9.9, in
accordance with Applicable Laws and Regulations. In addition to its rights under
Section 15.1 hereof, Lessor shall have the right to review plans and
specifications and inspect the Property, at Lessee's sole cost and expense, at
any time upon not less than three (3) Business Days' prior notice in connection
with any such repair, rebuilding, replacement or restoration.

(a)  If the Lessee shall have elected or be required to repair or
restore the Property and (i) no Material Lease Default or Lease Event of Default
has occurred and is continuing, (ii) Lessee shall then maintain a Credit Rating
of Investment Grade and (iii) the Net Proceeds (including amounts with respect
to which Lessee is self-insured as provided in Section 11.5 hereof) payable are
ten percent (10%) of the Purchase Price or less, all such Net Proceeds shall,
subject to Section 11.2(b), be paid to the Lessee immediately upon demand, and
in any event shall be applied, as necessary, for the repair or restoration of
the Property;

31

(b)  If (i) a Material Lease Default or Lease Event of Default has
occurred and is continuing at the time of the subject Casualty, Condemnation or
Event of Loss, or thereafter during the repair or restoration period or (ii)
Lessee shall then not maintain a Credit Rating of Investment Grade or (iii) the
Net Proceeds with respect to the Property exceed ten percent (10%) of the
Purchase Price, the full amount of such Net Proceeds, or the amount of such
excess, as applicable shall be paid to the Depository. The Depository shall have
no affirmative obligation to prosecute a determination of the amount of, or to
effect the collection of, any Net Proceeds unless the Depository shall have been
given an express written undertaking to do so. Moneys received by the Depository
pursuant to the provisions of this Lease shall not be commingled with the
Depository's own funds and shall be held by the Depository in trust, either
separately or with other trust funds, for the uses and purposes provided in this
Lease. The Depository shall invest any moneys held by it in Permitted
Investments and the interest paid or received by the Depository on the moneys so
held in trust shall be added to the moneys so held in trust. The Depository
shall not be liable or accountable for any action taken or suffered by the
Depository or for any disbursement of moneys made by the Depository in good
faith in reliance on advice of legal counsel. In disbursing monies pursuant to
this Section, the Depository may rely conclusively on the information contained
in any notice given to the Depository by the Lessee (a copy of which shall be
sent to the Lessor) in accordance with the provisions hereof unless the Lessor
notifies the Depository in writing within ten (10) Business Days after the
giving of any such notice by the Lessee that (i) the Lessor intends to dispute
such information, in which case the disputed amount shall not be disbursed but
shall continue to be held by the Depository until such dispute shall have been
resolved or (ii) a Lease Event of Default is continuing, in which case the
proceeds shall be held in accordance with Section 23.9 hereof;

(c)  If such excess proceeds or the full amount of such Net Proceeds,
as applicable, are being held pursuant to clause (b) above, from time to time,
but not more often than once in any thirty (30) day period and provided that the
--------
Lessee has first paid any amounts required to be paid by the Lessee out of its
own funds hereunder, the Lessee may (i) request reimbursement out of such excess
proceeds or Net Proceeds, as applicable, for the actual costs and expenses
incurred by the Lessee in connection with such repair and rebuilding; or (ii)
request the Depository to pay such costs and expenses directly to contractors
and suppliers. Such requests shall be made by written notice to the Depository,
setting forth in reasonable detail all of such costs and expenses incurred by
the Lessee and certifying that (1) all of such costs and expenses are due and
owing (or will be due and owing within the next seven (7) days) and (2) such
costs and expenses were not the subject of a previous certificate delivered
pursuant to this clause (c) and (3) such other matters as are customary in
accordance with prudent practice for periodic construction draws. Any request by
the Lessee for the payment of such excess proceeds or such Net Proceeds, as
applicable, shall also be accompanied by:

(I)  a certificate of a licensed architect certifying:

(A)  that the restoration has been completed to the extent set
forth in the request for work completed to such date by the Lessee in
compliance in all material respects with the approved plans for such
restoration; and

(B)  the cost, as reasonably estimated by such certifying party,
of the restoration to be completed subsequent to the date of such
certificate; and

32

(II) an Officer's Certificate of the Lessee certifying that:

(A)  the amount of Net Proceeds then held by the Depository and
the Lessee, as the case may be, are sufficient to complete the restoration
to be completed subsequent to the date of such certificate or if not, that
Lessee has delivered to the Depository available funds (and Lessee hereby
agrees to deposit such funds with the Depository) which, together with the
undisbursed Net Proceeds, are sufficient to complete the restoration;

(B)  no Material Lease Default or Lease Event of Default is
continuing; and

(C)  no Liens other than Permitted Liens have arisen out or any
labor performed in connection with such repair and restoration.

If the Lessor shall in good faith desire to dispute the information
contained in any notice given by the Lessee, the Lessor shall so notify the
Lessee and the Depository in writing within five (5) Business Days after the
giving of such notice, specifying the amount intended to be disputed and the
nature of the dispute. After such five (5) Business Days period has elapsed, if
the Lessor has not disputed the information contained in the Lessee's notice,
the Depository shall promptly disburse to the Lessee out of such excess proceeds
or Net Proceeds, as the case may be, the amount of such costs and expenses;

(d)  Subject to Section 14.5, and once such repair and restoration is
completed in accordance with the plans and specifications approved by Lessor, as
certified by an independent architect engaged by Lessee, and fully paid for, any
Net Casualty Proceeds under insurance paid for or provided by the Lessee in
excess of amounts necessary for the repair or restoration of the affected
Improvements, or amounts necessary for the payments required to be paid pursuant
to Section 14.1, shall be paid to the Lessee upon payment of the amounts
required to be paid under Section 14.1 or to be paid because of the Lessor's
rejection of the Lessee's offer to purchase the Property; and

(e)  Any Net Condemnation Proceeds shall be divided between the Lessor
and the Lessee as their interests appear in accordance with Applicable Laws and
Regulations. Any such Net Condemnation Proceeds attributable to the Lessee's
interest in the affected Property(s) shall be applied first to the payment of
amounts required to be paid under Section 14.1, if applicable, and all other Net
Condemnation Proceeds attributable to the Lessee's interest shall be paid to the
Lessee. Any Net Condemnation Proceeds attributable to the Lessor's interest in
the Property shall be distributed to the Lessor.

During any period of repair or rebuilding pursuant to this Article
XIV, this Lease will remain in full force and effect and Basic Rent allocable to
the Property shall continue to accrue and be payable without abatement or
reduction. The Lessee shall maintain records setting forth information relating
to the receipt and application of payments in accordance with this Section 14.2.
Such records shall be kept on file by the Lessee at its offices and shall be
made available at their then current location to the Lessor during normal
business hours upon request. All repair and

33

rebuilding pursuant to this Article XIV shall be done in compliance with the
requirements of Section 9.2(a) (as if references therein to "Alterations" were
to such repair and rebuilding).

Section 14.3   Event of Taking. If an Event of Taking shall occur for
---------------
the Property, prior to the date title to the Property shall have been conveyed
to the condemning authority having jurisdiction thereof, the Lessee shall give
the Lessor prompt written notice of such occurrence and the date thereof.

Section 14.4   Application of Certain Payments Not Relating to an
--------------------------------------------------
Event of Taking. (a) In case of a requisition for temporary use of all or a
---------------
portion of the Property which is not an Event of Taking for the Property, this
Lease shall remain in full force and effect, without any abatement or reduction
of Basic Rent, and the Net Condemnation Proceeds for the Property shall, unless
a Material Lease Default or Lease Event of Default has occurred and is
continuing, be paid to the Lessee, except that any portion of such Net
Condemnation Proceeds that was awarded with respect to the time period after the
expiration or termination of the Lease Term shall be allocated between the
Lessor and the Lessee as their respective interests shall appear. Following the
occurrence of any Condemnation which is not an Event of Taking at the Property
(so long as this Lease shall not have been terminated with respect to the
Property as provided in this Article XIV), Lessee shall to the extent possible
restore the Property to the condition existing prior to the date of such
Condemnation not constituting an Event of Taking.

(b)  In case of a Condemnation not resulting in an Event of Taking and
which is not a case of a requisition for temporary use of all or a portion of
the Property, to the extent the Condemnation relates to an Improvement included
in the Property, the Lessee shall (i) construct a building or improvement of
equal remaining economic useful life and expected residual value or repair,
rebuild, replace or restore the Property to the fullest possible extent. In
connection therewith this Lease shall continue in full force and effect, without
any abatement or reduction in Basic Rent and the Net Condemnation Proceeds for
the Property shall be paid to the Lessor and the Lessee as their interests may
appear.

Section 14.5   Dispositions of Proceeds during Default. Subject to the
---------------------------------------
provisions of Sections 14.2(b) hereof, so long as a Material Lease Default or
Lease Event of Default shall have occurred and be continuing, any amount that
would otherwise be payable to or for the account of, or that would otherwise be
retained by, the Lessee pursuant to this Article XIV shall be paid to the Lessor
and applied by Lessor to the payment of Lessee's obligations under this Lease
and the other Operative Documents or held as security for the obligations of the
Lessee under this Lease pursuant to Section 23.9 hereof, as Lessor may elect.

Section 14.6   Negotiations. In the event any part of the Property
------------
becomes subject to condemnation or requisition proceedings, the Lessee shall
give notice thereof to the Lessor promptly after the Lessee has knowledge
thereof and so long as this Lease has not been terminated the Lessee shall
control the negotiations with the relevant Governmental Authority; provided that
--------
no settlement will be made without Lessor's prior consent, not to be
unreasonably withheld unless a Material Lease Default or Lease Event of Default
is continuing in which case Lessor shall assume control of such negotiations and
Lessor may agree to such settlement without the consent of the Lessee in its
sole discretion. The Lessee and the Lessor shall give to the other such
information, and copies of such documents, which relate to such proceedings, or
which relate to the settlement

34

of amounts due under insurance policies required by Article XI, and are in the
possession of the Lessee or the Lessor, as the case may be, as are reasonably
requested by the other.

