As filed with the Securities and Exchange Commission on June 9, 2000

Registration No. 333-83933

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
POST-EFFECTIVE AMENDMENT NO. 2 TO
FORM S-11
REGISTRATION STATEMENT
Under
The Securities Act of 1933
______________________
WELLS REAL ESTATE INVESTMENT TRUST, INC.
(Exact name of registrant as specified in governing instruments)

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

Douglas P. Williams, Executive Vice President
6200 The Corners Parkway
Norcross, Georgia 30092
770-449-7800
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)

Copies to:
Donald Kennicott, Esq.
Michael K. Rafter, Esq.
Holland & Knight LLP
1201 West Peachtree Street, N.W., Suite 2000
Atlanta, Georgia  30309-3400
(404) 817-8500
______________________

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

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

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

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

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

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

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

SUPPLEMENTAL INFORMATION - The prospectus of Wells Real Estate Investment
Trust, Inc. consists of this sticker, the prospectus dated December 22, 1999,
Supplement No. 2 dated March 15, 2000 and Supplement No. 3 dated April 25, 2000
(Supplement No. 2 includes and supercedes Supplement No. 1 dated January 5,
2000) (The Supplements are contained inside the back cover page of the
prospectus).  Supplement No. 2 includes descriptions of acquisitions of certain
real properties and revisions to the prospectus relating to the share redemption
program.  Supplement No. 3 includes descriptions of acquisitions of certain real
properties, updated financial statements and unaudited prior performance
tables.

WELLS REAL ESTATE INVESTMENT TRUST, INC.

Up to 20,000,000 shares offered to the public

_________________________________________

Wells Real Estate Investment Trust, Inc. (Wells REIT) is a real estate
investment trust. We invest in commercial real estate properties such as office
buildings. We currently own interests in 16 office buildings located in 11
states. 

We are offering and selling to the public up to 20,000,000 shares for $10
per share and up to 2,200,000 shares to be issued pursuant to our dividend
reinvestment plan at a purchase price of $10 per share. An additional 800,000
shares are being registered which are reserved for issuance at $12 per share to
participating broker-dealers upon their exercise of warrants.

You must purchase at least 100 shares for $1,000. Your money will be placed
initially in an escrow account with Bank of America, N.A.

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

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

.    lack of a public trading market for the shares

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

.    authorization of substantial fees to the advisor and its affiliates

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

.    conflicts of interest facing the advisor and its affiliates

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

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

The Offering:

.    The shares will be offered on a best efforts basis to investors at $10 per
share.
.    We will pay selling commissions to broker-dealers of 7% and a dealer
manager fee for reimbursement of marketing expenses of 2.5% out of the
offering proceeds raised.
.    We will invest approximately 84% of the offering proceeds raised in real
estate properties, and the balance will be used to pay fees and expenses.
.    The offering will terminate on or before December 19, 2001.

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

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

WELLS INVESTMENT SECURITIES, INC.
December 20, 1999     

TABLE OF CONTENTS

Questions and Answers About This Offering.....................................................................    1
Prospectus Summary............................................................................................    9
Risk Factors..................................................................................................   16
Investment Risks.......................................................................................   16
Real Estate Risks......................................................................................   20
Federal Income Tax Risks...............................................................................   24
Retirement Plan Risks..................................................................................   25
Suitability Standards.........................................................................................   25
Estimated Use of Proceeds.....................................................................................   27         
Management....................................................................................................   28
General................................................................................................   28
Executive Officers and Directors.......................................................................   30
Compensation of Directors..............................................................................   33
Independent Director Stock Option Plan.................................................................   34
Limited Liability and Indemnification of Directors, Officers, Employees and other Agents...............   35
The Advisor............................................................................................   37
The Advisory Agreement.................................................................................   38
Shareholdings..........................................................................................   40
Affiliated Companies...................................................................................   41
Management Decisions...................................................................................   42
Management Compensation.......................................................................................   43
Conflicts of Interest.........................................................................................   46
Interests in Real Estate Programs......................................................................   46
Other Activities of the Advisor and its Affiliates.....................................................   47
Competition............................................................................................   48
Affiliated Dealer Manager..............................................................................   48
Affiliated Property Manager............................................................................   48
Lack of Separate Representation........................................................................   48
Joint Ventures with Affiliates of the Advisor..........................................................   48
Receipt of Fees and Other Compensation by the Advisor and its Affiliates...............................   49
Certain Conflict Resolution Procedures.................................................................   49
Investment Objectives and Criteria............................................................................   50
General................................................................................................   50
Acquisition and Investment Policies....................................................................   51
Development and Construction of Properties.............................................................   53
Acquisition of Properties from Wells Development Corporation...........................................   53
Terms of Leases and Tenant Creditworthiness............................................................   55
Joint Venture Investments..............................................................................   56
Borrowing Policies.....................................................................................   57
Disposition Policies...................................................................................   57
Investment Limitations.................................................................................   58
Change in Investment Objectives and Limitations........................................................   60
Description of Properties.....................................................................................   60
Joint Ventures with Affiliates.........................................................................   61
The Lucent Building....................................................................................   63
The ABB Knoxville Building.............................................................................   64
The Ohmeda Building....................................................................................   66

i

The Interlocken Building...............................................................................   67
The Iomega Building....................................................................................   68
The Fairchild Building.................................................................................   69
The Cort Furniture Building............................................................................   70
The PWC Building.......................................................................................   71
The Vanguard Cellular Building.........................................................................   73
The Matsushita Property................................................................................   76
The EYBL CarTex Building...............................................................................   81
The Sprint Building....................................................................................   82
The ABB Richmond Property..............................................................................   83
The Johnson Matthey Building...........................................................................   88
The Videojet Building..................................................................................   89
The Gartner Building...................................................................................   90
Property Management Fees...............................................................................   91
Management's Discussion and Analysis of Financial Condition and Results of Operations.........................   92
Liquidity and Capital Resources........................................................................   92
Cash Flows from Operating Activities...................................................................   94
Cash Flow From Investing Activities....................................................................   94
Cash Flows from Financing Activities...................................................................   94
Results of Operations..................................................................................   94
Recent Accounting Pronouncements.......................................................................   94
Inflation..............................................................................................   95
Year 2000 Compliance...................................................................................   95
Prior Performance Summary.....................................................................................   96
Publicly Offered Unspecified Real Estate Programs......................................................   97
Federal Income Tax Considerations.............................................................................  105
General................................................................................................  105
Requirements for Qualification as a REIT...............................................................  106
Failure to Qualify as a REIT...........................................................................  112
Sale-Leaseback Transactions............................................................................  112
Taxation of U.S. Shareholders..........................................................................  112
Treatment of Tax-Exempt Shareholders...................................................................  114
Special Tax Considerations for Non-U.S. Shareholders...................................................  115
Statement of Stock Ownership...........................................................................  117
State and Local Taxation...............................................................................  117
Tax Aspects of the Operating Partnership...............................................................  117
ERISA Considerations..........................................................................................  121
Plan Asset Considerations..............................................................................  122
Other Prohibited Transactions..........................................................................  123
Annual Valuation.......................................................................................  124
Description of Shares.........................................................................................  125
Common Stock...........................................................................................  125
Preferred Stock........................................................................................  125
Soliciting Dealer Warrants.............................................................................  126
Meetings and Special Voting Requirements...............................................................  126
Restriction on Ownership of Shares.....................................................................  127
Dividends..............................................................................................  128
Dividend Reinvestment Plan.............................................................................  129
Share Redemption Program...............................................................................  129
Restrictions on Roll-Up Transactions...................................................................  130

ii       

Business Combinations...........................................................................         131
Control Share Acquisitions......................................................................         132
The Operating Partnership Agreement....................................................................         133
General.........................................................................................         133
Capital Contributions...........................................................................         134
Operations......................................................................................         134
Exchange Rights.................................................................................         135
Transferability of Interests....................................................................         135
Plan of Distribution...................................................................................         136
Supplemental Sales Material............................................................................         141
Legal Opinions.........................................................................................         141
Experts................................................................................................         142
Audited Financial Statements....................................................................         142
Unaudited Financial Statements..................................................................         142
Additional Information.................................................................................         142
Glossary...............................................................................................         143
Financial Statements ..................................................................................         151
Prior Performance Tables ..............................................................................         242
Subscription Agreement ................................................................................   Exhibit A
Amended and Restated Dividend Reinvestment Plan .......................................................   Exhibit B

iii

Questions and Answers About This Offering

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

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

Q:   What is a REIT?

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

.  pays dividends to investors of at least 95% of its taxable income;

.  avoids the "double taxation" treatment of income that generally results
from investments in a corporation because a REIT is not generally
subject to federal corporate income taxes on its net income, provided
certain income tax requirements are satisfied;

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

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

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

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

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

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

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

A:   Wells Capital, Inc. (Wells Capital) is our advisor and makes all of our
investment decisions.  In addition, our board of directors must approve all
of our acquisitions.

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

Q:   Who is Wells Capital?

A:   Wells Capital is a Georgia corporation formed in 1984.  As of October 1,
1999, Wells Capital has sponsored public real estate programs which have
raised in excess of $400,784,000 from approximately 30,000 investors and
own and operate a total of 43 commercial real estate properties.

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

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

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

1

sponsored by Wells Capital include Fairchild Technologies, Cort Furniture
Rental, IBM, Lucent Technologies and PriceWaterhouseCoopers.

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

Q.   Do you currently own any real estate properties?

A.   Yes.  As of the date of this prospectus, our REIT has acquired and owns
interests in 16 real estate properties.  We own interests in the following
real estate properties through joint ventures with affiliates:

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

Gartner Group, Inc.                Office Building                     Ft. Myers, Florida
---------------------------------------------------------------------------------------------------------
Johnson Matthey, Inc.              Research and Development,           Tredyffrin Township, Pennsylvania
Office and Warehouse
Building
---------------------------------------------------------------------------------------------------------
Sprint Communications              Office Building                     Leawood, Kansas
Company L.P.
---------------------------------------------------------------------------------------------------------
EYBL CarTex, Inc.                  Manufacturing and Office            Fountain Inn, South Carolina
Building
---------------------------------------------------------------------------------------------------------
Cort Furniture Rental              Office and Warehouse Building       Fountain Valley, California
Corporation
---------------------------------------------------------------------------------------------------------
Fairchild Technologies             Manufacturing and Office            Fremont, California
U.S.A., Inc.                    Building
---------------------------------------------------------------------------------------------------------
Iomega Corporation                 Office Building                     Ogden City, Utah
---------------------------------------------------------------------------------------------------------
ODS Technologies, L.P.             Office Building                     Broomfield, Colorado
---------------------------------------------------------------------------------------------------------
Ohmeda, Inc.                       Office Building                     Louisville, Colorado
---------------------------------------------------------------------------------------------------------
ABB Flakt, Inc.                    Office Building                     Knoxville, Tennessee
---------------------------------------------------------------------------------------------------------
Lucent Technologies, Inc.          Office Building                     Oklahoma City, Oklahoma
---------------------------------------------------------------------------------------------------------

We own the following properties directly:

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

Videojet Systems International,    Office, Assembly and                Wood Dale, Illinois
Inc.                            Manufacturing Building
---------------------------------------------------------------------------------------------------------
ABB Power Generation, Inc.         Office Building                     Richmond, Virginia
---------------------------------------------------------------------------------------------------------
Matsushita Avionics                Office Building                     Lake Forest, California
Systems Corporation
---------------------------------------------------------------------------------------------------------
Pennsylvania Cellular              Office Building                     Harrisburg, Pennsylvania
Telephone Corp.
---------------------------------------------------------------------------------------------------------
PriceWaterhouseCoopers             Office Building                     Tampa, Florida
---------------------------------------------------------------------------------------------------------

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

2

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Q:   What are the terms of your leases?

A:   Our leases are "triple-net" leases, generally having terms of seven to ten
years, many of which have renewal options for an additional five to ten
years.  "Triple-net" means that the tenant, not the Wells REIT, is
responsible for repairs, maintenance, property taxes, utilities and
insurance.  We often enter into leases where we have responsibility for
replacement of specific structural components of a property such as the
roof of the building or the parking lot.

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

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

A:   We have been making and intend to continue to make dividend distributions
on a quarterly basis to our shareholders. The amount of each dividend
distribution is determined by the board of directors and typically depends
on the amount of distributable funds, current and projected cash
requirements, tax considerations and other factors. However, in order to
remain qualified as a REIT, we must make distributions of at least 95% of
our REIT taxable income each year.

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

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

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

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

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

A:   We have paid the following dividends since we began operations:

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

3/rd/ Qtr. 1998           $.15 per share              6.0%                       
4/th/ Qtr. 1998           $.16 per share              6.5%                       
1/st/ Qtr. 1999           $.17 per share              7.0%                       
2/nd/ Qtr. 1999           $.17 per share              7.0%                       
3/rd/ Qtr. 1999           $.17 per share              7.0%                        

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

Q:   May I reinvest the dividends I am supposed to receive in shares of the
Wells REIT?

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

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

3

Q:   Will the dividends I receive be taxable?

A:   Yes.  Generally, dividends that you receive, including dividends that are
reinvested pursuant to our dividend reinvestment plan, will be taxed as
ordinary income to the extent they are from current or accumulated earnings
and profits.  We expect that some portion of your dividends will not be
subject to tax in the year received due to the fact that depreciation
expenses reduce taxable income but do not reduce cash available for
distribution.  Amounts not subject to tax immediately will reduce the tax
basis of your investment.  This, in effect, defers a portion of your tax
until your investment is sold or the Wells REIT is liquidated, at which
time you will be taxed at capital gains rates.  However, because each
investor's tax considerations are different, we suggest that you consult
with your tax advisor.  You should also review the section of the
prospectus entitled "Federal Income Tax Considerations."

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

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

A:   We will use your investment proceeds to purchase commercial real estate
such as high grade office buildings. We intend to invest a minimum of 84%
of the proceeds from this offering to acquire real estate properties, and
approximately 16% of the proceeds will be used to pay fees and expenses of
this offering and acquisition-related expenses. The payment of these fees
and expenses will not reduce your invested capital. Your initial invested
capital amount will remain $10 per share, and your dividend yield will be
based on your $10 per share investment.

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

We commenced our initial public offering of common stock in an offering
very similar to this one on January 30, 1998.  Our initial public offering
was terminated on December 20, 1999.  As of December 15, 1999, we had
received approximately $131,500,000 in gross offering proceeds from our
initial public offering, of which at least $110,460,000 was or is expected
to be invested in properties.

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

Q:   What kind of offering is this?

A:   We are offering the public up to 20,000,000 shares of common stock on a
best efforts basis.

--------------------------------------------------------------------------------
Q:   How does a best efforts offering work?

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

4

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Q:   How long will this offering last?

A:   The offering will not last beyond December 19, 2001.

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

Q:   Who can buy shares?

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

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

Q:   Is there any minimum investment required?

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

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

Q:   How do I subscribe for shares?

A:   If you choose to purchase shares in this offering, you will need to fill
out a Subscription Agreement, like the one contained in this prospectus as
Exhibit A, for a specific number of shares and pay for the shares at the
time you subscribe. The purchase price will be placed into an escrow
account with Bank of America, N.A., which will hold your funds, along with
those of other subscribers, until we withdraw funds for the acquisition of
real estate properties or the payment of fees and expenses.

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

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

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

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

5

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

Q:   What is the experience of your officers and directors?

A:   Our management team has extensive previous experience investing in and
managing commercial real estate.  Our directors are listed below.

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

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

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

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

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

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

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

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

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

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

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

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

Q:   Why do you acquire properties in joint ventures?

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

6

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

Q:   How does our REIT own its real estate properties?

A:   We own all of our real estate properties through an "UPREIT" called Wells
Operating Partnership, L.P. (Wells OP).  Wells OP was organized to own,
operate and manage real properties on our behalf.  We are the sole general
partner of Wells OP.

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

Q:   What is an "UPREIT"?

A:   UPREIT stands for "Umbrella Partnership Real Estate Investment Trust."  We
use this structure because a sale of property directly to the REIT would
generally be fully taxable to the property owner.  In an UPREIT structure,
the seller of a property who desires to defer taxable gain on the sale of
his property may transfer the property to the UPREIT in exchange for
limited partnership units in the UPREIT and defer taxation of gain until
the seller later exchanges his UPREIT units on a one-for-one basis for REIT
shares.  If the REIT shares are publicly traded, the former property owner
will achieve liquidity for his investment.  Using an UPREIT structure gives
us an advantage in acquiring desired properties from persons who would not
otherwise be able to sell such properties because of unfavorable tax
results.

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

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

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

.  Four detailed quarterly dividend reports;

.  Three quarterly financial reports;

.  An annual report; and

.  An annual IRS Form 1099.

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

Q:   When will I get my detailed tax information?

A:   Your Form 1099 tax information will be mailed to you by January 31 of each
year.

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

Q:   Are you prepared for the year 2000 problem?

A:   Yes, we have concluded our assessment of year 2000 compliance issues on our
information systems and business operations.  We have made renovations and
replacements to our equipment and software packages as warranted.  We have
also confirmed the year 2000 readiness of our third-party service
providers.  Although we do not anticipate any material risk relating to the
year 2000 problem, we have developed contingency plans to address potential
risks.  See the "Management's Discussion and Analysis of Financial
Condition and Results of Operations--

7

Year 2000 Compliance" section of this prospectus for a detailed description
of our year 2000 readiness.

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

Q:   Who can help answer my questions?

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

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

8

================================================================================

Prospectus Summary

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

Wells Real Estate Investment Trust, Inc.

Wells Real Estate Investment Trust, Inc. is a REIT that owns net leased
commercial real estate properties. We currently own interests in 16 commercial
real estate properties located in 11 states. Our office is located at 6200 The
Corners Parkway, Suite 250, Norcross, Georgia 30092. Our telephone number
outside the State of Georgia is 800-448-1010 (770-449-7800 in Georgia). We refer
to Wells Real Estate Investment Trust, Inc. as the Wells REIT in this
prospectus.

Our Advisor

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

Our Management

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

Our REIT Status

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

Summary Risk Factors

Following are the most significant risks relating to your investment:

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

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

================================================================================

9

================================================================================

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

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

.    The number of additional properties that we acquire from the proceeds of
this offering will be reduced to the extent that we sell less than all of
the 20,000,000 shares offered to the public.

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

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

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

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

.    Loans we obtain will generally be secured by our properties, which will put
us at risk of losing a property if we are unable to pay our debts.

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

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

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

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

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

Description of Properties

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

================================================================================

10

================================================================================

Estimated Use of Proceeds of Offering

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

Investment Objectives

Our investment objectives are:

.    to maximize cash dividends paid to you;

.    to preserve, protect and return your capital contribution;

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

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

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

Conflicts of Interest

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

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

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

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

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

See the "Conflicts of Interest" section of this prospectus on page 48 for a
detailed discussion of the various conflicts of interest relating to your
investment, as well as the procedures that we have established to resolve a
number of these potential conflicts.

================================================================================

11

================================================================================

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

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

100%
-------------------------------------------------------------------------------------------------------------------  
Wells Real Estate Funds, Inc.
-------------------------------------------------------------------------------------------------------------------     
100%                               100%                                       100%        
-------------------------         -----------------------------------------------        --------------------------       
Wells                                                                                                  
Management                                      Wells                                    Wells Capital,  
Company,                                     Investment                                     Inc.        
Inc.                                     Securities, Inc.                               (Advisor)      
(Property                                   (Dealer Manager)                                  
Manager)                             
-------------------------         -----------------------------------------------        --------------------------       
100%                                                                               Advisory
Agreement
-------------------------                                                                --------------------------       
Wells   
Development                                                                                   Wells REIT 
Corporation                                                                                   
-------------------------                                                                --------------------------       

Prior Offering Summary

The advisor and its affiliates have previously sponsored 13 publicly
offered real estate limited partnerships and the Wells REIT on an unspecified
property or "blind pool" basis. As of October 1, 1999, they have raised
approximately $400,784,000 from approximately 30,000 investors in these 14 real
estate programs. The "Prior Performance Summary" on page 100 of this prospectus
contains a discussion of the Wells programs sponsored to date. Certain
statistical data relating to the Wells programs with investment objectives
similar to ours is also provided in the "Prior Performance Tables" included at
the end of this prospectus.

The Offering

We are offering up to 20,000,000 shares to the public at $10 per share. We
are also offering up to 2,200,000 shares pursuant to our dividend reinvestment
plan at $10 per share, and up to 800,000 shares to broker-dealers pursuant to
warrants whereby participating broker-dealers will have the right to purchase
one share for every 25 shares they sell in this offering. The exercise price for
shares purchased pursuant to the warrants is $12 per share.

================================================================================

12

================================================================================

Terms of the Offering

We will begin selling shares in this offering upon the effective date of
this prospectus and the offering will terminate on or before December 19, 2001.
However, we may terminate this offering at any time prior to such termination
date. We will hold your proceeds in escrow until we withdraw funds for the
acquisition of real estate properties or the payment of fees and expenses. We
generally admit shareholders to the Wells REIT on a daily basis.

Compensation to the Advisor and its Affiliates

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

------------------------------------------------------------------------------------------------------
$$ Amount for
Type of Compensation                     Form of Compensation                      Maximum Offering
(22,200,000 shares)
------------------------------------------------------------------------------------------------------

Offering Stage
------------------------------------------------------------------------------------------------------
Sales Commission                    7% of gross offering proceeds             $15,540,000
------------------------------------------------------------------------------------------------------
Dealer Manager Fee                  2.5% of gross offering proceeds           $ 5,550,000
------------------------------------------------------------------------------------------------------
Offering Expenses                   3% of gross offering proceeds             $ 6,660,000
------------------------------------------------------------------------------------------------------
Acquisition and Development Stage
------------------------------------------------------------------------------------------------------
Acquisition and                     3% of gross offering proceeds             $ 6,660,000
Advisory Fees
------------------------------------------------------------------------------------------------------
Acquisition Expenses                .5% of gross offering proceeds            $ 1,110,000
------------------------------------------------------------------------------------------------------
Operational Stage
------------------------------------------------------------------------------------------------------
Property Management Fees            2.5% of gross revenues                    N/A
------------------------------------------------------------------------------------------------------
Leasing Fees                        2% of gross revenues                      N/A
------------------------------------------------------------------------------------------------------
Initial Lease-Up Fee for            Competitive fee for geographic            N/A
Newly Constructed Property          location of property based on a
survey of brokers and agents
(customarily equal to the first
month's rent)
------------------------------------------------------------------------------------------------------
Real Estate Commission              3% of sale price after investors          N/A
receive a return of capital plus a 6%
return on capital
------------------------------------------------------------------------------------------------------
Subordinated Participation in       10% of remaining amounts of net sale      N/A
Net Sale Proceeds (Payable          proceeds after return of capital plus
only if the Wells REIT is not       payment to investors of an 8%
listed on an exchange)              cumulative non-compounded return on
the capital contributed by investors
------------------------------------------------------------------------------------------------------
Subordinated Incentive Listing      10% of the amount by which the            N/A
Fee (Payable only if the Wells      adjusted market value of the Wells
REIT is listed on an exchange)      REIT exceeds the aggregate capital
contributions contributed by investors
------------------------------------------------------------------------------------------------------

================================================================================

13

=============================================================================== 

There are many additional conditions and restrictions on the amount of
compensation Wells Capital may receive.  There are also some smaller items of
compensation and expense reimbursements that Wells Capital may receive.  For a
more detailed explanation of these fees and expenses payable to Wells Capital
and its affiliates, please see the "Management Compensation" section of this
prospectus on page 44.

Dividend Policy

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

Listing

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

Dividend Reinvestment Plan

You may participate in our dividend reinvestment plan pursuant to which you
may have the dividends you receive reinvested in the Wells REIT.  If you
participate, you will be taxed on your share of our taxable income even though
you will not receive any cash dividends.  As a result, you may have a tax
liability with no cash dividends to pay such liability.  We may terminate the
dividend reinvestment plan in our discretion at any time upon 10 days notice to
you.  (See "Description of Shares -- Dividend Reinvestment Plan.")

Share Redemption Program

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

=============================================================================== 

14

================================================================================

Wells Operating Partnership, L.P.

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

ERISA Considerations

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

Description of Shares

General
-------

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

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

We will hold an annual meeting of shareholders for the election of
directors. Other business matters may be presented at the annual meeting or at a
special meeting of shareholders. You are entitled to one vote for each share you
own.

Limitation on Share Ownership
-----------------------------

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

For a more complete description of the shares, including limitations on the
ownership of shares, please see the "Description of Shares" section of this
prospectus on page 131.

================================================================================

15

Risk Factors

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

Investment Risks

Marketability Risk

There is no public trading market for your units.

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

Management Risks

You must rely on the advisor for selection of properties.

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

We depend on key personnel.

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

Conflicts of Interest Risks

The advisor will face conflicts of interest relating to time management.

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

16

The advisor will face conflicts of interest relating to the purchase and
leasing of properties.

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

The advisor will face conflicts of interest relating to joint ventures with
affiliates.

We are likely to enter into one or more joint ventures with other Wells
programs for the acquisition, development or improvement of properties,
including Wells Fund XI or Wells Fund XII.  We may also purchase and develop
properties in joint ventures or in partnerships, co-tenancies or other co-
ownership arrangements with the sellers of the properties, affiliates of the
sellers, developers or other persons.  Such investments may involve risks not
otherwise present, including, for example:

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

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

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

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

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

Under certain joint venture arrangements, neither co-venturer may have the
power to control the venture, and an impasse could be reached regarding matters
pertaining to the joint venture, which might have a negative influence on the
joint venture and decrease potential returns to you.  In the event that a co-
venturer has a right of first refusal to buy out the other co-venturer, it may
be unable to finance such buy-out at that time.  It may also be difficult for us
to sell our interest in any such joint venture or partnership or as a co-tenant
in property.  In addition, to the extent that our co-venturer, partner or co-

17

tenant is an affiliate of the advisor, certain conflicts of interest will exist.
(See "Conflicts of Interest -- Joint Ventures with Affiliates of the Advisor.")

General Investment Risks

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

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

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

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

.    an affiliate of an interested shareholder.

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

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

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

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

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

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

Even though our share redemption program provides you with the opportunity
to redeem your shares for $10 per share after you have held them for a period of
one year, you should be fully aware that our share redemption program contains
certain restrictions and limitations.  Shares will be redeemed on a first-come,
first-served basis and will be limited to the lesser of (1) during any calendar
year, one-half of one percent (0.5%) of the weighted average number of shares
outstanding during the prior calendar year, or (2) the proceeds we receive from
the sale of shares under our dividend reinvestment plan such that in no event
shall the aggregate amount of redemptions under our share redemption program
exceed aggregate proceeds received from the sale of shares pursuant to our
dividend reinvestment plan.  In     

18

addition, the board of directors reserves the right to reject any request for
redemption or to amend or terminate the share redemption program at any time.
Therefore, in making a decision to purchase shares of the Wells REIT, you should
not assume that you will be able to sell any of your shares back to us pursuant
to our share redemption program. (See "Description of Shares - Share Redemption
Program.")

We established the offering price on an arbitrary basis.

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

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

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

Payment of fees to the advisor and its affiliates will reduce cash
available for investment and distribution.

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

The availability and timing of cash dividends is uncertain.

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

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

Substantially all of the gross proceeds of the offering will be used for
investment in properties and for payment of various fees and expenses.  (See
"Estimated Use of Proceeds.")  In addition, we do not anticipate that we will
maintain any permanent working capital reserves.  Accordingly, in the event that
we develop a need for additional capital in the future for the improvement of
our properties or for any other reason, we have not identified any sources for
such funding, and we cannot assure you that such sources of funding will be
available to us for potential capital needs in the future.

Your investment may suffer adverse consequences if we are not prepared for
the year 2000 issue.     

19

Many existing computer programs were designed to use only two numeric
digits to identify a year without considering the impact of the year 2000.  If
not corrected, many computer applications could fail or create erroneous data.
We are currently addressing the year 2000 issue with respect to our operations.
Our failure or the failure of our tenants to properly or timely resolve the year
2000 issue could have a material adverse effect on our business and the return
on your investment.  (See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Year 2000 Issues.")

Real Estate Risks

General Real Estate Risks

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

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

.    changes in general economic or local conditions;

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

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

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

.    periods of high interest rates and tight money supply.

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

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

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

We are dependent on tenants for our revenue.

Most of our properties are occupied by a single tenant and, therefore, the
success of our investments are materially dependant on the financial stability
of our tenants. Lease payment defaults by tenants could cause us to reduce the
amount of distributions to shareholders. A default of a tenant on its lease
payments to us would cause us to lose the revenue from the property and cause us
to have to find an alternative source of revenue to meet the mortgage payment
and prevent a foreclosure if the property is subject to a mortgage. In the event
of a default, we may experience delays in enforcing our rights as landlord and
may incur substantial costs in protecting our investment and reletting our
property. If a lease is terminated, there is no assurance that we will be able
to lease the property for the rent previously received or sell the property
without incurring a loss.     

20

We may not have funding for future tenant improvements.

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

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

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

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

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

21

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

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

.    Wells Development fails to develop the property;

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

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

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

Competition for investments may increase costs and reduce returns.

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

22

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

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

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

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

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

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

Financing Risks

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

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

23

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

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

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

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

Federal Income Tax Risks

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

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

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

Legislative or regulatory action could adversely affect investors.

In recent years, numerous legislative, judicial and administrative changes
have been made in the provisions of the federal income tax laws applicable to
investments similar to an investment in shares.  The Taxpayer Relief Act of 1997
and the Internal Revenue Service Restructuring and Reform Act enacted in 1998
contain numerous provisions affecting the real estate industry, generally, and
the taxation of REITs, specifically.  Changes are likely to continue to occur in
the future, and we cannot assure you that any such changes will not adversely
affect the taxation of a shareholder.  Any such changes could have an adverse
effect on an investment in shares or on the market value or the resale potential
of our properties.  You are urged to consult with your own tax advisor with
respect to the impact of recent legislation on your investment in shares and the
status of legislative, regulatory or administrative developments and proposals
and their potential effect on an investment in shares.     

24

Retirement Plan Risks

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

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

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

.    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;

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

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

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

For a more complete discussion of the foregoing issues and other risks
associated with an investment in shares by retirement plans, please see the
"ERISA Considerations" section of this prospectus on page 127.

Suitability Standards

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

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

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

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

The minimum purchase is 100 shares ($1,000), except in certain states as
described below. You may not transfer less shares than the minimum purchase
requirement. In addition, you may not transfer, fractionalize or subdivide your
shares so as to retain less than the number of shares required for the minimum
purchase. In order to satisfy the minimum purchase requirements for retirement
plans, unless     

25

otherwise prohibited by state law, a husband and wife may jointly contribute
funds from their separate IRAs, provided that each such contribution is made in
increments of $100. You should note that an investment in the Wells REIT will
not, in itself, create a retirement plan and that, in order to create a
retirement plan, you must comply with all applicable provisions of the Internal
Revenue Code.

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

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

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

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

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

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

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

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

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

26

Estimated Use of Proceeds

The following table sets forth information about how the proceeds raised in
this offering will be used.  Many of the figures set forth below represent the
best estimate since they cannot be precisely calculated at this time.  We expect
that approximately 84% of the money you invest will be used to buy real estate,
while the remaining 16% will be used for working capital and to pay expenses and
fees including the payment of fees to Wells Investment Securities.

Maximum Offering(1)
----------------
Amount             Percent
------             -------  

Gross Offering Proceeds                              222,000,000           100%
Less Public Offering Expenses:
Selling Commissions and Dealer Manager Fee (2)      21,090,000           9.5%
Organization and Offering Expenses (3)               6,660,000             3%
------------           ----
Amount Available for Investment (4)                 $194,250,000          87.5%
Acquisition and Development:
Acquisition and Advisory Fees (5)                 $  6,660,000             3%
Acquisition Expenses (6)                             1,110,000            .5%
Initial Working Capital Reserve (7)                        (7)            --
------------           ----
Amount Invested in Properties (4)(8)                $186,480,000            84%

============           ====

-------------------------
(Footnotes to "Estimated Use of Proceeds")

1.  Includes 20,000,000 shares offered to the public at $10 per share and
2,200,000 shares offered pursuant to our dividend reinvestment plan at $10
per share.  Excludes 800,000 shares to be issued upon exercise of the
soliciting dealer warrants.

2.  Includes selling commissions equal to 7% of aggregate gross offering
proceeds which commissions may be reduced under certain circumstances and a
dealer manager fee equal to 2.5% of aggregate gross offering proceeds, both
of which are payable to the Dealer Manager, an affiliate of the advisor.
The Dealer Manager, in its sole discretion, may reallow selling commissions
of up to 7% of gross offering proceeds to other broker-dealers participating
in this offering attributable to the units sold by them and may reallow out
of its dealer manager fee up to 1.5% of gross offering proceeds in marketing
fees and due diligence expenses to broker-dealers participating in this
offering based on such factors as the volume of units sold by such
participating broker-dealers, marketing support provided by such
participating broker-dealers and bona fide conference fees incurred.  The
amount of selling commissions may often be reduced under certain
circumstances for volume discounts.  See the "Plan of Distribution" section
of this prospectus for a description of such provisions.

3.  Organization and offering expenses consist of estimated legal, accounting,
printing and other accountable offering expenses other than selling
commissions and the dealer manager fee. The advisor and its affiliates will
be responsible for the payment of organization and offering expenses other
than selling commissions and the dealer manager fee to the extent they
exceed 3% of gross offering proceeds without recourse against or
reimbursement by the Wells REIT.

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

27

5.  Acquisition and advisory fees are defined generally as fees and commissions
paid by any party to any person in connection with the purchase, development
or construction of properties.  We will pay Wells Capital, our advisor,
acquisition and advisory fees up to a maximum amount of 3% of gross offering
proceeds in connection with the acquisition of the real estate properties.
Acquisition and advisory fees do not include acquisition expenses.

6.  Acquisition expenses include legal fees and expenses, travel expenses, costs
of appraisals, nonrefundable option payments on property not acquired,
accounting fees and expenses, title insurance premiums and other closing
costs and miscellaneous expenses relating to the selection, acquisition and
development of real estate properties.

7.  Because the vast majority of leases for the properties acquired by the Wells
REIT will provide for tenant reimbursement of operating expenses, we do not
anticipate that a permanent reserve for maintenance and repairs of real
estate properties will be established.  However, to the extent that the we
have insufficient funds for such purposes, we may apply an amount of up to
1% of gross offering proceeds for maintenance and repairs of real estate
properties.  We also may, but are not required to, establish reserves from
gross offering proceeds, out of cash flow generated by operating properties
or out of nonliquidating net sale proceeds, defined generally to mean the
net cash proceeds received by the Wells REIT from any sale or exchange of
properties.

8.  Includes amounts anticipated to be invested in properties net of fees and
expenses.  We estimate that approximately 84% of the proceeds received from
the sale of shares will be used to acquire properties.

Management

General

We operate under the direction of the board, the members of which are
accountable to us and our shareholders as fiduciaries.  The board is responsible
for the management and control of our affairs. The board has retained Wells
Capital to manage our day-to-day affairs and the acquisition and disposition of
our investments, subject to the board's supervision.

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

Proposed transactions are often discussed before being brought to a final
board vote. During these discussions, independent directors often offer ideas
for ways in which deals can be changed to make them acceptable and these
suggestions are taken into consideration when structuring transactions. Each
director will serve until the next annual meeting of shareholders or until his
successor has been duly elected and qualified. Although the number of directors
may be increased or decreased, a decrease shall not have the effect of
shortening the term of any incumbent director.

Any director may resign at any time and may be removed with or without cause
by the shareholders upon the affirmative vote of at least a majority of all the
votes entitled to be cast at a meeting     

28

called for the purpose of the proposed removal. The notice of the meeting shall
indicate that the purpose, or one of the purposes, of the meeting is to
determine if the director shall be removed. The term "cause" as used in this
context is a term used in the Maryland Corporation Law. Since the Maryland
Corporation Law does not define the term "cause," shareholders may not know
exactly what actions by a director may be grounds for removal.

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

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

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

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

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

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

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

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

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

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

29

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

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

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

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

Executive Officers and Directors

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

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

Leo F. Wells, III                President and Director                                 55
Douglas P. Williams              Executive Vice President, Secretary and Treasurer      49
John L. Bell(1)                  Director                                               59
Richard W. Carpenter(1)          Director                                               62
Bud Carter(1)                    Director                                               61
William H. Keogler, Jr.(1)       Director                                               54
Donald S. Moss(1)                Director                                               63
Walter W. Sessoms(1)             Director                                               65
Neil H. Strickland(1)            Director                                               63

--------
(1) Messrs. Bell, Carpenter, Carter, Keogler, Moss, Sessoms and Strickland serve
on our Audit Committee.

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

.  Wells Management Company, Inc., our property manager;
.  Wells Investment Securities, Inc., the dealer manager;
.  Wells Advisors, Inc., a company he organized in 1991 to act as a non-bank
custodian for IRAs; and
.  Wells Development Corporation, a company he organized in 1997 to
temporarily own, operate, manage and develop real properties.

Mr. Wells was a real estate salesman and property manager from 1970 to 1973
for Roy D. Warren & Company, an Atlanta real estate company, and he was
associated from 1973 to 1976 with Sax Gaskin Real Estate Company, during which
time he became a Life Member of the Atlanta Board of Realtors      

30

Million Dollar Club. From 1980 to February 1985 he served as Vice President of
Hill-Johnson, Inc., a Georgia corporation engaged in the construction business.
Mr. Wells holds a Bachelor of Business Administration degree in economics from
the University of Georgia. Mr. Wells is a member of the International
Association for Financial Planning (IAFP) and a registered NASD principal.

Mr. Wells has over 25 years of experience in real estate sales, management
and brokerage services.  In addition to being the President and a director of
the Wells REIT, he is currently a co-general partner in a total of 26 real
estate limited partnerships formed for the purpose of acquiring, developing and
operating office buildings and other commercial properties.  As of October 1,
1999, these 26 real estate limited partnerships represented investments totaling
approximately $300,000,000 from approximately 27,000 investors.

Douglas P. Williams, who was elected as Executive Vice President, Secretary
and Treasurer of the Wells REIT on July 30, 1999, previously served as Vice
President, Controller of OneSource, Inc., a leading supplier of janitorial and
landscape services, from 1996 to 1999 where he was responsible for corporate-
wide accounting activities and financial analysis.  Mr. Williams was employed by
ECC International Inc. ("ECC"), a supplier to the paper industry and to the
paint, rubber and plastic industries, from 1982 to 1995.  While at ECC, Mr.
Williams served in a number of key accounting positions, including Corporate
Accounting Manager, U.S. Operations, Division Controller, Americas Region and
Corporate Controller, America/Pacific Division.  Prior to joining ECC and for
one year after leaving ECC, Mr. Williams was employed by Lithonia Lighting, a
manufacturer of lighting fixtures, as a Cost and General Accounting Manager and
Director of Planning and Control.  Mr. Williams started his professional career
as an auditor for KPMG Peat Marwick LLP.

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

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

Mr. Bell currently serves on the advisory boards of Windsor Capital,
Mountain Top Boys Home and the Eagle Ranch Boys Home.  Mr. Bell is also
extensively involved in buying and selling real estate both individually and in
partnership with others.  Mr. Bell graduated from Florida State University
majoring in accounting and marketing.

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

Mr. Carpenter is currently President and director of Realmark Holdings
Corp., a residential and commercial real estate developer, and has served in
that position since October 1983.  He is also President and director of Leisure
Technology, Inc., a retirement community developer, a position which he has held
since March 1993, Managing Partner of Carpenter Properties, L.P., a real estate
limited partnership, and     

31

President and director of the oil storage companies Wyatt Energy, Inc. and
Commonwealth Oil Refining Company, Inc., positions which he has held since 1995
and 1984, respectively.

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

Bud Carter was an award-winning broadcast news director and anchorman for
several radio and television stations in the Midwest for over 20 years.  From
1975 to 1980, Mr. Carter served as General Manager of WTAZ-FM, a radio station
in Peoria, Illinois and served as editor and publisher of The Peoria Press, a
weekly business and political journal in Peoria, Illinois.  From 1981 until
1989, Mr. Carter was also an owner and General Manager of Transitions, Inc., a
corporate outplacement company in Atlanta, Georgia.

Mr. Carter currently serves as Senior Vice President for The Executive
Committee, a 42-year old international organization established to aid
presidents and CEOs share ideas on ways to improve the management and
profitability of their respective companies.  The Executive Committee operates
in numerous large cities throughout the United States, Canada, Australia,
France, Italy, Malaysia, Brazil, the United Kingdom and Japan.  The Executive
Committee has more than 6,000 presidents and CEOs who are members.  In addition,
Mr. Carter was the first Chairman of the organization recruited in Atlanta and
still serves as Chairman of the first two groups formed in Atlanta, each
comprised of 14 noncompeting CEOs and presidents.  Mr. Carter is a graduate of
the University of Missouri where he earned degrees in journalism and social
psychology.

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

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

32

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

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

Walter W. Sessoms was employed by BellSouth Telecommunications, Inc. from
1971 until his retirement in June 1997.  While at BellSouth, Mr. Sessoms served
in a number of key positions, including Vice President-Residence for the State
of Georgia from June 1979 to July 1981, Vice President-Transitional Planning
Officer from July 1981 to February 1982, Vice President-Georgia from February
1982 to June 1989, Senior Vice President-Regulatory and External Affairs from
June 1989 to November 1991, and Group President-Services from December 1991
until his retirement on June 30, 1997.

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

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

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

Compensation of Directors

We pay our independent directors $250 for each board meeting they attend.
In addition, we have reserved 100,000 shares of common stock for future issuance
upon the exercise of stock options granted    

33

to the independent directors pursuant to our Independent Director Stock Option
Plan. All directors receive reimbursement of reasonable out-of-pocket expenses
incurred in connection with attendance at meetings of the board of directors. If
a director also is an officer of the Wells REIT, we do not pay separate
compensation for services rendered as a director.

Independent Director Stock Option Plan

The independent directors were each issued non-qualified stock options to
purchase 2,500 shares (Initial Options) pursuant to the Independent Director
Stock Option Plan (Plan).  The Plan further provides for subsequent grants of
options to purchase 1,000 shares (Subsequent Options) to each independent
director then in office on the date of each annual stockholder's meeting
beginning with the annual meeting to be held in the year 2000.  The Initial
Options and the Subsequent Options are collectively referred to as the
"Options."  However, Options may not be granted at any time when the grant,
along with grants to other independent directors, would exceed 10% of our issued
and outstanding shares.  The option price for the Initial Options will be $12.00
per share.  The option price for the Subsequent Options shall be the greater of
(1) $12.00 per share or (2) the fair market value of the shares on the date they
are granted.  Fair market value is defined generally to mean:

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

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

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

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

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

One-fifth of the Initial Options are exercisable beginning on the date we
granted them and an additional one-fifth of the Initial Options will become
exercisable on each anniversary of the date we grant them for a period of four
years until 100% of the shares become exercisable.  The Subsequent Options
granted under the Plan will become exercisable on the second anniversary of the
date we grant them.

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

Options granted under the Plan shall lapse on the first to occur of (1) the
tenth anniversary of the date we grant them, (2) the removal for cause of the
independent director as a member of the board of directors, or (3) three months
following the date the independent director ceases to be a director for any
reason other than death or disability, and may be exercised by payment of cash
or through the delivery of     

34

common stock. Options granted under the Plan are generally exercisable in the
case of death or disability for a period of one year after death or the
disabling event. No Option issued may be exercised if such exercise would
jeopardize our status as a REIT under the Internal Revenue Code.

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

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

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

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

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

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

Our organizational documents limit the personal liability of our directors
and officers for monetary damages to the fullest extent permitted under current
Maryland Corporation Law.  We also maintain a directors and officers liability
insurance policy.  Maryland Corporation Law allows directors and officers to be
indemnified against judgments, penalties, fines, settlements and expenses
actually incurred in a proceeding unless the following can be established:

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

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

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

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

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

35

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

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

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

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

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

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

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

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

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

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

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

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

36

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

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

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

The Advisor

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

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

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

Leo F. Wells, III          55  President and sole director
Douglas P. Williams        49  Senior Vice President
Stephen G. Franklin        52  Senior Vice President
Kim R. Comer               44  Vice President and Assistant Director
of Investor Services
Edna B. King               61  Vice President of Investor Services
Linda L. Carson            55  Vice President of Accounting

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

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

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

37

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

Edna B. King is the Vice President of Investor Services for Wells Capital.
She is responsible for processing new investments, sales reporting and investor
communications. Prior to joining Wells Capital in 1985, Ms. King served as the
Southeast Service Coordinator for Beckman Instruments and as office manager for
a regional office of Commerce Clearing House. Ms. King holds an Associates
Degree in Business Administration from DeKalb Community College in Atlanta,
Georgia, and has completed courses at the University of North Carolina at
Wilmington.

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

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

Wells Capital currently owns 20,000 limited partnership units in Wells OP,
our operating partnership, for which it contributed $200,000.  Wells Capital may
not sell these units while the advisory agreement is in effect, although it has
the right to transfer such units to an affiliate.  (See "The Operating
Partnership Agreement.")

The Advisory Agreement

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

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

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

38

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

.     arrange for financing and refinancing of properties; and

.     enter into leases and service contracts for the properties acquired.

The term of the advisory agreement ends on January 30, 2000 and may be
renewed for an unlimited number of successive one year periods.  Additionally,
the advisory agreement may be terminated:

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

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

.     immediately with "good reason" by Wells Capital.

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

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

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

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

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

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

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

.     organization and offering expenses in an amount up to 3% of gross
offering proceeds, which include expenses attributable to preparing
the SEC registration statement, formation and organization of the
Wells REIT, qualification of the shares for sale in the states, escrow
arrangements, filing fees and expenses attributable to selling the
shares including, but not limited to, selling commissions, advertising
expenses, expense reimbursements, and counsel and accounting fees;    

39

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

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

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

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

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

Shareholdings

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

40

Affiliated Companies

Property Manager

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

Name                      Positions
----                      ---------

Michael C. Berndt         Vice President and Chief Investment Officer
M. Scott Meadows          Vice President of Property Management
Robert H. Stroud          Vice President of Leasing
Michael L. Watson         Vice President of Development

Wells Management is engaged in the business of real estate management.  It
was organized and commenced active operations in 1983 to lease and manage real
estate projects which the advisor and its affiliates operate or in which they
own an interest.  As of October 1, 1999, Wells Management was managing in excess
of 3,200,000 square feet of office buildings and shopping centers.  We will pay
Wells Management property management fees equal to 2.5% of the gross revenues of
each building managed for management of our commercial properties.  In addition,
we will pay Wells Management leasing fees equal to 2.0% of the gross revenues of
each building for which Wells Management provides leasing and tenant
coordinating services.  A special one-time initial rent-up or leasing fee
typically equal to the first month's rent may be paid on the first leases for
newly constructed properties.  This fee must be competitive for the geographic
area of the property, and the amount of this fee received by Wells Management
will be reduced by any amount paid to an outside broker.  The advisor believes
these terms will be no less favorable to the Wells REIT than those customary for
similar services in the relevant geographic area.  Depending upon the location
of certain of our properties and other circumstances, we may retain unaffiliated
property management companies to render property management services for some of
our properties.

In the event that Wells Management assists a tenant with tenant
improvements, a separate fee may be charged to the tenant and paid by the
tenant.  This fee will not exceed 5% of the cost of the tenant improvements.

Wells Management derives all of its income from its property management and
leasing operations.  For the fiscal year ended December 31, 1998, Wells
Management reported $1,581,235 in gross operating revenues and $352,963 in net
income.

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

.  the advisor;

.  the property manager;     

41

.  partnerships organized by the advisor and its affiliates; and

.  other persons or entities owning properties managed by the property
manager.

The property manager will also direct the purchase of equipment and supplies and
will supervise all maintenance activity.

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

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

Dealer Manager

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

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

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

IRA Custodian

Wells Advisors, Inc. was organized in 1991 for the purpose of acting as a
non-bank custodian for IRAs investing in the securities of Wells real estate
programs. Wells Advisors currently charges no fees for such services. Wells
Advisors was approved by the Internal Revenue Service to act as a qualified non-
bank custodian for IRAs on March 20, 1992. In circumstances where Wells Advisors
acts as an IRA custodian, the authority of Wells Advisors is limited to holding
limited partnership units or REIT shares on behalf of the beneficiary of the IRA
and making distributions or reinvestments in such units or shares solely at the
direction of the beneficiary of the IRA. Well Advisors is not authorized to vote
any of such units or shares held in any IRA except in accordance with the
written instructions of the beneficiary of the IRA. Mr. Wells is the President
and sole director and owns 50% of the common stock and all of the preferred
stock of Wells Advisors. As of October 1, 1999, Wells Advisors was acting as the
IRA custodian for in excess of $50,000,000 in Wells real estate program
investments.

Management Decisions

The primary responsibility for the selection of our investments and the
negotiation for these investments will reside in Michael C. Berndt, an officer
of Wells Management and the principal real estate acquisition employee of Wells
Capital, and Leo F. Wells, III, an officer and director of Wells Capital.
Messrs. Berndt and Wells seek to invest in commercial properties, typically
office buildings in which the major tenant is a company with a net worth of in
excess of $100,000,000.  The board of directors must approve all acquisitions of
real estate properties.

42

Management Compensation     

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

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

Organizational and Offering Stage

Selling              Up to 7% of gross offering proceeds before reallowance of       $15,540,000
Commissions - The    commissions earned by participating broker-dealers.  The
Dealer Manager       Dealer Manager intends to reallow 100% of commissions
earned to participating broker-dealers.

Dealer Manager       Up to 2.5% of gross offering proceeds before reallowance        $ 5,550,000
Fee - The Dealer     to participating broker-dealers.  The Dealer Manager, in
Manager              its sole discretion, may reallow a portion of its dealer
manager fee of up to 1.5% of the gross
offering proceeds to be paid to such participating
broker-dealers as a marketing fee and due diligence
expense reimbursement, based on such factors as the
volume of shares sold by such participating
broker-dealers, marketing support and bona fide
conference fees incurred.

Reimbursement of     Up to 3% of gross offering proceeds.  All                       $ 6,660,000
Organization         organization and offering expenses (excluding selling
and Offering         commissions and the dealer manager fee) will be
Expenses - The       advanced by the advisor or its affiliates and
Advisor or its       reimbursed by the Wells REIT.
Affiliates
Acquisition and Development Stage

Acquisition and      For the review and evaluation of potential real                 $ 6,660,000
Advisory             property acquisitions, a fee of up to 3% of gross
Fees - The           offering proceeds.
Advisor or its
Affiliates (2)

Reimbursement of     Up to .5% of gross offering proceeds for                        $ 1,110,000
Acquisition          reimbursement of expenses related to real property
Expenses - The       acquisitions, such as legal fees, travel expenses,
Advisor or its       property appraisals, title insurance premium expenses
Affiliates (2)       and other closing costs.

43

Operational Stage  

Property             For the management of our properties, property management   Actual amounts are
Management and       fees equal to 2.5% of gross revenues.  For leasing and      dependent upon
Leasing Fees -       tenant coordinating services, leasing fees equal to 2% of   results of
Wells Management     gross revenues.  In addition, a separate fee for the        operations and
Company, Inc.        one-time initial rent-up or leasing-up of newly             therefore cannot be
constructed properties in an amount not to exceed the fee   determined at the
customarily charged in arm's-length transactions by         present time.
others rendering similar services in the same geographic
area for similar properties as determined by a survey of
brokers and agents in such area (customarily equal to the
first month's rent).

Real Estate          In connection with the sale of properties, an amount not    Actual amounts are
Commissions -        exceeding the lesser of:  (A) 50% of the reasonable,        dependent upon
The Advisor or       customary and competitive real estate brokerage             results of
its Affiliates       commissions customarily paid for the sale of a comparable   operations and
property in light of the size, type and location of the     therefore cannot be
property, or (B) 3% of the gross sales price of each        determined at the
property, subordinated to distributions to  investors       present time.
from sale proceeds of an amount which, together with 
prior distributions to the investors, will equal (1) 100%
of their capital contributions plus (2) an 8% annual 
cumulative, noncompounded return on their net capital
contributions.

Subordinated         After investors have received a return of their net         Actual amounts are
Participation in     capital contributions and an 8% per year cumulative,        dependent upon
Net Sale Proceeds    noncompounded return, then the advisor is entitled to       results of
- The Advisor (3)    receive 10% of remaining net sales proceeds.                operations and
therefore cannot be
determined at the
present time.

Subordinated         Upon listing, a fee equal to 10% of the amount by which     Actual amounts are
Incentive            (1) the market value of the outstanding stock of the        dependent upon
Listing Fee -        Wells REIT plus distributions paid by the Wells REIT        results of
The Advisor(4)(5)    prior to listing, exceeds (2) the sum of the total amount   operations and
of capital raised from investors and the amount cash flow   therefore cannot be
necessary to generate an 8% per year cumulative,            determined at the
noncompounded return to investors.                          present time.

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

_________________________
(Footnotes to "Management Compensation")     

44

1.   The estimated maximum dollar amounts are based on the sale of a maximum of
20,000,000 shares to the public at $10 per share and the sale of 2,200,000
shares at $10 per share pursuant to our dividend reinvestment plan.

2.   The total of all acquisition and advisory fees and the acquisition expenses
shall not exceed, in the aggregate, an amount equal to 6% of the contract
price of all of the properties which we will purchase.

3.   The subordinated participation in net sale proceeds and the subordinated
incentive listing fee to be received by the advisor are mutually exclusive
of each other. In the event that the Wells REIT becomes listed and the
advisor receives the subordinated incentive listing fee prior to its
receipt of the subordinated participation in net sale proceeds, the advisor
shall not be entitled to any such participation in net sale proceeds.

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

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

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

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

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

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

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

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

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

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

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

45

In addition, the advisor and its affiliates will be reimbursed only for the
actual cost of goods, services and materials used for or by the Wells REIT.  The
advisor may be reimbursed for the administrative services necessary to the
prudent operation of the Wells REIT provided that the reimbursement shall be at
the lower of the advisor's actual cost or the amount the Wells REIT would be
required to pay to independent parties for comparable administrative services in
the same geographic location.  We will not reimburse the advisor or its
affiliates for services for which they are entitled to compensation by way of a
separate fee.  Excluded from allowable reimbursement shall be: (1) rent or
depreciation, utilities, capital equipment, other administrative items; and (2)
salaries, fringe benefits, travel expenses and other administrative items
incurred by or allocated to any controlling persons of the advisor or its
affiliates.

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

Conflicts of Interest

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

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

Interests in Real Estate Programs

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

The advisor and its affiliates are currently sponsoring a real estate
program known as Wells Real Estate Fund XII, L.P.  The registration statement of
Wells Real Estate Fund XII, L.P. was declared effective by the Securities and
Exchange Commission on March 22, 1999 for the offer and sale to the public of up
to 7,000,000 units of limited partnership interest at a price of $10.00 per
unit.

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

1.  Wells Real Estate Fund I (Wells Fund I),     

46

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

In the event that the Wells REIT, or any other Wells program or other
entity formed or managed by the advisor or its affiliates is in the market for
similar properties, the advisor will review the investment portfolio of each
such affiliated entity prior to making a decision as to which Wells program will
purchase such properties.  (See "Certain Conflict Resolution Procedures.")

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

Other Activities of the Advisor and its Affiliates

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

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

.    loan funds to the advisor or any of its affiliates; or

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

47

Competition      

Conflicts of interest will exist to the extent that we may acquire
properties in the same geographic areas where properties owned by other Wells
programs are located.  In such a case, a conflict could arise in the leasing of
properties in the event that the Wells REIT and another Wells program were to
compete for the same tenants in negotiating leases, or a conflict could arise in
connection with the resale of properties in the event that the Wells REIT and
another Wells program were to attempt to sell similar properties at the same
time.  Conflicts of interest may also exist at such time as the Wells REIT or
our affiliates managing property on our behalf seek to employ developers,
contractors or building managers as well as under other circumstances.  The
advisor will seek to reduce conflicts relating to the employment of developers,
contractors or building managers by making prospective employees aware of all
such properties seeking to employ such persons.  In addition, the advisor will
seek to reduce conflicts which may arise with respect to properties available
for sale or rent by making prospective purchasers or tenants aware of all such
properties.  However, these conflicts cannot be fully avoided in that the
advisor may establish differing compensation arrangements for employees at
different properties or differing terms for resales or leasing of the various
properties.

