WELLS REAL ESTATE FUND IX LP - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)

[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
[Fee Required]

For the fiscal year ended December 31, 1996 or
---------------------------------------------------

[_] Transition report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
[No Fee Required]

For the transition period from to
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Commission file number 33-838522 (1933 Act)
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Wells Real Estate Fund IX, L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Georgia 58-2126622
- ------------------------------ ---------------------------------
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)

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

Registrant's telephone number, including area code (770) 449-7800
------------------------------
Securities registered pursuant to Section 12 (b) of the Act:

Title of each class Name of exchange on which registered
- ------------------------------ ------------------------------------
NONE NONE
- ------------------------------ ---------------------------------------

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

NONE
- --------------------------------------------------------------------------------
(Title of Class)

NONE
- --------------------------------------------------------------------------------
(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 IX, L.P. (the "Partnership") is a Georgia public limited
partnership having Leo F. Wells, III and Wells Partners, L.P., a Georgia non-
public partnership, as General Partners. The Partnership was formed on August
15, 1994, for the purpose of acquiring, developing, constructing, owning,
operating, improving, leasing and otherwise managing for investment purposes
income-producing commercial or industrial properties.

On January 5, 1996, the Partnership commenced a public offering of up to
$35,000,000 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 February 12, 1996, when it received
and accepted subscriptions for 125,000 units. An aggregate requirement of
$2,500,000 of offering proceeds was reached on February 26, 1996, thus allowing
for the admission of New York and Pennsylvania investors in the Partnership. The
offering was terminated on December 30, 1996, at which time the Partnership had
sold 2,935,931 Class A Status Units, and 564,069 Class B Status Units, held by a
total of 1,841 and 257 Limited Partners respectively, for total Limited Partner
capital contributions of $35,000,000. After payment of $1,400,000 in Acquisition
and Advisory Fees and expenses, payment of $5,250,000 in selling commissions and
organization and offering expenses, the investment by the Partnership of
$4,748,974 in the Fund VIII - Fund IX Joint Venture and $676,257 for land and
development, as of December 31, 1996, the Partnership was holding net offering
proceeds of $22,924,769 available for investment in properties.

As of December 31, 1996, the Partnership owned land in Knoxville, Tennessee on
which an office building is to be constructed and interest in two properties
through ownership in the Fund VIII - Fund IX Joint Venture, an office building
in Farmer's Branch, Texas and an office building under construction in Madison,
Wisconsin.

EMPLOYEES

The Partnership has no direct employees. The employees of Wells Capital, Inc.,
the sole general partner of Wells Partners, L.P., a General Partner of the
Partnership, 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 fees paid to the General Partners and their affiliates during
the fiscal year ended December 31, 1996.

2

INSURANCE

Wells Management Company, Inc., an affiliate of the General Partners, carries
comprehensive liability and extended coverage with respect to all the properties
owned directly or indirectly by the Partnership. In the opinion of management of
the registrant, the 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 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 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.
- --------------------

The Partnership owns interests in three properties directly or through its
ownership in joint ventures of which one is land on which an office building is
to be constructed, one is an office building under construction, and one is an
office building. The Partnership does not have control over the operations of
the joint ventures; however, it does exercise significant influence.
Accordingly, investment in joint ventures is recorded on the equity method. As
of December 31, 1996, one building was 100% occupied. As of December 31, 1996,
the Partnership was holding approximately $22,924,000 to invest in properties.
As of December 31, 1996, no lease expirations will occur during the next ten
years.

The following describes the properties in which the Partnership owns an interest
as of December 31, 1996:

THE ABB PROPERTY
- ----------------

On December 13, 1996, the Partnership purchased a 5.62 acre tract of real
property in Knoxville, Knox County, Tennessee for a total cost of $582,897,
including closing costs. As of December 31, 1996, the Partnership had
contributed an additional $93,360 toward the development of this project for a
total contribution of $676,257.

A three-story office building containing approximately 83,885 rentable square
feet is under construction on the site. An agreement was signed with ADEVCO
Corporation to supervise, manage and coordinate the planning, design,
construction and completion of the property. Integra Construction, Inc. is
acting as the general contractor and Smallwood, Reynolds, Stewart, Stewart
Associates, Inc. as the architect.

ABB Environmental Systems, a subsidiary of ABB, Inc. has executed a lease for
55,000 rentable square feet comprising approximately 66% of the building. The
initial term of the lease will be 9

3

years and 11 months commencing on substantial completion of the project which is
currently anticipated to be January 1, 1998. ABB has the option to extend the
initial term of the lease for two consecutive five year periods. The annual base
rent payable during the initial term is $646,250 payable in equal monthly
installments of $53,854 during the first five years and $728,750 payable in
equal monthly installments of $60,729 during the last four years and 11 months
of the initial term. The annual base rent for each extended term will be at
market rental rate. In addition to the base rent, ABB is required to pay
additional rent equal to its share of operating expenses during the lease term.

It is currently anticipated that the total cost to complete the property, which
is estimated to be approximately $7,800,000, will be contributed by the
Partnership. The Partnership has reserved sufficient funds for this purpose. For
further information regarding the ABB Property, refer to Supplement No. 4 dated
December 27, 1996, to the Prospectus of Wells Real Estate Fund IX, L.P. dated
January 5, 1996, contained in Post-Effective Amendment No. 13 to Form S-11
Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real
Estate Fund IX L.P. filed with the Commission on December 27, 1996, (Commission
File No. 33-83852).

FUND VIII - FUND IX JOINT VENTURE
- ---------------------------------

On June 10, 1996, the Partnership and Wells Real Estate Fund VIII, L.P. ("Wells
Fund VIII"), a Georgia public limited partnership, affiliated with the
Partnership through common general partners, formed a joint venture known as
Fund VIII and Fund IX Associates (the "Fund VIII - Fund IX Joint Venture"). The
investment objectives of Wells Fund VIII are substantially identical to those of
the Partnership. As of December 31, 1996, the Partnership had contributed
$4,748,974 for an approximately 50% equity interest, and Wells Fund VIII had
contributed $4,725,614 for an approximately 50% equity interest in the Fund
VIII-Fund IX Joint Venture which owns an office building in Farmer's Branch,
Texas, and an office building, under development, in Madison, Wisconsin. The
total cost to complete the Madison property is anticipated to be approximately
$10,500,000. Although the ultimate percentages of ownership in the Fund VIII -
Fund IX Joint Venture have not yet been finally determined, it is anticipated
that the Partnership and Wells Fund VIII will contribute equally the remaining
cost of approximately $5,500,000 for an approximately 50% equity interest each.

Cellular One Property
- ---------------------

On June 17, 1996, the Fund VIII - Fund IX Joint Venture purchased a 7.09 acre
tract of real property in Madison, Dane County, Wisconsin for a total cost of
$859,255 including closing costs. A four-story office building containing
approximately 96,750 rentable square feet is under construction on the site. An
agreement was signed with ADEVCO Corporation to supervise, manage and coordinate
the planning, design, construction and completion of the property. Kraemer
Brothers, Inc. is acting as the general contractor and Strang, Inc. as the
architect.

Cellular One, a subsidiary of BellSouth Corporation, has executed a lease for
75,000 rentable square feet comprising approximately 78% of the building. The
initial term of the lease will be 9 years and 11 months beginning in June 1997,
with the option to extend the initial term of the

4

lease for two consecutive five year periods. The annual base rent payable during
the initial term is $862,500 payable in equal monthly installments of $71,875
during the first five years and $975,000 payable in equal monthly installments
of $81,250 during the last four years and 11 months of the initial term. The
annual base rent for each extended term will be at market rental rate.

The land purchase and construction costs, to date, have been funded by capital
contributions of $2,512,444 by the Partnership and $2,487,444 by Wells Fund
VIII.