Section 14.7   No Rent Abatement. Rent shall not abate hereunder by
-----------------
reason of any Casualty, any Condemnation or any Event of Loss when this Lease
does not terminate in accordance with the provisions of this Article XIV, and
the Lessee shall continue to perform and fulfill all of the Lessee's
obligations, covenants and agreements hereunder to the extent reasonably
practicable given such Casualty, Condemnation or Event of Loss. Without limiting
the foregoing, the Lessee expressly waives the provisions and benefits of any
present or future law relating to damage or destruction (including, without
limitation, any statutes now or hereafter in effect in any jurisdiction where
the Property is located) and agrees that the provisions of this Lease shall
control the rights of the Lessor and the Lessee with respect to damage or
destruction or any condemnation.

Section 14.8  Investment. Provided that no Lease Event of Default is
----------  --------
continuing, the Lessor agrees that the Lessee may direct the investment of
amounts held by the Lessor or the Depository pursuant to this Article XIV and
not applied to the payment of Lessee's obligations under this Lease and the
other Operative Documents in Permitted Investments. Any losses attributable to
such investment shall be promptly reimbursed by the Lessee. During the
continuance of a Material Lease Default or Lease Event of Default, the Lessor
shall cause all such funds to be invested in Permitted Investments.

ARTICLE XV

INSPECTION
----------

Section 15.1  Entry on Property. Lessor, its agents, employees and
-----------------
contractors, at their own expense, or after a Lease Event of Default has
occurred and is continuing at Lessee's expense, may enter the Property (to be
accompanied by a designated representative of Lessee) during normal business
hours and upon not less than five (5) Business Days' prior written notice (or,
in the case of an emergency, two (2) Business Day' prior written notice;
provided that if Lessor reasonably believes that irreparable damage to the
--------
Property will occur by not inspecting sooner than after such two (2) Business
Day period, upon such shorter notice as is reasonable in light of the
circumstances) to conduct inspections of the Property, or exhibit the Property
to bona fide prospective purchasers or lenders, excluding designated secured
areas. Other than in connection with a proposed sale of the Property or
refinancing of any loan secured thereby or during a period when a Lease Event of
Default shall have occurred and be continuing or during the twelve (12) month
period prior to the expiration of the Lease Term, such inspections shall be
limited to no greater than twice per calendar year.

Lessee waives any claim for damages for any injury or inconvenience to
or interference with Lessee's business or any loss of occupancy or quiet
enjoyment of the Property occasioned by such entry; except if the claim arises
out of the gross negligence or willful misconduct of such parties or their
respective agents or contractors in connection with such entry. In the exercise
of its right of entry hereunder, such parties shall use all reasonable efforts
not to interfere with the business operations of Lessee or any other Person at
the Property. In addition, subject to such confidentiality requirements with
respect to trade secrets or information relating to

35

the proprietary business of Lessee as Lessee shall reasonably deem necessary or
appropriate, and upon reasonable prior notice, Lessor and its agents, employees
and contractors shall be entitled to inspect the books and records relating to
the condition, maintenance and operation of the Property (other than in respect
of any businesses operated thereon) at the offices of Lessee or any Affiliate of
Lessee that may be subleasing or managing the Property and to meet with
representatives of Lessee regarding the same, in each case during normal
business hours.

ARTICLE XVI

EVENTS OF DEFAULT
-----------------

Section 16.1   Events of Default. The following events shall
-----------------
constitute Lease Events of Default:

(a)  the Lessee shall fail to make any payment of Basic Rent within
five (5) days after the due date thereof or shall fail to make any payment of
Stipulated Loss Value or Termination Value within ten (10) Business Days after
the receipt of written notice of such failure to the Lessee from the Lessor;

(b)  the Lessee shall fail to make any payment of Additional Rent or
any other amount payable hereunder and such failure shall continue for a period
of twenty (20) Business Days after written notice of such failure to the Lessee
from the Lessor or the payee thereof;

(c)  the Lessee shall sublease, assign or otherwise transfer its
interest in this Lease in violation of the terms hereof, violate the provisions
of Section 13.4 hereof or abandon the Property;

(d)  the Lessee shall fail to perform in any material respect any
covenant, condition or agreement (not included in clauses (a), (b), (c) or (g)
of this Section 16.1) to be performed by it hereunder or under any other
Operative Document and such failure shall continue for a period of thirty (30)
days after written notice thereof to the Lessee from the Lessor; provided, that
if such default is capable of being cured but cannot be cured within such 30-day
period, the cure period shall be extended, for as long as is necessary to
effectuate a cure, so long as the Lessee is diligently pursuing such cure (but
in no event in excess of one hundred eighty (180) days from the date of Lessor's
notice of default);

(e)  the filing by Lessee of any petition for dissolution or
liquidation of Lessee, or the commencement by Lessee of a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or Lessee shall have consented to the entry of an order for relief in an
involuntary case under any such law, or the failure of Lessee generally to pay
its debts as such debts become due (within the meaning of the Bankruptcy Code or
any other applicable bankruptcy laws), or the failure by Lessee promptly to
satisfy or discharge any execution, garnishment or attachment of such
consequence as will impair its ability to carry out its obligations under this
Lease, or the appointment of or taking possession by a receiver, custodian or
trustee (or other similar official) for Lessee or any substantial part of its
property, or a general assignment by Lessee for the benefit of its creditors, or
the entry by Lessee into an agreement of composition with its creditors, or
Lessee shall have taken any corporate action in furtherance of any

36

of the foregoing; or the filing against Lessee of an involuntary petition in
bankruptcy which results in an order for relief being entered or,
notwithstanding that an order for relief has not been entered, the petition is
not dismissed within ninety (90) days of the date of the filing of the petition,
or the filing under any law relating to bankruptcy, insolvency or relief of
debtors of any petition against Lessee for reorganization, composition,
extension or arrangement with creditors which either (i) results in a finding or
adjudication of insolvency of Lessee or (ii) is not dismissed within ninety (90)
days of the date of the filing of such petition (the term "dissolution or
liquidation" of Lessee, as used in this paragraph (e), shall not be construed to
include the cessation of the corporate existence of Lessee resulting either from
a merger or consolidation of Lessee into or with another corporation or a
dissolution or liquidation of Lessee following a transfer of all or
substantially all of its assets as an entirety as permitted by the express terms
of the Operative Documents);

(f)  any representation or warranty by Lessee in any Operative
Document or in any certificate or document delivered pursuant to any Operative
Document shall have been materially incorrect when made, shall remain material
when discovered and, if capable of cure, shall not have been cured within thirty
(30) days after receipt of written notice by Lessee from Lessor, unless the
default is not curable within such thirty (30) days but is capable of being
cured within one hundred eighty (180) days and the Lessee shall be diligently
proceeding to correct such failure and such failure shall not be corrected
within one hundred eighty (180) days from the date of Lessor's notice of
default; or

(g)  the failure by the Lessee to maintain the insurance required by
Article XI hereof.

ARTICLE XVII

ENFORCEMENT
-----------

Section 17.1   Remedies. Upon the occurrence of any Lease Event of
--------
Default and at any time thereafter so long as the same shall be continuing, the
Lessor may, at its option, by notice to the Lessee declare this Lease to be in
default, and subject to Applicable Laws and Regulations, at any time thereafter
the Lessor may, so long as such Lease Event of Default is continuing, do one or
more of the following as the Lessor, in its sole discretion shall determine:

(a)  the Lessor may, by notice to the Lessee terminate this Lease as
of the date specified in such notice, and as of the date specified in such
notice the term of this Lease shall expire and terminate as fully and completely
as if such date had been fixed for the expiration of the term of this Lease, and
all rights of Lessee hereunder shall expire and terminate, but Lessee shall
remain liable as hereinafter provided; however, (A) no reletting, reentry or
taking of possession of the Property by the Lessor will be construed as an
election on the Lessor's part to terminate this Lease unless a written notice of
such intention is given to the Lessee, (B) notwithstanding any reletting,
reentry or taking of possession, the Lessor may at any time thereafter elect to
terminate this Lease for a continuing Lease Event of Default, and (C) no act or
thing done by the Lessor or any of its agents, representatives or employees and
no agreement accepting a surrender of the Property shall be valid unless the
same be made in writing and executed by the Lessor;

37

(b)  the Lessor may (i) demand that the Lessee, and the Lessee shall
upon the written demand of the Lessor, return the Property promptly to the
Lessor in the manner and condition required by, and otherwise in accordance with
all of the provisions of, Articles IX and XII hereof as if the Property were
being returned at the end of the Lease Term, and the Lessor shall not be liable
for the reimbursement of the Lessee for any costs and expenses incurred by the
Lessee in connection therewith and (ii) without prejudice to any other remedy
which the Lessor may have for possession of the Property, enter upon the
Property and take immediate possession of (to the exclusion of the Lessee) the
Property and expel or remove the Lessee and any other Person who may be
occupying the Property, but if such other Person shall have entered into a
non-disturbance and attornment agreement with the Lessor only to the extent
permitted therein, by summary proceedings, all without liability to the Lessor
for or by reason of such entry or taking of possession, whether for the
restoration of damage to the Property caused by such taking or otherwise and, in
addition to Lessor's other damages, Lessee shall be responsible for the
reasonably necessary costs and expenses of reletting, including, without
limitation, brokers' fees and the costs of any alterations (but only for use of
the Improvements as then constituted) or repairs made by Lessor;

(c)  the Lessor may sell the Property at public or private sale, as
the Lessor may determine, free and clear of any rights of the Lessee in which
event the Lessee's obligation to pay Basic Rent hereunder for periods commencing
after the date of such sale shall be terminated (except to the extent that Basic
Rent is to be included in computations under paragraph (e) or (f) below if the
Lessor shall elect to exercise its rights thereunder);

(d)  the Lessor may hold, keep idle or lease to others all or any part
of the Property as the Lessor in its sole discretion may determine, free and
clear of any rights of the Lessee and without any duty to account to the Lessee
with respect to such action or inaction or for any proceeds with respect to such
action or inaction, except that the Lessee's obligation to pay Basic Rent from
and after the occurrence of a Lease Event of Default shall be reduced by the net
proceeds, if any, received by the Lessor from leasing the Property to any Person
other than the Lessee for the same periods or any portion thereof after
deductions for all costs of reletting the Property, including without limitation
all repossession costs, brokerage commissions, reasonable attorneys fees
(including fees and expenses of appellate proceedings), employee expenses,
alteration costs and expenses of preparation for such reletting;

