WELLS REAL ESTATE FUND XIII L P - FORM 10-K

WELLS REAL ESTATE FUND XIII L P - FORM 10-K - March 31, 2017

Attached files

Attached files

WELLS REAL ESTATE FUND XIII L P Reports

file	filename
EX-32.1 - EXHIBIT 32.1 - WELLS REAL ESTATE FUND XIII L P	fund13q42016ex321.htm
EX-31.2 - EXHIBIT 31.2 - WELLS REAL ESTATE FUND XIII L P	fund13q42016ex312.htm
EX-31.1 - EXHIBIT 31.1 - WELLS REAL ESTATE FUND XIII L P	fund13q42016ex311.htm
EX-10.29 - EXHIBIT 10.29 - WELLS REAL ESTATE FUND XIII L P	fund13q42016ex1029.htm

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UNITED STATES

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
	For the fiscal year ended December 31, 2016

or

o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from _____________ to _____________



	Commission file number 000-49633

WELLS REAL ESTATE FUND XIII, L.P.

(Exact name of registrant as specified in its charter)

_________________________________



Georgia		58-2438244
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

5445 Triangle Pkwy., Suite 320, Peachtree Corners, Georgia		30092-2584
(Address of principal executive offices)		(Zip Code)



Registrant's telephone number including area code		(770) 243-4600

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



Title of each class		Name of each exchange on which registered
None		None



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

CASH PREFERRED UNITS		TAX PREFERRED UNITS
(Title of class)		(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o No x

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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer x (Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The registrant conducted its offering pursuant to a Form S-11, which commenced on March 29, 2001 and terminated on March 28, 2003. Units in the offering were sold at $10 per limited partnership unit, with discounts available for certain categories of purchasers. There is no established market for the registrant's limited partnership units. The number of Cash Preferred Units and Tax Preferred Units held by non-affiliates as of June 30, 2016 was approximately 3,213,008 and 559,040, respectively.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Form 10-K of Wells Real Estate Fund XIII, L.P. (the "Partnership" or the "Registrant") other than historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such statements include, in particular, statements about our plans, strategies, and prospects and are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate","seek," "estimate," "believe," "continue," or other similar words. Specifically, we consider, among others, statements concerning future operating results and cash flows, our ability to meet future obligations, and the amount and timing of any future distributions to limited partners to be forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the Securities and Exchange Commission ("SEC"). We make no representations or warranties (express or implied) about the accuracy of any such forward-looking statements contained in this Form 10-K, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Any such forward-looking statements are subject to unknown risks, uncertainties, and other factors and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive, and market conditions, all of which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual results, our ability to meet such forward-looking statements, including our ability to generate positive cash flow from operations, provide distributions to partners, and maintain the value of our real estate properties, may be significantly hindered. Contained in Item 1A are some of the risks and uncertainties, although not all risks and uncertainties, which could cause actual results to differ materially from those presented in our forward-looking statements.

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PART I


ITEM 1.	BUSINESS.

General

Wells Real Estate Fund XIII, L.P. (the "Partnership," "we," "our" and "us") is a Georgia public limited partnership with Leo F. Wells, III and Wells Capital, Inc. ("Wells Capital"), a Georgia corporation, serving as its general partners (collectively, the "General Partners"). Wells Capital is a wholly owned subsidiary of Wells Real Estate Funds, Inc. ("WREF"). Leo F. Wells, III is the president and sole director of Wells Capital and the sole director and sole owner of WREF. The Partnership was formed on September 15, 1998, for the purpose of acquiring, developing, owning, operating, improving, leasing, and managing income-producing commercial properties for investment purposes. Upon subscription for units, limited partners elected to have their units treated as Cash Preferred Units or Tax Preferred Units. Thereafter, limited partners have the right to change their prior elections to have some or all of their units treated as Cash Preferred Units or Tax Preferred Units one time during each quarterly accounting period ("conversion elections"). Limited partners may vote to, among other things: (a) amend the partnership agreement, subject to certain limitations; (b) change our business purpose or investment objectives of the Partnership; (c) add or remove a general partner; (d) elect a new general partner; (e) dissolve the Partnership; (f) authorize a merger or a consolidation of the Partnership; and (g) approve a sale involving all or substantially all of our assets, subject to certain limitations. 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 which class of unit is selected.

On March 29, 2001, we commenced an offering of up to $45,000,000 of Cash Preferred or Tax Preferred limited partnership units ($10.00 per unit) pursuant to a Registration Statement filed on Form S-11 under the Securities Act of 1933. The offering was terminated on March 28, 2003, at which time we had sold approximately 3,023,371 Cash Preferred Units and 748,678 Tax Preferred Units, representing total limited partner capital contributions of $37,720,487.

As of February 28, 2017, we owned a partial interest in one property located in Englewood, Colorado encompassing approximately 149,000 square feet. See Item 2, "Properties" for a more detailed description of the properties we owned or own an interest in through joint ventures during the periods presented.

Operating Phases and Objectives

The Partnership typically operates in the following five life-cycle phases and, during which, typically focuses on the following key operating objectives. The duration of each phase is dependent upon various economic, industry, market, and other internal/external factors. Some overlap naturally exists in the transition from one phase to the next.


•	Fundraising phase

The period during which we are raising capital through the sale and issuance of limited partner units to the public;


•	Investing phase

The period during which we invest the capital raised during the fundraising phase, less up-front fees, into the acquisition of real estate assets;


•	Holding phase

The period during which we own and operate our real estate assets during the initial lease terms of the tenants;


•	Positioning-for-sale phase

The period during which the leases in place at the time of acquisition expire and, thus, we expend time, effort, and funds to re-lease such space to existing and/or new tenants. Following the holding phase, we continue to own and operate the real estate assets, evaluate various options for disposition, and market the real estate assets for sale; and


•	Disposition-and-liquidation phase

The period during which we sell our real estate investments, distribute net sale proceeds to the partners, liquidate, and terminate the Partnership.

We are currently in the positioning-for-sale phase of our life cycle. While our focus at this time involves leasing and marketing efforts at our remaining property that we believe will ultimately result in the best disposition pricing of our remaining asset for our limited partners, we will evaluate offers to sell our remaining property on an as-is basis.

Employees

We have no direct employees. The employees of Wells Capital and Wells Management Company, Inc. ("Wells Management"), an affiliate of the General Partners, perform a full range of real estate and administrative services for us, including leasing and property

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management, accounting, asset management, and investor relations. See Item 13, "Certain Relationships and Related Transactions," for a summary of the fees paid to the General Partners or their affiliates during the years ended December 31, 2016, 2015, and 2014.

Insurance

Wells Management carries comprehensive liability and extended coverage with respect to the remaining property we own through our investment in the joint venture described in Item 2. In the opinion of management, our property is adequately insured.

Competition

We will experience competition for tenants from owners and managers of competing projects that may include the General Partners or their affiliates. As a result, in connection with negotiating leases, we may offer rental concessions, reduced charges for tenant improvements, and other inducements, all of which may have an adverse impact on results of operations. We are also in competition with sellers of similar properties to locate suitable purchasers for our remaining property.

Operational Dependency

We have engaged Wells Capital and Wells Management to provide certain essential services, including supervision of the management and leasing of our remaining property, asset acquisition and disposition services, as well as other administrative responsibilities, including accounting services and investor communications and relations. These agreements are terminable by either party upon 60 days' written notice. As a result of these relationships, our operations are dependent upon Wells Capital and Wells Management.

Wells Capital and Wells Management are owned and controlled by WREF. The operations of Wells Capital, Wells Management, and their affiliates represent substantially all of the business of WREF. Accordingly, we focus on the financial condition of WREF when assessing the financial condition of Wells Capital and Wells Management. In the event that WREF were to become unable to meet its obligations as they become due, we might be required to find alternative service providers. Beginning in 2013, WREF began winding down its operations and, as a result, its workforce has been reduced. As of December 31, 2016, we have no reason to believe that WREF does not have access to adequate liquidity and capital resources, including cash on hand, other investments, and borrowing capacity, necessary to meet its current and future obligations as they become due.

Economic Dependency

We are also dependent upon the ability of our current tenants to pay their contractual rent amounts as they become due. The inability of a tenant to pay future rental amounts would be likely to have a negative impact on our results of operations. Situations preventing the tenants from paying contractual rents could result in a material adverse impact on our results of operations. See Item 2, "Properties" for further information.

Proxy to Liquidate

Under Section 20.2 of the partnership agreement, limited partners holding 10% or more of the outstanding units have the right to provide a written request to the General Partners directing the General Partners to formally proxy the limited partners to determine whether the assets of the Partnership should be liquidated.

Website Address

Access to copies of each of our filings with the SEC is available, free of charge, on the SEC's website, located at https://www.sec.gov. We maintain an Internet website, located at http://www.wellsref.com. Reference to our website does not constitute incorporation by reference of the information contained on the site and should not be considered part of this document.


ITEM 1A.	RISK FACTORS.

Risk Related to Current Economic Conditions

Disruptions in the financial markets and deteriorating economic conditions could adversely impact our ability to implement our investment strategy and achieve our investment objectives.

United States and global financial markets experienced extreme volatility and disruption in recent years. There was widespread tightening in overall credit markets, devaluation of the assets underlying certain financial contracts and increased borrowing by governmental entities. The recent turmoil in the capital markets resulted in constrained equity and debt capital available for

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investment in the real estate market, resulting in fewer buyers seeking to acquire real properties, increases in capitalization rates and lower property values. Recently, capital has been more available and the overall economy has improved. However, the failure of a sustained economic recovery or future disruptions in the financial markets and deteriorating economic conditions could impact the value of our investments in our remaining property. In addition, if potential purchasers of real properties have difficulty obtaining capital to finance property acquisitions, capitalization rates could increase and property values could decrease. Current economic conditions greatly increase the risks of our investment. See “Real Estate Risks.”

Real Estate Risks

Changes in general economic conditions and regulatory matters germane to the real estate industry may cause our operating results to suffer and the value of our real estate property to decline.

Our operating results will be subject to risks generally incident to the ownership of real estate, including:


•	changes in general or local economic conditions;


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


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


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


•	periods of high interest rates and tight money supply.

These and other reasons may prevent us from being profitable or from realizing growth or maintaining the value of our remaining real estate property.

General economic conditions may affect the timing of the sale of our remaining property and the sale price we receive.

We may be unable to sell our remaining property if or when we decide to do so. The real estate market is affected by many factors, such as general economic conditions, the availability of financing, interest rates, and other factors, including supply and demand for real estate investments, all of which are beyond our control. We cannot predict whether we will be able to sell our remaining property for the price or on terms which are acceptable to us. Further, we cannot predict the length of time that will be needed to find a willing purchaser and to close the sale of our remaining property.

Adverse economic conditions in the geographic region in which we own our remaining property may negatively impact your overall returns.

Adverse economic conditions in the geographic region in which we own our remaining property could affect the real estate values in this area or the business of our tenants if any of our tenants rely upon the local economy for their revenues. Therefore, changes in local economic conditions could reduce our income and distributions to limited partners or the amounts we could otherwise receive upon the sale of our remaining property.

Adverse economic conditions affecting the particular industries of the tenants of our remaining property may negatively impact your overall returns.

Adverse economic conditions affecting a particular industry of one or more of our tenants could affect the financial ability of one or more of our tenants to make payments under their leases, which could cause delays in our receipt of rental revenues or a vacancy in our remaining property for a period of time. Therefore, changes in economic conditions of the particular industry of one or more of our tenants could reduce our income and distributions to limited partners and the value of our remaining property at the time of sale.

We are dependent on only a few tenants for substantially all of our revenue.

Our remaining property is occupied by only a few tenants and, therefore, the success of our investment is materially dependent on the financial stability of our tenants. Lease payment defaults by tenants could cause us to reduce the amount of distributions to limited partners holding Cash Preferred Units. A default of a tenant on its lease payments to us or a lease termination would cause us to lose the revenue from the property. In the event of a default or bankruptcy, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-letting our property. In addition, any event of bankruptcy, insolvency, or a general downturn in the business of any of these tenants may result in the failure or delay of such tenant's rental payments, which may have a substantial adverse effect on our financial performance. If any of these events occur,

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we cannot assure you that we will be able to lease the property for the rent previously received or sell the property without incurring a loss. Further, we may suffer reduced revenues resulting in less cash to be distributed to limited partners.

Your investment in units is subject to greater risk because we lack a diversified property portfolio.

Because we own an interest in only one remaining property, your investment in units is subject to a greater risk of loss. There is a greater risk that you will lose money in your investment because our portfolio is not diverse by geographic location, property type, or industry group of tenants.

If one or more of our tenants files for bankruptcy, we may be precluded from collecting all sums due.

If one or more of our tenants, or the guarantor of a tenant's lease, commences, or has commenced against it, any proceeding under any provision of the federal Bankruptcy Code, as amended, or any other legal or equitable proceeding under any bankruptcy, insolvency, rehabilitation, receivership, or debtor's relief statute or law (bankruptcy proceeding), we may be unable to collect sums due under relevant leases. Any or all of the tenants, or a guarantor of a tenant's lease obligations, could be subject to a bankruptcy proceeding. Such a bankruptcy proceeding may bar our efforts to collect pre-bankruptcy debts from these entities or their properties, unless we are able to obtain an enabling order from the bankruptcy court. If a lease is rejected by a tenant in bankruptcy, we would have only a general unsecured claim against the tenant, and may not be entitled to any further payments under the lease. A tenant's or lease guarantor's bankruptcy proceeding could hinder or delay efforts to collect past-due balances under relevant leases, and could ultimately preclude collection of these sums. Such an event could cause a decrease or cessation of rental payments, which would result in a reduction in our cash flow and the amount available for distribution to limited partners holding Cash Preferred Units. In the event of a bankruptcy proceeding, we cannot assure you that the tenant or its trustee will assume our lease. If a given lease, or guaranty of a lease, is not assumed, our cash flow and the amounts available for distribution to limited partners holding Cash Preferred Units may be adversely affected.

We may not have funding for future tenant improvements, which may reduce your returns and make it difficult to attract one or more new tenants.

When a tenant at our remaining property does not renew its lease or otherwise vacates its space in our building, it is likely that in order to attract one or more new tenants, we will be required to expend substantial funds for tenant improvements and tenant refurbishments to the vacated space and other lease-up costs. Substantially all of our net offering proceeds available for investment have been used for investment in our properties, and we do not anticipate that we will maintain permanent working capital reserves. We also have not identified a funding source to provide funds that may be required in the future for tenant improvements, tenant refurbishments, and other lease-up costs in order to attract new tenants. We cannot assure you that any such source of funding will be available to us for such purposes in the future. In the event that we are required to use net cash from operations to fund such tenant improvements, tenant refurbishments, and other lease-up costs, cash distributions to limited partners holding Cash Preferred Units will be reduced or eliminated for potentially extended periods of time.

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

Our property may incur a vacancy either by the continued default of a tenant under its lease or the expiration of one of our leases. Our remaining property may be leased to a single tenant and/or may be specifically suited to the particular needs of a certain tenant based on the type of business the tenant operates. If a vacancy in our remaining property continues for a long period of time, we may suffer reduced revenues, resulting in less cash to be distributed to limited partners holding Cash Preferred Units. In addition, the resale value of the property could be diminished because the market value of the property will depend principally upon the value of the leases of the property.

Uninsured losses relating to real property or excessively expensive premiums for insurance coverage could reduce our net income.

Our General Partners will attempt to obtain adequate insurance at our remaining property to cover casualty losses. However, there are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution, or environmental matters that are uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. Insurance risks associated with potential terrorism acts could sharply increase the premiums we pay for coverage against property and casualty claims. We may not have adequate coverage for such losses. If our remaining property incurs a casualty loss that is not fully insured, the value of our assets will be reduced by such uninsured loss. In addition, other than reserves of net cash from operations we may establish, we have no source of funding to repair or reconstruct any uninsured damaged property. Also, to the extent we must pay unexpectedly large amounts for insurance, we could suffer reduced earnings that would result in lower distributions to limited partners holding Cash Preferred Units.

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Uncertain market conditions and the broad discretion of our General Partners relating to the future disposition of our remaining property could adversely affect the return on your investment.

We intend to hold the remaining real property in which we are invested until such time as the General Partners determine that the sale or other disposition thereof appears to be advantageous to achieve our investment objectives or until the sale of the property is warranted, even if it appears that such objectives will not be met. Our General Partners may exercise their discretion as to whether and when to sell a property, and we will have no obligation to sell our remaining property at any particular time, except upon the termination of the Partnership as specified in the partnership agreement, or earlier if a majority of the limited partners vote to liquidate the Partnership pursuant to a formal proxy to liquidate. We cannot predict with any certainty the various market conditions affecting real estate investments that will exist at any particular time in the future. Due to the uncertainty of market conditions that may affect the future disposition of our remaining property, we cannot assure you that we will be able to sell our property at a profit in the future. Accordingly, the timing of liquidation of the Partnership and the extent to which you will receive cash distributions and realize potential appreciation on our real estate investment will be dependent upon fluctuating market conditions.

If any environmentally hazardous material is determined to exist on our remaining property, our operating results could be adversely affected.

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

We and/or other prior Wells public limited partnerships sponsored by our General Partners have sold real estate properties for a sale price less than the original purchase price.

Certain of the real estate properties we and other Wells public limited partnerships sponsored by the General Partners previously purchased have not appreciated to the levels anticipated at the time of purchase. Recently some of these properties have been sold by such partnerships at sales prices below the prices paid for such properties. We cannot guarantee that our remaining property will appreciate in value.

General Investment Risks

The Georgia Revised Uniform Limited Partnership Act ("GRULPA") does not grant you any specific voting rights, and your rights are limited under our partnership agreement.