It is anticipated that the total cost to complete the property, which is
estimated to be approximately $10,500,000, will be contributed equally by the
Partnership and Wells Fund VIII. The Partnership has reserved sufficient funds
for this purpose. For further information regarding the Cellular One Property,
refer to Supplement No. 2 dated June 28, 1996, to the Prospectus of Wells Real
Estate Fund IX, L.P. dated January 5, 1996, contained in Post-Effective
Amendment No. 11 to Form S-11 Registration Statement of Wells Real Estate Fund
VIII, L.P. and Wells Real Estate Fund IX, L.P. filed with the Commission on July
3, 1996 (Commission File No. 33-83852).

The TCI Building
- ----------------

On October 10, 1996, Fund VIII- Fund IX Joint Venture purchased a one-story
office building containing approximately 40,000 rentable square feet, located on
approximately 4.864 acres of land in Farmer's Branch, Dallas County, Texas for a
purchase price of $4,450,000 excluding acquisition costs.

The funds used by the Fund VIII - Fund IX Joint Venture to acquire the TCI
Building were derived from capital contributions made by the Partnership and
Wells Fund V III totaling $2,236,530 and $2,238,170, respectively, for total
contributions to the Fund VIII-Fund IX Joint Venture of $4,474,700, including
acquisition costs. The Partnership owns an approximately 50% equity interest in
the Fund VIII-IX Joint Venture.

The TCI Building is leased to TCI Valwood Limited Partnership I for a period of
fifteen years, with options to extend the lease for three consecutive five-year
periods. The annual base rent is $430,001 during the first five years, $454,001
during the next five years and $482,001 during the last five years. The TCI
lease commenced on July 19, 1996 and was assigned by the seller to the Fund
VIII-Fund IX Joint Venture on October 10, 1996. The lease agreement with TCI
Valwood Limited Partnership I is a net lease in that the tenant is responsible
for the payment of virtually all opeating expenses relating to the TCI Building
including real estate taxes.

The occupancy rate at the TCI Building was 100% for the last three months of
1996. The average rental per square foot in the TCI Building is $10.75 for 1996,
the first year of ownership.

For further information regarding the TCI Building, refer to Supplement No. 3
dated October 22, 1996, to the Prospectus of Wells Real Estate Fund IX, L.P.
dated January 5, 1996, contained in Post-Effective Amendment No. 12 to Form S-11
Registration Statement of Wells Real Estate

5

Fund VIII, L.P. and Wells Real Esate Fund IX, L.P. filed with the Commission on
October 24, 1996 (Commission File No. 33-83852).

ITEM 3. LEGAL PROCEEDINGS
- --------------------------

There were no material pending legal proceedings or proceedings known to be
contemplated by governmental authorities involving the Partnership during 1996.

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 1996.

6

PART II
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ITEM 5. MARKET FOR PARTNERSHIP'S UNITS AND RELATED SECURITY HOLDER MATTERS.
- ----------------------------------------------------------------------------

The offering for sale of Units in the Partnership terminated on December 30,
1996, at which time the Partnership had 2,935,931 outstanding Class A Status
Units held by a total of 1,841 Limited Partners and 564,069 outstanding Class B
Status Units held by a total of 257 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.

Class A Status Limited Partners are entitled to a distribution from Net Cash
from Operations, as defined in the Partnership Agreement to mean 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 Class A 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 Class B Status Units. Holders of Class A
Status Units will, except in limited circumstances, be allocated none of the
Partnership's net loss, depreciation, amortization and cost recovery deductions.
These deductions will be allocated to the Class B Status Units, until their
capital account balances have been reduced to zero. No distributions have been
made to the General Partners as of December 31, 1996.

Cash available to 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 Class A Status Limited Partners during 1996
were as follows:

Per Class A Status Unit
-----------------------
Distribution for Total Cash Investment Return of General
Quarter Ended Distributed Income Capital Partner
- ------------- ----------- ---------- --------- -------

March 31, 1996 $ 0 $0.00 $0.00 $0.00
June 30, 1996 $ 0 $0.00 $0.00 $0.00
September 30, 1996 $149,279 $0.19 $0.00 $0.00
December 31, 1996 $178,917 $0.09 $0.00 $0.00

The fourth quarter distribution was accrued for accounting purposes in 1996, and
was not actually paid to Limited Partners until February, 1997. Although there
is no assurance, the General Partners anticipate that cash distributions to
Limited Partners holding Class A Status

7

Units will continue in 1997 at a level at least comparable with 1996 cash
distributions on an annual basis.

ITEM 6. SELECTED FINANCIAL DATA.
- ---------------------------------

The Partnership did not commence active operations until it received and
accepted subscriptions for a minimum of 125,000 units on February 12, 1996, and
accordingly, there is no comparative financial data available from prior fiscal
years. As of December 31, 1995, the Partnership's assets totaled approximately
$142,829 consisting primarily of the General Partners' capital contributions and
deferred offering costs.

The following sets forth a summary of the selected financial data for the eleven
months ended December 31, 1996.

1996
----

Total assets $30,913,877
Total revenues 406,891
Net income 298,756
Net loss allocated
to General Partners (294)
Net income allocated to
Class A Limited Partners 330,270
Net loss allocated to
Class B Limited Partners (31,220)
Net income per weighted
average (1) Class A
Limited Partner Unit .28
Net loss per weighted
average (1) Class B
Limited Partner Unit (0.11)
Cash Distributions per
weighted average (1)
Class A Limited Partner Unit:
Investment Income 0.28
Return of Capital 0.00

(1) The weighted average unit is calculated by averaging units over the period
they are outstanding during the time units are still being purchased by Limited
Partners in the Partnership.

8

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
- -------------------------------------------------------------------------
RESULTS OF OPERATION.
- ---------------------

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 could cause actual results to
differ materially from any forward-looking statement made in the Report, which
include construction costs which may exceed estimates, construction delays,
lease-up risks, inability to obtain new tenants upon the expiration of existing
leases, and the potential need to fund tenant improvements or other capital
expenditures out of operating cash flow.

RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL CONDITIONS
- ---------------------------------------------------------

General
- -------

The Partnership commenced active operations on February 12, 1996, when it
received and accepted subscriptions for 125,000 units. An aggregate requirement
of $2,500,000 of offering proceeds was reached on February 26, 1996, thus
allowing for the admission of New York and Pennsylvania investors into the
Partnership. The offering was terminated on December 30, 1996, at which time the
Partnership had sold 2,935,931 Class A Status Units and 564,069 Class B Status
Units, held by a total of 1,841 and 257 Limited Partners respectively, for total
Limited Partner contributions of $35,000,000. After payment of $1,400,000 in
Acquisition and Advisory Fees and expenses, payment of $5,250,000 in selling
commissions and organization and offering expenses, the investment by the
Partnership of $4,748,974 in the Fund VIII - Fund IX Joint Venture and $676,257
for the ABB Property, as of December 31, 1996, the Partnership was holding net
offering proceeds of $22,924,769 available for investment in properties.

It is anticipated that an additional investment in the Fund VIII-Fund IX Joint
Venture of approximately $5,500,000 will be required to complete the Cellular
One Property and that an additional investment of approximately $7,123,743 will
be required to complete the ABB Property. It is anticipated that the Partnership
and Wells Fund VIII will each contribute approximately $2,750,000 to the Fund
VIII - Fund IX Joint Venture. It is currently anticipated that the Partnership
will contribute the remaining $7,123,743 required to complete the ABB Project.
The Partnership has reserved $9,873,743 out of its net offering proceeds of
approximately $22,924,769 available for investment in properties for these
purposes.

Gross revenues of the Partnership of $406,891 for the eleven months ended
December 31, 1996, were attributable primarily to interest income earned on
funds held by the Partnership prior to the

9

investment in joint ventures. Equity in income of joint ventures of $23,007 was
due primarily to rental income received from the TCI Building.