Affiliated Dealer Manager

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

Affiliated Property Manager

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

Lack of Separate Representation

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

Joint Ventures with Affiliates of the Advisor

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

48

Receipt of Fees and Other Compensation by the Advisor and its Affiliates

A transaction involving the purchase and sale of properties may result in
the receipt of commissions, fees and other compensation by the advisor and its
affiliates, including acquisition and advisory fees, the dealer manager fee,
property management and leasing fees, real estate brokerage commissions, and
participation in nonliquidating net sale proceeds.  However, the fees and
compensation payable to the advisor and its affiliates relating to the sale of
properties are subordinated to the return to the shareholders of their capital
contributions plus cumulative returns on such capital.  Subject to oversight by
the board of directors, the advisor has considerable discretion with respect to
all decisions relating to the terms and timing of all transactions.  Therefore,
the advisor may have conflicts of interest concerning certain actions taken on
our behalf, particularly due to the fact that such fees will generally be
payable to the advisor and its affiliates regardless of the quality of the
properties acquired or the services provided to the Wells REIT.  (See
"Management Compensation.")

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

Certain Conflict Resolution Procedures

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

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

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

.    We will not make any loans to Wells Capital or its affiliates or to
our directors. In addition, Wells Capital and its affiliates will not
make loans to us or to joint ventures in which we are a joint venture
partner for the purpose of acquiring properties. Any loans made to us
by Wells Capital or its affiliates or to our directors for other
purposes must be     

49

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

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

.    the cash requirements of each program;

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

.    the policy of each program relating to leverage of properties;

.    the anticipated cash flow of each program;

.    the income tax effects of the purchase of each program;

.    the size of the investment; and

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

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

Investment Objectives and Criteria

General

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

50

.    to maximize cash dividends paid to you;

.    to preserve, protect and return your capital contributions; and

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

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

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

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

Acquisition and Investment Policies

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

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

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

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

Investment in real estate generally will take the form of fee title or of a
long-term leasehold estate.  We will acquire such interests either directly in
Wells OP (see "The Operating Partnership     

51

Agreement") or indirectly through limited liability companies or through
investments in joint ventures, general partnerships, co-tenancies or other co-
ownership arrangements with the developers of the properties, affiliates of the
advisor or other persons. (See "Joint Venture Investments" below.) In addition,
we may purchase properties and lease them back to the sellers of such
properties. While we will use our best efforts to structure any such sale-
leaseback transaction such that the lease will be characterized as a "true
lease" so that we will be treated as the owner of the property for federal
income tax purposes, we cannot assure you that the IRS will not challenge such
characterization. In the event that any such sale-leaseback transaction is
recharacterized as a financing transaction for federal income tax purposes,
deductions for depreciation and cost recovery relating to such property would be
disallowed. (See "Federal Income Tax Considerations -- Sale-Leaseback
Transactions.")

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

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

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

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

.    plans and specifications;

.    environmental reports;

.    surveys;

.    evidence of marketable title subject to such liens and encumbrances as
are acceptable to the advisor;

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

.    title and liability insurance policies.

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

We may also enter into arrangements with the seller or developer of a
property whereby the seller or developer agrees that if during a stated period
the property does not generate a specified cash     

52

flow, the seller or developer will pay in cash to the Wells REIT a sum necessary
to reach the specified cash flow level, subject in some cases to negotiated
dollar limitations.

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

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

.    changes in general economic or local conditions;

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

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

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

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

.    tenant turnover; and

.    general overbuilding or excess supply in the market area.

Development and Construction of Properties

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

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

Acquisition of Properties from Wells Development Corporation

We may acquire properties, directly or through joint ventures with
affiliated entities, from Wells Development Corporation (Wells Development), a
corporation formed by Wells Management Company, Inc. (Wells Management) as a
wholly owned subsidiary for the purposes of (1) acquiring existing income-
producing commercial real estate properties, and (2) acquiring land, developing
commercial real     

53

properties, securing tenants for such properties, and selling such properties
upon completion to the Wells REIT or other Wells programs. In the case of
properties to be developed by Wells Development and sold to the Wells REIT, we
anticipate that Wells Development will:

.    acquire a parcel of land;

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

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

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

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

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

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

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

We may enter into a contract to acquire property from Wells Development
notwithstanding the fact that at the time of contracting, we have not yet raised
sufficient proceeds to enable us to pay the full amount of the purchase price at
closing.  We anticipate that we will be able to raise sufficient additional
proceeds from the offering during the period between execution of the contract
and the date provided in the contract for closing.  In the case of properties to
be developed by Wells Development, the contract will likely provide that the
closing will occur immediately following the completion of the development by
Wells Development.  However, the contract may also provide that we may elect to
close the purchase     

54

of the property before the development has been completed, in which case we
would obtain an assignment of the construction and development contracts from
Wells Development and would complete the construction either directly or through
a joint venture with an affiliate. Any contract between the Wells REIT, directly
or indirectly through a joint venture with an affiliate, and Wells Development
for the purchase of property to be developed by Wells Development will provide
that we will be obligated to purchase the property only if:

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

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

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

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

Terms of Leases and Tenant Creditworthiness

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

Wells Capital has developed specific standards for determining the
creditworthiness of potential tenants of our properties.  While authorized to
enter into leases with any type of tenant, we anticipate that a majority of our
tenants will be U.S. corporations or other entities which have a net worth in
excess of $100,000,000 or whose lease obligations are guaranteed by another
corporation or entity with a net worth in excess of $100,000,000.

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

We anticipate that tenant improvements required to be funded by the
landlord in connection with newly acquired properties will be funded from our
offering proceeds.  However, at such time as a tenant     

55

at one of our properties does not renew its lease or otherwise vacates its space
in one of our buildings, it is likely that, in order to attract new tenants, we
will be required to expend substantial funds for tenant improvements and tenant
refurbishments to the vacated space. Since we do not anticipate maintaining
permanent working capital reserves, we may not have access to funds required in
the future for tenant improvements and tenant refurbishments in order to attract
new tenants to lease vacated space. (See "Risk Factors -- Real Estate Risks.")

Joint Venture Investments

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

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

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

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

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

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

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

56

Borrowing Policies

While we strive for diversification, the number of different properties we
can acquire will be affected by the amount of funds available to us.

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

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

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

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

We may not borrow money from any of our directors or from Wells Capital and
its affiliates for the purpose of acquiring real properties.  Any loans by such
parties for other purposes must be approved by a majority of the directors,
including a majority of the independent directors, not otherwise interested in
the transaction as fair, competitive and commercially reasonable and no less
favorable to the Wells REIT than comparable loans between unaffiliated parties.

Disposition Policies

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

.    the tenant has involuntarily liquidated;

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

57

.    an opportunity has arisen to improve other properties;

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

.    the tenant is in default under the lease; or

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

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

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

Investment Limitations

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

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

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

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

.    make or invest in mortgage loans unless an appraisal is obtained
concerning the underlying property except for those mortgage loans
insured or guaranteed by a government or government agency.  Mortgage
debt on any property shall not exceed     

58

such property's appraised value. In cases where the board of directors
determines, and in all cases in which the transaction is with any of
our directors or Wells Capital and its affiliates, such appraisal
shall be obtained from an independent appraiser. We will maintain such
appraisal in our records for at least five years and it will be
available for your inspection and duplication. We will also obtain a
mortgagee's or owner's title insurance policy as to the priority of
the mortgage;

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

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

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

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

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

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

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

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

.    issue equity securities which are non-voting or assessable;

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

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

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

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

59

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

.    lend money to Wells Capital or its affiliates;

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

Change in Investment Objectives and Limitations

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

Description of Properties

As of September 30, 1999, we had purchased interests in 16 real estate
properties located in 11 states, all of which are leased to tenants on a triple-
net basis.  The cost of each of the properties will be depreciated for tax
purposes over a 40 year period on a straight-line basis.  We believe all of the
properties are adequately covered by insurance and are suitable for their
intended purposes.  The following table provides certain additional information
about these properties.

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

Gartner Group,       Ft. Myers, FL       56.8%      $ 8,320,000       62,400      $  642,798         01/2008
Inc.
--------------------------------------------------------------------------------------------------------------
Videojet Systems     Wood Dale,           100%      $32,630,940      250,354      $2,838,952         11/2008
International,       IL
Inc.
--------------------------------------------------------------------------------------------------------------
Johnson              Tredyffrin          56.8%      $ 8,000,000      130,000      $  789,750         06/2007
Matthey, Inc.        Township, 
PA
--------------------------------------------------------------------------------------------------------------
ABB Power            Richmond,            100%      $11,559,347      100,000      $  956,000         05/2011
Generation Inc.      VA 
--------------------------------------------------------------------------------------------------------------
Sprint Communi-      Leawood,            56.8%      $ 9,500,000       68,900      $  999,050         05/2007
cations Company      KS 
L.P.
--------------------------------------------------------------------------------------------------------------
EYBL CarTex,         Fountain            56.8%      $ 5,121,828      169,510      $  508,530         02/2008
Inc.                 Inn, SC
--------------------------------------------------------------------------------------------------------------

60

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

Matsushita           Lake Forest,         100%      $18,400,000      150,000      $1,830,000         12/2009
Avionics             CA        
Systems
Corporation
--------------------------------------------------------------------------------------------------------------
Pennsylvania         Harrisburg, PA       100%      $12,291,200       81,859      $  880,264         11/2008
Cellular 
Telephone Corp.
--------------------------------------------------------------------------------------------------------------
Price-               Tampa, FL            100%      $21,127,854      130,091      $1,915,741         12/2008
Waterhouse-
Coopers, LLP
--------------------------------------------------------------------------------------------------------------
Cort Furniture       Fountain            43.7%      $ 6,400,000       52,000      $  758,964         10/2003
Rental               Valley, CA
Corporation 
--------------------------------------------------------------------------------------------------------------
Fairchild            Fremont, CA         77.5%      $ 8,900,000       58,424      $  842,062         11/2004
Technologies
U.S.A., Inc.
--------------------------------------------------------------------------------------------------------------
Iomega               Ogden City,          3.7%      $ 5,025,000      108,000      $  480,000         07/2006
Corporation          UT 
--------------------------------------------------------------------------------------------------------------
ODS                  Broomfield, CO       3.7%      $ 8,275,000       51,974      $  839,400         10/2001
Technologies,
L.P. and
Transecon, Inc.
--------------------------------------------------------------------------------------------------------------
Ohmeda, Inc.         Louisville, CO       3.7%      $10,325,000      106,750      $1,004,520         01/2005
--------------------------------------------------------------------------------------------------------------
ABB Flakt, Inc.      Knoxville, TN        3.7%      $ 7,900,000       87,000      $  881,150         12/2007
--------------------------------------------------------------------------------------------------------------
Lucent               Oklahoma             3.7%      $ 5,504,276       55,017      $  508,383         01/2008
Technologies,        City, OK
Inc.
--------------------------------------------------------------------------------------------------------------

Joint Ventures with Affiliates

The Wells Fund XI-Fund XII-REIT Joint Venture

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

The XI-XII-REIT Joint Venture Agreement provides that all income, profit,
loss, cash flow, resale gain, resale loss and sale proceeds of the XI-XII-REIT
Joint Venture will be allocated and distributed among Wells OP, Wells Fund XI
and Wells Fund XII based on their respective capital contributions to the joint
venture.  As of September 30, 1999, the joint venture partners of the XI-XII-
REIT Joint Venture had made the following contributions and held the following
equity percentage interests:

61

Joint Venture Partner  Capital Contribution  Equity Interest
---------------------  --------------------  ---------------      

Wells OP                $17,641,211            56.77    
Wells Fund XI           $ 8,131,351            26.17%   
Wells Fund XII          $ 5,300,000            17.06%    

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

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

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

The IX-X-XI-REIT Joint Venture Agreement provides that all income, profit,
loss, cash flow, resale gain, resale loss and sale proceeds of the IX-X-XI-REIT
Joint Venture will be allocated and distributed among Wells OP, Wells Fund IX,
Wells Fund X and Wells Fund XI based on their respective capital contributions
to the IX-X-XI-REIT Joint Venture. As of September 30, 1999, the joint venture
partners of the IX-X-XI-REIT Joint Venture had made the following contributions
and held the following equity percentage interests:

Joint Venture Partner      Capital Contribution  Equity Interest  
---------------------      --------------------  ---------------- 

Wells OP                  $ 1,421,466             3.74%          
Wells Fund IX             $14,833,708            39.00%          
Wells Fund X              $18,420,162            48.43%          
Wells Fund XI             $ 3,357,436             8.83%           

The IX-X-XI-REIT Joint Venture owns the Lucent Building, the ABB Knoxville
Building, the Ohmeda Building, the Interlocken Building and the Iomega Building.

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

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

62

The Lucent Building

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

The Lucent Building is located at 14400 Hertz Quail Springs Parkway,
Oklahoma City, Oklahoma. The site consists of approximately 5.3 acres located in
the Quail Springs Office Park in the northwest sector of Oklahoma City.

The Lucent Building is currently being leased to Lucent Technologies Inc.
(Lucent Technologies). Lucent Technologies is a telecommunications company which
was spun off by AT&T in April 1996. Lucent Technologies is in the business of
designing, developing and marketing communications systems and technologies
ranging from microchips to whole networks and is one of the world's leading
designers, developers and manufacturers of telecommunications system software
and products. Lucent Technologies is a public company traded on the New York
Stock Exchange. For the fiscal year ended September 30, 1998, Lucent
Technologies had total assets of in excess of $26 billion dollars and a net
worth of in excess of $5 billion dollars.

The initial term of the Lucent lease is ten years which commenced on
January 5, 1998 and expires in January 2008.  Lucent Technologies has the option
to extend the initial term of the Lucent lease for two additional five year
periods.

The annual base rent payable under the Lucent lease will be $508,383
payable in equal monthly installments of $42,365 during the first five years of
the initial lease term, and $594,152 payable in equal monthly installments of
$49,513 during the second five years of the initial lease term.  The annual base
rent for each extended term under the lease will be based upon the fair market
rent then being charged by landlords under new leases of office space in the
metropolitan Oklahoma City market for similar space in a building of comparable
quality with comparable amenities.  The Lucent lease provides that if the
parties cannot agree upon the appropriate fair market value rate, the rate will
be established by real estate appraisers.

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

63

The ABB Knoxville Building     

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

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

The ABB Knoxville Building is currently leased as follows:

Rentable
Floors                 Tenant                            Sq. Ft.
------                 -------                           -------

1                      Center Partners, Inc.             23,992  
2, 3                   ABB Flakt, Inc.                   57,831
2                      Green Tree Financial          
Servicing Corporation             2,581

The entire third floor and most of the second floor of the ABB Knoxville
Building containing approximately 57,831 square feet (69% of the total square
feet) is currently under lease to ABB Flakt, Inc. (ABB).  The initial term of
the ABB lease is nine years and 11 months which commenced on January 1, 1998 and
expires in December 2007.

ABB is principally engaged in the business of pollution control engineering
and consulting.  ABB will use the leased area as office space for approximately
220 employees.  ABB Asea Brown Boveri, Ltd., a Swiss corporation based in
Zurich, is the holding company of the ABB Asea Brown Boveri Group which is
comprised of approximately 1,000 companies around the world, including ABB.  The
ABB Group revenue is predominately provided by contracts with utilities and
independent power producers for the design and engineering, construction,
manufacture and marketing of products, services and systems in connection with
the generation, transmission and distribution of electricity.  In addition, the
ABB Group generates a significant portion of its revenues from the sale of
industrial automation products, systems and services to pulp and paper,
automotive and other manufacturers.

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

The annual base rent payable under the ABB lease is $646,250 payable in
equal monthly installments of $53,854 during the first five years of the initial
lease term, and $728,750 payable in equal monthly installments of $60,729 during
the last four years and 11 months of the initial lease term.

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

The terms of the ABB lease provide that ABB has the right of first refusal
for the lease of the space in the ABB Knoxville Building that was not initially
leased by ABB.  Therefore, at the expiration     

64

of the lease terms of Center Partners, Inc. and Green Tree Financial Services
which are described below, ABB will again have a right of first refusal for this
space.

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

The entire first floor of the ABB Knoxville Building containing
approximately 23,992 square feet (28% of the total square feet) is currently
under lease to Center Partners, Inc. (CPI).  The initial term of the CPI lease
is five years which commences in January 2000 and expires in December 2004.  CPI
has the right to extend the lease for two additional five year periods of time.

CPI is engaged in the business of providing comprehensive solutions to
corporations in technical support, customer service and order processing.

The base rent payable under the CPI lease is as follows:

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

1              $299,900           $24,991.67
2              $307,338           $25,611.46
3              $315,015           $26,251.25
4              $322,932           $26,911.03
5              $331,090           $27,590.80

The base rent payable during the extension term shall be the market rental
rate then being charged by landlords under new leases in the Knoxville rental
market for a building, parking area and other improvements similar to the ABB
Knoxville Building.  If the parties cannot agree on the market rental rate
within six months of the commencement of the extension term, such rental rate
shall be determined by appraisal.

A portion of the second floor of the ABB Knoxville Building containing
approximately 2,581 square feet (3% of the total square feet) is currently under
lease to Green Tree Financial Servicing Corporation (Green Tree).  The term of
the Green Tree lease is five years which commenced on January 1, 1999 and will
expire in December 2003.

The base rent payable under the Green Tree lease is as follows:

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

1             $50,330            $4,194.13      
2             $51,672            $4,305.97      
3             $53,091            $4,424.26      
4             $41,632            $3,469.29

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5             $43,103        $3,591.89        

The Ohmeda Building

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

The site is a 15 acre tract of land in the Centennial Valley Business Park
located approximately five miles southeast of Boulder and approximately 17 miles
northwest of Denver, situated near Highway 36, which is the main thoroughfare
between Boulder and Denver.

The entire 106,750 rentable square feet of the Ohmeda Building is currently
under lease with Ohmeda, Inc. (Ohmeda).  The Ohmeda lease currently expires in
January 2005, subject to (1) Ohmeda's right to effectuate an early termination
of the Ohmeda lease under the terms and conditions described below, and (2)
Ohmeda's right to extend the Ohmeda Lease for two additional five year periods
of time.

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

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

The base rent payable under the Ohmeda lease is as follows:

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

1999-2002         $1,004,520         $83,710
2003              $1,054,692         $87,891
2004              $1,107,000         $92,250

The Ohmeda lease contains an early termination clause that allows Ohmeda
the right to terminate the Ohmeda lease, subject to certain conditions, on
either January 31, 2001 or January 31, 2002.  In order to exercise this early
termination clause, Ohmeda must give the IX-X-XI-REIT Joint Venture notice on or
before 5:00 p.m. MST, January 31, 2000, and said notice must identify which
early termination date Ohmeda is exercising.  If Ohmeda exercises its right to
terminate on January 31, 2001, then Ohmeda must tender $753,388 plus an amount
equal to the amount of real property taxes estimated to be payable to the
landlord in 2002 for the tax year 2001 based on the most recent assessment
information available on the early termination date.  If Ohmeda exercises its
right to terminate on January 31, 2002, then Ohmeda must tender $502,259 plus an
amount equal to the amount of real property taxes estimated to be payable to the
landlord in 2003 for the tax year 2002 based on the most recent assessment
information available on the early termination date.  At the present time, real
property taxes relating to this property are approximately $135,500 per year.
The payment of these amounts by Ohmeda for early termination must be made on or
before the 180th day prior to the appropriate early termination date.  If the
amount of the real property taxes actually assessed is greater or lesser than
the amount paid by Ohmeda on the early termination date, then the difference
shall be adjusted accordingly within 30 days of notice of such difference.     

66

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

The base rental for the expansion space payable under the Ohmeda lease
shall be calculated to generate a rate of return to the IX-X-XI-REIT Joint
Venture on its project costs and any retrofit expenses with respect to the
existing premises incurred by landlord over the new, ten year extended primary
lease term, equal to the prime lending rate published by Norwest Bank, N.A. on
the first day of such extended primary lease term, plus 3.0%, plus full
amortization of the tenant finish costs with respect to the expansion space and
the existing premises.  This base rental shall be payable through January 31,
2005.  The base rental payable under the Ohmeda lease from February 1, 2005
through the remaining balance of the new, extended ten year primary lease term,
shall be based on a combined rental rate equal to the sum of (1) the base rental
payable by Ohmeda during lease year number seven for the existing premises, plus
(2) the base rent payable by Ohmeda during lease year number seven for the
expansion space, plus an amount equal to 2% of the combined rental rate.
Thereafter, the base rent payable for the entire premises shall be the base rent
payable during the previous lease year plus an amount equal to 2% of the base
rent payable during such previous lease year.

The Interlocken Building

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

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

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

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

The entire third floor of the Interlocken Building containing 19,229
rentable square feet (37% of the total rentable square feet) is currently under
lease to Transecon, Inc.  The Transecon lease currently expires in October 2001,
subject to Transecon's right to extend for one additional term of five years
upon 180 days' notice.

Transecon is a consumer distributor of environmental friendly products,
including on-site video and audio production of environmental and alternative
health videos using state-of-the-art     

67

electronics and sound stage. Transecon was founded in 1989 and currently employs
approximately 60 people.

The monthly base rent payable under the Transecon Lease is approximately
$24,000 for the initial term of the lease, and is calculated under the Transecon
lease based upon 18,011 rentable square feet.  In addition, Transecon has a
right of first refusal under the lease for any second floor space proposed to be
leased by the landlord.  If Transecon elects to extend the lease, the monthly
base rent shall be a market rate, but no less than $24,000 and no more than
$27,700.  In accordance with the Transecon lease, Golden Rule, Inc., an
affiliate of Transecon, occupies 6,621 rentable square feet of the third floor.
Transecon guarantees the entire payment due under the Transecon Lease.
Transecon also leases 1,510 rentable square feet on the first floor.  The base
rent payable for this space is as follows:

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

1999           $25,200               $2,100
2000           $25,800               $2,150 
2001           $26,400               $2,200

The entire second floor of the Interlocken Building containing 17,146
rentable square feet (33% of total rentable square feet) is currently under
lease to ODS Technologies, L.P. (ODS).  The ODS lease expires in September 2003,
subject to ODS's right to extend for one additional term of three years upon 180
days' notice.

ODS provides in-home financial transaction services via telephone and
television, and it has developed interactive computer-based applications for
such in-home purchasing.  Originally based in Tulsa, Oklahoma, ODS has relocated
its business to the Interlocken Building.

The base rent payable under the ODS lease is as follows:

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

1999          $271,200               $22,600
2000          $277,200               $23,100
2001          $282,600               $23,550
2002          $288,600               $24,050
2003          $294,600               $24,550

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

The first floor of the Interlocken Building containing 15,599 rentable
square feet is occupied by several tenants whose leases expire in late 2001 or
2002.  The aggregate monthly base rent payable under these leases for 1999 is
approximately $22,055.

The Iomega Building

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

68

The site is an approximately 8 acre tract of land located at 2976 South
Commerce Way in the Ogden Commercial and Industrial Park, which is one mile
north of Roy City, one mile northwest of Riverdale City and three miles
southwest of the Ogden central business district.

The entire Iomega Building is currently under lease to Iomega Corporation
(Iomega). The Iomega lease had a ten year lease term which commenced on August
1, 1996. In March 1999, the IX-X-XI-REIT Joint Venture acquired an adjacent
parcel of land and began constructing additional parking at the site. As a
result, Iomega increased its monthly base rent and extended the term of its
lease until April 30, 2009. The Iomega lease contains no further extension
provisions. Iomega's world headquarters are located within one mile of the
Iomega Building.

Iomega, a New York Stock Exchange company, is a manufacturer of computer
storage devices used by individuals, businesses, government and educational
institutions, including "Zip" drives and disks, "Jaz" one gigabyte drives and
disks, and tape backup drives and cartridges. Iomega reported total sales of in
excess of $1.6 billion and a net worth of in excess of $400 million for its
fiscal year ended December 31, 1998.

The monthly base rent payable under the Iomega lease is $54,989.41. On
March 1, 2003 and July 1, 2006, the monthly base rent payable under the Iomega
lease will be increased to reflect an amount equal to 100% of the increase in
the Consumer Price Index during the preceding 40 months; provided however, that
in no event shall the base rent be increased with respect to any one year by
more than 6% or by less than 3% per year, compounded annually, on a cumulative
basis from the beginning of the lease term.

The Fairchild Building

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

As of October 15, 1999, Wells OP had made total capital contributions to
the Fremont Joint Venture of $6,983,110 and held an equity percentage interest
in the Fremont Joint Venture of 77.5%, and the Fund X-XI Joint Venture had made
total capital contributions to the Fremont Joint Venture of $2,000,000 and held
an equity percentage interest in the Fremont Joint Venture of 22.5%.

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

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

The entire 58,424 rentable square feet of the Fairchild Building is
currently under lease to Fairchild Technologies U.S.A., Inc. (Fairchild). The
Fairchild lease commenced on December 1, 1997 and expires in November 2004,
subject to Fairchild's right to extend the Fairchild lease for an additional
five year period.     

69

Fairchild is a global leader in the design and manufacture of production
equipment for semiconductor and compact disk manufacturing. The semiconductor
equipment group recently unveiled a new line of semiconductor wafer processing
equipment which will provide alternatives to the traditional semiconductor chip
production methods.

Fairchild is a wholly-owned subsidiary of the Fairchild Corporation
(Fairchild Corp). Fairchild Corp is the largest aerospace fastener and fastening
system manufacturer and is one of the largest independent aerospace parts
distributors in the world. Fairchild Corp is a leading supplier to aircraft
manufacturers such as Boeing, Airbus, Lockheed Martin, British Aerospace and
Bombardier and to airlines such as Delta Airlines and U.S. Airways. The
obligations of Fairchild under the Fairchild lease are guaranteed by Fairchild
Corp, which reported total consolidated sales of in excess of $741 million and a
net worth of in excess of $470 million for its fiscal year ended June 30, 1998.

The base rent payable under the Fairchild lease is as follows:

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

1999        $817,536          $68,128
2000        $842,064          $70,172
2001        $867,324          $72,277
2002        $893,340          $74,445
2003        $920,136          $76,678
2004        $947,736          $78,978

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

The Cort Furniture Building

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

As of October 15, 1999, Wells OP had made total capital contributions to
the Cort Joint Venture of $2,870,982 and held an equity percentage interest in
the Cort Joint Venture of 43.7%, and the Fund X-XI Joint Venture made total
capital contributions to the Cort Joint Venture of $3,695,000 and held an equity
percentage interest in the Cort Joint Venture of 56.3%.

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

The Cort Furniture Building is a one story office and warehouse building
with 52,000 rentable square feet comprised of an 18,000 square foot office and
open showroom area and a 34,000 square foot      

70

warehouse area. The Cort Joint Venture purchased the Cort Furniture Building on
July 31, 1998 for a purchase price of $6,400,000. Construction of the Cort
Furniture Building was completed in 1975.

The site consists of two parcels of land totaling approximately 3.6 acres
and is located at 10700 Spencer Street on the southeast corner of Spencer Avenue
and Mt. Langley Street adjacent on the south side to Interstate 405 in the City
of Fountain Valley, California.

The entire 52,000 rentable square feet of the Cort Furniture Building is
currently under lease to Cort Furniture Rental Corporation (Cort).  Cort uses
the Cort Furniture Building as its regional corporate headquarters with an
attached clearance showroom and warehouse storage areas.

The Cort lease contains a lease term of 15 years which commenced on
November 1, 1988, and expires in October 2003.  Cort has an option to extend the
Cort lease for an additional five year period of time.

Cort is a wholly-owned subsidiary of Cort Business Services Corporation, a
New York Stock Exchange Company trading under the symbol CBZ (Cort Business
Services).  Cort Business Services is the largest and only national provider of
high-quality office and residential rental furniture and related accessories.
Cort Business Services has operations that cover 32 states and the District of
Columbia and includes 119 rental showrooms.  The obligations of Cort under the
Cort Furniture lease are guaranteed by Cort Business Services, which reported
net income of in excess of $23 million on total consolidated revenue of in
excess of $319 million, and reported a net worth of in excess of $175 million
for its fiscal year ended December 31, 1998.

The monthly base rent payable under the Cort lease is $63,247 through April
30, 2001 at which time the monthly base rent will be increased 10% to $69,574
for the remainder of the lease term.  The monthly base rent during the first
year of the extended term shall be 90% of the then fair market rental value of
the Cort Furniture Building, but will be no less than the rent in the 15th year
of the Cort lease.  If Cort and the Cort Joint Venture are unable to agree upon
a fair rental value for the extended lease term, each party shall select an
appraiser and the two appraisers shall provide appraisals on the Cort Furniture
Building.  If the appraisal values established are within 10% of each other, the
average of such appraised value shall be the fair market rental value.  If said
appraisals are varied by more than 10%, the two appraisers shall appoint a third
appraiser and the middle appraisal of the three shall be the fair rental value.

The PWC Building

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

Wells OP purchased the PWC Building subject to a loan from SouthTrust
Bank, N.A. (SouthTrust) in the outstanding principal amount of $14,132,537.87
(SouthTrust Loan).  The SouthTrust Loan consists of a revolving credit facility
whereby SouthTrust agreed to loan up to $15.2 million to Wells OP in connection
with its purchase of real properties.  The principal balance of the SouthTrust
Loan relating to the acquisition of the PWC Building has since been paid off by
Wells OP leaving in place the revolving credit facility.  The SouthTrust Loan
requires monthly payments of interest only and matures on December 31, 2000. The
interest rate on the SouthTrust Loan is a variable rate per annum equal to the
London InterBank Offered Rate for a thirty day period plus 200 basis points.
The current interest rate under the SouthTrust Loan is 7.44%.  The SouthTrust
Loan is secured by a first mortgage against the PWC Building.     

71

The site consists of approximately 9 acres of land located in Sunforest
Business Park between Eisenhower Boulevard and George Road approximately 1,250
feet south of West Hillsborough Avenue. The Sunforest Business Park is located
in the Westshore Business District, which is a suburban business center
surrounding Tampa International Airport.

The entire PWC Building is under lease to PriceWaterhouseCoopers (PWC). The
PWC lease currently expires in December 2008, subject to PWC's right to extend
the lease for two additional five year periods of time.

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

The annual base rent payable under the PWC lease is $1,915,741 ($14.73 per
square foot) payable in equal monthly installments of $159,645.09 during the
first year of the initial lease term. The base rent escalates at the rate of 3%
per year throughout the ten year lease term. In addition, PWC is required to pay
a "reserve" of $13,009 ($.10 per square foot) as additional rent.

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

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

In addition, the PWC lease contains an option to expand the premises to
include a second three or four story building with an amount of square feet up
to a total of 132,000 square feet which, if exercised by PWC, will require Wells
OP to expend funds necessary to construct the expansion building. PWC may
exercise its expansion option by delivering written notice to Wells OP at any
time between the 60th day after the rental commencement date and the expiration
of the initial term of the lease. If PWC for any     

72

reason fails to deliver the expansion notice on or prior to the last day of the
initial term, the expansion option shall automatically expire. Upon PWC's
delivery of the expansion notice and commencement of construction of the
improvements by Wells OP, the term of the lease shall automatically be extended
for an additional period of ten years from the date of substantial completion of
the expansion building, without further action by either PWC or Wells OP. During
the first five lease years of the initial term, Wells OP shall be obligated to
construct the expansion building if PWC delivers the expansion notice. Wells OP
and PWC have agreed that Wells OP shall not be required to construct the
expansion building, however, if PWC delivers the expansion notice after the end
of the fifth lease year and, following delivery of such expansion notice, Wells
OP determines not to construct the expansion building based upon the base rent
it would receive for the expansion building. If Wells OP notifies PWC in writing
of such determination within 30 days after Wells OP's receipt of the expansion
notice, PWC shall have the right to exercise its option to purchase the PWC
building.

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

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

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

The Vanguard Cellular Building

The Vanguard Cellular Building is a four story office building containing
approximately 81,859 rentable square feet located in Harrisburg, Pennsylvania.
Construction of the Vanguard Cellular Building was completed in November 1998.

Wells OP purchased the Vanguard Cellular Building on February 4, 1999 for a
purchase price of $12,291,200. Wells OP expended cash proceeds in the amount of
$6,332,100 and obtained a loan in the amount of $6,425,000 from Bank of America,
N.A., (BOA Loan), the net proceeds of which were used to fund the remainder of
the purchase price of the Vanguard Cellular Building.     

73

The BOA loan matures on January 4, 2002. The interest rate on the BOA Loan
is a fixed rate equal to the rate appearing on Telerate Page 3750 as the London
Inter Bank Offered Rate plus 200 basis points over a six month period. Wells OP
made a required principal installment in the amount of $6,150,000 on July 22,
1999. As of September 30, 1999, the outstanding principal balance of the BOA
Loan was $203,504. On September 13, 1999, Bank of America agreed to make a new
revolving credit loan of up to $9,825,000 to Wells OP for the acquisition of
real properties. Wells OP is required to make monthly installments of accrued
interest under the BOA Loan. The BOA Loan is secured by a first mortgage against
the Vanguard Cellular Building. Leo F. Wells, III and the Wells REIT are co-
guarantors of the BOA Loan.

The site consists of approximately 10.5 acres of land in Commerce Park,
located in the Lower Paxton Township, a planned business park, at the
intersection of Progress Avenue and Interstate Drive just off of the Progress
Avenue exit of Interstate 81.

The Vanguard Cellular Building is leased to Pennsylvania Cellular Telephone
Corp., a subsidiary of Vanguard Cellular, and the obligations of Pennsylvania
Telephone under the Vanguard Cellular Lease are guaranteed by Vanguard Cellular.

Vanguard Cellular is an independent operator of cellular telephone systems
in the United States with over 664,000 subscribers located in 26 markets in the
Mid-Atlantic, Ohio Valley and New England regions of the United States. Vanguard
Cellular markets its wireless products and services under the name CellularOne,
a nationally recognized brand name partially owned by Vanguard Cellular.
Vanguard Cellular operates primarily in suburban and rural areas that are close
in proximity to major urban areas, which it believes affords several advantages
over its traditional urban competitors, including (1) greater network capacity,
(2) greater roaming revenue opportunities, (3) lower distribution costs, and (4)
higher barriers to entry by competitors. Vanguard Cellular reported net income
in excess of $74 million on revenues in excess of $420 million and a net worth
in excess of $100 million for the year ended December 31, 1998.

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

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

Year    Annual Rent    $ Per Sq. Ft.    Monthly Rent
----    -----------    -------------    ------------

2      $1,390,833     $16.99           $115,902.76
3      $1,416,221     $17.30           $118,018.38
4      $1,442,116     $17.62           $120,176.32
5      $1,468,529     $17.94           $122,377.41
6      $1,374,011     $16.79           $114,500.91
7      $1,401,491     $17.12           $116,790.93
8      $1,429,521     $17.46           $119,126.74
9      $1,458,111     $17.81           $121,509.28
10      $1,487,274     $18.17           $123,939.47

74

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

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

Within 60 days after Wells OP's receipt of the expansion notice, Wells OP
shall consult with Pennsylvania Telephone concerning Pennsylvania Telephone's
specific requirements with regard to the expansion improvements and, within such
60 day period, Wells OP shall notify Pennsylvania Telephone in writing of the
total estimated expansion costs to be incurred in planning and constructing the
expansion improvements. Within 60 days after Pennsylvania Telephone receives
Wells OP's written notification of the costs for the expansion improvements,
Pennsylvania Telephone shall notify Wells OP in writing either (1) that
Pennsylvania Telephone authorizes Wells OP to proceed with the construction of
the expansion improvements, (2) that Pennsylvania Telephone intends to submit
revised specifications within 60 days to reduce the estimated costs of the
expansion improvements to an amount satisfactory to Pennsylvania Telephone, or
(3) that Pennsylvania Telephone elects not to expand the premises. If
Pennsylvania Telephone fails to deliver its notice to proceed within the above
mentioned 60 day period, then Pennsylvania Telephone shall be deemed to have
elected not to expand.

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

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

75

The Matsushita Property

Purchase of the Matsushita Property.  On March 15, 1999, Wells OP purchased
-----------------------------------                                        
an 8.8 acre tract of land located in Lake Forest, Orange County, California for
a purchase price of $4,450,230.

Wells OP entered into a development agreement for the construction of a two
story office building containing approximately 150,000 rentable square feet to
be erected on the Matsushita Property. Wells OP entered into an Office Lease
with Matsushita Avionics Systems Corporation (Matsushita Avionics), pursuant to
which Matsushita Avionics agreed to lease all of the Matsushita Project upon its
completion.

Termination of Existing Lease.  Matsushita Avionics is currently a tenant
-----------------------------                                            
of a building located at 15253 Bake Parkway, Irvine, California owned by Fund
VIII and Fund IX Associates (Fund VIII-IX Joint Venture), a Georgia joint
venture between Wells Fund VIII and Wells Fund IX. Matsushita Avionics and the
Fund VIII-IX Joint Venture have entered into a Lease and Guaranty Termination
Agreement dated February 18, 1999 pursuant to which Matsushita Avionics will be
vacating the existing building in December 1999 and relieved of any of its
obligations under the existing lease upon the Matsushita commencement date of
the Matsushita lease. The existing lease terminates in September 2003.

Rental Income Guaranty by Wells OP.  In consideration for the Fund VIII-IX
----------------------------------                                        
Joint Venture releasing Matsushita Avionics from its obligations under the
existing lease and thereby allowing Wells OP to enter into the Matsushita lease
with Matsushita Avionics, Wells OP entered into a Rental Income Guaranty
Agreement dated February 18, 1999, whereby Wells OP guaranteed the Fund VIII-IX
Joint Venture that it will receive rental income on the existing building at
least equal to the rental and building expenses that the Fund VIII-IX Joint
Venture would have received over the remaining term of the existing lease.
Current rental and building expenses are approximately $90,000 per month. The
Wells REIT's maximum exposure to liability to the Fund VIII-IX Joint Venture
under this Rental Income Guaranty was taken into account in the economic
analysis performed in making the determination to go forward with the
development of the Matsushita project. Management of the Wells REIT anticipates
that the ultimate liability will be less than the maximum exposure to liability;
however, management cannot, at this time, determine the ultimate liability under
the Rental Income Guaranty Agreement. (See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital
Resources.")

Description of the Matsushita Project and the Site.  The Matsushita project
--------------------------------------------------                         
involves the construction of a two story office building containing 150,000
rentable square feet. The building will contain parking for approximately 600
vehicles.

The site consists of an 8.8 acre tract of land located in the Pacific
Commercentre, which is a 33 acre master-planned business park positioned near
the Irvine Spectrum in the heart of Southern California's Technology Coast.
Pacific Commercentre is a nine building complex featuring office, technology,
and light manufacturing uses, and is located in the city of Lake Forest in
Southern Orange County with easy access to the Foothill Transportation Corridor
and the San Diego Freeway.

An independent appraisal of the Matsushita project dated March 16, 1999 was
prepared by CB Richard Ellis, Inc., real estate appraisers, pursuant to which
the market value of the land and the leased fee interest in the Matsushita
project subject to the Matsushita lease was estimated to be $18.9 million, in
cash or terms equivalent to cash, as of December 21, 1999, the anticipated
completion date.  This value estimate was based upon a number of assumptions,
including that the Matsushita project will be finished in accordance with plans
and specifications, that total development costs would not exceed $17.8 million
and that the building will be operated following completion at a stabilized
level with Matsushita Avionics     

76

occupying 100% of the building at a rental rate calculated based upon the $17.8
million development budget. Prior to closing of the Matsushita loan (described
below), Bank of America will obtain a revised independent appraisal of the
Matsushita Property reflecting a value estimate based upon a development budget
of $18.4 million. Wells OP obtained an environmental report prior to closing of
the Matsushita Property evidencing that the environmental condition of the
Matsushita Property is satisfactory.

The Matsushita Project Loans.  Wells OP obtained $7,000,000 in financing
----------------------------                                            
for the Matsushita project from SouthTrust Bank, N.A. pursuant to the revolving
credit facility extended to Wells OP in connection with the acquisition of the
PWC Building.

In addition, Wells OP obtained a construction loan from Bank of America,
N.A. in the maximum principal amount of $15,375,000, the proceeds of which are
being used to fund the development and construction of the Matsushita project.
The Matsushita loan shall mature on May 9, 2001. The interest rate on the
Matsushita loan is a variable rate equal to either (1) the Bank of America
"prime rate," or (2) at the option of Wells OP, the rate per annum appearing on
Telerate Page 3750 as the London Inter Bank Offered Rate for a 30 day period,
plus 200 basis points. Wells OP is making monthly installments of interest, and
it is anticipated that, commencing in January 2000, Wells OP will make monthly
installments of principal in the amount of $10,703 until maturity. On the
maturity date, the entire outstanding principal balance plus any accrued but
unpaid interest shall be due and payable. The Matsushita loan is secured by a
first priority mortgage against the Matsushita project. Leo F. Wells, III and
the Wells REIT are co-guarantors of the Matsushita loan.

Development Agreement.  On March 23, 1999, Wells OP entered into a
---------------------                                             
development agreement with ADEVCO Corporation as the exclusive development
manager to supervise, manage and coordinate the planning, design, construction
and completion of the Matsushita project.

The developer is an Atlanta-based real estate development and management
company formed in 1990 which specializes in the development of office buildings.
The developer has previously developed or is developing a total of six office
buildings for affiliates of our advisor. In this regard, the developer entered
into:

.    a development agreement with Wells Real Estate Fund III, L.P. (Wells
Fund III) for the development of a two-story office building
containing approximately 34,300 rentable square feet located in
Greenville, North Carolina;

.    a development agreement with Fund IV and Fund V Associates, a joint
venture between Wells Real Estate Fund IV, L.P., (Wells Fund IV) and
Wells Real Estate Fund V, L.P. (Wells Fund V), for the development of
a four-story office building located in Jacksonville, Florida
containing approximately 87,600 rentable square feet;

.    a development agreement with the Fund VII-VIII Joint Venture, a joint
venture between Wells Real Estate Fund VII, L.P.(Wells Fund VII), and
Wells Real Estate Fund VIII, L.P. (Wells Fund VIII), for the
development of a two-story office building containing approximately
62,000 rentable square feet located in Alachua County, near
Gainesville, Florida;

.    a development agreement with Fund VI, Fund VII and Fund VIII
Associates, a joint venture among Wells Real Estate Fund VI, L.P.
(Wells Fund VI), Wells Fund VII and Wells Fund VIII, for the
development of a four-story office building containing approximately
92,964 rentable square feet located in Jacksonville, Florida;     

77

.    a development agreement with Fund VIII and Fund IX Associates, a joint
venture between Wells Fund VIII and Wells Real Estate Fund IX, L.P.
(Wells Fund IX), for the development of a four-story office building
containing approximately 96,750 rentable square feet located in
Madison, Wisconsin; and

.    a development agreement with Wells Fund IX for the development of a
three-story office building containing approximately 83,885 rentable
square feet located in Knoxville, Tennessee.

The President of the Developer is David M. Kraxberger. Mr. Kraxberger has
been in the real estate business for over 17 years. From 1984 to 1990, Mr.
Kraxberger served as Senior Vice President of Office Development for The Oxford
Group, Inc., an Atlanta-based real estate company with operations in seven
southeastern states. Mr. Kraxberger holds a Masters Degree in Business
Administration from Pepperdine University in Los Angeles, California, and is a
member of the Urban Land Institute and the National Association of Industrial
Office Parks. Mr. Kraxberger also holds a Georgia real estate license. Pursuant
to the terms of a guaranty agreement, Mr. Kraxberger has personally guaranteed
the performance of the developer under the development agreement. Mr. Kraxberger
has also personally guaranteed the performance of the contractor, Integra
Construction, Inc., under the construction contract pursuant to the terms of a
separate guaranty agreement. Neither the developer nor Mr. Kraxberger are
affiliated with the advisor or its affiliates.

As compensation for the services to be rendered by the developer under the
development agreement, Wells OP will pay a development fee of $250,000. The fee
will be due and payable ratably (on the basis of the percentage of construction
completed) as the construction and development of the Matsushita project is
completed.

We anticipate that the aggregate of all costs and expenses to be incurred
by Wells OP with respect to the acquisition of the Matsushita property, the
planning, design, development, construction and completion of the Matsushita
project, the build-out of tenant improvements under the Matsushita lease and the
contingency reserve will total approximately $18,400,000. The development budget
may be adjusted upward or downward based upon changes agreed to by Wells OP and
Matsushita Avionics. The development budget is as follows:

Construction Contract     $6,492,431
Tenant Improvements        3,675,957
Land                       4,450,230
Property Taxes                65,000
Architectural Fees           622,472
Architect's Expenses          60,000
Development Fee              250,000
Government Fees            1,072,019
Survey and Engineering        30,300
Appraisal                      7,500
Miscellaneous                 32,000
Lease Commissions            608,292
Contingency                  300,000
Construction Interest        535,757
Loan Fees                     91,844
Legal Fees                    75,000

78

Under the terms of the development agreement, the developer has agreed
that, in the event that the total of all such costs and expenses exceeds
$18,400,000 (except for changes agreed to by Wells OP and Matsushita Avionics),
the amount of fees payable to the developer shall be reduced by the amount of
any such excess. Unless the fees otherwise payable to the developer are reduced
as set forth above, it is estimated that the total sums due and payable to the
developer under the development agreement will be approximately $250,000.

Construction Contract.  Wells OP entered into a construction contract with
---------------------                                                     
the general contracting firm of GWGC, Inc. doing business as Gordon & Williams
General Contractors, Inc. for the construction of the Matsushita project. The
contractor is a California corporation based in Laguna Hills, California
specializing in commercial, industrial, amusement park and office buildings. The
contractor is presently engaged in the construction of ten projects with a total
construction value of in excess of $72 million, and since 1993, has completed 45
projects with a total construction value in excess of $1.9 billion. Construction
of the Matsushita project began in May 1999.

The construction contract provides that Wells OP shall pay the contractor a
fee equal to 3% of the cost of the work performed by the contractor, as adjusted
by approved change orders, for the construction of the Matsushita project,
excluding tenant improvements. The contractor will be responsible for all costs
of labor, materials, construction equipment and machinery necessary for
completion of the Matsushita project. In addition, the contractor will be
required to secure and pay for any additional business licenses, tap fees and
building permits which may be necessary for construction of the Matsushita
project. Under the construction contract, the cost of the work and the
contractor's fees will be guaranteed not to exceed $6,500,000, subject to
additions and deductions by approved change orders. To the extent that costs
incurred by the contractor exceed such guaranteed maximum price, the contractor
will be required to pay all such costs without reimbursement by Wells OP.

Any amounts saved by the contractor as a result of bids awarded or
subcontracted at amounts below the approved costs for such items shall be set
aside as a contingency reserve. The contractor may only be reimbursed from the
contingency reserve for reasonable costs incurred in connection with certain
unknown and unforeseeable risks enumerated in the construction contract, and
only to the extent that such costs will not cause the contractor to exceed the
guaranteed maximum price. In the event that, at the time of final completion,
the total aggregate sum of the actual cost of the work, the contractor's fees
and any amounts incurred to remedy defects in the work is less than the
guaranteed maximum price, the difference shall be divided evenly by the
contractor and Wells OP.

Wells OP will make monthly progress payments to the contractor in an amount
of 90% of the portion of the contract price properly allocable to labor,
materials and equipment, less the aggregate of any previous payments made by
Wells OP. Wells OP will pay the entire unpaid balance when the Matsushita
project has been fully completed in accordance with the terms and conditions of
the construction contract.

As of September 30, 1999, Wells OP had spent in excess of $8,800,000 on the
Matsushita project, and it was approximately 51% complete. We anticipate that
the Matsushita project will be completed in December 1999.

The contractor will be responsible to Wells OP for the acts or omissions of
its subcontractors and suppliers of materials and of persons either directly or
indirectly employed by them. The contractor will agree to indemnify Wells OP
from and against all liability, claims, damages, losses, expenses and costs of
any kind or description arising out of or in connection with the performance of
the construction contract, provided that such liability, claim, damage, loss or
expense is caused in whole or in part by any action or omission of the
contractor, any subcontractor or materialmen, anyone directly or indirectly
employed by     

79

any of them or anyone for whose acts any of them may be liable. The construction
contract will also require the contractor to obtain and maintain, until
completion of the Matsushita project, adequate insurance coverage relating to
the Matsushita project, including insurance for workers' compensation, personal
injury and property damage.

Architect's Agreement.  Ware & Malcomb Architects, Inc. is the architect
---------------------                                                   
for the Matsushita project pursuant to the architect's agreement dated January
11, 1999 entered into with Wells OP. The architect, which was founded in 1972,
is based in Irvine, California, has a professional staff of over 75 persons, and
specializes in the design of office buildings, corporate facilities, industrial
and research and development buildings, healthcare and high-tech facilities, as
well as commercial/retail centers.

The architect's basic services under the architect's agreement include the
schematic design phase, the design development phase, the construction documents
phase, the bidding or negotiation phase and the construction phase.

The total amount of fees payable to the architect under the architect's
agreement is $622,472.  Payments are being paid to the architect on a monthly
basis in proportion to the services performed within each phase of service.  In
addition, the architect and its employees and consultants are reimbursed for
expenses including, but not limited to, transportation in connection with the
Matsushita project, living expenses in connection with out-of-town travel, long
distance communications and fees paid for securing approval of authorities
having jurisdiction over the Matsushita project.  It is estimated that the total
reimbursable expenses in connection with the development of the Matsushita
project will be approximately $60,000.

Matsushita Lease.  On February 18, 1999, Wells OP entered into an office
----------------                                                        
lease pursuant to which Matsushita Avionics agreed to lease 100% of the 150,000
rentable square feet of the Matsushita project.

Matsushita Avionics is a wholly-owned subsidiary of Matsushita Electric
Corporation of America (Matsushita Electric). Matsushita Avionics manufactures
and sells audio-visual products to the airline industry for passenger use in
airplanes. Matsushita Electric is a wholly-owned subsidiary of Matsushita
Electric Industrial Co., Ltd. (Matsushita Industrial), a Japanese company which
is the world's largest consumer electronics manufacturer. Matsushita Electric
oversees the North American operations of Matsushita Industrial. In North
America, Matsushita Electric makes consumer, commercial and industrial
electronics, including products ranging from juke boxes to flat digital
television sets, primarily under the Panasonic brand name. Matsushita Electric
has more than 20 plants in the United States, Mexico and Canada and employs over
23,000 people. Matsushita Electric has guaranteed the obligations of Matsushita
Avionics under the Matsushita lease. Matsushita Electric reported net income for
the fiscal year ended March 31, 1998 of over $700 million on gross revenues of
over $8.0 billion.

The initial term of the Matsushita lease will be seven years to commence on
the earlier of (1) the date Matsushita Avionics commences business in the
premises, or (2) the date upon which a series of conditions are met, including
but not limited to, Wells OP's completion of the improvements and a certificate
of occupancy is issued. Matsushita Avionics has the option to extend the initial
term of the Matsushita Lease for two successive five year periods. Each
extension option must be exercised not more than 19 months and not less than 15
months prior to the expiration of the then current lease term.

80

The base rent payable under the Matsushita lease shall be as follows:

Yearly           Monthly
Lease Year      Base Rent        Base Rent
----------      ---------        ---------

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

The monthly base rent is based upon a projected total cost for the
Matsushita project of $17,847,769. If the total project cost, as provided in the
work letter attached as an exhibit to the Matsushita lease, is more or less than
$17,847,769, then the monthly base rent shall be adjusted upward or downward, as
the case may be, by ten percent (10%) of the difference.

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

The EYBL CarTex Building

The EYBL CarTex Building is a manufacturing and office building consisting
of a total of 169,510 square feet comprised of approximately 140,580 square feet
of manufacturing space, 25,300 square feet of two story office space and 3,360
square feet of cafeteria/training space. The XI-XII-REIT Joint Venture purchased
the EYBL CarTex Building on May 18, 1999 for a purchase price of $5,085,000.

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

The entire 169,510 rentable square feet of the EYBL CarTex Building is
currently under lease to EYBL CarTex, Inc. (EYBL CarTex). The EYBL CarTex lease
commenced on March 1, 1998 and expires in February 2008, subject to EYBL
CarTex's right to extend the lease for two additional five year periods of time.

EYBL CarTex produces automotive textiles for BMW, Mercedes, GM Bali, VW
Mexico and Golf A4. EYBL CarTex is a wholly-owned subsidiary of EYBL
International, AG, Krems/Austria. EYBL International is the world's largest
producer of circular knit textile products and loop pile plushes for the
automotive industry. It has plants in Austria, Germany, Hungary, Slovakia,
Brazil and the United States. EYBL International reported total consolidated
sales of in excess of $260 million and a net worth of approximately $50 million
during 1998.

81

The base rent payable under the EYBL CarTex lease for the remainder of the
lease term shall be as follows:     

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

2            $508,530.00      $42,377.50
3            $508,530.00      $42,377.50
4            $508,530.00      $42,377.50
5            $550,907.50      $45,908.95
6            $550,907.50      $45,908.95
7            $593,285.00      $49,440.42
8            $593,285.00      $49,440.42
9            $610,236.00      $50,853.00
10           $610,236.00      $50,853.00

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

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

The Sprint Building

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

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

The entire 68,900 rentable square feet of the Sprint Building is currently
under lease to Sprint Communications Company L.P. (Sprint). The Sprint lease
commenced on May 19, 1997 and expires in May 2007, subject to Sprint's right to
extend the lease for two additional five year periods of time.

Sprint is the nation's third largest long distance phone company, which
operates on an all-digital long distance telecommunications network using state-
of-the-art fiber optic and electronic technology. Sprint provides domestic and
international voice, video and data communications services as well as
integration management and support services for computer networks. Sprint
reported net income of in excess of $1.3 billion on net revenues of in excess of
$9.9 billion for its fiscal year ended December 31, 1998.

The monthly base rent payable under the Sprint lease is $83,254 through May
18, 2002 and $91,867 for the remainder of the lease term. The monthly base rent
payable for each extended term of the     

82

Sprint lease will be equal to 95% of the then current market rate for
comparable office buildings in the suburban south Kansas City, Missouri and
south Johnson County, Kansas areas. If the parties are unable to agree upon the
current market rate within 30 days of the date negotiations begin, the current
market rate shall be determined by three licensed real estate brokers, one of
which will be selected by Sprint, one of which will be selected by the XI-XII-
REIT Joint Venture and the final appraiser will be selected by the two
appraisers previously selected.

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

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

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

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

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

The ABB Richmond Property

Purchase of the ABB Richmond Property.  On July 22, 1999, Wells REIT, LLC -
-------------------------------------                                      
VA I (Wells LLC VA), a limited liability company wholly owned by Wells OP,
purchased a 7.49 acre tract of land located in Midlothian, Chesterfield County,
Virginia for a purchase price of $936,250.

Wells LLC VA entered into a development agreement for the construction of a
four-story brick office building containing approximately 100,000 rentable
square feet to be erected on the ABB Richmond Property. Wells LLC VA entered
into an office lease with ABB Power Generation Inc. (ABB Power) pursuant to
which ABB Power agreed to lease the ABB Richmond project upon its completion.

Description of the ABB Richmond Project and the Site.  The ABB Richmond
----------------------------------------------------                   
project involves the construction of a four-story brick office building
containing 102,000 gross square feet with on-grade parking for approximately 500
cars.

The site consists of a 7.49 acre tract of land located in the Waterford
Business Park in Southwest Richmond, Virginia. Waterford is a 250-acre office
park in the Clover Hill District of Chesterfield     

83

County, one of the fastest growing counties in Virginia. The office park is
located at the interchange of I-288 and the Powhite Parkway with excellent
access to I-95 and I-64.

Midlothian is located approximately nine miles southwest of the Richmond
central business district. The moderate cost of living, low taxes and strong
economic base, as well as the transportation networks and waterways, make
Richmond an attractive location for businesses.

An independent appraisal of the ABB Richmond project was prepared by CB
Richard Ellis, Inc., real estate appraisers, as of June 21, 1999, pursuant to
which the market value of the land and the leased fee interest in the ABB
Richmond project subject to the ABB Richmond lease was estimated to be $11.6
million, in cash or terms equivalent to cash. This value estimate was based upon
a number of assumptions, including that the ABB Richmond project will be
finished in accordance with plans and specifications, that total development
costs would not exceed $11.5 million and that the building will be operated
following completion at a stabilized level with ABB Power occupying 80% of the
building at a rental rate calculated based upon the $11.5 million development
budget. Wells OP obtained an environmental report prior to closing of the ABB
Richmond Property evidencing that the environmental condition of the ABB
Richmond Property is satisfactory.

The ABB Richmond Loan.  In addition, Wells LLC VA has received a commitment
---------------------                                                      
to obtain a construction loan from SouthTrust Bank, N.A. in the maximum
principal amount of $9,280,000, the proceeds of which will be used to fund the
development and construction of the ABB Richmond project. The ABB Richmond loan
matures 30 months from the date of the loan closing. The interest rate on the
ABB Richmond loan is 225 basis points over the London Inter Bank Offered Rate
with a 1/2 point origination fee. The loan will be secured by a pledge of the
real estate, the ABB Richmond lease and a $4,000,000 letter of credit issued by
Unibank. Leo F. Wells, III will be a guarantor of the ABB Richmond loan.