A vote of a majority in interest of the limited partners is sufficient to take the following significant Partnership actions:


•	to amend our partnership agreement;


•	to change our business purpose or our investment objectives;


•	to add or remove a general partner;


•	to elect a new general partner;


•	to dissolve the Partnership;


•	to authorize a merger or a consolidation of the Partnership; or


•	to approve a sale involving all or substantially all of the Partnership's assets, subject to certain limitations.

These are your only significant voting rights granted under our partnership agreement. In addition, GRULPA does not grant you any specific voting rights. Therefore, your voting rights are severely limited.

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

Limited partners may approve any of the above actions by majority vote of the outstanding units. Therefore, you are bound by such majority vote even if you do not vote with the majority on any of these actions.

Under our partnership agreement, we are required to indemnify our General Partners under certain circumstances, which may reduce returns to our limited partners.

Under our partnership agreement and subject to certain limitations, we are required to indemnify our General Partners from and against losses, liabilities, and damages relating to or arising out of any action or inaction on behalf of us done in good faith and in our best interest. If substantial and expensive litigation should ensue and we are obligated to indemnify one or both General Partners, we may be forced to use substantial funds to do so, which may reduce the return on your investment.

Payment of fees to our General Partners or their affiliates will reduce cash available for distributions to our limited partners.

Our General Partners or their affiliates perform services for us in connection with the management and leasing of our remaining property. Our affiliates may receive property management, leasing, and asset management fees in connection with the commercial property we own. In addition, we will reimburse our General Partners or their affiliates for the administrative services necessary to our prudent operation, which includes actual costs of goods, services, and materials used for or by us. These fees and reimbursements will reduce the amount of cash available for capital expenditures to our remaining property or distributions to our limited partners holding Cash Preferred Units.

The availability and the timing of cash distributions are uncertain.

We cannot assure you that sufficient cash will be available to make distributions to you from either net cash from operations or proceeds from the sale of our remaining property. We bear all expenses incurred in connection with our operations, which are deducted from cash funds generated by operations prior to computing the amount of net cash from operations to be distributed to our general and limited partners. In addition, our General Partners, in their discretion, may retain all or any portion of net cash generated from our operations for tenant improvements, tenant refurbishments, and other lease-up costs or for working capital reserves.

Gains and distributions upon the sale of our remaining property are uncertain.

Although gains from the sale of properties typically represent a substantial portion of any profits attributable to real estate investments, we cannot assure you that we will realize any gains on the sale of our remaining property. Our General Partners may exercise their discretion as to whether and when to sell the property; therefore, we have no obligation to sell our remaining property at any particular time. Further, receipt of the full proceeds of such sale may be extended over a substantial period of time following the sales. In addition, the amount of taxable gain allocated to you with respect to the sale of the property could exceed the cash proceeds received from such sale. While proceeds from the sale of the property will generally be distributed to our limited partners, the General Partners, in their sole discretion, may not make such distribution if such proceeds are used to:


•	buy out the interest of any co-venturer or joint venture partner in a property that is jointly owned; or


•	establish working capital reserves.

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

Substantially all of the gross proceeds of the offering were used to invest in our properties and to pay various fees and expenses. In addition, we do not anticipate that we will maintain any permanent working capital reserves. Accordingly, in the event that we develop a need for additional capital in the future, such as the funding of tenant improvements, tenant refurbishments or other lease-up costs, we have not identified any sources for such funding, and we cannot assure you that any sources of funding will be available to us for potential capital needs in the future.

We may maintain cash balances in our bank accounts that exceed the amount insured by the Federal Deposit Insurance Corporation, and such excess amounts are subject to loss, which may reduce your returns.

We maintain bank accounts with high-credit, quality financial institutions and may concentrate our funds among certain of these banks. At times, our cash balances may exceed the amounts insured by the Federal Deposit Insurance Corporation (FDIC). In the event of these financial institutions failing, we may lose the amount of our deposits over any amount insured by the FDIC, which could have a material adverse effect on our financial condition and our results of operations.

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Marketability and Transferability Risks

There is no public trading market for your units.

There is no public market for your units, and we do not anticipate that any public trading market for your units will ever develop. If you attempt to sell your units, you would likely do so at substantially discounted prices on the secondary market. Further, our partnership agreement restricts our ability to participate in a public trading market or anything substantially equivalent to one by providing that any transfer which may cause us to be classified as a "publicly traded partnership" as defined in Section 7704 of the Internal Revenue Code shall be deemed void and shall not be recognized. Because classification of the Partnership as a "publicly traded partnership" may significantly decrease the value of your units, our General Partners intend to use their authority to the maximum extent possible to prohibit transfers of units, which could cause us to be classified as a "publicly traded partnership."

Your units have limited transferability and lack liquidity due to restrictions under state regulatory laws and our partnership agreement.

You are limited in your ability to transfer your units. Our partnership agreement and certain state regulatory agencies have imposed restrictions relating to the number of units you may transfer. In addition, the suitability standards applied to you upon the purchase of your units may also be applied to persons to whom you wish to transfer your units. Accordingly, you may find it difficult to sell your units for cash or if you are able to sell your units, you may have to sell your units at a substantial discount. You may not be able to sell your units in the event of an emergency, and your units are not likely to be accepted as collateral for a loan.

Our estimated unit valuations should not be viewed as an accurate reflection of the value of the limited partners' units.

The estimated unit valuations contained in this Annual Report on Form 10-K should not be viewed as an accurate reflection of the value of the limited partners' units, what limited partners might be able to sell their units for, or the fair market value of our remaining property, nor do they necessarily represent the amount of net proceeds limited partners would receive if our property was sold and the proceeds distributed in a liquidation of the Partnership in accordance with the net sale proceeds distribution allocation outlined in the partnership agreement. There is no established public trading market for our limited partnership units, and it is not anticipated that a public trading market for the units will ever develop. We did not obtain any third-party appraisals of our remaining property in connection with these estimated unit valuations. In addition, property values are subject to change and could decline in the future. The valuations performed by the General Partners are estimates only and are based on a number of assumptions that may not be accurate or complete and may or may not be applicable to any specific limited partnership units. Further, these estimated valuations are applicable only to limited partners who purchased their units directly from us in our original public offering of units.

Special Risks Regarding Status of Units

If you hold Cash Preferred Units, we expect that you will be allocated more income than cash flow.

Since limited partners holding Cash Preferred Units are allocated substantially all of our net income, and since substantially all deductions for depreciation and other tax losses are allocated to limited partners holding Tax Preferred Units, we expect that those of you who hold Cash Preferred Units will be allocated taxable income in excess of your cash distributions. We cannot assure you that cash flow will be available for distribution in any year.

The desired effect of holding Cash Preferred Units or Tax Preferred Units may be reduced depending on how many limited partners hold each type of unit.

You will be entitled to different rights and priorities as to distributions of cash flow from operations and net sale proceeds and as to the allocation of depreciation and other tax losses depending upon whether you are holding Cash Preferred Units or Tax Preferred Units. However, the effect of any advantage associated with holding Cash Preferred Units or Tax Preferred Units may be significantly reduced or eliminated, depending upon the ratio of Cash Preferred Units to Tax Preferred Units during any given period. We will not attempt to restrict the ratio of Cash Preferred Units to Tax Preferred Units, and we will not attempt to establish or maintain any particular ratio.

Management Risks

You must rely on our General Partners for management of our business.

Our General Partners make all decisions with respect to the management of the Partnership. Limited partners have no right or power to take part in the management of the Partnership, except through the exercise of limited voting rights. Therefore, you must rely almost entirely on our General Partners for management of the Partnership and the operation of our business. Our General

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Partners may be removed only under certain conditions set forth in our partnership agreement. If our General Partners are removed, they will receive payment equal to the fair market value of their interests in the Partnership, as agreed upon by our General Partners and the Partnership or by arbitration if they are unable to agree.

Our ability to carry out our current business objectives may be adversely affected by the winding down of WREF.

WREF is winding down its operations and, as a result, its workforce and available capital have been significantly reduced. Accordingly, we may not be able to rely on our General Partners to allocate sufficient time and resources to our operations, which may adversely affect our ability to operate our business and continue our operations in the same manner as in the past.

Leo F. Wells, III has a primary role in determining what is in the best interest of the Partnership and our limited partners.

Leo F. Wells, III is one of our General Partners and is the president, treasurer, and sole director of Wells Capital, our other general partner. Therefore, one person has a primary role in determining what is in the best interest of the Partnership and its limited partners. Although Mr. Wells relies on the input of the officers and other employees of Wells Capital, he ultimately has the authority to make decisions affecting our Partnership operations. Therefore, Mr. Wells alone will determine the propriety of his own actions, which could result in a conflict of interest when he is faced with any significant decision relating to our Partnership affairs.

Our loss of, or inability to obtain, key personnel could delay or hinder implementation of our investment strategies, which could limit our ability to make distributions.

Our success depends to a significant degree upon the contributions of Leo F. Wells, III, Randy A. Simmons and Kerianne Maloney, each of whom would be difficult to replace. We cannot guarantee that such persons will remain affiliated with us. If any of Wells Capital's key personnel were to cease their affiliation with us, we may be unable to find suitable replacement personnel, and our operating results could suffer. We do not maintain key person life insurance on any person. We believe that our future success depends, in large part, upon the ability of our General Partners to hire and retain highly skilled managerial and operational personnel. If we lose, or are unable to obtain, the services of highly skilled personnel or do not establish or maintain appropriate strategic relationships, our ability to implement our investment strategies could be delayed or hindered, and the value of your investment may decline.

Our operating performance could suffer if Wells Capital incurs significant losses, including those losses that may result from being the general partner of other entities.

We are dependent on Wells Capital to conduct our operations; thus, adverse changes in the financial condition of Wells Capital, including changes arising from litigation or our relationship with Wells Capital, could hinder its ability to successfully manage our operations and our remaining property. As a general partner in many WREF-sponsored programs, Wells Capital may have contingent liabilities for the obligations of such programs. Enforcement of such obligations against Wells Capital could result in a substantial reduction of its net worth. If such liabilities affected the level of services that Wells Capital could provide, our operations and financial performance could suffer.

Our General Partners have a limited net worth consisting of illiquid assets, which may affect their ability to fulfill their financial obligations to us.

The net worth of our General Partners consists primarily of interests in real estate, retirement plans, partnerships, and closely held businesses and, in the case of Wells Capital, receivables from affiliated corporations and partnerships. Accordingly, the net worth of our General Partners is illiquid and not readily marketable. This illiquidity may be relevant to you in evaluating the ability of our General Partners to fulfill their financial obligations to us. In addition, our General Partners have significant commitments to the other investment programs sponsored by Wells Capital.

Our general and administrative operating expenses, including expenses associated with operating as a public company in the current regulatory environment, could limit our ability to make distributions.

As we evolve through our Partnership life cycle and sell the remaining property in our portfolio, our general and administrative operating expenses become a larger percentage in relationship to our operating cash flow and the value of our remaining property. Further, we bear all expenses incurred in connection with our operations, which are deducted from cash funds generated by operations prior to computing the amount of net cash from operations to be distributed to our limited partners. Therefore, as a result of the general and administrative operating expenses and percentage of such expenses, we cannot assure you that sufficient cash will be available to make future distributions to you from either net cash from our operations or proceeds from the sale of our remaining property.

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Conflicts of Interest Risks

Our General Partners will face conflicts of interest relating to time management, which could result in lower returns on our investments.

Because our General Partners and their affiliates have interests in other real estate programs and also engage in other business activities, they could have conflicts of interest in allocating their time between our business and these other activities, which could affect our operations. You should note that our partnership agreement does not specify any minimum amount of time or level of attention that our General Partners are required to devote to the Partnership.

Investments in joint ventures with affiliates and Piedmont Operating Partnership, LP will result in additional risks involving our relationship with the co-venturer.

We have entered into joint ventures with affiliates and Piedmont Operating Partnership, LP. In addition, Piedmont Operating Partnership, LP has a majority interest in the Wells Fund XIII-REIT Joint Venture Partnership and, as a result, holds the controlling vote on significant joint venture matters. Such investments may involve risks not otherwise present with an investment in real estate, including, for example:


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


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


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

Actions by such a co-venturer, co-tenant, or partner might limit our ability to execute certain exit strategies, delay the liquidation of our investments in joint ventures and dissolution of the Partnership, and could result in subjecting the Partnership to liabilities or losses in excess of those contemplated and may have the effect of reducing your returns.

Our General Partners will face various conflicts of interest relating to joint ventures with affiliates.

Since our General Partners and their affiliates control both the Partnership and other affiliates, transactions between the parties with respect to joint ventures between such parties do not have the benefit of arm's-length negotiation of the type normally conducted between unrelated co-venturers. Under these joint venture arrangements, neither co-venturer has the power to control the venture, and an impasse could be reached regarding matters pertaining to the joint venture, which might have a negative influence on the joint venture and decrease potential returns to you. In the event that a co-venturer has a right of first refusal to buy out the other co-venturer, it may be unable to finance such a buy-out at that time. It may also be difficult for us to sell our interest in any such joint venture or partnership or as a co-tenant in property. In addition, to the extent that our co-venturer, partner, or co-tenant is an affiliate of our General Partners, certain conflicts of interest will exist.

Federal Income Tax Risks

The Internal Revenue Service ("IRS") may challenge our characterization of material tax aspects of your investment in the Partnership.

An investment in units involves certain material income tax risks, the character and extent of which are, to some extent, a function of whether you hold Cash Preferred Units or Tax Preferred Units. We will not seek any rulings from the IRS regarding any of the tax issues related to your units.

Investors may realize taxable income without cash distributions.

As a limited partner in the Partnership, you are required to report your allocable share of our taxable income on your personal income tax return regardless of whether or not you have received any cash distributions from the Partnership. For example, if you hold Cash Preferred Units, you will be allocated substantially all of our net income, defined in the partnership agreement to mean generally net income for federal income tax purposes, including any income exempt from tax, but excluding all deductions for depreciation and amortization and gain or loss from the sale of our properties, even if such income is in excess of any distributions of cash from our operations. In addition, if you hold Cash Preferred Units, you will be allocated your share of our net income with respect to such units even though net cash from our operations otherwise distributable to you will instead be paid to third parties to satisfy the deferred commission obligations with respect to such units for a period of six years following the year of purchase, or longer if required to satisfy the outstanding commission obligation. If you hold Cash Preferred Units, you will likely be allocated

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taxable income in excess of any distributions to you, and the amount of cash received by you could be less than the income tax attributable to the net income allocated to you.

We could potentially be characterized as a publicly traded partnership resulting in unfavorable tax results.

If the IRS were to classify the Partnership as a "publicly traded partnership," we could be taxable as a corporation, and distributions made to you could be treated as portfolio income to you rather than passive income. We cannot assure you that we will not, at some time in the future, be treated as a publicly traded partnership due to the following factors:


•	the complex nature of the IRS rules governing our potential exemption from classification as a publicly traded partnership;


•	the lack of interpretive guidance with respect to such rules; and


•	the fact that any determination in this regard will necessarily be based upon events that have not yet occurred.

The IRS may challenge our allocations of profit and loss.

While it is more likely than not that Partnership items of income, gain, loss, deduction, and credit will be allocated among our General Partners and our limited partners substantially in accordance with the allocation provisions of the partnership agreement, we cannot assure you that the IRS will not successfully challenge the allocations in the partnership agreement and reallocate items of income, gain, loss, deduction, and credit in a manner which reduces the anticipated tax benefits to limited partners holding Tax Preferred Units or increases the income allocated to limited partners holding Cash Preferred Units.

We may be audited and additional tax, interest, and penalties may be imposed upon you.

Our federal income tax returns may be audited by the IRS. Any audit of the Partnership could result in an audit of your tax return, causing adjustments of items unrelated to your investment in the Partnership, in addition to adjustments to various Partnership items. In the event of any such adjustments, you might incur accountants' or attorneys' fees, court costs, and other expenses contesting deficiencies asserted by the IRS. You may also be liable for interest on any underpayment and certain penalties from the date your tax was originally due. The tax treatment of all Partnership items will generally be determined at the Partnership level in a single proceeding rather than in separate proceedings with each partner, and our General Partners are primarily responsible for contesting federal income tax adjustments proposed by the IRS. In this connection, our General Partners may extend the statute of limitations as to all partners and, in certain circumstances, may bind the partners to a settlement with the IRS. Further, our General Partners may cause us to elect to be treated as an "electing large partnership." If they do, we could take advantage of simplified flow-through reporting of Partnership items. Adjustments to Partnership items would continue to be determined at the Partnership level, however, and any such adjustments would be accounted for in the year they take effect, rather than in the year to which such adjustments relate. Accordingly, if you make an election to change the status of your units between the years in which a tax benefit is claimed and an adjustment is made, you may suffer a disproportionate adverse impact with respect to any such adjustment. Further, our General Partners will have the discretion in such circumstances either to pass along any such adjustments to the partners or to bear such adjustments at the Partnership level, thereby potentially adversely impacting the limited partners holding a particular class of units disproportionately to the limited partners holding the other class of units.

State and local taxes and a requirement to withhold state taxes may apply.

The state in which you reside may impose an income tax upon your share of our taxable income. Further, states in which we own properties may impose income taxes upon your share of our taxable income allocable to any property located in that state or other taxes on limited partnerships owning properties in their states. Many states have implemented or are implementing programs to require partnerships to withhold and pay state income taxes owed by nonresident partners relating to income-producing properties located in their states, and we may be required to withhold state taxes from cash distributions otherwise payable to you. In the event we are required to withhold state taxes from your cash distributions, or pay other state taxes, the amount of the net cash from operations otherwise payable to you would be reduced. In addition, such collection and filing requirements at the state level may result in increases in our administrative expenses, which would have the effect of reducing cash available for distribution to you. You are urged to consult with your own tax advisors with respect to the impact of applicable state and local taxes and state tax withholding requirements or other potential state taxes relating to an investment in our units.