Expenses of the Partnership were $108,135 for the eleven months ended December
31, 1996, and consisted primarily of accounting and partnership administrative
costs. Net income of the Partnership was $298,756 for the eleven months ended
December 31, 1996. Net income allocated per weighted average unit to Class A
Limited Partners was $0.28; net loss allocated per weighted average unit to
Class B Limited Partners was $0.11 and net loss allocated to General Partners
was $294 for the eleven months ended December 31, 1996.

Since the Partnership did not commence active operations until it received and
accepted subscriptions for a minimum of 125,000 Units on February 12, 1996,
there is no comparative financial data available from the prior fiscal year.

Property Operations
- -------------------

As of December 31, 1996, the Partnership owned an interest in the following
operational property:

The TCI Building - Fund VIII-IX Joint Venture
- ---------------------------------------------

Three Months Ended
December 31, 1996
-----------------

Revenues:
Rental income $ 101,277

Expenses:
Depreciation 50,444
Management & leasing expenses 3,884
Other operating expenses 1,050
--------
55,378
--------

Net income $ 45,899
========

Occupied % 100%

Partnership's Ownership % in the Fund
VIII - Fund IX Joint Venture 50.1%

Cash distribution to Partnership $ 46,197

Net income allocated to Partnership $ 23,007

Since the TCI Building was purchased in October, 1996, comparative income and
expense figures for prior years are not available.

10

Real estate taxes and primarily all operational expenses for the building are
the responsibility of the tenant.

For comments on the general competitive conditions to which the property may be
subject, see Item 1, Business, page 2. For additional information on tenants,
etc. refer to Item 2, Properties, page 3.

On October 10, 1996, the Fund VIII - Fund IX Joint Venture purchased the TCI
Building in Farmer's Branch, Texas. The entire building is leased to TCI Valwood
Limited Partnership I for a term of fifteen years. The annual base rent is
$430,001 for the first five years, $454,001 for the next five years and $482,001
for the last five years.

The funds used by the Fund VIII - Fund IX Joint Venture to acquire the TCI
Building were derived from capital contributions made by the Partnership and
Wells Fund VIII, totaling $2,236,580 and $2,238,170, respectively. The
Partnership owns an approximately 50% equity interest in the Fund VIII - Fund IX
Joint Venture.

LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------

The Partnership commenced active operations on February 12, 1996, when it
received and accepted subscriptions for 125,000 units.

The Partnership terminated its offering on December 30, 1996, the Partnership
raised $35,000,000 in capital through the sale of 3,500,000 units.

After payment of $1,400,000 in Acquisition and Advisory fees and expenses,
payment of $5,250,000 in selling commissions and organizational and offering
expenses, and the investment by the Partnership of $5,425,231 in a property and
Joint Venture, as of December 31, 1996, the Partnership was holding net offering
proceeds of approximately $22,924,769 available for additional properties.

The Partnership's net cash provided by operating activities of $1,725 is due
primarily to interest income earned on funds held by the Partnership prior to
investment in properties. Net cash used in investing activities of $6,544,019 is
primarily the result of the payment of Acquisition and Advisory Fees and
investment in the Fund VIII - Fund IX Joint Venture of $4,748,974 and investment
of $676,257 in the ABB Property. Net cash provided by financing activities is
the result of raising $35,000,000 in Limited Partners contributions less
commissions and organizational and offering expenses, and therefore, increasing
cash and cash equivalents from $600 of General Partners' contribution at the
beginning of the year to $23,557,985 as of December 31, 1996.

The Partnership's distributions to holders of Class A Status Units for the 4th
quarter ended December 31, 1996 will be paid in February, 1997 from Investment
Income. Although there is no assurance, the Partnership anticipates that
distributions will continue to be paid on a quarterly

11

basis from such sources on a level at least consistent with 1996. No cash
distributions were paid to holders of Class B Status Units in 1996.

The Partnership expects to continue to meet its short-term liquidity
requirements generally through net cash provided by operations which the
Partnership believes will continue to be adequate to meet both operating
requirements and distributions to limited partners. At this time, given the
nature of the joint venture and property in which the Partnership has invested,
there are no known improvements or renovations to the properties expected to be
funded from cash flow from operations.

The Partnership expects to make future real estate investments, directly or
through investments in joint ventures from limited partnership contributions. As
of December 31, 1996, the Partnership has reserved $22,924,769 for this purpose
including approximately $2,750,000 for an office building in Madison, Wisconsin
owned by the Fund VIII -Fund IX Joint Venture and approximately $7,123,743
needed to complete the office building in Knoxville, Tennessee owned directly by
the Partnership.

Since properties are acquired on an all-cash basis, the Partnership has no
permanent long-term liquidity requirements.

Subsequent to December 31, 1996, the Fund VIII - Fund IX Joint Venture has
purchased two additional properties. On January 10, 1997, a two-story office
building was acquired in Dallas County, Texas for approximately $7,232,860. The
entire building is currently under a net lease to Matsushita Avionics Systems
Corporation. On February 20, 1997, a two-story partially complete office
building was acquired in Boulder County, Colorado for approximately $7,071,522.
The entire building is leased to Cirrus Logic with scheduled occupancy in March,
1997. The funds used to purchase these two buildings by the Fund VIII - Fund IX
Joint Venture were derived from capital contributions of approximately
$7,141,691 from the Partnership and approximately $7,162,691 from Wells Fund
VIII.

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 the majority of tenant leases to protect the Partnership from the impact of
inflation. These leases contain common area maintenance charges (CAM charges),
real estate tax and insurance reimbursements on a per square foot bases, or in
some cases, annual reimbursement of operating expenses above a certain per
square foot allowance. These provisions reduce the Partnership's exposure to
increases in costs and operating expenses resulting from inflation.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
- ----------------------------------------------------

The financial statements of the Registrant and supplementary data are detailed
under Item 14 (a) and filed as part of the report on the pages indicated.

12

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- ------------------------------------------------------------------------
FINANCIAL DISCLOSURE.
- --------------------

The Partnership's change in accountants during 1995 was previously reported in
the Partnership's Form 8-K dated September 11, 1995. There were no disagreements
with the Partnership's accountants or other reportable events during 1996.

13

PART III
--------

ITEM 10. GENERAL PARTNERS OF THE PARTNERSHIP.
- ---------------------------------------------

WELLS PARTNERS, L.P. Wells Partners, L.P. is a private Georgia limited
--------------------
partnership formed on October 25, 1990. The sole General Partner of Wells
Partners, L.P. is Wells Capital, Inc., a Georgia Corporation. The executive
offices of Wells Capital, Inc. are located at 3885 Holcomb Bridge Road,
Norcross, Georgia 30092.

LEO F. WELLS, III. Mr. Wells is a resident of Atlanta, Georgia, is 53
-----------------
years of age and holds a Bachelor of Business Administration Degree in Economics
from the University of Georgia. 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. 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.

14

ITEM 11. COMPENSATION OF GENERAL PARTNERS AND AFFILIATES.
- ---------------------------------------------------------

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, 1996.

CASH COMPENSATION TABLE
-----------------------

(A) (B) (C)
Name of individual or Capacities in which served - Cash Compensation
number in group Form of Compensation
- ---------------------- ----------------------------- --------------------

Wells Capital, Inc. General Partner of Wells $1,390,055
Partners, L.P.
Acquisition and Advisory Fees

Wells Capital, Inc. General Partner of Wells $1,750,000
Partners, L.P. Reimbursement
of Organization and Offering
Expenses

Leo F. Wells, III General Partner 0

Wells Investment Dealer Manager - $3,500,000 (1)
Securities, Inc. Selling Commissions

Wells Management Property Manager - $ 1,941 (2)
Company, Inc. Management and Leasing
Fees

(1) This amount includes all selling commissions paid or payable to Wells
Investment Securities, Inc., a substantial portion of which were reallocated to
other broker-dealers.