(e)  The Lessor may, whether or not the Lessor shall have exercised or
shall thereafter at any time exercise any of its rights under paragraph (a),
(b), (c) or (d) of this Article XVII with respect to the Property, demand, by
written notice to the Lessee specifying a date (the "Final Payment Date") not
------------------
earlier than ten (10) days after the date of such notice, that the Lessee pay to
the Lessor, and the Lessee shall pay to the Lessor, on the Final Payment Date,
as liquidated damages for loss of a bargain and not as a penalty (the parties
agreeing that the Lessor's actual damages would be difficult to predict, but the
aforementioned liquidated damages represent a reasonable approximation of such
amount) pursuant to clause (iii) below, as consideration for the transfer of the
Property, an amount equal to the sum of (A) all accrued and unpaid Basic Rent
due and unpaid as of the Final Payment Date (it being understood that the Lessee
shall pay when due any Basic Rent due on a Rent Payment Date which occurs on or
after the Lease Event of Default but prior to the Final Payment Date), plus (B)
whichever of the following amounts the Lessor, in its

38

sole discretion, shall specify in such notice (together with interest on such
amount at the Overdue Rate from the Final Payment Date specified in such notice
to the date of actual payment):

(i)   if the Property or any part thereof has not been sold, an
amount equal to the excess, if any, of the Stipulated Loss Value or
Termination Value for that portion of the Property not so sold,
computed as of the Final Payment Date, over the Fair Market Sales
Value of the Property as of the Final Payment Date (such Fair Market
Sales Value to be determined by mutual agreement of the Lessor and the
Lessee or if they cannot agree within ten (10) days after such notice
by the Appraisal Procedure); or

(ii)  if the Property or any part thereof has not been sold, an
amount equal to the excess, if any, of the Stipulated Loss Value or
Termination Value for the portion of the Property not so sold computed
as of the Final Payment Date over the present value of the Fair Market
Rental Value for the portion of the Property not so sold for the
balance of the Lease Term discounted monthly at an annual rate of
eight percent (8%) (such Fair Market Rental Value to be determined by
mutual agreement of the Lessor and the Lessee or if they cannot agree
within ten (10) days of such notice by the Appraisal Procedure);

(f)  if the Lessor shall have sold the Property or any part thereof
pursuant to paragraph (c) above, the Lessor may, if it shall so elect, demand
that the Lessee pay to the Lessor, and the Lessee shall pay to the Lessor, on
the date of such sale, as liquidated damages for loss of a bargain and not as a
penalty (the parties agreeing that the Lessor's actual damages would be
difficult to predict, but the aforementioned liquidated damages represent a
reasonable approximation of such amount) (in lieu of Basic Rent for the Property
due for periods commencing on or after the Stipulated Loss Value Date or
Termination Value coinciding with such date of sale (or, if the sale date is not
a Stipulated Loss Value Date, the Stipulated Loss Value or Termination Value
date next preceding the date of such sale)), an amount equal to the sum of (A)
all accrued and unpaid Basic Rent due and unpaid as of such sale date (it being
understood that the Lessee shall pay when due any Basic Rent due on a Rent
Payment Date which occurs on or after the Lease Event of Default but prior to
such sale date), plus (B) the amount of any excess of the Stipulated Loss Value
or Termination Value for the Property so sold, computed as of such Stipulated
Loss Value Date, over the net proceeds of such sale, together with interest at
the interest rate on any debt secured by an interest in the Lease and the
Property on such excess from such Stipulated Loss Value Date to the date of
sale, plus (C) interest at the Overdue Rate on all of the foregoing amounts from
the date of such sale until the date of payment; provided, however, to the
--------  -------
extent that the Lessee shall have paid Basic Rent in advance on or after the
date the Lease Event of Default occurred but prior to such sale date, the amount
payable by the Lessee hereunder shall be reduced by an amount equal to the
advance Basic Rent so paid multiplied by a fraction, the numerator of which
shall be the number of days in the Lease Period with respect to such advance
Basic Rent payment before such sale date and the denominator of which shall be
the actual number of days in such Lease Period.

(g)  The Lessor may exercise any other right or remedy that may be
available to it under Applicable Laws and Regulations or in equity, or proceed
by appropriate court action (legal or equitable) to enforce the terms hereof or
to recover damages for the breach hereof.

39

Separate suits may be brought to collect any such damages for any Lease
Period(s), and such suits shall not in any manner prejudice the Lessor's right
to collect any such damages for any subsequent Lease Period(s).

(h)  The Lessor may retain and apply against the Lessor's damages all
sums which the Lessor would, absent such Lease Event of Default, be required to
pay to, or turn over to, the Lessee pursuant to the terms of this Lease,
including, without limitation, any sums which the Lessor may be required to pay
to Lessee under Section 14.5.

Section 17.2   Survival of Lessee's Obligations. No termination of
--------------------------------
this Lease, in whole or in part, or repossession of any of the Property or
exercise of any remedy under Section 17.1 shall, except as specifically provided
therein, relieve the Lessee of any of its liabilities and obligations hereunder.
In addition, except as specifically provided therein, the Lessee shall be
liable, except as otherwise provided above, for any and all unpaid Rent,
including Additional Rent, due hereunder before, after or during the exercise of
any of the foregoing remedies, including all reasonable legal fees and other
costs and expenses incurred by the Lessor by reason of the occurrence of any
Lease Event of Default or the exercise of the Lessor's remedies with respect
thereto, and including all costs and expenses incurred in connection with (x)
the return of the Property in the manner and condition required by, and
otherwise in accordance with the provisions of, Articles IX and XII hereof as if
the Property were being returned at the end of the Lease Term or (y) making any
Alterations the Lessor deems reasonably necessary for purposes of reletting the
Property as then constituted. At any sale of the Property or any part thereof or
any other rights pursuant to Section 17.1, the Lessor may bid for and purchase
the Property.

Section 17.3   Remedies Cumulative; No Waiver; Consents. To the extent
----------------------------------------
permitted by, and subject to the mandatory requirements of Applicable Laws and
Regulations, each and every right, power and remedy herein specifically given to
the Lessor or otherwise in this Lease shall be cumulative and shall be in
addition to every other right, power and remedy herein specifically given or now
or hereafter existing at law, in equity or by statute, and each and every right,
power and remedy whether specifically herein given or otherwise existing may be
exercised from time to time and as often and in such order as may be deemed
expedient by the Lessor, and the exercise or the beginning of the exercise of
any power or remedy shall not be construed to be a waiver of the right to
exercise at the same time or thereafter any right, power or remedy. No delay or
omission by the Lessor in the exercise of any right, power or remedy or in the
pursuit of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Lessee or to be an
acquiescence therein. The Lessor's consent to any request made by the Lessee
shall not be deemed to constitute or preclude the necessity for obtaining the
Lessor's consent, in the future, to all similar requests. No waiver by the
Lessor of any Lease Event of Default shall in any way be, or be construed to be,
a waiver of any future or subsequent Lease Event of Default.

40

ARTICLE XVIII

RIGHT TO PERFORM FOR LESSEE
---------------------------

If the Lessee shall fail to perform or comply with any of its
agreements contained herein, the Lessor may, on five Business Days' prior
written notice to the Lessee (except in the event of an emergency, in which case
only such prior notice, if any, as is reasonable under the circumstances shall
be required), perform or comply with such agreement, and the Lessor shall not
thereby be deemed to have waived any default caused by such failure and such
performance or compliance shall not relieve the Lessee from any default
hereunder, and the amount of such payment and the amount of the expenses of the
Lessor (including reasonable attorney's fees and expenses) incurred in
connection with such payment or the performance of or compliance with such
agreement, as the case may be, together with interest thereon at the Overdue
Rate, shall be deemed Additional Rent, payable by the Lessee to the Lessor upon
demand.

ARTICLE XIX

[Intentionally Omitted]
-----------------------

ARTICLE XX

INDEMNIFICATION
---------------

Section 20.1  General Indemnification. The Lessee agrees to assume
-----------------------
liability for, and to indemnify, protect, defend, save and keep harmless each
Indemnitee, on an After-Tax Basis, from and against, any and all Claims that may
be imposed on, incurred by or asserted against any Indemnitee, whether or not
such Indemnitee shall also be indemnified as to any such Claim by any other
Person, in any way relating to or arising out of (a) the ownership, operation,
possession, use, improvement, leasing, subleasing, disposition or maintenance of
all or any part of the Property (or any Replacement Property), (b) the
construction, design, purchase, acceptance, rejection, modification,
substitution or condition of the Property (or any Replacement Property),
including without limitation claims or penalties arising from any violation of
Applicable Laws and Regulations, without regard to whether compliance therewith
is required by the terms of this Lease or liability in tort (strict or
otherwise), (c) any Release, violation of Environmental Laws, Environmental
Claim or other loss of or damage to any property or the environment relating to
the Property (or any Replacement Property) or the Lessee (including, without
limitation, all expenses associated with remediation, response, removal,
corrective action, financial assurance, natural resource damages and the
protection of wildlife, aquatic species, vegetation, flora and fauna, and any
mitigative action required under applicable Environmental Laws), (d) the
Operative Documents, or the transaction contemplated thereby, including, without
limitation, the transfer of title to the Land, the Improvements and the Fixtures
(and any Replacement Property) to the Lessor or (e) any breach by the Lessee or
the Seller of any of their representations or warranties under the Operative
Documents (including, without limitation, any such breach of representations
relating to the Lessor's title to any portion of the Property (or any
Replacement Property)) or failure by the Lessee or the Seller to perform or
observe any covenant or agreement to be performed by it under