Legislative or regulatory action could adversely affect investors.

In recent years, numerous legislative, judicial, and administrative changes have been made in the provisions of the federal income tax laws applicable to investments similar to an investment in our units. Additional changes to the tax laws are likely to continue to occur in the future, and we cannot assure you that any such changes will not adversely affect the taxation of a limited partner. Any such changes could have an adverse effect on an investment in our units or on the market value or the resale potential of our

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properties. You are urged to consult with your own tax advisor with respect to the impact of recent legislation on your investment in units and the status of legislative, regulatory, or administrative developments and proposals and their potential effect on an investment in our units.

Retirement Plan and Qualified Plan Risks

There are special considerations that apply to a pension or profit-sharing trust or an Individual Retirement Account ("IRA") investing in units.

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


•	your investment is consistent with your fiduciary obligations under the Employee Retirement Income Security Act ("ERISA") and the Internal Revenue Code;


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


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


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


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


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


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

We may dissolve the Partnership if our assets are deemed to be plan assets or if we engage in prohibited transactions.

If our assets were deemed to be assets of qualified plans investing as limited partners, i.e., plan assets, our General Partners would be considered to be fiduciaries of such plans and certain contemplated transactions between our General Partners or their affiliates, and us may then be deemed to be "prohibited transactions" subject to excise taxation under Section 4975 of the Internal Revenue Code. Additionally, if our assets were deemed to be plan assets, the standards of prudence and other provisions of ERISA applicable to plan fiduciaries would apply to the General Partners with respect to our investments. We have not sought a ruling from the U.S. Department of Labor regarding the potential classification of our assets as plan assets.

In this regard, U.S. Department of Labor regulations defining plan assets for purposes of ERISA contain exemptions which, if satisfied, would preclude assets of a limited partnership such as ours from being treated as plan assets. We cannot assure you that our partnership agreement has been structured so that the exemptions in such regulations would apply to us, although our General Partners intend that an investment by a qualified plan in units will not be deemed an investment in our assets. We can make no representations or warranties of any kind regarding the consequences of an investment in our units by qualified plans in this regard. Plan fiduciaries are urged to consult with, and rely upon, their own advisors with respect to this and other ERISA issues which, if decided adversely to us, could result in qualified plan investors being deemed to have engaged in "prohibited transactions," which would cause the imposition of excise taxes and co-fiduciary liability under Section 405 of ERISA in the event actions taken by us are deemed to be nonprudent investments or "prohibited transactions."

In the event our assets are deemed to constitute plan assets or if certain transactions undertaken by us are deemed to constitute "prohibited transactions" under ERISA or the Internal Revenue Code, and no exemption for such transactions is obtainable by us, the General Partners have the right, but not the obligation, upon notice to all limited partners, but without the consent of any limited partner, to:


•	compel a termination and dissolution of the Partnership; or


•	restructure our activities to the extent necessary to comply with any exemption in the U.S. Department of Labor regulations or any prohibited transaction exemption granted by the Department of Labor or any condition that the Department of Labor might impose as a condition to granting a prohibited transaction exemption.

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Adverse tax consequences may result because of minimum distribution requirements.

If you hold units in an IRA or you intend to acquire units in a secondary market through your IRA, or if you are a custodian of an IRA or a trustee or other fiduciary of a retirement plan that is holding units or is considering an acquisition of units through a secondary market, you must consider the limited liquidity of an investment in our units as it relates to applicable minimum distribution requirements under the Internal Revenue Code. If units are held and our properties have not yet been sold at such time as mandatory distributions are required to begin to an IRA beneficiary or qualified plan participant, Sections 408(a)(6) and 401(a)(9) of the Internal Revenue Code will likely require that a distribution-in-kind of the units be made to the IRA beneficiary or qualified plan participant. Any such distribution-in-kind of units must be included in the taxable income of the IRA beneficiary or qualified plan participant for the year in which the units are received at the fair market value of the units, and taxes attributable thereto must be paid without any corresponding cash distributions from us with which to pay such income tax liability.

Unrelated business taxable income ("UBTI") may be generated with respect to tax-exempt investors.

We do not intend or anticipate that the tax-exempt investors in the Partnership will be allocated income deemed to be derived from an unrelated trade or business. Notwithstanding this, the General Partners do have limited authority to borrow funds deemed necessary:


•	to finance improvements necessary to protect capital previously invested in a property;


•	to protect the value of our investment in a property; or


•	to make one of our properties more attractive for sale or lease.

Our General Partners have represented that they will not cause us to incur indebtedness unless they obtain an opinion from legal counsel or an opinion from our tax accountants that the proposed indebtedness more than likely will not cause the income allocable to tax-exempt investors to be characterized as UBTI. Any such opinion will have no binding effect on the IRS or any court, however, and some risk remains that we may generate UBTI for our tax-exempt investors in the event that it becomes necessary for us to borrow funds.

Further, in the event we were deemed to be a "dealer" in real property, defined as one who holds real estate primarily for sale to customers in the ordinary course of business, the gain realized on the sale of our properties, which is allocable to tax-exempt investors, would be characterized as UBTI.


ITEM 1B.	UNRESOLVED STAFF COMMENTS.

Not applicable.

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ITEM 2.	PROPERTIES.

Overview

We have owned indirect interests in all of our real estate assets through joint ventures with other entities affiliated with the General Partners and Piedmont Operating Partnership, LP ("Piedmont OP"). Piedmont OP is a Delaware limited partnership, with Piedmont REIT serving as its general partner. Piedmont REIT is a Maryland corporation that qualifies as a real estate investment trust.

During the periods presented, we owned interests in the following joint ventures (the "Joint Ventures") and properties:



		Ownership %		Leased % as of December 31,
Joint Venture	Joint Venture Partners	Ownership %	Properties	2016	2015	2014	2013	2012
Wells Fund XIII-REIT Joint Venture Partnership ("Fund XIII-REIT Associates")	Wells Real Estate Fund XIII, L.P. Piedmont Operating Partnership, LP	28.1% 71.9%	1. 8560 Upland Drive⁽¹⁾ Two connected one-story office and assembly buildings located in Englewood, Colorado	100%	100%	100%	57%	74%
			2. Two Park Center⁽²⁾ A four-story office building located in Hoffman Estates, Illinois	—	—	—	38%⁽³⁾	38%
Fund XIII and Fund XIV Associates ("Fund XIII-XIV Associates")⁽⁴⁾	Wells Real Estate Fund XIII, L.P. Wells Real Estate Fund XIV, L.P.	47.3% 52.7%	3. Siemens - Orlando Building⁽⁵⁾ Two one-story office buildings located in Orlando, Florida	—	—	—	100%	100%


⁽¹⁾	Charter Communications Holding Company, LLC's lease for 43% of building was signed December 31, 2016 and commences May 2017.


⁽²⁾	This property was sold in May 2014.


⁽³⁾	Effective January 1, 2014, Two Park Center was 0% leased.


⁽⁴⁾	This joint venture wound up its affairs and was terminated in 2015.


⁽⁵⁾	This property was sold in December 2014.

Wells Real Estate Fund XIV, L.P. was affiliated with us through common general partners. Each of the properties described above was acquired on an all-cash basis.

Lease Expirations

As of December 31, 2016, the lease expirations scheduled during the following 10 years for the property in which we hold an interest through the Joint Venture, assuming no exercise of renewal options or termination rights, are summarized below:



Year of Lease Expiration	Number of Leases Expiring	Square Feet Expiring	Annualized Gross Base Rent in Year of Expiration		Partnership Share of Annualized Gross Base Rent in Year of Expiration⁽¹⁾		Percentage of Total Square Feet Expiring		Percentage of Total Annualized Gross Base Rent in Year of Expiration
2021⁽²⁾	1	83,877	$	827,866	$	232,713	100.0	%	100.0	%


⁽¹⁾	Our share of annualized gross base rent in year of expiration is calculated based on our ownership percentage in the joint venture that owns the leased property.


⁽²⁾	8560 Upland Drive: Quantum Corporation lease (approximately 83,900 square feet).

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Property Descriptions

The properties in which we own or owned an interest through the Joint Ventures during the periods presented are further described below:

Remaining Property We Currently Own

8560 Upland Drive

The 8560 Upland Drive property consists of two one-story office buildings connected to a light assembly building containing approximately 148,000 rentable square feet located in Englewood, Colorado. Additionally, Fund XIII-REIT Associates purchased an undeveloped 3.43-acre tract of land immediately adjacent to 8560 Upland Drive. The 8560 Upland Drive property was under a lease agreement with Quantum Corporation ("Quantum") for the entire property, which was set to expire on December 31, 2011. On April 11, 2011, Fund XIII-REIT Associates entered into the first lease amendment, which reduced Quantum's square footage from 100% of the building to approximately 57% of the building, effective January 1, 2012, and extended the lease term on the reduced square footage to December 31, 2021. Quantum has the right to extend the lease term for two additional five-year periods at the then-current fair market rental rate. As of December 31, 2016, annual base rent payable under the Quantum lease was approximately $750,000, increasing by 2% annually each January through the expiration of the lease. The annualized base rent in 2021 will be approximately $828,000.

In December 2016, Fund XIII-REIT Associates executed a lease with Charter Communications Holding Company, LLC ("Charter") for approximately 43% of the building that commences in May 2017 and expires in October 2027. Following a six-month base rental abatement period, annual base rent of $11.50 per square foot shall be payable and is scheduled to increase by approximately 3% annually beginning on the 19th month of the Lease. In addition to monthly base rent, Charter will be required to reimburse the Joint Venture for its pro rata share of all operating expenses and real estate taxes for 8560 Upland Drive. Charter is entitled to a landlord-funded tenant allowance not to exceed $20 per square foot. The Lease is subject to termination by Charter at the end of 90 months upon payment of a termination fee in accordance with the Lease. Charter has the right to extend the Lease term for two additional five-year periods at the then current fair market rental rate. The annualized base rent in 2027 will be approximately $970,000.

Properties Sold During Periods Presented

Two Park Center

Two Park Center is a four-story office building containing approximately 194,000 rentable square feet located in Hoffman Estates, Illinois. On May 29, 2014, Fund XIII-REIT Associates sold Two Park Center to an unaffiliated third party for a gross sales price of $8,825,000, exclusive of closing costs. As a result of the sale, the Partnership received net sale proceeds of approximately $2,353,000 and was allocated a loss of approximately $66,000.

Siemens - Orlando Building

The Siemens - Orlando Building is comprised of two single-story office buildings containing approximately 82,000 aggregate rentable square feet, on an approximately 7.5-acre tract of land located in Orlando, Florida. On December 31, 2014, Fund XIII-XIV Associates sold the Siemens - Orlando Building to an unaffiliated third party for a gross sales price of $13,570,000, exclusive of closing costs. As a result of the sale, the Partnership received net sale proceeds of approximately $6,175,000 and was allocated a gain of approximately $2,153,000.


ITEM 3.	LEGAL PROCEEDINGS.

From time to time, we are party to legal proceedings which arise in the ordinary course of our business. We are not currently involved in any litigation for which the outcome would, in the judgment of the General Partners based on information currently available, have a materially adverse impact on the results of our operations or financial condition, nor is management aware of any such litigation threatened against us.


ITEM 4.	MINE SAFETY DISCLOSURES.

Not applicable.

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PART II


ITEM 5.	MARKET FOR PARTNERSHIP'S UNITS, RELATED SECURITY HOLDER MATTERS AND ISSUER PURCHASES OF UNITS.

Summary

As of February 28, 2017, 3,213,008 Cash Preferred Units and 559,040 Tax Preferred Units, held by a total of 1,286 and 139 limited partners, respectively, were outstanding. Original capital contributions were equal to $10.00 per each limited partnership unit. As of February 28, 2017, we have returned capital in the form of distributions of net sale proceeds to our limited partners equal to, on average, $6.64 per Cash Preferred Unit and $10.07 per Tax Preferred Unit, as further described below. A public trading market has not been established for our limited partnership units, nor is such a market anticipated to develop in the future. The partnership agreement provides the General Partners with the right to prohibit transfers of units under certain circumstances.

Unit Valuation

Because fiduciaries of retirement plans subject to ERISA and the IRA custodians are required to determine and report the value of the assets held in their respective plans or accounts on an annual basis, the General Partners are required under the partnership agreement to report estimated unit values to the limited partners each year in our Annual Report on Form 10-K. The methodology to be utilized for determining such estimated unit values under the partnership agreement requires the General Partners to estimate the amount a unit holder would receive, assuming that our properties were sold at their estimated fair market values as of the end of our fiscal year and the proceeds therefrom, plus the amount of net sale proceeds held by the Partnership at year-end from previous property sales, if any, were distributed to the limited partners in liquidation in accordance with the net sale proceeds distribution allocation outlined in the partnership agreement. The estimated unit valuations are intended to be an estimate of the distributions that would be made to limited partners who purchased their units directly from us in our original public offering of units, taking into account conversion elections as provided for in the partnership agreement.

The General Partners of the Partnership recently completed their estimated unit valuations as of December 31, 2016. Utilizing the foregoing methodology, the General Partners have estimated our unit valuations, based on their estimates of property values as of December 31, 2016, to be approximately $2.13 per Cash Preferred Unit and $2.13 per Tax Preferred Unit, based upon market conditions existing at December 31, 2016. These estimates should not be viewed as an accurate reflection of the value of the limited partners' units, how much limited partners might be able to sell their units for, or the fair market value of the Partnership's remaining property, nor do they necessarily represent the amount of net proceeds limited partners would receive if our remaining property was sold and the proceeds were distributed in a liquidation of the Partnership. There is no established public trading market for our limited partnership units, and it is not anticipated that a public trading market for the units will ever develop. In addition, property values are subject to change and could decline in the future. As required by the partnership agreement, the General Partners have obtained an opinion from The David L. Beal Company, an independent appraiser certified by the Member Appraisal Institute, to the effect that such estimates of value were deemed reasonable and were prepared in accordance with appropriate methods for valuing real estate.

The valuations performed by the General Partners are estimates only and are based on a number of assumptions that may not be accurate or complete and may or may not be applicable to any specific limited partnership units. For example, as a result of the availability of conversion elections under the partnership agreement and the resulting complexities involved relating to the distribution methodology under the partnership agreement, each limited partnership unit of the Partnership potentially has its own unique characteristics as to distributions and value. These estimated valuations are applicable only to limited partners who purchased their units directly from us in our original public offering of units. Further, as set forth above, no third-party appraisals have been or will be obtained. For these reasons, the estimated unit valuations set forth above should not be used by or relied upon by our limited partners, other than fiduciaries of retirement plans and IRA custodians for limited ERISA and IRA reporting purposes, as any indication of the fair market value of their units. In addition, it should be noted that ERISA plan fiduciaries and IRA custodians may use estimated unit valuations obtained from other sources, such as prices paid for our units in secondary market trades, and that such estimated unit valuations may well be lower than those estimated by the General Partners using the methodology required by the partnership agreement.

It should also be noted that we are in the process of selling our remaining property. In considering the foregoing estimated unit valuations, it should be noted that we have previously distributed net sale proceeds in the amount of $6.64 per Cash Preferred Unit and $10.07 per Tax Preferred Unit to our limited partners. These amounts are intended to represent the per-unit distributions received by limited partners who purchased their units directly from us in our original public offering of units, and who have made no conversion elections under the partnership agreement. Limited partners who have made one or more conversion elections would have received different levels of per-unit distributions.

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Operating Distributions

Operating cash available for distribution to the limited partners is generally distributed on a quarterly basis. Under the partnership agreement, distributions from net cash from operations are allocated first to the limited partners holding Cash Preferred Units (and limited partners holding Tax Preferred Units that have elected a conversion right that allows them to share in the distribution rights of limited partners holding Cash Preferred Units) until they have received 10% of their adjusted capital contributions. Cash available for distribution is then distributed to the General Partners until they have received an amount equal to 10% of cash distributions previously distributed to the limited partners. Any remaining cash available for distribution is split between the limited partners holding Cash Preferred Units and the General Partners on a basis of 90% and 10%, respectively.

No operating cash distributions were paid to the limited partners holding Cash Preferred Units or Tax Preferred Units, or to the General Partners during the years ended December 31, 2016 and 2015.

Net Sale Proceeds Distributions

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

•

In the event that the particular property sold is sold for a price that is less than its original property purchase price, to the limited partners holding Cash Preferred Units until they have received an amount equal to the excess of the original property purchase price over the price for which the property was sold, limited to the amount of depreciation, amortization, and cost recovery deductions taken by the limited partners holding Tax Preferred Units with respect to such property;


•	To limited partners holding units which at any time have been treated as Tax Preferred Units until the limited partners have received an amount necessary to equal the net cash from operations previously received by the limited partners holding Cash Preferred Units on a per-unit basis;


•	To all limited partners on a per-unit basis until the limited partners have received 100% of their respective net capital contributions, as defined;


•	To all limited partners on a per-unit basis until the limited partners have received a cumulative 10% per annum return on their respective net capital contributions, as defined;

•

To limited partners on a per-unit basis until the limited partners have received an amount equal to their respective preferential limited partner returns (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 Cash Preferred Units and a 15% per annum cumulative return on net capital contributions for all periods during which the units were treated as Tax Preferred Units);


•	To the General Partners until they have received 100% of their respective capital contributions, as defined;

•

Then, if limited partners have received any excess limited partner distributions (defined as distributions to limited partners over the life of their investment in the Partnership in excess of their net capital contributions, as defined, plus their preferential limited partner return), to the General Partners until they have received distributions equal to 20% of the sum of any such excess limited partner distributions plus distributions made to the General Partners pursuant to this provision; and


•	Thereafter, 80% to the limited partners on a per-unit basis and 20% to the General Partners.

