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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

[Fee Required]

For the fiscal year ended December 31, 2002

[No Fee Required]

For the transition period from __________________ to _________________

Commission file number 0-49633

WELLS REAL ESTATE FUND XIII, L.P.

(Exact name of registrant as specified in its charter)

Securities registered pursuant to Section 12 (g) of the Act:

CASH PREFERRED UNITS

(Title of Class)

TAX PREFERRED UNITS

(Title of Class)

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

Yes  x    No  ¨

Aggregate market value of the voting stock held by non-affiliates:    Not Applicable

PART I

ITEM 1.    BUSINESS

General

Wells Real Estate Fund XIII, L.P. (the “Partnership”) is a Georgia public limited partnership with Leo F. Wells, III and Wells Capital, Inc. (the “Company”), a Georgia corporation, serving as General Partners. The Partnership was formed on September 15, 1998, for the purpose of acquiring, developing, owning, operating, improving, leasing, and otherwise managing income producing commercial properties for investment purposes. Upon subscription for units, the Limited Partners must elect whether to have their units treated as Cash Preferred Status Units or Tax Preferred Status Units. Thereafter, Limited Partners have the right to change their prior elections to have some or all of their units treated as Cash Preferred Status Units or Tax Preferred Status Units one time during each quarterly accounting period. Limited Partners may vote to, among other things: (a) amend the partnership agreement, subject to certain limitations, (b) change the business purpose or investment objectives of the Partnership, (c) remove a General Partner, (d) elect a new General Partner, (e) dissolve the Partnership, and (f) approve a sale involving all or substantially all of the Partnership’s assets, subject to certain limitations. The majority vote on any of the described matters will bind the Partnership, without the concurrence of the General Partners. Each limited partnership unit has equal voting rights, regardless of which class of unit is selected.

On March 29, 2001, the Partnership commenced a public offering of up to $45,000,000 of limited partnership units ($10.00 per unit) pursuant to a Registration Statement filed on Form S-11 under the Securities Act of 1933. The Partnership commenced active operations on June 14, 2001, upon receiving and accepting subscriptions for 125,000 units. As of December 31, 2002, the Partnership had sold 2,201,817 Cash Preferred Units and 521,472 Tax Preferred Units, net of conversions, held by a total of 1,075 and 101 Limited Partners, respectively, for total Limited Partner capital contributions of $27,073,737. After payment of $901,030 in acquisition and advisory fees and acquisition expenses, payment of $3,239,323 in selling commissions and organization and offering expenses, and the investment of $16,729,212 in Fund XIII-REIT Associates (“the Joint Venture”), as of December 31, 2002, the Partnership was holding net offering proceeds of $6,204,172 available for investment in properties.

Employees

The Partnership has no direct employees. The employees of the Company and Wells Management Company, Inc. perform a full range of real estate services including leasing and property management, accounting, asset management and investor relations for the Partnership. See item 11—“Compensation of General Partners and Affiliates” for a summary of the compensation and fees paid to the General Partners and their affiliates during the year ended December 31, 2002.

Insurance

Wells Management Company, Inc., an affiliate of the General Partners, carries comprehensive liability and extended coverage with respect to all of the properties owned by the Partnership through its interest in the Joint Venture. In the opinion of management, all such properties are adequately insured.

Competition

The Partnership will experience competition for tenants from owners and managers of competing projects, which may include the General Partners and their affiliates. As a result, the Partnership may provide free

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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 Partnership elects to dispose of its properties, the Partnership will also be in competition with sellers of similar properties to locate suitable purchasers for its properties.

ITEM 2.    PROPERTIES

As of December 31, 2002, the Partnership owned interests in the following three properties through the affiliated joint venture listed below:

As of December 31, 2002, the lease expirations scheduled during each of the following ten years for all properties owned by Fund XIII-REIT Associates, assuming no exercise of renewal options or termination rights, are summarized below:

Additional information about the properties in which the Partnership owns interests as of December 31, 2002 is provided below:

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Fund XIII-REIT Associates

On June 27, 2001, the Partnership and Wells OP entered into a joint venture partnership agreement, known as Fund XIII-REIT Associates, for the purposes of acquiring, owning, leasing, operating, and, managing real properties. All income, loss, net cash flow, resale gain and sale proceeds of Fund XIII-REIT Associates are allocated and distributed to the Partnership and Wells OP according to their ownership interests, as calculated by the respective cumulative capital contributions made to Fund XIII-REIT Associates. As of December 31, 2002, the Partnership and Wells OP had contributed approximately $17,426,263 and $26,414,355 for equity interests in Fund XIII-REIT Associates of approximately 39% and 61%, respectively.