Although management of Wells LLC VA currently anticipates obtaining the ABB
Richmond loan from SouthTrust Bank, N.A., pursuant to the terms described above,
Wells LLC VA has not yet entered into a formal loan agreement. Therefore, there
is no guarantee that Wells LLC VA will obtain the ABB Richmond loan under the
terms described above or that the loan obtained to fund the construction and
development of the ABB Richmond project will materially differ from the terms
described above.

Development Agreement.  On June 28, 1999, Wells LLC VA entered into a
---------------------                                                
development agreement with ADEVCO Corporation as the exclusive development
manager to supervise, manage and coordinate the planning, design, construction
and completion of the ABB Richmond project.

As compensation for the services to be rendered by the developer under the
development agreement, Wells LLC VA will pay a development fee of $150,000. The
development fee will be due and payable ratably (on the basis of the percentage
of construction completed) as the construction and development of the ABB
Richmond project is completed. Wells LLC VA will also pay the developer an "ABB
Work Fee" of $150,000 which will be payable in a lump sum at the completion of
the ABB Richmond project. The ABB Work Fee is for services rendered by the
developer with respect to the supervision and management of tenant build-out of
the premises leased by ABB Power pursuant to the ABB Power lease.

We anticipate that the aggregate of all costs and expenses to be incurred
by Wells LLC VA with respect to the acquisition of the ABB Richmond Property,
the planning, design, development, construction and completion of the ABB
Richmond project, the build-out of tenant improvements under the ABB Richmond
lease and the contingency reserve will total approximately $11,559,347 comprised
of the following expenditures:     

84

Construction Contract                     $5,549,527
Tenant Improvements - ABB Premises         2,047,112
Tenant Improvements - Additional Space       483,050
Land                                         937,500
Contractor's Bond                             45,000
Work Fee                                      60,000
Architectural Fees & Expenses                235,134
Space Planning                                80,000
Development Fee                              150,000
ABB Work Fee                                 150,000
Survey and Engineering                        78,500
Landscape Construction                       150,000
Holdover Contingency                          75,000
Construction Interest                        350,000
Loan Commitment Fee                          100,000
Commissions                                  600,639
Legal Fees                                    75,000
Contingency                                  298,233
Miscellaneous                                 94,652

Under the terms of the development agreement, the developer has agreed
that, in the event that the total of all such costs and expenses (excluding
costs for closing costs, loan fees, construction interest, tenant improvements
and leasing commissions) exceeds $9,454,658 (except for changes agreed to by
Wells LLC VA and ABB Power), the amount of fees payable to the developer shall
be reduced by the amount of any such excess.

Construction Contract.  Wells LLC VA entered into a construction contract
---------------------                                                    
dated June 14, 1999 with the general contracting firm of Bovis Construction
Corp. for the construction of the ABB Richmond project. The contractor, which
was founded in London in 1885, now ranks among the world's top 10 construction
companies with projects in 36 countries. At any one time, the contractor is
engaged in approximately 500 projects.

The construction contract provides that Wells LLC VA shall pay the
contractor $5,549,527 for the full and proper work detailed in the contract. The
contractor commenced work on the ABB Richmond project in June 1999.

Wells LLC VA will make monthly progress payments to the contractor in an
amount of 90% of the portion of the contract price properly allocable to labor,
materials and equipment, less the aggregate of any previous payments made by
Wells LLC VA; provided, however, that when a total of $277,500 has been withheld
as retainage, no further retainage will be withheld from the monthly progress
payments. Wells LLC VA will pay the entire unpaid balance when the ABB Richmond
project has been fully completed in accordance with the terms and conditions of
the construction contract. As a condition of final payment, the contractor will
be required to execute and deliver a release of all claims and liens against
Wells LLC VA.

As of September 30, 1999, Wells OP had spent approximately $1,800,000 on
the ABB Richmond project and it was approximately 15% complete. We anticipate
that the ABB Richmond project will be completed in May 2000.

The contractor is responsible to Wells LLC VA for the acts or omissions of
its subcontractors and suppliers of materials and of persons either directly or
indirectly employed by them. The contractor     

85

agreed to indemnify Wells LLC VA from and against all liability, claims,
damages, losses, expenses and costs of any kind or description arising out of or
in connection with the performance of the construction contract, provided that
such liability, claim, damage, loss or expense is caused in whole or in part by
any action or omission of the contractor, any subcontractor or materialmen,
anyone directly or indirectly employed by any of them or anyone for whose acts
any of them may be liable. The construction contract also requires the
contractor to obtain and maintain, until completion of the ABB Richmond project,
adequate insurance coverage relating to the ABB Richmond project, including
insurance for workers' compensation, personal injury and property damage.

The contractor is required to work expeditiously and diligently to maintain
progress in accordance with the construction schedule and to achieve substantial
completion of the ABB Richmond project within the contract time. The contractor
is required to employ all such additional labor, services and supervision,
including such extra shifts and overtime, as may be necessary to maintain
progress in accordance with the construction schedule. The performance of the
contractor is secured by a $1,000,000 letter of credit. In addition, performance
by the contractor of the construction contract has been personally guaranteed by
David Kraxberger, a principal of the developer.

Architect's Agreement.  Smallwood, Reynolds, Stewart, Stewart & Associates,
---------------------                                                      
Inc. is the architect for the ABB Richmond project pursuant to the architect's
agreement dated May 18, 1999 entered into with Wells LLC VA. The architect,
which was founded in 1979, is based in Atlanta, Georgia, has a staff of over 200
persons, and specializes in programming, planning, architecture, interior
design, landscape architecture and construction administration. The architect
has its principal office in Atlanta, Georgia and additional offices in Tampa,
Florida and Singapore, Malaysia. The architect has designed a wide variety of
projects, with a total construction cost in excess of $2 billion, including
facilities for corporate office space, educational and athletic facilities,
retail space, manufacturing, warehouse and distribution facilities, hotels and
resorts, correctional institutions, and luxury residential units. The architect
has performed architectural services with respect to various projects for
affiliates of the Wells REIT and is currently performing such services for the
Matsushita project. The architect is not affiliated with the Wells REIT or our
advisor.

The architect's basic services under the architect's agreement include the
schematic design phase, the design development phase, the construction documents
phase, the bidding or negotiation phase and the construction phase. During the
schematic design phase, the architect will prepare schematic design documents
consisting of drawings and other documents illustrating the scale and
relationship of the ABB Richmond project components. The architect will be paid
$35,190 for these services.

The total amount of fees payable to the architect under the architect's
agreement is $234,600. Payments are being paid to the architect on a monthly
basis in proportion to the services performed within each phase of service. In
addition, the architect and its employees and consultants are reimbursed for
expenses including, but not limited to, transportation in connection with the
ABB Richmond project, living expenses in connection with out-of-town travel,
long distance communications and fees paid for securing approval of authorities
having jurisdiction over the ABB Richmond project. It is estimated that the
total reimbursable expenses in connection with the development of the ABB
Richmond project will be approximately $25,000.

ABB Richmond Lease.  Wells  LLC VA entered into an office lease pursuant to
------------------                                                         
which ABB Power agreed to lease 100% of the 99,057 rentable square feet of the
ABB Richmond project.

ABB Power is a subsidiary of Asea Brown Boveri, Inc., a large multi-
national engineering and construction company headquartered in Switzerland. ABB
Power reported net income for the fiscal year     

86

ended December 31, 1998 of over $1.3 billion on gross revenues of over $30.9
billion and a net worth of over $6.0 billion.

The initial term of the ABB Richmond lease will be seven years to commence
on the later of April 1, 2000 or the earlier of (1) the date which is ten days
after "Substantial Completion" (as defined in Exhibit D of the lease) or the
date ABB Power commences business in the premises. ABB Power has the right to
extend the lease for two additional five year periods of time. Each extension
option must be exercised by giving notice to the landlord at least 12 months
prior to the expiration date of the then-current lease term.

The ABB Richmond lease is credit enhanced by a letter of credit in the
amount of $4 million issued by Unibank, a large Danish bank with offices in New
York, for the account of Asea Brown Boveri, Inc., the parent company.

The base rent payable under the ABB Richmond lease will be as follows:

Lease Year      Yearly Base Rent        Monthly Base Rent
----------      ----------------        -----------------

1               $1,183,731              $ 98,644.26
2               $1,213,324              $101,110.37
3               $1,243,657              $103,638.08
4               $1,274,748              $106,229.04
5               $1,306,618              $108,884.80
6               $1,339,283              $111,606.90
7               $1,372,765              $114,397.11

The monthly base rent is based upon a projected total cost for the ABB
Richmond project of $11,036,139. If the total project cost, as provided in the
work letter attached as an exhibit to the ABB Richmond lease, is more or less
than $11,036,139, then the monthly base rent shall be adjusted upward or
downward, as the case may be, by 10.54% of the difference.

The monthly base rent payable for each extended term of the ABB Richmond
lease will be equal to the "Market Rate" for new leases of office space in that
portion of the Richmond, Virginia market that is located south of the James
River and west of I-95 for space similar to the premises. In the event the
parties are unable to agree upon the Market Rate, then each party shall appoint
a real estate appraiser. If the appraisers are unable to agree upon the Market
Rate, they shall appoint a third appraiser and each shall make a determination
of the Market Rate. The appraisal that is farthest from the middle appraisal
shall be disregarded and the remaining two appraisals shall be averaged to
establish the Market Rate.

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

In the event that ABB Power exercises its termination option as of the
third anniversary of the rental commencement date, ABB Power has a one-time
option to terminate the ABB Richmond lease as     

87

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

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

The Johnson Matthey Building

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

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

The XI-XII-REIT Joint Venture obtained an environmental report prepared by
Dames & Moore evidencing that the environmental condition of the land and the
Johnson Matthey Building was satisfactory. Although the soil does contain some
traces of environmental groundwater contaminants approximately 60 feet below the
surface, Dames & Moore, in a letter addressed to Wells Capital, Inc. dated
August 13, 1999, did not recommend any further environmental investigation for
the site. At the closing, the seller assigned its rights to a $2,000,000
insurance policy to the XI-XII-REIT Joint Venture relating to potential losses
from environmental contamination. Management of the Wells REIT is satisfied that
the environmental condition of the site is satisfactory and believes that the
rights assigned under this insurance policy protect us from potential liability
exposure resulting from environmental contamination.

The entire 130,000 rentable square feet of the Johnson Matthey Building is
currently leased to Johnson Matthey, Inc. (Johnson Matthey). The current lease
term expires in June 2007. Johnson Matthey has the right to extend the lease for
two additional three year periods of time.

Johnson Matthey is a wholly owned subsidiary of Johnson Matthey, PLC of the
United Kingdom, a world leader in advanced materials technology. Johnson
Matthey, PLC applies the latest technology to     

88

add value to precious metals and other specialized materials. Johnson Matthey,
PLC is a publicly traded company that is over 175 years old, has operations in
38 countries and employs 12,000 people.

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

The base rent payable under the Johnson Matthey lease for the remainder of
the lease term is as follows:

Lease Year      Yearly Rent      Monthly Rent
----------      -----------      ------------

3          $789,750         $65,812.50
4          $809,250         $67,437.50
5          $828,750         $69,062.50
6          $854,750         $71,229.17
7          $874,250         $72,854.17
8          $897,000         $74,750.00
9          $916,500         $76,375.00
10          $939,250         $78,270.84

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

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

The Videojet Building

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

The $33,158,865 required to close the Videojet acquisition consisted of
$26,158,865 in cash funded from a capital contribution by the Wells REIT and
$7,000,000 in loan proceeds obtained from SouthTrust Bank, N.A. pursuant to the
revolving credit facility originally extended to Wells OP in connection with the
acquisition of the PWC Building.

The site is a 15.3 acre tract of land that is adjacent to the western
entrance to O'Hare International Airport. The site is also situated very
convenient to most of Chicago's major interstates, including the Elgin/O'Hare
Expressway which, when finished, will extend along Thorndale Road adjacent to
the main entrance to the Chancellory Business Park. The Chancellory Business
Park consists of good quality     

89

office, manufacturing and warehouse buildings mostly
occupied by national tenants such as Sony, Mitsubishi, NEC Minolta and United
Airlines.

Wood Dale is a small suburb with a population of greater than 12,000
located northwest of the City of Chicago and directly west of O'Hare
International Airport.  Since the City of Chicago is bordered on the East by
Lake Michigan, some have described Wood Dale as the true center of Chicago.
Wood Dale has a long-term positive outlook due to its superior location.

The entire 250,354 rentable square feet of the Videojet Building is
currently under a net lease agreement with Videojet Systems International, Inc.
(Videojet).  The initial term of the Videojet lease is twenty years which
commenced in November 1991 and expires in November 2011.  Videojet has the right
to extend the Videojet lease for one additional five year period of time.

Videojet is the world's leading producer of state-of-the-art industrial ink
jet marking and coding products.  Videojet manufactures and distributes
industrial ink jet printers, digital imaging systems, laser coding systems, inks
and fluids to customers worldwide.  The Videojet lease is guaranteed by GEC
Incorporated, a Delaware corporation which is a wholly-owned subsidiary of
General Electric Company, p.l.c., a publicly traded United Kingdom corporation
that ranks among the largest electronic system and equipment manufacturers in
the world.

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

Lease Year                   Yearly Base Rent             Monthly Base Rent
----------                   ----------------             -----------------

2000-2001                    $2,838,952                   $236,579.33
2002-2011                    $3,376,746                   $281,395.50
Extension Term               $4,667,439                   $388,953.25

The Gartner Building

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

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

The recent growth of the Fort Myers area is primarily due to the opening of
Interstate 75 in the eastern portion of the metro area and the relatively new
Southwest Florida Regional Airport, which is located just south of Gateway and
is easily accessible by a two lane road.  Another major expansion to the local
economy is the new Florida Gulf Coast University, which is part of the State of
Florida University system.  The enrollment at this university is expected to
increase to between 10,000 and 15,000 in the next few years.

The entire 62,400 rentable square feet of the Gartner Building is currently
leased to Gartner.  The initial term of the Gartner lease is ten years which
commenced on February 1, 1998 and expires on January 31, 2008.  Gartner has the
right to extend the lease for two additional five year periods of time.     

90

The Gartner Building will be occupied by Gartner's Financial Services
Division.  Gartner, which was founded in 1979, is the world's leading
independent provider of research and analysis related to information and
technology solutions.  Gartner serves as a consultant to business clients for
their information technology purchasing decisions.  Gartner has over 80
locations worldwide and over 12,000 clients.  Gartner, which is headquartered in
Stamford, Connecticut, had net income of over $98 million and a net worth of
over $530 million for its fiscal year ended September 30, 1998.

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

Lease Year            Yearly Base Rent          Monthly Base Rent
----------            ----------------          -----------------

2/1999-1/2000            $642,798                  $53,566.50
2/2000-1/2001            $790,642                  $65,886.83
2/2001-1/2002            $810,408                  $67,534.00
2/2002-1/2003            $830,668                  $69,222.35
2/2003-1/2004            $851,435                  $70,952.89
2/2004-1/2005            $872,721                  $72,726.74
2/2005-1/2006            $894,539                  $74,544.92
2/2006-1/2007            $916,902                  $76,408.54
2/2007-1/2008            $939,825                  $78,318.71

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

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

The "Small Option Building" expansion option allows Gartner the ability to
expand into a separate, free standing facility on the property containing
between 30,000 and 32,000 rentable square feet to be constructed by the 
XI-XII-REIT Joint Venture. Gartner may exercise its expansion right for the
Small Option Building by providing notice in writing to the joint venture on or
before February 15, 2002. In the event that Gartner exercises its expansion
option, the parties shall enter into a separate lease within 30 days of such
notice by Gartner with a guaranteed ten year lease term and yearly base rent to
be determined by mutual agreement of the parties.

The "Large Option Building" expansion option allows Gartner the ability to
expand into a separate, free standing facility on the property containing
between 60,000 and 75,000 rentable square feet to be constructed by the 
XI-XII-REIT Joint Venture. Gartner may exercise its expansion right for the
Small Option Building by providing notice in writing to the joint venture on or
before February 15, 2002. In the event that Gartner exercises its expansion
option, the parties shall enter into a separate lease within 30 days of such
notice by Gartner with a guaranteed ten year lease term and yearly base rent to
be determined by mutual agreement of the parties.

Property Management Fees

Wells Management has been retained to manage and lease the Fairchild
Building, the Cort Furniture Building, the Associates Building, the PWC
Building, the Vanguard Cellular Building, the EYBL CarTex Building, the Sprint
Building, the Johnson Matthey Building, the Videojet Building and the Gartner
Building. Wells Management will also be retained to manage and lease the
Matsushita    

91

project and the ABB Richmond project upon completion of such projects. Wells
Management shall receive 4.5% of gross revenues of each of these buildings for
property management and leasing services.

Wells Management has also been retained to manage and lease all of the
properties currently owned by the IX-X-XI-REIT Joint Venture.  While Wells Fund
XI and the Wells REIT are authorized to pay aggregate management and leasing
fees to Wells Management in the amount of 4.5% of gross revenues, Wells Fund IX
and Wells Fund X are authorized to pay aggregate management and leasing fees to
Wells Management in the amount of 6% of gross revenues.  Since Wells Fund IX and
Wells Fund X hold an aggregate 87.4% ownership percentage interest in the IX-X-
XI-REIT Joint Venture, while Wells Fund XI and the Wells REIT hold an aggregate
12.6% ownership percentage interest in the IX-X-XI-REIT Joint Venture, 87.4% of
the gross revenues of the IX-X-XI-REIT Joint Venture are subject to a 6%
property management and leasing fee, while 12.6% of the gross revenues of the
IX-X-XI-REIT Joint Venture are subject to a 4.5% property management and leasing
fee.

Wells Management received a one-time initial lease-up fee equal to the
first month's rent for the leasing of the ABB Knoxville Building and the Lucent
Building.  In addition, Wells Management will receive a one-time initial lease-
up fee equal to the first month's rent for the leasing of the Matsushita project
and the ABB Richmond project.

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

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

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

Liquidity and Capital Resources

We began active operations on June 5, 1998, when we received and accepted
subscriptions for 125,000 shares.  As of December 31, 1998, we had raised
$31,541,360 in offering proceeds through the sale of 3,154,136 shares, which
includes the 5,122 shares we issued pursuant to our dividend reinvestment plan.
After we paid $5,046,458 in acquisition and advisory fees and acquisition
expenses, selling commissions and organizational and offering expenses, and
$18,442,540 in capital contributions to Wells OP for investment in joint
ventures and acquisitions of real properties, as of December 31, 1998, we were
holding net offering proceeds of approximately $8,052,362 available for
investment in additional properties.     

92

Between December 31, 1998 and September 30, 1999, we raised an additional
$76,927,944 in offering proceeds through the sale of 7,692,795 shares and
invested an additional $71,477,174 in real properties.  Accordingly, as of
September 30, 1999, we had raised a total of $108,469,304 in offering proceeds
through the sale of 10,846,930 shares.  After we paid a total of $17,354,929 in
acquisition and advisory fees and acquisition expenses, selling commissions and
organizational and offering expenses, and a total of $89,919,734 in capital
contributions to Wells OP for investment in joint ventures and acquisitions of
real properties, as of September 30, 1999, we were holding net offering proceeds
of approximately $1,194,641 available for investment in additional properties.

Cash and cash equivalents at September 30, 1999 and 1998 were $2,850,263
and $591,122, respectively.  The increase in cash and cash equivalents resulted
primarily from raising additional capital in our initial public offering.  We
intend to use cash and cash equivalents to purchase additional properties, to
pay dividends and to pay offering costs.

Our capital needs and resources are expected to undergo changes as a result
of the completion of our initial public offering of shares, the commencement of
the follow-on offering and the future acquisition of properties.  Operating cash
flow is expected to increase as additional properties are added to our
portfolio.  Dividends to be distributed to our shareholders are determined by
our board of directors and are dependent on a number of factors, including our
funds available for payment of dividends, our financial condition, our capital
expenditure requirements and our annual distribution requirements in order to
maintain our REIT status under the Internal Revenue Code.

As of September 30, 1999, we had acquired interests in 16 real estate
properties.  These properties are generating sufficient cash flow to cover our
operating expenses and pay quarterly dividends.  Dividends declared for the
third quarter of 1999 totaled $0.175 per share, which were calculated using
daily declaration and record dates in the amount of $0.001902 per share to the
shareholders of record at the close of business on each day during the third
quarter of 1999, commencing on July 1, 1999, and continuing on each day
thereafter through and including September 30, 1999.  Similarly, our board of
directors has declared dividends for the fourth quarter of 1999, also totalling
$0.175 per share, to be calculated using daily declaration and record dates in
the amount of $0.001902 per share to shareholders of record at the close of
business on each day during the fourth quarter of 1999, commencing on October 1,
1999, and continuing on each day thereafter through and including December 31,
1999.

On February 18, 1999, Wells OP entered into a Rental Income Guaranty
Agreement with the Fund VIII-IX Joint Venture, whereby Wells OP guaranteed the
Fund VIII-IX Joint Venture that the joint venture would receive rental income on
its existing building previously leased to Matsushita Avionics at least equal to
the rental and building expenses that the Fund VIII-IX Joint Venture would have
received over the remaining term of its lease with Matsushita Avionics.
Matsushita Avionics will vacate the existing building in December 1999, with the
existing term ending in September 2003.  Currently rental and building expenses
are approximately $90,000 per month.  (See "Description of Properties -- The
Matsushita Property.")

Our maximum exposure to liability to the Fund VIII-IX Joint Venture for
rental income and building expenses potentially payable under this Rental Income
Guaranty Agreement was taken into account in the economic analysis performed in
making the determination to go forward with the development of the Matsushita
project.  Management of the Wells REIT anticipates that our actual liability
will be less than our maximum exposure; however, management cannot, at this
time, determine the amount of our actual liability under the Rental Income
Guaranty Agreement.  Any payment made to the Fund VIII-IX Joint Venture for
rental and building expenses will be made from the operating cash flow of the
Wells REIT and will reduce the amount of cash available for payment of
dividends.     

93

Cash Flows From Operating Activities

Net cash provided by operating activities was $2,273,102 for the nine
months ended September 30, 1999, as compared to $20,007 for the four-month
period ended September 30, 1998.  The increase in net cash provided by operating
activities was due primarily to the purchase of additional properties in 1999
and a full nine months of operations for the properties acquired during 1998.

Cash Flows From Investing Activities

The increase in net cash used in investing activities from $9,959,917 for
the four months ended September 30, 1998 to $75,420,671 for the nine months
ended September 30, 1999 was due primarily to the raising of additional capital
through the sale of our shares and investing such capital in acquisitions of
real property.

Cash Flows From Financing Activities

The increase in net cash provided by financing activities from $10,330,032
for the four months ended September 30, 1998 to $68,018,429 for the nine months
ended September 30, 1999 was also due primarily to the raising of additional
capital.  We raised $76,927,944 in offering proceeds for the nine months ended
September 30, 1999, as compared to $11,691,923 for the four months ended
September 30, 1998.  In addition, during the nine months ended September 30,
1999, we received loan proceeds from various financing transactions of
$25,598,666 and repaid a total of $22,732,539 of our company debt.

Results of Operations

As of September 30, 1999, the properties owned by the Wells REIT were
99.99% occupied.  Gross revenues for the four months ended September 30, 1998
and for the nine months ended September 30, 1999 were $84,209 and $3,996,290,
respectively.  This increase was due to the purchase of interests in additional
properties during 1998 and 1999 and a full nine months of operations of the
properties acquired during 1998.  The purchase of interests in additional
properties also resulted in an increase in rental income, operating expenses and
depreciation expenses.

During the offering period, interest income is likely to be higher since we
will invest funds in short-term investments while we are evaluating potential
real estate acquisitions.  Interest income will eventually decrease and will not
be a significant component of revenues after the net offering proceeds are fully
invested in real properties.

We have invested significant funds in the Matsushita project and the ABB
Richmond project which are under construction.  During the construction period,
we will not receive any rental income from these properties, nor will we receive
interest income on the amounts we must pay to the developer as construction
progresses.  Therefore, if the number of construction projects represents a
significant percentage of our investments during our initial acquisitions
stages, net income will be adversely affected on a short-term basis.  However,
we believe that the return on investment on our construction projects will
produce long-term returns that are in excess of returns on existing buildings.

Recent Accounting Pronouncements

Effective April 3, 1998, the American Institute of Certified Public
Accountants issued Statement of Position (SOP) 98-5, "Reporting on the Costs of
Start-Up Activities."  SOP 98-5 is effective for fiscal years beginning after
December 15, 1998, and initial application is required to be reported as a
cumulative effect of change in accounting principle.  This SOP provides guidance
on the financial reporting of start-     

94

up costs and organization costs. It requires costs of start-up activities and
organization costs to be expensed as incurred. Adoption of this Statement by the
Wells REIT in the first quarter of 1999 may result in the write-off of certain
capitalized organization costs. Adoption of this Statement is not expected to
have a material impact on our results of operations and financial condition.

Inflation

The real estate market has not been affected significantly by inflation in
the past three years due to the relatively low inflation rate.  There are
provisions in a majority of our tenant leases to protect us from the impact of
inflation.  These leases contain common area maintenance charges, real estate
tax and insurance reimbursements on a per square foot basis, or in some cases,
annual reimbursement of operating expenses above a certain per square foot
allowance.  These provisions should reduce our exposure to increases in costs
and operating expenses resulting from inflation.

Year 2000 Compliance

We began a full assessment of year 2000 compliance issues on our
information systems and business operations in late 1997, and we completed the
assessment during the first quarter of 1999.  Renovations and replacements of
equipment have been and are being made as warranted.  We have not incurred any
material costs so far for such renovations and replacements.  Testing of our
systems has been completed.

As to the status of our information technology systems, we presently
believe that all major systems and software packages are year 2000 compliant.
We have purchased the upgrade for the accounting and property management package
system and it was installed at the end of the first quarter of 1999.  At the
present time, we believe that all major non-information technology systems are
year 2000 compliant.  We have not incurred any material costs to upgrade our
non-compliant systems.

We confirmed the year 2000 readiness of our vendors, including third-party
service providers such as banks.  Based on the information we received, the
primary third-party service providers with which we have relationships are year
2000 compliant.

We rely on computers and operating systems provided by equipment
manufacturers, and also on application software designed for use with our
accounting, property management and investment portfolio tracking.  We have
preliminarily determined that any costs, problems or uncertainties associated
with the potential consequences of year 2000 issues are not expected to have a
material impact on our future operations or financial condition.  We will
perform due diligence as to the year 2000 readiness of each property we own and
each property we contemplate for purchase.

Our reliance on embedded computed systems (i.e., microcontrollers) is
limited to facilities related matters, such as office security systems and
environmental control systems.

Contingency plans have been developed to operate the business in the
unlikely circumstance that the computer and phone systems are rendered
inoperable.  Offsite facilities and alternative procedures to communicate with
key third party vendors have been identified for use should existing facilities
not function properly. A written contingency plan has been disseminated to each
staff member of our advisor.

We believe that our risk of year 2000 problems is minimal.  In the unlikely
event there is a problem, the worst case scenarios would include the risks that
the elevator or security systems within our properties would fail or the key
third-party vendors upon which we rely would be unable to provide accurate
investor information.  In the event that the elevator shuts down, we have
devised a plan for each     

95

building whereby the tenants will use the stairs until the elevators are fixed.
In the event that the security system shuts down, we have devised a plan for
each building to hire temporary on-site security guards. In the event that a
third-party vendor has year 2000 problems relating to investor information, we
intend to perform a full system back-up of all investor information as of
December 31, 1999 so that we will have accurate hard-copy investor information.

Prior Performance Summary

The information presented in this section represents the historical
experience of real estate programs managed by the advisor and its affiliates.
Investors in the Wells REIT should not assume that they will experience returns,
if any, comparable to those experienced by investors in such prior real estate
programs.

Leo F. Wells, III has served as a general partner of a total of 13 publicly
offered real estate limited partnerships, 12 of such limited partnerships have
completed their respective offerings.  These 12 limited partnerships and the
year in which each of their offerings was completed are:

1.    Wells Real Estate Fund I (1986)
2.    Wells Real Estate Fund II (1988)
3.    Wells Real Estate Fund II-OW (1988)
4.    Wells Real Estate Fund III, L.P. (1990)
5.    Wells Real Estate Fund IV, L.P. (1992)
6.    Wells Real Estate Fund V, L.P. (1993)
7.    Wells Real Estate Fund VI, L.P. (1994)
8.    Wells Real Estate Fund VII, L.P. (1995)
9.    Wells Real Estate Fund VIII, L.P. (1996)
10.    Wells Real Estate Fund IX, L.P. (1996)
11.    Wells Real Estate Fund X, L.P. (1997)
12.    Wells Real Estate Fund XI, L.P. (1998).

In addition to the foregoing real estate limited partnerships, the advisor
and its affiliates sponsored the initial public offering of 14,400,000 shares of
Common Stock of the Wells REIT. The initial public offering began on January 30,
1998 and was terminated on December 20, 1999. As of December 15, 1999, we had
received gross proceeds of approximately $131,500,000 from the sale of
approximately 13,150,000 shares from our initial public offering.

The advisor and its affiliates are currently also sponsoring a public
offering of 7,000,000 units on behalf of Wells Real Estate Fund XII, L.P., a
public limited partnership. Wells Fund XII began its offering on March 22, 1999,
and as of October 1, 1999, Wells Fund XII had raised $7,044,956 from 710
investors.

The Prior Performance Tables included in the back of this prospectus set
forth information as of the dates indicated regarding certain of these Wells
programs as to (1) experience in raising and investing funds (Table I); (2)
compensation to sponsor (Table II); and (3) annual operating results of prior
programs (Table III). No information is given as to results of completed
programs or sales or disposals of property because, to date, none of the Wells
programs have sold any of their properties.

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

96

results corresponding to the performance of the S&P REIT Index by investing in
the REIT stocks included in the S&P REIT Index. The REIT Fund began its offering
on January 12, 1998, and as of October 1, 1999, the REIT Fund had raised
$26,465,998 from 1,232 investors.

Publicly Offered Unspecified Real Estate Programs

The advisor and its affiliates have previously sponsored the above listed
12 publicly offered real estate limited partnerships and are currently
sponsoring Wells Fund XII offered on an unspecified property or "blind pool"
basis. The total amount of funds raised from investors in the offerings of these
13 publicly offered limited partnerships, as of October 1, 1999, was
approximately $292,000,000, and the total number of investors in such programs
was approximately 27,100.

The investment objectives of each of the other Wells programs are
substantially identical to the investment objectives of the Wells REIT. All of
the proceeds of the offerings of Wells Fund I, Wells Fund II, Wells Fund II-OW,
Wells Fund III, Wells Fund IV, Wells Fund V, Wells Fund VI, Wells Fund VII,
Wells Fund VIII, Wells Fund IX, Wells Fund X and Wells Fund XI available for
investment in real properties have been invested in properties. For the fiscal
year ended December 31, 1998, approximately 75% of the aggregate gross rental
income of the 12 publicly offered programs listed above was derived from tenants
which are U.S. corporations, each of which has net worth of at least
$100,000,000 or whose lease obligations are guaranteed by another corporation
with a net worth of at least $100,000,000.

Because of the cyclical nature of the real estate market, decreases in net
income of the public partnerships could occur at any time in the future when
economic conditions decline. None of the Wells programs has liquidated or sold
any of its real properties to date and, accordingly, no assurance can be made
that Wells programs will ultimately be successful in meeting their investment
objectives. (See "Risk Factors.")

The aggregate dollar amount of the acquisition and development costs of the
properties purchased by the previously sponsored Wells programs, as of December
31, 1998, was $252,097,627 of which $170,000 (or approximately .07%) had not yet
been expended on the development of certain of the projects which are still
under construction. Of the aggregate amount, approximately 73% was or will be
spent on acquiring or developing office buildings, and approximately 27% was or
will be spent on acquiring or developing shopping centers. Of the aggregate
amount, approximately 6% was or will be spent on new properties, 49% on existing
or used properties and 45% on construction properties. Following is a table
showing a breakdown of the aggregate amount of the acquisition and development
costs of the properties purchased by the Wells REIT and the 12 Wells programs
listed above as of December 31, 1998:

Type of Property         New   Used   Construction
----------------         ---   ----   ------------

Office Buildings         6%    41%    26%
Shopping Centers         0%     9%    18%

Wells Fund I terminated its offering on September 5, 1986, and received
gross proceeds of $35,321,000 representing subscriptions from 4,895 limited
partners.  $24,679,000 of the gross proceeds were attributable to sales of Class
A Units, and $10,642,000 of the gross proceeds were attributable to sales of
Class B Units.  Limited partners in Wells Fund I have no right to change the
status of their units from Class A to Class B or vice versa.  Wells Fund I owns
interests in the following properties:

.  a three story medical office building in Atlanta, Georgia;     

97

.  two commercial office buildings in Atlanta, Georgia;

.  a shopping center in DeKalb County, Georgia having Kroger as the anchor
tenant;

.  a shopping center in Knoxville, Tennessee;

.  a shopping center in Cherokee County, Georgia having Kroger as the
anchor tenant; and

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

The prospectus of Wells Fund I provided that the properties purchased by
Wells Fund I would typically be held for a period of eight to 12 years, but that
the general partners may exercise their discretion as to whether and when to
sell the properties owned by Wells Fund I and that the general partners were
under no obligation to sell the properties at any particular time. Wells Fund I
acquired its properties between 1985 and 1987, and has not yet liquidated or
sold any of its properties.

Wells Fund II and Wells Fund II-OW terminated their offerings on September
7, 1988, and received aggregate gross proceeds of $36,870,250 representing
subscriptions from 4,659 limited partners. $28,829,000 of the gross proceeds
were attributable to sales of Class A Units, and $8,041,250 of the gross
proceeds were attributable to sales of Class B Units. Limited partners in Wells
Fund II and Wells Fund II-OW have no right to change the status of their units
from Class A to Class B or vice versa. Wells Fund II and Wells Fund II-OW own
all of their properties through a joint venture, which owns interests in the
following properties:

.  a shopping center in Cherokee County, Georgia having Kroger as the
anchor tenant;

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

.  a two story office building in Charlotte, North Carolina leased to First
Union Bank;

.  a four story office building in Houston, Texas leased to The Boeing
Company;

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

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

The prospectus of Wells Fund II and Wells Fund II-OW provided that the
properties purchased by Wells Fund II and Wells Fund II-OW would typically be
held for a period of eight to 12  years, but that the general partners may
exercise their discretion as to whether and when to sell the properties owned by
Wells Fund II and Wells Fund II-OW and that the partnerships were under no
obligation to sell their properties at any particular time.  Wells Fund II and
Wells Fund II-OW acquired their properties between 1987 and 1989, and have not
yet liquidated or sold any of their properties.

Wells Fund III terminated its offering on October 23, 1990, and received
gross proceeds of $22,206,310 representing subscriptions from 2,700 limited
partners.  $19,661,770 of the gross proceeds were attributable to sales of Class
A Units, and $2,544,540 of the gross proceeds were attributable to sales of
Class B Units.  Limited partners in Wells Fund III have no right to change the
status of their units from Class A to Class B or vice versa.  Wells Fund III
owns interests in the following properties:

.  a four story office building in Houston, Texas leased to The Boeing
Company;     

98

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

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

.  a two story office building in Greenville, North Carolina leased to
International Business Machines Corporation (IBM);

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

.  a two story office building in Richmond, Virginia leased to General
Electric.

Wells Fund IV terminated its offering on February 29, 1992, and received
gross proceeds of $13,614,655 representing subscriptions from 1,286 limited
partners.  $13,229,150 of the gross proceeds were attributable to sales of Class
A Units, and $385,505 of the gross proceeds were attributable to sales of Class
B Units.  Limited partners in Wells Fund IV have no right to change the status
of their units from Class A to Class B or vice versa.  Wells Fund IV owns
interests in the following properties:

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

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

.  a two story office building in Richmond, Virginia leased to General
Electric; and

.  two two story office buildings in Stockbridge, Georgia, a substantial
portion of which is leased to Georgia Baptist Hospital.

Wells Fund V terminated its offering on March 3, 1993, and received gross
proceeds of $17,006,020 representing subscriptions from 1,667 limited partners.
$15,209,666 of the gross proceeds were attributable to sales of Class A Units,
and $1,796,354 of the gross proceeds were attributable to sales of Class B
Units.  Limited partners in Wells Fund V who purchased Class B Units are
entitled to change the status of their units to Class A, but limited partners
who purchased Class A Units are not entitled to change the status of their units
to Class B.  After taking into effect conversion elections made by limited
partners subsequent to their subscription for units, as of December 31, 1998,
$15,590,210 of units of Wells Fund V were treated as Class A Units, and
$1,415,810 of units were treated as Class B Units.  Wells Fund V owns interests
in the following properties:

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

.  two two story office buildings in Stockbridge, Georgia, a substantial
portion of which is leased to Georgia Baptist Hospital;

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

.  two restaurant properties in Stockbridge, Georgia leased to Apple
Restaurants, Inc. and Glenn's Open Pit Bar-B-Que; and

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

Wells Fund V experienced an operating loss of $18,089 in 1992 (at which
time it only owned interests in the Jacksonville, Florida property which was
under construction and the first office building in     

99

Stockbridge, Georgia which was under construction), recognized net income of
$354,999 in 1993 (at which time it had also acquired an interest in the
Hartford, Connecticut property and the second office building in Stockbridge,
Georgia was under construction), recognized net income of $561,721 in 1994 (at
which time it owned interests in all of the properties listed above for which it
currently holds an ownership interest, with the exception that only one of the
two restaurants had been developed on the tract of land in Stockbridge,
Georgia), recognized net income of $689,639 in 1995, recognized net income of
$505,650 in 1996 and recognized net income of $559,801 in 1997.

Wells Fund VI terminated its offering on April 4, 1994, and received gross
proceeds of $25,000,000 representing subscriptions from 1,793 limited partners.
$19,332,176 of the gross proceeds were attributable to sales of Class A Units,
and $5,667,824 of the gross proceeds were attributable to sales of Class B
Units.  Limited partners in Wells Fund VI are entitled to change the status of
their units from Class A to Class B and vice versa.  After taking into effect
conversion elections made by limited partners subsequent to their subscription
for units, as of December 31, 1998, $21,877,575 of units of Wells Fund VI were
treated as Class A Units, and $3,122,425 of units were treated as Class B Units.
Wells Fund VI owns interests in the following properties:

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

.  two restaurant properties in Stockbridge, Georgia leased to Apple
Restaurants, Inc. and Glenn's Open Pit Bar-B-Que;

.  a restaurant and retail building in Stockbridge, Georgia;

.  a shopping center in Stockbridge, Georgia;

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

.  a shopping center in Cherokee County, Georgia having Kroger as the
anchor tenant;

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

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

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

Wells Fund VI recognized net income of $31,428 in 1993 (at which time it
only owned an interest in the Hartford, Connecticut property), recognized net
income of $700,896 in 1994 (at which time it owned only interests in (1) the
four story office building in Hartford, Connecticut; (2) the retail building and
an undeveloped tract of land in Stockbridge, Georgia; and (3) the three story
office building in Appleton, Wisconsin), recognized net income of $901,828 in
1995 (at which time each of the following properties was under construction: (1)
one of the retail buildings in Stockbridge, Georgia, (2) the combined retail and
office development in Roswell, Georgia, (3) the office building in Jacksonville,
Florida, and (4) the shopping center in Clemmons, North Carolina), recognized
net income of $589,053 in 1996, recognized net income of $795,654 in 1997 and
recognized net income of $855,788 in 1998.    

100

Wells Fund VII terminated its offering on January 5, 1995, and received
gross proceeds of $24,180,174 representing subscriptions from 1,910 limited
partners.  $16,788,095 of the gross proceeds were attributable to sales of Class
A Units, and $7,392,079 of the gross proceeds were attributable to sales of
Class B Units.  Limited partners in Wells Fund VII are entitled to change the
status of their units from Class A to Class B and vice versa.  After taking into
effect conversion elections made by limited partners subsequent to their
subscriptions for units, as of December 31, 1998, $20,095,174 of units in Wells
Fund VII were treated as Class A Units, and $4,085,000 of units were treated as
Class B Units.  Wells Fund VII owns interests in the following properties:

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

.  a restaurant and retail building in Stockbridge, Georgia;

.  a shopping center in Stockbridge, Georgia;

.  a shopping center in Cherokee County, Georgia having Kroger as the
anchor tenant;

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

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

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

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

.  a retail development in Clayton County, Georgia.

Wells Fund VII recognized net income of $203,263 in 1994 (at which time it
only owned an interest in the three story office building in Appleton, Wisconsin
and an undeveloped tract of land in Stockbridge, Georgia), recognized net income
of $804,043 in 1995 (at which time it only owned interests in the office
building in Appleton, Wisconsin, the developments in Stockbridge, Georgia, the
office building in Alachua County, Florida, the office building in Jacksonville,
Florida, the tract of land in Clemmons, North Carolina, which was under
construction, and the retail building in Stockbridge, Georgia, which was under
construction), recognized net income of $452,776 in 1996, recognized net income
of $733,149 in 1997 and recognized net income of $754,334 in 1998.

Wells Fund VIII terminated its offering on January 4, 1996, and received
gross proceeds of $32,042,689 representing subscriptions from 2,241 limited
partners.  $26,135,339 of the gross proceeds were attributable to sales of Class
A Units, and $5,907,350 were attributable to sales of Class B Units.  Limited
partners in Wells Fund VIII are entitled to change the status of their units
from Class A to Class B and vice versa.  After taking into effect conversion
elections made by limited partners subsequent to their subscriptions for units
and certain repurchases made by Wells Fund VIII, as of December 31, 1998,
$26,745,845 of units in Wells Fund VIII were treated as Class A Units, and
$5,286,844 of units were treated as Class B Units.  Wells Fund VIII owns
interests in the following properties:

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

101

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

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

.  a retail development in Clayton County, Georgia;

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

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

.  a two story office building in Orange County, California; and

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

Wells Fund VIII recognized net income of $273,914 in 1995 (at which time it
only owned interests in the office building in Alachua County, Florida, the
office building in Jacksonville, Florida, which was under construction, and the
tract of land in Clemmons, North Carolina, which was under construction),
recognized net income of $936,590 in 1996, recognized net income of $1,102,567
in 1997 and recognized net income of $1,269,171 in 1998.

Wells Fund IX terminated its offering on December 30, 1996, and received
gross proceeds of $35,000,000 representing subscriptions from 2,098 limited
partners.  $29,359,310 of the gross proceeds were attributable to sales of Class
A Units, and $5,640,690 were attributable to sales of Class B Units.  After
taking into effect conversion elections made by limited partners subsequent to
their subscriptions for units, as of December 31, 1998, $29,898,750 of units in
Wells Fund IX were treated as Class A Units, and $5,101,250 of units were
treated as Class B Units.  Wells Fund IX owns interests in the following
properties:

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

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

.  a two story office building in Orange County, California;

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

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

.  a three story office building in Knox County, Tennessee leased to ABB
Environmental Systems;

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

.  a three story office building in Boulder County, Colorado; and     

102

.  a one story office building in Oklahoma City, Oklahoma leased to Lucent
Technologies, Inc.

Wells Fund IX recognized net income of $298,756 in 1996, recognized net
income of $1,091,766 in 1997 and recognized net income of $1,449,955 in 1998.

Wells Fund X terminated its offering on December 30, 1997, and received
gross proceeds of $27,128,912 representing subscriptions from 1,806 limited
partners.  $21,160,992 of the gross proceeds were contributable to sales of
Class A Units, and $5,967,920 were attributable to sales of Class B Units.
After taking into effect conversion elections made by limited partners
subsequent to their subscriptions for units as of December 31, 1998, $21,258,042
of units in Wells Fund X were treated as Class A Units and $5,870,870 of units
were treated as Class B Units.  Wells Fund X owns interests in the following
properties:

.  a three story office building in Knox County, Tennessee leased to ABB
Environmental Systems;

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

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

.  a three story office building in Boulder County, Colorado;

.  a one story office building in Oklahoma City, Oklahoma leased to Lucent
Technologies, Inc.;

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

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

Wells Fund X recognized net income of $278,025 in 1997 and recognized net
income of $1,050,329 in 1998.

Wells Fund XI terminated its offering on December 30, 1998, and received
gross proceeds of $16,532,802 representing subscriptions from 1,345 limited
partners.  $13,029,424 of the gross proceeds were attributable to sales of Class
A Units and $3,503,378 were attributable to sales of Class B Units.  Wells Fund
XI owns interests in the following properties:

.  a three story office building in Knox County, Tennessee leased to ABB
Environmental Systems;

.  a one story office building in Oklahoma City, Oklahoma leased to Lucent
Technologies, Inc.;

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

.  a three story office building in Boulder County, Colorado;     

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

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

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

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

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

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

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

Wells Fund XI recognized net income of $143,295 in 1998.

Wells Fund XII began its offering on March 22, 1999.  As of October 1,
1999, Wells Fund XII had received gross proceeds of $7,044,956 representing
subscriptions from 710 limited partners.  $5,515,572 of the gross proceeds were
attributable to sales of cash preferred units and $1,529,384 were attributable
to sales of tax preferred units.  Wells Fund XII owns interests in the following
properties:

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

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

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

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

The information set forth above should not be considered indicative of
results to be expected from the partnership.

The foregoing properties in which the above 13 limited partnerships have
invested have all been acquired on an all cash basis.

Leo F. Wells, III and Wells Partners, L.P. are the general partners of
Wells Fund IV, Wells Fund V, Wells Fund VI, Wells Fund VII, Wells Fund VIII,
Wells Fund IX, Wells Fund X, Wells Fund XI and Wells Fund XII.  Wells Capital,
which is the general partner of Wells Partners, L.P., and Leo F. Wells, III are
the general partners of Wells Fund I, Wells Fund II, Wells Fund II-OW and Wells
Fund III.

Potential investors are encouraged to examine the Prior Performance Tables
included in the back of the prospectus for more detailed information regarding
the prior experience of the sponsors.  In addition, upon request, prospective
investors may obtain from us without charge copies of offering     

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materials and any reports prepared in connection with any of the Wells programs,
including a copy of the most recent Annual Report on Form 10-K filed with the
Securities and Exchange Commission. For a reasonable fee, we will also furnish
upon request copies of the exhibits to any such Form 10-K. Any such request
should be directed to our secretary. Additionally, Table VI contained in Part II
of the registration statement, which is not part of this prospectus, gives
certain additional information relating to properties acquired by the Wells
programs. We will furnish, without charge, copies of such table upon request.

Federal Income Tax Considerations

General

The following is a summary of material federal income tax
considerations associated with an investment in the shares.  This summary does
not address all possible tax considerations that may be material to an investor
and does not constitute tax advice. Moreover, this summary does not deal with
all tax aspects that might be relevant to you, as a prospective shareholder, in
light of your personal circumstances; nor does it deal with particular types of
shareholders that are subject to special treatment under the Code, such as
insurance companies, tax-exempt organizations, financial institutions or broker-
dealers, or foreign corporations or persons who are not citizens or residents of
the United States ("Non-US Shareholders").  The Internal Revenue Code provisions
governing the federal income tax treatment of REITs are highly technical and
complex, and this summary is qualified in its entirety by the express language
of applicable Internal Revenue Code provisions, Treasury Regulations promulgated
thereunder and administrative and judicial interpretations thereof.

We urge you, as a prospective investor, to consult your own tax adviser
regarding the specific tax consequences to you of a purchase of shares,
ownership and sale of the shares and of our election to be taxed as a REIT,
including the federal, state, local, foreign and other tax consequences of such
purchase, ownership, sale and election.

Opinion of Counsel

Holland & Knight LLP has acted as our counsel, has reviewed this summary
and is of the opinion that it fairly summarizes the federal income tax
considerations addressed that are material to shareholders.  It is also the
opinion of our counsel that, commencing with our taxable year ended December 31,
1998, it is more likely than not that we qualified to be taxed as a REIT under
the Internal Revenue Code, provided that we have operated and will continue to
operate in accordance with various assumptions and the factual representations
we made to counsel concerning our business, properties and operations.  It must
be emphasized that Holland & Knight LLP's opinion is based on various
assumptions and is conditioned upon the assumptions and representations we made
concerning our business and properties.  Moreover, our qualification for
taxation as a REIT depends on our ability to meet the various qualification
tests imposed under the Internal Revenue Code discussed below, the results of
which will not be reviewed by Holland & Knight LLP.  Accordingly, we cannot
assure you that the actual results of our operations for any one taxable year
will satisfy these requirements.  See "Risk Factors -- Failure to Qualify as a
REIT."

The statements made in this section of the prospectus and in the opinion of
Holland & Knight LLP are based upon existing law and Treasury Regulations, as
currently applicable, currently published administrative positions of the
Internal Revenue Service and judicial decisions, all of which are subject to
change, either prospectively or retroactively.  We cannot assure you that any
changes will not modify the conclusions expressed in counsel's opinion.
Moreover, an opinion of counsel is not binding on the Internal Revenue Service
and we cannot assure you that the Internal Revenue Service will not successfully
challenge our status as a REIT.     

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Taxation of the Company

If we qualify for taxation as a REIT, we generally will not be subject to
federal corporate income taxes on that portion of our ordinary income or capital
gain that we distribute currently to our shareholders, because the REIT
provisions of the Internal Revenue Code generally allow a REIT to deduct
distributions paid to its shareholders.  This substantially eliminates the
federal "double taxation" on earnings (taxation at both the corporate level and
shareholder level) that usually results from an investment in a corporation.

Even if we qualify for taxation as a REIT, however, we will be subject to
federal income taxation as follows:

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

.  under some circumstances, we will be subject to "alternative minimum
tax";

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

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

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

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

.  if we acquire any asset from a C corporation (i.e., a corporation
generally subject to corporate-level tax) in a carryover-basis
transaction and we subsequently recognize gain on the disposition of the
asset during the ten year period beginning on the date on which we
acquired the asset, then a portion of the gains may be subject to tax at
the highest regular corporate rate, pursuant to guidelines issued by the
Internal Revenue Service (the "Built-In-Gain Rules").

Requirements for Qualification as a REIT

We elected to be taxable as a REIT for our taxable year ended December 31,
1998. In order for us to qualify as a REIT, however, we had to meet and we must
continue to meet the requirements discussed below relating to our organization,
sources of income, nature of assets and distributions of income to our
shareholders.     

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Organizational Requirements

In order to qualify for taxation as a REIT under the Internal Revenue Code,
we must:

.  be a domestic corporation;

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

.  be managed by one or more trustees or directors;

.  have transferable shares;

.  not be a financial institution or an insurance company;

.  use a calendar year for federal income tax purposes;

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

.  not be closely held.

As a Maryland corporation, we satisfy the first requirement, and we have
filed an election to be taxed as a REIT with the IRS. In addition, we are
managed by a board of directors, we have transferable shares and we do not
intend to operate as a financial institution or insurance company. We utilize
the calendar year for federal income tax purposes, and we have more than 100
shareholders. We would be treated as closely held only if five or fewer
individuals or certain tax-exempt entities own, directly or indirectly, more
than 50% (by value) of our shares at any time during the last half of our
taxable year. For purposes of the closely-held test, the Internal Revenue Code
generally permits a look-through for pension funds and certain other tax-exempt
entities to the beneficiaries of the entity to determine if the REIT is closely
held. Five or fewer individuals or tax-exempt entities have never owned more
than 50% of our outstanding shares during the last half of any taxable year.

We are authorized to refuse to transfer our shares to any person if the
sale or transfer would jeopardize our ability to satisfy the REIT ownership
requirements. There can be no assurance that a refusal to transfer will be
effective. However, based on the foregoing, we should currently satisfy the
organizational requirements, including the share ownership requirements.
Notwithstanding compliance with the share ownership requirements outlined above,
tax-exempt shareholders may be required to treat all or a portion of their
distributions from us as "unrelated business taxable income" if tax-exempt
shareholders, in the aggregate, exceed certain ownership thresholds set forth in
the Internal Revenue Code. (See "Taxation of Tax Exempt Shareholders.")     

107

Ownership of Interests in Partnerships and Qualified REIT Subsidiaries

In the case of a REIT that is a partner in a partnership, Treasury
Regulations provide that the REIT is deemed to own its proportionate share,
based on its interest in partnership capital, of the assets of the partnership
and is deemed to have earned its allocable share of partnership income.  Also,
if a REIT owns a qualified REIT subsidiary, which is defined as a corporation
wholly-owned by a REIT, the REIT will be deemed to own all of the subsidiary's
assets and liabilities and it will be deemed to be entitled to treat the income
of that subsidiary as its own.  In addition, the character of the assets and
gross income of the partnership or qualified REIT subsidiary shall retain the
same character in the hands of the REIT for purposes of satisfying the gross
income tests and asset tests set forth in the Internal Revenue Code.

Operational Requirements -- Gross Income Tests

To maintain our qualification as a REIT, we must satisfy annually two gross
income requirements.

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

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

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

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

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

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

.    the REIT must not operate or manage the property or furnish or
render services to tenants, other than through an "independent
contractor" who is adequately    

108

compensated and from whom the REIT does not derive any income.
However, a REIT may provide services with respect to its
properties, and the income derived therefrom will qualify as
"rents from real property," if the services are "usually or
customarily rendered" in connection with the rental of space
only and are not otherwise considered "rendered to the
occupant." Even if the services with respect to a property are
impermissible tenant services, the income derived therefrom will
qualify as "rents from real property" if such income does not
exceed one percent of all amounts received or accrued with
respect to that property.

If we acquire ownership of property by reason of the default of a borrower
on a loan or possession of property by reason of a tenant default, if the
property qualifies and we elect to treat it as foreclosure property, the income
from the property will qualify under the 75% Income Test and the 95% Income Test
notwithstanding its failure to satisfy these requirements for three years, or if
extended for good cause, up to a total of six years. In that event, we must
satisfy a number of complex rules, one of which is a requirement that we operate
the property through an independent contractor. We will be subject to tax on
that portion of our net income from foreclosure property that does not otherwise
qualify under the 75% Income Test.

Prior to the making of investments in properties, we may satisfy the 75%
Income Test and the 95% Income Test by investing in liquid assets such as
government securities or certificates of deposit, but earnings from those types
of assets are qualifying income under the 75% Income Test only for one year from
the receipt of proceeds. Accordingly, to the extent that offering proceeds have
not been invested in properties prior to the expiration of this one year period,
in order to satisfy the 75% Income Test, we may invest the offering proceeds in
less liquid investments such as mortgage-backed securities, maturing mortgage
loans purchased from mortgage lenders or shares in other REITs. We expect to
receive proceeds from the offering in a series of closings and to trace those
proceeds for purposes of determining the one year period for "new capital
investments." No rulings or regulations have been issued under the provisions of
the Internal Revenue Code governing "new capital investments," however, so that
there can be no assurance that the Internal Revenue Service will agree with this
method of calculation.

Except for amounts received with respect to certain investments of cash
reserves, we anticipate that substantially all of our gross income will be from
sources that will allow us to satisfy the income tests described above; however,
there can be no assurance given in this regard. Notwithstanding our failure to
satisfy one or both of the 75% Income and the 95% Income Tests for any taxable
year, we may still qualify as a REIT for that year if we are eligible for relief
under specific provisions of the Internal Revenue Code. These relief provisions
generally will be available if:

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

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

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

It is not possible, however, to state whether, in all circumstances, we would be
entitled to the benefit of these relief provisions. For example, if we fail to
satisfy the gross income tests because nonqualifying income that we
intentionally earn exceeds the limits on this income, the Internal Revenue
Service could conclude that our failure to satisfy the tests was not due to
reasonable cause. As discussed above in "Taxation of the Company," even if these
relief provisions apply, a tax would be imposed with respect to the excess net
income.     

109

Operational Requirements -- Asset Tests

At the close of each quarter of our taxable year, we also must satisfy
three tests relating to the nature and diversification of our assets.

.    First, at least 75% of the value of our total assets must be
represented by real estate assets, cash, cash items and government
securities. The term "real estate assets" includes real property,
mortgages on real property, shares in other qualified REITs and a
proportionate share of any real estate assets owned by a partnership
in which we are a partner or of any qualified REIT subsidiary of ours.

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

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

The 5% test must generally be met for any quarter in which we acquire
securities. Further, if we meet the asset tests at the close of any quarter, we
will not lose our REIT status for a failure to satisfy the asset tests at the
end of a later quarter if such failure occurs solely because of changes in asset
values. If our failure to satisfy the asset tests results from an acquisition of
securities or other property during a quarter, we can cure the failure by
disposing of a sufficient amount of nonqualifying assets within 30 days after
the close of that quarter. We maintain, and will continue to maintain, adequate
records of the value of our assets to ensure compliance with the asset tests and
will take other action within 30 days after the close of any quarter as may be
required to cure any noncompliance.