41

any of the Operative Documents; provided, however, that the Lessee shall not be
--------  -------
required to indemnify an Indemnitee under this Section 20.1 for any of the
following: (1) with respect to the Lease, any Claim to the extent attributable
to acts or events which occur after the later of (A) the expiration of the Lease
Term or earlier termination of the Lease (and, if required by the terms of the
Lease, the surrender of the Property (or any Replacement Property) by the Lessee
to the Lessor or its assigns) (except to the extent fairly attributable to acts
or events occurring or accruing prior thereto) and (B) the surrender of
possession of the Property to the Lessor, (2) any Claim to the extent resulting
from the willful misconduct or gross negligence of such Indemnitee or any of its
Indemnitee Group (other than willful misconduct or gross negligence which is
imputed as a matter of law to such Indemnitee by virtue of a Lessor's ownership
of the Property or any Replacement Property), (3) any cost or expense expressly
provided under the Operative Documents to be paid or borne by a party other than
the Seller or the Lessee, (4) any Claim resulting from a transfer by any
Indemnitee of all or part of its interest in a Lease, the other Operative
Documents or any Property, other than (w) while a Lease Event of Default shall
have occurred and be continuing, (x) a transfer as a result of an Event of Loss
or Event of Taking pursuant to the Lease, (y) a transfer resulting from Lessee's
election to terminate the Lease pursuant to Section 6.1 or to cause a
substitution pursuant to Section 6.2 of the Lease, or (z) any other transfer
required by the terms of the Lease, (5) any Claim resulting from a breach or
violation by such Indemnitee of any of its or by Indemnitee Group of any of
their respective representations, warranties or covenants in any of the
Operative Documents or from a violation of Applicable Laws and Regulations by an
Indemnitee or by any of its Indemnitee Group other than any such violation (x)
imputed to any such Person as a matter of law by reason of their participation
in the Overall Transaction or (y) otherwise related to the business or
activities of the Lessee or the nature, design, engineering, construction,
location, maintenance, repair or use of the Property (or any Replacement
Property) by the Lessee, (6) any Claim resulting from Lessor Liens attributable
to such Indemnitee or any of its Indemnitee Group and (7) any Claim in respect
of Taxes (as to which the Tax Indemnity Agreement and the provisions of Article
IV hereof shall govern), other than a payment necessary to make a payment under
this Section 20.1 on an After-Tax Basis. The Lessee shall be entitled to credit
against any payments due under this Section 20.1 any insurance recoveries
received by the Indemnitee in respect of the related Claim under or from
insurance paid for by the Lessee or assigned to the Lessor by the Lessee.

If the Lessee shall obtain knowledge of any Claim indemnified against
under this Section 20.1, the Lessee shall give prompt notice thereof to the
appropriate Indemnitee or Indemnitees, and if any Indemnitee shall obtain any
such knowledge, such Indemnitee shall give prompt notice thereof to the Lessee,
provided that failure so to notify the Lessee shall not release the Lessee from
--------
any of its obligations to indemnify hereunder except to the extent such failure
shall have precluded the Lessee from contesting such Claim or such failure shall
result in an increased Claim, but only to the extent of such increase. With
respect to any amount that the Lessee is requested by an Indemnitee to pay by
reason of this Section 20.1, such Indemnitee shall, if so requested by the
Lessee and prior to any payment and at Lessee's expense, submit such additional
information to the Lessee as the Lessee may reasonably request and which is
reasonably available to such Indemnitee to substantiate properly the requested
payment.

In case any action, suit or proceeding shall be brought against any
Indemnitee, such Indemnitee shall notify the Lessee of the commencement thereof,
and the Lessee shall be entitled, at its expense, acting through counsel
reasonably acceptable to such Indemnitee, to participate in,

42

and, to the extent that the Lessee desires to, assume and control the defense
thereof; provided, however, that the Lessee shall not be entitled to assume and
--------  -------
control the defense of any such action, suit or proceeding if and to the extent
that, (A) in the reasonable opinion of such Indemnitee, (x) such action, suit or
proceeding involves the potential imposition of criminal liability or civil
sanctions on such Indemnitee or (y) the control of such action, suit or
proceeding would involve the Lessee in a potential conflict of interest which
under applicable rules of professional conduct would prohibit representation of
both such parties, (B) a Material Lease Default or Lease Event of Default has
occurred and is continuing and the Indemnitee notifies the Lessee that it is no
longer permitted to control the defense of such Claim, (C) the proceeding
involves any material danger of the sale, forfeiture or loss of, or the creation
of any Lien (other than any Permitted Lien) on the Property, or (D) the amounts
involved, in the good faith opinion of the Indemnitee, are likely to have a
material adverse effect on the business of such Indemnitee, in which case the
Indemnitee will be entitled to assume and take control of the defense thereof at
Lessee's expense. The Indemnitee may participate in a reasonable manner at its
own expense and with its own counsel in any proceeding conducted by the Lessee
in accordance with the foregoing. The Lessee shall not settle or compromise any
such action, suit or proceeding unless in connection therewith Lessee shall
obtain a full release against any Claim involved therein in favor of each
Indemnitee.

Each Indemnitee shall at the Lessee's expense supply the Lessee with
such information and documents reasonably requested by the Lessee as are
necessary or advisable for the Lessee to participate in any action, suit or
proceeding to the extent permitted by this Section 20.1. No Indemnitee shall
enter into any settlement or other compromise with respect to any Claim which is
entitled to be indemnified under this Section 20.1 without the prior written
consent of the Lessee, which consent shall not be unreasonably withheld, unless
such Indemnitee waives its right to be indemnified under this Section 20.1 with
respect to such Claim.

Upon payment in full of any Claim by the Lessee pursuant to this
Section 20.1 to or on behalf of an Indemnitee, the Lessee, without any further
action, shall be subrogated to any and all claims that such Indemnitee may have
relating thereto (other than claims in respect of insurance policies maintained
by such Indemnitee at its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be necessary to preserve
any such claims and otherwise cooperate with the Lessee and give such further
assurances as are necessary or advisable to enable the Lessee vigorously to
pursue such claims.

Nothing in this Section 20.1 shall be construed as a guaranty by the
Lessee of any residual value in the Property.

The Lender shall be a third party beneficiary of this Article XX
entitled to enforce the provisions hereof directly against the Lessee.

Section 20.2  Survival. The obligations of Lessee under this Article
--------
XX shall survive expiration or earlier termination of this Lease. No Indemnitee
shall be entitled to payment of any amount hereunder to the extent of any prior
payment with respect to the same Claim under any other indemnity from the
Lessee.

43

ARTICLE XXI

TRANSFERS OF INTERESTS
----------------------

Section 21.1  Transfers of Interests. (a) (a) (i) Other than as
----------------------
expressly permitted by this Section 21.1, Lessor shall not, without the prior
written consent of the Lessee, assign, convey or otherwise transfer all or any
part of the Lessor's right, title or interest in, to and under this Lease or any
other Operative Documents or the Property (the "Lessor Interest") and (ii) other
---------------
than as expressly permitted by this Section 21.1, the Lessor Parent, which is
the sole member of the Lessor, shall not assign, convey or otherwise transfer
all or any part of its membership interest with respect to the Lessor (the
"Member Interest").
---------------

(b)  If Lessor desires to sell or offer for sale the Lessor Interest,
or Lessor Parent desires to sell or offer for sale the Member Interest, the
Lessor or Lessor Parent, as the case may be, shall first provide Lessee in
writing all of the material economic terms and conditions of the proposed sale,
including, without limitation, the price (the "Offered Terms") and the
-------------
requirements for compliance with or satisfaction of any transfer, assignment and
assumption obligations under any Loan then outstanding, and shall offer Lessee
the opportunity to purchase the Lessor Interest or Member Interest, as the case
may be, for the same purchase price and otherwise on substantially the same
terms and conditions as such Offered Terms (other than representations and
warranties that may be offered as an inducement to certain third parties).
Lessee shall have the right to accept the Offered Terms by written notice to the
Lessor given within thirty (30) Days after Lessee's receipt of the Offered
Terms; provided, however, that the Lessee shall have satisfied any transfer,
assignment and assumption obligations and any other requirements of Lessor in
connection therewith under any Loan then outstanding. If Lessee does not accept
the Offered Terms within thirty (30) Days after receipt of the Offered Terms
from the Lessor, Lessee shall be deemed to have rejected the Offered Terms and
the Lessor may enter into a contract to sell the Lessor Interest or the Lessor
Parent may enter into a contract to sell the Member Interest during the twelve
(12) month period beginning on the date of the expiration of the applicable
period, provided that a sale resulting from such offer shall be consummated on
--------
substantially the same terms as the Offered Terms (other than representations
and warranties that may be offered as an inducement to certain third parties)
(it being agreed that any sale at a price that is equal to or greater than 95%
of the purchase price contained in the Offered Terms shall be considered to be
substantially the same terms as to price). If such sale is not consummated
within a reasonable period after a contract for sale has been executed within
such twelve (12) month period, the provisions of this Section 21.1(b) shall
again apply in respect of any proposed offer of the Lessor Interest or Member
Interest whether made during such twelve (12) month period or thereafter.

(c)  Notwithstanding anything contained to the contrary in this
Section 21.1, Lessee shall not have the right of first offer under Section
21.1(b) with respect to the Lessor Interest or Member Interest; (i) while a
Lease Event of Default has occurred and is continuing; (ii) following a
retention of the Property by the Lessor in connection with a termination under
Section 6.1; (iii) at any time after the expiration or earlier termination of
this Lease; (iv) in connection with a termination of this Lease or a sale of the
Property pursuant to Section 6.1; or (v) the first transfer occurring in the
first twelve (12) months of the Basic Term.

44

(d)  Neither Lessor nor Lessor Parent shall, directly or indirectly
assign, convey or otherwise transfer all or any part of the Lessor Interest or
Member Interest to a transferee, respectively, without the prior written consent
of Lessee, unless:

(1)  Lessor and Lessor Parent shall have complied with
their respective obligations under Section 21.1(b) above;

(2)  Lessee shall have received at least two (2) Business
Days prior notice for the first transfer and fifteen (15) Business
Days prior notice for transfers thereafter, which notice shall specify
the name and address of the proposed transferee, whether such proposed
transferee meets the requirements of paragraph (5) of this Section
21.1(d) and a certification to the effect that the Lessor has complied
with the provisions of Section 21.1(b);

(3)  the transferee shall have the requisite power and
authority to enter into and carry out the transactions contemplated
hereby and by the other related Operative Documents, such transfer
does not and will not involve, either directly or indirectly, the
assets of any employee benefit plan or plan that would cause a
violation of any provision of ERISA or the imposition of an excise tax
under the Code, and such transfer will not violate any Applicable Laws
and Regulations or create a relationship which would be in violation
of any Applicable Laws and Regulations;

(4)  the transferee shall agree in writing to be bound by
all the terms of, and to undertake all the obligations of Lessor and
Lessor Parent, respectively, contained in this Lease and the Operative
Documents pursuant to an assignment and assumption agreement in a form
reasonably acceptable to Lessee;

(5)  the transferee (x) is a U.S. Person or, if not, Lessee
receives, at Lessor's cost and expense, satisfactory legal opinions
that Lessee is not subject to any material increased tax indemnity or
withholding tax risk, and such other corporate, tax and regulatory
opinions as Lessee may reasonably request, (y) is not a Competitor;
and (z) has a tangible net worth equal to or greater than $1,000,000;
and

(6)  the Lessor Parent and Lessee shall have received an
opinion of counsel to the transferee (prepared at no expense to
Lessee) as to compliance with paragraph (3) and due authorization,
execution, delivery, validity and enforceability of the assumption
agreement referred to in paragraph (4) of this Section 21.1(d).