AmeriCredit Building

On July 16, 2001, Fund XIII-REIT Associates acquired the AmeriCredit Building, a two-story office building containing approximately 85,000 rentable square feet located in Orange Park, Clay County, Florida. The purchase price of the AmeriCredit Building was $12,500,000, plus closing costs of approximately $41,500. The purchase price was funded by capital contributions of $1,651,426 by the Partnership and $10,890,040 by Wells OP.

The entire AmeriCredit Building is currently under a net lease agreement with AmeriCredit, a wholly owned subsidiary of Americredit Corp., which expires in June 2011. AmeriCredit Corp., a Texas corporation with common stock publicly traded on the New York Stock Exchange, is the guarantor of the lease. AmeriCredit has the right to extend the lease for two additional five-year periods of time by giving written notice to the landlord at least 12 months prior to the expiration date of the then current lease term. The base rent payable for each extended term of the lease will be equal to 95% of the then current market rate.

Under the lease, AmeriCredit is required to pay all operating expenses, routine maintenance and repairs to the AmeriCredit Building. Fund XIII-REIT Associates, as landlord, is responsible for the repair and maintenance of the roof, structural systems, and parking lot, as well as payment of a monthly 7% sales tax on rental income for the AmeriCredit Building. AmeriCredit is also required to reimburse Fund XIII-REIT Associates for sales tax costs through increased rental income. The rental information below is provided net of these sales tax reimbursements.

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 notice to Fund XIII-REIT Associates. If AmeriCredit exercises its termination option, it will be required to pay the joint venture a termination payment estimated at $1.9 million, or approximately 16 months of rent.

AmeriCredit also has an expansion option for an additional 15,000 square feet of office space and 120 parking spaces that can be exercised at any time during the first seven 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 Fund XIII-REIT Associates of written notice of the expansion option.

The average effective annual rental rate per square foot at the AmeriCredit Building was $17.24 for 2002 and $17.03 for 2001, the first year of ownership.

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ADIC Buildings

On December 21, 2001, Fund XIII-REIT Associates acquired the ADIC Buildings, two one-story office buildings connected to a light assembly building containing approximately 148,204 rentable square feet located in Parker, Douglas County, Colorado. Additionally, Fund XIII-REIT Associates purchased an undeveloped 3.43 acre tract of land immediately adjacent to the ADIC Buildings (“ADIC Land”). The purchase price of the ADIC Buildings and ADIC Land was $12,954,213, plus closing costs of approximately $215,600. The purchase price was funded by capital contributions of $6,500,000 by the Partnership and $6,669,834 by Wells OP.

The ADIC Buildings are currently under a net lease agreement with ADIC, which expires in October 2011. ADIC has the right to extend the lease for two additional five-year periods of time by giving written notice to the landlord at least 9 months prior to the expiration date of the then current lease term. The base rent payable for each extended term of the lease will be the then current market rate.

The average effective annual rental rate per square foot for the AmeriCredit Building was $9.07 for 2002 and $8.09 for 2001, the first year of ownership.

John Wiley Indianapolis Building

On December 12, 2002, Fund XIII-REIT Associates acquired the John Wiley Indianapolis Building (“John Wiley Building”), a four-story office building containing approximately 141,047 rentable square feet located in Fishers, Hamilton County, Indiana. The purchase price of the John Wiley Building was $17,450,000, plus closing costs of approximately $56,700. The purchase price was funded by capital contributions of $8,577,787 by the Partnership and $8,928,915 by Wells OP.

The John Wiley Building is currently under net lease agreements with John Wiley & Sons (123,674 square-feet), Robert Half International (2,960 square-feet), and United Students Aid Funds (14,413 square-feet), which expire in October 2009, April 2005, and July 2005, respectively. John Wiley & Sons has the right to extend the lease for two additional five-year periods of time by giving written notice to the landlord at least 12 months prior to the expiration date equal to 95% of the then fair market rate but not less than 8% over the last year of the previous term.

The average effective annual rental rate per square foot for the John Wiley Building was approximately $16.24 for 2002, the first year of ownership.

ITEM 3.    LEGAL PROCEEDINGS

There were no material pending legal proceedings or proceedings known to be contemplated by governmental authorities involving the Partnership during the fourth quarter of 2002.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the Limited Partners during the fourth quarter of 2002.

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PART II

As of February 28, 2003, the Partnership had 2,454,454 outstanding Cash Preferred Units held by a total of 1,154 Limited Partners and 570,743 outstanding Tax Preferred Units held by a total of 111 Limited Partners. The capital contribution per unit is $10.00. There is no established public trading for the Partnership’s limited partnership units, and it is not anticipated that a public trading market for the units will develop. Under the Partnership Agreement, the General Partners have the right to prohibit transfers of units.