Operational Requirements -- Annual Distribution Requirement

In order to be taxed as a REIT, we are required to make distributions,
other than capital gain distributions, to our shareholders. The amount of these
distributions must be equal to at least 95% of our REIT taxable income (computed
without regard to the distributions-paid deduction and our capital gain and
subject to certain other potential adjustments).

We must generally pay distributions in the taxable year to which they
relate. Alternatively, however, distributions may be made in the following
taxable year if (1) they are declared before we timely file our federal income
tax return for the taxable year in question and if (2) they are paid on or
before the first regular distribution payment after the declaration.

Even if we satisfy the foregoing distribution requirement and, accordingly,
continue to qualify as a REIT for tax purposes, we will still be subject to tax
on the excess of our net capital gain and our REIT taxable income, as adjusted,
over amounts distributed to shareholders.

In addition, if we fail to distribute during each calendar year at least
the sum of:

.    85% of our ordinary income for that year;

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

.    any undistributed taxable income from prior periods,     

110

we will be subject to a 4% excise tax on the excess of the amount of such
required distributions over amounts actually distributed during such year.

We intend to make timely distributions sufficient to satisfy this
requirement; however, it is possible that we may experience timing differences
between (1) the actual receipt of income and payment of deductible expenses, and
(2) the inclusion of that income. It is also possible that we may be allocated a
share of net capital gain attributable to the sale of depreciated property that
exceeds our allocable share of cash attributable to that sale.

In such circumstances, we may have less cash than is necessary to meet our
annual distribution requirement or to avoid income or excise taxation on certain
undistributed income. We may find it necessary in such circumstances to arrange
for financing or raise funds through the issuance of additional shares in order
to meet our distribution requirements, or we may pay taxable stock distributions
to meet the distribution requirement.

If we fail to satisfy the distribution requirement for any taxable year by
reason of a later adjustment to our taxable income made by the Internal Revenue
Service, we may be able to pay "deficiency dividends" in a later year and
include such distributions in our deductions for dividends paid for the earlier
year. In such event, we may be able to avoid being taxed on amounts distributed
as deficiency dividends, but we would be required in such circumstances to pay
interest to the Internal Revenue Service based upon the amount of any deduction
taken for deficiency dividends for the earlier year.

As noted above, we may also elect to retain, rather than distribute our net
long-term capital gains. The effect of such an election would be as follows:

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

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

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

In computing our REIT taxable income, we will use the accrual method of
accounting and depreciate depreciable property under the alternative
depreciation system. We are required to file an annual federal income tax
return, which, like other corporate returns, is subject to examination by the
Internal Revenue Service. Because the tax law requires us to make many judgments
regarding the proper treatment of a transaction or an item of income or
deduction, it is possible that the Internal Revenue Service will challenge
positions we take in computing our REIT taxable income and our distributions.
Issues could arise, for example, with respect to the allocation of the purchase
price of properties between depreciable or amortizable assets and nondepreciable
or non-amortizable assets such as land and the current deductibility of fees
paid to Wells Capital or its affiliates. Were the Internal Revenue Service to
challenge successfully our characterization of a transaction or determination of
our REIT taxable income, we could be found not to have satisfied a requirement
for qualification as a REIT and mitigation provisions might not apply. (See
"Sale-Leaseback Transactions.") If, as a result of a challenge, we are
determined not to have satisfied the distribution requirements for a taxable
year, we would be disqualified as a REIT, unless we were permitted to pay a
deficiency distribution to our shareholders and pay interest thereon to the
Internal Revenue Service, as provided by the Internal Revenue Code. A 
deficiency     

111

distribution cannot be used to satisfy the distribution requirement, however, if
the failure to meet the requirement is not due to a later adjustment to our
income by the Internal Revenue Service.

Operational Requirements -- Recordkeeping

In order to continue to qualify as a REIT, we must maintain certain records
as set forth in applicable Treasury Regulations. Further, we must request, on an
annual basis, certain information designed to disclose the ownership of our
outstanding shares. We intend to comply with such requirements.

Failure to Qualify as a REIT

If we fail to qualify as a REIT for any reason in a taxable year and
applicable relief provisions do not apply, we will be subject to tax (including
any applicable alternative minimum tax) on our taxable income at regular
corporate rates. We will not be able to deduct distributions to our shareholders
in any year in which we fail to qualify as a REIT. We also will be disqualified
for the four taxable years following the year during which qualification was
lost unless we are entitled to relief under specific statutory provisions. (See
"Risk Factors -- Federal Income Tax Risks")

Sale-Leaseback Transactions

Some of our investments may be in the form of sale-leaseback transactions.
In most instances, depending on the economic terms of the transaction, we will
be treated for federal income tax purposes as either the owner of the property
or the holder of a debt secured by the property. We do not expect to request an
opinion of counsel concerning the status of any leases of properties as true
leases for federal income tax purposes.

The Internal Revenue Service may take the position that a specific sale-
leaseback transaction which we treat as a true lease is not a true lease for
federal income tax purposes but is, instead, a financing arrangement or loan. We
may also structure some sale-leaseback transactions as loans. In this event, for
purposes of the asset tests and the 75% Income Test, each such loan likely would
be viewed as secured by real property to the extent of the fair market value of
the underlying property. It is expected that, for this purpose, the fair market
value of the underlying property would be determined without taking into account
our lease. If a sale-leaseback transaction were so recharacterized, we might
fail to satisfy the asset tests or the Income Tests and, consequently, lose our
REIT status effective with the year of recharacterization. Alternatively, the
amount of our REIT taxable income could be recalculated which might also cause
us to fail to meet the distribution requirement for a taxable year.

Taxation of U.S. Shareholders

Definition

In this section, the phrase "U.S. shareholder" means a holder of shares
that for federal income tax purposes:

.    is a citizen or resident of the United States;

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

112

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

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

For any taxable year for which we qualify for taxation as a REIT, amounts
distributed to taxable U.S. shareholders will be taxed as described below.

Distributions Generally

Distributions to U.S. shareholders, other than capital gain distributions
discussed below, will constitute dividends up to the amount of our current or
accumulated earnings and profits and will be taxable to the shareholders as
ordinary income. These distributions are not eligible for the dividends received
deduction generally available to corporations. To the extent that we make a
distribution in excess of our current or accumulated earnings and profits, the
distribution will be treated first as a tax-free return of capital, reducing the
tax basis in each U.S. shareholder's shares, and the amount of each distribution
in excess of a U.S. shareholder's tax basis in its shares will be taxable as
gain realized from the sale of its shares. Distributions that we declare in
October, November or December of any year payable to a shareholder of record on
a specified date in any of these months will be treated as both paid by us and
received by the shareholder on December 31 of the year, provided that we
actually pay the distribution during January of the following calendar year.
U.S. shareholders may not include any of our losses on their own federal income
tax returns.

We will be treated as having sufficient earnings and profits to treat as a
dividend any distribution by us up to the amount required to be distributed in
order to avoid imposition of the 4% excise tax discussed above. Moreover, any
"deficiency distribution" will be treated as an ordinary or capital gain
distribution, as the case may be, regardless of our earnings and profits. As a
result, shareholders may be required to treat some distributions that would
otherwise result in a tax-free return of capital as taxable.

Capital Gain Distributions

Distributions to U.S. shareholders that we properly designate as capital
gain distributions will be treated as long-term capital gains, to the extent
they do not exceed our actual net capital gain, for the taxable year without
regard to the period for which the U.S. shareholder has held his stock.

Passive Activity Loss and Investment Interest Limitations

Our distributions and any gain you realize from a disposition of shares
will not be treated as passive activity income, and shareholders may not be able
to utilize any of their "passive losses" to offset this income in their personal
tax returns. Our distributions (to the extent they do not constitute a return of
capital) will generally be treated as investment income for purposes of the
limitations on the deduction of investment interest. Net capital gain from a
disposition of shares and capital gain distributions generally will be included
in investment income for purposes of the investment interest deduction
limitations only if, and to the extent, you so elect, in which case any such
capital gains will be taxed as ordinary income.

Certain Dispositions of the Shares

In general, any gain or loss realized upon a taxable disposition of shares
by a U.S. shareholder who is not a dealer in securities will be treated as long-
term capital gain or loss if the shares have been      

113

held for more than 12 months and as short-term capital gain or loss if the
shares have been held for 12 months or less. If, however, a U.S. shareholder has
received any capital gains distributions with respect to his shares, any loss
realized upon a taxable disposition of shares held for six months or less, to
the extent of the capital gains distributions received with respect to his
shares, will be treated as long-term capital loss. Also, the Internal Revenue
Service is authorized to issue Treasury Regulations that would subject a portion
of the capital gain a U.S. shareholder recognizes from selling his shares or
from a capital gain distribution to a tax at a 25% rate, to the extent the
capital gain is attributable to depreciation previously deducted.

Information Reporting Requirements and Backup Withholding for U.S.
Shareholders

Under some circumstances, U.S. shareholders may be subject to backup
withholding at a rate of 31% on payments made with respect to, or cash proceeds
of a sale or exchange of, our shares. Backup withholding will apply only if the
shareholder:

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

.    furnishes an incorrect tax identification number;

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

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

Backup withholding will not apply with respect to payments made to some
shareholders, such as corporations and tax-exempt organizations. Backup
withholding is not an additional tax. Rather, the amount of any backup
withholding with respect to a payment to a U.S. shareholder will be allowed as a
credit against the U.S. shareholder's U.S. federal income tax liability and may
entitle the U.S. shareholder to a refund, provided that the required information
is furnished to the Internal Revenue Service. U.S. shareholders should consult
their own tax advisors regarding their qualifications for exemption from backup
withholding and the procedure for obtaining an exemption.

Treatment of Tax-Exempt Shareholders

Tax-exempt entities such as employee pension benefit trusts, individual
retirement accounts, charitable remainder trusts, etc. generally are exempt from
federal income taxation. Such entities are subject to taxation, however, on any
"unrelated business taxable income," as defined in the Internal Revenue Code.
The payment of dividends to a tax-exempt employee pension benefit trust or other
domestic tax-exempt shareholder generally will not constitute unrelated business
taxable income to such shareholder unless such shareholder has borrowed to
acquire or carry its shares.

If we are deemed to be "predominately held" by qualified employee pension
benefit trusts that each hold more than 10% (by value) of our shares, such
trusts would be required to treat a certain percentage of the dividend
distributions paid to them as unrelated business taxable income. We would be
deemed to be "predominately held" by such trusts if either (1) one such trust
owns more than 25% in value of our shares, or (ii) any group of such trusts,
each owning more than 10% in value of our shares,      

114

holds in the aggregate more than 50% in value of our shares. If either of these
ownership thresholds is exceeded, any such qualified employee pension benefit
trust holding more than 10% in value of our shares will generally be subject to
tax on that portion of our dividend distributions made to it which is equal to
the percentage of our income which would be "unrelated business taxable income"
if we were a qualified trust, rather than a REIT. We will attempt to monitor the
concentration of ownership of such trusts in our shares, and we do not expect
our shares to be deemed to be "predominately held" by qualified employee pension
benefit trusts, as defined in the Internal Revenue Code, to the extent required
to trigger the treatment of our income as unrelated business taxable income.

For social clubs, voluntary employee benefit associations, supplemental
unemployment benefit trusts and qualified group legal services plans exempt from
federal income taxation under Sections 501(c)(7), (c)(9), (c)(17) and (c)(20) of
the Internal Revenue Code, respectively, income from an investment in our shares
will constitute unrelated business taxable income unless the shareholder in
question is able to deduct amounts "set aside" or placed in reserve for certain
purposes so as to offset the unrelated business taxable income generated. Any
such organization which is a prospective shareholder should consult its own tax
advisor concerning these "set aside" and reserve requirements.

Special Tax Considerations for Non-U.S. Shareholders

The rules governing U.S. income taxation of non-resident alien individuals,
foreign corporations, foreign partnerships and foreign trusts and estates
(collectively, "Non-U.S. shareholders") are complex. The following discussion is
intended only as a summary of these rules. Non-U.S. investors should consult
with their own tax advisors to determine the impact of federal, state and local
income tax laws on an investment in our shares, including any reporting
requirements.

Income Effectively Connected With a U.S. Trade or Business

In general, Non-U.S. shareholders will be subject to regular U.S. federal
income taxation with respect to their investment in our shares if the income
derived therefrom is "effectively connected" with the Non-U.S. shareholder's
conduct of a trade or business in the United States. A corporate Non-U.S.
shareholder that receives income that is (or is treated as) effectively
connected with a U.S. trade or business also may be subject to a branch profits
tax under Section 884 of the Internal Revenue Code, which is payable in addition
to the regular U.S. federal corporate income tax.

The following discussion will apply to Non-U.S. shareholders whose income
derived from ownership of our shares is deemed to be not effectively connected
with a U.S. trade or business.

Distributions Not Attributable to Gain From the Sale or Exchange of a
United States Real Property Interest

A distribution to a Non-U.S. shareholder that is not attributable to gain
realized by us from the sale or exchange of a United States real property
interest and that we do not designate as a capital gain distribution will be
treated as an ordinary income distribution to the extent that it is made out of
current or accumulated earnings and profits. Generally, any ordinary income
distribution will be subject to a U.S. federal income tax equal to 30% of the
gross amount of the distribution unless this tax is reduced by the provisions of
an applicable tax treaty. Any such distribution in excess of our earnings and
profits will be treated first as a return of capital that will reduce each Non-
U.S. shareholder's basis in its shares (but not below zero) and then as gain
from the disposition of those shares, the tax treatment of which is described
under the rules discussed below with respect to dispositions of shares.     

115

Distributions Attributable to Gain From the Sale or Exchange of a United
States Real Property Interest

Distributions to a Non-U.S. shareholder that are attributable to gain from
the sale or exchange of a United States real property interest will be taxed to
a Non-U.S. shareholder under Internal Revenue Code provisions enacted by the
Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA").  Under FIRPTA,
such distributions are taxed to a Non-U.S. shareholder as if the distributions
were gains "effectively connected" with a U.S. trade or business.  Accordingly,
a Non-U.S. shareholder will be taxed at the normal capital gain rates applicable
to a U.S. shareholder (subject to any applicable alternative minimum tax and a
special alternative minimum tax in the case of non-resident alien individuals).
Distributions subject to FIRPTA also may be subject to a 30% branch profits tax
when made to a corporate Non-U.S. shareholder that is not entitled to a treaty
exemption.

Withholding Obligations With Respect to Distributions to Non-U.S.
Shareholders

Although tax treaties may reduce our withholding obligations, we generally
will be required to withhold from distributions to Non-U.S. shareholders, and
remit to the Internal Revenue Service:

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

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

In addition, if we designate prior distributions as capital gain distributions,
subsequent distributions, up to the amount of the prior distributions, will be
treated as capital gain distributions for purposes of withholding. A
distribution in excess of our earnings and profits will be subject to 30%
withholding if at the time of the distribution it cannot be determined whether
the distribution will be in an amount in excess of our current or accumulated
earnings and profits. If the amount of tax we withhold with respect to a
distribution to a Non-U.S. shareholder exceeds the shareholder's U.S. tax
liability with respect to that distribution, the Non-U.S. shareholder may file a
claim with the Internal Revenue Service for a refund of the excess.

Sale of Our Shares by a Non-U.S. Shareholder

A sale of our shares by a Non-U.S. shareholder will generally not be
subject to U.S. federal income taxation unless our shares constitute a "United
States real property interest" within the meaning of FIRPTA. Our shares will not
constitute a United States real property interest if we are a "domestically
controlled REIT." A "domestically controlled REIT" is a REIT that at all times
during a specified testing period has less than 50% in value of its shares held
directly or indirectly by Non-U.S. shareholders. We currently anticipate that we
will be a domestically controlled REIT. Therefore, sales of our shares should
not be subject to taxation under FIRPTA. However, we cannot assure you that we
will continue to be a domestically controlled REIT. If we were not a
domestically controlled REIT, whether a Non-U.S. shareholder's sale of our
shares would be subject to tax under FIRPTA as a sale of a United States real
property interest would depend on whether our shares were "regularly traded" on
an established securities market and on the size of the selling shareholder's
interest in us. Our shares currently are not "regularly traded" on an
established securities market.

If the gain on the sale of shares were subject to taxation under FIRPTA, a
Non-U.S. shareholder would be subject to the same treatment as a U.S.
shareholder with respect to the gain, subject to any applicable alternative
minimum tax and a special alternative minimum tax in the case of 
non-resident     

116

alien individuals. In addition, distributions that are treated as gain from the
disposition of shares and are subject to tax under FIRPTA also may be subject to
a 30% branch profits tax when made to a corporate Non-U.S. shareholder that is
not entitled to a treaty exemption. Under FIRPTA, the purchaser of our shares
may be required to withhold 10% of the purchase price and remit this amount to
the Internal Revenue Service.

Even if not subject to FIRPTA, capital gains will be taxable to a Non-U.S.
shareholder if the Non-U.S. shareholder is a non-resident alien individual who
is present in the United States for 183 days or more during the taxable year and
some other conditions apply, in which case the non-resident alien individual
will be subject to a 30% tax on his or her U.S. source capital gains.

Recently promulgated Treasury Regulations may alter the procedures for
claiming the benefits of an income tax treaty. Our Non-U.S. shareholders should
consult their tax advisors concerning the effect, if any, of these Treasury
Regulations on an investment in our shares.

Information Reporting Requirements and Backup Withholding for Non-U.S.
Shareholders

Additional issues may arise for information reporting and backup
withholding for Non-U.S. shareholders. Non-U.S. shareholders should consult
their tax advisors with regard to U.S. information reporting and backup
withholding requirements under the Internal Revenue Code.

Statement of Stock Ownership

We are required to demand annual written statements from the record holders
of designated percentages of our shares disclosing the actual owners of the
shares.  Any record shareholder who, upon our request, does not provide us with
required information concerning actual ownership of the shares is required to
include specified information relating to his shares in his federal income tax
return.  We also must maintain, within the Internal Revenue District in which we
are required to file our federal income tax return, permanent records showing
the information we have received about the actual ownership of shares and a list
of those persons failing or refusing to comply with our demand.

State and Local Taxation

We and any operating subsidiaries of ours may be subject to state and local
tax in states and localities in which we or they do business or own property.
The tax treatment of the Wells REIT, our operating partnership, our operating
subsidiaries and the holders of our shares in local jurisdictions may differ
from the federal income tax treatment described above.

Tax Aspects of the Operating Partnership

The following discussion summarizes certain federal income tax
considerations applicable to our investment in Wells OP, our operating
partnership.  The discussion does not cover state or local tax laws or any
federal tax laws other than income tax laws.     

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Classification as a Partnership

We will be entitled to include in our income a distributive share of Wells
OP's income and to deduct our distributive share of Wells OP's losses only if
Wells OP is classified for federal income tax purposes as a partnership, rather
than as an association taxable as a corporation.  Under applicable Treasury
Regulations (the "Check-the-Box-Regulations"), an unincorporated entity with at
least two members may elect to be classified either as an association taxable as
a corporation or as a partnership.  If such an entity fails to make an election,
it generally will be treated as a partnership for federal income tax purposes.
Wells OP intends to be classified as a partnership for federal income tax
purposes and will not elect to be treated as an association taxable as a
corporation under the Check-the-Box-Regulations.

Even though Wells OP will elect to be treated as a partnership for federal
income tax purposes, it may be taxed as a corporation if it is deemed to be a
"publicly traded partnership."  A publicly traded partnership is a partnership
whose interests are traded on an established securities market or are readily
tradable on a secondary market (or the substantial equivalent thereof);
provided, that even if the foregoing requirements are met, a publicly traded
partnership will not be treated as a corporation for federal income tax purposes
if at least 90% of such partnership's gross income for a taxable year consists
of "qualifying income" under Section 7704(d) of the Internal Revenue Code.
Qualifying income generally includes any income that is qualifying income for
purposes of the 95% gross income test applicable to REITs (90% Passive-Type
Income Exception).  (See "Requirements for Qualification as a REIT --
Operational Requirements -- Gross Income Tests").

Under applicable Treasury Regulations (PTP Regulations), limited safe
harbors from the definition  of a publicly traded partnership are provided.
Pursuant to one of those safe harbors (Private Placement Exclusion), interests
in a partnership will not be treated as readily tradable on a secondary market
or the substantial equivalent thereof if (i) all interests in the partnership
were issued in a transaction (or transactions) that was not required to be
registered under the Securities Act of 1933, as amended, and (ii) the
partnership does not have more than 100 partners at any time during the
partnership's taxable year.  In determining the number of partners in a
partnership, a person owning an interest in a flow-through entity (i.e., a
---    
partnership, grantor trust, or S corporation) that owns an interest in the
partnership is treated as a partner in such partnership only if (a)
substantially all of the value of the owner's interest in the flow-through is
attributable to the flow-through entity's interest (direct or indirect) in the
partnership and (b) a principal purpose of the use of the flow-through entity is
to permit the partnership to satisfy the 100 partner limitation.  Wells OP
qualifies for the Private Placement Exclusion.  Even if Wells OP is considered a
publicly traded partnership under the PTP Regulations because it is deemed to
have more than 100 partners, however, Wells OP should not be treated as a
corporation because it should be eligible for the 90% Passive-Type Income
Exception described above.

We have not requested, and do not intend to request, a ruling from the
Internal Revenue Service that Wells OP will be classified as a partnership for
federal income tax purposes.  Holland & Knight LLP is of the opinion, however,
that based on certain factual assumptions and representations, Wells OP will
more likely than not be treated for federal income tax purposes as a partnership
and not as an association taxable as a corporation, or as a publicly traded
partnership.  Unlike a tax ruling, however, an opinion of counsel is not binding
upon the Internal Revenue Service, and no assurance can be given that the
Internal Revenue Service will not challenge the status of Wells OP as a
partnership for federal income tax purposes.  If such challenge were sustained
by a court, Wells OP would be treated as a corporation for federal income tax
purposes, as described below.  In addition, the opinion of Holland & Knight LLP
is based on existing law, which is to a great extent the result of
administrative and judicial interpretation.  No assurance can be given that
administrative or judicial changes would not modify the conclusions expressed in
the opinion.     

118

If for any reason Wells OP were taxable as a corporation, rather than a
partnership, for federal income tax purposes, we would not be able to qualify as
a REIT.  (See "Federal Income Tax Considerations -- Requirements for
Qualification as a REIT -- Operational Requirements - Gross Income Tests" and
"Requirements for Qualification as a REIT -- Operational Requirements - Asset
Tests.")  In addition, any change in Wells OP's status for tax purposes might be
treated as a taxable event, in which case we might incur a tax liability without
any related cash distribution.  (See "Federal Income Tax Considerations --
Requirements for Qualification as a REIT -- Operational Requirements- Annual
Distribution Requirement.")  Further, items of income and deduction of Wells OP
would not pass through to its partners, and its partners would be treated as
shareholders for tax purposes.  Consequently, Wells OP would be required to pay
income tax at corporate tax rates on its net income, and distributions to its
partners would constitute dividends that would not be deductible in computing
Wells OP's taxable income.

Income Taxation of the Operating Partnership and its Partners

Partners, Not a Partnership, Subject to Tax.  A partnership is not a
taxable entity for federal income tax purposes.  As a partner in Wells OP, we
will be required to take into account our allocable share of Wells OP's income,
gains, losses, deductions, and credits for any taxable year of Wells OP ending
within or with our taxable year, without regard to whether we have received or
will receive any distribution from Wells OP.

Partnership Allocations.  Although a partnership agreement generally
determines the allocation of income and losses among partners, such allocations
will be disregarded for tax purposes under Section 704(b) of the Internal
Revenue Code if they do not comply with the provisions of Section 704(b) of the
Internal Revenue Code and the Treasury Regulations promulgated thereunder.  If
an allocation is not recognized for federal income tax purposes, the item
subject to the allocation will be reallocated in accordance with the partner's
interests in the partnership, which will be determined by taking into account
all of the facts and circumstances relating to the economic arrangement of the
partners with respect to such item.  Wells OP's allocations of taxable income
and loss are intended to comply with the requirements of Section 704(b) of the
Internal Revenue Code and the Treasury Regulations promulgated thereunder.

Tax Allocations With Respect to Contributed Properties.  Pursuant to
Section 704(c) of the Internal Revenue Code, income, gain, loss, and deduction
attributable to appreciated or depreciated property that is contributed to a
partnership in exchange for an interest in the partnership must be allocated for
federal income tax purposes in a manner such that the contributor is charged
with, or benefits from, the unrealized gain or unrealized loss associated with
the property at the time of the contribution.  The amount of such unrealized
gain or unrealized loss is generally equal to the difference between the fair
market value of the contributed property at the time of contribution and the
adjusted tax basis of such property at the time of contribution.  Under
applicable Treasury Regulations, partnerships are required to use a "reasonable
method" for allocating items subject to Section 704(c) of the Internal Revenue
Code and several reasonable allocation methods are described therein.

Under the partnership agreement for Wells OP, depreciation or amortization
deductions of Wells OP generally will be allocated among the partners in
accordance with their respective interests in Wells OP, except to the extent
that Wells OP is required under Section 704(c) to use a method for allocating
depreciation deductions attributable to its properties that results in us
receiving a disproportionately large share of such deductions.  It is possible
that we may (1) be allocated lower amounts of depreciation deductions for tax
purposes with respect to contributed properties than would be allocated to us if
each such property were to have a tax basis equal to its fair market value at
the time of contribution, and (2) be allocated taxable gain in the event of a
sale of such contributed properties in excess of the economic profit      

119

allocated to us as a result of such sale. These allocations may cause us to
recognize taxable income in excess of cash proceeds received by us, which might
adversely affect our ability to comply with the REIT distribution requirements,
although we do not anticipate that this event will occur. The foregoing
principles also will affect the calculation of our earnings and profits for
purposes of determining which portion of our distributions is taxable as a
dividend. The allocations described in this paragraph may result in a higher
portion of our distributions being taxed as a dividend than would have occurred
had we purchased such properties for cash.

Basis in Operating Partnership Interest.  The adjusted tax basis of our
partnership interest in Wells OP generally is equal to (1) the amount of cash
and the basis of any other property contributed to Wells OP by us, (2) increased
by (A) our allocable share of Wells OP's income and (B) our allocable share of
indebtedness of Wells OP, and (3) reduced, but not below zero, by (A) our
allocable share of Wells OP's loss and (B) the amount of cash distributed to us,
including constructive cash distributions resulting from a reduction in our
share of indebtedness of Wells OP.

If the allocation of our distributive share of Wells OP's loss would reduce
the adjusted tax basis of our partnership interest in Wells OP below zero, the
recognition of such loss will be deferred until such time as the recognition of
such loss would not reduce our adjusted tax basis below zero.  If a distribution
from Wells OP or a reduction in our share of Wells OP's liabilities (which is
treated as a constructive distribution for tax purposes) would reduce our
adjusted tax basis below zero, any such distribution, including a constructive
distribution, would constitute taxable income to us.  The gain realized by us
upon the receipt of any such distribution or constructive distribution would
normally be characterized as capital gain, and if our partnership interest in
Wells OP has been held for longer than the long-term capital gain holding period
(currently one year), the distribution would constitute long-term capital gain.

Depreciation Deductions Available to the Operating Partnership.  Wells OP
will use a portion of contributions made by the Wells REIT from offering
proceeds to acquire interests in properties.  To the extent that Wells OP
acquires properties for cash, Wells OP's initial basis in such properties for
federal income tax purposes generally will be equal to the purchase price paid
by Wells OP.  Wells OP plans to depreciate each such depreciable property for
federal income tax purposes under the alternative depreciation system of
depreciation ("ADS").  Under ADS, Wells OP generally will depreciate such
buildings and improvements over a 40 year recovery period using a straight-line
method and a mid-month convention and will depreciate furnishings and equipment
over a 12 year recovery period.  To the extent that Wells OP acquires properties
in exchange for units of Wells OP, Wells OP's initial basis in each such
property for federal income tax purposes should be the same as the transferor's
basis in that property on the date of acquisition by Wells OP.  Although the law
is not entirely clear, Wells OP generally intends to depreciate such depreciable
property for federal income tax purposes over the same remaining useful lives
and under the same methods used by the transferors.

Sale of the Operating Partnership's Property

Generally, any gain realized by Wells OP on the sale of property held for
more than one year will be long-term capital gain, except for any portion of
such gain that is treated as depreciation or cost recovery recapture.  Any gain
recognized by Wells OP upon the disposition of a property acquired by Wells OP
for cash will be allocated among the partners in accordance with their
respective percentage interests in Wells OP.

Our share of any gain realized by Wells OP on the sale of any property held
by Wells OP as inventory or other property held primarily for sale to customers
in the ordinary course of Wells OP's trade or business will be treated as income
from a prohibited transaction that is subject to a 100% penalty tax.  Such
prohibited transaction income also may have an adverse effect upon our ability
to satisfy the income      

120

tests for maintaining our REIT status. (See "Federal Income Tax Considerations--
Requirements for Qualification as a REIT -- Gross Income Tests" above.) We,
however, do not presently intend to acquire or hold or allow Wells OP to acquire
or hold any property that represents inventory or other property held primarily
for sale to customers in the ordinary course of our or Wells OP's trade or
business.

ERISA Considerations

The following is a summary of some non-tax considerations associated with
an investment in our shares by a qualified employee pension benefit plan or an
IRA.  This summary is based on provisions of ERISA and the Internal Revenue
Code, as amended through the date of this prospectus, and relevant regulations
and opinions issued by the Department of Labor and the Internal Revenue Service.
We cannot assure you that legislative, regulatory or administrative changes or
court decisions may not be forthcoming which would significantly modify the
statements expressed herein. Any changes may or may not apply to transactions
entered into prior to the date of their enactment.

Each fiduciary of an employee pension benefit plan subject to ERISA, such
as a profit sharing, section 401(k) or pension plan, or of any other retirement
plan or account subject to Section 4975 of the Internal Revenue Code, such as an
IRA (Benefit Plans), seeking to invest plan assets in our shares must, taking
into account the facts and circumstances of such Benefit Plan, consider, among
other matters:

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

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

.    whether the investment will produce unrelated business taxable income
to the Benefit Plan (see "Federal Income Tax Considerations --
Treatment of Tax-Exempt Shareholders"); and

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

Under ERISA, a plan fiduciary's responsibilities include the following
duties:

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

.    to invest plan assets prudently;

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

.    to ensure sufficient liquidity for the plan; and

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

ERISA also requires that the assets of an employee benefit plan be held in trust
and that the trustee, or a duly authorized named fiduciary or investment
manager, have exclusive authority and discretion to manage and control the
assets of the plan.     

121

Section 406 of ERISA and Section 4975 of the Internal Revenue Code prohibit
specified transactions involving the assets of a Benefit Plan which are between
the plan and any "party in interest" or "disqualified person" with respect to
that Benefit Plan.  These transactions are prohibited regardless of how
beneficial they may be for the Benefit Plan.  Prohibited transactions include
the sale, exchange or leasing of property, the lending of money or the extension
of credit between a Benefit Plan and a party in interest or disqualified person,
and the transfer to, or use by, or for the benefit of, a party in interest, or
disqualified person, of any assets of a Benefit Plan.  A fiduciary of a Benefit
Plan also is prohibited from engaging in self-dealing, acting for a person who
has an interest adverse to the plan or receiving any consideration for its own
account from a party dealing with the plan in a transaction involving plan
assets.  Furthermore, Section 408 of the Internal Revenue Code states that
assets of an IRA trust may not be commingled with other property except in a
common trust fund or common investment fund.

Plan Asset Considerations

In order to determine whether an investment in our shares by Benefit Plans
creates or gives rise to the potential for either prohibited transactions or the
commingling of assets referred to above, a fiduciary must consider whether an
investment in our shares will cause our assets to be treated as assets of the
investing Benefit Plans.  Neither ERISA nor the Internal Revenue Code define the
term "plan assets," however, U.S. Department of Labor Regulations provide
guidelines as to whether, and under what circumstances, the underlying assets of
an entity will be deemed to constitute assets of a Benefit Plan when the plan
invests in that entity (29 C.F.R. Section 2510.3-101, the Regulation).  Under
the Regulation, the assets of corporations, partnerships or other entities in
which a Benefit Plan makes an equity investment will generally be deemed to be
assets of the Benefit Plan unless the entity satisfies one of the exceptions to
this general rule.  As discussed below, we have received an opinion of counsel
that, based on the Regulation, our underlying assets should not be deemed to be
"plan assets" of Benefit Plans investing in shares, assuming the conditions set
forth in the opinion are satisfied, based upon the fact that at least one of the
specific exemptions set forth in the Regulation is satisfied, as determined
below.

Specifically, the Regulation provides that the underlying assets of REITs
will not be treated as assets of a Benefit Plan investing therein if the
interest the Benefit Plan acquires is a "publicly-offered security." A publicly-
offered security must be:

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

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

.    "freely transferable."

Our shares are being sold as part of an offering of securities to the
public pursuant to an effective registration statement under the Securities Act,
and are part of a class registered under the Securities Exchange Act.  Any
shares purchased, therefore, should satisfy the first criterion of the publicly-
offered security exemption.

We have over 100 independent shareholders.  Thus, the second criterion of
the publicly-offered security exception will be satisfied.

Whether a security is "freely transferable" depends upon the particular
facts and circumstances. Our shares are subject to certain restrictions on
transferability intended to ensure that we continue to      

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qualify for federal income tax treatment as a REIT. The Regulation provides,
however, that where the minimum investment in a public offering of securities is
$10,000 or less, the presence of a restriction on transferability intended to
prohibit transfers which would result in a termination or reclassification of
the entity for state or federal tax purposes will not ordinarily affect a
determination that such securities are freely transferable. The minimum
investment in our shares is less than $10,000; thus, the restrictions imposed in
order to maintain our status as a REIT should not cause the shares to be deemed
to be not freely transferable.

In the event that our underlying assets were treated by the Department of
Labor as the assets of investing Benefit Plans, our management would be treated
as fiduciaries with respect to each Benefit Plan shareholder, and an investment
in our shares might constitute an ineffective delegation of fiduciary
responsibility to Wells Capital and expose the fiduciary of the Benefit Plan to
co-fiduciary liability under ERISA for any breach by Wells Capital of the
fiduciary duties mandated under ERISA.  Further, if our assets are deemed to be
"plan assets," an investment by an IRA in our shares might be deemed to result
in an impermissible commingling of IRA assets with other property.

If our management were treated as fiduciaries with respect to Benefit Plan
shareholders, the prohibited transaction restrictions of ERISA and the Internal
Revenue Code would apply to any transaction involving our assets.  These
restrictions could, for example, require that we avoid transactions with
entities that are affiliated with us or our affiliates or restructure our
activities in order to obtain an administrative exemption from the prohibited
transaction restrictions.  Alternatively, we might have to provide Benefit Plan
shareholders with the opportunity to sell their shares to us or we might
dissolve or terminate.

If a prohibited transaction were to occur, the Internal Revenue Code
imposes an excise tax equal to 15 percent of the amount involved and authorizes
the IRS to impose an additional 100% excise tax if the prohibited transaction is
not "corrected."  These taxes would be imposed on any disqualified person who
participates in the prohibited transaction.  In addition, Wells Capital and
possibly other fiduciaries of Benefit Plan shareholders subject to ERISA who
permitted the prohibited transaction to occur or who otherwise breached their
fiduciary responsibilities, or a non-fiduciary participating in a prohibited
transaction, could be required to restore to the Benefit Plan any profits they
realized as a result of the transaction or breach, and make good to the Benefit
Plan any losses incurred by the Benefit Plan as a result of the transaction or
breach. With respect to an IRA that invests in our shares, the occurrence of a
prohibited transaction involving the individual who established the IRA, or his
or her beneficiary, would cause the IRA to lose its tax-exempt status under
Section 408(e)(2) of the Internal Revenue Code.

We have obtained an opinion from Holland & Knight LLP that our shares more
likely than not constitute "publicly-offered securities" and, accordingly, it is
more likely than not that our underlying assets should not be considered plan
assets under the Regulation, assuming the offering takes place as described in
this prospectus.  If our underlying assets are not deemed to be "plan assets,"
the problems discussed in the immediately preceding three paragraphs are not
expected to arise.

Other Prohibited Transactions

Regardless of whether the shares qualify for the "publicly-offered
security" exception of the Regulation, a prohibited transaction could occur if
the Wells REIT, the advisor, any selected dealer, the escrow agent or any of
their affiliates is a fiduciary (within the meaning of Section 3(21) of ERISA)
with respect to any Benefit Plan purchasing the shares. Accordingly, unless an
administrative or statutory exemption applies, shares should not be purchased by
a Benefit Plan with respect to which any of the above persons is a fiduciary.  A
person is a fiduciary with respect to a Benefit Plan under Section 3(21) of
ERISA if, among other things, the person has discretionary authority or control
with respect to plan assets      

123

or provides investment advice for a fee with respect to plan assets. Under a
regulation issued by the Department of Labor, a person shall be deemed to be
providing investment advice if that person renders advice as to the advisability
of investing in our shares and that person regularly provides investment advice
to the Benefit Plan pursuant to a mutual agreement or understanding (written or
otherwise) (1) that the advice will serve as the primary basis for investment
decisions, and (2) that the advice will be individualized for the Benefit Plan
based on its particular needs.

Annual Valuation

A fiduciary of an employee benefit plan subject to ERISA is required to
determine annually the fair market value of each asset of the plan as of the end
of the plan's fiscal year and to file a report reflecting that value with the
Department of Labor.  When the fair market value of any particular asset is not
available, the fiduciary is required to make a good faith determination of that
asset's "fair market value" assuming an orderly liquidation at the time the
determination is made.  In addition, a trustee or custodian of an IRA must
provide an IRA participant with a statement of the value of the IRA each year.
In discharging its obligation to value assets of a plan, a fiduciary subject to
ERISA must act consistently with the relevant provisions of the plan and the
general fiduciary standards of ERISA.

Unless and until our shares are listed on a national securities exchange or
are included for quotation on Nasdaq, it is not expected that a public market
for the shares will develop.  To date, neither the Internal Revenue Service nor
the Department of Labor has promulgated regulations specifying how a plan
fiduciary should determine the "fair market value" of the shares, namely when
the fair market value of the shares is not determined in the marketplace.
Therefore, to assist fiduciaries in fulfilling their valuation and annual
reporting responsibilities with respect to ownership of shares, we intend to
provide reports of our annual determinations of the current value of our net
assets per outstanding share to those fiduciaries (including IRA trustees and
custodians) who identify themselves to us and request the reports. Until
December 31, 2002, we intend to use the offering price of shares as the per
share net asset value. Beginning with the year 2003, the value of the properties
and our other assets will be based on a valuation. Such valuation will be
performed by a person independent of us and of Wells Capital.

We anticipate that we will provide annual reports of our determination of
value (1) to IRA trustees and custodians not later than January 15 of each year,
and (2) to other Benefit Plan fiduciaries within 75 days after the end of each
calendar year. Each determination may be based upon valuation information
available as of October 31 of the preceding year, up-dated, however, for any
material changes occurring between October 31 and December 31.

We intend to revise these valuation procedures to conform with any relevant
guidelines that the Internal Revenue Service or the Department of Labor may
hereafter issue.  Meanwhile, we cannot assure you:

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

.    that shareholders could realize this value if they were to attempt to
sell their shares; or

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

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Description of Shares

The following description of the shares is not complete but is a summary of
portions of our articles of incorporation and is qualified in its entirety by
reference to the articles of incorporation.

Under our articles of incorporation, we have authority to issue a total of
90,000,000 shares of capital stock.  Of the total shares authorized, 40,000,000
shares are designated as common stock with a par value of $.01 per share,
5,000,000 shares are designated as preferred stock with a par value of $.01 per
share and 45,000,000 shares are designated as shares-in-trust, which would be
issued only in the event we have purchases in excess of the ownership limits
described below.

As of December 15, 1999, approximately 13,150,000 shares of our common
stock were issued and outstanding.

Common Stock

The holders of common stock are entitled to one vote per share on all
matters voted on by shareholders, including election of our directors.  Our
articles of incorporation do not provide for cumulative voting in the election
of directors.  Therefore, the holders of a majority of the outstanding common
shares can elect our entire board of directors.  Subject to any preferential
rights of any outstanding series of preferred stock, the holders of common stock
are entitled to such dividends as may be declared from time to time by our board
of directors out of legally available funds and, upon liquidation, are entitled
to receive all assets available for distribution to shareholders.  All shares
issued in the offering will be fully paid and non-assessable shares of common
stock.  Holders of shares of common stock will not have preemptive rights, which
means that you will not have an automatic option to purchase any new shares that
we issue.

We will not issue certificates for our shares.  Shares will be held in
"uncertificated" form which will eliminate the physical handling and safekeeping
responsibilities inherent in owning transferable stock certificates and
eliminate the need to return a duly executed stock certificate to effect a
transfer.  Wells Capital, our advisor, acts as our registrar and as the transfer
agent for our shares.  Transfers can be effected simply by mailing to Wells
Capital a transfer and assignment form, which we will provide to you at no
charge.

Preferred Stock

Our articles of incorporation authorize our board of directors to designate
and issue one or more classes or series of preferred stock without stockholder
approval.  The board of directors may determine the relative rights, preferences
and privileges of each class or series of preferred stock so issued, which may
be more beneficial than the rights, preferences and privileges attributable to
the common stock.  The issuance of preferred stock could have the effect of
delaying or preventing a change in control of the Wells REIT.  Our board of
directors has no present plans to issue preferred stock, but may do so at any
time in the future without shareholder approval.     

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Soliciting Dealer Warrants

We have agreed to issue and sell to the Dealer Manager warrants to purchase
up to 800,000 shares of our common stock at a price of $0.0008 per warrant.  The
Dealer Manager may retain or reallow these warrants to broker-dealers
participating in the offering, unless such issuance of soliciting dealer
warrants is prohibited by either federal or state securities laws.  The shares
to be issued upon exercise of these warrants are being registered as part of
this offering.

Each participating broker-dealer will receive from the Dealer Manager one
soliciting dealer warrant for every 25 shares sold by such participating broker-
dealer during this offering.  All shares sold by the Wells REIT other than
through the dividend reinvestment plan will be included in the computation of
the number of shares sold to determine the number of soliciting dealer warrants
to be issued.

The holder of a soliciting dealer warrant will be entitled to purchase one
share of our common stock at a price of $12 per share (120% of the offering
price) during the time period beginning one year from the effective date of this
offering and ending five years after the effective date of this offering.

A soliciting dealer warrant may not be exercised unless the shares to be
issued upon exercise have been registered or are exempt from registration in the
state of residence of the holder of the warrant and any prospectus required
under the laws of such state has been delivered to the buyer on behalf of the
Wells REIT.  In addition, holders of soliciting dealer warrants may not exercise
them to the extent such exercise would jeopardize our status as a REIT under the
Internal Revenue Code.

The terms of the soliciting dealer warrants, including exercise price and
the number and type of securities issuable upon exercise of these warrants, may
be adjusted in the event of stock dividends, stock splits or a merger,
consolidation, reclassification, reorganization, recapitalization or sale of our
assets.  Soliciting dealer warrants are not transferable or assignable except by
the Dealer Manager, the participating broker-dealers, or their successors in
interest, or to individuals who are officers of such participating broker-
dealers.  Exercise of the soliciting dealer warrants is governed by the terms
and conditions detailed in this prospectus and in the Warrant Purchase
Agreement, which is an exhibit to the registration statement.

Holders of soliciting dealer warrants do not have the rights of
stockholders and, therefore, may not vote on matters and are not entitled to
receive dividends until such time as the warrants are exercised.

Meetings and Special Voting Requirements

An annual meeting of the shareholders will be held each year, at least 30
days after delivery of our annual report.  Special meetings of shareholders may
be called only upon the request of a majority of the directors, a majority of
the independent directors, the chairman, the president or upon the written
request of 10% of the shareholders.  The presence of a majority of the
outstanding shares either in person or by proxy shall constitute a quorum.
Generally, the affirmative vote of a majority of all votes entitled to be voted
is necessary to take shareholder action authorized by our articles of
incorporation, except that a majority of the votes represented in person or by
proxy at a meeting at which a quorum is present is sufficient to elect a
director.

Under Maryland Corporation Law and our articles of incorporation,
shareholders are entitled to vote at a duly held meeting at which a quorum is
present on (1) amendment of our articles of incorporation, (2) liquidation or
dissolution of the Wells REIT, (3) reorganization of the Wells REIT, (4) merger,
consolidation or sale or other disposition of substantially all of our assets,
and (5) termination of our status as a REIT.  Shareholders voting against any
merger or sale of assets are permitted under      

126

Maryland Corporation Law to petition a court for the appraisal and payment of
the fair value of their shares. In an appraisal proceeding, the court appoints
appraisers who attempt to determine the fair value of the stock as of the date
of the shareholder vote on the merger or sale of assets. After considering the
appraisers' report, the court makes the final determination of the fair value to
be paid to the dissenting shareholder and decides whether to award interest from
the date of the merger or sale of assets and costs of the proceeding to the
dissenting shareholders.

Our advisor is selected and approved annually by our directors.  While the
shareholders do not have the ability to vote to replace Wells Capital or to
select a new advisor, shareholders do have the ability, by the affirmative vote
of a majority of the shareholders entitled to vote on such matter, to elect to
remove a director from our board.

Shareholders are entitled to receive a copy of our shareholder list upon
request.  The list provided by us will include each shareholder's name, address
and telephone number, if available, and number of shares owned by each
shareholder and will be sent within ten days of the receipt by us of the
request.  A shareholder requesting a list will be required to pay reasonable
costs of postage and duplication.  We have the right to request that a
requesting shareholder represent to us that the list will not be used to pursue
commercial interests.

In addition to the foregoing, shareholders have rights under Rule 14a-7
under the Securities Exchange Act, which provides that, upon the request of
investors and the payment of the expenses of the distribution, we are required
to distribute specific materials to shareholders in the context of the
solicitation of proxies for voting on matters presented to shareholders or, at
our option, provide requesting shareholders with a copy of the list of
shareholders so that the requesting shareholders may make the distribution of
proxies themselves.

Restriction on Ownership of Shares

In order for us to qualify as a REIT, not more than 50% of our outstanding
shares may be owned by any five or fewer individuals, including some tax-exempt
entities.  In addition, the outstanding shares must be owned by 100 or more
persons independent of us and each other during at least 335 days of a 12-month
taxable year or during a proportionate part of a shorter taxable year.  We may
prohibit certain acquisitions and transfers of shares so as to ensure our
continued qualification as a REIT under the Internal Revenue Code.  However, we
cannot assure you that this prohibition will be effective.

In order to assist us in preserving our status as a REIT, our articles of
incorporation contain a limitation on ownership which prohibits any person or
group of persons from acquiring, directly or indirectly, beneficial ownership of
more than 9.8% of our outstanding shares.  Our Articles of Incorporation provide
that a transfer of shares that would violate our share ownership limitations is
null and void and the intended transferee will acquire no rights in such shares,
unless such transfer is approved by the board of directors based upon
information that such transfer would not violate the provisions of the Internal
Revenue Code thereby adversely affecting our status as a REIT.

The shares in excess of the ownership limit which are attempted to be
transferred will be designated as "shares-in-trust" and will be transferred
automatically to a trust effective on the day before the reported transfer of
such shares.  The record holder of the shares that are designated as shares-in-
trust will be required to submit such number of shares to the Wells REIT in the
name of the trustee of the trust.  We will designate a trustee of the share
trust that will not be affiliated with us.  We will also name one or more
charitable organizations as a beneficiary of the share trust.  Shares-in-trust
will remain issued and outstanding shares and will be entitled to the same
rights and privileges as all other shares of the same class or series.  The
trustee will receive all dividends and distributions on the shares-in-trust and
will hold      

127

such dividends or distributions in trust for the benefit of the
beneficiary.  The trustee will vote all shares-in-trust during the period they
are held in trust.

At our direction, the trustee will transfer the shares-in-trust to a person
whose ownership will not violate the ownership limits.  The transfer shall be
made within 20 days of our receipt of notice that shares have been transferred
to the trust.  During this 20 day period, we will have the option of redeeming
such shares.  Upon any such transfer or redemption, the purported transferee or
holder shall receive a per share price equal to the lesser of (a) the price per
share in the transaction that created such shares-in-trust, or (b) the market
price per share on the date of the transfer or redemption.

Any person who (1) acquires shares in violation of the foregoing
restriction or who owns shares that were transferred to any such trust is
required to give immediate written notice to the Wells REIT of such event or (2)
transfers or receives shares subject to such limitations is required to give the
Wells REIT 15 days written notice prior to such transaction.  In both cases,
such persons shall provide to the Wells REIT such other information as we may
request in order to determine the effect, if any, of such transfer on our status
as a REIT.

The foregoing restrictions will continue to apply until (1) the board of
directors determines it is no longer in the best interest of the Wells REIT to
continue to qualify as a REIT and (2) there is an affirmative vote of the
majority of shares entitled to vote on such matter at a regular or special
meeting of the shareholders of the Wells REIT.

The ownership limit does not apply to an offeror which, in accordance with
applicable federal and state securities laws, makes a cash tender offer, where
at least 85% of the outstanding shares are duly tendered and accepted pursuant
to the cash tender offer.  The ownership limit also does not apply to the
underwriter in a public offering of shares.  In addition, the ownership limit
does not apply to a person or persons which the directors so exempt from the
ownership limit upon appropriate assurances that our qualification as a REIT is
not jeopardized.

Any person who owns 5% or more of the outstanding shares during any taxable
year will be asked to deliver a statement or affidavit setting forth the number
of shares beneficially owned, directly or indirectly.

Dividends

Dividends will be paid on a quarterly basis regardless of the frequency
with which such distributions are declared.  Dividends will be paid to investors
who are shareholders as of the record dates selected by the directors.  We
calculate our quarterly dividends based upon daily record and dividend
declaration dates so our investors will be entitled to be paid dividends
immediately upon  their purchase of shares.

We are required to make distributions sufficient to satisfy the
requirements for qualification as a REIT for tax purposes.  Generally, income
distributed as dividends will not be taxable to us under the Internal Revenue
Code if we distribute at least 95% of our taxable income.  (See "Federal Income
Tax Considerations--Requirements for Qualification as a REIT.")

Dividends will be declared at the discretion of the board of directors, in
accordance with our earnings, cash flow and general financial condition.  The
board's discretion will be directed, in substantial part, by its obligation to
cause us to comply with the REIT requirements.  Because we may receive income
from interest or rents at various times during our fiscal year, dividends may
not reflect our income earned in that particular distribution period but may be
made in anticipation of cash flow which we expect      

128

to receive during a later quarter and may be made in advance of actual receipt
of funds in an attempt to make dividends relatively uniform. We may borrow
money, issue new securities or sell assets in order to make dividend
distributions.

We are not prohibited from distributing our own securities in lieu of
making cash dividends to shareholders, provided that the securities distributed
to shareholders are readily marketable. Shareholders who receive marketable
securities in lieu of cash dividends may incur transaction expenses in
liquidating the securities.

Dividend Reinvestment Plan

We currently have a dividend reinvestment plan available that allows you to
have your dividends otherwise distributable to you invested in additional shares
of the Wells REIT.

You may purchase shares under the dividend reinvestment plan for $10 per
share until all of the 2,200,000 shares registered as part of this offering have
been sold.  After this time, we may purchase shares either through purchases on
the open market, if a market then exists, or through an additional issuance of
shares.  In any case, the price per share will be equal to the then-prevailing
market price, which shall equal the price on the securities exchange or over-
the-counter market on which such shares are listed at the date of purchase if
such shares are then listed.

You may elect to participate in the dividend reinvestment plan by
completing the Subscription Agreement, the enrollment form or by other written
notice to the plan administrator.  Participation in the plan will begin with the
next distribution made after receipt of your written notice.  We may terminate
the dividend reinvestment plan for any reason at any time upon 10 days' prior
written notice to participants.  Your participation in the plan will also be
terminated to the extent that a reinvestment of your distributions in our shares
would cause the percentage ownership limitation contained in our articles of
incorporation to be exceeded.

If you elect to participate in the dividend reinvestment plan and are
subject to federal income taxation, you will incur a tax liability for dividends
allocated to you even though you have elected not to receive the dividends in
cash but rather to have the dividends held pursuant to the dividend reinvestment
plan.  Specifically, you will be treated as if you have received the dividend
from us in cash and then applied such dividend to the purchase of additional
shares.  You will be taxed on the amount of such dividend as ordinary income to
the extent such dividend is from current or accumulated earnings and profits,
unless we have designated all or a portion of the dividend as a capital gain
dividend.

Share Redemption Program

Prior to the time that our shares are listed on a national securities
exchange, shareholders of the Wells REIT who have held their shares for at least
one year may receive the benefit of limited interim liquidity by presenting for
redemption all or any portion of their shares to us at any time in accordance
with the procedures outlined herein.  At that time, we may, subject to the
conditions and limitations described below, redeem the shares presented for
redemption for cash to the extent that we have sufficient funds available to us
to fund such redemption.

If you have held your shares for the required one-year period, you may
redeem your shares for a purchase price to the Wells REIT of $10 per share.  The
board of directors reserves the right to reject any request for redemption and
to amend or change the purchase price in its sole discretion at any time and
from time to time as it deems appropriate.     

129

Redemption of shares, when requested, will be made quarterly on a first-
come, first-served basis.  Subject to funds being available, we will limit the
number of shares redeemed pursuant to our share redemption program as follows:
(1) during any calendar year, we will not redeem in excess of one-half of one
percent (0.5%) of the weighted average number of shares outstanding during the
prior calendar year; and (2) funding for the redemption of shares will come
exclusively from the proceeds we receive from the sale of shares under our
dividend reinvestment plan such that in no event shall the aggregate amount of
redemptions under our share redemption program exceed aggregate proceeds
received from the sale of shares pursuant to our dividend reinvestment plan.
The board of directors, at its sole discretion, may choose to terminate the
share redemption program or reduce the number of shares purchased under the
share redemption program if it determines the funds otherwise available to fund
our share redemption program are needed for other purposes. (See "Risk Factors--
General Investment Risks.")

We cannot guarantee that the funds set aside for the share redemption
program will be sufficient to accommodate all requests made in any year.  If we
do not have such funds available, at the time when redemption is requested, you
can (1) withdraw your request for redemption, or (2) ask that we honor your
request at such time, if any, when sufficient funds become available.  Such
pending requests will be honored on a first-come, first-served basis.

The share redemption program is only intended to provide interim liquidity
for shareholders until a secondary market develops for the shares.  No such
market presently exists, and we cannot assure you that any market for your
shares will ever develop.

The shares we purchase under the share redemption program will be
cancelled, and will have the status of authorized, but unissued shares.  We will
not reissue such shares unless they are first registered with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933 and
under appropriate state securities laws or otherwise issued in compliance with
such laws.

If we terminate, reduce the scope of or otherwise change the share
redemption program, we will send a letter to you informing you of the changes
and disclose the changes in reports filed with the Commission.

Restrictions on Roll-Up Transactions

In connection with any proposed transaction considered a "Roll-up
Transaction" involving the Wells REIT and the issuance of securities of an
entity (a Roll-up Entity) that would be created or would survive after the
successful completion of the Roll-up Transaction, an appraisal of all properties
shall be obtained from a competent independent appraiser.  The properties shall
be appraised on a consistent basis, and the appraisal shall be based on the
evaluation of all relevant information and shall indicate the value of the
properties as of a date immediately prior to the announcement of the proposed
Roll-up Transaction.  The appraisal shall assume an orderly liquidation of
properties over a 12-month period.  The terms of the engagement of the
independent appraiser shall clearly state that the engagement is for our benefit
and the shareholders.  A summary of the appraisal, indicating all material
assumptions underlying the appraisal, shall be included in a report to
shareholders in connection with any proposed Roll-up Transaction.

A "Roll-up Transaction" is a transaction involving the acquisition, merger,
conversion or consolidation, directly or indirectly, of the Wells REIT and the
issuance of securities of a Roll-up Entity.  This term does not include:

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

130

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

In connection with a proposed Roll-up Transaction, the person sponsoring
the Roll-up Transaction must offer to shareholders who vote "no" on the proposal
the choice of:

(1)  accepting the securities of a Roll-up Entity offered in the proposed
Roll-up Transaction; or

(2)  one of the following:

(A)  remaining as shareholders of the Wells REIT and preserving their
interests therein on the same terms and conditions as existed
previously, or

(B)  receiving cash in an amount equal to the shareholder's pro rata
share of the appraised value of our net assets.