(e)  Each party hereto agrees that, upon any transfer by the Lessor or
the Lessor Parent of the Lessor Interest or the Member Interest, as the case may
be, in accordance with the provisions of Section 21.1 hereof, the transferee
shall, with respect to the interest transferred, succeed to, and be substituted
for, and may exercise every right and power of, the Lessor or the Lessor Parent,
as the case may be, under this Lease and each other Operative Document to which
the Lessor or the Lessor Parent is a party with the same effect as if such
transferee had been named as the Lessor or the Lessor Parent herein and therein,
and the transferor (and the Lessor Parent to the extent the transferor is the
Lessor) shall, subject to the provisions of Section 21.1(d)(4) hereof,

45

be released from all of its obligations under such Operative Documents to the
extent of the interest transferred; provided, however, that the transferor shall
--------  -------
not be released from any obligation arising, accruing or relating to any period
prior to such transfer unless such new transferee expressly agrees to assume
such obligations.

(f) Notwithstanding anything to the contrary contained herein, the
provisions of this Article XXI, except clauses (d)(5)(x) and (d)(5)(y) of
Section 21.1, shall not apply to transfers to Affiliates of General Electric
Capital Corporation, a Delaware corporation, or during the continuance of an
Event of Default under this Lease.

ARTICLE XXII

[Intentionally Omitted]
-----------------------

ARTICLE XXIII

MISCELLANEOUS
-------------

Section 23.1  Binding Effect; Successors and Assigns; Survival. The
------------------------------------------------
terms and provisions of this Lease, and the respective rights and obligations
hereunder of the Lessor and the Lessee, shall be binding upon their respective
permitted successors, legal representatives and assigns, and inure to the
benefit of their respective permitted successors, legal representatives and
assigns.

Section 23.2  Quiet Enjoyment. The Lessor covenants that it will not
---------------
and it will not cause or permit anyone claiming by or through Lessor to
interfere in the Lessee's or any of its sublessees' quiet enjoyment of the
Property hereunder during the Lease Term, so long as no Lease Event of Default
has occurred and is continuing.

Section 23.3  Notices. Unless otherwise specifically provided herein,
-------
all notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be in writing by United States mail, by nationally recognized
courier service or by hand and any such notice shall become effective when
received or, if sent by nationally recognized courier service for next day
delivery, on the next day after delivery of such notice to such courier service,
and shall be directed to the Address of such Person. From time to time any party
may designate a new Address for purposes of notice hereunder by notice to each
of the other parties hereto. The Lessee shall deliver copies to the Lender of
all notices delivered to the Lessor at the time, and in the manner, delivered to
the Lessor; provided, however, that the failure to deliver such notice shall not
--------  -------
constitute a default hereunder or a breach hereof.

Section 23.4  Severability. Any provision of this Lease that shall be
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable

46

such provision in any other jurisdiction, and Lessee shall remain liable to
perform its obligations hereunder except to the extent of such unenforceability.

Section 23.5  Amendment; Complete Agreements. Neither this Lease nor
------------------------------
any of the terms hereof may be terminated, amended, supplemented, waived or
modified orally, but only by an instrument in writing signed by the Lessee and
the Lessor. This Lease, together with the other Operative Documents, is intended
by the parties as a final expression of their agreement and as a complete and
exclusive statement of the terms thereof, all negotiations, considerations and
representations between the parties having been incorporated herein and therein.
No course of prior dealings between the parties or their officers, employees,
agents or Affiliates shall be relevant or admissible to supplement, explain, or
vary any of the terms of this Lease or any other Operative Document. Acceptance
of, or acquiescence in, a course of performance rendered under this or any prior
agreement between the parties or their Affiliates shall not be relevant or
admissible to determine the meaning of any of the terms of this Lease or any
other Operative Document. No representations, undertakings, or agreements have
been made or relied upon in the making of this Lease other than those
specifically set forth in the Operative Documents.

Section 23.6  Headings. The Table of Contents and headings of the
--------
various Articles and Sections of this Lease are for convenience of reference
only and shall not modify, define or limit any of the terms or provisions
hereof.

Section 23.7  Counterparts. This Lease may be executed by the parties
------------
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.

Section 23.8  Governing Law; WAIVER OF JURY TRIAL. This Lease shall be
-----------------------------------
governed by and construed in accordance with the internal laws (and not the
conflict laws) of the State of New York; provided, however, that if the law of
the State in which the Property is located is required to be applicable to any
provisions hereof, then the State law shall be applicable with respect to such
provisions.

(a)  Jurisdiction. Any action or proceeding against any of the parties
------------
hereto relating in any way to this Lease or any other Operative Document may be
brought and enforced in the courts of the State of New York or of the United
States for the Southern District of New York, and the parties hereto irrevocably
consent to the jurisdiction of each such court in respect of any such action or
proceeding. Each of the parties hereto further irrevocably consents to the
service of process in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, return receipt
requested, to the Address of such party as provided for notices under Section
23.3 hereof. The foregoing shall not limit the right of any party to serve
process in any other manner permitted by law or to bring any action or
proceeding, or to obtain execution of any judgment, in any other jurisdiction,
including without limitation the State in which the Property is located.

(b)  Venue. Each of the parties hereto hereby irrevocably waives any
-----
objection that it may now or hereafter have to the laying of venue of any action
or proceeding arising under or relating to this Lease or any other Operative
Document in any court located in the Borough of Manhattan, City and State of New
York, and hereby further irrevocably waives any claim that a

47

court located in the Borough of Manhattan, City and State of New York is not a
convenient forum for any such action or proceeding.

(c)  WAIVER OF JURY TRIAL. LESSEE AND LESSOR HEREBY WAIVE TRIAL BY
--------------------
JURY IN ANY ACTION OR PROCEEDING TO WHICH LESSEE AND LESSOR MAY BE PARTIES
ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS LEASE. IT IS HEREBY AGREED AND
UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS
AGAINST PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES
WHO ARE NOT PARTIES TO THIS LEASE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND
VOLUNTARILY MADE BY LESSEE AND LESSOR, AND LESSEE AND LESSOR HEREBY ACKNOWLEDGE
THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO
INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS
EFFECT. LESSEE AND LESSOR FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED IN
THE SIGNING OF THIS LEASE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, SELECTED OF THEIR OWN FREE WILL, AND THAT THEY HAVE HAD THE OPPORTUNITY
TO DISCUSS THIS WAIVER WITH COUNSEL.

Section 23.9  Security Funds. Any amounts otherwise payable to Lessee
--------------
under this Lease or any other Operative Document but which shall be paid to or
retained by Lessor pursuant to the terms hereof as a result of any Lease Default
or Lease Event of Default shall be held by the Lessor, as security for the
obligations of Lessee under this Lease and the other Operative Documents and, at
such time as there shall not be continuing any such Lease Default or Lease Event
of Default, such amounts, net of any amounts theretofore applied to Lessee's
obligations hereunder or under any other Operative Document, shall be paid to
Lessee. Any such amounts which are held by the Lessor pending payment to Lessee
shall, until paid to Lessee as provided herein or until applied against Lessee's
obligations hereunder, under any other Operative Document in connection with any
exercise of remedies hereunder, be invested in Permitted Investments by the
Lessor as directed from time to time by Lessor for the benefit and at the risk
and expense of the Lessee.

Section 23.10 Discharge of Lessee's Obligations by its Affiliates. The
---------------------------------------------------
Lessor agrees that performance of any of the Lessee's obligations hereunder by
one or more of its Affiliates or one or more sublessees of the Property or any
part thereof shall constitute performance by the Lessee of such obligations to
the same extent and with the same effect hereunder as if such obligations were
performed by the Lessee.

Section 23.11 Estoppel Certificates. Each party hereto agrees that at
---------------------
any time and from time to time during the Lease Term, it will promptly, but in
no event later than fifteen (15) Business Days after request by the other party
hereto, execute, acknowledge and deliver to such other party or to any
prospective purchaser (if such prospective purchaser has signed a commitment or
letter of intent to purchase the Property or any part thereof), assignee or
mortgagee or third party designated by such other party, a certificate stating
(a) that this Lease is unmodified and in force and effect (or if there have been
modifications, that this Lease is in force and effect as modified, and
identifying the modification agreements); (b) the date to which Basic Rent has
been paid; (c) whether or not there is any existing default by the Lessee in the
payment of Basic Rent or any other

48

sum of money hereunder, and whether or not there is any other existing default
by either party with respect to which a notice of default has been served, and,
if there is any such default, specifying the nature and extent thereof; (d)
whether or not, to the knowledge of the signer, there are any setoffs, defenses
or counterclaims against enforcement of the obligations to be performed
hereunder existing in favor of the party executing such certificate and (e)
other items that may be reasonably requested; provided that no such certificate
--------
may be requested unless the requesting party has a good faith reason for such
request.