During the years ended December 31, 2016 and 2015, we distributed net sale proceeds of approximately $0 and $8,540,000, respectively, to the limited partners holding Cash Preferred Units or Tax Preferred Units. No net sale proceeds distributions were paid to the General Partners during the years ended December 31, 2016 and 2015.

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ITEM 6. SELECTED FINANCIAL DATA.

A summary of the selected financial data as of and for the fiscal years ended December 31, 2016, 2015, 2014, 2013, and 2012 for the Partnership is provided below. The comparability of net income (loss) for the periods presented below is impacted by the sale of properties described in Item 2.



	2016			2015			2014		2013			2012
Total assets	$	6,782,089		$	7,020,514		$	15,609,911	$	13,433,675		$	15,012,286
Equity in income of Joint Ventures	$	141,341		$	212,340		$	2,399,540	$	315,438		$	202,588
Net income (loss)	$	(224,794	)	$	(61,858	)	$	2,188,060	$	(1,581,585	)	$	10,443
Net income (loss) allocated to:
Cash Preferred Limited Partners	$	(223,257	)	$	3,405		$	907,445	$	(1,565,769	)	$	10,339
Tax Preferred Limited Partners	$	—		$	(64,644	)	$	1,279,661	$	—		$	—
General Partners	$	(1,537	)	$	(619	)	$	954	$	(15,816	)	$	104
Net income (loss) per weighted-average Limited Partner Unit:
Cash Preferred	$	(0.07	)	$	—		$	0.28	$	(0.49	)	$	—
Tax Preferred	$	—		$	(0.12	)	$	2.29	$	—		$	—
Operating cash distributions per weighted- average Cash Preferred Limited Partner Unit:
Investment income	$	—		$	—		$	—	$	—		$	—
Return of capital	$	—		$	—		$	—	$	—		$	—
Operating cash distributions per weighted- average Tax Preferred Limited Partner Unit:
Investment income	$	—		$	—		$	—	$	—		$	—
Return of capital	$	—		$	—		$	—	$	—		$	—
Distribution of net sale proceeds per weighted- average Limited Partner Unit:
Cash Preferred	$	—		$	7,325,398		$	—	$	—		$	—
Tax Preferred	$	—		$	1,215,017		$	—	$	—		$	—


ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis should be read in conjunction with the Selected Financial Data presented in Item 6 and our accompanying financial statements and notes thereto. See also "Cautionary Note Regarding Forward-Looking Statements" preceding Part I of this report and "Risk Factors" in Item 1A of this report.

Overview

Portfolio Overview

We are currently in the positioning-for-sale phase of our life cycle. We have sold six of the seven properties in which we have held interests. Effective September 30, 2016, FedEx Ground Package System, Inc. vacated its space at 8560 Upland Drive upon the expiration of its lease. In December 2016, Fund XIII-REIT Associates executed a lease with Charter Communications Holding Company, LLC ("Charter") for approximately 43% of 8560 Upland Drive that extends through October 2027.

The 2016 operating distributions to limited partners holding Cash Preferred Units were reserved.

Property Summary

As we move further into the positioning-for-sale phase, we will continue to focus on re-leasing space that may become vacant upon the expiration of our current leases. In doing so, we will seek to maximize returns to our limited partners by attempting to negotiate long-term leases at market rental rates while attempting to minimize down time, re-leasing expenditures, ongoing property level costs, and portfolio costs. As of February 28, 2017, we owned an interest in one remaining property.

Information relating to the properties owned, or previously owned, by the Joint Ventures is provided below:

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•	The AmeriCredit Building was sold on April 13, 2005.


•	The John Wiley Building was sold on April 13, 2005.


•	The 7500 Setzler Parkway building was sold on January 31, 2007.


•	The Randstad – Atlanta Building was sold on April 24, 2007.


•	Two Park Center was sold on May 29, 2014.


•	The Siemens – Orlando Building was sold on December 31, 2014.


•	8560 Upland Drive, located in Englewood, Colorado, is currently 100% leased to Charter and Quantum.

Liquidity and Capital Resources

Overview

The Partnership is an investment vehicle formed for the purpose of acquiring, owning, and operating income-producing real properties, or investing in joint ventures formed for the same purpose, and has invested all of the partners' original net offering proceeds available for investment. Thus, it is unlikely that we will acquire interests in any additional properties or joint ventures. Historically, our investment strategy has generally involved acquiring properties that are preleased to creditworthy tenants on an all-cash basis through joint ventures with affiliated partnerships.

Our operating strategy entails funding expenditures related to the recurring operations of our remaining property with operating cash flows, including current and prior period operating distributions received from the Joint Venture, and assessing the amount of remaining cash flows that will be required to fund known future re-leasing costs and other capital improvements. Any residual operating cash flows are generally considered available for distribution to the Cash Preferred limited partners and, unless reserved, are generally paid quarterly. As a result, the ongoing monitoring of our cash position is critical to ensuring that adequate liquidity and capital resources are available. Economic downturns in our remaining market could adversely impact the ability of our tenants to honor lease payments and our ability to re-lease space on favorable terms as leases expire or space otherwise becomes vacant. In the event of either situation, cash flows and, consequently, our ability to provide funding for capital needs could be adversely affected.

Short-Term Liquidity

During the year ended December 31, 2016, net cash outflows from operating activities were approximately $180,000 primarily due to funding our general and administrative expenses. The extent to which any future operating distributions are paid to limited partners will be largely dependent upon the amount of cash generated from the remaining Joint Venture, our expectations of future cash flows, and determination of near-term cash needs to fund our share of capital improvements and re-leasing costs for our remaining property. The 2016 operating distributions to limited partners were reserved.

We believe that the cash on hand and distributions due from the remaining Joint Venture will be sufficient to cover our working capital needs, including those provided for within our total liabilities of approximately $7,000, as of December 31, 2016.

Long-Term Liquidity

We expect that our future sources of capital will be primarily derived from operating cash flows generated from our remaining property owned by the remaining Joint Venture and net proceeds generated from the sale of that property. Our future long-term liquidity requirements will include, but not be limited to, funding our share of tenant improvements, renovations, expansions, and other significant capital improvements necessary for marketing and selling our remaining property owned by the remaining Joint Venture. We expect to continue to use substantially all future net cash from operations, including distributions received from the Joint Venture, to fund (i) leasing costs and capital expenditures necessary to position our remaining property for sale and (ii) our general and administrative expenses. To the extent that residual operating cash flows remain after considering these funding requirements, we would then distribute such residual operating cash flow to the limited partners.

Capital Resources

The remaining Joint Venture incurs capital expenditures primarily related to building improvements for the purpose of maintaining the quality of our remaining property, and tenant improvements for the purpose of readying the property for re-leasing and sale. As leases expire, we will work with the remaining Joint Venture to attempt to re-lease space to an existing tenant or market the space to prospective new tenants. Generally, tenant improvements funded in connection with lease renewals require less capital than those funded in connection with new leases. However, external conditions, such as the supply of and demand for comparable space available within a given market, drive capital costs as well as rental rates.

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Operating cash flows, if available, are generally distributed from the remaining Joint Venture to us approximately one month following calendar quarter-ends. However, the remaining Joint Venture will reserve operating distributions, or a portion thereof, as needed in order to fund known capital and other expenditures. Our cash management policy typically includes first utilizing current period operating cash flows until depleted, at which point operating reserves are utilized to fund capital and other required expenditures. Any capital or other expenditures not funded from the operations of the Joint Venture will be required to be funded by us and our joint venture partner on a pro rata basis.

As of December 31, 2016, we have received, used, distributed, and held net sale proceeds allocated to the Partnership from the sale of properties as presented below:



	Net Sale Proceeds		Partnership's Approximate Ownership %		Net Sale Proceeds Allocated to the Partnership		Use of Net Sale Proceeds			Net Sale Proceeds Distributed to Partners as of December 31, 2016		Undistributed Net Sale Proceeds as of December 31, 2016
Property Sold	Net Sale Proceeds		Partnership's Approximate Ownership %		Net Sale Proceeds Allocated to the Partnership		Amount		Purpose			Undistributed Net Sale Proceeds as of December 31, 2016
AmeriCredit Building (sold in 2005)	$	14,301,802	28.11	%	$	4,020,236	$	—	—	$	4,020,236	$	—
John Wiley Building (sold in 2005)	$	21,427,599	28.11	%	6,023,298		—		—	6,023,298		—
7500 Setzler Parkway (sold in 2007)	$	8,723,080	47.30	%	4,126,017		—		—	4,126,017		—
Randstad-Atlanta Building (sold in 2007)	$	8,992,600	47.30	%	4,253,500		—		—	4,253,500		—
Two Park Center (sold in 2014)	$	8,369,237	28.11	%	2,352,592		—		—	2,352,592		—
Siemens-Orlando Building (sold in 2014)	$	13,054,482	47.30	%	6,174,770		—		—	6,174,770		—
Total					$	26,950,413	$	—		$	26,950,413	$	—

Our General Partners distributed net sale proceeds of approximately $8,540,000 in April 2015 from the sales of the Randstad - Atlanta Building, Two Park Center, and the Siemens - Orlando Building.

Results of Operations

Comparison of the year ended December 31, 2015 vs. the year ended December 31, 2016

Equity in Income of Joint Ventures

Equity in income of Joint Ventures decreased from $212,340 for the year ended December 31, 2015 to $141,341 for the year ended December 31, 2016, primarily due to a decrease in rental and reimbursement income at 8560 Upland Drive related to the expiration of the FedEx lease in September 2016. We expect equity in income of Joint Ventures to increase as a result of the execution of the lease with Charter.

General and Administrative Expenses

General and administrative expenses increased from $277,107 for the year ended December 31, 2015 to $366,135 for the year ended December 31, 2016, primarily due to an increase in the allocation of costs related to reporting and regulatory requirements. We anticipate that future general and administrative expenses will vary based on future changes in our reporting and regulatory requirements.

Comparison of the year ended December 31, 2014 vs. the year ended December 31, 2015

Equity in Income of Joint Ventures

Equity in income of Joint Ventures decreased from $2,399,540 for the year ended December 31, 2014 to $212,340 for the year ended December 31, 2015, primarily due to recognizing a gain on the sale of the Siemens - Orlando Building in the fourth quarter of 2014.

General and Administrative Expenses

General and administrative expenses increased from $213,988 for the year ended December 31, 2014 to $277,107 for the year ended December 31, 2015, primarily due to an increase in the allocation of costs related to reporting and regulatory requirements.

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Inflation

We are exposed to inflation risk, as income from long-term leases is the primary source of our cash flows from operations. There are provisions in the majority of our tenant leases that are intended to help protect us from the impact of inflation. These provisions include rent steps, 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 our leases, the leases may not readjust their reimbursement rates frequently enough to cover inflation.

Application of Critical Accounting Policies

Summary

Our accounting policies have been established to conform with U.S. generally accepted accounting principles ("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 our results of operations to those of companies in similar businesses.

Below is a discussion of the accounting policies used by us and the Joint Venture, which are considered to be critical in that they may require complex judgment in their application or require estimates about matters that are inherently uncertain.

Investment in Joint Venture

We have evaluated the remaining Joint Venture and concluded that it is not a variable interest entity. We do not have control over the operations of the Joint Venture; however, we do exercise significant influence. Approval by us as well as the other joint venture partner is required for any major decision or any action that would materially affect the Joint Venture or its real property investment. Accordingly, we account for our investment in the Joint Venture using the equity method of accounting, whereby the original investment is recorded at cost and subsequently adjusted for contributions, distributions, and net income (loss) attributable to the Partnership. Pursuant to the terms of the joint venture agreement, all income (loss) and distributions are allocated to joint venture partners in accordance with their respective ownership interests. Distributions of net cash from operations, if available, are generally distributed to the joint venture partners on a quarterly basis.

The Partnership continually evaluates the fair value of its equity interest in the Joint Venture. If management determines that the fair value is less than the carrying value of its interest, and such loss is other than temporary, the Partnership reduces its carrying value to fair value and recognizes the loss in the statement of operations.

Evaluating the Recoverability of Real Estate Assets

We continually monitor events and changes in circumstances that could indicate that the carrying amounts of the real estate assets and related intangible assets in which we have an ownership interest through our investment in the Joint Venture, may not be recoverable. When indicators of potential impairment are present which suggest that the carrying amounts of real estate assets and related intangible assets may not be recoverable, we assess the recoverability of the real estate assets and related intangible assets by determining whether the respective carrying values will be recovered through the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition for assets held for use, or with the estimated fair values, less costs to sell, for assets held for sale. In the event that such expected undiscounted future cash flows for assets held for use, or the estimated fair values, less costs to sell, for assets held for sale, do not exceed the respective assets' carrying values, we adjust the real estate assets and related intangible assets to their respective estimated fair values, pursuant to the provisions of the property, plant, and equipment accounting standard for the impairment or disposal of long-lived assets, and recognize an impairment loss. Estimated fair values are determined based on the following information, dependent upon availability: (i) recently quoted market price(s) for the subject property, or highly comparable properties, under sufficiently active and normal market conditions, or (ii) the present value of future cash flows, including estimated residual value.

Projections of expected future cash flows require that we estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, the number of months it takes to re-lease the property, and the number of years the property is held for investment, among other factors. The subjectivity of assumptions used in the future cash flow analysis, including discount rates, could result in an incorrect assessment of the property's future cash flows and fair value, and

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could result in the misstatement of the carrying values of real estate assets and related intangible assets held by the Joint Venture and our net income (loss).

Related-Party Transactions and Agreements

We have entered into agreements with Wells Capital, Wells Management, an affiliate of our General Partners, and their affiliates, whereby we pay certain fees and expense reimbursements to Wells Capital, Wells Management, and their affiliates for asset management; the management and leasing of our remaining property; and administrative services relating to accounting, property management, and other partnership administration, and we incur the related expenses. See Item 13, "Certain Relationships and Related Transactions" for a description of these fees and reimbursements and amounts incurred and "Risk Factors - Conflicts of Interest Risks" in Item 1A of this report.

Commitments and Contingencies

We are subject to certain commitments and contingencies with regard to certain transactions. Refer to Note 4 and Note 10 of our accompanying financial statements for further explanations. Examples of such commitments and contingencies include:


•	commitments under existing lease agreements; and


•	property management and leasing agreements.


ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Since we do not borrow any money, make any foreign investments, or invest in any market risk-sensitive instruments, we are not subject to risks relating to interest rates, foreign currency exchange rate fluctuations, or the other market risks contemplated by Item 305 of Regulation S-K.


ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Our financial statements and supplementary data are detailed under Item 15-(a) and filed as part of the report on the pages indicated.


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

There were no disagreements with our independent registered public accounting firm during the years ended December 31, 2016 and 2015.


ITEM 9A.	CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of management of Wells Capital, one of our General Partners, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as required by Rule 13a-15(b) of the Exchange Act as of December 31, 2016. Based upon that evaluation, which was completed as of the end of the period covered by this Form 10-K, the Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective at December 31, 2016, in providing a reasonable level of assurance that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable SEC rules and forms, including providing a reasonable level of assurance that the information required to be disclosed by us in such reports is accumulated and communicated to our management, including our Principal Executive Officer and our Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Management Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, as a process designed by or under the supervision of the Principal Executive Officer and Principal Financial Officer and effected by our management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:

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•	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of the assets of the Partnership;


•	provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Partnership are being made only in accordance with authorizations of management and/or members of the Financial Oversight Committee; and


•	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Partnership's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of human error and the circumvention or overriding of controls, material misstatements may not be prevented or detected on a timely basis. In addition, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes and conditions or that the degree of compliance with policies or procedures may deteriorate. Accordingly, even internal controls determined to be effective can provide only reasonable assurance that the information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized, and represented within the time periods required.

Our management has assessed the effectiveness of our internal control over financial reporting at December 31, 2016. To make this assessment, we used the criteria for effective internal control over financial reporting described in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, our management believes that our system of internal control over financial reporting met those criteria, and therefore our management has concluded that we maintained effective internal control over financial reporting as of December 31, 2016.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2016, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


ITEM 9B.	OTHER INFORMATION.

For the quarter ended December 31, 2016, all items required to be disclosed under Form 8-K were reported under Form 8-K.

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PART III


ITEM 10.	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT'S GENERAL PARTNERS.

Wells Capital

Wells Capital, our corporate general partner, was formed in April 1984. The executive offices of Wells Capital are located at 5445 Triangle Parkway, Suite 320, Peachtree Corners, Georgia 30092. Leo F. Wells, III is the sole Director and the President of Wells Capital. Wells Capital was organized under the Georgia Business Corporation Code, and is primarily in the business of serving as general partner or as an affiliate of the general partner in affiliated public limited partnerships ("Wells Public Partnerships"). Wells Capital or its affiliates previously served as the advisor to Signature Office Income REIT (formerly Wells Core Office Income REIT, Inc.), CatchMark Timber Trust, Inc. (formerly Wells Timberland REIT, Inc.), Columbia Property Trust (formerly Wells Real Estate Investment Trust II, Inc.), and Piedmont Office Realty Trust, Inc. (formerly known as Wells Real Estate Investment Trust, Inc.) (collectively, the "Wells REITs"). In these capacities, Wells Capital performs certain services for Wells Public Partnerships, including presenting, structuring, and acquiring real estate investment opportunities; entering into leases and service contracts on acquired properties; arranging for and completing the disposition of properties; and providing other services such as accounting and administrative functions. Wells Capital previously performed these services for the Wells REITs. Wells Capital is a wholly owned subsidiary of WREF, of which Leo F. Wells, III is the sole stockholder.