We are prohibited from participating in any proposed Roll-up Transaction:

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

.    which includes provisions that would operate to materially impede or
frustrate the accumulation of shares by any purchaser of the
securities of the Roll-up Entity, except to the minimum extent
necessary to preserve the tax status of the Roll-up Entity, or which
would limit the ability of an investor to exercise the voting rights
of its securities of the Roll-up Entity on the basis of the number of
shares held by that investor;

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

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

Business Combinations

Under Maryland Corporation Law, business combinations between a Maryland
corporation and an interested shareholder or the interested shareholder's
affiliate are prohibited for five years after the most recent date on which the
shareholder becomes an interested shareholder.  For this purpose, the term
"business combinations" includes mergers, consolidations, share exchanges, asset
transfers and issuances or reclassifications of equity securities.  An
"interested shareholder" is defined for this purpose as:

(1)  any person who beneficially owns ten percent or more of the voting
power of the corporation's shares; or     

131

(2)  an affiliate or associate of the corporation who, at any time within
the two-year period prior to the date in question, was the beneficial owner of
ten percent or more of the voting power of the then outstanding voting shares of
the corporation.

After the five-year prohibition, any business combination between the
corporation and an interested shareholder generally must be recommended by the
board of directors of the corporation and approved by the affirmative vote of at
least:

(1)  80% of the votes entitled to be cast by holders of outstanding voting
shares of the corporation; and

(2)  two-thirds of the votes entitled to be cast by holders of voting
shares of the corporation other than shares held by the interested shareholder
or its affiliate with whom the business combination is to be effected, or held
by an affiliate or associate of the interested shareholder voting together as a
single voting group.

These super-majority vote requirements do not apply if the corporation's
common shareholders receive a minimum price, as defined under Maryland
Corporation Law, for their shares in the form of cash or other consideration in
the same form as previously paid by the interested shareholder for its shares.
None of these provisions of the Maryland Corporation Law will apply, however, to
business combinations that are approved or exempted by the board of directors of
the corporation prior to the time that the interested shareholder becomes an
interested shareholder.

The business combination statute may discourage others from trying to
acquire control of us and increase the difficulty of consummating any offer.

Control Share Acquisitions

Maryland Corporation Law provides that control shares of a Maryland
corporation acquired in a control share acquisition have no voting rights except
to the extent approved by a vote of two-thirds of the votes entitled to be cast
on the matter.  Shares owned by the acquiror, or by officers or directors who
are employees of the corporation are not entitled to vote on the matter.  As
permitted by Maryland Corporation Law, we have provided in our bylaws that the
control share provisions of Maryland Corporation Law will not apply to
transactions involving the Wells REIT, but the board of directors retains the
discretion to change this provision in the future.

"Control shares" are voting shares which, if aggregated with all other
shares owned by the acquiror or with respect to which the acquiror has the right
to vote or to direct the voting of, other than solely by virtue of revocable
proxy, would entitle the acquiror to exercise voting power in electing directors
within one of the following ranges of voting powers:

.    one-fifth or more but less than one-third;

.    one-third or more but less than a majority; or

.    a majority or more of all voting power.

Control shares do not include shares the acquiring person is then entitled
to vote as a result of having previously obtained shareholder approval.     

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Except as otherwise specified in the statute, a "control share acquisition"
means the acquisition of control shares.

Once a person who has made or proposes to make a control share acquisition
has undertaken to pay expenses and has satisfied other required conditions, the
person may compel the board of directors to call a special meeting of
shareholders to be held within 50 days of demand to consider the voting rights
of the shares. If no request for a meeting is made, the corporation may itself
present the question at any shareholders meeting.

If voting rights are not approved for the control shares at the meeting or
if the acquiring person does not deliver an "acquiring person statement" for the
control shares as required by the statute, the corporation may redeem any or all
of the control shares for their fair value, except for control shares for which
voting rights have previously been approved. Fair value is to be determined for
this purpose without regard to the absence of voting rights for the control
shares, and is to be determined as of the date of the last control share
acquisition or of any meeting of shareholders at which the voting rights for
control shares are considered and not approved.

If voting rights for control shares are approved at a shareholders meeting
and the acquiror becomes entitled to vote a majority of the shares entitled to
vote, all other shareholders may exercise appraisal rights. The fair value of
the shares as determined for purposes of these appraisal rights may not be less
than the highest price per share paid in the control share acquisition. Some of
the limitations and restrictions otherwise applicable to the exercise of
dissenters' rights do not apply in the context of a control share acquisition.

The control share acquisition statute does not apply to shares acquired in
a merger, consolidation or share exchange if the corporation is a party to the
transaction or to acquisitions approved or exempted by the articles of
incorporation or bylaws of the corporation.

The Operating Partnership Agreement

General

Wells Operating Partnership, L.P. (Wells OP) was formed in January 1998 to
acquire, own and operate properties on our behalf. It is considered to be an
Umbrella Partnership Real Estate Investment Trust (UPREIT), which structure is
utilized generally to provide for the acquisition of real property from owners
who desire to defer taxable gain otherwise to be recognized by them upon the
disposition of their property. Such owners may also desire to achieve diversity
in their investment and other benefits afforded to owners of stock in a REIT.
For purposes of satisfying the asset and income tests for qualification as a
REIT for tax purposes, the REIT's proportionate share of the assets and income
of an UPREIT, such as Wells OP, will be deemed to be assets and income of the
REIT.

The property owner's goals are accomplished because a property owner may
contribute property to an UPREIT in exchange for limited partnership units on a
tax-free basis. Further, Wells OP is structured to make distributions with
respect to limited partnership units which are equivalent to the dividend
distributions made to shareholders of the Wells REIT. Finally, a limited partner
in Wells OP may later exchange his limited partnership units in Wells OP for
shares in the Wells REIT (in a taxable transaction) and, if our shares are then
listed, achieve liquidity for his investment.

Substantially all of our assets are held by Wells OP, and we intend to make
future acquisitions of real properties using the UPREIT structure. The Wells
REIT is the sole general partner of Wells OP and,    

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as of October 1, 1999, owned an approximately 99% equity percentage interest in
Wells OP. Wells Capital, our advisor, has contributed $200,000 to Wells OP and
is currently the only limited partner owning the other approximately 1% equity
percentage interest in Wells OP. As the sole general partner of Wells OP, we
have the exclusive power to manage and conduct the business of Wells OP.

The following is a summary of certain provisions of the partnership
agreement of Wells OP. This summary is not complete and is qualified by the
specific language in the partnership agreement. You should refer to the
partnership agreement, itself, which we have filed as an exhibit to the
registration statement, for more detail.

Capital Contributions

As we accept subscriptions for shares, we will transfer substantially all
of the net proceeds of the offering to Wells OP as a capital contribution;
however, we will be deemed to have made capital contributions in the amount of
the gross offering proceeds received from investors. Wells OP will be deemed to
have simultaneously paid the selling commissions and other costs associated with
the offering. If Wells OP requires additional funds at any time in excess of
capital contributions made by us and Wells Capital or from borrowing, we may
borrow funds from a financial institution or other lender and lend such funds to
Wells OP on the same terms and conditions as are applicable to our borrowing of
such funds. In addition, we are authorized to cause Wells OP to issue
partnership interests for less than fair market value if we conclude in good
faith that such issuance is in the best interest of Wells OP and the Wells REIT.

Operations

The partnership agreement requires that Wells OP be operated in a manner
that will enable the Wells REIT to (1) satisfy the requirements for being
classified as a REIT for tax purposes, (2) avoid any federal income or excise
tax liability, and (3) ensure that Wells OP will not be classified as a
"publicly traded partnership" for purposes of Section 7704 of the Internal
Revenue Code, which classification could result in Wells OP being taxed as a
corporation, rather than as a partnership. (See "Federal Income Tax
Considerations - Tax Aspects of the Operating Partnership -Classification as a
Partnership.")

The partnership agreement provides that Wells OP will distribute cash flow
from operations to the limited partners of Wells OP in accordance with their
relative percentage interests on at least a quarterly basis in amounts
determined by the Wells REIT as general partner such that a holder of one unit
of limited partnership interest in Wells OP will receive the same amount of
annual cash flow distributions from Wells OP as the amount of annual dividends
paid to the holder of one of our shares. Remaining cash from operations will be
distributed to the Wells REIT as the general partner to enable us to make
dividend distributions to our shareholders.

Similarly, the partnership agreement of Wells OP provides that taxable
income is allocated to the limited partners of Wells OP in accordance with their
relative percentage interests such that a holder of one unit of limited
partnership interest in Wells OP will be allocated taxable income for each
taxable year in an amount equal to the amount of taxable income to be recognized
by a holder of one of our shares, subject to compliance with the provisions of
Sections 704(b) and 704(c) of the Internal Revenue Code and corresponding
Treasury Regulations. Losses, if any, will generally be allocated among the
partners in accordance with their respective percentage interests in Wells OP.

Upon the liquidation of Wells OP, after payment of debts and obligations,
any remaining assets of Wells OP will be distributed to partners with positive
capital accounts in accordance with their respective positive capital account
balances. If the Wells REIT were to have a negative balance in its capital    

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account following a liquidation, it would be obligated to contribute cash to
Wells OP equal to such negative balance for distribution to other partners, if
any, having positive balances in their capital accounts.

In addition to the administrative and operating costs and expenses incurred
by Wells OP in acquiring and operating real properties, Wells OP will pay all
administrative costs and expenses of the Wells REIT and such expenses will be
treated as expenses of Wells OP. Such expenses will include:

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

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

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

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

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

Exchange Rights

The limited partners of Wells OP, including Wells Capital, have the right
to cause Wells OP to redeem their limited partnership units for cash equal to
the value of an equivalent number of our shares, or, at our option, we may
purchase their limited partnership units by issuing one share of the Wells REIT
for each limited partnership unit redeemed. These exchange rights may not be
exercised, however, if and to the extent that the delivery of shares upon such
exercise would (1) result in any person owning shares in excess of our ownership
limits, (2) result in shares being owned by fewer than 100 persons, (3) result
in the Wells REIT being "closely held" within the meaning of Section 856(h) of
the Internal Revenue Code, (4) cause the Wells REIT to own 10% or more of the
ownership interests in a tenant within the meaning of Section 856(d)(2)(B) of
the Internal Revenue Code, or (5) cause the acquisition of shares by a redeemed
limited partner to be "integrated" with any other distribution of our shares for
purposes of complying with the Securities Act.

Subject to the foregoing, limited partners may exercise their exchange
rights at any time after one year following the date of issuance of their
limited partnership units; provided, however, that a limited partner may not
deliver more than two exchange notices each calendar year and may not exercise
an exchange right for less than 1,000 limited partnership units, unless such
limited partner holds less than 1,000 units, in which case, he must exercise his
exchange right for all of his units.

Transferability of Interests

The Wells REIT may not (1) voluntarily withdraw as the general partner of
Wells OP, (2) engage in any merger, consolidation or other business combination,
or (3) transfer its general partnership interest in Wells OP (except to a
wholly-owned subsidiary), unless the transaction in which such withdrawal,
business combination or transfer occurs results in the limited partners
receiving or having the right to receive an amount of cash, securities or other
property equal in value to the amount they would have received if they had
exercised their exchange rights immediately prior to such transaction or unless,
in the case of a merger or other business combination, the successor entity
contributes substantially all of its assets to Wells OP in return for an
interest in Wells OP and agrees to assume all obligations of the general      

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partner of Wells OP. The Wells REIT may also enter into a business combination
or we may transfer our general partnership interest upon the receipt of the
consent of a majority-in-interest of the limited partners of Wells OP, other
than Wells Capital. With certain exceptions, the limited partners may not
transfer their interests in Wells OP, in whole or in part, without the written
consent of the Wells REIT as general partner. In addition, Wells Capital may not
transfer its interest in Wells OP as long as it is acting as the advisor to the
Wells REIT, except pursuant to the exercise of its right to exchange limited
partnership units for Wells REIT shares, in which case similar restrictions on
transfer will apply to the REIT shares received by Wells Capital .

Plan of Distribution

We are offering a maximum of 20,000,000 shares to the public through Wells
Investment Securities, Inc., the Dealer Manager, a registered broker-dealer
affiliated with the advisor.  (See "Conflicts of Interest.")  The shares are
being offered at a price of $10.00 per share on a "best efforts" basis, which
means generally that the Dealer Manager will be required to use only its best
efforts to sell the shares and it has no firm commitment or obligation to
purchase any of the shares.  We are also offering 2,200,000 shares for sale
pursuant to our dividend reinvestment plan at a price of $10 per share.  An
additional 800,000 shares are reserved for issuance upon exercise of soliciting
dealer warrants, which are granted to participating broker-dealers based upon
the number of shares they sell.  Therefore, a total of 23,000,000 shares are
being registered in this offering.

Except as provided below, the Dealer Manager will receive selling
commissions of 7% of the gross offering proceeds.  The Dealer Manager will also
receive 2.5% of the gross offering proceeds in the form of a dealer manager fee
as compensation for acting as the Dealer Manager and for expenses incurred in
connection with coordinating sales efforts, training of personnel and generally
performing "wholesaling" functions.  We will not pay referral or similar fees to
any accountants, attorneys or other persons in connection with the distribution
of the shares.  Shareholders who elect to participate in the dividend
reinvestment plan will be charged selling commissions and dealer manager fees on
shares purchased pursuant to the dividend reinvestment plan on the same basis as
shareholders purchasing shares other than pursuant to the dividend reinvestment
plan.

We will also award to participating broker-dealers one soliciting dealer
warrant for every 25 shares they sell during the offering period.  The holder of
a soliciting dealer warrant will be entitled to purchase one share from the
Wells REIT at a price of $12 per share during the period beginning on the first
anniversary of the effective date of this offering and ending five years after
the effective date of this offering.  Subject to certain exceptions, a
soliciting dealer warrant may not be transferred, assigned, pledged or
hypothecated for a period of one year following the effective date of this
offering.  The shares issuable upon exercise of the soliciting dealer warrants
are being registered as part of this offering.  For the life of the soliciting
dealer warrants, participating broker-dealers are given the opportunity to
profit from a rise in the market price for the common stock without assuming the
risk of ownership, with a resulting dilution in the interest of other
shareholders upon exercise of such warrants.  In addition, holders of the
soliciting dealer warrants would be expected to exercise such warrants at a time
when we could obtain needed capital by offering new securities on terms more
favorable than those provided by the soliciting dealer warrants.

The Dealer Manager may authorize certain other broker-dealers who are
members of the NASD to sell shares.  In the event of the sale of shares by such
other broker-dealers, the Dealer Manager may reallow its commissions in the
amount of up to 7% of the gross offering proceeds to such participating broker-
dealers.  In addition, the Dealer Manager, in its sole discretion, may reallow
to broker-dealers participating in the offering a portion of its dealer manager
fee in the aggregate amount of up to 1.5% of      

136

gross offering proceeds to be paid to such participating broker-dealer as
marketing fees and as reimbursement of due diligence expenses, based on such
factors as the number of shares sold by such participating broker-dealer, the
assistance of such participating broker-dealer in marketing the offering and
bona fide conference fees incurred.

We anticipate that the total underwriting compensation, including sales
commissions, the dealer manager fee and underwriting expense reimbursements,
will not exceed 9.5% of gross offering proceeds, except for the soliciting
dealer warrants described above.

We have agreed to indemnify the participating broker-dealers, including the
Dealer Manager, against certain liabilities arising under the Securities Act of
1933, as amended.

The broker-dealers participating in the offering of our shares are not
obligated to obtain any subscriptions on our behalf, and we cannot assure you
that any shares will be sold.

Our executive officers and directors, as well as officers and employees of
Wells Capital or other affiliates, may purchase shares offered in this offering
at a discount.  The purchase price for such shares shall be $8.90 per share
reflecting the fact that the acquisition and advisory fees relating to such
shares will be reduced by $0.15 per share and selling commissions in the amount
of $0.70 per share and dealer manager fees in the amount of $0.25 per share will
not be payable in connection with such sales.  The net offering proceeds we
receive will not be affected by such sales of shares at a discount.  Wells
Capital and its affiliates shall be expected to hold their shares purchased as
shareholders for investment and not with a view towards distribution.  In
addition, shares purchased by Wells Capital or its affiliates shall not be
entitled to vote on any matter presented to the shareholders for a vote.

You should pay for your shares by check payable to "Bank of America, N.A.,
as Escrow Agent."  Subscriptions will be effective only upon our acceptance, and
we reserve the right to reject any subscription in whole or in part.  We may not
accept a subscription for shares until at least five business days after the
date you receive this prospectus.  You will receive a confirmation of your
purchase.  Except for purchases pursuant to our dividend reinvestment plan or
reinvestment plans of other public real estate programs, all accepted
subscriptions will be for whole shares and for not less than 100 shares
($1,000).  (See "Suitability Standards.")  Except in Maine, Minnesota, Nebraska
and Washington, investors who have satisfied the minimum purchase requirement
and have purchased units or shares in Wells programs or units or shares in other
public real estate programs may purchase less than the minimum number of shares
discussed above, provided that such investors purchase a minimum of 2.5 shares
($25).  After investors have satisfied the minimum purchase requirement, minimum
additional purchases must be in increments of at least 2.5 shares ($25), except
for purchases made pursuant to our dividend reinvestment plan or reinvestment
plans of other public real estate programs.

We will place the subscription proceeds in an interest-bearing account with
Bank of America, N.A., Atlanta, Georgia.  Subscription proceeds held in the
escrow account will be invested in securities backed by the United States
government or bank money-market accounts or certificates of deposit of national
or state banks that have deposits insured by the Federal Deposit Insurance
Corporation, including certificates of deposit of any bank acting as depository
or custodian for any such funds, as directed by our advisor.  Subscribers may
not withdraw funds from the escrow account.  We will withdraw funds from the
escrow account periodically for the acquisition of real estate properties or the
payment of fees and expenses.  We generally admit shareholders to the Wells REIT
on a daily basis.

Investors who desire to establish an IRA for purposes of investing in
shares may do so by having Wells Advisors, Inc., a qualified non-bank IRA
custodian affiliated with the advisor, act as their IRA custodian. In the event
that an IRA is established having Wells Advisors, Inc. as the IRA custodian,
the    

137

authority of Wells Advisors, Inc. will be limited to holding the shares on
behalf of the beneficiary of the IRA and making distributions or reinvestments
in shares solely at the discretion of the beneficiary of the IRA.  Wells
Advisors, Inc. will not have the authority to vote any of the shares held in an
IRA except strictly in accordance with the written instructions of the
beneficiary of the IRA.

The offering of shares will terminate on or before December 19, 2001.
However, we reserve the right to terminate this offering at any time prior to
such termination date.

The proceeds of this offering will be received and held in trust for the
benefit of purchasers of shares to be used only for the purposes set forth in
the "Estimated Use of Proceeds" section.  Subscriptions will be accepted or
rejected within 30 days of receipt by the Wells REIT, and if rejected, all funds
shall be returned to the rejected subscribers within ten business days.

We may sell shares to retirement plans of broker-dealers participating in
the offering, to broker-dealers in their individual capacities, to IRAs and
qualified plans of their registered representatives or to any one of their
registered representatives in their individual capacities for 93% of the public
offering price in consideration of the services rendered by such broker-dealers
and registered representatives in the offering.  The net proceeds to the Wells
REIT from such sales will be identical to net proceeds we receive from other
sales of shares.

In connection with sales of 25,000 or more shares ($250,000) to a
"purchaser" as defined below, investors may agree with their registered
representatives to reduce the amount of selling commissions payable to
participating broker-dealers.  Such reduction will be credited to the purchaser
by reducing the total purchase price payable by such purchaser.  The following
table illustrates the various discount levels:

Dollar                                        Net
Volume                    Sales Commissions   Purchase   Net
of Shares                 -----------------   Price      Proceeds
Purchased                Percent   Per Share  Per Share  Per Share
---------                --------  ---------  ---------  ---------

Under $250,000               7.0%    $0.7000    $10.000      $9.30
$250,000-$649,999            6.0%    $0.5936    $9.8936      $9.30
$650,000-$999,999            3.0%    $0.2876    $9.5876      $9.30
$1,000,000-$1,999,999        1.0%    $0.0939    $9.3939      $9.30
$2,000,000 and Over          0.5%    $0.0467    $9.3467      $9.30

For example, if an investor purchases 100,000 shares, he could pay as
little as $939,390 rather than $1,000,000 for the shares in which event the
commission on the sale of such shares would be $9,390 ($0.0939 per share), and
we would receive net proceeds of $930,000 ($9.30 per share).  The net proceeds
to the Wells REIT will not be affected by volume discounts.

Because all investors will be deemed to have contributed the same amount
per share to the Wells REIT for purposes of declaring and paying dividends, an
investor qualifying for a volume discount will receive a higher return on his
investment than investors who do not qualify for such discount.

Subscriptions may be combined for the purpose of determining the volume
discounts in the case of subscriptions made by any "purchaser," as that term is
defined below, provided all such shares are purchased through the same broker-
dealer.  The volume discount shall be prorated among the separate subscribers
considered to be a single "purchaser."  Any request to combine more than one
subscription      

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must be made in writing, and must set forth the basis for such
request.  Any such request will be subject to verification by the advisor that
all of such subscriptions were made by a single "purchaser."

For the purposes of such volume discounts, the term "purchaser" includes:

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

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

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

.    all commingled trust funds maintained by a given bank.

Notwithstanding the above, in connection with volume sales made to investors in
the Wells REIT, the advisor may, in its sole discretion, waive the "purchaser"
requirements and aggregate subscriptions, including subscriptions to public real
estate programs previously sponsored by the advisor, or its affiliates, as part
of a combined order for purposes of determining the number of shares purchased,
provided that any aggregate group of subscriptions must be received from the
same broker-dealer, including the Dealer Manager.  Any such reduction in selling
commission will be prorated among the separate subscribers except that, in the
case of purchases through the Dealer Manager, the Dealer Manager may allocate
such reduction among separate subscribers considered to be a single "purchaser"
as it deems appropriate.  An investor may reduce the amount of his purchase
price to the net amount shown in the foregoing table, if applicable.  If such
investor does not reduce the purchase price, the excess amount submitted over
the discounted purchase price shall be returned to the actual separate
subscribers for shares.  Except as provided in this paragraph, separate
subscriptions will not be cumulated, combined or aggregated.

In addition, in order to encourage purchases in amounts of 500,000 or more
shares, a potential purchaser who proposes to purchase at least 500,000 shares
may agree with the advisor and the Dealer Manager to have the acquisition and
advisory fees payable to the advisor with respect to the sale of such shares
reduced to 0.5%, to have the dealer manager fee payable to the Dealer Manager
with respect to the sale of such shares reduced to 0.5%, and to have the selling
commissions payable with respect to the sale of such shares reduced to 0.5%, in
which event the aggregate fees payable with respect to the sale of such shares
would be reduced by $1.10 per share, and the purchaser of such shares would be
required to pay a total of $8.90 per share purchased, rather than $10.00 per
share.  The net proceeds to the Wells REIT would not be affected by such fee
reductions.  Of the $8.90 paid per share, we anticipate that approximately $8.40
per share or approximately 94.4% will be used to acquire properties and pay
required acquisition expenses relating to the acquisition of properties.  All
such sales must be made through registered broker-dealers.

California residents should be aware that volume discounts will not be
available in connection with the sale of shares made to California residents to
the extent such discounts do not comply with the provisions of Rule 260.140.51
adopted pursuant to the California Corporate Securities Law of 1968.  Pursuant
to this Rule, volume discounts can be made available to California residents
only in accordance with the following conditions:

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

139

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

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

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

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

.    no discounts are allowed to any group of purchasers.

Accordingly, volume discounts for California residents will be available in
accordance with the foregoing table of uniform discount levels based on dollar
volume of shares purchased, but no discounts are allowed to any group of
purchasers, and no subscriptions may be aggregated as part of a combined order
for purposes of determining the number of shares purchased.

Investors who, in connection with their purchase of shares, have engaged
the services of a registered investment advisor with whom the investor has
agreed to pay a fee for investment advisory services in lieu of normal
commissions based on the volume of securities sold may agree with the
participating broker-dealer selling such shares and the Dealer Manager to reduce
the amount of selling commissions payable with respect to such sale to zero.
The net proceeds to the Wells REIT will not be affected by eliminating the
commissions payable in connection with sales to investors purchasing through
such investment advisors.  All such sales must be made through registered
broker-dealers.

Neither the Dealer Manager nor its affiliates will directly or indirectly
compensate any person engaged as an investment advisor by a potential investor
as an inducement for such investment advisor to advise favorably for investment
in the Wells REIT.

In addition, subscribers for shares may agree with their participating
broker-dealers and the Dealer Manager to have selling commissions due with
respect to the purchase of their shares paid over a six year period pursuant to
a deferred commission arrangement.  Shareholders electing the deferred
commission option will be required to pay a total of $9.40 per share purchased
upon subscription, rather than $10.00 per share, with respect to which $0.10 per
share will be payable as commissions due upon subscription.  For the period of
six years following subscription, $0.10 per share will be deducted on an annual
basis from dividends or other cash distributions otherwise payable to the
shareholders and used by the Wells REIT to pay deferred commission obligations.
The net proceeds to the Wells REIT will not be affected by the election of the
deferred commission option.  Under this arrangement, a shareholder electing the
deferred commission option will pay a 1% commission upon subscription, rather
than a 7% commission, and an amount equal to a 1% commission per year thereafter
for the next six years will be deducted from dividends or other cash
distributions otherwise payable to such shareholder and used by the Wells REIT
to satisfy commission obligations.  The foregoing commission amounts may be
adjusted with approval of the Dealer Manager by application of the volume
discount provisions described previously.

Shareholders electing the deferred commission option who are subject to
federal income taxation will incur tax liability for dividends or other cash
distributions otherwise payable to them with respect to their shares even though
such dividends or other cash distributions will be withheld from such
shareholders and will instead be paid to third parties to satisfy commission
obligations.     

140

Investors who wish to elect the deferred commission option should make the
election on their Subscription Agreement Signature Page.  Election of the
deferred commission option shall authorize the Wells REIT to withhold dividends
or other cash distributions otherwise payable to such shareholder for the
purpose of paying commissions due under the deferred commission option;
provided, however, that in no event may the Wells REIT withhold in excess of
$0.60 per share in the aggregate under the deferred commission option.  Such
dividends or cash distributions otherwise payable to shareholders may be pledged
by the Wells REIT, the Dealer Manager, the advisor or their affiliates to secure
one or more loans, the proceeds of which would be used to satisfy sales
commission obligations.

In the event that listing of the shares occurs or is reasonably anticipated
to occur at any time prior to the satisfaction of our remaining commission
obligations, the remaining commissions due under the deferred commission option
may be accelerated by the Wells REIT.  In such event, we shall provide notice of
such acceleration to shareholders who have elected the deferred commission
option.  The amount of the remaining commissions due shall be deducted and paid
by the Wells REIT out of dividends or other cash distributions otherwise payable
to such shareholders during the time period prior to listing; provided that, in
no event may the Wells REIT withhold in excess of $0.60 per share in the
aggregate.  To the extent that the distributions during such time period are
insufficient to satisfy the remaining commissions due, the obligation of Wells
REIT and our shareholders to make any further payments of deferred commissions
under the deferred commission option shall terminate, and participating broker-
dealers will not be entitled to receive any further portion of their deferred
commissions following listing of our shares.

Supplemental Sales Material

In addition to this prospectus, we may utilize certain sales material in
connection with the offering of the shares, although only when accompanied by or
preceded by the delivery of this prospectus.  In certain jurisdictions, some or
all of such sales material may not be available.  This material may include
information relating to this offering, the past performance of the advisor and
its affiliates, property brochures and articles and publications concerning real
estate.  In addition, the sales material may contain certain quotes from various
publications without obtaining the consent of the author or the publication for
use of the quoted material in the sales material.

The offering of shares is made only by means of this prospectus.  Although
the information contained in such sales material will not conflict with any of
the information contained in this prospectus, such material does not purport to
be complete, and should not be considered a part of this prospectus or the
registration statement of which this prospectus is a part, or as incorporated by
reference in this prospectus or said registration statement or as forming the
basis of the offering of the shares.

Legal Opinions

The legality of the shares being offered hereby has been passed upon for
the Wells REIT by Holland & Knight LLP (Counsel).  The statements under the
caption "Federal Income Tax Consequences" as they relate to federal income tax
matters have been reviewed by such counsel, and counsel has opined as to certain
income tax matters relating to an investment in the Wells REIT.  Counsel has
represented the advisor, as well as affiliates of the advisor, in other matters
and may continue to do so in the future.  (See "Conflicts of Interest.")     

141

Experts

Audited Financial Statements

The financial statements of the Wells REIT as of December 31, 1998 and
1997, and for each of the years in the two year period ended December 31, 1998,
included in this prospectus and elsewhere in the registration statement, have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included in this
prospectus in reliance upon the authority of said firm as experts in giving said
report.

The financial statements of Fund IX and X Associates as of December 31,
1997 and for the period from inception (March 20, 1997) to December 31, 1997,
included in this prospectus and elsewhere in the registration statement, have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included in this
prospectus in reliance upon the authority of said firm as experts in giving said
report.

The Statements of Revenues over Certain Operating Expenses of the Iomega
Building for the year ended December 31, 1997; the Cort Furniture Building for
the year ended December 31, 1997; the Fairchild Building for the year ended
December 31, 1997; the Vanguard Cellular Building for the period from inception
(November 16, 1998) to December 31, 1998; the EYBL CarTex Building for the year
ended December 31, 1998; the Sprint Building for the year ended December 31,
1998; the Johnson Matthey Building for the year ended December 31, 1998; the
Videojet Building for the year ended December 31, 1998; and the Gartner Building
for the year ended December 31, 1998 , which are included in this prospectus and
elsewhere in the registration statement, have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto, and are included in this prospectus in reliance upon the authority of
said firm as experts in giving said reports.

Unaudited Financial Statements

The interim financial statements of the Wells REIT as of September 30, 1999
and for the nine month periods ended September 30, 1999 and 1998, which are
included in this prospectus, have not been audited.

The interim financial statements of Fund IX and X Associates as of March
31, 1998 and for the three months ended March 31, 1998, which are included in
this prospectus, have not been audited.

The Statements of Revenues over Certain Operating Expenses of the Lucent
Building for the three months ended March 31, 1998; the Iomega Building for the
six months ended June 30, 1998; the Cort Furniture Building for the six months
ended June 30, 1998; the Fairchild Building for the six months ended June 30,
1998; the EYBL CarTex Building for the three months ended March 31, 1999; the
Sprint Building for the three months ended March 31, 1999; the Johnson Matthey
Building for the six months ended June 30, 1999; the Videojet Building for the
six months ended June 30, 1999; and the Gartner Building for the six months
ended June 30, 1999, which are included in this prospectus, have not been
audited.

The pro forma financial information for Wells Real Estate Investment Trust,
Inc. for the year ended December 31, 1998 and for the nine months ended
September 30, 1999, which are included in this prospectus, have not been
audited.

Additional Information     

142

We have filed with the Securities and Exchange Commission (Commission),
Washington, D.C., a registration statement under the Securities Act of 1933, as
amended, with respect to the shares offered pursuant to this prospectus.  This
prospectus does not contain all the information set forth in the registration
statement and the exhibits related thereto filed with the Commission, reference
to which is hereby made.  Copies of the registration statement and exhibits
related thereto, as well as periodic reports and information filed by the Wells
REIT, may be obtained upon payment of the fees prescribed by the Commission, or
may be examined at the offices of the Commission without charge, at:

.    the public reference facilities in Washington, D.C. at Judiciary
Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549;

.    the Northeast Regional Office in New York at 7 World Trade Center,
Suite 1300, New York, New York 10048; and

.    the Midwest Regional Office in Chicago, Illinois at 500 West Madison
Street, Suite 1400, Chicago, Illinois 66661-2511.

The Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission.  The address of the Commission's website is
http://www.sec.gov.

Glossary

The following are definitions of certain terms used in this prospectus and
not otherwise defined in this prospectus:

"Dealer Manager" means Wells Investment Securities, Inc.

"IRA" means an individual retirement account established pursuant to
Section 408 or Section 408A of the Internal Revenue Code.

"NASAA Guidelines" means the Statement of Policy Regarding Real Estate
Investment Trusts of the North American Securities Administrators Association,
Inc., as revised and adopted on September 29, 1993.

"Property Manager" means Wells Management Company, Inc.

"UBTI" means unrelated business taxable income, as that term is defined in
Sections 511 through 514 of the Internal Revenue Code.     

143

INDEX TO FINANCIAL STATEMENTS

Page
----

Wells Real Estate Investment Trust, Inc. and Subsidiary

Audited Financial Statements
----------------------------

Report of Independent Public Accountants                                      154 
Consolidated Balance Sheets as of December 31, 1998 and                           
December 31, 1997                                                           155 
Consolidated Statement of Income for the year ended                               
December 31, 1998                                                           156 
Consolidated Statement of Shareholders' Equity for the                            
year ended December 31, 1998                                                157 
Consolidated Statement of Cash Flows for the year ended                           
December 31, 1998                                                           158 
Notes to Consolidated Financial Statements                                    159 

Interim (Unaudited) Financial Statements                                          
----------------------------------------                                          

Balance Sheets as of September 30, 1999 and December 31, 1998                 176 
Statements of Income for the three months ended September 30, 1999                
and 1998, the nine months ended September 30, 1999 and the four                 
months ended September 30, 1998                                             177 
Statements of Shareholders' Equity for the nine months ended                      
September 30, 1999 and the year ended December 31, 1998                     178 
Statements of Cash Flows for the nine months ended September 30, 1999             
and the four months ended September 30, 1998                                179 
Condensed Notes to Financial Statements                                       180 

Fund IX and X Associates                                                             
Report of Independent Public Accountants                                      190 
Balance Sheets as of March 31, 1998 (Unaudited) and                               
December 31, 1997 (Audited)                                                 191 
Statements of Income (Loss) for the three months ended March 31,                  
1998 (Unaudited) and the period from inception (March 20, 1997)                 
to December 31, 1997 (Audited)                                              192 
Statements of Partners' Capital for the three months ended March 31,              
1998 (Unaudited) and the period from inception (March 20, 1997)                 
to December 31, 1997 (Audited)                                              193 
Statements of Cash Flows for the three months ended March 31,                     
1998 (Unaudited) and the period from inception (March 20, 1997)                 
to December 31, 1997 (Audited)                                              194 
Notes to Financial Statements                                                 195 

151

The Lucent Building
Statement of Revenues Over Certain Operating Expenses for the
three months ended March 31, 1998 (Unaudited)                               199
Notes to Statement of Revenues Over Certain Operating Expenses for
the three months ended March 31, 1998 (Unaudited)                           200

The Iomega Building
Report of Independent Public Accountants                                      201
Statement of Revenues Over Certain Operating Expenses for the
year ended December 31, 1997 (Audited) and for the six months
ended June 30, 1998 (Unaudited)                                             202
Notes to Statement of Revenues Over Certain Operating Expenses for
year ended December 31, 1997 (Audited) and for the six months ended
June 30, 1998 (Unaudited)                                                   203

The Fairchild Building
Report of Independent Public Accountants                                      205
Statement of Revenues Over Certain Operating Expenses for the
year ended December 31, 1997 (Audited) and for the six months
ended June 30, 1998 (Unaudited)                                             206
Notes to Statement of Revenues Over Certain Operating Expenses for
year ended December 31, 1997 (Audited) and for the six months ended
June 30, 1998 (Unaudited)                                                   207

The Cort Furniture Building
Report of Independent Public Accountants                                      209
Statement of Revenues Over Certain Operating Expenses for the
year ended December 31, 1997 (Audited) and for the six months
ended June 30, 1998 (Unaudited)                                             210
Notes to Statement of Revenues Over Certain Operating Expenses for
year ended December 31, 1997 (Audited) and for the six months ended
June 30, 1998 (Unaudited)                                                   211

The Vanguard Cellular Building
Report of Independent Public Accountants                                      213
Statement of Revenues Over Certain Operating Expenses for the period
from Inception (November 16, 1998) to December 31, 1998 (Audited)           214
Notes to Statement of Revenues Over Certain Operating Expenses for the
period from Inception (November 16, 1998) to December 31, 1998 (Audited)    215

The EYBL CarTex Building
Report of Independent Public Accountants                                      217
Statement of Revenues Over Certain Operating Expenses for the
year ended December 31, 1998 (Audited) and for the three months
ended March 31, 1999 (Unaudited)                                            218
Notes to Statement of Revenues Over Certain Operating Expenses for
the year ended December 31, 1998 (Audited) and for the three months
ended March 31, 1999 (Unaudited)                                            219

152

The Sprint Building
Report of Independent Public Accountants                                      221
Statement of Revenues Over Certain Operating Expenses for the
year ended December 31, 1998 (Audited) and for the three months
ended March 31, 1999 (Unaudited)                                            222
Notes to Statement of Revenues Over Certain Operating Expenses for
the year ended December 31, 1998 (Audited) and for the three months
ended March 31, 1999 (Unaudited)                                            223

The Johnson Matthey Building
Report of Independent Public Accountants                                      225
Statement of Revenues Over Certain Operating Expenses for the
year ended December 31, 1998 (Audited) and for the six months
ended June 30, 1999 (Unaudited)                                             226
Notes to Statement of Revenues Over Certain Operating Expenses for
the year ended December 31, 1998 (Audited) and for the six months
ended June 30, 1999 (Unaudited)                                             227

The Videojet Building
Report of Independent Public Accountants                                      229
Statement of Revenues Over Certain Operating Expenses for the
year ended December 31, 1998 (Audited) and for the six months
ended June 30, 1999 (Unaudited)                                             230
Notes to Statement of Revenues Over Certain Operating Expenses for
the year ended December 31, 1998 (Audited) and for the six months
ended June 30, 1999 (Unaudited)                                             231

The Gartner Building
Report of Independent Public Accountants                                      233
Statement of Revenues Over Certain Operating Expenses for the
year ended December 31, 1998 (Audited) and for the six months
ended June 30, 1999 (Unaudited)                                             234
Notes to Statement of Revenues Over Certain Operating Expenses for

the year ended December 31, 1998 (Audited) and for the six months
ended June 30, 1999 (Unaudited)                                             235

Wells Real Estate Investment Trust, Inc.
Summary of Unaudited Pro Forma Financial Statements                           237
Pro Forma Statement of Income for the year ended December 31, 1998            238
Pro Forma Statement of Income for the nine month period ended
September 30, 1999                                                          240

153

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying consolidated balance sheets of WELLS REAL
ESTATE INVESTMENT TRUST, INC. (a Maryland corporation) AND SUBSIDIARY as of
December 31, 1998 and 1997 and the related consolidated statements of income,
shareholders' equity, and cash flows for the year ended December 31, 1998.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wells Real Estate Investment
Trust, Inc. and subsidiary as of December 31, 1998 and 1997 and the results of
their operations and their cash flows for the year ended December 31, 1998 in
conformity with generally accepted accounting principles.

/s/ Arthur Andersen LLP

Atlanta, Georgia
January 27, 1999

154

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 1998 AND 1997

ASSETS

1998              1997
-------------      ----------- 

REAL ESTATE ASSETS, at cost:
Land                                                                                   $ 1,520,834         $      0
Building                                                                                20,076,845                0
-------------      -----------
Total real estate assets                                                        21,597,679                0

INVESTMENT IN JOINT VENTURES                                                             11,568,677                0

CASH AND CASH EQUIVALENTS                                                                 7,979,403          201,000

DEFERRED OFFERING COSTS                                                                     548,729          289,073

DEFERRED PROJECT COSTS                                                                      335,421                0

DUE FROM AFFILIATES                                                                         262,345                0

PREPAID EXPENSES AND OTHER ASSETS                                                           540,319                0
-------------      -----------
Total assets                                                                     $42,832,573         $490,073
-------------      -----------

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES:
Accounts payable and accrued expenses                                                  $   187,827         $      0
Note payable                                                                            14,059,930                0
Shareholder distributions payable                                                          408,176                0
Due to affiliate                                                                           554,953          289,073
-------------      -----------
Total liabilities                                                                 15,210,886          289,073
-------------      -----------
MINORITY INTEREST OF UNIT HOLDER IN OPERATING PARTNERSHIP
200,000          200,000
-------------      -----------
SHAREHOLDERS' EQUITY:
Common shares, $.01 par value; 16,500,000 shares authorized, 3,154,136 and
100 shares issued and outstanding, respectively                                            31,541                1

Additional paid-in capital                                                              27,056,112              999
Retained earnings                                                                          334,034                0
-------------      -----------
Total shareholders' equity                                                        27,421,687            1,000
-------------      -----------
Total liabilities and shareholders' equity                                       $42,832,573         $490,073
-------------      -----------

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

155

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 1998

REVENUES:                                                                 
Rental income                                                                $ 20,994
Equity in income of joint ventures                                            263,315
Interest income                                                              110,869
--------
395,178
--------
EXPENSES:                                                                 
Operating costs, net of reimbursements                                         11,033
General and administrative                                                     29,943
Legal and accounting                                                           19,552
Computer costs                                                                    616
--------
61,144
-------- 
NET INCOME                                                                    $334,034
========

EARNINGS PER SHARE:                                                       
Basic and diluted                                                            $   0.40
========

The accompanying notes are an integral part of this consolidated statement.

156

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

FOR THE YEAR ENDED DECEMBER 31, 1998

Common Stock      Additional                   Total                
--------------------   Paid-In      Retained   Shareholders'            
Shares    Amount     Capital      Earnings       Equity               
---------- --------- ------------- ----------- --------------           

BALANCE, December 31, 1997                                        100  $     1   $       999    $      0     $     1,000           

Issuance of common stock                                3,154,036   31,540    31,508,820           0      31,540,360           
Net income                                                      0        0             0     334,034         334,034           
Distributions                                                   0        0      (511,163)          0        (511,163)          
Sales commissions                                               0        0    (2,996,334)          0      (2,996,334)          
Other offering expenses                                         0        0      (946,210)          0        (946,210)          
---------  --------  ------------   ---------    -----------           
BALANCE, December 31, 1998                                  3,154,136  $31,541   $27,056,112    $334,034     $27,421,687           
=========  ========  ============   =========    ===========

The accompanying notes are an integral part of this consolidated statement.

157

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 1998

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                                           $    334,034
------------ 
Adjustments to reconcile net income to net cash used in operating activities:
Equity in income of joint ventures                                                                   (263,315)
Changes in assets and liabilities:
Prepaid expenses and other assets                                                                (540,319)
Accounts payable and accrued expenses                                                             187,827
Due to affiliates                                                                                   6,224
------------ 
Total adjustments                                                                              (609,583)
------------ 
Net cash used in operating activities                                                          (275,549)
------------ 
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate                                                                             (21,299,071)
Investment in joint ventures                                                                          (11,276,007)
Deferred project costs paid                                                                            (1,103,913)
Distributions received from joint ventures                                                                178,184
------------ 
Net cash used in investing activities                                                       (33,500,807)
------------ 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from note payable                                                                             14,059,930
Distributions                                                                                            (102,987)
Issuance of common stock                                                                               31,540,360
Sales commission paid                                                                                  (2,996,334)
Offering costs paid                                                                                      (946,210)
------------ 
Net cash provided by financing activities                                                    41,554,759
------------ 
NET INCREASE IN CASH AND CASH EQUIVALENTS                                                                 7,778,403

CASH AND CASH EQUIVALENTS, beginning of year                                                                201,000
------------ 
CASH AND CASH EQUIVALENTS, end of year                                                                 $  7,979,403
============  

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING ACTIVITIES:
Deferred project costs applied to real estate assets                                             $    298,608
============  

Deferred project costs contributed to joint ventures                                             $    469,884
============  

The accompanying notes are an integral part of this consolidated statement.

158

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1998 AND 1997

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Wells Real Estate Investment Trust, Inc. (the "Company") is a Maryland
corporation that qualifies as a real estate investment trust ("REIT").  The
Company is conducting an offering for the sale of a maximum of 15,000,000
(exclusive of 1,500,000 shares available pursuant to the Company's dividend
reinvestment plan) shares of common stock, $.01 par value per share, at a
price of $10 per share.  During 1997, the Company sold 100 shares to Wells
Capital, Inc. (the "Advisor") at the proposed initial public offering price
of $10 per share.  The Company will seek to acquire and operate commercial
properties, including, but not limited to, office buildings, shopping
centers, business and industrial parks, and other commercial and industrial
properties, including properties which are under construction, are newly
constructed, or have been constructed and have operating histories.  All such
properties may be acquired, developed, and operated by the Company alone or
jointly with another party.  The Company is likely to enter into one or more
joint ventures with affiliated entities for the acquisition of properties.
In connection with this, the Company may enter into joint ventures for the
acquisition of properties with prior or future real estate limited
partnership programs sponsored by the Advisor or its affiliates.

Substantially all of the Company's business is conducted through Wells
Operating Partnership, L.P. (the "Operating Partnership"), a Delaware limited
partnership.  During 1997, the Operating Partnership issued 20,000 limited
partner units to the Advisor in exchange for $200,000.  The Company is the
sole general partner in the Operating Partnership and possesses full legal
control and authority over the operations of the Operating Partnership;
consequently, the accompanying consolidated financial statements of the
Company include the amounts of the Operating Partnership.

The Company owns interests in several properties through a joint venture
among the Operating Partnership, Wells Real Estate Fund IX, L.P. ("Wells Fund
IX"), Wells Real Estate Fund X, L.P. ("Wells Fund X"), and Wells Real Estate
Fund XI, L.P. ("Wells Fund XI").  This joint venture is referred to as the
Fund IX, Fund X, Fund XI, and REIT Joint Venture ("Fund IX, X, XI, and REIT
Joint Venture").  In addition, the Company owns two properties through joint
ventures between the Operating Partnership and a joint venture between Wells
Fund X 

159

and Wells Fund XI, referred to as "Fund X and XI Associates." In addition,
the Operating Partnership directly owns an office building in Tampa, Florida.

Through its investment in the Fund IX, X, XI, and REIT Joint Venture, the
Company owns interests in the following properties:  (i) a three-story office
building in Knoxville, Tennessee (the "ABB Building"), (ii) a two-story
office building in Louisville, Colorado (the "Ohmeda Building"), (iii) a
three-story office building in Broomfield, Colorado (the "360 Interlocken
Building"), (iv) a one-story warehouse facility in Ogden, Utah (the "Iomega
Building"), and (v) a one-story office building in Oklahoma City, Oklahoma
(the "Lucent Technologies Building").

The following properties are owned by the Operating Partnership through
investments in joint ventures with Fund X and XI Associates:  (i) a one-story
office and warehouse building in Fountain Valley, California (the "Cort
Furniture Building") owned by Wells/Orange County Associates and (ii) a
warehouse and office building in Fremont, California (the "Fairchild
Building") owned by Wells/Fremont Associates.

Use of Estimates and Factors Affecting the Company

The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those
estimates.

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

Real Estate Assets

Real estate assets held by the Company and joint ventures are stated at cost
less accumulated depreciation.  Major improvements and betterments are
capitalized when they extend the useful life of the related asset.  All
repair and maintenance are expensed as incurred.

Management continually monitors events and changes in circumstances which
could indicate that carrying amounts of real estate assets may not be
recoverable.  When events or changes in circumstances are present which
indicate that the carrying amounts of real estate assets may not be
recoverable, management assesses the recoverability of real estate assets by
determining whether the carrying value of such real estate assets will be
recovered through the future cash flows expected from the use of the asset
and its eventual disposition.  Management has determined that there has been
no impairment in the carrying 

160

value of real estate assets held by the Company or the joint ventures as of
December 31, 1998.

Depreciation of building and improvements is calculated using the straight-
line method over 25 years.  Tenant improvements are amortized over the life
of the related lease or the life of the asset, whichever is shorter.

Investment in Joint Ventures

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

Revenue Recognition

All leases on real estate assets held by the Company or the joint ventures
are classified as operating leases, and the related rental income is
recognized on a straight-line basis over the terms of the respective leases.

Deferred Lease Acquisition Costs

Costs incurred to procure operating leases are capitalized and amortized on a
straight-line basis over the terms of the related leases.

Cash and Cash Equivalents

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

2. DEFERRED PROJECT COSTS

The Company paid a percentage of shareholder contributions to the Advisor for
acquisition and advisory services.  These payments, as stipulated in the
prospectus, can be up to 3.5% of shareholder contributions, subject to
certain overall limitations contained in the prospectus.  Aggregate fees paid
through December 31, 1998 were $1,103,913 and amounted to 3.5% of
shareholders' contributions received.  These fees are allocated to specific
properties as they are purchased or developed and are included in capitalized
assets of the joint ventures or real estate assets.  Deferred project costs
at December 31, 1998 represent fees not yet applied to properties.

161

3. DEFERRED OFFERING COSTS

Organization and offering expenses, to the extent they exceed 3% of gross
proceeds, will be paid by the Advisor and not by the Company.  Organization
and offering expenses do not include sales or underwriting commissions but do
include such costs as legal and accounting fees, printing costs, and other
offering expenses.

As of December 31, 1998 and 1997, the Advisor had paid organization and
offering expenses related to the Company of $946,211 and $0, respectively.

4. RELATED-PARTY TRANSACTIONS

Due from affiliates at December 31, 1998 represents the Operating
Partnership's share of the cash to be distributed for the fourth quarter of
1998 as follows:

Fund IX, X, XI, and REIT Joint Venture                    $ 38,360 
Wells/Orange County Associates                              77,123 
Wells/Fremont Associates                                   146,862 
-------- 
$262,345 
========  

The Company entered into a property management agreement with Wells
Management Company, Inc. ("Wells Management"), an affiliate of the Advisor.
In consideration for supervising the management and leasing of the Operating
Partnership's properties, the Operating Partnership will pay Wells Management
management and leasing fees equal to the lesser of (a) fees that would be
paid to a comparable outside firm, or (b) 4.5% of the gross revenues
generally paid over the life of the lease plus a separate competitive fee for
the one-time initial lease-up of newly constructed properties generally paid
in conjunction with the receipt of the first month's rent.  In the case of
commercial properties which are leased on a long-term (ten or more years) net
lease basis, the maximum property management fee from such leases shall be 1%
of the gross revenues generally paid over the life of the leases except for a
one-time initial leasing fee of 3% of the gross revenues on each lease
payable over the first five full years of the original lease term.

The Operating Partnership's portion of the management and leasing fees and
lease acquisition costs paid to Wells Management by the joint ventures was
$5,673 for the year ended December 31, 1998.

The Advisor performs certain administrative services for the Operating
Partnership, such as accounting and other partnership administration, and
incurs the related expenses.  Such expenses are allocated among the Operating
Partnership and the various Wells Real Estate Funds based on time spent on
each fund by individual administrative personnel.  In the opinion of
management, such allocation is a reasonable basis for allocating such
expenses.

The Advisor is a general partner in various Wells Real Estate Funds.  As
such, there may exist conflicts of interest where the Advisor, while serving
in the 

162

capacity as general partner for Wells Real Estate Funds, may be in
competition with the Operating Partnership for tenants in similar geographic
markets.

5. INVESTMENT IN JOINT VENTURES

The Operating Partnership's investment and percentage ownership in joint
ventures at December 31, 1998 is summarized as follows:

Amount          Percent   
------          -------

Fund IX, X, XI, and REIT Joint Venture               $ 1,443,378            4%
Wells/Orange County Associates                         2,958,617           44 
Wells/Fremont Associates                               7,166,682           78 
----------- 
$11,568,677                
=========== 

The following is a roll forward of the Operating Partnership's investment in
joint ventures for the year ended December 31, 1998:

Investment in joint ventures, beginning of year      $         0
Equity in income of joint ventures                       263,315
Contributions to joint ventures                       11,745,890
Distributions from joint venture                        (440,528)
----------- 
Investment in joint ventures, end of year            $11,568,677 
=========== 

Fund IX, X, XI, and REIT Joint Venture

On March 20, 1997, Wells Fund IX and Wells Fund X entered into a joint
venture agreement.  The joint venture, Fund IX and X Associates, was formed
to acquire, develop, operate, and sell real properties.  On March 20, 1997,
Wells Fund IX contributed a 5.62-acre tract of real property in Knoxville,
Tennessee, and improvements thereon, known as the ABB Building, to the Fund
IX and X Associates joint venture.  A 83,885-square-foot, three-story
building was constructed and commenced operations at the end of 1997.

On February 13, 1998, the joint venture purchased a two-story office
building, known as the Ohmeda Building, in Louisville, Colorado.  On March
20, 1998, the joint venture purchased a three-story office building, known as
the 360 Interlocken Building, in Broomfield, Colorado.  On June 11, 1998,
Fund IX and X Associates was amended and restated to admit Wells Fund XI and
the Operating Partnership.  The joint venture was renamed the Fund IX, X, XI,
and REIT Joint Venture.  On June 24, 1998, the new joint venture purchased a
one-story office building, known as the Lucent Technologies Building, in
Oklahoma City, Oklahoma.  On April 1, 1998, Wells Fund X purchased a one-
story warehouse facility, known as the Iomega Building, in Ogden, Utah.  On
July 1, 1998, Wells Fund X contributed the Iomega Building to the Fund IX, X,
XI, and REIT Joint Venture.

163

Following are the financial statements for the Fund IX, X, XI, and REIT Joint
Venture:

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

(A Georgia Joint Venture)
Balance Sheets
December 31, 1998 and 1997

Assets

1998              1997
-----------       ----------

Real estate assets, at cost:                                
Land                                                                      $ 6,454,213       $  607,930
Building and improvements, less                           
accumulated depreciation of $1,253,156 in                
1998 and $36,863 in 1997                                                  30,686,845        6,445,300 
Construction in progress                                                          990           35,622
-----------       ----------
Total real estate assets                                              37,142,048        7,088,852
Cash and cash equivalents                                                    1,329,457          289,171
Accounts receivable                                                            133,257           40,512
Prepaid expenses and other assets                                              441,128          329,310
-----------       ----------
Total assets                                                         $39,045,890       $7,747,845
===========       ========== 
Liabilities and Partners' Capital    

Liabilities:                                                
Accounts payable                                                       $   409,737       $  379,770
Due to affiliates                                                            4,406            2,479
Partnership distributions payable                                        1,000,127                0
-----------       ----------  
Total liabilities                                              1,414,270          382,249
-----------       ----------  
Partners' capital:                                       
Wells Real Estate Fund IX                                               14,960,100        3,702,793
Wells Real Estate Fund X                                                18,707,139        3,662,803
Wells Real Estate Fund XI                                                2,521,003                0
Wells Operating Partnership, L.P.                                        1,443,378                0
-----------       ----------  
Total partners' capital                                       37,631,620        7,365,596
-----------       ----------  
Total liabilities and partners' capital                      $39,045,890       $7,747,845
===========       ==========  

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

164

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Income (Loss)
for the Year Ended December 31, 1998 and
for the Period from Inception (March 20, 1997) to December 31, 1997

1998              1997
-----------        ----------

Revenues:
Rental income                                                                          $2,945,980         $ 28,512
Interest income                                                                            20,438                0
----------         --------
2,966,418           28,512
----------         --------
Expenses:
Depreciation                                                                            1,216,293           36,863
Management and leasing fees                                                               226,643            1,711
Operating costs, net of reimbursements                                                   (140,506)          10,118
Property administration                                                                    34,821                0
Legal and accounting                                                                       15,351                0
----------         --------
1,352,602           48,692
----------         --------
Net income (loss)                                                                        $1,613,816         $(20,180)
==========         ========

Net income (loss) allocated to Wells Real Estate                                         $  692,116         $(10,145)
Fund IX                                                                                ==========         ========

Net income (loss) allocated to Wells Real Estate                                         $  787,481         $(10,035)
Fund X                                                                                 ==========         ========

Net income allocated to Wells Real Estate Fund XI                                        $   85,352         $      0
==========         ========

Net income allocated to Wells Operating                                                  $   48,867         $      0
==========         ========
Partnership, L.P. 