(2) These fees are not paid directly by the Partnership but are paid by the
joint venture entities which owns the TCI Property for which the property
management and leasing services relate and include management and leasing fees
which were accrued for accounting purposes in 1996 but not actually paid until
January, 1997.

15

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
- -------------------------------------------------------------------------

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,
1997.

(1) (2) (3) (4)
Amount and Nature
Name of of Beneficial
Title of Class Beneficial Owner Ownership Percent of Class
- ---------------- ----------------- ------------------ ----------------

Class A Status Leo F. Wells, III 26.80 Units (IRA, less than 1%
Units 401 (k) Plan

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

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
- --------------------------------------------------------

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
Class A 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 Class A 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 Class B 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, 1996.

PROPERTY MANAGEMENT AND LEASING FEES. Wells Management Company, Inc., an
------------------------------------
affiliate of the General Partners, will receive compensation for
supervising the

16

management of the Partnership properties equal to the lessor of (A) (i) 3%
of the gross revenues for management and 3% of the gross revenues for
leasing (aggregate maximum of 6%) plus a separate one-time fee for 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; and (ii) in the case of industrial and commercial properties
which are leased on a long-term basis (ten or more years), 1% of the gross
revenues except for initial leasing fees equal to 3% of the gross revenues
over the first five years of the lease term; or (B) the amounts charged by
unaffiliated persons rendering comparable services in the same geographic
area.

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 were $1,947 for the year ended December 31, 1996.

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, 1996.

DEFERRED PROJECT COSTS
----------------------

The Partnership pays Acquisition and Advisory Fees to the General Partners
for acquisition and advisory services. These payments, as provided by the
Partnership Agreement, may not exceed 5% of the Limited Partners' capital
contributions. Acquisition and Advisory Fees paid as of December 31, 1996,
amounted to $1,390,055 and represented approximately 4.0% of the Limited
Partners' capital contributions received through such date. These fees are
allocated to specific properties as they are purchased.

DEFERRED OFFERING COSTS
-----------------------

Wells Capital, Inc. (the "Company"), the General Partner of Wells Partners,
L.P., pays all the offering expenses for the Partnership. The Company may
be reimbursed by the Partnership to the extent that such offering expenses
do not exceed 5% of total Limited Partners' capital contributions. As of
December 31, 1996, the Partnership had reimbursed the Company for
$1,750,000 in offering expenses, which amounted to 5% of Limited Partners'
capital contributions.

17

PART IV
-------

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
- --------------------------------------------------------------------------

(a) 1. Financial Statements
Information with respect to this item is contained on Pages F-2 to F-
17 of this Annual Report of Form 10-K.

(a) 2. Financial Statement Schedule III
Information with respect to this item begins on Page S-1 of this
Annual Report on Form 10-K

(a)3. The Exhibits filed in response to Item 601 of Regulation S-K are
listed on the Exhibit Index attached hereto.

(b) The Partnership filed the following two (2) Reports on Form 8-K during
the fourth quarter of 1996:

(i) Report on Form 8-K dated October 10, 1996, to report the
acquisition of the TCI Building located in Farmer's Branch, Texas
in the north Dallas, Texas metropolitan area by the Fund VIII -
fund IX Joint Venture; and

(ii) Report on Form 8-K dated December 13, 1996, to report
the acquisition of Knoxville Porperty by the Partnership.

(c) The Exhibits filed in response to Item 601 of Regulation S-K are
listed on the Exhibit Index attached hereto.

(d) See (a) 2 above.

18

SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized this 17h day of March, 1997

WELLS REAL ESTATE FUND IX, L.P.
(Registrant)

By: /s/ Leo F. Wells, III
------------------------
LEO F. WELLS, III
Individual General Partner and as President,
of Wells Capital, Inc., the General Partner
of Wells Partners, L.P.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following person on behalf of the registrant and in
the capacity as and on the date indicated.

Signature Title
- --------- -----

/s/ Leo F. Wells, III Individual General Partner, March 17, 1997
- ---------------------------- President and Sole Director
LEO F. WELLS, III of Wells Capital, Inc.

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRARS 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.

19

EXHIBIT INDEX
-------------

(Wells Real Estate Fund IX, 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.

EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION OF DOCUMENT PAGE NUMBER
- ------- ----------------------- -----------

*3(a) Amended and Restated Agreement of Limited Partnership N/A
of Wells Real Estate Fund IX, L.P. (Exhibit 3(a) to
Form S-11 Registration Statement of Wells Real Estate
Fund VIII, L.P. and Wells Real Estate Fund IX, L.P.,
File No. 33-83852)

*3(b) Certificate of Limited Partnership of Wells Real Estate N/A
Fund IX, L.P. (Exhibit 3(c) to Form S-11 Registration
Statement of Wells Real Estate Fund VIII, L.P. and
Wells Real Estate Fund IX, L.P., File No. 33-83852)

*10(a) Leasing and Tenant Coordinating Agreement between Wells N/A
Real Estate Fund IX, L.P. and Wells Management Company,
Inc. (Exhibit 10(d) to Form S-11 Registration Statement
of Wells Real Estate Fund VIII, L.P. and Wells Real
Estate Fund IX, L.P., File No. 33-83852)

*10(b) Management Agreement between Wells Real Estate Fund IX, N/A
L.P. and Wells Management Company, Inc. (Exhibit 10(e)
to Form S-11 Registration Statement of Wells Real
Estate Fund VIII, L.P. and Wells Real Estate Fund IX,
L.P., File No. 33-83852)

*10(c) Amended and Restated Custodial Agency Agreement between N/A
Wells Real Estate Fund IX, L.P. and NationsBank of
Georgia, N.A. (Exhibit 10(f) to Form S-11 Registration
Statement of Wells Real Estate Fund VIII, L.P. and
Wells Real Estate Fund IX, L.P., File No. 33-83852)

*10(d) Joint Venture Agreement of Fund VIII and Fund IX Associates N/A
dated June 10, 1996 (Exhibit 10(aa) to Post-Effective
Amendment No. 11 to Form S-11 Registration Statement
of Wells Real Estate Fund VIII, L.P. and Wells Real
Estate Fund IX, L.P., File No. 33-83852)

20

EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION OF DOCUMENT PAGE NUMBER
- ------- ----------------------- -----------

*10(e) Agreement for the Purchase and Sale of Real Property N/A
dated April 23, 1996, between American Family Mutual
Insurance Company and Wells Capital, Inc. (Exhibit
10(bb) to Post-Effective Amendment No. 11 to
Form S-11 Registration Statement of Wells Real
Estate Fund VIII, L.P. and Wells Real Estate Fund
IX, L.P., File No. 33-83852)

*10(f) Agreement to Lease dated June 18, 1996, between Fund N/A
VIII and IX Associates and Westel-Milwaukee, Inc.,
d/b/a Cellular One (Exhibit 10(cc) to Post-Effective
Amendment No. 11 to Form S-11 Registration Statement
of Wells Real Estate Fund VIII, L.P. and Wells Real
Estate Fund IX, L.P., File No. 33-83852)

*10(g) Development Agreement dated June 18, 1996, between Fund N/A
VIII and Fund IX Associates and ADEVCO Corporation
(Exhibit 10(dd) to Post-Effective Amendment No. 11
to Form S-11 Registration Statement of Wells Real
Estate Fund VIII, L.P. and Wells Real Estate Fund IX,
L.P., File No. 33-83852)