Leo F. Wells

Mr. Wells, 73, who serves as one of our General Partners, is the president, treasurer, and sole director of Wells Capital, which is our corporate general partner. He is also the sole stockholder and sole director of WREF, which he founded in 1984 and served as WREF's President and Treasurer until February 2012. WREF directly or indirectly owns Wells Capital, the Advisor; Wells Management; and Wells Investment Securities, Inc. He is also the president, treasurer, and sole director of Wells Management.

Mr. Wells was the president and Chairman of the Board of Signature Office REIT, Inc. from July 2007 to December 31, 2013. Mr Wells also served as a director of Columbia Property Trust, Inc. ("Columbia") from 2003 through May 2012 and as president of Columbia from July 2003 through July 2010. He served as the president of CatchMark Timber Trust, Inc. ("CatchMark") from September 2005 through December 2013 and as a director of Catchmark from September 2005 to June 2007 and from March 2012 through December 2013. From 1998 to 2007, Mr. Wells served as president and Chairman of the Board of Piedmont Office Realty Trust, Inc.

Mr. Wells was a real estate salesman and property manager from 1970 to 1973 for Roy D. Warren & Company, an Atlanta-based real estate company, and he was associated from 1973 to 1976 with Sax Gaskin Real Estate Company. From 1980 to February 1985, he served as Vice President of Hill-Johnson, Inc., a Georgia corporation engaged in the construction business. Mr. Wells holds a Bachelor of Business Administration degree in economics from The University of Georgia. Mr. Wells is an inaugural sponsor of the Financial Services Institute.

Section 16(a), Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the officers and directors of our general partner, and persons who own 10% or more of any class of equity interests in the Partnership, to report their beneficial ownership of equity interests in the Partnership to the SEC. Their initial reports are required to be filed using the SEC's Form 3, and they are required to report subsequent purchases, sales, and other changes using the SEC's Form 4, which must be filed within two business days of most transactions. Officers, directors, and partners owning more than 10% of any class of equity interests in the Partnership are required by SEC regulations to furnish us with copies of all reports they file pursuant to Section 16(a). We believe all persons subject to these reporting requirements filed any reports on a timely basis in 2016.

Financial Oversight Committee

We do not have a board of directors or an audit committee. Accordingly, as our corporate general partner, Wells Capital has established a Financial Oversight Committee consisting of Randy A. Simmons as the Principal Financial Officer; Tony Marrs as the Senior Vice President; and Kerianne Maloney as Senior Vice President. The Financial Oversight Committee serves the equivalent function of an audit committee for, among others, the following purposes: appointment, compensation, review, and oversight of the work of our independent registered public accountants, and establishing and enforcing the code of ethics. However, since neither we nor our corporate general partner have an audit committee and the Financial Oversight Committee is not independent of us or the General Partners, we do not have an "audit committee financial expert."

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Code of Ethics

We have adopted a code of ethics applicable to our corporate general partner's Principal Executive Officer and Principal Financial Officer, as well as the principal accounting officer, controller, or other employees of our corporate general partner performing similar functions on our behalf, if any. The code of ethics is contained in the Business Standards/Code of Conduct/General Policies established by WREF. You may obtain a copy of this code of ethics, without charge, upon request by calling our Client Services Department at 800-557-4830, option 2.


ITEM 11.	COMPENSATION OF GENERAL PARTNERS AND AFFILIATES.

While we are managed by the General Partners and their affiliates, we do not pay any salaries or other compensation directly to the General Partners or to any of the General Partners' individual employees, officers, or directors. Further, we do not employ, and are not managed by, any of our own employees, officers, or directors. Accordingly, no compensation has been awarded to, earned by, or paid to any such individuals in connection with the operation or management of the Partnership. Due to our current management structure and our lack of any employees, officers, or directors, no discussion and analysis of compensation paid by the Partnership; tabular information concerning salaries, bonuses, and other types of compensation to executive officers or directors of the Partnership; or other information regarding compensation policies and practices of the Partnership has been included in this Annual Report on Form 10-K.

See Item 13, "Certain Relationships and Related Transactions," for a description of the fees we incurred that were payable to affiliates of the General Partners during the year ended December 31, 2016.


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


(a)	No limited partner owns beneficially more than 5% of any class of the outstanding units of the Partnership as of February 28, 2017.


(b)	Set forth below is the security ownership of management as of February 28, 2017.


⁽¹⁾	Leo F. Wells, III owns 2,095.945 Cash Preferred Units through an individual retirement account.


(c)	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 we pay to our General Partners or their affiliates in connection with our operations are as follows:

Interest in Partnership Cash Flow and Net Sales Proceeds

The General Partners are entitled to receive a subordinated participation in net cash flow from operations equal to 10% of net cash flow after the limited partners holding Cash Preferred Units have received preferential distributions equal to 10% of their adjusted capital accounts in each fiscal year. The General Partners are also entitled to 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 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 of net cash from operations or net sales proceeds during the years ended December 31, 2016, 2015, and 2014.

Management and Leasing Fees

We have entered into a property management, leasing, and asset management agreement with Wells Management, an affiliate of the General Partners. In accordance with the property management and leasing agreement, Wells Management receives compensation for the management and leasing of our properties, owned directly or through the Joint Ventures, equal to the lesser

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of (a) fees that would be paid to a comparable outside firm, that is assessed periodically based on market studies, or (b) 4.5% of the gross revenues collected monthly; 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 leased on a long-term net-lease basis (10 or more years), 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 paid by the Joint Ventures and, accordingly, are included in equity in income of joint ventures in the accompanying statements of operations. Our share of management and leasing fees and lease acquisition costs incurred through the Joint Ventures that are payable to Wells Management is $2,943, $2,935, and $8,705 for the years ended December 31, 2016, 2015, and 2014, respectively.

Administrative Reimbursements

Wells Capital, one of our General Partners, and Wells Management perform certain administrative services for us, relating to accounting, property management, and other partnership administration, and incur the related expenses. Such expenses are allocated among other entities affiliated with the General Partners based on time spent on each fund by individual administrative personnel. In the opinion of the General Partners, this allocation is a reasonable estimation of such expenses. We incurred administrative expenses of $186,206, $80,736, and $92,145 payable to Wells Capital and Wells Management for the years ended December 31, 2016, 2015, and 2014, respectively.

Real Estate Commissions

In connection with the sale of our 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 years ended December 31, 2016, 2015, or 2014.

Procedures Regarding Related-Party Transactions

Our policies and procedures governing related-party transactions with our General Partners and their affiliates, including, but not limited to, all transactions required to be disclosed under Item 404(a) of Regulation S-K, are restricted or severely limited by the provisions of Articles XI, XII, XIII, and XIV of our partnership agreement, which has been filed with the SEC. No transaction has been entered into with either of our General Partners or their affiliates that does not comply with those policies and procedures. In addition, in any transaction involving a potential conflict of interest, including any transaction that would require disclosure under Item 404(a) of Regulation S-K, our General Partners must view such a transaction after taking into consideration their fiduciary duties to us.


ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES.

Preapproval Policies and Procedures

The Financial Oversight Committee preapproves all auditing and permissible nonauditing services provided by our independent registered public accountants. The approval may be given as part of the Financial Oversight Committee's approval of the scope of the engagement of our independent registered public accountants or on an individual basis. The preapproval of certain audit-related services and certain nonauditing services not exceeding enumerated dollar limits may be delegated to one or more of the Financial Oversight Committee's members, but the member to whom such authority is delegated shall report any preapproval decisions to the full Financial Oversight Committee. Our independent registered public accountants may not be retained to perform the nonauditing services specified in Section 10A(g) of the Exchange Act.

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Fees Paid to the Independent Registered Public Accountants

Frazier & Deeter, LLC serves as our independent registered public accountants and has provided audit services since September 22, 2006. All such fees are recognized in the period to which the services relate. A portion of such fees is allocated to the joint ventures in which we invest. The aggregate fees billed to us for professional accounting services by Frazier & Deeter, LLC, including the audit of our annual financial statements for the fiscal years ended December 31, 2016 and 2015, are set forth in the table below.



	2016		2015
Audit Fees	$	42,200	$	40,235
Audit-Related Fees	—		—
Tax Fees	—		—
Other Fees	—		—
Total	$	42,200	$	40,235

For purposes of the preceding table, the professional fees are classified as follows:

•

Audit Fees – These are fees for professional services performed for the audit of our annual financial statements and review of financial statements included in our Form 10-Q filings, services that are normally provided by independent registered public accountants in connection with statutory and regulatory filings or engagements, and services that generally independent registered public accountants reasonably can provide, such as statutory audits, attest services, consents, and assistance with and review of documents filed with the SEC.


•	Audit-Related Fees – These are fees for assurance and related services that traditionally are performed by independent registered public accountants, such as due diligence related to acquisitions and dispositions, internal control reviews, attestation services that are not required by statute or regulation, and consultation concerning financial accounting and reporting standards.

•

Tax Fees – These are fees for all professional services performed by professional staff in our independent registered public accountant's tax division, except those services related to the audit of our financial statements. These include fees for tax compliance, tax planning, and tax advice. Tax compliance involves preparation of any federal, state or local tax returns. Tax planning and tax advice encompass a diverse range of services, including assistance with tax audits and appeals, tax advice related to acquisitions and dispositions of assets, and requests for rulings or technical advice from taxing authorities.


•	Other Fees – These are fees for other permissible work performed that do not meet the above-described categories, including assistance with internal audit plans and risk assessments.

During the fiscal years ended December 31, 2016 and 2015, 100% of the services performed by Frazier & Deeter, LLC described above under the caption "Audit Fees" were approved in advance by a member of the Financial Oversight Committee. In addition, fees were incurred for tax services performed by an accounting firm separate from our independent registered public accountants in each year presented.

PART IV


ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) 1. A list of the financial statements contained herein is set forth on page F-1 hereof.

2. Not applicable.

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

(b) See (a) 3 above.

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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.



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

	By:	WELLS CAPITAL, INC. (General Partner)

March 31, 2017		/s/ LEO F. WELLS, III
		Leo F. Wells, III President, Principal Executive Officer, and Sole Director of Wells Capital, Inc.

March 31, 2017		/s/ RANDY A. SIMMONS
		Randy A. Simmons Senior Vice President and Principal Financial Officer of Wells Capital, Inc.

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EXHIBIT INDEX

2016 FORM 10-K

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.



Exhibit Number			Description of Document
*3.1			Agreement of Limited Partnership of Wells Real Estate Fund XIII, L.P. (Exhibit 3.1 to Form S-11 Registration Statement of Wells Real Estate Fund XIII, L.P., Commission File No. 333-48984)
*3.2			Certificate of Limited Partnership of Wells Real Estate Fund XIII, L.P. dated September 15, 1998 (Exhibit 3.2 to Form S-11 Registration Statement of Wells Real Estate Fund XIII, L.P., Commission File No. 333-48984)
*3.3			Certificate of Amendment to the Certificate of Limited Partnership of Wells Real Estate Fund XIII, L.P. dated October 20, 2000 (Exhibit 3.2(a) to Form S-11 Registration Statement of Wells Real Estate Fund XIII, L.P., Commission File No. 333-48984)
*10.1			Management and Leasing Agreement with Wells Management Company, Inc. (Exhibit 10.2 to Form S-11 Registration Statement of Wells Real Estate Fund XIII, L.P., Commission File No. 333-48984)
*10.2			Joint Venture Partnership Agreement of Wells Fund XIII-REIT Joint Venture Partnership (Exhibit 10.85 to Post-Effective Amendment No. 3 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., Commission File No. 333-44900)
*10.3			Purchase Agreement for 8560 Upland Drive (Exhibit 10.6 to Form S-11 Registration Statement of Wells Real Estate Fund XIII, L.P., Commission File No. 333-48984)
*10.4			Purchase Agreement for land adjacent to 8560 Upland Drive (Exhibit 10.7 to Form S-11 Registration Statement of Wells Real Estate Fund XIII, L.P., Commission File No. 333-48984)
*10.5			Lease Agreement for 8560 Upland Drive (Exhibit 10.8 to Form S-11 Registration Statement of Wells Real Estate Fund XIII, L.P., Commission File No. 333-48984)
*10.6			Purchase and Sale Agreement relating to Two Park Center (Exhibit 10.1 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended September 30, 2003, Commission File No. 000-49633)
*10.7			Lease Agreement with American Intercontinental University, Inc. (Exhibit 10.2 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended September 30, 2003, Commission File No. 000-49633)
*10.8			Agreement of Purchase and Sale of Property for Siemens Orlando Buildings and Third Amendment Thereto (Exhibit 10.3 to Form S-11 Registration Statement of Wells Real Estate Fund XIV, L.P., Commission File No. 333-101463)
*10.9			Lease Agreement with Siemens Shared Services, LLC (Exhibit 10.4 to Form S-11 Registration Statement of Wells Real Estate Fund XIV, L.P., Commission File No. 333-101463)
*10.10			Joint Venture Partnership Agreement of Fund XIII and Fund XIV Associates (Exhibit 10.16 to Form 10-K of Wells Real Estate Fund XIII, L.P. for the fiscal year ended December 31, 2003, Commission File No. 000-49633)
*10.11			Second Amendment to Lease Agreement with Siemens Shared Services, LLC relating to the Siemens-Orlando Building (Exhibit 10.1 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended June 30, 2009, Commission File No. 000-49633)
*10.12			Eighth Amendment to Lease Agreement with American Intercontinental University, Inc. relating to Two Park Center (Exhibit 10.1 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended June 30, 2010, Commission File No. 000-49633)
*10.13			First Amendment to Lease with Quantum Corporation relating to 8560 Upland Drive (Exhibit 10.1 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended March 31, 2011, Commission File No. 000-49633)
*10.14			Third Amendment to Lease Agreement with Siemens Real Estate relating to the Siemens-Orlando Building (Exhibit 10.1 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended September 30, 2011, Commission File No. 000-49633)
*10.15			Tenth Amendment to Lease Agreement with American Intercontinental University, Inc. relating to Two Park Center (Exhibit 10.15 to Form 10-K of Wells Real Estate Fund XIII, L.P. for the fiscal year ended December 31, 2011, Commission File No. 000-49633)

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*10.16			Fourth Amendment to Lease Agreement with Siemens Real Estate relating to the Siemens-Orlando Building (Exhibit 10.2 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended March 31, 2012, Commission File No. 000-49633)
*10.17			Second Amendment to Lease Agreement with Etour and Travel, Inc. relating to the Siemens-Orlando Building (Exhibit 10.1 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended June 30, 2012, Commission File No. 000-49633)
*10.18			Fifth Amendment to Lease Agreement with Siemens Real Estate relating to the Siemens-Orlando Building (Exhibit 10.18 to Form 10-K of Wells Real Estate Fund XIII, L.P. for the year ended December 31, 2013, Commission File No. 000-49633)
*10.19			Purchase and Sale Agreement for the sale of Two Park Center (Exhibit 10.1 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended March 31, 2014, Commission File No. 000-49633)
*10.20			Purchase and Sale Agreement for the sale of the Siemens - Orlando Building (Exhibit 10.2 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended September 30, 2014, Commission File No. 000-49633)
*10.21			First Amendment to the Purchase and Sale Agreement for the sale of the Siemens - Orlando Building (Exhibit 10.3 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended September 30, 2014, Commission File No. 000-49633)
*10.22			Second Amendment to the Purchase and Sale Agreement for the sale of the Siemens - Orlando Building (Exhibit 10.4 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended September 30, 2014, Commission File No. 000-49633)
*10.23			Third Amendment to the Purchase and Sale Agreement for the sale of the Siemens - Orlando Building (Exhibit 10.5 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended September 30, 2014, Commission File No. 000-49633)
*10.24			Fourth Amendment to the Purchase and Sale Agreement for the sale of the Siemens - Orlando Building (Exhibit 10.6 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended September 30, 2014, Commission File No. 000-49633)
*10.25			Fifth Amendment to the Purchase and Sale Agreement for the sale of the Siemens - Orlando Building (Exhibit 10.7 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended September 30, 2014, Commission File No. 000-49633)
*10.26			Sixth Amendment to the Purchase and Sale Agreement for the sale of the Siemens - Orlando Building (Exhibit 10.8 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended September 30, 2014, Commission File No. 000-49633)
*10.27			Seventh Amendment to the Purchase and Sale Agreement for the sale of the Siemens - Orlando Building (Exhibit 10.9 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended September 30, 2014, Commission File No. 000-49633)
*10.28			Reinstatement of and First Amendment to Purchase and Sale Agreement (Exhibit 10.1 to Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended March 31, 2015, Commission File No. 000-49633)
10.29			Lease between Wells Real Estate Fund XIII-REIT Joint Venture Partnership and Charter Communications Holding Company, LLC related to 8560 Upland Drive
31.1			Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2			Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1			Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS			XBRL Instance Document.
101.SCH			XBRL Taxonomy Extension Schema.
101.CAL			XBRL Taxonomy Extension Calculation Linkbase.
101.DEF			XBRL Taxonomy Extension Definition Linkbase.
101.LAB			XBRL Taxonomy Extension Label Linkbase.
101.PRE			XBRL Taxonomy Extension Presentation Linkbase.


*	Previously filed and incorporated herein by reference.

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WELLS REAL ESTATE FUND XIII, L.P.

TABLE OF CONTENTS



FINANCIAL STATEMENTS		Page No.

WELLS REAL ESTATE FUND XIII, L.P.