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Year Ended December 31, 1998 and
for the Period from Inception (March 20, 1997) to December 31, 1997

Wells Real    Wells Real   Wells Real         Wells            Total
Estate        Estate       Estate         Operating        Partners'
Fund IX        Fund X       Fund XI    Partnership, L.P.     Capital
------------   -----------   ----------   -----------------   -----------

Balance, December 31, 1996               $         0   $         0   $        0       $        0      $         0
Net loss                                 (10,145)      (10,035)           0                0          (20,180)
Partnership contributions              3,712,938     3,672,838            0                0        7,385,776
-----------   -----------   ----------       ----------      ----------- 
Balance, December 31, 1997                 3,702,793     3,662,803            0                0        7,365,596
Net income                               692,116       787,481       85,352           48,867        1,613,816
Partnership contributions             11,771,312    15,613,477    2,586,262        1,480,741       31,451,792
Partnership distributions             (1,206,121)   (1,356,622)    (150,611)         (86,230)      (2,799,584)
-----------   -----------   ----------       ----------      ----------- 
Balance, December 31, 1998          $14,960,100   $18,707,139   $2,521,003       $1,443,378      $37,631,620
===========   ===========   ==========       ==========      =========== 

165

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Cash Flows
for the Year Ended December 31, 1998 and
for the Period from Inception (March 20, 1997) to December 31, 1997

1998                1997
------------        -----------
Cash flows from operating activities:

Net income (loss)                                                            $  1,613,816        $   (20,180)
------------        -----------   
Adjustments to reconcile net income (loss) to net cash provided by                               
operating activities:                                                                           
Depreciation                                                                1,216,293             36,863
Changes in assets and liabilities:                                                           
Accounts receivable                                                       (92,745)           (40,512)
Prepaid expenses and other assets                                        (111,818)          (329,310)
Accounts payable                                                           29,967            379,770
Due to affiliates                                                           1,927              2,479
------------        -----------   
Total adjustments                                                     1,043,624             49,290   
------------        -----------   
Net cash provided by operating activities                             2,657,440             29,110   
------------        -----------   
Cash flows from investing activities:                                                              
Investment in real estate                                                     (24,788,070)        (5,715,847)
------------        -----------   
Cash flows from financing activities:                                                                            
Distributions to joint venture partners                                        (1,799,457)                 0   
Contributions received from partners                                           24,970,373          5,975,908   
------------        -----------   
Net cash provided by financing activities                            23,170,916          5,975,908   
------------        -----------   
Net increase in cash and cash equivalents                                         1,040,286            289,171   
Cash and cash equivalents, beginning of period                                      289,171                  0   
------------        -----------   
Cash and cash equivalents, end of year                                         $  1,329,457        $   289,171   
============        ===========   

Supplemental disclosure of noncash activities:                                                                   
Deferred project costs contributed                                           $  1,470,780        $   318,981   

Contribution of real estate assets                                           $  5,010,639        $ 1,090,887   
============        ===========   

Wells/Orange County Associates

On July 27, 1998, the Operating Partnership entered into a joint venture
agreement with Wells Development Corporation, referred to as Wells/Orange
County Associates.  On July 31, 1998, Wells/Orange County Associates acquired
a 52,000-square-foot warehouse and office building located in Fountain
Valley, California, known as the Cort Furniture Building.

On September 1, 1998, Fund X and XI Associates acquired Wells Development
Corporation's interest in Wells/Orange County Associates which resulted in
Fund X and XI Associates becoming a joint venture partner with the Operating
Partnership in the ownership of the Cort Furniture Building.

166

Following are the financial statements for Wells/Orange County Associates:

Wells/Orange County Associates
(A Georgia Joint Venture)
Balance Sheet
December 31, 1998

Assets

Real estate assets, at cost:

Land                                                                                                 $2,187,501
Building, less accumulated depreciation of $92,087                                                    4,572,028
----------
Total real estate assets                                                                 6,759,529
Cash and cash equivalents                                                                               180,895
Accounts receivable                                                                                      13,123
----------
Total assets                                                                            $6,953,547
========== 

Liabilities and Partners' Capital                               

Liabilities:                                                                                           
Accounts payable                                                                                     $    1,550
Partnership distributions payable                                                                       176,614
----------
Total liabilities                                                                          178,164
----------
Partners' capital:                                                                                     
Wells Operating Partnership, L.P.                                                                     2,958,617
Fund X and XI Associates                                                                              3,816,766
----------
Total partners' capital                                                                  6,775,383
----------
Total liabilities and partners' capital                                                 $6,953,547
==========

Wells/Orange County Associates
(A Georgia Joint Venture)
Statement of Income
for the Period From Inception (July 27, 1998)
to December 31, 1998

Revenues:

Rental income                                                                                             $331,477
Interest income                                                                                                448
--------
331,925
--------
Expenses:                                                                                                  
Depreciation                                                                                                92,087
Management and leasing fees                                                                                 12,734
Operating costs, net of reimbursements                                                                       2,288
Interest                                                                                                    29,472
Legal and accounting                                                                                         3,930
--------
140,511
--------
Net income                                                                                                 $191,414
========

Net income allocated to Wells Operating Partnership, L.P.                                                  $ 91,978
========

Net income allocated to Fund X and XI Associates                                                           $ 99,436
========

167

Wells/Orange County Associates
(A Georgia Joint Venture)
Statement of Partners' Capital
for the Period From Inception (July 27, 1998)
to December 31, 1998

Wells
Operating             Fund X              Total
Partnership,            and XI            Partners'
L.P.              Associates           Capital
------------------   -----------------   ----------------- 

Balance, December 31, 1997                                            $        0          $        0          $        0 
Net income                                                              91,978              99,436             191,414
Partnership contributions                                            2,991,074           3,863,272           6,854,346
Partnership distributions                                             (124,435)           (145,942)           (270,377)
------------------   -----------------   ----------------- 
Balance, December 31, 1998                                            $2,958,617          $3,816,766          $6,775,383
==================   =================   ================= 

Wells/Orange County Associates
(A Georgia Joint Venture)
Statement of Cash Flows
for the Period From Inception (July 27, 1998)
to December 31, 1998

Cash flows from operating activities:

Net income                                                                                                        $   191,414
----------- 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation                                                                                                         92,087
Changes in assets and liabilities:
Accounts receivable                                                                                               (13,123)
Accounts payable                                                                                                    1,550
----------- 
Total adjustments                                                                                                80,514
----------- 
Net cash provided by operating activities                                                                       271,928
----------- 
Cash flows from investing activities:
Investment in real estate                                                                                          (6,563,700)
----------- 
Cash flows from financing activities:
Issuance of note payable                                                                                            4,875,000
Payment of note payable                                                                                            (4,875,000)
Distributions to partners                                                                                             (93,763)
Contributions received from partners                                                                                6,566,430
----------- 
Net cash provided by financing activities                                                                     6,472,667
----------- 
Net increase in cash and cash equivalents                                                                              180,895
Cash and cash equivalents, beginning of period                                                                               0
----------- 
Cash and cash equivalents, end of year                                                                             $   180,895
===========  

Supplemental disclosure of noncash investing activities:
Deferred project costs contributed                                                                                $   287,916
=========== 

168

Wells/Fremont Associates

On July 15, 1998, the Operating Partnership entered into a joint venture
agreement with Wells Development Corporation, referred to as Wells/Fremont
Associates.  On July 21, 1998, Wells/Fremont Associates acquired a 58,424-
square-foot warehouse and office building located in Fremont, California,
known as the Fairchild Building.

On October 8, 1998, Fund X and XI Associates acquired Wells Development
Corporation's interest in Wells/Fremont Associates which resulted in Fund X
and XI Associates becoming a joint venture partner with the Operating
Partnership in the ownership of the Fairchild Building.

169

Following are the financial statements for Wells/Fremont Associates:

Wells/Fremont Associates 
(A Georgia Joint Venture)
Balance Sheet 
December 31, 1998

Assets

Real estate assets, at cost:

Land                                                                                                $2,219,251
Building, less accumulated depreciation of $142,720                                                  6,995,439
---------- 
Total real estate assets                                                                   9,214,690
Cash and cash equivalents                                                                                   192,512
Accounts receivable                                                                                          34,742
---------- 
Total assets                                                                              $9,441,944
========== 

Liabilities and Partners' Capital

Liabilities:
Accounts payable                                                                                    $    3,565
Due to affiliate                                                                                         2,052
Partnership distributions payable                                                                      189,490
---------- 
Total liabilities                                                                            195,107
---------- 
Partners' capital:   
Wells Operating Partnership, L.P.                                                                    7,166,682
Fund X and XI Associates                                                                             2,080,155
---------- 
Total partners' capital                                                                    9,246,837
---------- 
Total liabilities and partners' capital                                                   $9,441,944
========== 

170

Wells/Fremont Associates
(A Georgia Joint Venture)
Statement of Income
for the Period From Inception (July 15, 1998)
to December 31, 1998

Revenues:

Rental income                                                                                             $401,058
Interest income                                                                                              3,896
-------- 
404,954
-------- 
Expenses:
Depreciation                                                                                               142,720
Management and leasing fees                                                                                 16,726
Operating costs, net of reimbursements                                                                       3,364
Interest                                                                                                    73,919
Legal and accounting                                                                                         6,306
-------- 
243,035
-------- 
Net income                                                                                                 $161,919
-------- 

Net income allocated to Wells Operating Partnership, L.P.                                                  $122,470
-------- 

Net income allocated to Fund X and XI Associates                                                           $ 39,449
-------- 

Wells/Fremont Associates
(A Georgia Joint Venture)
Statement of Partners' Capital
for the Period From Inception (July 15, 1998)
to December 31, 1998

Wells
Operating            Fund X              Total
Partnership,           and XI            Partners'
L.P.             Associates           Capital
--------------       ------------        ----------- 

Balance, December 31, 1997                                         $        0         $        0          $        0
Net income                                                        122,470             39,449             161,919
Partner contributions                                           7,274,075          2,083,334           9,357,409
Partnership distributions                                        (229,863)           (42,628)           (272,491)
-----------        -----------         ---------- 
Balance, December 31, 1998                                         $7,166,682         $2,080,155          $9,246,837
===========        ===========         ========== 

171

Wells/Fremont Associates
(A Georgia Joint Venture)
Statement of Cash Flows
for the Period From Inception (July 15, 1998)
to December 31, 1998

Cash flows from operating activities:                                                                     
Net income                                                                                 $   161,919   
------------  
Adjustments to reconcile net income to net cash provided by operating activities:                        
Depreciation                                                                               142,720   
Changes in assets and liabilities:                                                                   
Accounts receivable                                                                       (34,742)  
Accounts payable                                                                            3,565   
Due to affiliate                                                                            2,052   
------------  
Total adjustments                                                                       113,595   
------------  
Net cash provided by operating activities                                               275,514   
------------  
Cash flows from investing activities:                                                                     
Investment in real estate                                                                   (8,983,111)  
------------  
Cash flows from financing activities:                                                                     
Issuance of note payable                                                                     5,960,000   
Payment of note payable                                                                     (5,960,000)  
Distributions to partners                                                                      (83,001)  
Contributions received from partners                                                         8,983,110   
------------  
Net cash provided by financing activities                                             8,900,109   
------------  
Net increase in cash and cash equivalents                                                       192,512   
Cash and cash equivalents, beginning of period                                                        0   
------------  
Cash and cash equivalents, end of year                                                      $   192,512   
============  
Supplemental disclosure of noncash investing activities:                                                  
Deferred project costs contributed                                                         $   374,299   
============

172

6.  INCOME TAX BASIS NET INCOME AND PARTNERS' CAPITAL

The Operating Partnership's income tax basis net income for the year ended
December 31, 1998 is calculated as follows:

Financial statement net income                                                      $   334,034   
Increase (decrease) in net income resulting from:                                                 
Depreciation expense for financial reporting purposes in excess of amounts                       
for income tax purposes                                                                82,618   
Rental income accrued for financial reporting purposes in excess of amounts                      
for income tax purposes                                                               (35,427)  
Expenses capitalized for income tax purposes, deducted for financial                             
reporting purposes                                                                      1,634   
-----------
Income tax basis net income                                                  $   382,859    
===========

The Operating Partnership's income tax basis partners' capital at December
31, 1998 is computed as follows:

Financial statement partners' capital                                               $27,421,687             
Increase (decrease) in partners' capital resulting from:                                          
Depreciation expense for financial reporting purposes in excess of amounts                       
for income tax purposes                                                                82,618   
Capitalization of syndication costs for income tax purposes, which are                           
accounted for as cost of capital for financial reporting purposes                   3,942,545   
Accumulated rental income accrued for financial reporting purposes in                            
excess of amounts for income tax purposes                                             (35,427)  
Accumulated expenses capitalized for income tax purposes, deducted for                          
financial reporting purposes                                                            1,634   
Operating Partnership's distributions payable                                          408,176   
-----------
Income tax basis partners' capital                                                  $31,821,233   
============

173

7.  RENTAL INCOME

The future minimum rental income due from the Operating Partnership's direct
investment in real estate or its respective ownership interest in the joint
ventures under noncancelable operating leases at December 31, 1998 is as
follows:

Year ended December 31:                                                                 

1999                                                                    $ 3,056,108
2000                                                                      3,130,347
2001                                                                      3,229,087
2002                                                                      3,306,364
2003                                                                      3,332,111
Thereafter                                                                 12,865,333
-----------
$28,919,350            
===========

Two tenants contributed 47% and 35% of rental income, which is included in
equity in income of joint ventures for the year ended December 31, 1998.  In
addition, one tenant will contribute 77% of future minimum rental income.

The future minimum rental income due the Fund IX, X, XI, and REIT Joint
Venture under noncancealable operating leases at December 31, 1998 is as
follows:

Year ended December 31:

1999                                                                    $ 3,689,498 
2000                                                                      3,615,011 
2001                                                                      3,542,714 
2002                                                                      3,137,241 
2003                                                                      3,196,100 
Thereafter                                                                  8,225,566
-----------
$25,406,130  
===========

Three significant tenants contributed 31%, 26%, and 13% of rental income for
the year ended December 31, 1998.  In addition, four significant tenants will
contribute 27%, 25%, 21%, and 15% of future minimum rental income.

The future minimum rental income due Wells/Orange County Associates under
noncancealable operating leases at December 31, 1998 is as follows:

Year ended December 31:

1999                                                                    $  758,964
2000                                                                       758,964
2001                                                                       809,580
2002                                                                       834,888
2003                                                                       695,740
----------
$3,858,136
==========

One tenant contributed 100% of rental income for the year ended December 31,
1998 and will contribute 100% of future minimum rental income.

174

The future minimum rental income due Wells/Fremont Associates under
noncancelable operating leases at December 31, 1998 is as follows:

Year ended December 31:

1999                                                                    $  844,167
2000                                                                       869,492
2001                                                                       895,577
2002                                                                       922,444
2003                                                                       950,118
Thereafter                                                                   894,832
----------
$5,376,630
==========

One tenant contributed 100% of rental income for the year ended December 31,
1998 and will contribute 100% of future minimum rental income.

8. COMMITMENTS AND CONTINGENCIES

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

175

WELLS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES

BALANCE SHEETS

September 30,         December 31,
1999                 1998
-------------         ------------ 

ASSETS:
Real estate, at cost:
Land                                                                 $ 12,984,155          $ 1,520,834
Building improvements, less accumulated 
depreciation of $1,036,003 in 1999                                    66,019,334           20,076,845
------------          ----------- 
Total real estate                                                    79,003,489           21,597,679
Investments in joint ventures (Note 2)                                    29,617,140           11,568,677
Due from affiliates                                                          546,602              262,345
Cash and cash equivalents                                                  2,850,263            7,979,403
Deferred project costs (Note 3)                                               19,431              335,421
Deferred offering costs (Note 4)                                             749,369              548,729
Prepaid expenses and other assets                                            946,847              540,319
------------          ----------- 
Total assets                                                       $113,733,141          $42,832,573
------------          ----------- 

LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Accounts payable                                                     $    513,993          $   187,827
Notes payable (Note 6)                                                 16,926,057           14,059,930
Due to affiliates (Note 5)                                                838,493              554,953
Dividends payable                                                       1,645,122              408,176
Minority interest of unit holder in operating 
partnership                                                              200,000              200,000
------------          ----------- 
Total liabilities                                                    20,123,665           15,410,886
------------          ----------- 
COMMITMENT AND CONTINGENT 
LIABILITIES (Note 7)
Shareholders' equity:
Common shares, $.01 par value; 
40,000,000 shares authorised,                            
10,846,930 shares issued and 
outstanding at September 30,1999 
and 3,154,136 shares issued and 
outstanding at December 31, 1998                                         108,469               31,541 
Additional paid-in capital                                                90,894,541           27,056,112
Retained earnings                                                          2,606,466              334,034
------------          ----------- 
Total shareholders' equity                                       93,609,476           27,421,687
------------          ----------- 
Total liabilities and shareholders' 
equity                                                    $113,733,141          $42,832,573
============          ===========

See accompanying condensed notes to financial statements.

176

WELLS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES

STATEMENTS OF INCOME

Nine Months    Four Months
Three Months Ended             Ended          Ended
-----------------------------   ----------------------------
September 30,   September 30,   September 30,  September 30,
1999           1998            1999           1998
-------------   -------------   -------------  ------------- 
REVENUES:

Rental income                                             $1,227,144         $     0     $2,806,158        $     0
Equity in income of joint ventures                           384,887          68,683        783,065         75,314
Interest income                                              191,321           4,609        407,067          8,895
----------         -------     ----------        -------       
1,803,352          73,292      3,996,290         84,209
----------         -------     ----------        -------       
EXPENSES:
Operating costs, net of reimbursements                       (11,632)              0        359,112              0
Management and leasing fees                                   68,823               0        150,908              0
Depreciation                                                 423,760               0      1,036,003              0
Administrative costs                                          21,076          10,846         91,016         10,864
Legal and accounting                                          22,187             318         78,637            318
Computer costs                                                 2,119               0          8,182              0
----------         -------     ----------        -------       
526,333          11,164      1,723,858         11,182
----------         -------     ----------        -------       
NET INCOME                                                     $1,277,019         $62,128     $2,272,432        $73,027
----------         -------     ----------        -------        
BASIC AND DILUTED EARNINGS PER 
SHARE                                                        $     0.18         $  0.06     $     0.37        $  0.06
----------         -------     ----------        -------       

See accompanying condensed notes to financial statements.

177

WELLS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES

STATEMENTS OF SHAREHOLDERS' EQUITY

THE NINE MONTHS ENDED SEPTEMBER 30, 1999

AND FOR THE YEAR ENDED DECEMBER 31, 1998

Total
Additional Paid-    Retained   Shareholders'
Shares     Amounts     In Capital       Earnings       Equity
-----------  --------  ----------------   ----------  ------------- 

BALANCE, December 31, 1997                                    100  $      1       $       999   $        0    $     1,000

Issuance of common stock                              3,154,036    31,540        31,508,820            0     31,540,360
Net income                                                    0         0                 0      334,034        334,034
Dividends                                                     0         0          (511,163)           0       (511,163)
Sales commissions                                             0         0        (2,996,334)           0     (2,996,334)
Other offering expenses                                       0         0          (946,210)           0       (946,210)
-----------  --------       -----------   ----------    -----------
BALANCE, December 31, 1998                              3,154,136    31,541        27,056,112      334,034     27,421,687

Issuance of common stock                              7,692,794    76,928        76,851,016            0     76,927,944
Net income                                                    0         0                 0    2,272,432      2,272,432
Dividends                                                     0         0        (3,396,594)           0     (3,396,594)
Sales commissions                                             0         0        (7,308,155)           0     (7,308,155)
Other offering expenses                                       0         0        (2,307,838)           0     (2,307,838)
-----------  --------       -----------   ----------    -----------
BALANCE, September 30, 1999                            10,846,930  $108,469       $90,894,541   $2,606,466    $93,609,476
===========  ========       ===========   ==========    ===========

See accompanying condensed notes to financial statements.

178

WELLS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

Nine Months     Four Months
Ended           Ended
September 30,   September 30,
1999            1998
-------------   -------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                            $  2,272,432     $    73,027
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation                                                                          1,036,003               0
Equity in income of joint ventures                                                     (783,065)        (75,314)
Changes in assets and liabilities:                   
Accounts payable                                                                      326,166               0
Increase in prepaid expenses and other assets                                        (661,335)        (11,250)
Increase due to affiliates                                                             82,901          33,544
------------     -----------
Net cash provided by operating activities                                         2,273,102          20,007
------------     -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in real estate                                                             (55,913,594)              0
Investments in joint ventures                                                          (17,641,421)     (9,566,007)
Deferred project costs                                                                  (2,692,478)       (409,217)
Distributions received from joint ventures                                                 826,822          15,307
------------     -----------
Net cash used in investing activities                                           (75,420,671)     (9,959,917)
------------     -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from note payable                                                              25,598,666               0
Repayment of note                                                                      (22,732,539)              0
Dividends paid                                                                          (2,159,649)              0
Issuance of common stock                                                                76,927,944      11,691,923
Sales commission paid                                                                   (7,308,155)     (1,011,133)
Offering costs paid                                                                     (2,307,838)       (350,758)
------------     -----------
Net cash provided by financing activities                                        68,018,429      10,330,032
------------     -----------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                      (5,129,140)        390,122

CASH AND CASH EQUIVALENTS, beginning of year                                               7,979,403         201,000
------------     -----------
CASH AND CASH EQUIVALENTS, end of period                                                $  2,850,263     $   591,122
============     =========== 
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES:
Deferred project costs applied to investing activities                                $  3,008,467     $   398,634
============     ===========

See accompanying condensed notes to financial statements.

179

WELLS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES

(A Georgia Public Limited Partnership)

CONDENSED NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 1999

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) General

Wells Real Estate Investment Trust, Inc. (the "Company") is a Maryland
corporation formed on July 3, 1997.  The Company is the sole general partner
of Wells Operating Partnership, L.P. ("Wells OP"), a Delaware limited
partnership organized for the purpose of acquiring, developing, owning,
operating, improving, leasing, and otherwise managing for investment purposes
income-producing commercial properties on behalf of the Company.

On January 30, 1998, the Company commenced a public offering of up to
16,500,000 shares of common stock ($10 per share) pursuant to a registration
statement on Form S-11 filed under the Securities Act of 1933.  The Company
commenced active operations on June 5, 1998, when it received and accepted
subscriptions for 125,000 shares.  As of September 30, 1999, the Company had
sold 10,846,930 shares for total capital contributions of $108,469,304.
After payment of $3,796,391 in acquisition and advisory fees and acquisition
expenses, payment of $13,558,538 in selling commissions and organization and
offering expenses, and investment by Wells OP of $89,919,734 in property
acquisitions, as of September 30, 1999, the Company was holding net offering
proceeds of $1,194,641 available for investment in properties.

Wells OP owns interests in properties both directly and through equity
ownership in the following joint ventures:  (i) the Fund IX-X-XI-REIT Joint
Venture, a joint venture among Wells OP and Wells Real Estate Fund IX, L.P.,
Wells Real Estate Fund X, L.P., and Wells Real Estate Fund XI, L.P. (the
"Fund IX-X-XI-REIT Joint Venture"), (ii) Wells/Fremont Associates (the
"Fremont Joint Venture"), a joint venture between Wells OP and Fund X and
Fund XI Associates, which is a joint venture between Wells Real Estate Fund
X, L.P. and Wells Real Estate Fund XI, L.P. (the "Fund X-XI Joint Venture"),
(iii) Wells/Orange County Associates (the "Cort Joint Venture"), a joint
venture between Wells OP and the Fund X-XI Joint Venture, and  (iv) the Fund
XI-XII-REIT Joint Venture, a joint venture among Wells OP, Wells Real Estate
Fund XI, L.P., and Wells Real Estate Fund XII, L.P. (the "Fund XI-XII-REIT
Joint Venture").

As of September 30, 1999, Wells OP owned interests in the following
properties: (i) a three story office building in Knoxville, Tennessee (the
"ABB Building"), (ii) a two-story office building in Louisville, Colorado
(the "Ohmeda Building"), (iii) a three-story office building in Broomfield,
Colorado (the "360 Interlocken 

180

Building"), (iv) a one-story office building in Oklahoma City, Oklahoma (the
"Lucent Technologies Building"), (v) a one-story warehouse and office
building in Ogden, Utah (the "Iomega Building"), all five of which are owned
by the Fund IX-X-XI-REIT Joint Venture, (vi) a two-story warehouse and office
building in Fremont, California (the "Fairchild Building"), which is owned by
the Fremont Joint Venture, (vii) a one-story warehouse and office building in
Fountain Valley, California (the "Cort Building"), which is owned by the Cort
Joint Venture, (viii) a four-story office building in Tampa, Florida (the
"PWC Building"), (ix) a four-story office building in Harrisburg,
Pennsylvania (the "AT&T Building"), which are owned directly by Wells OP, (x)
a two-story manufacturing and office building located in Fountain Inn, South
Carolina (the "EYBL CarTex Building"), (xi) a three-story office building
located in Leawood, Kansas (the "Sprint Building"), (xii) a one-story office
building and warehouse in Tredyffrin Township, Pennsylvania (the "Johnson
Matthey Building"), (xiii) a two-story office building in Ft. Meyers, Florida
(the "Gartner Building"), all four of which are owned by Fund XI-XII-REIT
Joint Venture, (xiv) a two-story office building under construction located
in Lake Forest, California ( the "Matsushita Project"), (xv) a four-story
office building under construction in Richmond, Virginia (the "ABB
Building"), and (xvi) a two-story office building and warehouse in Wood Dale,
Illinois (the "Videojet Building"), all three of which are owned directly by
Wells OP.

(b) Employees

The Company has no direct employees.  The employees of Wells Capital, Inc.,
the Company's Advisor (the "Advisor"), perform a full range of real estate
services including leasing and property management, accounting, asset
management, and investor relations for the Company.

(c) Insurance

Wells Management Company, Inc., an affiliate of the Company and the Advisor,
carries comprehensive liability and extended coverage with respect to all the
properties owned directly or indirectly by the Company.  In the opinion of
management, the properties are adequately insured.

(d) Competition

The Company will experience competition for tenants from owners and managers
of competing projects which may include its affiliates.  As a result, the
Company may be required to provide free rent, reduced charges for tenant
improvements, and other inducements, all of which may have an adverse impact
on results of operations.  At the time the Company elects to dispose of its
properties, the Company will also be in competition with sellers of similar
properties to locate suitable purchasers for its properties.

(e) Basis of Presentation

Substantially all of the Company's business will be conducted through Wells
OP.  At December 31, 1997, Wells OP had issued 20,000 limited partner units
to Wells Capital Inc., the Advisor, in exchange for a capital contribution of
$200,000.  The 

181

Company is the sole general partner in Wells OP and possesses full legal
control and authority over the operations of Wells OP; consequently, the
accompanying consolidated balance sheets of the Company include the amounts
of the Company and Wells OP.

The consolidated financial statements of the Company have been prepared in
accordance with instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.  These quarterly statements
have not been examined by independent accountants, but in the opinion of the
board of directors, the statements for the unaudited interim periods
presented include all adjustments, which are of a normal and recurring
nature, necessary to present a fair presentation of the results for such
periods. For further information, refer to the financial statements and
footnotes included in the Company's Form 10-K for the year ended December 31,
1998.

(f) Distribution Policy

The Company is required to make distributions each taxable year (not
including a return of capital for federal income tax purposes) equal to at
least 95% of its real estate investment trust taxable income.  The Company
intends to make regular quarterly dividend distributions to holders of the
shares.  Distributions will be made to those shareholders who are
shareholders as of the record dates selected by the directors.  Distributions
will be paid on a quarterly basis.

(g) Income Taxes

The Company has made an election under Section 856(c) of the Internal Revenue
Code of 1986, as amended (the "Code"), to be taxed as a real estate
investment trust ("REIT") under the Code beginning with its taxable year
ended December 31, 1998.  As a REIT for federal income tax purposes, the
Company generally will not be subject to federal income tax on income that it
distributes to its shareholders.  If the Company fails to qualify as a REIT
in any taxable year, it will then be subject to federal income tax on its
taxable income at regular corporate rates and will not be permitted to
qualify for treatment as a REIT for federal income tax purposes for four
years following the year during which qualification is lost.  Such an event
could materially adversely affect the Company's net income and net cash
available to distribute to shareholders.  However, the Company believes that
it is organized and operates in such a manner as to qualify for treatment as
a REIT and intends to continue to operate in the foreseeable future in such a
manner so that the Company will remain qualified as a REIT for federal income
tax purposes.

(h) Statements of Cash Flows

For the purpose of the statements of cash flows, the Company considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents.  Cash equivalents include cash and
short-term investments.

182

2. INVESTMENTS IN JOINT VENTURES

The Company owns interests in 14 office buildings and 2 office buildings
under construction through its ownership in Wells OP which owns properties
directly or through its interest in four joint ventures.  The Company does
not have control over the operations of these joint ventures; however, it
does exercise significant influence.  Accordingly, investments in joint
ventures are recorded using the equity method.

The following describes additional information about the properties in which
the Company owns interests as of September 30, 1999:

The Sprint Building

On July 2, 1999, the Fund XI-XII-REIT Joint Venture acquired a three-
story office building with approximately 68,900 rentable square feet on
a 7.12-acre tract of land located in Leawood, Johnson County, Kansas
(the "Sprint Building") from Bridge Information Systems America, Inc.

The purchase price for the Sprint Building was $9,500,000.  The Fund XI-
XII-REIT Joint Venture also incurred additional acquisition expenses in
connection with the purchase of the Sprint Building, including
attorneys' fees, recording fees, and other closing costs, of
approximately $46,210.

The entire 68,900 rentable square feet of the Sprint Building are
currently under a net lease agreement with Sprint Communications, Inc.
("Sprint") dated February 14, 1997 (the "Lease").  The landlord's
interest in the Lease was assigned to the Fund XI-XII-REIT Joint Venture
at the closing.

The initial term of the Lease is ten years which commenced on May 19,
1997 and expires on May 18, 2007.  Sprint has the right to extend the
Lease for two additional five-year periods of time.

The monthly base rent payable under the Lease is $83,254.17 ($14.50 per
square foot) through May 18, 2002 and $91,866.67 ($16 per square foot)
for the remainder of the lease term.  The monthly base rent payable for
each extended term of the Lease will be equal to 95% of the then
"current market rate" which is calculated as a full-service rental rate
less anticipated annual operating expenses on a rentable square foot
basis charged for space of comparable location, size, and conditions in
comparable office buildings in the suburban south Kansas City, Missouri,
and south Johnson County, Kansas, areas.

Under the Lease, Sprint is required to pay as additional rent all real
estate taxes, special assessments, utilities, taxes, insurance, and
other operating costs with respect to the Sprint Building during the
term of the Lease.  In addition, Sprint is responsible for all routine
maintenance and repairs including the interior mechanical and electrical
systems, the HVAC system, the parking lot, and the landscaping to the
Sprint Building.  The 

183

Fund XI-XII-REIT Joint Venture, as landlord, is responsible for repair
and replacement of the exterior, roof, foundation, and structure.

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

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

For additional information regarding the Sprint Building, refer to the
Form 8-K of Wells Real Estate Investment Trust, Inc. dated July 2, 1999,
which was filed with the Commission on July 16, 1999 (Commission File
No. 0-25739).

The Johnson Matthey Building

On August 17, 1999, the Fund XI-XII-REIT Joint Venture acquired a
research and development office and warehouse building located in
Chester County, Pennsylvania, from Alliance Commercial Properties Ltd.

Wells Capital, Inc., as original purchaser under the agreement, assigned
its rights under the agreement to the Fund XI-XII-REIT Joint Venture at
closing.  The purchase price paid for the Johnson Matthey Building was
$8,000,000.  The Fund XI-XII-REIT Joint Venture also incurred additional
acquisition expenses in connection with the purchase of the Johnson
Matthey Building, including attorneys' fees, recording fees, and other
closing costs, of approximately $50,000.

The Johnson Matthey Building is a 130,000 square-foot research and
development office and warehouse building that was first constructed in
1973 as a multitenant facility.  It was subsequently converted into a
single-tenant facility in 1998.  The site consists of a ten-acre tract
of land located at 434-436 Devon Park Drive in the Tredyffrin Township,
Chester County, Pennsylvania.

The entire 130,000 rentable square feet of the Johnson Matthey Building
are currently leased to Johnson Matthey.  The Johnson Matthey lease was
assigned to the Fund XI-XII-REIT Joint Venture at the closing with the
result that the joint venture is now the landlord under the lease.  The
annual base rent payable under the Johnson Matthey lease for the
remainder of the lease term is as follows:  year three-$789,750, year

184

four-$809,250, year five-$828,750, year six-$854,750, year seven-
$874,250, year eight-$897,000, year nine-$916,500, and year ten-
$939,250.

The current lease term expires in June 2007.  Johnson Matthey has the
right to extend the lease for two additional three-year periods of time.

Under the lease, Johnson Matthey is required to pay as additional rent
all real estate taxes, special assessments, utilities, taxes, insurance,
and other operating costs with respect to the Johnson Matthey Building
during the term of the lease.  In addition, Johnson Matthey is
responsible for all routine maintenance and repairs to the Johnson
Matthey Building.  The Fund XI-XII-REIT Joint Venture, as landlord, is
responsible for maintenance of the footings and foundations and the
structural steel columns and girders associated with the building.

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

For additional information regarding the Johnson Matthey Building, refer
to Supplement No. 10 dated October 10, 1999, to the Prospectus of Wells
Real Estate Investment Trust, Inc. dated January 30, 1998, contained in
Post-Effective Amendment No. 7 to Form S-11 Registration Statement of
Wells Real Estate Investment Trust, Inc., which was filed with the
Commission on October 14, 1999 (Commission File No. 333-32099).

The Videojet Building

On September 10, 1999, Wells OP acquired an office, assembly, and
manufacturing building containing approximately 250,354 rentable square
feet on a 15.3-acre tract of land located in Wood Dale, DuPage County,
Illinois.  Wells OP acquired the Videojet Building from Sun-Pla, a
California limited partnership, pursuant to the agreement of purchase
and sale (the "Contract").  The rights under the Contract were assigned
by Wells Capital, Inc., the original purchaser under the Contract, to
Wells OP at closing.  The purchase price for the Videojet Building was
$32,630,940.  In addition, Wells OP paid brokerage commissions of
$500,000 at closing. Wells OP incurred acquisition expenses in
connection with the purchase of the Videojet Building, including
attorneys' fees, appraisers' fees, environmental consultants' fees, and
other closing costs, of approximately $27,925.

The Videojet Building is a two-story corporate headquarters facility
with 128,247 square feet of office space and 122,107 square feet of
assembly 

185

and distribution space. The Videojet Building was completed in 1991 and
is located at 1500 Mittel Boulevard in the Chancellory Business Park in
Wood Dale, Illinois. The site is a 15.3-acre tract of land that is
adjacent to the western entrance to O'Hare International Airport.

The entire 250,354 rentable square feet of the Videojet Building are
currently under a net lease agreement with Videojet dated May 31, 1991
(the "Videojet Lease").  The landlord's interest in the Videojet Lease
was assigned to Wells OP at the closing.  The initial term of the
Videojet Lease is 20 years which commenced in November 1991 and expires
in November 2011.  Videojet has the right to extend the Videojet Lease
for one additional five-year period of time.  The extension option must
be exercised by giving notice to the landlord at least 365 days prior to
the expiration date of the current lease term.

The base rent payable for the remainder of the Videojet Lease term is as
follows:

Lease Year           Yearly Base Rent         Monthly Base Rent
----------           ----------------         -----------------  

2000-2001             $2,838,952               $236,579.33       
2002-2011              3,376,746                281,395.50       
Extension Term            4,667,439                388,953.25       

Under its lease, Videojet is responsible for repairs and maintenance of
the roof, walls, structure and foundation landscaping, and the heating,
ventilating, air conditioning, mechanical, electrical, plumbing, and
other systems, and all other operating costs, including, but not limited
to, real estate taxes, special assessments, utilities, and insurance.

For additional information regarding the Videojet Building, refer to the
Form 8-K of Wells Real Estate Investment Trust, Inc. dated September 10,
1999, which was filed with the Commission on September 24, 1999
(Commission File No. 0-25739).

The Gartner Building

On September 20, 1999, the Fund XI-XII-REIT Joint Venture acquired a
two-story office building with approximately 62,400 rentable square feet
on a 4.9-acre tract of land located at 12600 Gateway Boulevard in Fort
Myers, Lee County, Florida, from Hogan Triad Ft. Myers I, Ltd., a
Florida limited partnership.

The rights under the contract were assigned by Wells Capital, Inc, the
original purchaser under the contract, to the Fund XI-XII-REIT Joint
Venture at closing.  The purchase price for the Gartner Building was
$8,320,000.  The Fund XI-XII-REIT Joint Venture also incurred additional
acquisition expenses in connection with the purchase of the Gartner

186

Building, including attorneys' fees, recording fees, and other closing
costs, of approximately $27,600.

The entire 62,400 rentable square feet of the Gartner Building are
currently under a net lease agreement with Gartner dated July 30, 1997
(the "Gartner Lease").  The landlord's interest in the Gartner Lease was
assigned to the Fund XI-XII-REIT Joint Venture at the closing.

The initial term of the Gartner Lease is ten years which commenced on
February 1, 1998 and expires on January 31, 2008.  Gartner has the right
to extend the Gartner Lease for two additional five-year periods of
time.  The yearly base rent payable for the remainder of the Gartner
Lease term is $642,798 through January 2000, $790,642 through January
2001, and thereafter will increase by 2.5% through the remainder of the
Gartner Lease.

Under the Gartner Lease, Gartner is required to pay as additional rent
all real estate taxes, special assessments, utilities, taxes, insurance,
and other operating costs with respect to the Gartner Building during
the term of the Gartner Lease.  In addition, Gartner is responsible for
all routine maintenance and repairs to the Gartner Building.  The Fund
XI-XII-REIT Joint Venture, as landlord, is responsible for repairs and
replacement of the roof, structures, and paved parking areas.

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

The "Small Option Building" expansion option allows Gartner the ability
to expand into a separate, free-standing facility on the property
containing between 30,000 and 32,000 rentable square feet to be
constructed by the Fund XI-XII-REIT Joint Venture.  Gartner may exercise
its expansion right for the "Small Option Building" by providing notice
in writing to the Fund XI-XII-REIT Joint Venture on or before February
15, 2002.

The "Large Option Building" expansion option allows Gartner the ability
to expand into a separate, free-standing facility on the property
containing between 60,000 and 75,000 rentable square feet to be
constructed by the Fund XI-XII-REIT Joint Venture.  Gartner may exercise
its expansion right for the "Small Option Building" by providing notice
in writing to the Fund XI-XII-REIT Joint Venture on or before February
15, 2002.

For additional information regarding the Gartner Building, refer to the
Form 8-K of Wells Real Estate Investment Trust, Inc. dated September 20,
1999, which was filed with the Commission on October 5, 1999 (Commission
File No. 0-25739).

187

3. DEFERRED PROJECT COSTS

The Company pays acquisition and advisory fees and acquisition expenses to
Wells Capital, Inc., the Advisor, for acquisition and advisory services and
as reimbursement for acquisition expenses.  These payments may not exceed 3
1/2% of shareholders' capital contributions. Acquisition and advisory fees
and acquisition expenses paid as of September 30, 1999 amounted to $3,796,391
and represented approximately 3 1/2% of shareholders' capital contributions
received. These fees are allocated to specific properties as they are
purchased.

4. DEFERRED OFFERING COSTS

The Advisor pays all the offering expenses for the Company.   The Advisor may
be reimbursed by the Company to the extent that such offering expenses do not
exceed 3% of shareholders' capital contributions.  As of September 30, 1999,
the Company had reimbursed the Advisor for $3,254,048 in offering expenses,
which amounted to approximately 3% of shareholders' capital contributions.

5. DUE TO AFFILIATES

Due to Affiliates consists of acquisition and advisory fees, deferred
offering costs, and other operating expenses paid by the Advisor on behalf of
the Company.

6. NOTES PAYABLE

Wells OP obtained a loan in the amount of $6,450,000 from Bank of America,
N.A. (the "Bank of America"), formerly known as NationsBank, N.A., on
February 4, 1999 with an outstanding balance of $203,504 at September 30,
1999.  The Bank of America loan matures on January 4, 2002.  The interest
rate on the Bank of America loan is a fixed rate equal to the rate appearing
on Telerate Page 3750 as the London InterBank Offered Rate plus 200 basis
points over a six-month period.  The interest rate is fixed for the initial
six months of the loan at 7% per annum.  Wells OP is required to make
quarterly installments of principal in an amount to one-ninth of the
outstanding principal balance as of October 1, 1999.  The Bank of America
loan is secured by a first mortgage against the AT&T Building.

Wells OP also obtained a revolving credit facility loan in the amount of
$15,500,000 on December 31, 1998 from SouthTrust Bank with an outstanding
balance of $11,500,000 at September 30, 1999.  The SouthTrust Loan matures on
December 31, 2000.  The interest rate on the SouthTrust Loan is a variable
rate per annum equal to the London InterBank Offered Rate for a 30-day
period, plus 185 basis points.  The SouthTrust Loan is secured by a first
mortgage against the PWC Building.

Wells OP obtained a construction loan dated May 10, 1999 from Bank of
America, N.A., formerly known as NationsBank, N.A., with a maximum principal
amount of 

188

$15,375,000, the proceeds of the loan are being used to fund the development
and construction of the Matsushita Project (the "Matsushita Loan"). At
September 30, 1999, the balance on the Matsushita Loan was $5,222,553. The
Matsushita Loan will mature 24 months from the date of the loan closing. The
interest rate on the Matsushita Loan will be a variable rate equal to either
(1) the Bank of America "prime rate" or (2) at the option of Wells OP, the
rate per annum appearing on Telerate Page 3750 as the London InterBank
Offered Rate for a 30-day period, plus 200 basis points. Wells OP will make
monthly installments of interest, and commencing one year after the date of
the loan closing, Wells OP will make monthly installments of principal in the
amount of $10,703 until maturity. On the maturity date, the entire
outstanding principal balance plus any accrued but unpaid interest shall be
due and payable. At the closing, Wells OP paid a nonrefundable origination
fee of $76,900 to Bank of America. The Matsushita Loan was secured by a first
priority mortgage against the Matsushita Project. Leo F. Wells, III (an
officer and director of the Company and the Advisor) and the Company will be
coguarantors of the Matsushita Loan.

7. COMMITMENTS AND CONTINGENT LIABILITIES

On March 15, 1999, Wells OP purchased an 8.8 tract of land in Lake Forest,
Orange County, California, for a purchase price of $4,450,230.  On February
18, 1999, Wells OP entered into an office lease with Matsushita Avionics
Systems Corporation ("Matsushita Avionics") for the occupancy of a to be
constructed two-story office building containing approximately 150,000
rentable square feet on this tract (the "Matsushita Project").  Matsushita
Avionics currently occupies an existing building owned by Fund VIII and IX
Joint Venture, a joint venture between Wells Real Estate Fund VIII, L.P. and
Wells Real Estate Fund IX, L.P.--related parties to Wells OP.

On February 18, 1999, Wells OP entered into a rental income guaranty
agreement with Fund VIII and IX Joint Venture, whereby Wells OP guaranteed
the Fund VIII-Fund IX Joint Venture that the joint venture would receive
rental income on the existing building at least equal to the rent and
building expenses that the Fund VIII-Fund IX Joint Venture would have
received over the remaining term of the existing lease.  Matsushita Avionics
will vacate the existing building in December 1999, with the existing lease
term ending in September 2003.  Current rental and building expenses are
approximately $90,000 per month.

The Company's maximum liability to Fund VIII-Fund XI Joint Venture for rental
income and building expenses for the existing building was included in the
economic analysis for developing the Matsushita Project.  The Company
anticipates that the ultimate liability will be less than the maximum
liability; however, management cannot determine at this time the ultimate
liability under the rental income guaranty agreement.  Any payment made to
the Fund VIII-Fund IX Joint Venture for rental income and building expenses
will be made from the Wells REIT operating cash flow and will reduce cash
available for dividends.

189

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Fund IX and X Associates

We have audited the accompanying balance sheet of FUND IX AND X ASSOCIATES (a
Georgia Joint Venture) as of December 31, 1997 and the related statements of
loss, partners' capital, and cash flows for the period from inception (March 20,
1997) to December 31, 1997. These financial statements are the responsibility of
the Joint Venture's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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 Fund IX and X Associates as of
December 31, 1997 and the results of its operations and its cash flows for the
period from inception (March 20, 1997) to December 31, 1997 in conformity with
generally accepted accounting principles.

/s/ Arthur Andersen LLP

Atlanta, Georgia
January 9, 1998

190

FUND IX AND X ASSOCIATES

(A Georgia Joint Venture)

BALANCE SHEETS

MARCH 31, 1998 AND DECEMBER 31, 1997

ASSETS

1998              1997
------------       ----------- 
(Unaudited)

REAL ESTATE ASSETS, AT COST:
Land                                                                     $ 5,004,893        $  607,930
Building and improvements, less accumulated depreciation of 
$205,915 in 1998 and $36,863 in 1997                                   22,005,710         6,445,300
Construction in progress                                                       6,498            35,622
------------       -----------  
Total real estate assets                                            27,017,101         7,088,852

CASH AND CASH EQUIVALENTS                                                      390,276           289,171

ACCOUNTS RECEIVABLE                                                            150,402            40,512

PREPAID EXPENSES AND OTHER ASSETS                                              383,399           329,310
------------       ----------- 
Total assets                                                       $27,941,178        $7,747,845
============       ===========

LIABILITIES AND PARTNERS' CAPITAL

LIABILITIES:
Accounts payable                                                         $   385,072        $  379,770
Due to affiliates                                                              2,281             2,479
------------       -----------
Total liabilities                                                      387,353           382,249
------------       -----------
PARTNERS' CAPITAL:
Wells Real Estate Fund IX                                                 14,569,085         3,702,793
Wells Real Estate Fund X                                                  12,984,740         3,662,803
------------       -----------
Total partners' capital                                             27,553,825         7,365,596
------------       -----------
Total liabilities and partners' capital                            $27,941,178        $7,747,845
============       ===========

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

191

FUND IX AND X ASSOCIATES

(A Georgia Joint Venture)

STATEMENTS OF INCOME (LOSS)

FOR THE THREE MONTHS ENDED MARCH 31, 1998

AND THE PERIOD FROM INCEPTION (MARCH 20, 1997)

TO DECEMBER 31, 1997

1998            1997                 
----------       ---------                 
(Unaudited)                             

REVENUES:                                                                                                     
Rental income                                                       $351,203       $ 28,512              
--------       --------              
EXPENSES:                                                                                                  
Depreciation and amortization                                        178,881         36,863              
Management and leasing fees                                           22,838          1,711              
Operating costs, net of reimbursements                                24,052         10,118              
Property administration                                                5,632              0              
--------       --------              
231,403         48,692              
--------       --------              
NET INCOME (LOSS)                                                     $119,800       $(20,180)             
========       ========              

NET INCOME (LOSS) ALLOCATED TO WELLS REAL ESTATE FUND IX              $ 57,858       $(10,145)     
========       ========              

NET INCOME (LOSS) ALLOCATED TO WELLS REAL ESTATE FUND X               $ 61,942       $(10,035)             
========       ========               

The accompanying notes are an integral part of these  statements.

192

FUND IX AND X ASSOCIATES

(A Georgia Joint Venture)

STATEMENTS OF PARTNERS' CAPITAL

FOR THE THREE MONTHS ENDED MARCH 31, 1998

AND THE PERIOD FROM INCEPTION (MARCH 20, 1997)

TO DECEMBER 31, 1997

Wells Real          Wells Real             Total    
Estate               Estate             Partners'  
Fund IX              Fund X              Capital   
------------         -------------        ------------   

BALANCE, December 31, 1996                             $          0          $          0        $          0

Net loss                                                  (10,145)              (10,035)            (20,180)
Partnership contributions                               3,712,938             3,672,838           7,385,776
------------         -------------        ------------    
BALANCE, December 31, 1997                                3,702,793             3,662,803           7,365,596

Partnership distributions                                (100,863)             (101,419)           (202,282)
Net income                                                 57,858                61,942             119,800
Partnership contributions                              10,909,297             9,361,414          20,270,711
------------         -------------        ------------     
BALANCE, March 31, 1998 (unaudited)                    $ 14,569,085         $  12,984,740        $ 27,553,825
============         =============        ============      

The accompanying notes are an integral part of these statements.

193

FUND IX AND X ASSOCIATES

(A Georgia Joint Venture)

STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 1998

AND THE PERIOD FROM INCEPTION (MARCH 20, 1997)

TO DECEMBER 31, 1997

1998                 1997
-------------       -------------- 
(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:  

Net income (loss)                                                                               $    119,800        $   (20,180)
-------------       -------------- 
Adjustments to reconcile net income (loss) to net cash 
provided by operating activities:
Depreciation                                                                                   178,881               36,863
Changes in assets and liabilities:
Accounts receivable                                                                         (109,890)             (40,512)
Prepaid expenses and other assets                                                            (54,089)            (329,310)
Accounts payable                                                                               5,302              379,770
Due to affiliates                                                                               (198)               2,479
-------------       -------------- 
Total adjustments                                                                           20,006               49,290
-------------       -------------- 
Net cash provided by operating activities                                                  139,806               29,110
-------------       --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate from partners                                                          (19,123,419)          (5,715,847)
-------------       --------------
CASH FLOWS FROM FINANCING ACTIVITIES:                                              
Distributions to joint venture partners                                                             (202,282)                   0
Contributions received from partners                                                              19,287,000            5,975,908
-------------       -------------- 
Net cash provided by financing activities                                                      19,084,718
-------------       -------------- 
NET INCREASE IN CASH AND CASH EQUIVALENTS                                                              101,105              289,171
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                         289,171                    0
-------------       -------------- 
CASH AND CASH EQUIVALENTS, END OF PERIOD                                                          $    390,276        $     289,171
=============       ============== 
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:                                     
Deferred project costs applied by partners, net of deferred project costs        
transferred                                                                                   $    983,711        $     318,981
=============       ==============

Contribution of real estate assets                                                                $          0        $   1,090,887
=============       ============== 

The accompanying notes are an integral part of these statements.

194

FUND IX AND X ASSOCIATES

(A Georgia Joint Venture)

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 1998 AND DECEMBER 31, 1997

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business

On March 20, 1997, Fund IX and X Associates (a joint venture between Wells
Real Estate Fund IX, L.P. ("Fund IX") and Wells Real Estate Fund X, L.P.
("Fund X") was formed to acquire, develop, operate, and sell real properties.
On March 20, 1997, Fund IX contributed a 5.62-acre tract of real property in
Knoxville, Tennessee, and improvements thereon, known as the ABB Property, to
Fund IX and X Associates (the "Joint Venture").  A 83,885-square-foot, three-
story office building was constructed and commenced operations at the end of
1997.

Cash and Cash Equivalents

For the purposes of the statements of cash flows, 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.

Use of Estimates and Factors Affecting the Partnership

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

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

195

Income Taxes

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

Real Estate Assets

Real estate assets held by the Joint Venture are stated at cost less
accumulated depreciation.  Major improvements and betterments are capitalized
when they extend the useful life of the related asset.  All ordinary repairs
and maintenance are expensed as incurred.

Management continually monitors events and changes in circumstances which
could indicate that the carrying amounts of real estate assets may not be
recoverable. When events or changes in circumstances are present that
indicate the carrying amounts of real estate assets may not be recoverable,
management assesses the recoverability of real estate assets under Statement
of Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed of," by
determining whether the carrying value of such real estate assets will be
recovered through the future cash flows expected from the use of the asset
and its eventual disposition. Management believes that there has been no
impairment in the carrying value of real estate assets held by the Joint
Venture.

Depreciation of buildings and land improvements is calculated using the
straight-line method over 25 years.  Tenant improvements are amortized over
the life of the related lease or the life of the asset, whichever is shorter.

Revenue Recognition

All leases on real estate assets held by the Joint Venture are classified as
operating leases, and the related rental income is recognized on a straight-
line basis over the terms of the respective leases.

Partners' Distributions and Allocations of Profit and Loss

Cash available for distribution and allocations of profit and loss to Fund IX
and Fund X by the Joint Venture are made in accordance with the terms of the
joint venture agreement.  Generally, these items are allocated in proportion
to the partners' respective ownership interests.  Cash distributions are
generally paid by the Joint Venture to Fund IX and Fund X quarterly.

Deferred Lease Acquisition Costs

Costs incurred to procure operating leases are capitalized and amortized on a
straight-line basis over the terms of the related leases.

196

2.  DEFERRED PROJECT COSTS

The Wells Real Estate Funds pay a percentage of limited partner
contributions to Wells Capital, Inc., an affiliate of the Joint Venture,
for acquisition and advisory services.  These payments, as stipulated by
the partnership agreement, can be up to 5% of the limited partner
contributions, subject to certain overall limitations contained in the
partnership agreement.  These fees are allocated to specific properties as
they are purchased or developed and are included in capitalized assets of
the Joint Venture.

3.  FUTURE MINIMUM RENTAL INCOME

The future minimum rental income due Fund IX and X Associates under
noncancelable operating leases at December 31, 1997 is as follows:

Year ending December 31:   

1998                                      $  646,250
1999                                         646,250
2000                                         646,250
2001                                         646,250
2002                                         646,250
Thereafter                                    3,583,021
----------
$6,814,271
==========

4. COMMITMENTS AND CONTINGENCIES

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

5. SUBSEQUENT EVENTS (UNAUDITED)

On February 13, 1998, the Joint Venture acquired a two-story office
building, the Ohmeda Building, a 106,750-square-foot office building located
in Louisville, Colorado, for a cash purchase price of $10,325,000 plus
acquisition expenses of $6,644. The building is 100% occupied by one tenant
with an original lease term of ten years that commenced February 1, 1988.
The lease term was extended for an additional seven years commencing
February 1, 1998.

On March 20, 1998, the Joint Venture acquired the Interlocken Building, a
51,974-square-foot three-story multitenant office building located in
Broomfield, Colorado, for a cash purchase price of $8,275,000 plus
acquisition expenses of $18,000.

On June 11, 1998, Wells Operating Partnership, L.P. (of which Wells Real
Estate Investment Trust, Inc. is the sole general partner) and Wells Real
Estate Fund XI, L.P. were admitted to the Joint Venture. The Joint Venture
agreement was

197

restated and amended as such and was renamed the Fund IX, Fund X, Fund XI,
and REIT Joint Venture.

On June 24, 1998, Fund IX, Fund X, Fund XI, and REIT Joint Venture acquired
the Lucent Building, a one-story office building, from Wells Development
Corporation, an affiliate of the Joint Venture, for a cash purchase price of
$5,504,276 which equaled the book value of the building. The building is 100%
occupied by one tenant with an original lease term of ten years that
commenced January 1, 1998.

198

LUCENT BUILDING

STATEMENT OF REVENUES OVER CERTAIN

OPERATING EXPENSES

FOR THE THREE MONTHS ENDED MARCH 31, 1998

(Unaudited)

REVENUES:

Rental revenue                                        $137,817

OPERATING EXPENSES                                           675
--------
REVENUES OVER OPERATING EXPENSES                        $137,142
--------    

The accompanying notes are an integral part of this statement.

199

LUCENT BUILDING

NOTES TO STATEMENT OF REVENUES OVER CERTAIN

OPERATING EXPENSES

FOR THE THREE MONTHS ENDED MARCH 31, 1998

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On June 24, 1998, Wells Real Estate Fund IX, L.P., Wells Real Estate Fund X,
L.P., Wells Real Estate Fund XI, L.P., and Wells Real Estate Investment
Trust, Inc., through Fund IX, Fund X, Fund XI, and REIT Joint Venture (a
Georgia joint venture), acquired the Lucent Building, a 57,186-square-foot
one-story office building located in Oklahoma City, Oklahoma, for a cash
purchase price of $5,504,276.  The building is 100% occupied by one tenant
with an original lease term of 10 years that commenced January 1, 1998.  The
lease is a triple net lease, whereby the terms require the tenant to pay all
operating expenses relating to the building.

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over the
life of the lease.

2. BASIS OF ACCOUNTING

The accompanying statement of revenues over operating expenses are presented
on the accrual basis. This statement has been prepared in accordance with the
applicable rules and regulations of the Securities and Exchange Commission
for real estate properties acquired. Accordingly, the statement excludes
certain historical expenses, such as depreciation, interest, and management
fees, not comparable to the operations of the Lucent Building after
acquisition by Wells Real Estate Fund IX, L.P., Wells Real Estate Fund X,
L.P, Wells Real Estate Fund XI, L.P., and Wells Real Estate Investment Trust,
Inc.

200

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Fund XI, L.P. and
Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the IOMEGA BUILDING for the year ended December 31, 1997.  This
financial statement is the responsibility of management.  Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues over certain operating
expenses is free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
revenues over certain operating expenses.  An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audit provides a reasonable basis for our opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Iomega
Building after acquisition by Fund IX, X, XI, and REIT Joint Venture (a joint
venture between Wells Real Estate Fund IX, L.P., Wells Real Estate Fund X, L.P.,
Wells Real Estate Fund XI, L.P. and Wells Operating Partnership, L.P.).  The
accompanying statement of revenues over certain operating expenses was prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission and is not intended to be a complete presentation of the
Iomega Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Iomega Building for the year ended December 31, 1997 in
conformity with generally accepted accounting principles.

/s/ Arthur Andersen LLP

Atlanta, Georgia
August 6, 1998

201

IOMEGA BUILDING

STATEMENTS OF REVENUES OVER CERTAIN

OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1997

AND FOR THE SIX MONTHS ENDED JUNE 30, 1998

1997          1998
----------    ----------
(Unaudited)

RENTAL REVENUES                                     $552,828      $276,414

OPERATING EXPENSES, net of reimbursements             (1,426)        9,750
---------     --------- 
REVENUES OVER CERTAIN OPERATING EXPENSES            $554,254      $266,664
=========     =========

The accompanying notes are an integral part of these statements.