*10(h) Owner-Contractor Agreement dated June 18, 1996, with N/A
Kraemer Brothers, Inc. (Exhibit 10(ee) to Post-
Effective Amendment No. 11 to Form S-11 Registration
Statement of Wells Real Estate Fund VIII, L.P. and
Wells Real Estate Fund IX, L.P., File No. 33-83852)

*10(i) First Amendment to Joint Venture Agreement of Fund N/A
VIII and Fund IX Associates dated October 10, 1996
(Exhibit 10(ii) to Post-Effective Amendment No. 12
to Form S-11 Registration Statement of Wells Real
Estate Fund VIII, L.P. and Wells Real Estate Fund
IX, L.P., File No. 33-83852)

21

EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION OF DOCUMENT PAGE NUMBER
- ------- ----------------------- -----------

*10(j) Agreement for the Purchase and Sale of Property dated N/A
October 10, 1996, between TCI Valwood Limited
Partnership I and Fund VIII and Fund IX Associates
(Exhibit 10(ff) to Post-Effective Amendment No. 12
to Form S-11 Registration Statement of Wells Real
Estate Fund VIII, L.P. and Wells Real Estate Fund IX,
L.P., File No. 33-83852)

*10(k) Build to Suite Industrial Lease Agreement dated N/A
November 1, 1995, between Industrial Developments
International, Inc. and TCI Central, Inc., as amended
July 16, 1996 and August 29, 1996 (Exhibit 10(gg) to
Post-Effective Amendment No. 12 to Form S-11
Registration Statement of Wells Real Estate Fund
VIII, L.P. and Wells Real Estate Fund IX, L.P.,
File No. 33-83852)

*10(l) Assignment and Assumption of Lease dated October 10, N/A
1996, between TCI Valwood Limited Partnership I and
The Bank of New York, as Agent for Fund VIII and
Fund IX Associates (Exhibit 10(hh) to Post-
Effective Amendment No. 12 to Form S-11 Registration
Statement of Wells Real Estate Fund VIII, L.P. and
Wells Real Estate Fund IX, L.P., File No. 33-83852)

*10(m) Real Estate Option Agreement dated December 9, 1996, N/A
between The Development Corporation of Knox County and
Wells Real Estate Fund IX, L.P. (Exhibit 10(jj) to Post-
Effective Amendment No. 13 to Form S-11 Registration
Statement of Wells Real Estate Fund VIII, L.P. and
Wells Real Estate Fund IX, L.P., File No. 33-83852)

*10(n) Lease Agreement dated December 10, 1996, between Wells N/A
Real Estate Fund IX, L.P. and ABB Flakt, Inc. (Exhibit
10(kk) to Post-Effective Amendment No. 13 to Form
S-11 Registration Statement of Wells Real Estate
Fund VIII, L.P. and Wells Real Estate Fund IX, L.P.,
File No. 33-83852)

22

EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION OF DOCUMENT PAGE NUMBER
- ------- ----------------------- -----------

*10(o) Development Agreement dated December 10, 1996, between N/A
Wells Real Estate Fund IX, L.P. and ADEVCO Corporation
(Exhibit 10(ll) to Post-Effective Amendment No. 13
to Form S-11 Registration Statement of Wells Real
Estate Fund VIII, L.P. and Wells Real Estate Fund IX,
L.P., File No. 33-83852)

*10(p) Owner-Contractor Agreement dated November 1, 1996, N/A
between Wells Real Estate Fund IX, L.P. and Integra
Construction, Inc. (Exhibit 10(mm) to Post-Effective
Amendment No. 13 to Form S-11 Registration
Statement of Wells Real Estate Fund VIII, L.P. and
Wells Real Estate Fund IX, L.P., File No. 33-83852)

ATL1-192945

23

INDEX TO FINANCIAL STATEMENTS
-----------------------------

FINANCIAL STATEMENTS PAGE
- -------------------- ----

Independent Auditors' Report F-2

Balance Sheets as of December 31, 1996 and 1995 F-3

Statement of Income for the Year Ended December 31, 1996 F-4

Statement of Partners' Capital for the Year Ended
December 31, 1996 F-5

Statement of Cash Flows for the Year Ended December 31,
1996 F-6

Notes to Financial Statements for December 31, 1996 and
1995 F-7

F-1

ARTHUR ANDERSEN LLP

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
Wells Real Estate Fund IX, L.P.:

We have audited the accompanying balance sheets of WELLS REAL ESTATE FUND IX,
L.P. (a Georgia public limited partnership) as of December 31, 1996 and 1995 and
the related statements of income, partners' capital, and cash flows for the year
ended December 31, 1996. 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 generally accepted auditing
standards. 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 presents fairly, in
all material respects, the financial position of Wells Real Estate Fund IX, L.P.
as of December 31, 1996 and 1995 and the results of its operations and its cash
flows for the year ended December 31, 1996 in conformity with generally accepted
accounting principles.

/s/ Arthur Andersen LLP

Atlanta, Georgia
January 10, 1997

F-2

WELLS REAL ESTATE FUND IX, L.P.

(A GEORGIA PUBLIC LIMITED PARTNERSHIP)

BALANCE SHEETS

DECEMBER 31, 1996 AND 1995

ASSETS

1996 1995
----------- ------------

NONOPERATING REAL ESTATE ASSETS, AT COST:
Land $ 607,930 $ 0
Construction in progress 482,959 0
----------- ------------
Total nonoperating real estate assets 1,090,889 0

INVESTMENT IN JOINT VENTURE 4,929,728 0

CASH AND CASH EQUIVALENTS 23,557,985 600

DUE FROM AFFILIATES 46,197 0

DEFERRED PROJECT COSTS 1,161,078 0

DEFERRED OFFERING COSTS 0 142,229

ORGANIZATIONAL COSTS, LESS ACCUMULATED
AMORTIZATION OF $6,250 IN 1996 25,000 0

PREPAID EXPENSES AND OTHER ASSETS 103,000 0
----------- ------------
Total assets $30,913,877 $ 142,829
=========== ============

LIABILITIES AND PARTNERS' CAPITAL

LIABILITIES:
Accounts payable and accrued expenses $ 393,001 $ 0
Due to affiliate 422,996 142,229
Partnership distributions payable 178,771 0
Sales commissions payable 166,701 0
----------- ------------
Total liabilities 1,161,469 142,229
----------- ------------
COMMITMENTS AND CONTINGENCIES (NOTE 9)

PARTNERS' CAPITAL:
General partners 206 500
Limited partners:
Class A 24,911,231 0
Class B 4,840,871 0
Original limited partner 100 100
----------- ------------
Total partners' capital 29,752,408 600
----------- ------------
Total liabilities and partners' capital $30,913,877 $ 142,829
=========== ============

The accompanying notes are an integral part of these balance sheets.

F-3

WELLS REAL ESTATE FUND IX, L.P.

(A GEORGIA PUBLIC LIMITED PARTNERSHIP)

STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 1996

REVENUES:
Equity in income of joint venture $ 23,007
Interest income 383,884
-----------
406,891
-----------
EXPENSES:
Partnership administration 90,469
Legal and accounting 7,008
Amortization of organization costs 6,250
Computer costs 4,408
-----------
108,135
-----------
NET INCOME $298,756
-----------

NET LOSS ALLOCATED TO GENERAL PARTNERS $ (294)
===========
NET INCOME ALLOCATED TO CLASS A LIMITED PARTNERS $330,270
===========

NET LOSS ALLOCATED TO CLASS B LIMITED PARTNERS $(31,220)
===========

NET INCOME PER WEIGHTED AVERAGE CLASS A LIMITED PARTNER UNIT $ 0.28
===========
NET LOSS PER WEIGHTED AVERAGE CLASS B LIMITED PARTNER UNIT $ (0.11)
===========
CASH DISTRIBUTION PER WEIGHTED AVERAGE CLASS A LIMITED PARTNER UNIT $ 0.28
===========

The accompanying notes are an integral part of this statement.