Section 23.12 Miscellaneous Matters Affecting the Property.
--------------------------------------------

(1)  If no Material Lease Default or Lease Event of Default shall
occur and be continuing (other than any Material Lease Default or Lease Event of
Default which will be cured by the action which Lessee requests pursuant to this
Section 23.12(1)), the Lessor shall (within thirty (30) days after its receipt
of (x) the written request of Lessee, and (y) the materials requested by the
party in question pursuant to Section 23.12(2) hereof (such request to be made
within fifteen (15) days of receipt of Lessee's notice under clause (x)
hereof)), subject to the requirements of Section 23.12(2) hereof, join in any
(i) grant of easements, licenses, rights of way, party wall rights and other
rights in the nature of easements, with or without consideration, (ii) release
of easements, licenses, rights of way, party wall rights or other rights in the
nature of easements which are for the benefit of the Land or Property or any
portion thereof, with or without consideration, (iii) dedication or transfer of
portions of the Land, not improved with a building, for road, highway or other
public purposes, with or without consideration, (iv) execution of petitions to
have the Land or any portion thereof annexed to any municipal corporation or
utility district, (v) to the extent necessary to use of the Property, execution
of agreements for the use and maintenance of common areas, for reciprocal rights
of parking, ingress and egress and amendments to any covenants and restrictions
affecting the Land or Property or any portion thereof, with or without
consideration, (vi) request to any Governmental Authority for platting or
subdivision or replatting or resubdivision approval with respect to the Land or
any portion thereof or any parcel of land of which the Land or any portion
thereof forms a part or a request for any variance from zoning or other
governmental requirements, with or without consideration, (vii) creation of a
governmental special benefit district for public improvements and payments of
special assessments in connection therewith, in lump sum or installments, and
(viii) execution and delivery to such Person of any instrument appropriate to
confirm or effect such grant, release, dedication, transfer, request or such
other matter, document or proceeding (to the extent of their respective
interests in the Land, Property or the applicable portion thereof).

(2)  The Lessor's obligations pursuant to Section 23.12 (1)
hereto shall be subject to the requirements that:

(i)  any action taken pursuant to Section 23.12(1) hereof
(an "Action") shall be at the sole cost and expense of Lessee, and,
------
whether or not any proposed Action is consummated, Lessee shall pay
all reasonable out-of-pocket costs of the Lessor and the Lender in
connection therewith (including, without limitation, the reasonable
fees of attorneys, architects, engineers, planners, appraisers and
other professionals retained by the Lessor or the Lender in connection
with any proposed Action);

49

(ii)   the requested Action will not interfere with and is
not detrimental to the continued use and operation of the Property and
will not cause the Property or any portion thereof to fail to comply
in all respects with the provisions of this Lease or any other
Operative Documents and all Applicable Laws and Regulations and
applicable Permitted Liens (including, without limitation, all
applicable zoning, planning, building, and subdivision ordinances, all
applicable setback and parking requirements, all applicable
restrictive covenants and all applicable architectural approval
requirements) and will not cause a breach of or a default under any
mortgages secured by or other loan document evidencing indebtedness
secured by the Property;

(iii)  all Governmental Actions required prior to the
requested Action shall have been applied for or obtained, and all
filings required prior to the requested Action shall have been made;

(iv)   no such Action shall result in any material
down-zoning of the related Land or any portion thereof or a material
reduction in the maximum density or development rights available to
the Land under all Applicable Laws and Regulations;

(v)    all consideration received in connection with any
Action (net of all expenses paid by Lessee under clause (i) above)
shall be paid to Lessee and any portion thereof (to the extent
received by Lessee) which is allocable to the interests of the Lessor
shall be paid by Lessee over to such party as its interest may appear
promptly following receipt thereof;

(vi)   all documents executed in connection with any Action
shall be reasonably satisfactory in form and substance to the Lessor
and the Lender;

(vii)  Lender's consent, if and to the extent required
under any document evidencing the Loan, shall have been obtained;

(viii) the Lessor and the Lender shall have received the
items, if any, requested pursuant to Section 23.12(2) hereof;

(ix)   this Lease and Lessee's obligations hereunder shall
continue in full force and effect, without abatement, suspension,
deferment, diminution, reduction, counterclaim, setoff, relevant
defense or deduction, notwithstanding the taking of any requested
Action or the refusal of the Lessor or the Lender to take any
requested Action;

(x)    to the extent any agreement entered into in
connection with such Action provides any party a right to a Lien on
any portion of the Property, such agreement shall expressly provide
that such Lien shall be subject and subordinate to any mortgage on the
Property;

(xi)   no such requested Action shall reduce the Fair
Market Sales Value, Residual Value, condition, utility or Remaining
Life of the Property other

50

than to a de minimis extent or otherwise cause any adverse tax
consequences to Lessor;

(xii)  Lessor shall have received at Lessee's sole cost and
expense any title endorsement to its Owner's Title Insurance Policy as
Lessor reasonably requests in connection therewith;

(xiii) Lender shall have received at Lessee's sole cost and
expense any title endorsement to the Mortgage Title Policy as Lender
reasonably requests in connection therewith; and

(xiv)  Lessee shall have paid, or reimbursed Lessor and
Lender for, all costs and expenses incurred in connection therewith.

(3)  In connection with any request by Lessee pursuant to this Section
23.12, Lessee shall deliver to the Lessor (each in form and substance reasonably
satisfactory to the Lessor), a written report that describes (1) the nature of
the Action and (2) the form and amount of consideration to be paid or received,
copies of all Governmental Actions required in connection with such Action,
copies of all governmental filings required in connection with such Action and
other reasonable evidence (including an Officer's Certificate certifying as to
the satisfaction of the requirements of Section 23.12(2) hereof), surveys, plans
and specifications and the like containing satisfaction of the requirements of
Section 23.12(2) herein with respect to such Action.

Section 23.13 Lessor Bankruptcy. The parties hereto agree that the
-----------------
benefits to the Lessee of Section 365(h) of the Bankruptcy Code shall include
any Renewal Terms even if the Lessor becomes subject to the Bankruptcy Code
prior to the commencement of any Renewal Term.

Section 23.14 No Joint Venture. There is no intention to create a
----------------
joint venture or partnership relation between the Lessor and the Lessee and any
such implication is hereby expressly disclaimed.

Section 23.15 No Accord and Satisfaction. The acceptance by the Lessor
--------------------------
of any sums from the Lessee (whether as Basic Rent or otherwise) in amounts
which are less than the amounts due and payable by the Lessee hereunder is not
intended, nor shall be construed, to constitute an accord and satisfaction of
any dispute between the Lessor and the Lessee regarding sums due and payable by
the Lessee hereunder, unless the Lessor specifically deems it as such in
writing.

Section 23.16 No Merger. In no event shall the leasehold interests,
---------
estates or rights of the Lessee hereunder merge with any interests, estates or
rights of the Lessor in or to the Property, it being understood that such
leasehold interests, estates and rights of the Lessee hereunder shall be deemed
to be separate and distinct from the Lessor's interests, estates and rights in
or to the Property, notwithstanding that any such interests, estates or rights
shall at any time or times be held by or vested in the same person, corporation
or other entity.

Section 23.17 Further Assurances. The Lessee, at its own cost and
------------------
expense, will cause to be promptly and duly taken, executed, acknowledged and
delivered all such further acts,

51

documents and assurances as the Lessor reasonably may request from time to time
in order to carry out more effectively the intent and purposes of this Lease and
the other Operative Documents.

Section 23.18 Memorandum of Lease. Concurrently with execution and
-------------------
delivery hereof, the parties shall execute and deliver a short form memorandum
of lease in substantially the form of Exhibit C attached hereto and made a part
hereof to be recorded (or if required, the Lease shall be so recorded) in the
Register of Deeds office of the county in which the Property is situated.

Section 23.19 Interest Conveyed. This Lease is an agreement of lease
-----------------
and the Lessor does not convey to the Lessee any right, title or interest in or
to the Property except as a lessee.

Section 23.20 Computation of Stipulated Loss Value and Termination
----------------------------------------------------
Value. Stipulated Loss Value as of any Stipulated Loss Value Date shall be
-----
computed by multiplying the Purchase Price of the Property by the percentage set
forth opposite the applicable Stipulated Loss Value Date on Schedule 2A hereto.
-----------
Termination Value as of any Termination Date shall be computed by multiplying
the Purchase Price of the Property by the percentage set forth opposite the
applicable Termination Date on Schedule 2B hereto.
-----------

Section 23.21 Subordination and Nondisturbance. Upon the Lessor's
--------------------------------
request from time to time, the Lessee shall execute an agreement subordinating
the Lessee's right, title and interest in and to the Property under this Lease
to the Lien of mortgages or deeds of trust encumbering the Lessor's right, title
and interest in and to the Property, and to all renewals, modifications,
consolidations, replacements and extensions thereof; provided, however, that the
--------  -------
mortgagee of such mortgage or beneficiary of such deed of trust shall have
executed an agreement in form and substance reasonably satisfactory to the
Lessee providing that, so long as no Lease Event of Default shall have occurred
and then be continuing, no foreclosure or other proceedings for the enforcement
of such mortgage or deed of trust shall terminate this Lease or otherwise
adversely affect the Lessee's quiet and peaceful use and possession of the
Property for the uses and purposes permitted under this Lease, nor shall the
leasehold estate granted by this Lease be affected in any other manner, Lessee
shall not (except to the extent required by Applicable Laws and Regulations) be
named in any such proceedings and upon completion thereof the successor in title
to the Lessor shall be bound to this Lease as a direct obligation between the
Lessee and such successor, except that no such successor shall be (A) liable for
any act or omission of any prior Lessor, (B) bound by any payment of Rent which
the Lessee might have paid more than one month prior to its due date hereunder,
or (C) bound by any amendment or modification (made subsequent to the date of
such mortgage or deed of trust) or cancellation of this Lease or surrender of
the Property (except surrenders and cancellations expressly provided for herein)
made without the prior written consent of the mortgagee of such mortgage or the
beneficiary of such deed of trust. Lessee shall attorn to and recognize any such
mortgagee or beneficiary, in the event such mortgagee or beneficiary becomes the
owner of the Property by foreclosure, conveyance in lieu of foreclosure or
otherwise, or any other successor or assignee of Lessor permitted under the
terms of this Lease, as the landlord and lessor under this Lease for the
remainder of the term hereof, and Lessee shall perform and observe its
obligations hereunder, subject only to the terms and conditions of this Lease.
Lessee further covenants and agrees to execute and deliver upon the request of
such mortgagee or beneficiary or successor or assignee of Lessor an appropriate
agreement of

52

attornment to such person or entity and any subsequent titleholder of the
Property in accordance with the terms of this Section 23.21.

Lessee agrees to enter into agreements that are reasonably required for
Lessor to obtain financing, upon the request and at the expense of Lessor;
provided, however, that no such agreement shall adversely affect the rights or
--------  -------
interests of the Lessee, including without limitation, the rights of Lessee
under this Lease or any other Operative Document.

Section 23.22 True Lease. Lessor and Lessee agree that this Lease is a
----------
true lease and as such the lessor shall be treated as the owner and Lessor of
the Property and the Lessee as the lessee thereof and that this Lease does not
represent a financing arrangement. Each party shall reflect the transaction
represented hereby in all applicable books, records and reports (including tax
filings) in a manner consistent with "true lease" treatment rather than
"financing" treatment.