202

IOMEGA BUILDING

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1997

AND FOR THE SIX MONTHS ENDED JUNE 30, 1998

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On July 1, 1998, Wells Real Estate Fund X, L.P. ("Fund X") contributed a
single-story warehouse and office building with 108,000 rentable square feet
(the "Iomega Building") to the Fund IX, Fund X, Fund XI, and REIT Joint
Venture ("IX-X-XI-REIT Joint Venture") (a Georgia joint venture) as a capital
contribution.  Fund X was credited with making a capital contribution to the
IX-X-XI-REIT Joint Venture in the amount of $5,050,425, which represents the
purchase price of $5,025,000 plus acquisition expenses of $25,425 originally
paid by Fund X for the Iomega Building on April 1, 1998.  As of August 1,
1998, Fund X had made total capital contributions to the IX-X-XI-REIT Joint
Venture of $18,410,965 and held an equity percentage interest in the IX-X-XI-
REIT Joint Venture of 49.9%; Wells Real Estate Fund IX, L.P. had made total
capital contributions to the IX-X-XI-REIT Joint Venture of $14,571,686 and
held an equity percentage interest in the IX-X-XI-REIT Joint Venture of
39.5%; Wells Operating Partnership, L.P. had made total capital contributions
to the IX-X-XI-REIT Joint Venture of $1,421,466 and held an equity percentage
interest in the IX-X-XI-REIT Joint Venture of 3.9%; and Wells Real Estate
Fund XI, L.P. had made total capital contributions to the IX-X-XI-REIT Joint
Venture of $2,482,810 and held an equity percentage interest in the IX-X-XI-
REIT Joint Venture of 6.7%.

The building is 100% occupied by one tenant with a ten year lease term that
expires on July 31, 2006.  The monthly base rent payable under the lease is
$40,000 through November 12, 1999.  Beginning on the 40th and 80th months of
the lease term, the monthly base rent payable under the lease will be
increased to reflect an amount equal to 100% of the increase in the Consumer
Price Index (as defined in the lease) during the preceding 40 months;
provided however, that in no event shall the base rent be increased with
respect to any one year by more than 6% or by less than 3% per annum,
compounded annually, on a cumulative basis from the beginning of the lease
term.  The lease is a triple net lease, whereby the terms require the tenant
to reimburse the IX-X-XI-REIT Joint Venture for certain operating expenses,
as defined in the lease, related to the building.

203

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over the
life of the lease.

2. BASIS OF ACCOUNTING

The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis.  This statement has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired.  Accordingly, the
statement excludes certain historical expenses, such as depreciation and
management fees, not comparable to the operations of the Iomega Building
after acquisition by the IX-X-XI-REIT Joint Venture.

204

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Fund XI, L.P. and
Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the FAIRCHILD BUILDING for the year ended December 31, 1997.  This
financial statement is the responsibility of management.  Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues over certain operating
expenses is free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
revenues over certain operating expenses.  An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audit provides a reasonable basis for our opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the
Fairchild Building after acquisition by the Fremont Joint Venture (a joint
venture between Wells Operating Partnership, L.P. and Wells Development
Corporation).  The accompanying statement of revenues over certain operating
expenses was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission and is not intended to be
a complete presentation of the Fairchild Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Fairchild Building for the year ended December 31, 1997 in
conformity with generally accepted accounting principles.

/s/ Arthur Andersen LLP

Atlanta, Georgia
August 6, 1998

205

FAIRCHILD BUILDING

STATEMENTS OF REVENUES OVER CERTAIN

OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1997

AND FOR THE SIX MONTHS ENDED JUNE 30, 1998

1997           1998
---------      ----------
(Unaudited)

RENTAL REVENUES                                  $220,090        $440,178

OPERATING EXPENSES                                 67,573          10,420
---------       --------- 
REVENUES OVER CERTAIN OPERATING EXPENSES         $152,517        $429,758
=========       =========

The accompanying notes are an integral part of these statements.

206

FAIRCHILD BUILDING

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1997

AND FOR THE SIX MONTHS ENDED JUNE 30, 1998

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

The Wells Operating Partnership, L.P. ("Wells OP"), a Delaware limited
partnership organized to own and operate properties on behalf of the Wells
Real Estate Investment Trust, Inc., entered into a Joint Venture Agreement
known as Wells/Fremont Associates ("Fremont Joint Venture") with Wells
Development Corporation.  On July 21, 1998, the Fremont Joint Venture
acquired the Fairchild Building, a 58,424-square-foot warehouse and office
building located in Fremont, California, for a purchase price of $8,900,000
plus acquisition expenses of approximately $60,000.  The Fremont Joint
Venture used the $2,995,480 aggregate capital contributions described below
to partially fund the purchase of the Fairchild Building.  The Fremont Joint
Venture obtained a loan in the amount of $5,960,000 from NationsBank, N.A.,
the proceeds of which were used to fund the remainder of the cost of the
Fairchild Building (the "Fairchild Loan").  The Fairchild Loan matures on
July 21, 1999 (the "Fairchild Maturity Date"), unless the Fremont Joint
Venture exercises its option to extend the Fairchild Maturity Date to January
21, 2000.  The interest rate on the Fairchild Loan is a variable rate per
annum equal to the rate appearing on Telerate Page 3750 as the LIBOR Rate for
a 30-day period plus 220 basis points.

The building is 100% occupied by one tenant with a seven-year lease term that
commenced on December 1, 1997 (with an early possession date of October 1,
1997) and expires on November 30, 2004.  The monthly base rent payable under
the lease is $68,128 with a 3% increase on each anniversary of the
commencement date.  The lease is a triple net lease, whereby the terms
require the tenant to reimburse Wells/Fremont for certain operating expenses,
as defined in the lease, related to the building.  Prior to October 1, 1997,
the building was unoccupied and all operating expenses were paid by the
former owner of the Fairchild Building.

Acquisition of the Fremont Joint Venture Interest

Wells Real Estate Fund XI, L.P. ("Wells Fund XI") entered into a Joint
Venture Agreement with Wells Real Estate Fund X, L.P. ("Wells Fund X") known
as Fund X and Fund XI Associates ("Fund X-XI Joint Venture") for the purpose
of the 

207

acquisition, ownership, leasing, operation, sale and management of real
properties, and interests in real properties, including but not limited to,
the acquisition of equity interests in the Fremont Joint Venture.

On July 17, 1998, the Fund X-XI Joint Venture entered into an Agreement for
the Purchase and Sale of Joint Venture Interest (the "Fremont JV Contract")
with Wells Development.  Pursuant to the Fremont JV Contract, the Fund X-XI
Joint Venture contracted to acquire Wells Development's interest in the
Fremont Joint Venture (the "Freemont JV Interest") which, at closing, will
result in the Fund X-XI Joint Venture becoming a joint venture partner with
Wells OP in the ownership of the Fairchild Building.  Wells Fund X, Wells OP
and Wells Development are all affiliates of Wells Fund XI.

At the time of the entering into the Fremont JV Contract, the Fund X-XI Joint
Venture delivered $2,000,000 to Wells Development as an earnest money deposit
(the "Fremont Earnest Money").  Wells Fund XI contributed $1,000,000 of the
Fremont Earnest Money as a capital contribution to the Fund X-XI Joint
Venture and, as of July 21, 1998, held an equity percentage interest in the
Fund X-XI Joint Venture of 50%; and Wells Fund X contributed $1,000,000 of
the Fremont Earnest Money as a capital contribution to the Fund X-XI Joint
Venture and, as of July 21, 1998, held an equity percentage interest in the
Fund X-XI Joint Venture of 50%.  Wells Development contributed the Fremont
Earnest Money it received from the Fund X-XI Joint Venture to the Fremont
Joint Venture as its initial capital contribution, and Wells OP
simultaneously contributed $995,480 to the Fremont Joint Venture as its
initial capital contribution.

Cash flow distributions allocable by the Fremont Joint Venture to Wells
Development will be credited as a purchase price adjustment or paid to the
Fund X-XI Joint Venture at the closing of the acquisition of the Fremont JV
Interest from Wells Development since Wells Development is prohibited from
making any profit on the transaction during the holding period.  The Fund X-
XI Joint Venture will have no property rights in the Fairchild Building prior
to closing nor any potential liability on the Fairchild Loan, which will be
paid off prior to closing.

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over the
life of the lease.

2. BASIS OF ACCOUNTING

The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis.  This statement has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired.  Accordingly, the
statement excludes certain historical expenses, such as interest,
depreciation, and management fees, not comparable to the operations of the
Fairchild Building after acquisition by Wells/Fremont.

208

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Fund XI, L.P. and
Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the CORT FURNITURE BUILDING for the year ended December 31, 1997.
This financial statement is the responsibility of management.  Our
responsibility is to express an opinion on this financial statement based on our
audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues over certain operating
expenses is free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
revenues over certain operating expenses.  An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audit provides a reasonable basis for our opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Cort
Furniture Building after acquisition by the Cort Joint Venture (a joint venture
between Wells Operating Partnership, L.P. and Wells Development Corporation).
The accompanying statement of revenues over certain operating expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission and is not intended to be a complete
presentation of the Cort Furniture Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Cort Furniture Building for the year ended December 31, 1997 in
conformity with generally accepted accounting principles.

/s/ Arthur Andersen LLP

Atlanta, Georgia
August 6, 1998

209

CORT FURNITURE BUILDING

STATEMENTS OF REVENUES OVER CERTAIN

OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1997

AND FOR THE SIX MONTHS ENDED JUNE 30, 1998

1997             1998
--------        -----------
(Unaudited)

RENTAL REVENUES                                                               $771,618          $385,809

OPERATING EXPENSES                                                              16,408             4,104
--------          -------- 
REVENUES OVER CERTAIN OPERATING EXPENSES                                      $755,210          $381,705
--------          --------

The accompanying notes are an integral part of these statements.

210

CORT FURNITURE BUILDING

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1997

AND FOR THE SIX MONTHS ENDED JUNE 30, 1998

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

The Wells Operating Partnership, L.P. ("Wells OP"), a Delaware limited
partnership organized to own and operate properties on behalf of the Wells
Real Estate Investment Trust, Inc, entered into a Joint Venture Agreement
known as Wells/Orange County Associates ("Cort Joint Venture") with Wells
Development Corporation.  On July 31, 1998, the Cort Joint Venture acquired
the Cort Furniture Building, a 52,000-square-foot warehouse and office
building located in Fountain Valley, California, for a purchase price of
$6,400,000 plus acquisition expenses of approximately $150,000.  The Cort
Joint Venture used the $1,668,000 aggregate capital contributions described
below to partially fund the purchase of the Cort Furniture Building.  The
Cort Joint Venture obtained a loan in the amount of $4,875,000 from
NationsBank, N.A., the proceeds of which were used to fund the remainder of
the cost of the Cort Furniture Building (the "Cort Loan").  The Cort Loan
matures on July 31, 1999 (the "Cort Maturity Date"), unless the Cort Joint
Venture exercises its option to extend the Cort Maturity Date to January 31,
2000.  The interest rate on the Cort Loan is a variable rate per annum equal
to the rate appearing on Telerate Page 3750 as the LIBOR Rate for 30-day
period plus 220 basis points.

The building is 100% occupied by one tenant with a 15-year lease term that
commenced on November 1, 1988 and expires on October 31, 2003.  The monthly
base rent payable under the lease is $63,247 through April 30, 2001 at which
time the monthly base rent will be increased 10% to $69,574 for the remainder
of the lease term.  The lease is a triple net lease, whereby the terms
require the tenant to reimburse the Cort Joint Venture for certain operating
expenses, as defined in the lease, related to the building.

Acquisition of the Cort Joint Venture Interest

Wells Real Estate Fund XI, L.P. ("Wells Fund XI") entered into a Joint
Venture Agreement with Wells Real Estate Fund X, L.P. ("Wells Fund X") known
as Fund X and Fund XI Associates ("Fund X-XI Joint Venture") for the purpose
of the acquisition, ownership, leasing, operation, sale and management of
real 

211

properties, and interests in real properties, including but not limited
to, the acquisition of equity interests in the Cort Joint Venture.

On July 30, 1998, the Fund X-XI Joint Venture entered into an Agreement for
the Purchase and Sale of Joint Venture Interest (the "Cort JV Contract") with
Wells Development.  Pursuant to the Cort JV Contract, the Fund X-XI Joint
Venture contracted to acquire Wells Development's interest in the Cort Joint
Venture (the "Cort JV Interest") which, at closing, will result in the Fund
X-XI Joint Venture becoming a joint venture partner with Wells OP in the
ownership of the Cort Furniture Building.  Wells Fund X, Wells OP and Wells
Development are all affiliates of Wells Fund XI.

At the time of entering into the Cort JV Contract, the Fund X-XI Joint
Venture delivered $1,500,000 to Wells Development as an earnest money deposit
(the "Cort Earnest Money").  Wells Fund XI contributed $750,000 of the Cort
Earnest Money as a capital contribution to the Fund X-XI Joint Venture and,
as of July 31, 1998, held an equity percentage interest in the Fund X-XI
Joint Venture of 50%; and Wells Fund X contributed $750,000 of the Cort
Earnest Money as a capital contribution to the Fund X-XI Joint Venture and,
as of July 31, 1998, held an equity percentage interest in the Fund X-XI
Joint Venture of 50%.  Wells Development contributed the Cort Earnest Money
it received from the Fund X-XI Joint Venture to the Cort Joint Venture as its
initial capital contribution, and Wells OP simultaneously contributed
$168,000 to the Cort Joint Venture as its initial capital contribution.

Cash flow distributions allocable by the Cort Joint Venture to Wells
Development will be credited as a purchase price adjustment or paid to the
Fund X-XI Joint Venture at the closing of the acquisition of the Cort JV
Interest from Wells Development since Wells Development is prohibited from
making any profit on the transaction during the holding period.  The Fund X-
XI Joint Venture will have no property rights in the Cort Building prior to
closing nor any potential liability on the Cort Loan, which will be paid off
prior to closing.

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over the
life of the lease.

2. BASIS OF ACCOUNTING

The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis.  This statement has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired.  Accordingly, the
statement excludes certain historical expenses, such as interest,
depreciation, and management fees, not comparable to the operations of the
Cort Furniture Building after acquisition by the Cort Joint Venture.

212

Arthur Andersen LLP

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the VANGUARD CELLULAR BUILDING for the period from inception
(November 16, 1998) to December 31, 1998.  This financial statement is the
responsibility of management.  Our responsibility is to express an opinion on
this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues over certain operating
expenses is free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
revenues over certain operating expenses.  An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audit provides a reasonable basis for our opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Vanguard
Cellular Building after acquisition by Wells Operating Partnership, L.P. (on
behalf of Wells Real Estate Investment Trust, Inc.).  The accompanying statement
of revenues over certain operating expenses was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the Vanguard
Cellular Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Vanguard Cellular Building for the period from inception
(November 16, 1998) to December 31, 1998 in conformity with generally accepted
accounting principles.

/s/ Arthur Andersen LLP

Atlanta, Georgia
February 26, 1999

213

VANGUARD CELLULAR BUILDING

STATEMENT OF REVENUES OVER CERTAIN

OPERATING EXPENSES

FOR THE PERIOD FROM INCEPTION

(NOVEMBER 16, 1998) TO DECEMBER 31, 1998

RENTAL REVENUES                                           $171,855

OPERATING EXPENSES, net of reimbursements                        0
---------
REVENUES OVER CERTAIN OPERATING EXPENSES                  $171,855
=========

The accompanying notes are an integral part of this statement.

214

VANGUARD CELLULAR BUILDING

NOTES TO STATEMENT OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE PERIOD FROM INCEPTION

(NOVEMBER 16, 1998) TO DECEMBER 31, 1998

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On February 4, 1999, Wells Operating Partnership, L.P. ("Wells OP"), a
Delaware limited partnership, formed to acquire and hold real estate
properties on behalf of Wells Real Estate Investment Trust, Inc. (the
"Registrant"), acquired a four-story office building (the "Vanguard Cellular
Building") containing approximately 81,859 rentable square feet, for the
price of $12,291,200 plus acquisition expenses, including legal fees, of
approximately $240,900.  Wells OP paid $6,382,100 in cash and obtained a loan
in the amount of $6,450,000 from NationsBank, N.A. (the "NationsBank Loan").
As of  February 4, 1999, $6,150,000 was outstanding on the NationsBank Loan.
The NationsBank Loan gives Wells OP the option of extending the term of the
loan after the initial six months.  The interest rate for the initial six
months of the NationsBank Loan is fixed at 7%.  On August 1, 1999, Wells OP
may extend the NationsBank Loan at a rate of LIBOR plus 200 basis points for
up to 29 additional months.  During the term of the extension, Wells OP is
required to make quarterly principal installments in an amount equal to one-
ninth of the outstanding principal balance as of October 1, 1999.  The
NationsBank Loan is secured by a first mortgage against the Vanguard Cellular
Building.  Legal fees, loan origination costs, and appraisal fees incurred
from obtaining the NationsBank Loan totaled approximately $29,000.

The Vanguard Cellular Building is 100% occupied by one tenant with a ten-year
lease term that commenced on November 16, 1998 and expires on November 15,
2008.  Construction of the building was completed in November 1998.  Under
the terms of the lease agreement, monthly base rent payable is subject to
escalations of 2% per annum and certain lease inception discounts.  The lease
is a triple net lease, whereby the terms require the tenant to reimburse
Wells OP for certain operating expenses, as defined in the lease, related to
the building.  All of the operating expenses for the period from lease
inception (November 16, 1998) to December 31, 1998 have been passed through
to the tenant.

215

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over the
life of the lease.

2. BASIS OF ACCOUNTING

The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis.  This statement has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired.  Accordingly, the
statement excludes certain historical expenses, such as interest,
depreciation, and management fees, not comparable to the operations of the
Vanguard Cellular Building after acquisition by Wells OP.

216

Arthur Andersen LLP

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc. and Wells Real Estate Fund XII,
L.P.:

We have audited the accompanying statement of revenues over certain operating
expenses for the EYBL CARTEX BUILDING for the year ended December 31, 1998.
This financial statement is the responsibility of management.  Our
responsibility is to express an opinion on this financial statement based on our
audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues over certain operating
expenses is free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
revenues over certain operating expenses.  An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audit provides a reasonable basis for our opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the EYBL
CarTex Building after acquisition by the Wells Fund XI-Fund XII-REIT Joint
Venture (a joint venture between the Wells Operating Partnership, L.P. [on
behalf of Wells Real Estate Investment Trust, Inc.], Wells Real Estate Fund XI,
L.P., and Wells Real Estate Fund XII, L.P.).  The accompanying statement of
revenues over certain operating expenses was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the EYBL CarTex
Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the EYBL CarTex Building for the year ended December 31, 1998 in
conformity with generally accepted accounting principles.

/s/ ARTHUR ANDERSEN LLP

Atlanta, Georgia
May 21, 1999

217

EYBL CARTEX BUILDING

STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1998 AND

FOR THE THREE MONTHS ENDED MARCH 31, 1999

1998              1999                                
---------         ----------                             
(Unaudited)                            

RENTAL REVENUES                                   $213,330           $63,990                              

OPERATING EXPENSES, net of reimbursements           14,343                 0                              
---------          --------                              
REVENUES OVER CERTAIN OPERATING EXPENSES          $198,987           $63,990                              
=========          ========                              

The accompanying notes are an integral part of these statements.

218

EYBL CARTEX BUILDING

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1998 AND

FOR THE THREE MONTHS ENDED MARCH 31, 1999

1.  ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

The EYBL CarTex Building is an industrial building consisting of a total of
169,510 square feet.  On May 18, 1999, Wells Real Estate, LLC - SC I
("Wells LLC"), a Georgia limited liability company wholly owned by the
Wells Fund XI-REIT Joint Venture (the "Joint Venture"), acquired an
industrial building located in Fountain Inn, unincorporated Greenville
County, South Carolina (the "EYBL CarTex Building").  Wells LLC purchased
the EYBL CarTex Building from Liberty Property Trust, a Pennsylvania
limited partnership.

The Joint Venture is a Georgia joint venture between Wells Real Estate Fund
XI, L.P. ("Wells Fund XI"), a Georgia limited partnership, and Wells
Operating Partnership, L.P. ("Wells OP"), a Delaware limited partnership
formed to acquire, own, lease, operate, and manage real properties on
behalf of Wells Real Estate Investment Trust, Inc. The Joint Venture was
formed on May 1, 1999 for the purpose of the acquisition, ownership,
development, leasing, operations, sale, and management of real properties.
On June 21, 1999, Wells Real Estate Fund XII, L.P., a Georgia limited
partnership, was admitted to the Joint Venture, and the Joint Venture was
renamed the Wells Fund XI-Fund XII-REIT Joint Venture.

The purchase price for the EYBL CarTex Building was $5,085,000.  Wells LLC
also incurred additional acquisition expenses in connection with the
purchase of the EYBL CarTex Building, including attorneys' fees, recording
fees, and other closing costs of $36,828.  Wells Fund XI contributed
$1,530,000 to the Joint Venture and Wells OP contributed $3,591,828 to the
Joint Venture.

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over
the life of the lease.

219

2.  BASIS OF ACCOUNTING

The accompanying statements of revenues over certain operating expenses are
presented on the accrual basis.  These statements have been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired.  Accordingly, the
statements exclude certain historical expenses, such as depreciation and
management fees, not comparable to the operations of the EYBL CarTex
Building after acquisition by the Joint Venture.

220

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Fund XI, L.P., 
Wells Real Estate Fund XII, L.P., and 
Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the SPRINT BUILDING for the year ended December 31, 1998.  This
financial statement is the responsibility of management.  Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues over certain operating
expenses is free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
revenues over certain operating expenses.  An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audit provides a reasonable basis for our opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Sprint
Building after acquisition by the Wells Fund XI-Fund XII-REIT Joint Venture (a
joint venture between the Wells Operating Partnership, L.P. [on behalf of Wells
Real Estate Investment Trust, Inc.], Wells Real Estate Fund XI, L.P., and Wells
Real Estate Fund XII, L.P.).  The accompanying statement of revenues over
certain operating expenses was prepared for the purpose of complying with the
rules and regulations of the Securities and Exchange Commission and is not
intended to be a complete presentation of the Sprint Building's revenues and
expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Sprint Building for the year ended December 31, 1998, in
conformity with generally accepted accounting principles.

/s/ Arthur Andersen LLP

Atlanta, Georgia
July 12, 1999

221

SPRINT BUILDING

STATEMENTS OF REVENUES OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1998 AND

FOR THE THREE MONTHS ENDED MARCH 31, 1999

1998              1999
--------------   -----------------
(Unaudited)

RENTAL REVENUES                                                         $1,050,725           $262,681 

OPERATING EXPENSES, net of reimbursements                                   19,410              2,250
----------           --------   
REVENUES OVER CERTAIN OPERATING EXPENSES                                $1,031,315           $260,431 
----------           --------   

The accompanying notes are an integral part of these statements.

222

SPRINT BUILDING

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1998 AND

FOR THE THREE MONTHS ENDED MARCH 31, 1999

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired 

On July 2, 1999, the Wells Fund XI-XII-REIT Joint Venture (the "Joint
Venture") acquired a three-story office building with approximately 68,900
rentable square feet located in Leawood, Johnson County, Kansas (the "Sprint
Building"). The Joint Venture is a joint venture partnership between Wells
Real Estate Fund XI, L.P. ("Wells Fund XI"), Wells Real Estate Fund XII, L.P.
("Wells Fund XII"), and Wells Operating Partnership, L.P. ("Wells OP"), a
Delaware limited partnership formed to acquire, own, lease, operate and
manage real properties on behalf of Wells Real Estate Investment Trust, Inc.
(the "Wells REIT"). Wells Fund XI contributed $3,000,000, Wells Fund XII
contributed $1,000,000 and Wells OP contributed $5,546,210 to the Joint
Venture for their respective share of the purchase of the Sprint Building.

The entire 68,900 rentable square feet of the Sprint Building is currently
under a net lease agreement dated February 14, 1997 (the "Lease") with
Sprint. The Lease was assigned to the Joint Venture at the closing. The
initial term of the Lease is ten years which commenced on May 19, 1997 and
expires on May 18, 2007. Sprint has the right to extend the Lease for 2
additional five-year periods. Each extension option must be exercised by
giving notice to the landlord at least 270 days, but no earlier than 365
days, prior to the expiration date of the then current lease term. The
monthly base rent payable under the Lease will be $83,254.17 through May 18,
2002 and $91,866.67 for the remainder of the Lease term. The monthly base
rent payable for each extended term of the Lease will be equal to 95% of the
then current market rate which is calculated as a full-service rental rate
less anticipated annual operating expenses on a rentable square foot basis
charged for space of comparable location, size, and conditions in comparable
office buildings in the suburban south Kansas City, Missouri and south
Johnson County, Kansas areas.

Under the Lease, Sprint is required to pay as additional rent all real estate
taxes, special assessments, utilities, taxes, insurance, and other operating
costs with respect to the Sprint Building during the term of the Lease. In
addition, Sprint is responsible for all routine maintenance and repairs
including interior mechanical and electrical, HVAC, parking lot, and
landscaping to the Sprint Building. The

223

Joint Venture, as landlord, is responsible for repair and replacement of the
exterior, roof, foundation, and structure.

The Lease contains a termination option which may be exercised by Sprint
effective as of May 18, 2004 provided Sprint has not exercised its expansion
option, as described below. The early termination requires nine months'
notice and a termination payment to the Joint Venture equal to $6.53 per
square foot, or $450,199. Sprint also has an expansion option for an
additional 20,000 square feet of office space which may be exercised in two
phases, which involves building on unfinished ground level space that is
currently used as covered parking within the existing building footprint and
shell. At each exercise of an expansion option, the remaining lease term will
be extended to be a minimum of an additional five years from the date of the
completion of such expansion.

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over the
life of the lease.

2. BASIS OF ACCOUNTING

The accompanying statements of revenues over certain operating expenses are
presented on the accrual basis. These statements have been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired. Accordingly, the
statements exclude certain historical expenses, such as depreciation and
management fees, not comparable to the operations of the Sprint Building
after acquisition by the Joint Venture.

224

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc.,
Wells Real Estate Fund XI, L.P.,
and Wells Real Estate Fund XII, L.P.:

We have audited the accompanying statement of revenues over certain operating
expenses for the JOHNSON MATTHEY BUILDING for the year ended December 31, 1998.
This financial statement is the responsibility of management. Our responsibility
is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues over certain operating
expenses is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
revenues over certain operating expenses. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Johnson
Matthey Building after acquisition by the Wells Fund XI-Fund XII-REIT Joint
Venture (a joint venture between the Wells Operating Partnership, L.P. [on
behalf of Wells Real Estate Investment Trust, Inc.], Wells Real Estate Fund XI,
L.P., and Wells Real Estate Fund XII, L.P.).  The accompanying statement of
revenues over certain operating expenses was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the Johnson
Matthey Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Johnson Matthey Building for the year ended December 31, 1998 in
conformity with generally accepted accounting principles.

/s/ Arthur Andersen LLP

Atlanta, Georgia
August 30, 1999

225

JOHNSON MATTHEY BUILDING

STATEMENTS OF REVENUES OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1998 AND

FOR THE SIX MONTHS ENDED JUNE 30, 1999

1998             1999
--------         ----------
(Unaudited)

RENTAL REVENUES                                     $745,935          $424,724

OPERATING EXPENSES, net of reimbursements            100,314            59,398
--------          --------
REVENUES OVER CERTAIN OPERATING EXPENSES            $645,621          $365,326
--------          -------- 

The accompanying notes are an integral part of these statements.

226

JOHNSON MATTHEY BUILDING

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1998 AND

FOR THE SIX MONTHS ENDED JUNE 30, 1999

1.  ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On August 17, 1999, the Wells Fund XI-Fund XII-REIT Joint Venture (the
"Joint Venture") acquired an office building with approximately 130,000
rentable square feet located in Tredyffrin Township, Chester County,
Pennsylvania (the "Johnson Matthey Building"). The Joint Venture is a joint
venture partnership between Wells Real Estate Fund XI, L.P. ("Wells Fund
XI"), Wells Real Estate Fund XII, L.P. ("Wells Fund XII"), and Wells
Operating Partnership, L.P. ("Wells OP"), a Delaware limited partnership
formed to acquire, own, lease, operate, and manage real properties on
behalf of Wells Real Estate Investment Trust, Inc. (the "Wells REIT").
Wells Fund XI contributed $3,494,797, Wells Fund XII contributed
$1,500,000, and Wells OP contributed $3,055,694 to the Joint Venture for
their respective share of the purchase of the Johnson Matthey Building.

The entire 133,000 rentable square feet of the Johnson Matthey Building is
currently under a net lease agreement (the "Lease") with Johnson Matthey.
The Lease was assigned to the Joint Venture at the closing. The initial
term of the Lease is ten years, which commenced on July 1, 1997 and expires
on June 30, 2007. Johnson Matthey has the right to extend the Lease for two
additional three-year periods. Each extension option must be exercised by
giving notice to the landlord at least 12 months prior to the expiration
date of the then current lease term. The monthly base rent payable for each
extended term of the Lease will be equal to the fair market rent taking
into consideration rental rates for comparable industrial and research and
development properties in the local market area.

Under the Lease, Johnson Matthey is required to pay as additional rent all
real estate taxes, special assessments, utilities, taxes, insurance, and
other operating costs with respect to the Johnson Matthey Building during
the term of the Lease.  In addition, Johnson Matthey is responsible for all
routine maintenance and repairs including interior mechanical and
electrical, HVAC, parking lot, and landscaping to the Johnson Matthey
Building.  The Joint Venture, as landlord, is responsible for repair and
replacement of the exterior, roof, foundation, and structure.

227

The Lease contains a purchase option, which may be exercised by Johnson
Matthey in the event that the Joint Venture desires to sell the building to
an unrelated third party. The Joint Venture must give Johnson Matthey
written notice of its intent to sell the Johnson Matthey Building, and
Johnson Matthey will have ten days from the date of such notice to provide
written notice of its intent to purchase the building. If Johnson Matthey
exercises the purchase option, it must purchase the Johnson Matthey
Building on the same terms contained in the offer.

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over
the life of the lease.

2.  BASIS OF ACCOUNTING

The accompanying statements of revenues over certain operating expenses are
presented on the accrual basis. These statements have been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired. Accordingly, the
statements exclude certain historical expenses, such as depreciation, not
comparable to the operations of the Johnson Matthey Building after
acquisition by the Joint Venture.

228

ARTHUR ANDERSEN LLP

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the VIDEOJET BUILDING for the year ended December 31, 1998.  This
financial statement is the responsibility of management.  Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues over certain operating
expenses is free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
revenues over certain operating expenses.  An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audit provides a reasonable basis for our opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Videojet
Building after acquisition by the Wells Operating Partnership, L.P. (on behalf
of Wells Real Estate Investment Trust, Inc.).  The accompanying statement of
revenues over certain operating expenses was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the Videojet
Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Videojet Building for the year ended December 31, 1998, in
conformity with generally accepted accounting principles.

/s/ Arthur Andersen LLP
Atlanta, Georgia
September 17, 1999

229

VIDEOJET BUILDING

STATEMENTS OF REVENUES OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1998 AND

FOR THE SIX MONTHS ENDED JUNE 30, 1999

December 31,         June 30,
1998              1999
------------       -----------      
(Unaudited)

RENTAL REVENUES                                                            $2,995,806         $1,497,903

OPERATING EXPENSES, net of reimbursements                                           0                  0
------------       -----------      
REVENUES OVER CERTAIN OPERATING 
EXPENSES                                                                 $2,995,806         $1,497,903
------------       -----------      

The accompanying notes are an integral part of these statements.

230

VIDEOJET BUILDING

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1998 AND

FOR THE SIX MONTHS ENDED JUNE 30, 1999

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On September 10, 1999, the Wells Operating Partnership L.P. ("Wells OP"), a
Delaware Limited Partnership formed to acquire, own, lease, operate, and
manage real properties on behalf of the Wells Real Estate Investment Trust,
Inc., acquired a two-story corporate office building with a single story
assembly and manufacturing space containing approximately 250,354 rentable
square feet located in Wood Dale, DuPage County, Illinois (the "Videojet
Building").  The purchase price of the Videojet Building was $33,158,865
which includes acquisition related expenses and $500,000 in selling
commissions paid by Wells OP.  Wells OP paid $26,130,940 in cash and obtained
$7,000,000 in loan proceeds from a line of credit held by SouthTrust Bank,
N.A.  Additional acquisition fees of $27,925 were incurred related to
attorneys' fees, environmental consultants fees, appraisers fees, and other
costs.

The entire 250,354 rentable square feet of the Videojet Building is currently
under a net lease agreement dated November 1991 (the "Lease") with Videojet
Systems International, Inc. ("Videojet").  The Lease was assigned to Wells OP
at the closing.  The initial term of the Lease is 20 years which commenced in
November 1991 and expires in November 2011.  Videojet has the right to extend
the Lease for one additional five-year period.  The extension option must be
exercised by giving notice to the landlord at least 365 days prior to the
expiration date of the then current lease term.  The monthly base rent
payable under the Lease is $236,579 through November 2001 and will be
$281,396 for the remainder of the lease term.  The monthly base rent payable
for the extended term of the Lease will be $388,953, should Videojet choose
to extend the lease.

Under the Lease, Videojet is required to pay as additional rent all real
estate taxes, special assessments, utilities, taxes, insurance, and other
operating costs associated with the Videojet Building during the term of the
Lease.  In addition, Videojet is responsible for repair and maintenance of
the roof, walls, structure and foundation, landscaping and the heating,
ventilating, air conditioning, mechanical, electrical, plumbing, and other
systems.

231

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over the
life of the lease.

2. BASIS OF ACCOUNTING

The accompanying statements of revenues over certain operating expenses are
presented on the accrual basis.  These statements have been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired.  Accordingly, the
statements exclude certain historical expenses, such as depreciation,
interest, and management fees, not comparable to the operations of the
Videojet Building after acquisition by Wells OP.

232

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc.,
and Wells Real Estate Fund XII, L.P.:

We have audited the accompanying statement of revenues over certain operating
expenses for the GARTNER BUILDING for the year ended December 31, 1998.  This
financial statement is the responsibility of management.  Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues over certain operating
expenses is free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
revenues over certain operating expenses.  An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audit provides a reasonable basis for our opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Gartner
Building after acquisition by the Wells Fund XI-Fund XII-REIT Joint Venture (a
joint venture between the Wells Operating Partnership, L.P. [on behalf of Wells
Real Estate Investment Trust, Inc.], Wells Real Estate Fund XI, L.P., and Wells
Real Estate Fund XII, L.P.).  The accompanying statement of revenues over
certain operating expenses was prepared for the purpose of complying with the
rules and regulations of the Securities and Exchange Commission and is not
intended to be a complete presentation of the Gartner Building's revenues and
expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Gartner Building for the year ended December 31, 1998 in
conformity with generally accepted accounting principles.

/S/ Arthur Andersen LLP

Atlanta, Georgia
September 24, 1999

233

GARTNER BUILDING

STATEMENTS OF REVENUES OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1998 AND

FOR THE SIX MONTHS ENDED JUNE 30, 1999

1998        1999                               
----------   ----------
(Unaudited)                           

RENTAL REVENUES                                        $738,074     $402,590                           

OPERATING EXPENSES, net of reimbursements                 8,505           75
----------   ----------
REVENUES OVER CERTAIN OPERATING EXPENSES               $729,569     $402,515                            
==========   ==========

The accompanying notes are an integral part of these statements.

234

GARTNER BUILDING

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1998 AND

FOR THE SIX MONTHS ENDED JUNE 30, 1999

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On September 20, 1999, the Wells Fund XI-Fund XII-REIT Joint Venture (the
"Joint Venture") acquired a two story office building with approximately
62,400 rentable square feet located in Fort Myers, Lee County, Florida (the
"Gartner Building").

The Joint Venture is a partnership between Wells Real Estate Fund XII, L.P.
("Wells Fund XII"), Wells Real Estate Fund XI, L.P. ("Wells Fund XI"), and
Wells Operating Partnership, L.P. ("Wells OP"), a Delaware limited
partnership formed to acquire, own, lease, operate, and manage real
properties on behalf of Wells Real Estate Investment Trust, Inc.

The purchase price for the Gartner Building was $8,320,000.  The Joint
Venture also incurred additional acquisition expenses in connection with the
purchase of the Gartner Building, including attorneys' fees, recording fees
and other closing costs, of $27,600.

The Wells Fund XII contributed $2,800,000, Wells Fund XI contributed
$106,550, and Wells OP contributed $5,441,050 to the Joint Venture for their
respective share of the acquisition costs for the Gartner Building.

The entire 62,400 rentable square feet of the Gartner Building is currently
under a net lease agreement with Gartner dated July 30, 1997 (the "Lease").
The Lease was assigned to the Joint Venture at the closing.

The initial term of the Lease is ten years which commenced on February 1,
1998 and expires on January 31, 2008.  Gartner has the right to extend the
Lease for two additional five year periods of time.  Each extension option
must be exercised by giving at least one year's notice to the landlord prior
to the expiration date of the then current lease term.

Under the Lease, Gartner is required to pay as additional rent all real
estate taxes, special assessments, utilities, taxes, insurance, and other
operating costs with respect to the Gartner Building during the term of the
Lease. In addition, Gartner

235

is responsible for all routine maintenance and repairs to the Gartner
Building. The Joint Venture, as landlord, is responsible for repair and
replacement of the roof, structure, and paved parking areas.

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over the
life of the lease.

2. BASIS OF ACCOUNTING

The accompanying statements of revenues over certain operating expenses are
presented on the accrual basis. These statements have been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired. Accordingly, the
statements exclude certain historical expenses, such as depreciation and
management and leasing fees, not comparable to the operations of the Gartner
Building after acquisition by the Joint Venture.

236

WELLS REAL ESTATE INVESTMENT TRUST, INC.

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

Wells Operating Partnership, L.P., ("Wells OP") is a Delaware limited
partnership that was organized to own and operate properties on behalf of Wells
Real Estate Investment Trust, Inc. ("Wells REIT").  Wells REIT is the general
partner of Wells OP.

The following unaudited pro forma statements of income for the year ended
December 31, 1998 and the nine-month period ended September 30, 1999 have been
prepared to give effect to the following transactions as if each occurred on
January 1, 1998: (i) Wells OP's acquisition of an equity interest in Fund IX,
Fund X, Fund XI, and REIT Joint Venture (formerly Fund IX-Fund X Associates) (a
joint venture between Wells Real Estate Fund IX, L.P., Wells Real Estate Fund X,
L.P. ["Wells Fund X"], Wells Real Estate Fund XI, L.P. ["Wells Fund XI"], and
Wells OP); (ii) acquisition of Lucent Building by Fund IX, Fund X, Fund XI, and
REIT Joint Venture; (iii) Wells OP's adjusted equity interest in Fund IX, Fund
X, Fund XI, and REIT Joint Venture after giving affect to the contribution by
Wells Fund X of Iomega Building to Fund IX, Fund X, Fund XI, and REIT Joint
Venture; (iv) acquisition of the Fairchild Building by Wells/Fremont Associates
(a joint venture between Wells OP and Fund X and Fund XI Associates [a joint
venture between Wells Fund X and Wells Fund XI]); (v) acquisition of the Cort
Furniture Building by Wells/Orange County Associates (a joint venture between
Wells OP and Fund X and Fund XI Associates); (vi) acquisition of the EYBL CarTex
Building by Wells Fund XI-Fund XII-REIT Joint Venture (a joint venture between
Wells Fund XI, Wells Real Estate Fund XII, L.P., and Wells OP); (vii)
acquisition of the Sprint Building by Wells Fund XI-Fund XII-REIT Joint Venture;
(viii) acquisition of the Johnson Matthey Building by Wells Fund XI-Fund XI-REIT
Joint Venture; and (ix) acquisition of the Gartner Building by Wells Fund XI-
Fund XI-REIT Joint Venture.

The following unaudited pro forma statements of income for the year ended
December 31, 1998 and the nine-month period ended September 30, 1999 have been
prepared to give effect to the acquisition by Wells OP of the Vanguard Cellular
Building and the Videojet Building as if the acquisitions had occurred on
November 16, 1998 (Vanguard Cellular lease inception date) and on January 1,
1998, respectively.

No pro forma balance sheet as of September 30, 1999 has been prepared since no
acquisitions have occurred since September 30, 1999, the date of Wells REIT's
most recently issued historical balance sheet.

These unaudited pro forma financial statements are prepared for informational
purposes only and are not necessarily indicative of future results or of actual
results that would have been achieved had the acquisition been consummated at
the beginning of the period presented.

237

WELLS REAL ESTATE INVESTMENT TRUST, INC.

STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 1998

(Unaudited)

Fund IX,  
Fund X,                                                                 
Wells Real     Fund XI,                                                                
Estate       and REIT                                                            
Investment      Joint                                               Cort       Vanguard
Trust, Inc.    Venture      Lucent       Iomega      Fairchild    Furniture    Cellular  
-----------  -----------   --------     --------    -----------  -----------  ----------

REVENUES:                                                                                                                    
Rental income                           $ 20,994    $         0    $     0    $        0    $        0    $       0   $ 171,855(b)
Equity in income (loss) of joint         
ventures                                263,315         17,909(a)   7,142(a)      6,158(a)     13,316(a)    11,489(a)        0
Interest income                          110,869              0          0             0             0            0           0
--------    -----------    -------    ----------    ----------    ---------   ---------
395,178         17,909      7,142         6,158        13,316       11,489     171,855
--------    -----------    -------    ----------    ----------    ---------   ---------
EXPENSES:                                                                                                                        
Operating costs, net of                   
reimbursements                           11,033              0          0             0             0            0           0
General and administrative                29,943              0          0             0             0            0       2,384
Depreciation                                   0              0          0             0             0            0      60,896(c)
Interest                                       0              0          0             0             0            0      54,255(d)
Legal and accounting                      19,552              0          0             0             0            0           0 
Computer costs                               616              0          0             0             0            0           0
--------    -----------    -------    ----------    ----------    ---------   --------- 
61,144              0          0             0             0            0     117,535
--------    -----------    -------    ----------    ----------    ---------   ---------
NET INCOME (LOSS)                         $334,034    $    17,909    $ 7,142    $    6,158    $   13,316    $  11,489   $  54,320
========    ===========    =======    ==========    ==========    =========   =========
HISTORICAL EARNINGS PER SHARE (BASIC AND  
DILUTED)                                 $   0.40
========       

PRO FORMA EARNINGS PER SHARE (BASIC AND 
DILUTED)                              

238

Pro   
EYBL                     Johnson                                    Forma  
CarTex       Sprint       Matthey      Gartner      Videojet         Total  
--------     --------     ---------    ---------    ----------     ----------

REVENUES:                                       
Rental income                                    $     0      $      0     $      0     $      0     $2,995,806(b)  $3,188,655
Equity in income (loss) of joint ventures         (5,022)(a)   391,893(a)   235,468(a)   258,285(a)           0      1,199,953
Interest income                                        0             0            0            0              0        110,869
--------      --------    ---------    ---------     ----------     ----------
(5,022)      391,893      235,468      258,285      2,995,806      4,499,477
--------      --------    ---------    ---------     ----------     ----------
EXPENSES:                                       
Operating costs, net of reimbursements                 0             0            0            0              0         11,033
General and administrative                             0             0            0            0              0         32,327
Depreciation                                           0             0            0            0      1,173,286(c)   1,234,182
Interest                                               0             0            0            0        520,625(e)     574,880
Legal and accounting                                   0             0            0            0              0         19,552
Computer costs                                         0             0            0            0              0            616
--------      --------    ---------    ---------     ----------     ----------
0             0            0            0      1,693,911      1,872,590
--------      --------    ---------    ---------     ----------     ----------
NET INCOME (LOSS)                                  $(5,022)     $391,893     $235,468     $258,285     $1,301,895     $2,626,887
========      ========    =========    =========     ==========     ==========
HISTORICAL EARNINGS PER SHARE (BASIC AND DILUTED)

PRO FORMA EARNINGS PER SHARE (BASIC AND DILUTED)                                                                      $     0.25(f)
==========

(a)  Reflects Wells Real Estate Investment Trust, Inc.'s equity in income (loss)
of the joint venture which owns the respective property; the pro forma
adjustments result from rental revenues less operating expenses, management
and leasing fees, and depreciation of the respective property.
(b)  Rental income is recognized on a straight-line basis.
(c)  Depreciation expense is based on the straight-line method and a 25-year
life; depreciation expense commences when the property is placed in
service.
(d)  Interest expense is based on the $6,150,000 note payable which bears
interest at 7%.
(e)  Interest expense is based on the $7,000,000 note payable which bears
interest at 7.4375%.
(f)  As of the latest property acquisition date, September 20, 1999, Wells Real
Estate Investment Trust, Inc. had 10,588,947 shares of common stock
outstanding; the pro forma earnings per share amount is as if these shares
were outstanding for the year ending December 31, 1998.

239

WELLS REAL ESTATE INVESTMENT TRUST, INC.

STATEMENT OF INCOME

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1999

(Unaudited)

Wells Real Estate                                     
Investment                       EYBL                 
Trust, Inc.      Vanguard       CarTex         Sprint     
----------------   ----------    ---------      ----------

REVENUES:                                          
Rental income                                             $2,806,158        $87,071(a)     $    0        $      0   
Equity in income of joint ventures                           783,065              0         9,428(d)      183,914(d) 
Interest income                                              407,067              0             0               0   
----------        -------        ------        --------   
3,996,290         87,071         9,428         183,914   
----------        -------        ------        --------   
EXPENSES:                                                                                                           
Operating costs, net of reimbursements                       359,112               0            0               0   
Management and leasing fees                                  150,908           1,710            0               0   
Depreciation                                               1,036,003          40,236(b)         0               0   
Interest                                                           0          33,866(c)         0               0   
Administrative costs                                          91,016               0            0               0   
Legal and accounting                                          78,637               0            0               0   
Computer costs                                                 8,182               0            0               0   
----------        --------       ------        --------   
1,723,858          75,812            0               0
----------        --------       ------        --------   
NET INCOME                                                  $2,272,432        $ 11,259       $9,428        $183,914    
==========        ========       ======        ========

HISTORICAL EARNINGS PER SHARE (BASIC AND DILUTED)           $     0.37
==========

PRO FORMA EARNINGS PER SHARE (BASIC AND DILUTED)                      

240

Johnson                                    Pro Forma   
Matthey      Gartner       Videojet          Total     
---------   ----------   --------------   ------------  

REVENUES:                                                                                                             

Rental income                                               $      0     $      0     $2,093,754(a)    $4,986,983   
Equity in income of joint ventures                           166,931(d)   194,078(d)           0        1,337,416   
Interest income                                                    0            0              0          407,067   
--------    ---------    -----------      -----------   
166,931      194,078      2,093,754        6,731,466   
--------    ---------    -----------      -----------   
EXPENSES:                                                                                                             
Operating costs, net of reimbursements                             0            0              0          359,112   
Management and leasing fees                                        0            0              0          152,618   
Depreciation                                                       0            0        820,004(b)     1,896,243   
Interest                                                           0            0        363,863(e)       397,729   
Administrative costs                                               0            0              0           91,016   
Legal and accounting                                               0            0              0           78,637   
Computer costs                                                     0            0              0            8,182   
--------    ---------    -----------      -----------   
0            0      1,183,867        2,983,537   
--------    ---------    -----------      -----------   
NET INCOME                                                    $166,931     $194,078     $  909,887       $3,747,929   
========    =========    ===========      ===========   

HISTORICAL EARNINGS PER SHARE (BASIC AND DILUTED)                                                                     

PRO FORMA EARNINGS PER SHARE (BASIC AND DILUTED)                                                         $     0.35(f)
===========    

(a)  Rental income is recognized on a straight-line basis.
(b)  Depreciation expense is based on the straight-line method and a 25-year
life; depreciation expense commences when the property is placed in
service.
(c)  Interest expense is based on the $6,150,000 note payable which bears
interest at 7%.
(d)  Reflects Wells Real Estate Investment Trust, Inc.'s equity in income of the
joint venture which owns the respective property; the pro forma adjustments
result from rental revenues less operating expenses, management and leasing
fees, and depreciation of the respective property.
(e)  Interest expense is based on the $7,000,000 note payable which bears
interest at 7.4375%.
(f)  As of the latest property acquisition date, September 20, 1999, Wells Real
Estate Investment Trust, Inc. had 10,588,957 shares of common stock
outstanding; the pro forma earnings per share amount is as if these shares
were outstanding for the nine-month period ending September 30, 1999.

241

PRIOR PERFORMANCE TABLES

The following prior performance tables (Tables) provide information
relating to real estate investment programs sponsored by the advisor and its
affiliates (Wells Public Programs) which have investment objectives
substantially similar to the Wells REIT.  (See "Investment Objectives and
Criteria.")  All of the Wells Public Programs, except for the Wells REIT, have
used a substantial amount of capital, and no acquisition indebtedness, to
acquire their properties.

Prospective investors should read these Tables carefully together with the
summary information concerning the Wells Public Programs as set forth in the
"Prior Performance Summary" section of this prospectus.

Investors in the Wells REIT will not own any interest in the other Wells
Public Programs and should not assume that they will experience returns, if any,
comparable to those experienced by investors in the Wells Public Programs.

The advisor is responsible for the acquisition, operation, maintenance and
resale of the real estate properties.  The financial results of the Wells Public
Programs thus provide an indication of the advisor's performance of its
obligations during the periods covered.  However, general economic conditions
affecting the real estate industry and other factors contribute significantly to
financial results.

The following tables are included in this Supplement to the Prospectus:

Table I - Experience in Raising and Investing Funds (As a Percentage of
Investment)

Table II - Compensation to Sponsor (in Dollars)

Table III - Annual Operating Results of Wells Public Programs

Table IV (Results of completed programs) and Table V (sales or disposals of
property) have been omitted since none of the Wells Public Programs have sold
any of their properties to date.

Additional information relating to the acquisition of properties by the
Wells Public Programs is contained in Table VI, which is included in Part II of
the registration statement which the Wells REIT has filed with the Securities
and Exchange Commission.  As described above, no Wells Public Program has sold
or disposed of any property held by it.  Copies of any or all information will
be provided to prospective investors at no charge upon request.

The following are definitions of certain terms used in the Tables:

"Acquisition Fees" shall mean fees and commissions paid by a Wells Public
Program in connection with its purchase or development of a property, except
development fees paid to a person not affiliated with the Wells Public Program
or with a general partner or advisor of the Wells Public Program in connection
with the actual development of a project after acquisition of the land by the
Wells Public Program.

"Organization Expenses" shall include legal fees, accounting fees,
securities filing fees, printing and reproduction expenses and fees paid to the
sponsor in connection with the planning and formation of the Wells Public
Program.

"Underwriting Fees" shall include selling commissions and wholesaling fees
paid to broker-dealers for services provided by the broker-dealers during the
offering.

242

TABLE I
(UNAUDITED)

EXPERIENCE IN RAISING AND INVESTING FUNDS

This Table provides a summary of the experience of the sponsors of Wells
Public Programs for which offerings have been completed since December 31, 1995.
Information is provided with regard to the manner in which the proceeds of the
offerings have been applied.  Also set forth is information pertaining to the
timing and length of these offerings and the time period over which the proceeds
have been invested in the properties.  All figures are as of December 31, 1998.

Wells Real         Wells Real          Wells Real          Wells Real
Estate Fund        Estate Fund        Estate Fund         Estate Fund
VIII, L.P.          IX, L.P.            X, L.P.             XI, L.P.
-----------------  -----------------  ------------------  ------------------

Dollar Amount Raised                               $32,042,689/(3)/   $35,000,000/(4)/    $27,128,912/(5)/    $16,532,802/(6)/
================   ================    ================    ================
Percentage Amount Raised                                100.0%/(3)/        100.0%/(4)/           100%/(5)/           100%/(6)/
Less Offering Expenses
Underwriting Fees                                      10.0%              10.0%               10.0%                9.5%      
Organizational Expenses                                 5.0%               5.0%                5.0%                3.0%      
Reserves/(1)/                                             0.0%               0.0%                0.0%                0.0%      
------             ------               -----               ------  
Percent Available for Investment                       85.0%              85.0%               85.0%               87.5%
Acquisition and Development Costs
Prepaid Items and Fees related to
Purchase of Property                                    .1%               2.0%                2.4%
Cash Down Payment                                      80.0%              66.4%               42.1%                0.0%
Acquisition Fees/(2)/                                   4.5%               4.5%                4.5%               29.5%      
Development and Construction Costs                       .4%              10.1%               12.0%                3.5%      

Reserve for Payment of Indebtedness                       0.0%               0.0%                0.0%                0.0%
------             ------               -----               -----   
Total Acquisition and Development Cost                   85.0%              83.0%               61.0%               33.0%      
Percent Leveraged                                         0.0%               0.0%                0.0%                0.0%       
======             ======               =====               =====  
Date Offering Began                                    01/06/95           01/05/96            12/31/96            12/31/97     
Length of Offering                                       12 mo.             12 mo.              12 mo.               12mo.     
Months to Invest 90% of Amount Available                                                                                       
for Investment (Measured from Beginning                 17 mo.             14 mo.              19 mo.               /(7)/      
of Offering)

Number of Investors as of 12/31/98                      2,247              2,118               1,812               1,345

______________________
(1)  Does not include general partner contributions held as part of reserves.
(2)  Includes acquisition fees, real estate commissions, general contractor fees
and/or architectural fees paid to affiliates of the general partners.
(3)  Total dollar amount registered and available to be offered was $35,000,000.
Wells Real Estate Fund VIII, L.P. closed its offering on January 4, 1996,
and the total dollar amount raised was $32,042,689.
(4)  Total dollar amount registered and available to be offered was $35,000,000.
Wells Real Estate Fund IX, L.P. closed its offering on December 30, 1996,
and the total dollar amount raised was $35,000,000.

243

(5)  Total dollar amount registered and available to be offered was $35,000,000.
Wells Real Estate Fund X, L.P. closed its offering on December 30, 1997,
and the total dollar amount raised was $27,128,912.
(6)  Total dollar amount registered and available to be offered was $35,000,000.
Wells Real Estate Fund XI, L.P. closed its offering on December 30, 1998,
and the total dollar amount raised was $16,532,802.
(7)  As of December 31, 1998, Wells Real Estate Fund XI, L.P. had not yet
invested 90% of the amount available for investment.  The amount invested
in properties (including acquisition fees paid but not yet associated with
a specific property) at December 31, 1998 was 33% of the total dollar
amount raised.

244

TABLE II
(UNAUDITED)

COMPENSATION TO SPONSOR

The following sets forth the compensation received by general partners or
their affiliates, including compensation paid out of offering proceeds and
compensation paid in connection with the ongoing operations of Wells Public
Programs having similar or identical investment objectives the offerings of
which have been completed since December 31, 1995.  These partnerships have not
sold or refinanced any of their properties to date.  All figures are as of
December 31, 1998.

Wells Real    Wells Real    Wells Real    Wells Real       Other
Estate Fund   Estate Fund   Estate Fund   Estate Fund      Public
VIII, L.P.     IX, L.P.      X, L.P.       XI, L.P.    Programs/(1)/
------------  ------------  ------------  ------------  -------------

Date Offering Commenced                                01/06/95      01/05/96      12/31/96      12/31/97             --

Dollar Amount Raised                                $32,042,689   $35,000,000   $27,128,912   $16,532,802   $174,198,406
to Sponsor from Proceeds of Offering:
Underwriting Fees/(2)/                            $   174,295   $   309,556   $   260,748   $   151,911   $    749,861
Acquisition Fees
Real Estate Commissions                                   --            --            --                           --
Acquisition and Advisory Fees/(3)/               $ 1,281,708   $ 1,400,000   $ 1,085,157   $   578,648   $  8,877,691

Dollar Amount of Cash Generated from Operations
Before Deducting Payments to Sponsor/(4)/          $ 5,898,456   $ 4,472,419   $ 2,100,001   $    87,465   $ 31,156,353

Amount Paid to Sponsor from Operations:
Property Management Fee/(1)/                       $   165,073   $    82,791   $    39,957   $     6,267   $  1,089,740
Partnership Management Fee                                  --            --            --            --             --
Reimbursements                                     $   171,240   $    72,803   $    41,659   $    14,623   $  1,300,327
Leasing Commissions                                $   225,234   $   174,185   $   110,655   $    17,559   $  1,148,836
General Partner Distributions                               --            --            --            --         15,205
Other                                                       --            --            --            --             --

Dollar Amount of Property Sales and Refinancing
Payments to Sponsors:
Cash                                                       --            --            --            --             --
Notes                                                      --            --            --            --             --

Amount Paid to Sponsor from Property Sales
and Refinancing:
Real Estate Commissions                                    --            --            --            --             --
Incentive Fees                                             --            --            --            --             --
Other                                                      --            --            --            --             --

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

(1) Includes compensation paid to general partners from Wells Real Estate Fund
I, Wells Real Estate Fund II, Wells Real Estate Fund II-OW, Wells Real
Estate Fund III, L.P., Wells Real Estate Fund IV, L.P., Wells Real Estate
Fund V, L.P., Wells Real Estate Fund VI, L.P. and Wells Real Estate Fund
VII, L.P. during the past three years.  In addition to the amounts shown,
affiliates of the general partners of Wells Real Estate Fund I are entitled
to certain property management and leasing fees but have elected to defer
the payment of such fees until a later year on properties owned by Wells
Real Estate Fund I. At December 31, 1998, the amount of such fees due the
general partners totaled $2,283,808.
(2) Includes net underwriting compensation and commissions paid to Wells
Investment Securities, Inc. in connection with the offerings of Wells Real
Estate Funds VIII, IX, X, and XI, which were not reallowed to participating
broker-dealers.