F-4

WELLS REAL ESTATE FUND IX, L.P.

(A GEORGIA PUBLIC LIMITED PARTNERSHIP)

STATEMENT OF PARTNERS' CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 1996

LIMITED PARTNERS TOTAL
------------------------------------------------------------------
CLASS A CLASS B GENERAL PARTNERS'
--------------------------- -------------------------
ORIGINAL UNITS AMOUNT UNITS AMOUNT PARTNERS CAPITAL
---------- ---------- ----------- ---------- ----------- ---------- ------------

BALANCE, DECEMBER 31, 1995 $100 0 $ 0 0 $ 0 $ 500 $ 600
Net income (loss) 0 0 330,270 0 (31,220) (294) 298,756
Limited partner contributions 0 2,935,931 29,359,306 564,069 5,640,694 0 35,000,000
Partnership distributions 0 0 (328,196) 0 0 0 (328,196)
Sales commissions and
discounts 0 0 (2,935,927) 0 (564,073) 0 (3,500,000)
Other offering expenses 0 0 (1,441,752) 0 (277,000) 0 (1,718,752)
Class A conversion elections 0 (8,488) (72,470) 8,488 72,470 0 0
--------- ----------- ------------- ---------- ------------ ---------- -------------
BALANCE, DECEMBER 31, 1996 $100 2,927,443 $24,911,231 572,557 $4,840,871 $ 206 $29,752,408
========= =========== ============= ========== ============ ========== =============

The accompanying notes are an integral part of this statement.

F-5

WELLS REAL ESTATE FUND IX, L.P.

(A GEORGIA PUBLIC LIMITED PARTNERSHIP)

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 1996

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 298,756
-----------
Adjustments to reconcile net income to
net cash provided by operating activities:
Equity in income of joint venture (23,007)
Distributions to partners from accumulated earnings (149,425)
Amortization of organization costs 6,250
Changes in assets and liabilities:
Prepaid expenses and other assets (103,000)
Organization costs (31,250)
Accounts payable and accrued expenses 3,401
-----------
Total adjustments (297,031)
-----------
Net cash provided by operating activities 1,725
-----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in joint venture (4,748,974)
Deferred project costs paid (1,118,789)
Increase in construction payable 389,600
Investment in real estate (1,065,856)
-----------
Net cash used in investing activities (6,544,019)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Limited partners' contributions 35,000,000
Sales commissions and discounts paid (3,333,299)
Offering costs paid (1,567,022)
-----------
Net cash provided by financing activities 30,099,679
-----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 23,557,385

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 600
-----------
CASH AND CASH EQUIVALENTS, END OF YEAR $23,557,985
===========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES:
Deferred project costs applied to real estate and joint
venture property $ 228,977
===========

The accompanying notes are an integral part of this statement.

F-6

WELLS REAL ESTATE FUND IX, L.P.

(A GEORGIA PUBLIC LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1996 AND 1995

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BUSINESS

Wells Real Estate Fund IX, L.P. (the "Partnership") is a public limited
partnership organized on August 15, 1994, under the laws of the state of
Georgia. The general partners are Leo F. Wells, III and Wells Partners,
L.P. ("Wells Partners"), a Georgia nonpublic limited partnership. The
Partnership began offering units for sale in the beginning of 1996. The
Partnership has one class of limited partnership units. Upon subscription
for units, each limited partner must elect whether to have their units
treated as Class A units (entitled to allocation of substantially all of
the Partnership's net income without allocation of any deductions for
depreciation, amortization, cost recovery, or net losses) or Class B units
(entitled to a larger share of deductions for depreciation, amortization,
cost recovery and net loss, and a higher percentage return on appreciation
(if any) of real estate investments, but no current cash distributions).
Thereafter, limited partners shall have the right to change their prior
election to have some or all of their units treated as Class A units or
Class B 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, and (c) remove a general
partner. A 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 class.

The Partnership was formed to acquire and operate commercial real
properties, including properties which are either to be developed,
currently under development or construction, newly constructed, or which
have operating histories. The Partnership directly owns a parcel of land
under development in Knoxville, Tennessee. In addition, the Partnership
owns an interest in two properties through a joint venture between the
Partnership and Wells Real Estate Fund VIII, L.P.("Fund VIII"), as follows:
(i) an office building under construction in Madison, Wisconsin and (ii) an
office building in Farmers Branch, Texas (the "Dallas property") (Note 5).

USE OF ESTIMATES AND FACTORS AFFECTING THE PARTNERSHIP

The preparation of 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

F-7

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 the real estate assets are based on management's
current intent to hold the real estate assets as long-term investments. The
success of the Partnership's future operations and the ability to realize
the investment in its assets will be dependent upon the Partnership's
ability to maintain an appropriate level of rental rates, occupancy, and
operating expenses in future years. Management believes that the steps it
is taking will enable the Partnership to realize its investment in its
assets.

INCOME TAXES

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

DISTRIBUTIONS OF NET CASH FROM OPERATIONS

Cash available for distribution, as defined by the Partnership agreement,
is distributed to the limited partners on a quarterly basis. In accordance
with the partnership agreement, such distributions first are paid to
limited partners holding Class A units until they have received a 10%
annual 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 thus far distributed. Any remaining cash available for
distribution is split between the limited partners holding Class A units
and the general partners on a basis of 90% and 10%, respectively. No such
distributions will be made to the limited partners holding Class B units.

DISTRIBUTION OF SALES PROCEEDS

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

. To limited partners holding units, which at any time have been
treated as Class B units, until they receive an amount necessary
to equal the net cash available for distribution received by the
limited partners holding Class A units

. To limited partners on a per unit basis until each limited
partner has received 100% of their net capital contribution, as
defined

. To all limited partners on a per unit basis until they receive a
cumulative 10% per annum return on their net capital
contribution, as defined

. To limited partners on a per unit basis until they receive an
amount equal to their preferential limited partner return
(defined as the sum of a 10% per annum cumulative return on net
capital contributions for all periods during which the units were
treated as Class A units and a 15% per annum cumulative return on
net capital contributions for all periods during which the units
were treated as Class B units)

F-8

. To all general partners until they have received 100% of their
capital contributions; in the event that limited partners have
received aggregate cash distributions from the Partnership over
the life of their investment in excess of a return of their net
capital contributions plus their preferential partner return,
then the general partners shall receive an additional sum equal
to 25% of such excess

. Thereafter 80% to the limited partners on a per unit basis and
20% to the general partners

ALLOCATION OF NET INCOME, NET LOSS, AND GAIN ON SALE

Net income is defined as net income recognized by the Partnership,
excluding deductions for depreciation, amortization, and cost recovery.
Net income, as defined, of the Partnership will be allocated each year in
the same proportions that net cash from operations is distributed to the
partners. To the extent the Partnership's net income in any year exceeds
net cash from operations, it will be allocated 99% to the limited partners
holding Class A units and 1% to the general partners.

Net loss, depreciation, amortization, and cost recovery deductions for each
fiscal year will be allocated as follows: (a) 99% to the limited partners
holding Class B units and 1% to the general partners until their capital
accounts are reduced to zero; (b) then to any partner having a positive
balance in his capital account in an amount not to exceed such positive
balance; and (c) thereafter to the general partners.

Gain on the sale or exchange of the Partnership's properties will be
allocated generally in the same manner that the net proceeds from such sale
are distributed to partners after the following allocations are made, if
applicable: (i) allocations made pursuant to the qualified income offset
provisions of the Partnership agreement; (ii) allocations to partners
having negative capital accounts until all negative capital accounts have
been restored to zero; and (iii) allocations to limited partners holding
Class B units in amounts equal to the deductions for depreciation,
amortization, and cost recovery previously allocated to them with respect
to the specific Partnership property sold, but not in excess of the amount
of gain on sale recognized by the Partnership with respect to the sale of
such property.