	Report of Independent Registered Public Accounting Firm - Frazier & Deeter, LLC	F- 2

	Balance Sheets as of December 31, 2016 and 2015	F- 3

	Statements of Operations for the Years Ended December 31, 2016, 2015, and 2014	F- 4

	Statements of Partners' Capital for the Years Ended December 31, 2016, 2015, and 2014	F- 5

	Statements of Cash Flows for the Years Ended December 31, 2016, 2015, and 2014	F- 6

	Notes to Financial Statements	F- 7

WELLS FUND XIII-REIT JOINT VENTURE PARTNERSHIP

	Report of Independent Registered Public Accounting Firm - Frazier & Deeter, LLC	F- 17

	Balance Sheets as of December 31, 2016 and 2015	F- 18

	Statements of Operations for the Years Ended December 31, 2016, 2015, and 2014	F- 19

	Statements of Partners' Capital for the Years Ended December 31, 2016, 2015, and 2014	F- 20

	Statements of Cash Flows for the Years Ended December 31, 2016, 2015, and 2014	F- 21

	Notes to Financial Statements	F- 22

	Schedule III - Real Estate and Accumulated Depreciation and Amortization	F- 27

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Partners of

Wells Real Estate Fund XIII, L.P.

We have audited the accompanying balance sheets of Wells Real Estate Fund XIII, L.P. (the "Partnership") as of December 31, 2016 and 2015, and the related statements of operations, partners' capital, and cash flows for each of the three years in the period ended December 31, 2016. 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 the standards of the Public Company Accounting Oversight Board (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. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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, 2016 and 2015 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles.

/s/ Frazier & Deeter, LLC

Atlanta, Georgia

March 31, 2017

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WELLS REAL ESTATE FUND XIII, L.P.

BALANCE SHEETS




	December 31, 2016		December 31, 2015
Assets:
Investment in joint venture	$	2,877,687	$	2,881,012
Cash and cash equivalents	3,870,222		4,050,609
Due from joint venture	—		81,591
Other assets	34,180		7,302
Total assets	$	6,782,089	$	7,020,514

Liabilities:
Accounts payable and accrued expenses	$	6,741	$	11,516
Due to affiliates	—		8,856
Total liabilities	6,741		20,372

Commitments and Contingencies

Partners' Capital:
Limited Partners:
Cash Preferred – 3,213,008 units issued and outstanding	6,775,348		6,998,605
Tax Preferred – 559,040 units issued and outstanding	—		—
General Partners	—		1,537
Total partners' capital	6,775,348		7,000,142
Total liabilities and partners' capital	$	6,782,089	$	7,020,514

See accompanying notes.

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WELLS REAL ESTATE FUND XIII, L.P.

STATEMENTS OF OPERATIONS



	Years ended December 31,
	2016			2015			2014
Revenues:
Equity in Income of Joint Ventures	$	141,341		$	212,340		$	2,399,540
Interest and other income	—			2,909			2,508
Total revenues	141,341			215,249			2,402,048

General and administrative expenses	366,135			277,107			213,988
Net Income (Loss)	$	(224,794	)	$	(61,858	)	$	2,188,060

Net Income (Loss) Allocated to:
Cash Preferred Limited Partners	$	(223,257	)	$	3,405		$	907,445
Tax Preferred Limited Partners	$	—		$	(64,644	)	$	1,279,661
General Partners	$	(1,537	)	$	(619	)	$	954

Net Income (Loss) per Weighted-Average Limited Partner Unit:
Cash Preferred	$	(0.07	)	$	0.00		$	0.28
Tax Preferred	$	0.00		$	(0.12	)	$	2.29

Weighted-Average Limited Partner Units Outstanding:
Cash Preferred	3,213,008			3,213,008			3,213,008
Tax Preferred	559,040			559,040			559,040

See accompanying notes.

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WELLS REAL ESTATE FUND XIII, L.P.

STATEMENTS OF PARTNERS' CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2016, 2015, AND 2014



	Limited Partners								General Partners			Total Partners' Capital
	Cash Preferred				Tax Preferred
	Units	Amount			Units	Amount
BALANCE, December 31, 2013	3,213,008	$	13,413,153		559,040	$	—		$	1,202		$	13,414,355

Net income	—	907,445			—	1,279,661			954			2,188,060
BALANCE, December 31, 2014	3,213,008	14,320,598			559,040	1,279,661			2,156			15,602,415

Net income (loss)	—	3,405			—	(64,644		)	(619		)	(61,858		)
Distributions of net sale proceeds ($2.28 and $2.17 per weighted-average Cash Preferred Unit and Tax Preferred Unit, respectively)	—	(7,325,398		)	—	(1,215,017		)	—			(8,540,415		)
BALANCE, December 31, 2015	3,213,008	6,998,605			559,040	—			1,537			7,000,142

Net loss	—	(223,257		)	—	—			(1,537		)	(224,794		)
BALANCE, December 31, 2016	3,213,008	$	6,775,348		559,040	$	—		$	—		$	6,775,348

See accompanying notes.

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WELLS REAL ESTATE FUND XIII, L.P.

STATEMENTS OF CASH FLOWS



	Years ended December 31,
	2016			2015			2014
Cash Flows from Operating Activities:
Net income (loss)	$	(224,794	)	$	(61,858	)	$	2,188,060
Operating distributions received from joint ventures	226,257			336,459			284,391
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Equity in income of joint ventures	(141,341		)	(212,340		)	(2,399,540		)
Changes in assets and liabilities:
(Increase) decrease in other assets	(26,878		)	10,036			(4,358		)
(Decrease) increase in accounts payable and accrued expenses	(4,775		)	9,675			(10,672		)
(Decrease) increase in due to affiliates	(8,856		)	3,201			(1,152		)
Net cash (used in) provided by operating activities	(180,387		)	85,173			56,729

Cash Flows from Investing Activities:
Net sale proceeds received from joint ventures	—			6,174,770			2,352,592
Investment in joint venture	—			(3,800		)	(16,490		)
Net cash provided by investing activities	—			6,170,970			2,336,102

Cash Flows from Financing Activities:
Distributions of net sale proceeds to limited partners	—			(8,540,415		)	—
Net (Decrease) Increase in Cash and Cash Equivalents	(180,387		)	(2,284,272		)	2,392,831

Cash and Cash Equivalents, beginning of year	4,050,609			6,334,881			3,942,050
Cash and Cash Equivalents, end of year	$	3,870,222		$	4,050,609		$	6,334,881

See accompanying notes.

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WELLS REAL ESTATE FUND XIII, L.P.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2016 AND 2015


1.	ORGANIZATION AND BUSINESS

Wells Real Estate Fund XIII, L.P. (the "Partnership") is a Georgia public limited partnership with Leo F. Wells, III and Wells Capital, Inc. ("Wells Capital"), a Georgia corporation, serving as its general partners (collectively, the "General Partners"). Wells Capital is a wholly owned subsidiary of Wells Real Estate Funds, Inc. ("WREF"). Leo F. Wells, III is the president and sole director of Wells Capital and the president, sole director, and sole owner of WREF. The Partnership was formed on September 15, 1998 for the purpose of acquiring, developing, owning, operating, improving, leasing, and managing income producing commercial properties for investment purposes. Upon subscription for units, the limited partners elected to have their units treated as Cash Preferred Units or Tax Preferred Units. Thereafter, limited partners have the right to change their prior elections to have some or all of their units treated as Cash Preferred Units or Tax Preferred 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) add or remove a general partner; (d) elect a new general partner; (e) dissolve the Partnership; (f) authorize a merger or a consolidation of the Partnership; and (g) approve a sale involving all or substantially all of the Partnership's assets, subject to certain limitations. 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 which class of unit is selected.

On March 29, 2001, the Partnership commenced a public offering of up to $45,000,000 of Cash Preferred or Tax Preferred limited partnership units ($10.00 per unit) pursuant to a Registration Statement filed on Form S-11 under the Securities Act. The offering was terminated on March 28, 2003, at which time the Partnership had sold approximately 3,023,371 Cash Preferred Units and 748,678 Tax Preferred Units representing total limited partner capital contributions of $37,720,487.

The Partnership has owned indirect interests in all of its real estate assets through joint ventures with other entities affiliated with the General Partners and Piedmont Operating Partnership, LP ("Piedmont OP"), formerly known as Wells Operating Partnership, L.P. Piedmont OP is a Delaware limited partnership with Piedmont Office Realty Trust, Inc., ("Piedmont REIT"), formerly known as Wells Real Estate Investment Trust, Inc., serving as its general partner. Piedmont REIT is a Maryland corporation that has elected to be taxed as a real estate investment trust. During the periods presented, the Partnership owned interests in the following joint ventures (the "Joint Ventures") and properties:



Joint Venture	Joint Venture Partners	Ownership %	Properties
Wells Fund XIII-REIT Joint Venture Partnership ("Fund XIII-REIT Associates")	• Wells Real Estate Fund XIII, L.P. • Piedmont Operating Partnership, LP	28.1% 71.9%	1. 8560 Upland Drive Two connected one-story office and assembly buildings located in Englewood, Colorado 2. Two Park Center⁽¹⁾ A four-story office building located in Hoffman Estates, Illinois
Fund XIII and Fund XIV Associates ("Fund XIII-XIV Associates")⁽²⁾	• Wells Real Estate Fund XIII, L.P. • Wells Real Estate Fund XIV, L.P.	47.3% 52.7%	3. Siemens – Orlando Building⁽³⁾ Two single-story office buildings located in Orlando, Florida

⁽¹⁾ This property was sold in May 2014.

⁽²⁾ This joint venture wound up its affairs and was terminated in 2015.

⁽³⁾ This property was sold in December 2014.

Wells Real Estate Fund XIV, L.P. was affiliated with the Partnership through common general partners. Each of the properties described above was acquired on an all-cash basis.


2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Partnership's financial statements are prepared in accordance with U.S. generally accepted accounting principles ("GAAP").

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Use of Estimates

Preparation of the Partnership's financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. Actual results could differ from those estimates.

Investment in Joint Venture

The Partnership has evaluated the remaining Joint Venture and concluded that it is not a variable interest entity. The Partnership does not have control over the operations of the Joint Venture; however, it does exercise significant influence. Approval by the Partnership as well as the other joint venture partner is required for any major decision or any action that would materially affect the Joint Venture or its real property investment. Accordingly, the Partnership accounts for its investment in the Joint Venture using the equity method of accounting, whereby the original investment is recorded at cost and subsequently adjusted for contributions, distributions, and net income (loss) attributable to the Partnership. Pursuant to the terms of the joint venture agreement, all income (loss) and distributions are allocated to the joint venture partners in accordance with their respective ownership interests. Distributions of net cash from operations, if available, are generally distributed to the joint venture partners on a quarterly basis.

Evaluating the Recoverability of Real Estate Assets

The Partnership continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate assets owned through the Partnership's investment in the Joint Venture may not be recoverable. When indicators of potential impairment are present which suggest 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 respective carrying values will be recovered through the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition for assets held for use, or with the estimated fair values, less costs to sell, for assets held for sale. In the event that the expected undiscounted future cash flows for assets held for use, or the estimated fair value, less costs to sell, for assets held for sale do not exceed the respective asset carrying value, management adjusts the real estate assets to their respective estimated fair values, pursuant to the provisions of the property, plant, and equipment accounting standard for the impairment or disposal of long-lived assets, and recognizes an impairment loss. Estimated fair values are determined based on the following information, dependent upon availability: (i) recently quoted market price(s) for the subject property, or highly comparable properties, under sufficiently active and normal market conditions, or (ii) the present value of future cash flows, including estimated residual value.

Fair Value

While various techniques and assumptions can be used to estimate fair value depending on the nature of the asset or liability, the accounting standard for fair value measurements and disclosures describes three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Partnership has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity's own assumptions, as little, if any, related market activity or information is available. Examples of Level 3 inputs include estimated holding periods, discount rates, market capitalization rates, expected lease rental rates, timing of new leases, and sales prices; additionally, the Partnership may assign an estimated probability-weighting to more than one fair value estimate based on the Partnership's assessment of the likelihood of the respective underlying assumptions occurring as of the evaluation date. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Partnership's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the asset or liability.

Projections of expected future cash flows require that the Partnership estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, the number of months it takes to re-lease the property, and the number of years the property is held for investment, among other factors. The subjectivity of assumptions used in the future cash flow analysis, including discount rates, could result in an incorrect assessment of the property's future cash flows and

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fair value, and could result in the misstatement of the carrying values of investments, real estate assets and related intangible assets held by the Partnership or the Joint Venture and net income of the Partnership.

Cash and Cash Equivalents

The Partnership considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents include cash and short-term investments. Short-term investments are stated at cost, which approximates fair value and consist of investments in money market accounts.

Other Assets

Other assets are primarily comprised of withholding taxes reimbursable from the limited partners and prepaid expenses. Prepaid expenses are recognized as the related services are provided. Balances without a future economic benefit are written off as they are identified.

Distribution of Net Cash from Operations

Net cash from operations, if available and unless reserved, is generally distributed quarterly to the limited partners as follows:


•	First, to all Cash Preferred limited partners on a per-unit basis until such limited partners have received distributions equal to a 10% per annum return on their respective net capital contributions, as defined.


•	Second, to the General Partners until the General Partners have received distributions equal to 10% of the total cumulative distributions paid by the Partnership.


•	Third, to the Cash Preferred limited partners on a per-unit basis and the General Partners allocated on a basis of 90% and 10%, respectively.

No distributions of net cash from operations will be made to limited partners holding Tax Preferred Units.

Distribution of Net Sale Proceeds

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

•


•	To limited partners holding units which at any time have been treated as Tax Preferred Units until the limited partners have received an amount necessary to equal the net cash from operations previously received by the limited partners holding Cash Preferred Units on a per-unit basis;


•	To all limited partners on a per-unit basis until the limited partners have received 100% of their respective net capital contributions, as defined;


•	To all limited partners on a per-unit basis until the limited partners have received a cumulative 10% per annum return on their respective net capital contributions, as defined;

•


•	To the General Partners until they have received 100% of their respective capital contributions, as defined;

•


•	Thereafter, 80% to the limited partners on a per-unit basis and 20% to the General Partners.

Allocations of Net Income, Net Loss, and Gain on Sale

For the purpose of determining allocations per the partnership agreement, net income is defined as net income recognized by the Partnership, excluding deductions for depreciation, amortization, cost recovery, and the gain on sale of assets. Net income, as

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defined, of the Partnership will be allocated each year in the same proportion that net cash from operations is distributed to the partners holding Cash Preferred Units and to the General Partners. To the extent the Partnership's net income in any year exceeds net cash from operations, such excess net income will be allocated 99% to the limited partners holding Cash Preferred Units and 1% to the General Partners.

Net loss, depreciation, and amortization deductions for each fiscal year will be allocated as follows: (a) 99% to the limited partners holding Tax Preferred 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 remaining property 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: (a) allocations made pursuant to the qualified income offset provisions of the partnership agreement; (b) allocations to partners having negative capital accounts until all negative capital accounts have been restored to zero; and (c) allocations to limited partners holding Tax Preferred Units in amounts equal to the deductions for depreciation and amortization previously allocated to them with respect to the specific 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.

Recent Accounting Pronouncements

In January 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-01, Recognition and Measurement of Financial Assets and Liabilities ("ASU 2016-01"), which requires equity investments, except those accounted for under the equity method of accounting, to be measured at estimated fair value with changes in fair value recognized in net income. Additionally, ASU 2016-01 simplifies the impairment assessment of equity investments, and eliminates certain disclosure requirements. ASU 2016-01 is effective for the period beginning on January 1, 2018. The Partnership is currently evaluating the impact that the adoption of ASU 2016-01 will have on its financial statements or disclosures. The Partnership has not yet determined the effect of ASU 2016-01 on its financial position or results of operations.

In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-02, Leases ("ASU 2016-02"), which changes the definition of a lease, as well as the accounting for operating leases by requiring lessees to recognize assets and liabilities which arise from the lease, consisting of a liability to make lease payments (the lease liability) and a right-of-use asset, representing the right to use the leased asset over the term of the lease for all leases with a term greater than 12 months. Accounting for leases by lessors is substantially unchanged from prior practice, which means continuing to recognize lease revenue on a straight-line basis. ASU 2016-02 is effective for the period beginning on January 1, 2019, but early adoption is permitted. The Partnership is currently evaluating the impact that the adoption of ASU 2016-02 will have on its financial statements or disclosures and has not selected a transition date.

In August 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments,” which addresses the Statement of Cash Flow classification and presentation of certain cash transactions. ASU No. 2016-15 is effective for the Company’s fiscal year commencing on January 1, 2018. The effect of this amendment is to be applied retrospectively where practical and early adoption is permitted. The Company expects to adopt ASU No. 2016-15 for the Company’s fiscal year commencing on January 1, 2018. The adoption of ASU No. 2016-15 will not have a material effect on the Company’s consolidated financial position or the Company’s consolidated results of operations.

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.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely that not that the tax position will be sustained on examination by the taxing authority, based on the technical merits of the position. All federal and state income tax positions taken or anticipated to be taken in the income tax returns are attributable to the partners and not to the entity. As of December 31, 2016, there are no known items which would result in a material accrual related to where the Company has federal or state attributable tax positions.

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3.	INVESTMENT IN JOINT VENTURE

Due from Joint Venture

As presented in the accompanying balance sheets, due from joint venture as of December 31, 2015 includes operating cash flow generated by the remaining Joint Venture during the fourth quarter of December 31, 2015, which is payable to the Partnership.

Fund XIII-XIV Associates wound up its affairs and was terminated in 2015.

Summary of Investments

The Partnership's investments and approximate ownership percentages in the remaining Joint Venture as of December 31, 2016 and 2015, are summarized below:



	2016			2015
	Amount		Percentage	Amount		Percentage
Fund XIII-REIT Associates	$	2,877,687	28%	$	2,881,012	28%

Fund XIII-XIV Associates wound up its affairs and was terminated in 2015.