In order for NASD members and their associated persons to participate in the offering and sale of units of the Partnership, the Partnership is required pursuant to NASD Rule 2810(b)(5) to disclose in each annual report distributed to limited partners a per unit estimated value of the units, the method by which it was developed and the date of the data used to develop the estimated value. In addition, pursuant to Section 15.2 of the Partnership Agreement and the Partnership’s Prospectus, the General Partners are required to prepare annual statements of estimated unit values to assist fiduciaries of retirement plans subject to the annual reporting requirements of ERISA in the preparation of their reports relating to an investment in the Partnership. Pursuant to Section 15.2 of the Partnership Agreement and the Partnership’s Prospectus, for the first three fiscal years following the termination of the offering of units in the Partnership, the estimated value of the units shall be deemed to be $10 per unit for these purposes. The basis for this valuation is the fact that the Partnership is currently engaged in a public offering of its units at the price of $10.00 per unit. However, please note that there is no public trading market for the units nor is one ever expected to develop and there can be no assurance that limited partners could receive $10 per unit if such a market did exist and they sold their units or that they will be able to receive such amount for their units in the future. In addition, the Partnership has not performed an evaluation of the Partnership properties and, therefore, this valuation is not based upon the value of the Partnership properties, nor does it represent the amount limited partners would receive if the Partnership properties were sold and the proceeds distributed to the limited partners in a liquidation of the Partnership, which amount would most likely be less than $10.00 per unit as a result of the fact that, at the time the Partnership is purchasing its properties, the amount of funds available for investment in properties is reduced by the 16% of offering proceeds raised by the Partnership, which are used to pay selling commissions and dealer manager fees, organization and offering expenses and acquisition and advisory fees, as described in more detail in this Annual Report and the Partnership’s Prospectus.

After the expiration of this three-year period, the General Partners are required under the Partnership Agreement to determine an estimated per unit valuation by estimating the amount a holder of Partnership units would receive if the Partnership properties were sold as of the close of the Partnership’s fiscal year at their estimated fair market values and the proceeds from such sales (without reductions for selling expenses and other costs), together with any other funds of the Partnership, were distributed in a liquidation of the Partnership. Such estimated property values will be based upon annual valuations performed by the General Partners, and no independent property appraisals will be obtained. Accordingly, these estimates, when prepared by the General Partners, should not be viewed as an accurate reflection of the values of the Limited Partners’ units, what a Limited Partner might be able to sell his units for, or the fair market value of the Partnership properties, nor will they represent the amount of net proceeds Limited Partners would receive if the Partnership properties were sold and the proceeds distributed in a liquidation of the Partnership. The valuations to be performed by the General Partners will be estimates only, and will be based a number of assumptions which may not be accurate or complete. In addition, property values are subject to change and could decline after the date of the valuations.

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Cash Preferred Status Limited Partners are entitled to a distribution from Net Cash From Operations, as defined in the Partnership Agreement, of cash flow, less adequate cash reserves for other obligations of the Partnership for which there is no provision, on a per unit basis until they have received distributions in each fiscal year of the Partnership equal to 10% of their adjusted capital contributions. After this preference is satisfied, the General Partners will receive an amount of Net Cash From Operations equal to 10% of the total amount of Net Cash From Operations distributed. Thereafter, the Limited Partners holding Cash Preferred Status Units will receive 90% of Net Cash From Operations and the General Partners will receive 10%. No Net Cash From Operations will be distributed to Limited Partners holding Tax Preferred Status Units. Holders of Cash Preferred Status Units will, except in limited circumstances, be allocated none of the Partnership’s net loss, depreciation and amortization deductions. These deductions will be allocated to the Tax Preferred Status Units, until their capital account balances have been reduced to zero. No distributions have been made to Limited Partners holding Tax Preferred Status Units or to the General Partners as of December 31, 2002.

Cash available for distribution to the Limited Partners is distributed on a quarterly basis unless Limited Partners select to have their cash distributed monthly. Cash distributions made to Cash Preferred Status Limited Partners during 2002 and 2001 are summarized below:

The fourth quarter distribution was accrued in 2002 and paid to the Limited Partners in February 2003.

ITEM 6.    SELECTED FINANCIAL DATA

The following sets forth a summary of the selected financial data as of and for the year ended December 31, 2002 and the seven months ended December 31, 2001:

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The following discussion and analysis should be read in conjunction with the Selected Financial Data and the accompanying financial statements of the Partnership and notes thereto.

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

Gross Revenues

Gross revenues of the Partnership increased to $621,381 for 2002, as compared to $96,685 for 2001, due to corresponding increases in equity in income of joint venture and interest income described below. The Partnership made an initial investment in the Joint Venture on June 27, 2001 and commenced operations on June 14, 2001. As of December 31, 2002, the Partnership has invested in three income producing properties as further discussed below.