Section 23.23 Financial Reporting. So long as the Lessee is subject to
-------------------
the reporting requirements of Sections 13 and 15(d) of the Securities Exchange
Act of 1934, as amended, Lessee will deliver to Lessor and to any Lender (a)
copies of all of Lessee's Annual Reports on Form 10-K within ninety (90) days
after filing the same with the Securities and Exchange Commission ("SEC"), (b)
Quarterly Reports on Form 10-Q within sixty (60) days after filing the same with
the SEC, and (c) with reasonable promptness, such additional information
(including copies of public reports filed by Lessee) regarding the business
affairs and financial condition of Lessee as Lessor or any Lender may reasonably
request. If Lessee is no longer subject to such reporting requirements, Lessee
will deliver to Lessor and to any Lender within 90 days after the end of each
fiscal year of Lessee, a balance sheet of Lessee and its consolidated
subsidiaries as at the end of such year and a statement of profits and losses of
Lessee and its consolidated subsidiaries for such year setting forth in each
case, in comparative form, the corresponding figures for the preceding fiscal
year, and certified by independent certified public accountants of recognized
national (in the United States) standing selected by Lessee and within 60 days
after the end of each fiscal quarter of Lessee a balance sheet of Lessee and its
consolidated subsidiaries as at the end of such quarter and statements of profit
and losses of Lessee and its consolidated subsidiaries for such quarter setting
forth in each case, in comparative form, the corresponding figures for the
similar quarter of the preceding year, and certified by the chief financial
officer of Lessee, the foregoing financial statements all being prepared in
accordance with generally accepted accounting principles, consistently applied.

Section 23.24 Notice of Certain Changes. Lessee shall provide Landlord
-------------------------
and, so long as the Lien of any loan secured by the Property has not been
terminated or discharged, the Lender, prompt written notice of any change in its
chief executive office, principal place of business, or name, jurisdiction of
incorporation or the place where it maintains its business records concerning
the Property or the Overall Transaction, which notice shall, in any event, be
provided no later than 30 days after such change.

Section 23.25 Non-Recourse. Notwithstanding anything in this Lease to
------------
the contrary, the obligations of Lessor under this Lease (except the obligations
of the sole member of Lessor described in Article XXI of this Lease) are not
personal obligations of the members, managers, directors, officers,
shareholders, agents or employees of Lessor and Lessor shall have no

53

obligation, nor incur any liability, beyond Lessor's interest in the Property
and Lessee shall look exclusively to such interest of Lessee in the Property for
the payment and discharge of any obligation imposed upon Lessor under this
Lease. Lessee agrees that, with respect to any judgment which may be obtained by
Lessee against Lessor, Lessee shall look solely to the estate or interest owned
by Lessor in the Property, and Lessee will not collect or attempt to collect any
such judgment out of any other assets of Lessor or seek recourse against the
assets of the members, managers, directors, officers, shareholders, agents or
employees of Lessor.

[signature page follows]

54

IN WITNESS WHEREOF, the undersigned have each caused this Lease
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above written.

LESSOR:

In the presence of:                DANACQ KALAMAZOO LLC, a Delaware limited
liability company

/s/ Margearet H. Pease             By: General Electric Capital Corporation
--------------------------         ----------------------------------------
Name:  Margaret H. Pease           Its:  Manager

/s/ Elizabeth M. Curley            By: /s/ Stephen Benko
--------------------------            -------------------------------------
Name:  Elizabeth M. Curley              Stephen Benko

Its: Authorized Signatory
-----------------------------------

LESSEE:

DANA CORPORATION, a Virginia corporation

________________________           By:____________________________________
Name:

________________________           Its:___________________________________

Acknowledged and agreed to for the sole
purpose of Article XXI hereof:

Lessor Parent--GEBAM, Inc., the sole member of Lessor,
will agree to the provisions of this Article

By: /s/ Stephen Benko
---------------------------
Stephen Benko

Its:  Authorized Signatory
------------------------

IN WITNESS WHEREOF, the undersigned have each caused this Lease
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above written.

LESSOR:

In the presence of:                DANACQ KALAMAZOO LLC, a Delaware limited
liability company

_______________________            By: General Electric Capital Corporation
------------------------------------
Name:                              Its:  Manager

_______________________            By: _____________________________________
Name:

Its: ____________________________________

LESSEE:

DANA CORPORATION, a Virginia corporation

/s/ Theresa S. Whetro              By: /s/ A. Glenn Paton
----------------------------         --------------------------------------
Name:  Theresa S. Whetro

/s/ Deborah A. VanKirk
----------------------------       Its: A. Glenn Paton, Vice President-Treasurer
Name:  Deborah A. VanKirk

Acknowledged and agreed to for the sole
purpose of Article XXI hereof:

Lessor Parent--GEBAM, Inc., the sole member of Lessor,
will agree to the provisions of this Article

By:________________________________

Its:  _____________________________

SCHEDULE 1
to
LEASE AGREEMENT

BASIC AND ALLOCATED RENT SCHEDULE

[see attached]

57

DANA CORP
Schedule 1 to Lease Agreement
Primary Term Rent Payment Schedule
Kalamazoo, Michigan

Rent Payment Dates                                        Monthly Rental Payment
------------------                                        ----------------------
November 1, 2001 - October 1, 2011                       $            153,566.67
November 1, 2011 - October 1, 2021                       $            168,923.33

EXHIBIT 10.132

SECOND AMENDMENT TO LEASE AGREEMENT
FOR THE DANA KALAMAZOO BUILDING

SECOND AMENDMENT TO LEASE AGREEMENT
(Kalamazoo, Michigan)

--------------------------------------------------------------------------------

THIS SECOND AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and
entered into as of March 29, 2002, by and between DANACQ KALAMAZOO, LLC, a
Delaware limited liability company ("Lessor"), and DANA CORPORATION, a Virginia
corporation ("Lessee").

W I T N E S S E T H:

WHEREAS, Lessor and Lessee previously entered into that certain Lease
Agreement, dated as of October 26, 2001 (the "Original Lease"), as amended by
that certain First Amendment to Lease Agreement between Lessor and Lessee dated
as of December 6, 2001 (the "First Amendment;" and the Original Lease, as so
previously amended, is herein referred to as the "Lease"), pursuant to the terms
of which Lessee has leased that certain "Property" (as defined in the Original
Lease) located at 6938 Elm Valley Drive, Kalamazoo, Michigan; and

WHEREAS, Danacq Farmington Hills LLC, a Delaware limited liability company
and an affiliate of Lessor (the "Farmington Hills Lessor") and Lessee also
previously entered into that certain Lease Agreement dated as of October 26,
2001 (the "Original Farmington Hills Lease"), as amended by that certain First
Amendment to Lease Agreement between the Farmington Hills Lessor and Lessee
dated as of December 6, 2001 (the "First Farmington Hills Amendment;" and the
Original Farmington Hills Lease, as so previously amended, is herein referred to
as the "Farmington Hills Lease"), pursuant to the terms of which Lessee has
leased certain improved real property more particularly described in the
Original Farmington Hills Lease which is located at 27404 Drake Road, Farmington
Hills, Oakland County, Michigan (the "Farmington Hills Property"); and

WHEREAS, to facilitate the sale by GEBAM, Inc., a Delaware corporation (the
"Lessor Parent" as defined in the Lease and the Farmington Hills Lease, and
referred to in this Amendment as "GEBAM") of all of its "Member Interest" (as
also defined in each of said leases) in Lessor and in the Farmington Hills
Lessor to Wells Operating Partnership, L.P., a Delaware limited partnership
("Wells") contemporaneously with, and immediately following, the execution and
delivery of this Amendment, Lessor and Wells have requested that Lessee agree to
modify and amend the Lease and the Farmington Hills Lease on the terms set
forth, respectively, in this Amendment and that certain Second Amendment to
Lease Agreement of even date herewith between the Farmington Hills Lessor and
Lessee relating to the Farmington Hills Lease (the "Second Farmington Hills
Lease Amendment"), and Lessee is willing to do so on the terms and conditions
set forth in this Amendment and the Second Farmington Hills Lease Amendment;

NOW, THEREFORE, for and in consideration of the sum of Ten and No/100
Dollars, the mutual premises contained herein and in the Second Farmington Hills
Lease Amendment, and

other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Lessor and Lessee do hereby covenant and agree as follows:

1.   Defined Terms. Terms used herein and denoted by their initial
-------------
capitalization shall have the meanings set forth in the Lease unless
specifically provided herein to the contrary. In the event of any conflict or
inconsistency between the terms and conditions of this Amendment and of the
Lease, the terms and conditions of this Amendment shall govern and control.

2.   Renewal Options. Article V of the Lease is hereby deleted in its
---------------
entirety, and the following Article V is hereby substituted in lieu thereof:

ARTICLE V

RENEWAL OPTIONS

Section 5.1.  FMV Renewal Terms. Upon the expiration of
-----------------
the Basic Term, Lessee shall have the right and option,
subject to the terms of this Article V, to extend the Lease
Term for up to six (6) successive fair market value renewal
terms (each such renewal term, a "Renewal Term") of five (5)
years commencing on the day following the expiration of the
Basic Term or the immediately preceding Renewal Term, as the
case may be.

Section 5.2.  Conditions to Renewal Terms. The right and
---------------------------
option of Lessee to extend this Lease for any of the Renewal
Terms shall be subject to the following terms:

(i)   At the commencement of any of the Renewal
Terms, this Lease shall be in full force and effect and
no Material Lease Default or Lease Event of Default
shall have occurred and be continuing;

(ii)  Lessee shall have exercised its right to
each Renewal Term by giving irrevocable written notice
to the Lessor no later than fifteen (15) months prior
to the expiration of the Basic Term or the previous
Renewal Term; and

(iii) Each Renewal Term shall be on the same
terms, covenants and conditions set forth in this
Lease; provided, however, that Basic Rent shall be
--------  -------
determined in the manner set forth in Section 5.3
hereof.