Summary of Activity

Rollforwards of the Partnership's investment in the remaining Joint Venture for the years ended December 31, 2016 and 2015, are presented below:



	2016			2015
Investment in Joint Venture, beginning of year	$	2,881,012		$	9,170,269
Equity in income of Joint Venture	141,341			212,340
Contributions to Joint Venture	—			3,800
Distributions from Joint Venture	(144,666		)	(6,505,397		)
Investment in Joint Venture, end of year	$	2,877,687		$	2,881,012

Summary of Financial Information

Condensed financial information for the Joint Ventures as of December 31, 2016 and 2015, and for the years ended December 31, 2016, 2015, and 2014, is presented below:



	Total Assets				Total Liabilities				Total Equity
	December 31,				December 31,				December 31,
	2016		2015		2016		2015		2016		2015
Fund XIII-REIT Associates	$	11,277,939	$	11,052,305	$	1,040,703	$	803,240	$	10,237,236	$	10,249,065

Fund XIII-XIV Associates wound up its affairs and was terminated in 2015.



	Total Revenues						Income (Loss) from Continuing Operations								Income (Loss) from Discontinued Operations							Net Income (Loss)
	For the Years Ended						For the Years Ended								For the Years Ended							For the Years Ended
	December 31,						December 31,								December 31,							December 31,
	2016		2015		2014		2016		2015			2014			2016		2015		2014			2016		2015			2014
Fund XIII-REIT Associates	$	1,765,191	$	1,979,829	$	1,540,697	$	502,812	$	768,905		$	307,318		$	—	$	—	$	(734,021	)	$	502,812	$	768,905		$	(426,703	)
Fund XIII-XIV Associates	—		—		—		—		(9,698		)	(19,328		)	—		1,666		5,345,937			—		(8,032		)	5,326,609
	$	1,765,191	$	1,979,829	$	1,540,697	$	502,812	$	759,207		$	287,990		$	—	$	1,666	$	4,611,916		$	502,812	$	760,873		$	4,899,906

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The Partnership implemented Accounting Standards Update 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity ("ASU 2014-08"), effective January 1, 2015. Properties sold prior to implementing ASU 2014-08 are included in discontinued operations for all periods presented.

The Partnership allocates its share of net income, net loss, and gain (loss) on sale generated by the properties owned by the Joint Ventures to its Cash Preferred and Tax Preferred limited partners pursuant to the partnership agreement provisions outlined in Note 2. The components of income (loss) from discontinued operations recognized by the Joint Ventures are provided below:



	Year Ended						Year Ended						Year Ended
	December 31, 2016						December 31, 2015						December 31, 2014
	Operating Income		Gain (Loss) on Sale		Total		Operating Income		Gain (Loss) on Sale		Total		Operating Income (Loss)			Gain (Loss) on Sale			Total
Fund XIII-REIT Associates	$	—	$	—	$	—	$	—	$	—	$	—	$	(498,880	)	$	(235,141	)	$	(734,021	)
Fund XIII-XIV Associates	$	—	$	—	$	—	$	1,666	$	—	$	1,666	$	794,455		$	4,551,482		$	5,345,937

On May 29, 2014, Fund XIII-REIT Associates sold Two Park Center to an unaffiliated third party for a gross sales price of $8,825,000, exclusive of closing costs. As result of the sale, the Partnership received net sale proceeds of approximately $2,353,000 and was allocated a loss of approximately $66,000.

On December 31, 2014, Fund XIII-XIV Associates sold the Siemens - Orlando Building to an unaffiliated third party for a gross sales price of $13,570,000, exclusive of closing costs. As result of the sale, the Partnership received net sale proceeds of approximately $6,175,000 in January 2015 and was allocated a gain of approximately $2,153,000.


4.	RELATED-PARTY TRANSACTIONS

Management and Leasing Fees

The Partnership has entered into a property management, leasing, and asset management agreement with Wells Management Company, Inc. ("Wells Management"), an affiliate of the General Partners. In accordance with the property management and leasing agreement, Wells Management receives compensation for the management and leasing of the Partnership's properties, owned through the Joint Ventures, equal to the lesser of (a) 4.5% of the gross revenues collected monthly; 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, or (b) fees that would be paid to a comparable outside firm, which is assessed periodically based on market studies. In the case of commercial properties leased on a long-term net-lease basis (ten or more years), 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 paid by the Joint Ventures and, accordingly, are included in equity in income of joint ventures in the accompanying statements of operations. The Partnership's share of management and leasing fees and lease acquisition costs incurred through the Joint Ventures and payable to Wells Management is $2,943, $2,935, and $8,705 for the years ended December 31, 2016, 2015, and 2014, respectively.

Administrative Reimbursements

Wells Capital, one of the Partnership's General Partners, and Wells Management perform certain administrative services for the Partnership, relating to accounting, property management, and other partnership administration, and incur the related expenses. Such expenses are allocated among other entities affiliated with the General Partners based on estimates of the amount of time dedicated to each fund by individual administrative personnel. In the opinion of the General Partners, this allocation is a reasonable estimation of such expenses. The Partnership incurred administrative expenses of $186,206, $80,736, and $92,145 payable to Wells Capital and Wells Management for the years ended December 31, 2016, 2015, and 2014, respectively. In addition, Wells Capital and Wells Management pay for certain operating expenses of the Partnership ("bill-backs") directly and invoice the Partnership for the reimbursement thereof on a quarterly basis. As presented in the accompanying balance sheets, due to affiliates as of December 31, 2016 and 2015 represents administrative reimbursements and bill-backs due to Wells Capital and/or Wells Management.

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Operational Dependency

The Partnership has engaged Wells Capital and Wells Management to provide certain essential services, including supervision of the management and leasing of its properties, asset acquisition and disposition services, as well as other administrative responsibilities, including accounting services and investor communications and relations. These agreements are terminable by either party upon 60 days' written notice. As a result of these relationships, the Partnership's operations are dependent upon Wells Capital and Wells Management.

Wells Capital and Wells Management are owned and controlled by WREF. The operations of Wells Capital, Wells Investment Securities, Inc., Wells Management, and their affiliates represent substantially all of the business of WREF. Accordingly, we focus on the financial condition of WREF when assessing the financial condition of Wells Capital and Wells Management. In the event that WREF were to become unable to meet its obligations as they become due, the Partnership might be required to find alternative service providers. Beginning in 2013, WREF began winding down its operations and, as a result, its workforce has been reduced. As of December 31, 2016, the Partnership has no reason to believe that WREF does not have access to adequate liquidity and capital resources, including cash on hand, other investments, and borrowing capacity, necessary to meet its current and future obligations as they become due.


5.	ECONOMIC DEPENDENCY

The Partnership is dependent upon the ability of its current tenants to pay their contractual rent amounts as they become due. The inability of a tenant to pay future rental amounts would be likely to have a negative impact on the Partnership's results of operations. The Partnership is not currently aware of any reason why its existing tenants should not be able to pay their contractual rental amounts as they become due in all material respects. Situations preventing the tenants from paying contractual rents could result in a material adverse impact on the Partnership's results of operations.


6.	PER-UNIT AMOUNTS

Income (loss) per limited partnership unit amounts are calculated based upon weighted-average units outstanding during the respective periods. Income (loss) per limited partnership unit, as presented in the accompanying financial statements, will vary from the per-unit amounts attributable to the individual limited partners due to the differences between the GAAP and tax basis treatment of certain items of income and expense and the fact that, within the respective classes of Cash Preferred Units and Tax Preferred Units, individual units have different characteristics including capital bases, cumulative operating and net property sales proceeds distributions, and cumulative earnings allocations as a result of, among other things, the ability of limited partners to elect that their units be treated as Cash Preferred Units or Tax Preferred Units, or to change their prior elections, on a quarterly basis.

For the reasons mentioned above, distributions of net sale proceeds per unit also vary among individual limited partners. Distributions of net sale proceeds have been calculated at the investor level pursuant to the partnership agreement and allocated between the Cash Preferred and Tax Preferred limited partners in the period paid. Accordingly, distributions of net sale proceeds per unit, as presented in the accompanying financial statements, vary from the per-unit amounts attributable to the individual limited partners.

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7.	INCOME TAX BASIS NET INCOME AND PARTNERS' CAPITAL

A reconciliation of the Partnership's financial statement net income (loss) to net income (loss) presented in accordance with the federal income tax basis of accounting is as follows for the years ended December 31, 2016, 2015, and 2014:



	2016			2015			2014
Financial statement net income (loss)	$	(224,794	)	$	(61,858	)	$	2,188,060
Adjustments in net income (loss) resulting from:
Depreciation expense for financial reporting purposes greater than (less than) amounts for income tax purposes	10,791			9,870			(33,797		)
Amortization expense for financial reporting purposes (greater than) less than amounts for income tax purposes	—			—			(141,664		)
Rental income for financial reporting purposes less than amounts for income tax purposes	8,770			(18,666		)	(304,178		)
Gain on sale of property for financial reporting purposes in excess of amounts for income tax purposes	—			—			(4,442,936		)
Other	669			677			(24,921		)
Income tax basis net income (loss)	$	(204,564	)	$	(69,977	)	$	(2,759,436	)

A reconciliation of partners' capital balances, as presented in the accompanying financial statements, to partners' capital balances, as presented in accordance with the federal income tax basis of accounting, is as follows for the years ended December 31, 2016, 2015, and 2014:



	2016			2015			2014
Financial statement partners' capital	$	6,775,348		$	7,000,142		$	15,602,415
Increase (decrease) in partners' capital resulting from:
Accumulated depreciation expense for financial reporting purposes less than amounts for income tax purposes	(348,470		)	(359,261		)	(369,131		)
Accumulated amortization expense for financial reporting purposes greater than amounts for income tax purposes	4,354,529			4,354,529			4,354,529
Accumulated meals and entertainment	31			31			31
Accumulated bad debt recoveries, net for financial reporting purposes in excess of amounts for income tax purposes	(9,838		)	(9,838		)	(9,838		)
Capitalization of syndication costs for income tax purposes, which are accounted for as cost of capital for financial reporting purposes	4,568,769			4,568,769			4,568,769
Accumulated rental income for income tax purposes greater than (less than) amounts for financial reporting purposes	(254,421		)	(263,191		)	(244,525		)
Accumulated gains on sale of properties for financial reporting purposes in (excess of) less than amounts for income tax purposes	(3,334,689		)	(3,334,689		)	(3,334,689		)
Other	(110,678		)	(111,347		)	(112,024		)
Income tax basis partners' capital	$	11,640,581		$	11,845,145		$	20,455,537

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8.	QUARTERLY RESULTS (UNAUDITED)

Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2016 and 2015:



	2016 Quarter Ended
	March 31			June 30			September 30			December 31
Equity in income of joint ventures	$	40,416		$	47,726		$	49,904		$	3,295
Net loss	$	(81,470	)	$	(16,350	)	$	(38,564	)	$	(88,410	)
Net loss allocated to:
Cash Preferred limited partners	$	(80,655	)	$	(16,187	)	$	(38,178	)	$	(88,237	)
Tax Preferred limited partners	$	—		$	—		$	—		$	—
General Partners	$	(815	)	$	(163	)	$	(386	)	$	(173	)
Net loss per weighted-average limited partner unit:
Cash Preferred^(a)	$	(0.03	)	$	(0.01	)	$	(0.01	)	$	(0.02	)
Tax Preferred	$	—		$	—		$	—		$	—
Distribution of operating cash per weighted-average limited partner unit:
Cash Preferred	$	—		$	—		$	—		$	—
Tax Preferred	$	—		$	—		$	—		$	—
Distribution of net sale proceeds per weighted-average limited partner unit:
Cash Preferred	$	—		$	—		$	—		$	—
Tax Preferred	$	—		$	—		$	—		$	—



	2015 Quarter Ended
	March 31			June 30			September 30			December 31
Equity in income of joint ventures	$	58,530		$	48,756		$	52,747		$	52,307
Net income (loss)	$	(17,323	)	$	(21,132	)	$	1,200		$	(24,603	)
Net income (loss) allocated to:
Cash Preferred limited partners	$	12,968		$	9,198		$	5,596		$	(24,357	)
Tax Preferred limited partners	$	(30,118	)	$	(30,118	)	$	(4,408	)	$	—
General Partners	$	(173	)	$	(212	)	$	12		$	(246	)
Net income (loss) per weighted-average limited partner unit:
Cash Preferred^(a)	$	—		$	—		$	—		$	(0.01	)
Tax Preferred^(a)	$	(0.05	)	$	(0.05	)	$	(0.01	)	$	—
Distribution of operating cash per weighted-average limited partner unit:
Cash Preferred	$	—		$	—		$	—		$	—
Tax Preferred	$	—		$	—		$	—		$	—
Distribution of net sale proceeds per weighted-average limited partner unit:
Cash Preferred	$	2.28		$	—		$	—		$	—
Tax Preferred	$	2.17		$	—		$	—		$	—

(a)

The quarterly per-unit amounts have been calculated using actual income (loss) for the respective quarters. Conversely, the corresponding annual income (loss) per-unit amounts have been calculated assuming that income (loss) was earned ratably over the year. As a result, the sum of these quarterly per-unit amounts does not equal the respective annual per-unit amount presented in the accompanying financial statements.

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9.	GENERAL AND ADMINISTRATIVE COSTS

General and administrative costs for the years ended December 31, 2016, 2015, and 2014, are composed of the following items:



	2016		2015		2014
Salary reimbursements	$	186,206	$	80,736	$	92,145
Other professional fees	102,892		88,211		58,053
Independent accounting fees	42,200		51,813		26,240
Computer costs	9,574		7,280		4,195
Transfer agent fees	8,708		8,604		6,779
Printing expenses	7,433		21,769		17,736
Postage and delivery expenses	4,048		9,990		3,279
Legal fees	3,556		6,412		4,288
Registration and filing fees	1,098		1,192		1,305
Bank service charges	420		985		346
Taxes and licensing fees	—		115		(378		)
Total general and administrative costs	$	366,135	$	277,107	$	213,988


10.	COMMITMENTS AND CONTINGENCIES

From time to time, the Partnership and its General Partners are parties to legal proceedings which arise in the ordinary course of the Partnership's business. The Partnership is not currently involved in any litigation for which the outcome would, in the judgment of the General Partners based on information currently available, have a materially adverse impact on the results of operations or financial condition of the Partnership, nor is management aware of any such litigation threatened against the Partnership.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The General Partners of

Wells Fund XIII-REIT Joint Venture Partnership:

We have audited the accompanying balance sheets of Wells Fund XIII-REIT Joint Venture Partnership (the "Joint Venture") as of December 31, 2016 and 2015, and the related statements of operations, partners' capital, and cash flows for each of the three years in the period ended December 31, 2016. In connection with our audits of the financial statements, we also have audited financial statement Schedule III, real estate and accumulated depreciation and amortization. These financial statements and financial statement schedule are the responsibility of the Joint Venture's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (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. The Joint Venture is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Joint Venture's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Fund XIII-REIT Joint Venture Partnership as of December 31, 2016 and 2015 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement Schedule III, real estate and accumulated depreciation and amortization, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ Frazier & Deeter, LLC

Atlanta, Georgia

March 31, 2017

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WELLS FUND XIII-REIT JOINT VENTURE PARTNERSHIP

BALANCE SHEETS

DECEMBER 31, 2016 AND 2015



	2016		2015
Assets:
Real estate assets, at cost:
Land	$	2,047,735	$	2,047,735
Building and improvements, less accumulated depreciation of $4,978,638 and $4,632,425 at December 31, 2016 and 2015, respectively	7,581,996		7,578,540
Total real estate assets	9,629,731		9,626,275

Cash and cash equivalents	490,701		616,138
Tenant receivables	329,446		485,392
Deferred leasing costs, less accumulated amortization of $241,741 and $256,332 at December 31, 2016 and 2015, respectively	822,563		322,429
Other assets	5,498		2,071
Total assets	$	11,277,939	$	11,052,305

Liabilities:
Accounts payable and accrued expenses	$	946,950	$	413,221
Due to affiliates	4,528		7,573
Deferred income	89,225		92,188
Partnership distributions payable	—		290,258
Total liabilities	1,040,703		803,240

Partners' Capital:
Wells Real Estate Fund XIII, L.P.	2,877,687		2,881,012
Piedmont Operating Partnership, LP	7,359,549		7,368,053
Total partners' capital	10,237,236		10,249,065
Total liabilities and partners' capital	$	11,277,939	$	11,052,305

See accompanying notes.

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WELLS FUND XIII-REIT JOINT VENTURE PARTNERSHIP

STATEMENTS OF OPERATIONS



	Years Ended December 31,
	2016		2015		2014
Revenues:
Rental income	$	1,169,917	$	1,275,003	$	987,927
Reimbursement income	595,274		704,826		552,770
Total revenues	1,765,191		1,979,829		1,540,697

Expenses:
Property operating costs	646,951		600,076		692,068
Management and leasing fees:
Related-party	83,806		83,584		61,625
Depreciation	346,213		340,386		340,388
Amortization	78,242		89,323		63,469
General and administrative	107,167		97,555		75,829
Total expenses	1,262,379		1,210,924		1,233,379
Income from Continuing Operations	502,812		768,905		307,318
Discontinued Operations:
Operating loss	—		—		(498,880		)
Loss on sale of real estate assets	—		—		(235,141		)
Loss from Discontinued Operations	—		—		(734,021		)
Net Income (Loss)	$	502,812	$	768,905	$	(426,703	)

See accompanying notes.

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WELLS FUND XIII-REIT JOINT VENTURE PARTNERSHIP

STATEMENTS OF PARTNERS' CAPITAL

FOR THE YEARS ENDED

DECEMBER 31, 2016, 2015, AND 2014



	Wells Real Estate Fund XIII, L.P.			Piedmont Operating Partnership, LP			Total Partners' Capital
Balance, December 31, 2013	$	5,504,981		$	14,078,729		$	19,583,710

Net loss	(119,947		)	(306,756		)	(426,703		)
Partnership contributions	16,491			42,174			58,665
Partnership distributions	(2,406,026		)	(6,153,299		)	(8,559,325		)
Balance, December 31, 2014	2,995,499			7,660,848			10,656,347

Net income	216,139			552,766			768,905
Partnership distributions	(330,626		)	(845,561		)	(1,176,187		)
Balance, December 31, 2015	2,881,012			7,368,053			10,249,065

Net income	141,341			361,471			502,812
Partnership distributions	(144,666		)	(369,975		)	(514,641		)
Balance, December 31, 2016	$	2,877,687		$	7,359,549		$	10,237,236

See accompanying notes.