Equity In Income of Joint Ventures

The net income of Fund XIII-REIT Associates, and the corresponding equity in income of joint venture of the Partnership, increased in 2002, as compared to 2001, primarily due to the acquisitions of the AmeriCredit Building in July 2001 and the ADIC Buildings in December 2001.

Expenses

Total expenses of the Partnership increased to $142,996 for 2002 as compared to $61,817 for 2001, primarily due to increases in administrative salaries and legal and accounting fees related to the growth in operations resulting from a full year of operations for the AmeriCredit Building and ADIC Buildings and the sale of additional limited partner units in 2002, as compared to 2001.

As a result, net income of the Partnership increased to $478,385 for 2002, as compared to $34,868 for 2001.

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On March 29, 2001, the Partnership commenced a public offering of up to $45,000,000 of limited partnership units, at $10.00 per unit, pursuant to a Registration Statement filed on Form S-11 under the Securities Act of 1933. The Partnership commenced active operations on June 14, 2001 upon receiving and accepting subscriptions for 125,000 units. As of December 31, 2001, the Partnership had sold 880,001 Cash Preferred units and 191,522 Tax Preferred units held by a total of 715 and 39 limited partners, respectively, for total limited partner capital contributions of $10,715,232. After payment of $371,324 in acquisition and advisory fees and acquisition expenses, payment of $1,259,747 in selling commissions and organization and offering expenses, and an investment of $8,151,426 in Fund XIII-REIT Associates, the Partnership held net offering proceeds of $846,499 that were available for investment in properties as of December 31, 2001.

As of December 31, 2002, the Partnership had sold 2,201,817 Cash Preferred Units and 521,472 Tax Preferred Units, net of conversions, held by a total of 1,075 and 101 Limited Partners, respectively, for total Limited Partner capital contributions of $27,073,737. After payment of $901,030 in acquisition and advisory fees and acquisition expenses, payment of $3,239,323 in selling commissions and organization and offering expenses, and the investment of $16,729,212 in Fund XIII-REIT Associates (“the Joint Venture”), as of December 31, 2002, the Partnership was holding net offering proceeds of $6,204,172 available for investment in properties.

Cash Flows From Operating Activities

Net cash flows provided by (used in) operating activities was ($7,821) for 2002, as compared to $81,705 for 2001, primarily due to additional salaries, printing, and legal costs of approximately $58,000, $12,000 and $4,000, respectively, as the Partnership commenced operations in June 2001 and was, therefore, operational for a full year in 2002.

Cash Flows From Investing Activities

Net cash used in investing activities remained relatively stable at $8,500,459 for 2002, as compared to $8,491,585 for 2001. The Partnership’s investment in Fund XIII-REIT Associates for the purchase of the John Wiley Building in 2002 exceeded the investments made for the purchases of the AmeriCredit Building and the ADIC Buildings in 2001. As the offering of the Partnership’s units commenced in March 2001, more capital was raised in 2002 than in 2001 and, thus, resulted in the payment of more deferred project costs in 2002 than in 2001. The majority of the additional investment in Fund XIII-REIT Associates and deferred project costs paid in 2002, as compared to 2001, were offset by the receipt of additional distributions from Fund XIII-REIT Associates resulting from a full year of operation for the AmeriCredit Building and ADIC Buildings for the first time in 2002.

Cash Flows From Financing Activities

Net cash flows provided by financing activities increased to $13,842,486 for 2002, as compared to $9,371,117 for 2001, as a result of raising additional capital in 2002, which is partially offset by the payment of additional related selling commissions and offering cost reimbursements. In addition, distributions were paid to limited partners for the first time in 2002, as this was the first full year of operations for the AmeriCredit Building and the ADIC Buildings.

As of December 31, 2002, the Partnership had paid reimbursements of organization and offering expenses of $816,987 to the Company, which amounted to 3% of the gross offering proceeds received to date. The Partnership reduces partners’ capital directly as such offering cost reimbursements are paid to Wells Capital, Inc.

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Selling Commissions and Dealer Manager Fees

The Partnership pays selling commissions and a dealer manager fee up to 7% and equal to 2.5%, respectively, of aggregate gross offering proceeds to Wells Investment Securities, Inc., a registered securities broker-dealer affiliated with the general partners. Wells Investment Securities may re-allow commissions and a portion of its dealer manager fee to other broker-dealers participating in the offering of the partnerships’ limited partner units (Participating Dealers) in the aggregate amount of up to 1.5% of gross offering proceeds as marketing fees, or to reimburse Participating Dealers the costs and expenses of representatives of such Participating Dealers of attending educational conferences and seminars. As of December 31, 2002, the Partnership had paid aggregate selling commissions of $1,906,302 and dealer-manager fees of $680,822, of which all $1,906,302 of the selling commissions and $181,338 of dealer-manager fees were re-allowed to Participating Dealers.