REAL ESTATE ASSETS

Real estate assets held by the Partnership directly or through its
investment in 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 ordinary repairs and
maintenance are expensed as incurred.

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
of," which is effective for fiscal years beginning after December 15, 1995.
SFAS No. 121 establishes standards for determining when impairment losses
on long-lived assets have occurred and how impairment losses should be
measured.

F-9

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 that
indicate the carrying amount of real estate assets may not be recoverable,
management assesses the recoverability of real estate assets under SFAS No.
121 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 joint ventures as of December 31, 1996.

Depreciation for buildings and land 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 joint venture are classified
as operating leases, and the related rental income is recognized on a
straight-line basis over the terms of the respective leases.

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.

INVESTMENT IN JOINT VENTURE

The Partnership does not have control over the operations of the joint
venture; however, it does exercise significant influence. Accordingly, the
Partnership's investment in joint venture is recorded using the equity
method of accounting.

The joint venture follows the same significant accounting policies as the
Partnership. Cash available for distribution and allocations of profit and
loss to the Partnership by the joint venture are made in accordance with
the terms of the joint venture agreement. Generally, these items are
allocated in proportion to the partners' respective ownership interests.
Cash is paid from the joint venture to the Partnership quarterly.

CASH AND CASH EQUIVALENTS

For the purposes of the statements of cash flows, the Partnership considers
all highly liquid instruments 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.

PER UNIT DATA

Net income (loss) per unit with respect to the Partnership for the year
ended December 31, 1996 is computed based on the weighted average number of
units outstanding during the period.

F-10

2. DEFERRED PROJECT COSTS

The Partnership paid a percentage of limited partner contributions to Wells
Capital, Inc. (the "Company"), which is the general partner of Wells
Partners, for acquisition and advisory services. These payments, as
stipulated by the partnership agreement, can be up to 5% of the limited
partner contributions, subject to certain overall limitations contained in
the partnership agreement. Fees paid or accrued through December 31, 1996
were $1,390,055 and ultimately amounted to 4% of the limited partners'
contributions received. As of December 31, 1996, $271,266 of fees have not
been paid and are included in due to affiliates. These fees are allocated
to specific properties as they are purchased or developed and are included
in capitalized assets of the Partnership or the joint venture. Deferred
project costs at December 31, 1996 represent fees not yet applied to
properties.

3. DEFERRED OFFERING COSTS

The Company paid all the offering expenses for the Partnership and was
reimbursed as the partnership agreement allowed. Pursuant to the terms of
the partnership agreement, the Partnership can only reimburse the Company
for offering and organizational expenses not exceeding 5% of total limited
partner contributions.

As of December 31, 1996, the Company paid organization and offering
expenses on behalf of the Partnership in the aggregate amount of
$1,927,333, of which the Company was reimbursed $1,750,000, which did not
exceed the 5% limitation. Wells Investment Securities, Inc., a related
party, agreed to absorb $104,037 of the excess offering and organization
expenses. The Company absorbed the remaining $73,296 of offering and
organization expenses which exceeded the 5% limitation. The liability of
$151,730 and $142,229 for the unpaid balance of the aforementioned expenses
was included in due to affiliate at December 31, 1996 and 1995,
respectively.

4. RELATED-PARTY TRANSACTIONS

Due from affiliate at December 31, 1996 represents the Partnership's share
of cash to be distributed from its investment in joint venture for the
fourth quarter of 1996.

The Partnership entered into a property management agreement with Wells
Management Company, Inc. ("Wells Management"), an affiliate of the general
partners. In consideration for supervising the management of the
Partnership's properties, the Partnership will generally pay Wells
Management management and leasing fees equal to: (a) 3% of the gross
revenues for management and 3% of the gross revenues for leasing (aggregate
maximum of 6%) plus a separate fee for the on-time initial lease-up of
newly constructed properties, and (b) in the case of commercial properties
which are leased on a long-term net basis (ten or more years), 1% of the
gross revenues except for initial leasing fees equal to 3% of the gross
revenues over the first five years of the lease term.

The Partnership incurred management and leasing fees and lease acquisition
costs, at the joint venture level, of $1,947 for the year ended December
31, 1996, which were paid to Wells Management.

F-11

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. In the opinion of management, such allocation is a reasonable
estimation of such expenses.

The general partners are also general partners in other Wells Real Estate
funds. As such, there may exist conflicts of interest where the general
partners while serving in the capacity as general partners for other Wells
Real Estate funds may be in competition with the Partnership for tenants in
similar geographic markets.

5. INVESTMENT IN JOINT VENTURE

The Partnership's investment and percentage ownership in the joint venture
at December 31, 1996 is summarized as follows:

AMOUNT PERCENT
---------- ---------

Fund VIII and IX Associates $4,929,728 50%
=========== =========

The following is a roll forward of the Partnership's investment in the
joint venture for the year ended December 31, 1996:

Investment in joint venture, beginning of period $ 0
Equity in income of joint venture 23,007
Contributions to joint venture 4,952,919
Distributions from joint venture (46,198)
----------
Investment in joint venture, end of period $4,929,728
==========

FUND VIII AND IX ASSOCIATES

On June 10, 1996, the Partnership entered into a joint venture with Fund
VIII. The joint venture, Fund VIII and IX Associates, was formed to
acquire, develop, operate, and sell real properties. On June 19, 1996, the
joint venture purchased a 7.09-acre parcel of land in Madison, Wisconsin.
The majority of the parcel is currently under development. On October 10,
1996, the joint venture purchased a 40,000-square-foot, one-story office
building, known as the Dallas property, in Farmers Branch, Texas.

F-12

Following are the financial statements for Fund VIII and IX Associates:

FUND VIII AND IX ASSOCIATES
(A GEORGIA JOINT VENTURE)
BALANCE SHEET
DECEMBER 31, 1996

Assets

Nonoperating real estate assets, at cost:
Land $ 896,698
Construction in progress 4,340,033
-----------
Total nonoperating real estate assets 5,236,731
-----------
Operating real estate assets, at cost:
Land 677,914
Building and improvements, less accumulated depreciation of
$50,444 in 1996 3,938,508
-----------
Total operating real estate assets 4,616,422
-----------
Total real estate assets 9,853,153
Cash and cash equivalents 675,353
Accounts receivable 7,489
-----------
Total assets $10,535,995
===========

Liabilities and Partners' Capital

Liabilities:
Accounts payable $ 608,622
Partnership distributions payable 92,163
-----------
Total liabilities 700,785
-----------
Partners' capital:
Wells Real Estate Fund VIII 4,905,482
Wells Real Estate Fund IX 4,929,728
-----------
Total partners' capital 9,835,210
-----------
Total liabilities and partners' capital $10,535,995
===========

F-13

FUND VIII AND IX ASSOCIATES
(A GEORGIA JOINT VENTURE)
STATEMENT OF INCOME
FOR THE PERIOD FROM INCEPTION (JUNE 10, 1996)
TO DECEMBER 31, 1996

Revenues:
Rental income $101,277
--------
Expenses:
Depreciation 50,444
Management and leasing fees 3,884
Property administration 1,050
--------
55,378
--------
Net income $ 45,899
========

Net income allocated to Wells Real Estate Fund VIII $ 22,892
========

Net income allocated to Wells Real Estate Fund IX $ 23,007
========

FUND VIII AND IX ASSOCIATES
(A GEORGIA JOINT VENTURE)
STATEMENT OF PARTNERS' CAPITAL
FOR THE PERIOD FROM INCEPTION (JUNE 10, 1996)
TO DECEMBER 31, 1996