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WELLS FUND XIII-REIT JOINT VENTURE PARTNERSHIP

STATEMENTS OF CASH FLOWS



	Years Ended December 31,
	2016			2015			2014
Cash Flows From Operating Activities:
Net income (loss)	$	502,812		$	768,905		$	(426,703	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Loss on sale of real estate assets	—			—			235,141
Depreciation	346,213			340,386			452,556
Amortization	81,438			92,519			66,665
Changes in assets and liabilities:
Decrease (increase) in tenant receivables	155,946			(155,348		)	(168,614		)
(Increase) decrease in other assets	(3,427		)	(143		)	6,669
Decrease in accounts payable and accrued expenses	(45,058		)	(46,643		)	(696,386		)
(Decrease) increase in due to affiliates	(3,045		)	1,535			(16,768		)
(Decrease) increase in deferred income	(2,963		)	34,117			(144,920		)
Net cash provided by (used in) operating activities	1,031,916			1,035,328			(692,360		)

Cash Flows From Investing Activities:
Net proceeds from sale of real estate	—			—			8,369,236
Investment in real estate assets	(349,669		)	—			—
Payment of deferred leasing costs	(2,785		)	—			(96,029		)
Net cash (used in) provided by investing activities	(352,454		)	—			8,273,207

Cash Flows From Financing Activities:
Net sale proceeds distributions to joint venture partners	—			—			(8,369,236		)
Operating distributions paid to joint venture partners	(804,899		)	(1,076,018		)	(370,037		)
Contributions from joint venture partners	—			—			58,665
Net cash used in financing activities	(804,899		)	(1,076,018		)	(8,680,608		)
Net Decrease In Cash And Cash Equivalents	(125,437		)	(40,690		)	(1,099,761		)

Cash And Cash Equivalents, beginning of year	616,138			656,828			1,756,589
Cash And Cash Equivalents, end of year	$	490,701		$	616,138		$	656,828

Supplemental Disclosure Noncash Investing And Financing Activities:
Partnership distributions payable	$	—		$	290,258		$	190,089
Accrued deferred lease acquisition costs	$	578,787		$	—		$	—

See accompanying notes.

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WELLS FUND XIII-REIT JOINT VENTURE PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2016 AND 2015


1.	ORGANIZATION AND BUSINESS

On June 27, 2001, Wells Real Estate Fund XIII, L.P. ("Fund XIII") and Piedmont Operating Partnership, LP ("Piedmont OP"), formerly known as Wells Operating Partnership, L.P., entered into a Georgia general partnership to form Wells Fund XIII-REIT Joint Venture Partnership (the "Joint Venture"). The general partners of Fund XIII are Leo F. Wells, III and Wells Capital, Inc. ("Wells Capital"). Piedmont OP is a Delaware limited partnership with Piedmont Office Realty Trust, Inc. ("Piedmont REIT"), formerly known as Wells Real Estate Investment Trust, Inc., serving as its general partner. Piedmont REIT is a Maryland corporation that qualifies as a real estate investment trust.

The Joint Venture was formed to acquire and operate commercial rental properties. On July 16, 2001, the Joint Venture purchased a two-story office building containing approximately 85,000 square feet, the AmeriCredit Building, located in Orange Park, Florida. On December 21, 2001, the Joint Venture purchased two connected one-story office and assembly buildings consisting of approximately 148,000 square feet, 8560 Upland Drive, located in Englewood, Colorado. On December 12, 2002, the Joint Venture purchased a four-story office building containing approximately 141,000 square feet, the John Wiley Building, located in Fishers, Indiana. On September 19, 2003, the Joint Venture purchased a four-story office building containing approximately 194,000 square feet, Two Park Center, located in Hoffman Estates, Illinois. Ownership interests were recomputed based on relative cumulative capital contributions from the joint venture partners.

On April 13, 2005, the Joint Venture sold the AmeriCredit Building and the John Wiley Building to an unrelated third party for an aggregate gross selling price of $35,974,000. As a result of the sale, the Joint Venture recognized a gain of approximately $7,318,000 and received net sale proceeds of approximately $35,729,000.

On May 29, 2014, the Joint Venture sold Two Park Center to an unaffiliated third party for a gross sales price of $8,825,000, exclusive of closing costs. As result of the sale, the Joint Venture received net sale proceeds of approximately $8,369,000 and recognized a loss of approximately $235,000.

Effective September 30, 2016, FedEx Ground Package System, Inc. vacated their space at 8560 Upland Drive upon the expiration of their lease. In December 2016, Fund XIII-REIT Associates executed a lease with Charter Communications Holding Company, LLC ("Charter") for approximately 43% of 8560 Upland Drive that extends through October 2027. The lease provides for an tenant improvement allowance of $20.00 per square foot.


2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Joint Venture's financial statements are prepared in accordance with U.S. generally accepted accounting principles ("GAAP").

Use of Estimates

The preparation of the Joint Venture's financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. Actual results could differ from those estimates.

Real Estate Assets

Investment in Real Estate Assets

Real estate assets are stated at cost, less accumulated depreciation and amortization. Amounts capitalized to real estate assets consist of the cost of acquisition or construction, application of acquisition fees incurred, and any tenant improvements or major improvements and betterments which extend the useful life of the related asset. The Joint Venture considers the period of future benefit of the asset to determine the appropriate useful lives. These assessments have a direct impact on net income. Upon receiving notification of a tenant's intention to terminate a lease, undepreciated tenant improvements and intangible lease assets are written off to lease termination expense. All repairs and maintenance are expensed as incurred.

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The Joint Venture's real estate assets are depreciated or amortized using the straight-line method over the following useful lives:



Buildings	40 years
Building improvements	5-25 years
Land improvements	20 years
Tenant improvements	Shorter of lease term or economic life
Intangible lease assets	Lease term

Evaluating the Recoverability of Real Estate Assets

Management continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate assets and related intangible assets owned by the Joint Venture may not be recoverable. When indicators of potential impairment are present, which suggest that the carrying amounts of the real estate assets and related intangible assets may not be recoverable, management assesses the recoverability of the real estate assets and related intangible assets by determining whether the respective carrying values will be recovered through the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition for assets held for use, or with the estimated fair values, less costs to sell, for assets held for sale. In the event that the expected undiscounted future cash flows for assets held for use, or the estimated fair value, less costs to sell, for assets held for sale, do not exceed the respective assets' carrying values, management adjusts the real estate assets and related intangible assets to the respective estimated fair values, pursuant to the provisions of the property, plant, and equipment accounting standard for the impairment or disposal of long-lived assets, and recognizes an impairment loss. Estimated fair values are determined based on the following information, dependent upon availability: (i) recently quoted market price(s) for the subject property, or highly comparable properties, under sufficiently active and normal market conditions, or (ii) the present value of future cash flows, including estimated residual value.

While various techniques and assumptions can be used to estimate fair value depending on the nature of the asset or liability, the accounting standard for fair value measurements and disclosures describes three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Joint Venture has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity's own assumptions, as there is little, if any, related market activity or information. Examples of Level 3 inputs include estimated holding periods, discount rates, market capitalization rates, expected lease rental rates, timing of new leases, and sales prices; additionally, the Joint Venture may assign an estimated probability-weighting to more than one fair value estimate based on the Joint Venture's assessment of the likelihood of the respective underlying assumptions occurring as of the evaluation date. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Joint Venture's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Cash and Cash Equivalents

The Joint Venture considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents include cash and short-term investments. Short-term investments are stated at cost, which approximates fair value, and consist of investments in money market accounts.

Tenant Receivables

Tenant receivables are comprised of rental and reimbursement billings due from tenants and the cumulative amount of future adjustments necessary to present rental income using the straight-line method. Upon receiving notification of a tenant's intention to terminate a lease, unamortized straight-line rent receivables are written off to lease termination expense. Tenant receivables are

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recorded at the original amount earned, less an allowance for any doubtful accounts, which approximates fair value. Management assesses the collectibility of tenant receivables on an ongoing basis and provides for allowances as such balances, or portions thereof, become uncollectible. No such allowances have been recorded as of December 31, 2016 or 2015.

Deferred Leasing Costs

Deferred leasing costs may include (i) costs incurred to procure leases, which are capitalized and recognized as amortization expense on a straight-line basis over the terms of the lease, and (ii) common area maintenance costs that are recoverable from tenants under the terms of the existing leases; such costs are capitalized and recognized as operating expenses over the shorter of the lease term or the recovery period provided for in the lease. The remaining unamortized balance of deferred leasing costs will be amortized over a weighted-average period of approximately nine years. Upon receiving notification of a tenant's intention to terminate a lease, unamortized deferred leasing costs are written-off to lease termination expense.

Other Assets

Other assets is comprised of prepaid expenses. Prepaid expenses are recognized as the related services are provided. Balances without a future economic benefit are written off as they are identified. No such allowances have been recorded as of December 31, 2016 or 2015.

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses are primarily comprised of accrued deferred lease acquisition costs, accrued real estate taxes and property operating costs. Accrued deferred lease acquisition costs of approximately $579,000 and $0 and accrued real estate taxes of approximately $355,000 and $385,000 are included in accounts payable and accrued expenses as of December 31, 2016 and 2015, respectively.

Allocation of Income and Distributions

Pursuant to the terms of the joint venture agreement, income and distributions are allocated to the joint venture partners based on their respective ownership interests as determined by relative cumulative capital contributions, as defined. Fund XIII and Piedmont OP held ownership interests in the Joint Venture of approximately 28% and 72%, respectively, for the years ended December 31, 2016 and 2015. Net cash from operations is generally distributed to the joint venture partners on a quarterly basis.

Revenue Recognition

The Joint Venture's leases typically include renewal options, escalation provisions, and provisions requiring tenants to reimburse the Joint Venture for a pro-rata share of operating costs incurred. All of the Joint Venture's leases are classified as operating leases, and the related rental income, including scheduled rental rate increases (other than scheduled increases based on the Consumer Price Index) is recognized on a straight-line basis over the terms of the respective leases. Tenant reimbursements are recognized as revenue in the period that the related operating cost is incurred and are billed to tenants pursuant to the terms of the underlying leases. Rents and tenant reimbursements collected in advance are recorded as deferred income in the accompanying balance sheets. Lease termination income is recognized when the tenant loses the right to lease the space and the Joint Venture has satisfied all obligations under the related lease or lease termination agreement.

The Joint Venture records the sale of real estate assets pursuant to the provisions of the property, plant, and equipment accounting standard for real estate sales. Accordingly, gains are recognized upon completing the sale and, among other things, determining the sale price and transferring all of the risks and rewards of ownership without significant continuing involvement with the seller. Recognition of all or a portion of the gain would be deferred until both of these conditions are met. Losses are recognized in full as of the sale date.

Income Taxes

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

Recent Accounting Pronouncements

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income. Additionally, ASU 2016-01 simplifies the impairment assessment of equity investments, and eliminates certain disclosure requirements. ASU 2016-01 is effective for the period beginning on January 1, 2018. The Partnership is currently evaluating the impact that the adoption of ASU 2016-01 will have on its financial statements or disclosures. The Partnership has not yet determined the effect of ASU 2016-01 in its financial position or results of operations.

In August 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments,” which addresses the Statement of Cash Flow classification and presentation of certain cash transactions. ASU No. 2016-15 is effective for the Partnership’s fiscal year commencing on January 1, 2018. The effect of this amendment is to be applied retrospectively where practical and early adoption is permitted. The Partnership expects to adopt ASU No. 2016-15 for the Partnership’s fiscal year commencing on January 1, 2018. The adoption of ASU No. 2016-15 will not have a material effect on the Partnership’s consolidated financial position or the Partnership’s consolidated results of operations.


3.	RELATED-PARTY TRANSACTIONS

Management and Leasing Fees

Fund XIII is a party to individual property management and leasing agreements with Wells Management Company, Inc. ("Wells Management"), an affiliate of each of its general partners.

The various fees payable under each of the respective agreements are summarized as follows:



	Management and Leasing Services	Management and Leasing Services- Industrial and Commercial properties leased on a net basis for 10 years or more
Fund XIII	Lesser of market rate charged for similar services for similar properties in the same geographic area, or 4.5% of gross revenues generally paid over the life of the lease, plus an additional initial lease-up fee for newly constructed properties based on market rate charged for similar services for similar properties in the same geographic area.	Initial lease-up fee based on 3% of the gross revenues over the first five years of the lease term. Recurring fee based on 1% of gross revenues collected monthly.

Management and leasing fees are recognized in accordance with the terms of the aforementioned agreements. During the years ended December 31, 2016, 2015, and 2014, the Joint Venture incurred management and leasing fees that are payable to Wells Management of $10,470, $10,442, and $7,699, respectively.

In addition, the Joint Venture incurs fees payable to Piedmont Office Management, LLC ("Piedmont Management"), or its affiliates, for the management and leasing of the Joint Venture's properties equal to (a) the lesser of 4.5% of the gross revenues generally paid over the life of the lease or 0.6% of net asset value calculated on an annual basis, (b) prorated by Piedmont OP's ownership interest in the Joint Venture. During the years ended December 31, 2016, 2015, and 2014, the Joint Venture incurred management and leasing fee expenses payable to Piedmont Management, or its affiliates, of $73,336, $73,141, and $110,176, respectively.

Administrative Reimbursements

Piedmont Management performs certain administrative services for the Joint Venture's properties, relating to accounting, property management, and other partnership administration, and incurs the related expenses. Such expenses are allocated among other entities affiliated with Wells Capital based on time spent on each entity by individual personnel. In the opinion of management, this is a reasonable estimation of such expenses. During the years ended December 31, 2016, 2015, and 2014, the Joint Venture incurred administrative expenses of $20,546, $27,119, and $64,389, respectively, payable to Piedmont Management, or its affiliates, for these services.

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Due to Affiliates

As presented in the accompanying balance sheets, due to affiliates as of December 31, 2016 and 2015 represents amounts due to Piedmont Management and/or Wells Management for administrative reimbursements.


4.	RENTAL INCOME

The future contractual rental income due to the Joint Venture under noncancelable operating leases as of December 31, 2016 , are as follows:



Year ending December 31:
2017	$	888,953
2018	1,527,799
2019	1,566,379
2020	1,605,173
2021	1,645,046
Thereafter	5,275,930
	$	12,509,280

Two tenants generated approximately 65% and 35% of contractual rental income for the year ended December 31, 2016, and two tenants will generate approximately 68% and 32% of future contractual rental income for leases in-place as of December 31, 2016.

5. DISCONTINUED OPERATIONS

In accordance with GAAP, the Joint Venture has classified the results of operations related to Two Park Center, which was sold on May 29, 2014, as discontinued operations in the accompanying statements of operations. The details comprising loss from discontinued operations for the years ended December 31, 2016, 2015, and 2014 are presented below:



	2016		2015		2014
Revenues:
Reimbursement income	$	—	$	—	$	3,044

Expenses:
Property operating costs	—		—		282,887
Management and leasing fees:
Related-party	—		—		56,250
Depreciation	—		—		112,168
General and administrative	—		—		50,619
Total expenses	—		—		501,924

Operating loss	—		—		(498,880		)
Loss on sale of real estate assets	—		—		(235,141		)
Loss from discontinued operations	$	—	$	—	$	(734,021	)

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WELLS FUND XIII-REIT JOINT VENTURE PARTNERSHIP

SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION AND AMORTIZATION

DECEMBER 31, 2016



		Initial Cost						Gross Carrying Amounts as of December 31, 2016
Description	Encumbrances	Land		Buildings and Improvements		Costs Capitalized Subsequent To Acquisition^(b)		Land		Buildings and Improvements		Intangible Lease Asset		Construction in Progress		Total		Accumulated Depreciation ^(c)		Date of Construction	Date Acquired
8560 UPLAND DRIVE^(a)	None	$	1,954,213	$	11,215,621	$	1,438,535	$	2,047,735	$	12,560,634	$	—	$	—	$	14,608,369	$	4,978,638	2001	12/21/2001


^(a)	8560 Upland Drive is comprised of two connected one-story office and assembly buildings located in Englewood, Colorado.


^(b)	Includes acquisition and advisory fees and acquisition expense reimbursements applied at acquisition as well as write-offs of fully depreciated/amortized capitalized costs.


^(c)	Buildings, land improvements, building improvements, and tenant improvements are depreciated using the straight-line method over 40 years, 20 years, 5 to 25 years, and the shorter of the economic life or corresponding lease terms, respectively.

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WELLS FUND XIII-REIT JOINT VENTURE PARTNERSHIP

SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION AND AMORTIZATION

DECEMBER 31, 2016



	Cost			Accumulated Depreciation & Amortization
BALANCE AT DECEMBER 31, 2013	$	28,153,915		$	9,130,321

Additions	—			452,556
Dispositions	(13,895,215		)	(5,290,838		)
BALANCE AT DECEMBER 31, 2014	14,258,700			4,292,039

Additions	—			340,386
BALANCE AT DECEMBER 31, 2015	14,258,700			4,632,425

Additions	349,669			346,213
BALANCE AT DECEMBER 31, 2016	$	14,608,369		$	4,978,638

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Title of Class

Name of
Beneficial Owner

Amount and Nature of Beneficial Ownership

Percent of Class

Limited Partnership Units

Leo F. Wells, III

2,095.945 Units⁽¹⁾

Less than 1%