Distributions

The Partnership made distributions to the limited partners holding Cash Preferred Units of $0.52 per unit and $0.08 per unit for the years ended December 31, 2002 and 2001, respectively. Such distributions have been made from net cash from operations and distributions received from the Partnership’s investment in Fund XIII-REIT Associates. No distributions have been made to the limited partners holding Tax Preferred Units or to the General Partners.

(d) Related-Party Transactions

Offering Expense Reimbursements

The Partnership reimburses the Company for organizational and offering expenses equal to the lesser of actual costs incurred or 3% of the aggregate gross offering proceeds, subject to the overall limitations of the partnership agreement. Organizational and offering expenses include such costs as legal and accounting fees, printing costs, and other offering expenses, but do not include sales or underwriting commissions. As of December 31, 2002, the Partnership had paid aggregate fees of $816,987 to the Company, which amounted to 3% of the aggregate gross offering proceeds received to date.

Selling Commissions and Dealer Mangers Fees

The Partnership pays selling commissions and dealer manager fees up to 7% and equal to 2.5%, respectively, of aggregate gross offering proceeds to Wells Investment Securities, Inc., an affiliated and registered securities broker-dealer, and/or other broker-dealers participating in the offering of the Partnership’s limited partner units (“Participating Dealers”). Wells Investment Securities, Inc. may re-allow a portion of its dealer manager fee to Participating Dealers in the aggregate amount of up to 1.5% of aggregate gross offering proceeds as marketing fees, or to reimburse Participating Dealers for the costs and expenses of representatives of such Participating Dealers of attending educational conferences and seminars. As of December 31, 2002, the Partnership had paid aggregate selling commissions of $2,427,974 and dealer manager fees of $680,822, of which all $2,427,974 of the selling commissions and $292,123 of the dealer manager fees were re-allowed to Participating Dealers.

Acquisition and Advisory Fees and Acquisition Expense Reimbursements

The Partnership pays the Company for acquisition and advisory services and acquisition expenses equal to 3.5% of the aggregate gross offering proceeds, subject to certain overall limitations contained in the partnership agreement. As of December 31, 2002, the Partnership had paid aggregate fees of $953,151 to the Company, which amounted to 3.5% of the aggregate gross offering proceeds received to date.

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Property Management and Leasing Fees

Wells Management Company, Inc., an affiliate of the General Partners, receives compensation for supervising the management and leasing of the Partnership properties 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 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.

Management and leasing fees are not paid directly by the Partnership but by the joint venture entity, which owns the properties. The Partnership’s share of these fees was $46,407 for the year ended December 31, 2002.

Administration Reimbursements

The Company performs certain administrative services for the Partnership, such as accounting and other partnership administration, and incurs the related expenses. Such expenses are allocated among the various Wells Real Estate Funds based on time spent on each fund by individual administrative personnel. During 2002 and 2001, the Partnership had paid $90,395 and $31,671, respectively, to the Company and its affiliates for reimbursement of such administrative services. See Note 8 to the financial statements included with this report for a summary of the Partnership’s administrative costs.

Conflicts of Interests

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

(e) Inflation

The real estate market has not been affected significantly by inflation in the past three years due to the relatively low inflation rate. However, there are provisions in the majority of tenant leases, which would protect the Partnership from the impact of inflation. These provisions include reimbursement billings for operating expense pass-through charges, real estate tax and insurance reimbursements on a per square foot basis, or in some cases, annual reimbursement of operating expenses above a certain per square foot allowance. However, due to the long-term nature of the leases, the leases may not re-set frequently enough to cover inflation.

(f) Application of Critical Accounting Policies

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

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Below is a discussion of the accounting policies that management considers to be critical in that they may require complex judgment in their application or require estimates about matters that are inherently uncertain. Additional discussion of accounting policies that management considers to be significant, including further discussion of the critical accounting policies described below, is presented in Note 1 to the Partnership’s financial statements included in this report.

Investment in Real Estate Assets

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

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

Valuation of Real Estate Assets

Management continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate assets in which the Partnership has an ownership interest, either directly or through investments in joint ventures, may not be recoverable. When indicators of potential impairment are present which indicate that the carrying amounts of real estate assets may not be recoverable, management assesses the recoverability of the real estate assets by determining whether the carrying value of the real estate assets will be recovered through the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying value, management adjusts the real estate assets to the fair value and recognizes an impairment loss. Management has determined that there has been no impairment in the carrying value of real estate assets held by the Partnership at December 31, 2002 and 2001.