WELLS REAL WELLS REAL TOTAL
ESTATE ESTATE PARTNERS'
FUND VIII FUND IX CAPITAL
---------- ---------- ----------

Balance, June 10, 1996 $ 0 $ 0 $ 0
Net income 22,892 23,007 45,899
Partnership contributions 4,928,555 4,952,919 9,881,474
Partnership distributions (45,965) (46,198) (92,163)
---------- ---------- ----------
Balance, December 31, 1996 $4,905,482 $4,929,728 $9,835,210
========== ========== ==========

F-14

FUND VIII AND IX ASSOCIATES
(A GEORGIA JOINT VENTURE)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION (JUNE 10, 1996)
TO DECEMBER 31, 1996

Cash flows from operating activities:
Net income $ 45,899
-----------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 50,444
Changes in assets and liabilities:
Accounts receivable (7,489)
Accounts payable 520
-----------
Total adjustments 43,475
-----------
Net cash provided by operating activities 89,374
-----------
Cash flows from investing activities:
Increase in construction payables 608,102

Investment in real estate (9,489,739)
-----------
Net cash used for investing activities (8,881,637)
-----------
Cash flows from financing activities:
Contributions from joint venture partners 9,467,616
-----------
Net increase in cash and cash equivalents 675,353
Cash and cash equivalents, beginning of period 0
-----------
Cash and cash equivalents, end of period $ 675,353
===========

Supplemental disclosure of noncash activities:
Deferred project costs applied by partners $ 413,858
===========

6. INCOME TAX BASIS INCOME AND PARTNERS' CAPITAL

The Partnership's tax basis income for the year ended December 31, 1996
were calculated as follows:

Financial statement net income $ 298,756
Increase in net income resulting from:
Depreciation expense for financial reporting purposes in
excess of amounts for income tax purposes 7,891
Rental income accrued for financial reporting purposes in
excess of amounts for income tax purposes (2,095)
-----------
Income tax basis net income $ 304,552
===========

F-15

The Partnership's income tax basis partners' capital at December 31, 1996
was computed as follows:

Financial statement partners' capital $29,752,408
Depreciation expense for financial reporting purposes in
excess of amounts for income tax purposes 7,891
Capitalization of syndication costs for income tax purposes, which are
accounted for as cost of capital for financial reporting purposes 5,218,752
Rental income accrued for financial reporting purposes in excess of amounts
for income tax purposes (2,095)
Partnership's distributions payable income tax basis partners' capital 178,771
Income tax basis partners' capital $35,155,727

7. RENTAL INCOME

The future minimum rental income due from the Partnership's respective
ownership interest in the joint venture under noncancelable operating
leases at December 31, 1996 is as follows:

Year ending December 31:

1997 $ 467,776
1998 647,931
1999 647,931
2000 647,931
2001 650,939
Thereafter 4,832,182
----------
$7,894,690
==========

One significant tenant contributed 100% of revenues for the year ended
December 31, 1996. In addition, two significant tenants will contribute
approximately 58% and 42% of future minimum rental income.

F-16

The future minimum rental income due Fund VIII and IX Associates under
noncancelable operating leases, including those lease signed at properties
under construction, at December 31, 1996 is as follows:

Year ending December 31:

1997 $ 933,126
1998 1,292,501
1999 1,292,501
2000 1,292,501
2001 1,298,501
Thereafter 9,639,301
-----------
$15,748,431
===========

One significant tenant contributed 100% of rental income for the year ended
December 31, 1996. In addition, two significant tenants will contribute
approximately 58% and 42% of future minimum rental income.

8. QUARTERLY RESULTS (UNAUDITED)

Presented below is a summary of the unaudited quarterly financial
information for the year ended December 31, 1996:

QUARTER ENDED
---------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
---------- ---------- -------------- --------------

Revenues $11,172 $69,153 $135,635 $190,931
Net (loss) income (981) 38,222 112,038 149,477
Net (loss) income allocated to general partners (10) 10 0 (294)
Net income allocated to Class A limited
partners 0 37,241 112,038 180,991
Net (loss) income allocated to Class B limited
partners (971) 971 0 (31,220)
Net income per weighted average Class A
limited partner unit outstanding $ 0.00 $ 0.07 $ 0.12 $ 0.09
Net (loss) income per weighted average
Class B limited partner unit outstanding (0.01) 0.01 0.00 (0.11)
Cash distribution per weighted average Class A
limited partner unit outstanding 0.00 0.00 0.19 0.09

F-17

9. COMMITMENTS AND CONTINGENCIES

Management, after consultation with legal counsel, is not aware of any
significant litigation or claims against the Partnership. In the normal
course of business, the Partnership may become subject to such litigation
or claims.

F-18

WELLS REAL ESTATE FUND IX, L.P.

(A GEORGIA PUBLIC LIMITED PARTNERSHIP)

SCHEDULE III--REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION

DECEMBER 31, 1996

INITIAL COST COST OF
--------------------------
BUILDINGS AND CAPITALIZED
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS IMPROVEMENTS
- -------------------------- -------------- ---------- -------------- --------------

KNOXVILLE PROPERTY (A) None $ 582,897 $0 $ 507,992

TCI-DALLAS PROPERTY (B) None 650,000 0 4,016,866

CELLULAR ONE PROPERTY (C) None 833,942 0 4,402,789
---------- -------------- --------------
Total $2,066,839 $0 $8,927,647
========== ============== ==============

GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, 1996
------------------------------------------------------------
BUILDINGS AND CONSTRUCTION
DESCRIPTION LAND IMPROVEMENTS IN PROGRESS TOTAL
- -------------------------- ---------- --------------- -------------- ------------

KNOXVILLE PROPERTY (A) $ 607,930 $ 0 $ 482,959 $ 1,090,889

TCI-DALLAS PROPERTY (B) 677,914 3,988,952 0 4,666,866

CELLULAR ONE PROPERTY (C) 896,698 0 4,340,033 5,236,731
---------- --------------- -------------- ------------
Total $2,182,542 $3,988,952 $4,822,992 $10,994,486
========== =============== ============== ============

LIFE ON WHICH
ACCUMULATED DATE OF DATE DEPRECIATION IS
DESCRIPTION DEPRECIATION CONSTRUCTION ACQUIRED COMPUTED (D)
- -------------------------- -------------- -------------- ---------- -----------------

KNOXVILLE PROPERTY (A) $ 0 12/10/96 20 to 25 years

TCI-DALLAS PROPERTY (B) 50,444 1996 10/10/96 20 to 25 years

CELLULAR ONE PROPERTY (C) 0 06/19/96 20 to 25 years
--------------
Total $ 50,444
==============

(a) The Knoxville Property is a 5.622-acre tract of real property under
construction in Knoxville, Tennessee. It is owned entirely by the
Partnership.

(b) The Dallas Property consists of a one-story office building located in
Farmers Branch, Texas. It is owned by Fund VIII and IX Associates. The
Partnership owned a 50% interest in Fund VIII and IX Associates at December
31, 1996.

(c) The Cellular One Property is a 7.09-acre tract of real property under
construction in Madison, Wisconsin. It is owned by Fund VIII and IX
Associates. The Partnership owned a 50% interest in Fund VIII and IX
Associates at December 31, 1996.

(d) Depreciation lives used for buildings are 40 years through September 30,
1995, changed to 25 years thereafter. Depreciation lives used for land
improvements are 20 years.

S-1

WELLS REAL ESTATE FUND IX, L.P.

(A GEORGIA PUBLIC LIMITED PARTNERSHIP)

SCHEDULE III--REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION

DECEMBER 31, 1996

ACCUMULATED
COST DEPRECIATION
----------- --------------

BALANCE AT DECEMBER 31, 1995 $ 0 $ 0

1996 additions 10,994,486 50,444
----------- --------------
BALANCE AT DECEMBER 31, 1996 $10,994,486 $50,444
=========== ==============

S-2