Section 5.3.  Rent During Renewal Terms. Basic Rent for
-------------------------
each Renewal Term shall be the Fair Market Rental Value of
the

2

Property as of the date of commencement of such Renewal
Term, determined in accordance with the Appraisal Procedure
not more than two hundred seventy (270) days prior to the
commencement of such Renewal Term payable monthly in
advance on the day of each month that Basic Rent was due
during the last year of the Basic Term or of the preceding
Renewal Term, as the case may be.

3.   Early Termination.
-----------------

(a)  Clause (ii) of the first (1st) full paragraph of Section 6.1, which
begins in the thirtieth (30/th/) line on page 14 of the Lease, and continuing
through the end of the sentence in which said clause (ii) is contained, is
hereby deleted in its entirety, and the following clause (ii) is hereby inserted
in lieu thereof:

(ii) the Lessor shall, on an "as is, where is" basis and
without recourse to or warranty by the Lessor, except as to
the absence of Lessor Liens (other than any Lien arising
out of a sublease for which the Lessor has provided a
non-disturbance agreement in accordance with the terms of
this Lease) and subject to the same disclaimers as set
forth in Section 7.1, simultaneously therewith sell the
Property to the highest bidder, the total net selling price
realized at such sale to be retained by the Lessor.

(b)  The last sentence of the third (3rd) full paragraph of Section 6.1,
appearing as the first (1/st/) full paragraph on page 15 of the Lease, is hereby
deleted in its entirety, and the following sentence is hereby inserted in lieu
thereof:

Lessee shall pay, as Additional Rent, on demand and no
later than the Termination Date, all of the Lessor's
reasonable costs and expenses of whatever kind or nature
paid or incurred in connection with the rescinded
termination or in connection with the completed termination
of this Lease, including, but not limited to reasonable
attorneys' fees.

4.   Loss, Destruction, Condemnation or Damage. The reference "Section
-----------------------------------------
14.1(d)" contained in the last sentence and last line of Section 14.1 of the
Lease, appearing on page 30 thereof, is hereby deleted, and the reference
"Section 14.1(c)" is hereby inserted in lieu thereof.

5.   Transfer of Interests.
---------------------

(a)  Section 21.1 (a) of the Lease, appearing on page 44 of the Lease,
is hereby deleted in its entirety, and the following Section 21.1(a) is hereby
inserted in lieu thereof:

Section 21.1  Transfers of Interests. (a)(i) Other than
----------------------
as expressly permitted by this Section 21.1, Lessor shall
not, without

3

the prior written consent of the Lessee, assign, convey or
otherwise transfer (other than to a Lender in connection
with a financing or mortgaging with respect to the
Property) all or any part of the Lessor's right, title or
interest in, to and under this Lease or any other Operative
Documents or the Property (the "Lessor Interest") and (ii)
---------------
other than as expressly permitted by this Section 21.1, the
Lessor Parent, which is the sole member of the Lessor,
shall not assign, convey or otherwise transfer all or any
part of its membership interest with respect to the Lessor
(the "Member Interest").
---------------
(b)  Section 21.1(f) of the Lease, appearing on page 46 thereof, is
hereby modified and amended by adding the following sentence thereto:

"Notwithstanding anything to the contrary contained herein,
the provisions of this Article XXI shall not apply to a
transfer or sale of the Property pursuant to Section 6.1 of
this Lease."

6.   Termination Value Schedule. Schedule 2B to the Lease is hereby deleted
--------------------------
in its entirety, and Schedule 2B attached to this Amendment is hereby
substituted in lieu thereof.

7.   Amendment of Appendix A. Appendix A of the Lease shall be modified and
-----------------------
amended as follows:

(a)  by deleting the "Address" of Lessor contained in clause "(i)" on
page 2 of Appendix A, and substituting in lieu thereof the following:

(i)  With respect to the Lessor:

Wells Operating Partnership, L.P.
c/o Wells Capital, Inc.
6200 The Corners Parkway
Suite 250
Atlanta, Georgia 30092
Attention: Michael C. Berndt
Fax:       (770) 200-8199

4

with a copy to:

Troutman Sanders LLP
Bank of America Plaza
Suite 5200
600 Peachtree Street, N.E.
Atlanta, Georgia 30308-2216
Attention: John W. Griffin or
Managing Partner
Fax:       (404) 962-6577;

(b)  By deleting the definition of "Appraiser" appearing on page 5 of
Appendix A in its entirety;

(c)  By deleting the definition of "Fixed Rate Renewal Term" appearing
on page 9 of Appendix A in its entirety;

(d)  By deleting the definition of "FMV Renewal Term" also appearing
on page 9 of Appendix A in its entirety;

(e)  By deleting the words "or 5.2" appearing in the second (2nd) line
of the definition of "Lease Term" on page 10 of Appendix A;

(f)  By deleting the definition of "Mortgage Title Policy" appearing
on page 14 of Appendix A and by substituting in lieu thereof the following
definition:

"Mortgage Title Policy" shall mean the mortgagee title
---------------------
insurance policy issued in favor of any Lender in
connection with a Loan."; and

(g)  By deleting the definition of "Title Company" appearing on page
18 of Appendix A in its entirety.

8.   Compliance with Transfer Requirements. By its execution and delivery
-------------------------------------
hereof, Lessee hereby acknowledges and agrees for the benefit of GEBAM and Wells
that all of requirements to be satisfied by Lessor and the Lessor Parent in
connection with the consummation contemporaneously herewith of the sale and
conveyance of the "Member Interest" by GEBAM to Wells pursuant to Article XXI of
the Lease have been satisfied in full.

9.   Condition to Amendment. This Amendment shall be of no force or effect
----------------------
in its entirety unless and until the following conditions are satisfied, and the
date on which both of said conditions have been satisfied shall be the effective
date of this Amendment:

(a)  The consummation of the purchase and sale of the Member Interest
in Lessor by and between GEBAM and Wells; and

5

(b)  The concurrent consummation of the purchase and sale of the
Member Interest in the Farmington Hills Lessor by and between GEBAM and Wells.

10.  Ratification and Binding Effect. Except to the extent expressly
-------------------------------
modified by this Amendment, all terms of the Lease shall remain in full force
and effect; and the Lease, as so modified and amended by this Amendment, is
expressly ratified and confirmed by the parties hereto. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. This Amendment may be executed in multiple
counterparts, each of which shall be deemed an original.

IN WITNESS WHEREOF, Lessee and Lessor have caused this Amendment to be duly
authorized, executed and delivered as of the day and year first above written.

LANDLORD:
--------

DANACQ KALAMAZOO LLC,
a Delaware limited liability company

By: General Electric Capital Corporation
a Delaware corporation, its Manager

By: /s/ Stephen Benko
-------------------------------------
Name:  Stephen Benko
-----------------------------------
Title: Authorized Signatory
----------------------------------

(SIGNATURES CONTINUED ON NEXT PAGE)

6

(SIGNATURES CONTINUED FROM PREVIOUS PAGE)

TENANT:
-------

DANA CORPORATION,
a Virginia corporation

By: /s/ A. Glenn Paton
-----------------------------------------
Name:  A. Glenn Paton
---------------------------------------
Title: Vice President-Treasurer
--------------------------------------

7

EXHIBIT 23.2

CONSENT OF ARTHUR ANDERSEN LLP

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our reports
and to all references to our Firm included in or made a part of this
registration statement.

/s/ ARTHUR ANDERSEN LLP

Atlanta, Georgia
April 18, 2002

EXHIBIT 24.1

POWER OF ATTORNEY

POWER OF ATTORNEY
-----------------

Each person whose signature appears below hereby constitutes and
appoints Leo F. Wells, III and Douglas P. Williams, or either of them acting
singly, as his true and lawful attorney-in-fact, for him and in his name, place
and stead, to execute and sign any and all amendments, including any
post-effective amendments, to the Registration Statement on Form S-11 of Wells
Real Estate Investment Trust, Inc. or any additional Registration Statement
filed pursuant to Rule 462 and to cause the same to be filed with the Securities
and Exchange Commission hereby granting to said attorneys-in-fact and each of
them full power and authority to do and perform all and every act and thing
whatsoever requisite or desirable to be done in and about the premises as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all acts and things that said attorneys-in-fact
or either of them may do or cause to be done by virtue of these presents.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Power of Attorney has been signed below, effective as of October 31, 2001,
by the following persons and in the capacities indicated below.

Signatures                                Title
----------                                -----

Signature                                 Title
---------                                 -----

/s/ Leo F. Wells, III                     President and Director
--------------------------------          (Principal Executive Officer)
Leo F. Wells, III

/s/ Douglas P. Williams                   Executive Vice President and Director
--------------------------------          (Principal Financial and Accounting Officer)
Douglas P. Williams

/s/ John L. Bell                          Director
--------------------------------
John L. Bell

/s/ Richard W. Carpenter                  Director
--------------------------------
Richard W. Carpenter

/s/ Bud Carter                            Director
--------------------------------
Bud Carter

/s/ William H. Keogler, Jr.               Director
--------------------------------
William H. Keogler, Jr.

/s/ Donald S. Moss                        Director
--------------------------------
Donald S. Moss

/s/ Walter W. Sessoms                     Director
--------------------------------
Walter W. Sessoms

/s/ Neil H. Strickland                    Director
--------------------------------
Neil H. Strickland

EXHIBIT 99.1

LETTER REGARDING INDEPENDENT PUBLIC ACCOUNTANTS

April 22, 2002

Securities and Exchange Commission
450 5/th/ Street, NW
Washington, DC 20549

Ladies and Gentlemen:

Pursuant to Securities and Exchange Commission Release Nos. 33-8070,
34-45590; 35-27503; 39-2395; IA-2018; IC-25464; FR-62; File No. S7-03-02, this
letter is to confirm that Wells Real Estate Investment Trust, Inc. has received
assurance from its independent public accountants, Arthur Andersen LLP (Arthur
Andersen), that Arthur Andersen's audits of the financial statements relating to
the Novartis Atlanta Building and the Dana Corporation Buildings for the year
ended December 31, 2001 (Audit) were subject to Arthur Andersen's quality
control system for the U.S. accounting and auditing practice to provide
reasonable assurance that the engagement was conducted in compliance with
professional standards, that there was appropriate continuity of Arthur Andersen
personnel working on the Audit and availability of national office consultation.

WELLS REAL ESTATE INVESTMENT TRUST, INC.

/s/ Douglas P. Williams
----------------------------------------
Douglas P. Williams
Executive Vice President,
Treasurer and Chief Financial Officer