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

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Since the Partnership does not borrow any money or make any foreign investments, it is not subject to risks relating to interest rate or foreign currency exchange rate fluctuations.

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ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Financial Statements of the Registrant and supplementary data are detailed under Item 15 (a) and filed as part of the report on the pages indicated.

There were no disagreements with the Partnership’s independent public accountants during the two years ended December 31, 2002.

On May 16, 2002, the general partners dismissed Arthur Andersen LLP (Andersen) as the Partnership’s independent public accountants effective immediately.

Andersen’s reports on the financial statements of the Partnership for the year ended December 31, 2001 and 2000 did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.

During the years ended December 31, 2001 and 2000 and through the date of Andersen’s dismissal, there were no disagreements with Andersen on any matter of accounting principle or practice, financial statement disclosure, or auditing scope or procedure which, if not resolved to Andersen’s satisfaction, would have caused Andersen to make reference to the subject matter in connection with its report on the financial statements of the Partnership for such year and there were no reportable events as set forth in Item 304(a)(1)(v) of Regulation S-K.

On July 3, 2002, the Partnership engaged Ernst & Young, LLP (Ernst & Young) to audit the financial statements of the Partnership, effective immediately. During the fiscal year ended December 31, 2001, and through the date of appointment of Ernst & Young as the Partnership’s independent public accountants, the Partnership did not consult Ernst & Young with respect to the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the financial statements of the Partnership, or any other matters or reportable events as set forth in Items 304(a)(2)(i) and (ii) of Regulation S-K.

(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)

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PART III

Wells Capital, Inc.

The executive offices of Wells Capital, Inc., a Georgia corporation, are located at 6200 The Corners Parkway Suite 250, Norcross, Georgia 30092.

Leo F. Wells, III

Mr. Wells is a resident of Atlanta, Georgia, is 59 years of age and holds a Bachelor of Business Administration Degree in Economics from the University of Georgia. Mr. Wells is the President, sole Director and sole shareholder of Wells Real Estate Funds, Inc., which is the parent company of Wells Capital, Wells & Associates, Inc., Wells Management Company, Inc. and Wells Investment Securities, Inc. Mr. Wells is the President and sole Director of Wells Capital, Inc. Mr. Wells is the 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, sole Director and sole shareholder of Wells Real Estate Investment Funds, Inc., the parent corporation of Wells Capital, Inc. Mr. Wells is also currently the sole Director and President of Wells Management Company, Inc., a property management company he founded in 1983. In addition, Mr. Wells is the President and Chairman of the Board of Wells Investment Securities, Inc., Wells & Associates, Inc., and Wells Management Company, Inc., which are affiliates of the General Partners. From 1980 to February 1985, Mr. Wells served as vice-president of Hill-Johnson, Inc., a Georgia corporation engaged in the construction business. From 1973 to 1976, he was associated with Sax Gaskin Real Estate Company and from 1970 to 1973, he was a real estate salesman and property manager for Roy D. Warren & Company, an Atlanta real estate company.

The following table summarizes the compensation and fees (including reimbursement of expenses) paid to the General Partners and their affiliates during the year ended December 31, 2002.

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No Limited Partner is known by the Partnership to own beneficially more than 5% of the outstanding units of the Partnership.

Set forth below is the security ownership of management as of February 28, 2003.

No arrangements exist which would, upon operation, result in a change in control of the Partnership.

The compensation and fees paid or to be paid by the Partnership to the General Partners and their affiliates in connection with the operation of the Partnership are as follows:

Interest in Partnership Cash Flow and Net Sales Proceeds

The General Partners will receive a subordinated participation in net cash flow from operations equal to 10% of net cash flow after the Limited Partners holding Cash Preferred Status Units have received preferential distributions equal to 10% of their adjusted capital accounts in each fiscal year. The General Partners will also receive a subordinated participation in net sales proceeds and net financing proceeds equal to 20% of residual proceeds available for distribution after Limited Partners holding Cash Preferred Status Units have received a return of their adjusted capital contributions plus a 10% cumulative return on their adjusted capital contributions and Limited Partners holding Tax Preferred Units have received a return of their adjusted capital contributions plus a 15% cumulative return on their adjusted capital contributions; provided, however, that in no event shall the General Partners receive in the aggregate in excess of 15% of net sales proceeds and net financing proceeds remaining after payments to Limited Partners from such proceeds of amounts equal to the sum of their adjusted capital contributions plus a 6% cumulative return on their adjusted capital contributions. The General Partners did not receive any distributions from net cash flow from operations or net sales proceeds for the year ended December 31, 2002.

Property Management and Leasing Fees—Incurred by the Joint Venture

Wells Management Company, Inc., an affiliate of the General Partners, receives compensation for supervising the management and leasing of the Partnership properties equal to the lesser of (a) fees that

15

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 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.

Management and leasing fees are not paid directly by the Partnership but by the joint venture entity, which owns the properties. The Partnership’s share of these fees was $46,407 for the year ended December 31, 2002.

Real Estate Commissions

In connection with the sale of Partnership properties, the General Partners or their affiliates may receive commissions not exceeding the lesser of (A) 50% of the commissions customarily charged by other brokers in arm’s-length transactions involving comparable properties in the same geographic area or (B) 3% of the gross sales price of the property, and provided that payments of such commissions will be made only after Limited Partners have received prior distributions totaling 100% of their capital contributions plus a 6% cumulative return on their adjusted capital contributions. No real estate commissions were paid to the General Partners or affiliates for the year ended December 31, 2002.

Acquisition and Advisory Fees and Expenses

The Partnership pays Acquisition and Advisory Fees and Acquisition Expenses to Wells Capital, Inc. for acquisition and advisory services performed on the Partnership’s behalf. These payments, as provided by the Partnership Agreement, are equal to 3.5% of the Limited Partners’ capital contributions. Acquisition and Advisory Fees and Acquisition Expenses paid as of December 31, 2002, amounted to $953,151 and represented approximately 3.5% of the Limited Partners’ capital contributions.

Organizational and Offering Expenses

Wells Capital, Inc. (the “Company”) pays all the organization and offering expenses for the Partnership. The Company may be reimbursed by the Partnership to the extent that such organization and offering expenses do not exceed 3% of total Limited Partners’ capital contributions. As of December 31, 2002, the Partnership had reimbursed the Company for $816,987 in organization and offering expenses, which amounted to approximately 3% of Limited Partners’ capital contributions.

Expense Reimbursements

See Note 8 to the Partnership’s financial statements included with this report for a description of the administrative costs and reimbursements made to the General Partners and their affiliates during the year ended December 31, 2002.

Within the 90 days prior to the date of this report, the Partnership carried out an evaluation, under the supervision and with the participation of management of Wells Capital, Inc., the corporate General Partner of the Partnership, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of the Partnership’s disclosure controls and procedures pursuant to Rule 13a – 14 under the Securities Exchange Act of 1934. Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Partnership’s disclosure controls and procedures were effective.

16

There were no significant changes in the Partnership’s internal controls or other factors that could significantly affect such controls subsequent to the date of their evaluation.

(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)

17

(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)

18

SIGNATURES

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

19

CERTIFICATIONS

I, Leo F. Wells, III, certify that:

20

CERTIFICATIONS

I, Douglas P. Williams, certify that:

21

EXHIBIT INDEX

TO

2002 FORM 10-K

OF

WELLS REAL ESTATE FUND XIII, L.P.

The following documents are filed as exhibits to this report. Those exhibits previously filed and incorporated herein by reference are identified below by an asterisk. For each such asterisked exhibit, there is shown below the description of the previous filing. Exhibits which are not required for this report are omitted.

22

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT

TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT BEEN

REGISTERED PURSUANT TO SECTION 12 OF THE ACT.

No annual report or proxy material relating to an annual or other meeting of security holders has been sent to security holders.

23

INDEX TO FINANCIAL STATEMENTS

F-1

REPORT OF INDEPENDENT AUDITORS

The Partners

Wells Real Estate Fund XIII, L.P.

We have audited the accompanying balance sheet of Wells Real Estate Fund XIII, L.P. (a Georgia public limited partnership) as of December 31, 2002 and the related statements of income, partners’ capital, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of Wells Real Estate Fund XIII, L.P. as of December 31, 2001, and for the year then ended were audited by other auditors who have ceased operations and whose report dated January 25, 2002 expressed an unqualified opinion on those financial statements before the restatement adjustments and disclosures described in Note 1.

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 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 audit provides a reasonable basis for our opinion.

In our opinion, the 2002 financial statements referred to above present fairly, in all material respects, the financial position of Wells Real Estate Fund XIII, L.P. at December 31, 2002 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States.

As discussed above, the financial statements of Wells Real Estate Fund XIII, L.P. as of December 31, 2001 and for the year then ended were audited by other auditors who have ceased operations. As described in Note 1, these financial statements have been restated. We audited the adjustments described in Note 1 that were applied to restate the 2001 financial statements. Our procedures included (a) agreeing the amounts in the restatement adjustments column to the corresponding accounts maintained in the underlying records of the Partnership, and (b) testing the application of the adjustments to the previously reported amounts. In our opinion, such adjustments are appropriate and have been properly applied. Additionally, as described in Note 1, these financial statements have been revised to include disclosure of the number of Cash Preferred and Tax Preferred weighted average limited partner units outstanding for the year ended December 31, 2001 on the statement of income. Our audit procedures with respect to this disclosure included recalculating the number of Cash Preferred and Tax Preferred weighted average limited partner units outstanding for the year ended December 31, 2001 by dividing the net income amount allocated to Cash Preferred limited partners and net loss amount allocated to Tax Preferred limited partners, previously reported on the statement of income in 2001, by the amount of net income per weighted average Cash Preferred limited partner unit and net loss per weighted average Tax Preferred limited partner unit, previously reported on the statement of income in 2001, respectively. In our opinion, the disclosure of the number of Cash Preferred and Tax Preferred weighted average limited partner units outstanding on the statement of income for the year ended December 31, 2001 is appropriate. However, we were not engaged to audit, review, or apply any procedures to the 2001 financial statements of Wells Real Estate Fund XIII, L.P. other than with respect to such restatement adjustments and disclosures and, accordingly, we do not express an opinion or any other form of assurance on the 2001 financial statements taken as a whole.

/s/ ERNST & YOUNG LLP

Atlanta, Georgia

January 24, 2003

F-2

(The following is a copy of the audit report previously issued by Arthur Andersen LLP in connection with the financial statements of Wells Real Estate Fund XIII, L.P. for the fiscal year ended December 31, 2001 included in the previous year’s Form 10-K filing. This audit report has not been reissued by Arthur Andersen in connection with the filing of this form 10-K for the fiscal year ended December 31, 2002.)

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Fund XIII, L.P.:

We have audited the accompanying balance sheets of WELLS REAL ESTATE FUND XIII, L.P. (a Georgia public limited partnership) as of December 31, 2001 and 2000, the related statement of income for the year ended December 31, 2001, the statements of partners’ capital for the years ended December 31, 2001 and 2000, and the statement of cash flows for the year ended December 31, 2001. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these 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 financial statements referred to above present fairly, in all material respects, the financial position of Wells Real Estate Fund XIII, L.P. as of December 31, 2001 and 2000, the results of its operations for the year ended December 31, 2001, its partners’ capital for the years ended December 31, 2001 and 2000, and its cash flows for the year ended December 31, 2001 in conformity with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

Atlanta, Georgia

January 25, 2002

F-3

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited Partnership)

BALANCE SHEETS

DECEMBER 31, 2002 AND 2001

See accompanying notes.

F-4

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited Partnership)

STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

See accompanying notes.

F-5

WELLS REAL ESTATE FUND XIII, L.P.

(a Georgia Public Limited Partnership)

STATEMENTS OF PARTNERS’ CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

See accompanying notes.

F-6

WELLS REAL ESTATE FUND XIII, L.P.

(a Georgia Public Limited Partnership)

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2002 and 2001

See accompanying notes

F-7

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited Partnership)

DECEMBER 31, 2002 AND 2001

NOTES TO FINANCIAL STATEMENTS

F-8

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited Partnership)

NOTES TO FINANCIAL STATEMENTS (Continued)

Use of Estimates

The preparation of the Partnership’s financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Income Taxes

The Partnership is not subject to federal or state income taxes; therefore, none have been provided for in the accompanying financial statements. The partners are required to include their respective shares of profits and losses in their individual income tax returns.

Limited Partner Contributions

On September 15, 1998, the Partnership was organized under the laws of the state of Georgia upon accepting initial contributions from the General Partners and Original Limited Partner of $500 and $100, respectively. On March 29, 2001, the Partnership commenced a public offering of up to $45,000,000 of limited partnership units ($10.00 per unit). As of December 31, 2002, the Partnership accepted subscriptions for approximately 2,201,817 cash preferred units and 521,472 tax preferred units, net of conversions, held by a total of 1,176 Limited Partners, respectively, for total Limited Partner capital contributions of $27,232,886. Pursuant to the terms of the partnership agreement, the Original Partner’s interest in the partnership was redeemed for $100 upon the admission of additional limited partners following commencement of the offering.

Distributions of Net Cash From Operations

Cash available for distribution, as defined by the partnership agreement, will be distributed to the limited partners on a quarterly basis. In accordance with the partnership agreement, distributions are paid first to limited partners holding cash preferred units until they have received a 10% per annum return on their net capital contributions, as defined. Then, such distributions are paid to the general partners until they have received 10% of the total amount distributed to date. Any remaining cash available for distribution is split 90% to the limited partners holding cash preferred units and 10% to the general partners. No cash distributions will be made to the limited partners holding tax preferred units.

Distribution of Sale Proceeds

Upon the sale of properties, the net sale proceeds will be distributed in the following order:

F-9

WELLS REAL ESTATE FUND XIII, L.P.