245

(3) Fees paid to the general partners or their affiliates for acquisition and
advisory services in connection with the review and evaluation of potential
real property acquisitions.
(4) Includes $567,231 in net cash provided by operating activities, $4,769,678
in distributions to limited partners and $561,547 in payments to sponsor for
Wells Real Estate Fund VIII, L.P.; $732,687 in net cash provided by
operating activities, $3,409,953 in distributions to limited partners and
$329,779 in payments to sponsor for Wells Real Estate Fund IX, L.P.;
$500,687 in net cash provided by operating activities, $1,407,043 in
distributions to limited partners and $192,271 in payments to sponsor for
Wells Real Estate Fund X, L.P.; $50,858 in net cash used by operating
activities, $99,874 in distributions to limited partners and $38,449 in
payments to sponsor for Wells Restate Fund XI, L.P.; and $2,917,222 in net
cash provided by operating activities, $24,700,228 in distributions to
limited partners and $3,538,903 in payments to sponsor for other public
programs.

246

TABLE III
(UNAUDITED)

The following six tables set forth operating results of Wells Public
Programs the offerings of which have been completed since December 31, 1993.
The information relates only to public programs with investment objectives
similar to those of the partnership.  All figures are as of December 31 of the
year indicated.

247

TABLE III (UNAUDITED)
OPERATING RESULTS OF WELLS PROGRAMS
WELLS REAL ESTATE FUND VI, L.P.

1998          1997          1996           1995           1994
------------  ------------  ------------  --------------  -------------

Gross Revenues/(1)/                                          $  939,519    $  884,802    $  675,782   $   1,002,567    $   819,535
Profit on Sale of Properties                                         --            --            --              --             --
Less: Operating Expenses/(2)/                                    82,168        82,898        80,479          94,489        112,389
Depreciation and Amortization/(3)/                              1,563         6,250         6,250           6,250          6,250
----------    ----------    ----------   -------------    -----------
Net Income GAAP Basis/(4)/                                   $  855,788    $  795,654    $  589,053   $     901,828        700,896
==========    ==========    ==========   =============    ===========
Taxable Income: Operations                                   $1,206,968    $1,091,770    $  809,389   $     916,531        667,682
==========    ==========    ==========   =============    ===========
Cash Generated (Used By): 
Operations                                                    (70,649)      (57,206)       (2,716)        278,728        276,376
Joint Ventures                                              1,829,428     1,500,023     1,044,891         766,212        203,543
----------    ----------    ----------   -------------    -----------
$1,758,779    $1,442,817    $1,042,175   $   1,044,940    $   479,919
Less Cash Distributions to Investors:  
Operating Cash Flow                                         1,745,626     1,442,817     1,042,175       1,044,940        245,800
Return of Capital                                                             9,986       125,314              --             --
Undistributed Cash Flow from Prior Year Operations             13,153            --    $   18,027         216,092             --
----------    ----------    ----------   -------------    -----------
Cash Generated (Deficiency) after Cash Distributions         $   13,153    $   (9,986)     (143,341)  $    (216,092)   $   234,119

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                     --            --            --              --             --
Increase in Limited Partner Contributions                         --            --            --              --     12,163,461
----------    ----------    ----------   -------------    -----------
$   13,153    $   (9,986)   $ (143,341)  $    (216,092)   $12,397,580
Use of Funds:
Sales Commissions and Offering Expenses                            --            --            --              --      1,776,909
Return of Original Limited Partner's Investment                    --            --            --              --             --
Property Acquisitions and Deferred Project Costs              135,602       310,759       234,924      10,721,376      5,912,454
----------    ----------    ----------   -------------    -----------
Cash Generated (Deficiency) after Cash Distributions  
and                                                          $ (122,449)   $ (320,745)   $ (378,265)  $ (10,937,468)   $ 4,708,217
==========    ==========    ==========   =============    ===========
Special Items 

Net Income and Distributions Data per $1,000 Invested:

Net Income on GAAP Basis:      
Ordinary Income (Loss)        
- Operations Class A Units                                       81            78            59              57             43
- Operations Class B Units                                     (280)         (247)         (160)            (60)           (12)
Capital Gain (Loss)                                               --            --            --              --             --

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                        80            75            56              56             41
- Operations Class B Units                                      (171)         (150)          (99)            (51)           (22)
Capital Gain (Loss)                                               --            --            --              --             --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                   80            67            56              57             14
- Return of Capital Class A Units                                   --            --            --               4             --
- Return of Capital Class B Units                                   --            --            --              --             --
Source (on Cash Basis)
- Operations Class A Units                                          80            67            50              61             14
- Return of Capital Class A Units                                    0             0             6              --             --
- Operations Class B Units                                          --            --            --              --             --

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year Reported  
in the Table                                                        100%

248

----------------------------------
(1) Includes $285,711 in equity in earnings of joint ventures and $533,824 from
investment of reserve funds in 1994, $681,033 in equity in earnings of joint
ventures and $321,534 from investment of reserve funds in 1995, $607,214 in
equity in earnings of joint ventures and $68,568 from investment of reserve
funds in 1996, $856,710 in equity in earnings of joint ventures and $28,092
from investment of reserve funds in 1997, and $928,000 in equity in earnings
of joint ventures and $11,519 from investment of reserve funds in 1998.  At
December 31, 1998, the leasing status was 95%.
(2) Includes partnership administrative expenses.
(3) Included in equity in earnings of joint ventures in gross revenues is
depreciation of $107,807 for 1994, $264,866 for 1995, $648,478 for 1996,
$896,753 for 1997, and $917,224 for 1998.
(4) In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $762,218 to Class A Limited
Partners, $(62,731) to Class B Limited Partners and $1,409 to the General
Partners for 1994; $1,172,944 to Class A Limited Partners, $(269,288) to
Class B Limited Partners and $(1,828) to the General Partners for 1995;
$1,234,717 to Class A Limited Partners, $(645,664) to Class B Limited
Partners and $0 to the General Partners for 1996; $1,677,826 to Class A
Limited Partners, $(882,172) to Class B Limited Partners and $0 to the
General Partners for 1997; and $1,770,058 to Class A Limited Partners
$(914,270) to Class B Limited Partners and $0 to the general partners for
1998.

249

TABLE III (UNAUDITED)
OPERATING RESULTS OF WELLS PROGRAMS
WELLS REAL ESTATE FUND VII, L.P.

1998          1997         1996           1995         1994
----          ----         ----           ----         ----  

Gross Revenues/(1)/                                             $  846,306    $  816,237    $ 543,291    $    925,246  $   286,371
Profit on Sale of Properties                                            --            --           --              --           --
Less: Operating Expenses/(2)/                                       85,722        76,838       84,265         114,953       78,420
Depreciation and Amortization/(3)/                                 6,250         6,250        6,250           6,250        4,688
----------    ----------    ---------    ------------  ----------- 
Net Income GAAP Basis/(4)/                                      $  754,334    $  733,149    $ 452,776    $    804,043  $   203,263
==========    ==========    =========    ============  ===========
Taxable Income: Operations                                      $1,109,096    $1,008,368    $ 657,443    $    812,402  $   195,067
==========    ==========    =========    ============  ===========
Cash Generated (Used By):                                       
Operations                                                       (72,194)      (43,250)      20,883         431,728       47,595
Joint Ventures                                                 1,770,742     1,420,126      760,628         424,304       14,243
----------    ----------    ---------    ------------  -----------
$1,698,548    $1,376,876    $ 781,511    $    856,032  $    61,838
Less Cash Distributions to Investors:                           
Operating Cash Flow                                            1,636,158     1,376,876      781,511         856,032       52,195
Return of Capital                                                     --         2,709       10,805          22,064           --
Undistributed Cash Flow from Prior Year Operations                    --            --           --           9,643           --
----------    ----------    ---------    ------------  -----------
Cash Generated (Deficiency) after Cash Distributions            $   62,390    $   (2,709)   $ (10,805)   $    (31,707) $     9,643

Special Items (not including sales and financing):                                                                    
Source of Funds:                                                                                                    
General Partner Contributions                                        --            --           --              --           --
Increase in Limited Partner Contributions                    $       --    $       --    $      --    $    805,212  $23,374,961
----------    ----------    ---------    ------------  -----------
$   62,390    $   (2,709)   $ (10,805)   $    773,505  $23,384,604
Use of Funds:                                                                                                         
Sales Commissions and Offering Expenses                               --            --           --    $    244,207  $ 3,351,569
Return of Original Limited Partner's Investment                       --            --           --             100           --
Property Acquisitions and Deferred Project Costs                 181,070       169,172      736,960      14,971,002    4,477,765
----------    ----------    ---------    ------------  -----------
Cash Generated (Deficiency) after Cash Distributions and       
Special Items                                                 $ (118,680)   $ (171,881)   $(747,765)   $(14,441,804) $15,555,270
==========    ==========    =========    ============  ===========
Net Income and Distributions Data per $1,000 Invested:                                                                
Net Income on GAAP Basis:                                                                                           
Ordinary Income (Loss)                                                                                             
- Operations Class A Units                                          85            86           62              57           29
- Operations Class B Units                                        (224)         (168)         (98)            (20)          (9)
Capital Gain (Loss)                                                  --            --           --              --           --
Tax and Distributions Data per $1,000 Invested:                                                                       
Federal Income Tax Results:                                                                                         
Ordinary Income (Loss)                                                                                             
- Operations Class A Units                                          82            78           55              55           28
- Operations Class B Units                                        (134)         (111)         (58)            (16)          17
Capital Gain (Loss)                                                  --            --           --              --           --
Cash Distributions to Investors:                                                                                      
Source (on GAAP Basis)                                                                                               
- Investment Income Class A Units                                     81            70           43              52            7
- Return of Capital Class A Units                                     --            --           --              --           --
- Return of Capital Class B Units                                     --            --           --              --           --
Source (on Cash Basis)                                                                                               
- Operations Class A Units                                            81            70           42              51            7
- Return of Capital Class A Units                                     --            --            1               1           --
- Operations Class B Units                                            --            --           --              --           --
Source (on a Priority Distribution Basis)/(5)/                                                                        
- Investment income Class A Units                                      62            54           29              30            4
- Return of Capital Class A Units                                      19            16           14              22            3
- Return of Capital Class B Units                                      --            --           --              --           --

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year Reported in
the Table                                                            100%

250

_____________
(1)    Includes $78,799 in equity in earnings of joint ventures and $207,572
from investment of reserve funds in 1994, $403,325 in equity in earnings
of joint ventures and $521,921 from investment of reserve funds in 1995,
$457,144 in equity in earnings of joint ventures and $86,147 from
investment of reserve funds in 1996, $785,398 in equity in earnings of
joint ventures and $30,839 from investment of reserve funds in 1997, and
$839,037 in equity in earnings of joint ventures and $7,269 from
investment of reserve funds in 1998. At December 31, 1998, the leasing
status was 96% including developed property in initial lease up.
(2)    Includes partnership administrative expenses.
(3)    Included in equity in earnings of joint ventures in gross revenues is
depreciation of $25,468 for 1994, $140,533 for 1995, $605,247 for 1996,
$877,869 for 1997, and $955,245 for 1998.
(4)    In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $233,337 to Class A Limited
Partners, $(29,854) to Class B Limited Partners and $(220) to the General
Partner for 1994; $950,826 to Class A Limited Partners, $(146,503) to
Class B Limited Partners and $(280) to the General Partners for 1995;
$1,062,605 to Class A Limited Partners, $(609,829) to Class B Limited
Partners and $0 to the General Partners for 1996; $1,615,965 to class A
Limited Partners, $(882,816) to Class B Limited Partners and $0 to the
General Partners for 1997; and $1,704,213 to Class A Limited Partners,
$(949,879) to Class B Limited Partners and $0 to the General Partners for
1998.
(5)    Pursuant to the terms of the partnership agreement, an amount equal to
the cash distributions paid to Class A Limited Partners is payable as
priority distributions out of the first available net proceeds from the
sale of partnership properties to Class B Limited Partners. The amount of
cash distributions paid per unit to Class A Limited Partners is shown as
a return of capital to the extent of such priority distributions payable
to Class B Limited Partners. As of December 31, 1998, the aggregate
amount of such priority distributions payable to Class B Limited Partners
totalled $1,364,217.

251

TABLE III (UNAUDITED)
OPERATING RESULTS OF WELLS PROGRAMS
WELLS REAL ESTATE FUND VIII, L.P.

1998            1997           1996           1995      1994
-------------  --------------  -------------  ------------  ----

Gross Revenues/(1)/                                            1,362,513    $  1,204,018    $ 1,057,694   $   402,428   N/A
Profit on Sale of Properties                                          --              --             --            --
Less: Operating Expenses/(2)/                                     87,092          95,201        114,854       122,264
Depreciation and Amortization/(3)/                               6,250           6,250          6,250         6,250
-----------    ------------    -----------   -----------
Net Income GAAP Basis/(4)/                                     1,269,171    $  1,102,567    $   936,590       273,914
===========    ============    ===========   ===========
Taxable Income: Operations                                     1,683,192    $  1,213,524    $ 1,001,974       404,348
===========    ============    ===========   ===========
Cash Generated (Used By):

Operations                                                     (63,946)          7,909        623,268       204,790  
Joint Ventures                                               2,293,504       1,229,282        279,984        20,287  
-----------    ------------    -----------   -----------  
$ 2,229,558    $  1,237,191    $   903,252       225,077  
Less Cash Distributions to Investors:                                                                                  
Operating Cash Flow                                          2,218,400       1,237,191        903,252            --  
Return of Capital                                                   --         183,315          2,443            --  
Undistributed Cash Flow from Prior Year                             --              --        225,077            --   
-----------    ------------    -----------   -----------   
Operations                                                $    11,158    $   (183,315)   $  (227,520)      225,077 
Cash Generated (Deficiency) after Cash Distributions

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                      --              --             --            --
Increase in Limited Partner Contributions/(5)/                     --              --      1,898,147    30,144,542
-----------    ------------    -----------   -----------
11,158    $   (183,315)   $ 1,670,627    30,369,619
Use of Funds:
Sales Commissions and Offering Expenses                             --              --        464,760     4,310,028
Return of Limited Partner's Investment                              --           8,600             --            --
Property Acquisitions and Deferred Project Costs             1,850,859      10,675,811      7,931,566     6,618,273
-----------    ------------    -----------   -----------
Cash Generated (Deficiency) after Cash Distributions
and Special Items                                           $(1,839,701)   $(10,867,726)   $(6,725,699)   19,441,318
===========    ============    ===========   ===========

Net Income and Distributions Data per $1,000
Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                        91              73             46            28
- Operations Class B Units                                      (212)           (150)           (47)           (3)
Capital Gain (Loss)                                                --              --             --            --

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                        89              65             46            17
- Operations Class B Units                                      (131)            (95)           (33)           (3)
Capital Gain (Loss)                                                --              --             --            --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                   83              54             43            --
- Return of Capital Class A Units                                   --              --             --            --
- Return of Capital Class B Units                                   --              --             --            --
Source (on Cash Basis)
- Operations Class A Units                                          83              47             43            --
- Return of Capital Class A Units                                   --               7              0            --
- Operations Class B Units                                          --              --             --            --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                                    67              42             33            --
- Return of Capital Class A Units                                    16              12             10            --
- Return of Capital Class B Units                                    --              --             --            --

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year Reported                  
in the Table                                                        100% 

252

___________________
(1) Includes $28,377 in equity in earnings of joint ventures and $374,051 from
investment of reserve funds in 1995, $241,819 in equity in earnings of joint
ventures and $815,875 from investment of reserve funds in 1996, $1,034,907
in equity in earnings of joint ventures and $169,111 from investment of
reserve funds in 1997, and $1,346,367 in equity in earnings of joint
ventures and $16,146 from investment of reserve funds in 1998.  At December
31, 1998, the leasing status was 99% including developed property in initial
lease up.
(2) Includes partnership administrative expenses.
(3) Included in equity in earnings of joint ventures in gross revenues is
depreciation of $14,058 for 1995, $265,259 for 1996, $841,666 for 1997, and
$1,157,355 for 1998.
(4) In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $294,221 to Class A Limited
Partners, $(20,104) to Class B Limited Partners and $(203) to the General
Partners for 1995; $1,207,540  to Class A Limited Partners, $(270,653) to
Class B Limited Partners and $(297) to the General Partners for 1996;
$1,947,536  to Class A Limited Partners, $(844,969) to Class B Limited
Partners and $0 to the General Partners for 1997; and $2,431,246 to Class A
Limited Partners, $(1,162,075) to Class B Limited Partners and $0 to the
General Partners for 1998.
(5) Pursuant to the terms of the partnership agreement, an amount equal to the
cash distributions paid to Class A Limited Partners is payable as priority
distributions out of the first available net proceeds from the sale of
partnership properties to Class B Limited Partners.  The amount of cash
distributions paid per unit to Class A Limited Partners is shown as a return
of capital to the extent of such priority distributions payable to Class B
Limited Partners.  As of December 31, 1998, the aggregate amount of such
priority distributions payable to Class B Limited Partners totalled
$989,966.

253

TABLE III (UNAUDITED)
OPERATING RESULTS OF WELLS PROGRAMS
WELLS REAL ESTATE FUND IX, L.P.

1998            1997           1996       1995  1994
-------------  --------------  -------------  ----  ----

Gross Revenues/(1)/                                             $ 1,561,456    $  1,199,300    $   406,891   N/A   N/A
Profit on Sale of Properties                                             --              --             --
Less: Operating Expenses/(2)/                                       105,251         101,284        101,885
Depreciation and Amortization/(3)/                                  6,250           6,250          6,250
-----------    ------------    -----------
Net Income GAAP Basis/(4)/                                      $ 1,449,955    $  1,091,766    $   298,756
===========    ============    ===========
Taxable Income: Operations                                      $ 1,906,011    $  1,083,824    $   304,552  
===========    ============    =========== 
Cash Generated (Used By):                                                                                  
Operations                                                    $    80,147    $    501,390    $   151,150 
Joint Ventures                                                  2,125,489         527,390             --
-----------    ------------    ----------- 
$ 2,205,636    $  1,028,780    $   151,150 
Less Cash Distributions to Investors:                                                                      
Operating Cash Flow                                             2,188,189       1,028,780        149,425 
Return of Capital                                                      --    $     41,834   $         --
Undistributed Cash Flow From Prior Year Operations                     --           1,725             -- 
-----------    ------------    ----------- 
Cash Generated (Deficiency) after Cash Distributions            $    17,447    $    (43,559)   $     1,725 

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                         --              --             -- 
Increase in Limited Partner Contributions                             --              --     35,000,000 
-----------    ------------    -----------
17,447    $    (43,559)   $35,001,725
Use of Funds:
Sales Commissions and Offering Expenses                                --         323,039      4,900,321
Return of Original Limited Partner's Investment                        --             100             --
Property Acquisitions and Deferred Project Costs                9,455,554      13,427,158      6,544,019
-----------    ------------    -----------
Cash Generated (Deficiency) after Cash Distributions and 
Special Items                                                 $(9,438,107)   $(13,793,856)   $23,557,385
===========    ============    =========== 

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                           88              53             28
- Operations Class B Units                                         (218)            (77)           (11)
Capital Gain (Loss)                                                   --              --             --
Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                           85              46             26
- Operations Class B Units                                         (123)            (47)           (48)
Capital Gain (Loss)                                                   --              --             --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                      73              36             13
- Return of Capital Class A Units                                      --              --             --
- Return of Capital Class B Units                                      --              --             --
Source (on Cash Basis)
- Operations Class A Units                                             73              35             13
- Return of Capital Class A Units                                      --               1             --
- Operations Class B Units                                             --              --             --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                                       61              29             10
- Return of Capital Class A Units                                       12               7              3
- Return of Capital Class B Units                                       --              --             --

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year Reported in
the Table                                                              100%

254

_________________
(1) Includes $23,007 in equity in earnings of joint ventures and $383,884 from
investment of reserve funds in 1996, and $593,914 in equity in earnings of
joint ventures and $605,386 from investment of reserve funds in 1997, and
$1,481,869 in equity in earnings of joint ventures and $79,587 from
investment of reserve funds in 1998.  At December 31, 1998, the leasing
status was 99% including developed property in initial lease up.
(2) Includes partnership administrative expenses.
(3) Included in equity in earnings of joint ventures in gross revenues is
depreciation of $25,286 for 1996, $469,126 for 1997, and $1,143,407 for
1998.
(4) In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $330,270 to Class A Limited
Partners, $(31,220) to Class B Limited Partners and $(294) to the General
Partners for 1996; $1,564,778 to Class A Limited Partners, $(472,806) to
Class B Limited Partners and $(206) to the General Partners for 1997; and
$2,597,938 to Class A Limited Partners, $(1,147,983) to Class B Limited
Partners and $0 to the General Partners for 1998.
(5) Pursuant to the terms of the partnership agreement, an amount equal to the
cash distributions paid to Class A Limited Partners is payable as priority
distributions out of the first available net proceeds from the sale of
partnership properties to Class B Limited Partners.  The amount of cash
distributions paid per unit to Class A Limited Partners is shown as a return
of capital to the extent of such priority distributions payable to Class B
Limited Partners.  As of December 31, 1998, the aggregate amount of such
priority distributions payable to Class B Limited Partners totalled
$609,724.

255

TABLE III (UNAUDITED)
OPERATING RESULTS OF WELLS PROGRAMS
WELLS REAL ESTATE FUND X, L.P.

1998           1997        1996    1995    1994   
--------------  -------------   ----    ----    ----   

Gross Revenues/(1)/                                             $  1,204,597    $   372,507    N/A     N/A     N/A     
Profit on Sale of Properties                                              --             --
Less: Operating Expenses/(2)/                                         99,034         88,232
Depreciation and Amortization/(3)/                                  55,234          6,250
------------    -----------
Net Income GAAP Basis/(4)/                                      $  1,050,329    $   278,025
============    =========== 
Taxable Income: Operations                                      $  1,277,016    $   382,543 
============    =========== 
Cash Generated (Used By):                                                                   
Operations                                                         300,019    $   200,668 
Joint Ventures                                                     886,846             -- 
------------    ----------- 
1,186,865    $   200,668 
Less Cash Distributions to Investors:                                                       
Operating Cash Flow                                              1,186,865             -- 
Return of Capital                                                   19,510             --
Undistributed Cash Flow From Prior Year Operations                 200,668             -- 
------------    ----------- 
Cash Generated (Deficiency) after Cash Distributions            $   (220,178)   $   200,668 

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                          --             --
Increase in Limited Partner Contributions                              --     27,128,912   
------------    -----------
$   (220,178)   $27,329,580
Use of Funds:
Sales Commissions and Offering Expenses                            300,725      3,737,363
Return of Original Limited Partner's Investment                         --            100
Property Acquisitions and Deferred Project Costs                17,613,067      5,188,485
------------    ----------- 
Cash Generated (Deficiency) after Cash Distributions and                                    
Special Items                                                 $(18,133,970)   $18,403,632
============    =========== 

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                            85             28
- Operations Class B Units                                          (123)            (9)
Capital Gain (Loss)                                                    --             --

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                            78             35
- Operations Class B Units                                           (64)             0
Capital Gain (Loss)                                                    --             --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                       66             --
- Return of Capital Class A Units                                       --             --
- Return of Capital Class B Units                                       --             --
Source (on Cash Basis)
- Operations Class A Units                                              56             --
- Return of Capital Class A Units                                       10             --
- Operations Class B Units                                              --             --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                                        48             --
- Return of Capital Class A Units                                        18             --
- Return of Capital Class B Units                                        --             --

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year Reported in                   
the Table                                                               100% 

256

_______________________
(1) Includes $(10,035) in equity in earnings of joint ventures and $382,542 from
investment of reserve funds in 1997, and $869,555 in equity in earnings of
joint ventures, $120,000 in rental income and $215,042 from investment of
reserve funds in 1998.  At December 31, 1998, the leasing status was 99%
including developed property in initial lease up.
(2) Includes partnership administrative expenses.
(3) Included in equity in earnings of joint ventures in gross revenues is
depreciation of $18,675 for 1997, and $674,986 for 1998.
(4) In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $302,862 to Class A Limited
Partners, $(24,675) to Class B Limited Partners and $(162) to the General
Partners for 1997, and $1,779,191 to Class A Limited Partners, $(728,524) to
Class B Limited Partners and $(338) to General Partners for 1998.
(5) Pursuant to the terms of the partnership agreement, an amount equal to the
cash distributions paid to Class A Limited Partners is payable as priority
distributions out of the first available net proceeds from the sale of
partnership properties to Class B Limited Partners.  The amount of cash
distributions paid per unit to Class A Limited Partners is shown as a return
of capital to the extent of such priority distributions payable to Class B
Limited Partners.  As of December 31, 1998, the aggregate amount of such
priority distributions payable to Class B Limited Partners totalled
$388,585.

257

TABLE III (UNAUDITED)
OPERATING RESULTS OF WELLS PROGRAMS
WELLS REAL ESTATE FUND XI, L.P.

1998      1997  1996  1995  1994
------------  ----  ----  ----  ----

Gross Revenues/(1)/                                                  262,729    N/A  N/A   N/A   N/A
Profit on Sale of Properties                                              --
Less: Operating Expenses/(2)/                                        113,184
Depreciation and Amortization/(3)/                                   6,250
-----------
Net Income GAAP Basis/(4)/                                       $   143,295
===========
Taxable Income: Operations                                       $   177,692
===========
Cash Generated (Used By):     
Operations                                                         (50,858)
Joint Ventures                                                     102,662
-----------
51,804
Less Cash Distributions to Investors:   
Operating Cash Flow                                                 51,804 
Return of Capital                                                   48,070
Undistributed Cash Flow From Prior Year Operations                      --
----------- 
Cash Generated (Deficiency) after Cash Distributions                 (48,070)

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                          --
Increase in Limited Partner Contributions                      16,532,801         
-----------
16,484,731
Use of Funds:
Sales Commissions and Offering Expenses                          1,779,661
Return of Original Limited Partner's Investment                         --
Property Acquisitions and Deferred Project Costs                 5,412,870
-----------
Cash Generated (Deficiency) after Cash Distributions and      
Special Items                                                  $ 9,292,200
===========
Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                             50
- Operations Class B Units                                            (77)
Capital Gain (Loss)                                                    --

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                             18
- Operations Class B Units                                            (17)
Capital Gain (Loss)                                                    --

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                        14
- Return of Capital Class A Units                                        --
- Return of Capital Class B Units                                        --
Source (on Cash Basis)
- Operations Class A Units                                                7
- Return of Capital Class A Units                                         7
- Operations Class B Units                                               --
Source (on a Priority Distribution Basis)/(5)/ 
- Investment Income Class A Units                                        11      
- Return of Capital Class A Units                                         3     
- Return of Capital Class B Units                                        --

Amount (in Percentage Terms) Remaining Invested in Program
Properties at the end of the Last Year Reported in the Table             100%

258

---------------------------------
(1) Includes $142,163 in equity in earnings of joint ventures and $120,566 from
investment of reserve funds in 1998.  At December 31, 1998, the leasing
status was 99% including developed property in initial lease up.
(2) Includes partnership administrative expenses.
(3) Included in equity in earnings of joint ventures in gross revenues is
depreciation of $105,458 for 1998.
(4) In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $254,862 to Class A Limited
Partners, $(111,067) to Class B Limited Partners and $(500) to General
Partners for 1998.
(5) Pursuant to the terms of the partnership agreement, an amount equal to the
cash distributions paid to Class A Limited Partners is payable as priority
distributions out of the first available net proceeds from the sale of
partnership properties to Class B Limited Partners.  The amount of cash
distributions paid per unit to Class A Limited Partners is shown as a return
of capital to the extent of such priority distributions payable to Class B
Limited Partners.  As of December 31, 1998, the aggregate amount of such
priority distributions payable to Class B Limited Partners totalled $24,621.

259

EXHIBIT "A"

SUBSCRIPTION AGREEMENT

To:  WELLS REAL ESTATE INVESTMENT TRUST, INC.
Suite 250
6200 The Corners Parkway
Norcross, Georgia 30092

Ladies and Gentlemen:

The undersigned, by signing and delivering a copy of the attached
Subscription Agreement Signature Page, hereby tenders this subscription and
applies for the purchase of the number of shares of common stock ("Shares") of
Wells Real Estate Investment Trust, Inc., a Maryland corporation (the
"Company"), set forth on such Subscription Agreement Signature Page.  Payment
for the Shares is hereby made by check payable to "Bank of America, N.A., as
Escrow Agent."

I hereby acknowledge receipt of the Prospectus of the Company dated
December 20, 1999 (the "Prospectus").

I agree that if this subscription is accepted, it will be held, together
with the accompanying payment, on the terms described in the Prospectus.
Subscriptions may be rejected in whole or in part by the Company in its sole and
absolute discretion.

Prospective investors are hereby advised of the following:

(a) The assignability and transferability of the Shares is restricted and
will be governed by the Company's Articles of Incorporation and Bylaws and all
applicable laws as described in the Prospectus.

(b) Prospective investors should not invest in Shares unless they have an
adequate means of providing for their current needs and personal contingencies
and have no need for liquidity in this investment.

(c) There will be no public market for the Shares, and accordingly, it may
not be possible to readily liquidate an investment in the Company.

A-1

SPECIAL NOTICE FOR CALIFORNIA RESIDENTS ONLY
CONDITIONS RESTRICTING TRANSFER OF SHARES

260.141.11 RESTRICTIONS ON TRANSFER.
------------------------ 

(a)  The issuer of any security upon which a restriction on transfer has
been imposed pursuant to Sections 260.102.6, 260.141.10 or 260.534 of the Rules
(the "Rules") adopted under the California Corporate Securities Law (the "Code")
shall cause a copy of this section to be delivered to each issuee or transferee
of such security at the time the certificate evidencing the security is
delivered to the issuee or transferee.

(b)  It is unlawful for the holder of any such security to consummate a
sale or transfer of such security, or any interest therein, without the prior
written consent of the Commissioner (until this condition is removed pursuant to
Section 260.141.12 of the Rules), except:

(1)  to the issuer;

(2)  pursuant to the order or process of any court;

(3)  to any person described in subdivision (i) of Section 25102 of
the Code or Section 260.105.14 of the Rules;

(4)  to the transferor's ancestors, descendants or spouse, or any
custodian or trustee for the account of the transferor or the transferor's
ancestors, descendants or spouse; or to a transferee by a trustee or custodian
for the account of the transferee or the transferee's ancestors, descendants or
spouse;

(5)  to holders of securities of the same class of the same issuer;

(6)  by way of gift or donation inter vivos or on death;

(7)  by or through a broker-dealer licensed under the Code (either
acting as such or as a finder) to a resident of a foreign state, territory or
country who is neither domiciled in this state to the knowledge of the broker-
dealer, nor actually present in this state if the sale of such securities is not
in violation of any securities laws of the foreign state, territory or country
concerned;

(8)  to a broker-dealer licensed under the Code in a principal
transaction, or as an underwriter or member of an underwriting syndicate or
selling group;

(9)  if the interest sold or transferred is a pledge or other lien
given by the purchaser to the seller upon a sale of the security for which the
Commissioner's written consent is obtained or under this rule not required;

(10) by way of a sale qualified under Sections 25111, 25112, 25113 or
25121 of the Code, of the securities to be transferred, provided that no order
under Section 25140 or subdivision (a) of Section 25143 is in effect with
respect to such qualification;

(11) by a corporation to a wholly owned subsidiary of such
corporation, or by a wholly owned subsidiary of a corporation to such
corporation;

A-2

(12) by way of an exchange qualified under Section 25111, 25112 or
25113 of the Code provided that no order under Section 25140 or subdivision (a)
of Section 25143 is in effect with respect to such qualification;

(13) between residents of foreign states, territories or countries who
are neither domiciled or actually present in this state;

(14) to the State Controller pursuant to the Unclaimed Property Law or
to the administrator of the unclaimed property law of another state;

(15) by the State Controller pursuant to the Unclaimed Property Law or
by the administrator of the unclaimed property law of another state if, in
either such case, such person (i) discloses to potential purchasers at the sale
that transfer of the securities is restricted under this rule, (ii) delivers to
each purchaser a copy of this rule, and (iii) advises the Commissioner of the
name of each purchaser;

(16) by a trustee to a successor trustee when such transfer does not
involve a change in the beneficial ownership of the securities;

(17) by way of an offer and sale of outstanding securities in an
issuer transaction that is subject to the qualification requirement of Section
25110 of the Code but exempt from that qualification requirement by subdivision
(f) of Section 25102; provided that any such transfer is on the condition that
any certificate evidencing the security issued to such transferee shall contain
the legend required by this section.

(c)  The certificates representing all such securities subject to such a
restriction on transfer, whether upon initial issuance or upon any transfer
thereof, shall bear on their face a legend, prominently stamped or printed
thereon in capital letters of not less than 10-point size, reading as follows:

"IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS
SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY
CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT
AS PERMITTED IN THE COMMISSIONER'S RULES."

[Last amended effective January 21, 1988.]

SPECIAL NOTICE FOR MAINE, MASSACHUSETTS, MINNESOTA, MISSOURI
AND NEBRASKA RESIDENTS ONLY

In no event may a subscription for Shares be accepted until at least five
business days after the date the subscriber receives the Prospectus.  Residents
of the States of Maine, Massachusetts, Minnesota, Missouri and Nebraska who
first received the Prospectus only at the time of subscription may receive a
refund of the subscription amount upon request to the Company within five days
of the date of subscription.

A-3

STANDARD REGISTRATION REQUIREMENTS

The following requirements have been established for the various forms of
registration.  Accordingly, complete Subscription Agreements and such supporting
material as may be necessary must be provided.

TYPE OF OWNERSHIP AND SIGNATURE(S) REQUIRED

1.   INDIVIDUAL:  One signature required.

2.   JOINT TENANTS WITH RIGHT OF SURVIVORSHIP:  All parties must sign.

3.   TENANTS IN COMMON:  All parties must sign.

4.   COMMUNITY PROPERTY:  Only one investor signature required.

5.   PENSION OR PROFIT SHARING PLANS:  The trustee signs the Signature Page.

6.   TRUST:  The trustee signs the Signature Page.  Provide the name of the
trust, the name of the trustee and the name of the beneficiary.

7.   COMPANY:  Identify whether the entity is a general or limited partnership.
The general partners must be identified and their signatures obtained on
the Signature Page.  In the case of an investment by a general partnership,
all partners must sign (unless a "managing partner" has been designated for
the partnership, in which case he may sign on behalf of the partnership if
a certified copy of the document granting him authority to invest on behalf
of the partnership is submitted).

8.   CORPORATION:  The Subscription Agreement must be accompanied by (1) a
certified copy of the resolution of the Board of Directors designating the
officer(s) of the corporation authorized to sign on behalf of the
corporation and (2) a certified copy of the Board's resolution authorizing
the investment.

9.   IRA AND IRA ROLLOVERS:  Requires signature of authorized signer (e.g., an
officer) of the bank, trust company, or other fiduciary.  The address of
the trustee must be provided in order for the trustee to receive checks and
other pertinent information regarding the investment.

10.  KEOGH (HR 10):  Same rules as those applicable to IRAs.

11.  UNIFORM GIFT TO MINORS ACT (UGMA) or UNIFORM TRANSFERS TO MINORS ACT
(UTMA):  The required signature is that of the custodian, not of the parent
(unless the parent has been designated as the custodian).  Only one child
is permitted in each investment under UGMA or UTMA. In addition, designate
the state under which the gift is being made.

A-4

INSTRUCTIONS TO SUBSCRIPTION AGREEMENT SIGNATURE PAGE
TO WELLS REAL ESTATE INVESTMENT TRUST, INC. SUBSCRIPTION AGREEMENT

--------------------------------------------------------------------------------
INVESTOR                 Please follow these instructions carefully.
INSTRUCTIONS             Failure to do so may result in the rejection
of your subscription.  All information on the
Subscription Agreement Signature Page should
be completed as follows:
--------------------------------------------------------------------------------
1.   INVESTMENT          a.   GENERAL: A minimum investment of $1,000 (100
Shares) is required, except for certain states
which require a higher minimum investment. A CHECK
FOR THE FULL PURCHASE PRICE OF THE SHARES
SUBSCRIBED FOR SHOULD BE MADE PAYABLE TO THE ORDER
OF "BANK OF AMERICA, N.A., AS ESCROW AGENT."
Investors who have satisfied the minimum purchase
requirements in Wells Real Estate Fund I, Wells
Real Estate Fund II, Wells Real Estate Fund II-OW,
Wells Real Estate Fund III, L.P., Wells Real
Estate Fund IV, L.P., Wells Real Estate Fund V,
L.P., Wells Real Estate Fund VI, L.P., Wells Real
Estate Fund VII, L.P., Wells Real Estate Fund
VIII, L.P., Wells Real Estate Fund IX, L.P., Wells
Real Estate Fund X, L.P., Wells Real Estate Fund
XI, L.P. or Wells Real Estate Fund XII, L.P. or in
any other public real estate program may invest as
little as $25 (2.5 Shares) except for residents of
Maine, Minnesota, Nebraska or Washington. Shares
may be purchased only by persons meeting the
standards set forth under the Section of the
Prospectus entitled "Investor Suitability
Standards." Please indicate the state in which the
sale was made.

b.   DEFERRED COMMISSION OPTION: Please check the box
if you have agreed with your Broker-Dealer to
elect the Deferred Commission Option, as described
in the Prospectus, as supplemented to date. By
electing the Deferred Commission Option, you are
required to pay only $9.40 per Share purchased
upon subscription. For the next six years
following the year of subscription, you will have
a 1% sales commission ($.10 per Share) per year
deducted from and paid out of dividends or other
cash distributions otherwise distributable to you.
Election of the Deferred Commission Option shall
authorize the Company to withhold such amounts
from dividends or other cash distributions
otherwise payable to you as is set forth in the
"Plan of Distribution" section of the Prospectus.
--------------------------------------------------------------------------------

A-5

--------------------------------------------------------------------------------
2.  Additional Investments    Please check if you plan to make one or more
additional investments in the Company. All
additional investments must be in increments of at
least $25. Additional investments by residents of
Maine must be for the minimum amounts stated under
"Suitability Standards" in the Prospectus, and
residents of Maine must execute a new Subscription
Agreement Signature Page to make additional
investments in the Company. If additional
investments in the Company are made, the investor
agrees to notify the Company and the Broker-Dealer
named on the Subscription Agreement Signature Page
in writing if at any time he fails to meet the
applicable suitability standards or he is unable
to make any other representations or warranties
set forth in the Prospectus or the Subscription
Agreement. The investor acknowledges that the
Broker-Dealer named in the Subscription Agreement
Signature Page may receive a commission not to
exceed 7% of any such additional investments in
the Company.
--------------------------------------------------------------------------------
3.  TYPE OF OWNERSHIP         Please check the appropriate box to indicate the
type of entity or type of individuals subscribing.
--------------------------------------------------------------------------------
4.  REGISTRATION NAME AND     Please enter the exact name in which the Shares
ADDRESS                   are to be held. For joint tenants with right of
survivorship or tenants in common, include the
names of both investors. In the case of
partnerships or corporations, include the name of
an individual to whom correspondence will be
addressed. Trusts should include the name of the
trustee. All investors must complete the space
provided for taxpayer identification number or
social security number. By signing in Section 6,
the investor is certifying that this number is
correct. Enter the mailing address and telephone
numbers of the registered owner of this
investment. In the case of a Qualified Plan or
trust, this will be the address of the trustee.
Indicate the birthdate and occupation of the
registered owner unless the registered owner is a
partnership, corporation or trust.
--------------------------------------------------------------------------------
5.  INVESTOR NAME             Complete this Section only if the investor's name
AND ADDRESS               and address is different from the registration
name and address provided in Section 4. If the
Shares are registered in the name of a trust,
enter the name, address, telephone number, social
security number, birthdate and occupation of the
beneficial owner of the trust.
--------------------------------------------------------------------------------
6.  SUBSCRIBER SIGNATURES     Please separately initial each representation made
by the investor where indicated. Except in the
case of fiduciary accounts, the investor may not
grant any person a power of attorney to make such
representations on his or her behalf. Each
investor must sign and date this Section. If title
is to be held jointly, all parties must sign. If
the registered owner is a partnership, corporation
or trust, a general partner, officer or trustee of
the entity must sign. PLEASE NOTE THAT THESE
SIGNATURES DO NOT HAVE TO BE NOTARIZED.
--------------------------------------------------------------------------------

A-6

--------------------------------------------------------------------------------
7.  DIVIDENDS            a.   DIVIDEND REINVESTMENT PLAN: By electing the
Dividend Reinvestment Plan, the investor elects to
reinvest all dividends otherwise payable to such
investor in Shares of the Company. The investor
agrees to notify the Company and the Broker-Dealer
named on the Subscription Agreement Signature Page
in writing if at any time he fails to meet the
applicable suitability standards or he is unable
to make any other representations and warranties
as set forth in the Prospectus or Subscription
Agreement or in the prospectus and subscription
agreement of any future limited partnerships
sponsored by the Advisor or its affiliates. The
investor acknowledges that the Broker-Dealer named
in the Subscription Agreement Signature Page may
receive a commission not to exceed 7% of any
reinvested dividends.

b.   DIVIDEND ADDRESS: If cash dividends are to be sent
to an address other than that provided in Section
4 (i.e., a bank, brokerage firm or savings and
loan, etc.), please provide the name, account
number and address.
--------------------------------------------------------------------------------
8.  BROKER-DEALER        This Section is to be completed by the Registered
Representative. Please complete all BROKER-DEALER
information contained in Section 8 including
suitability certification. SIGNATURE PAGE MUST BE
SIGNED BY AN AUTHORIZED REPRESENTATIVE.
--------------------------------------------------------------------------------

The Subscription Agreement Signature Page, which has been delivered with
this Prospectus, together with a check for the full purchase price, should be
delivered or mailed to your Broker-Dealer.  Only original, completed copies of
Subscription Agreements can be accepted.  Photocopied or otherwise duplicated
Subscription Agreements cannot be accepted by the Company.

IF YOU NEED FURTHER ASSISTANCE IN COMPLETING THIS
SUBSCRIPTION AGREEMENT SIGNATURE PAGE,
PLEASE CALL 1-800-448-1010

A-7

-------------------------------------------
SEE PRECEDING PAGE                     Special Instructions:            
FOR INSTRUCTIONS                                                        
-------------------------------------------

WELLS REAL ESTATE INVESTMENT TRUST, INC.
SUBSCRIPTION AGREEMENT SIGNATURE PAGE

1.   =====INVESTMENT================================================================================================================

--------------------------------------------------------                       
Make Investment Check Payable to:     
______________________    _________________________                        Bank of America, N.A.            
# of Shares             Total $ Invested                                  as Escrow Agent             
--------------------------------------------------------------
(# Shares x $10 = $ Invested)                         [ ] Initial Investment (Minimum $1,000)    
[ ] Additional Investment (Minimum $25)               
Minimum purchase $1,000 or 100 Shares                                 State in which sale was made________________________
--------------------------------------------------------         --------------------------------------------------------------

Check the following box to elect the Deferred Commission Option:             [ ]
(This election must be agreed to by the Broker-Dealer listed below)

2.   ===== ADDITIONAL INVESTMENTS ==================================================================================================

Please check if you plan to make additional investments in the Company:  [ ]
[If additional investments are made, please include social security number or other taxpayer identification number on your 
check.]
[All additional investments must be made in increments of at least $25.]

3.   ===== TYPE OF OWNERSHIP =======================================================================================================

[ ]  IRA (06)                                                 [ ]  Individual (01)
[ ]  Keogh (10)                                               [ ]  Joint Tenants With Right of Survivorship (02)
[ ]  Qualified Pension Plan (11)                              [ ]  Community Property (03)
[ ]  Qualified Profit Sharing Plan (12)                       [ ]  Tenants in Common (04)
[ ]  Other Trust_______________________                       [ ]  Custodian:  A Custodian for_________________under
For the Benefit of________________                            the Uniform Gift to Minors Act or the Uniform Transfers
[ ]  Company (15)                                                  to Minors Act of the State of______________________(08)
[ ]  Other___________________________________     

4.  ===== REGISTRATION NAME AND ADDRESS=============================================================================================
Please print name(s) in which Shares are to be registered.  Include trust name if applicable.
[ ] Mr  [ ] Mrs  [ ] Ms  [ ] MD  [ ] PhD  [ ] DDS  [ ] Other_____________
________________________________________________________        
|                                                      |      Taxpayer Identification Number  
________________________________________________________      [ ]  [ ] - [ ]  [ ]  [ ]  [ ]  [ ]  [ ]  [ ]
|                                                      |      Social Security Number
________________________________________________________      [ ]  [ ]  [ ] - [ ]  [ ] - [ ]  [ ]  [ ]  [ ]

---------------------------------------------------------------------------------------------------------- 
Street Address                                                                                                                
or P.O. Box        ----------------------------------------------------------------------------------------------------------
City                                              State                   Zip Code                                            
----------------------------          ---------------            ----------------------------------------- 
----------------------------                     ---------------------------------------------------------
Home                                              Business      
Telephone No.        (        )                   Telephone No.      (        )
----------------------------                     ---------------------------------------------------------
----------------------------                     ---------------------------------------------------------
Birthdate                                         Occupation
----------------------------                     ---------------------------------------------------------

5.  ===== INVESTOR NAME AND ADDRESS ================================================================================================
(COMPLETE ONLY IF DIFFERENT FROM REGISTRATION NAME AND ADDRESS)
[ ] Mr  [ ] Mrs   [ ] Ms   [ ] MD   [ ] PhD   [ ] DDS   [ ] Other__________

Name                                                             Social Security Number
-------------------------------------------------------     
[ ] [ ] [ ]-[ ] [ ]-[ ] [ ] [ ] [ ]       
-------------------------------------------------------
---------------------------------------------------------------------------------------------------------- 
Street Address                                                                                                                
or P.O. Box        ----------------------------------------------------------------------------------------------------------
City                                              State                   Zip Code                                            
----------------------------          ---------------            ----------------------------------------- 
----------------------------                     ---------------------------------------------------------
Home                                              Business      
Telephone No.        (        )                   Telephone No.      (        )
----------------------------                     ---------------------------------------------------------
----------------------------                     ---------------------------------------------------------
Birthdate                                         Occupation
----------------------------                     ---------------------------------------------------------
==================================================================================================================================
(REVERSE SIDE MUST BE COMPLETED)

A-8

6.  ===== SUBSCRIBER SIGNATURES ====================================================================================================

Please separately initial each of the representations below. Except in the case of fiduciary accounts, you may not grant any
person a power of attorney to make such representations on your behalf. In order to induce the Company to accept this
subscription, I hereby represent and warrant to you as follows:

(a)  I have received the Prospectus.                                                        ____________  ___________  
Initials     Initials
(b)  I accept and agree to be bound by the terms and conditions of the Articles 
of Incorporation.                                                                      ____________   ____________  
Initials      Initials

(c)  I have (i) a net worth (exclusive of home, home furnishings and automobiles) 
of $150,000 or more; or (ii) a net worth (as described above) of at least 
$45,000 and had during the last tax year or estimate that I will have during 
the current tax year a minimum of $45,000 annual gross income, or that I meet 
the higher suitability requirements imposed by my state of primary residence 
as set forth in the Prospectus under "Suitability Standards."                          ____________   ____________  
Initials      Initials

(d)  If I am a California resident or if the Person to whom I subsequently propose to 
assign or transfer any Shares is a California resident, I may not consummate a 
sale or transfer of my Shares, or any interest therein, or receive any consideration 
therefor, without the prior written consent of the Commissioner of the  Department 
of Corporations of the State of California, except as permitted in the Commissioner's 
Rules, and I understand that my Shares, or any document evidencing my Shares, will 
bear a legend reflecting the substance of the foregoing understanding.                ____________   ____________  
Initials      Initials

(e)  ARKANSAS, NEW MEXICO AND TEXAS RESIDENTS ONLY: I am purchasing the Shares for my own
account and acknowledge that the investment is not liquid.                            ____________   ____________  
Initials      Initials

I declare that the information supplied above is true and correct and may be relied upon by the Company in connection with my
investment in the Company. Under penalties of perjury, by signing this Signature Page, I hereby certify that (a) I have
provided herein my correct Taxpayer Identification Number, and (b) I am not subject to back-up withholding as a result of a
failure to report all interest or dividends, or the Internal Revenue Service has notified me that I am no longer subject to
back-up withholding.
-------------------------------------       ---------------------------------------------       ---------------------------
-------------------------------------       ---------------------------------------------       ---------------------------
Signature of Investor or Trustee            Signature of Joint Owner, if applicable             Date
(MUST BE SIGNED BY TRUSTEE(S) IF IRA, KEOGH OR QUALIFIED PLAN.)

7.  =====  DISTRIBUTIONS ===========================================================================================================

7a.  Check the following box to participate in the Dividend Reinvestment Plan:  []

7b.  Complete the following section only to direct dividends to a party other than registered owner:
_______________________________________________________________________________________________
Name        
_______________________________________________________________________________________________
Account Number
_______________________________________________________________________________________________
Street Address or P.O. Box
_______________________________________________________________________________________________
City                                                                       State               Zip Code
_______________________________________             _________             _____________________
8.  =====  BROKER-DEALER ===========================================================================================================
(TO BE COMPLETED BY REGISTERED REPRESENTATIVE)

The Broker-Dealer or authorized representative must sign below to complete order. Broker-Dealer warrants that it is a duly
licensed Broker-Dealer and may lawfully offer Shares in the state designated as the investor's address or the state in which
the sale was made, if different. The Broker-Dealer or authorized representative warrants that he has reasonable grounds to
believe this investment is suitable for the subscriber as defined in Section 3(b) of the Rules of Fair Practice of the NASD
Manual and that he has informed subscriber of all aspects of liquidity and marketability of this investment as required by
Section 4 of such Rules of Fair Practice.

---------------------------------------------------------------                    -----------------
Broker-Dealer Name                                                                        Telephone No.(   )
----------------------------------------------------------------------------------------------------
Broker-Dealer Street                                                                                      
Address or P.O. Box 
----------------------------------------------------------------------------------------------------
City                                                    State                                  Zip Code                      
---------------------------             -----------------------                    -----------------

---------------------------------------------------------------                    -----------------
Registered                                                                                                   
Representative Name                                                                       Telephone No.(   ) 
----------------------------------------------------------------------------------------------------
Broker-Dealer Street                                                                                      
Address or P.O. Box 
----------------------------------------------------------------------------------------------------
City                                                    State                                  Zip Code                      
-----------------------------------------------------            -----------------------                    -----------------

-----------------------------------------------------             -----------------------------------------------------------
Broker-Dealer Name Signature, if required                           Registered Representative Name Signature 

Please mail completed Subscription Agreement (with all signatures) and check(s)
made payable to
Bank of America, N.A., as Escrow Agent to:
WELLS INVESTMENT SECURITIES, INC.
Suite 250 
6200 The Corners Parkway 
Norcross, Georgia  30092
800-448-1010  or 770-449-7800

Overnight address:                                              Mailing address:            
6200 The Corners Parkway, Suite 250                              P.O. Box 926040            
Norcross, Georgia 30092                             Norcross, Georgia 30092-9209            
FOR COMPANY USE ONLY:                                                                      
-----------------------------------------------------------------------------------------------------------------------------
ACCEPTANCE BY COMPANY               Amount_______________    Date ______________________________________________
Received and Subscription Accepted:        Check No. ____________________   Certificate No. ______________________________
By: ___________________________________    Wells Real Estate Investment Trust, Inc.

______________________________      ___________________________________________________________      ______________________
Broker-Dealer #                              Registered Representative #                            Account #
-----------------------------------------------------------------------------------------------------------------------------

A-9

EXHIBIT "B"

AMENDED AND RESTATED
DIVIDEND REINVESTMENT PLAN
As of December 20, 1999

Wells Real Estate Investment Trust, Inc., a Maryland corporation (the
"Company"), pursuant to its Amended and Restated Articles of Incorporation,
adopted a Dividend Reinvestment Plan (the "DRP"), which is hereby amended and
restated in its entirety as set forth below.  Capitalized terms shall have the
same meaning as set forth in the Articles unless otherwise defined herein.

1.  Dividend Reinvestment.  As agent for the shareholders
---------------------                                
("Shareholders") of the Company who (a) purchased shares of the Company's common
stock (the "Shares") pursuant to the Company's initial public offering (the
"Initial Offering"), which commenced on January 30, 1998 and will terminate on
or before January 30, 2000, (b) purchase Shares pursuant to the Company's second
public offering (the "Second Offering"), which will commence immediately upon
the termination of the Initial Offering, or (c) purchase Shares pursuant to any
future offering of the Company ("Future Offering"), and who elect to participate
in the DRP (the "Participants"), the Company will apply all dividends and other
distributions declared and paid in respect of the Shares held by each
Participant (the "Dividends"), including Dividends paid with respect to any full
or fractional Shares acquired under the DRP, to the purchase of the Shares for
such Participants directly, if permitted under state securities laws and, if
not, through the Dealer Manager or Soliciting Dealers registered in the
Participant's state of residence.

2.  Effective Date.  The effective date of this Amended and Restated
--------------                                                  
Dividend Reinvestment Plan (the "DRP") shall be the date that the Second
Offering becomes effective with the Securities and Exchange Commission (the
"Commission").

3.  Procedure for Participation.  Any Shareholder who purchased Shares
---------------------------                                       
pursuant to the Initial Offering, the Second Offering or any Future Offering and
who has received a prospectus, as contained in the Company's registration
statement filed with the Commission, may elect to become a Participant by
completing and executing the Subscription Agreement, an enrollment form or any
other appropriate authorization form as may be available from the Company, the
Dealer Manager or Soliciting Dealer.  Participation in the DRP will begin with
the next Dividend payable after receipt of a Participant's subscription,
enrollment or authorization.  Shares will be purchased under the DRP on the date
that Dividends are paid by the Company.  Dividends of the Company are currently
paid quarterly.  Each Participant agrees that if, at any time prior to the
listing of the Shares on a national stock exchange or inclusion of the Shares
for quotation on the National Association of Securities Dealers, Inc. Automated
Quotation System ("Nasdaq"), he or she fails to meet the suitability
requirements for making an investment in the Company or cannot make the other
representations or warranties set forth in the Subscription Agreement, he or she
will promptly so notify the Company in writing.

4.  Purchase of Shares.  Participants will acquire DRP Shares from the
------------------                                                
Company at a fixed price of $10 per Share until (i) all 2,200,000 of the DRP
Shares registered in the Second Offering are issued or (ii) the Second Offering
terminates and the Company elects to deregister with the Commission the unsold
DRP Shares.  Participants in the DRP may also purchase fractional Shares so that
100% of the Dividends will be used to acquire Shares.  However, a Participant
will not be able to acquire DRP Shares to the extent that any such purchase
would cause such Participant to exceed the Ownership Limit as set forth in the
Articles.

B-1

Shares to be distributed by the Company in connection with the DRP may
(but are not required to) be supplied from:  (a) the DRP Shares which will be
registered with the Commission in connection with the Company's Second Offering,
(b) Shares to be registered with the Commission in a Future Offering for use in
the DRP (a "Future Registration"), or (c) Shares of the Company's common stock
purchased by the Company for the DRP in a secondary market (if available) or on
a stock exchange or Nasdaq (if listed) (collectively, the "Secondary Market").

Shares purchased on the Secondary Market as set forth in (c) above
will be purchased at the then-prevailing market price, which price will be
utilized for purposes of purchases of Shares in the DRP.  Shares acquired by the
Company on the Secondary Market or registered in a Future Registration for use
in the DRP may be at prices lower or higher than the $10 per Share price which
will be paid for the DRP Shares pursuant to the Initial Offering and the Second
Offering.

If the Company acquires Shares in the Secondary Market for use in the
DRP, the Company shall use reasonable efforts to acquire Shares for use in the
DRP at the lowest price then reasonably available.  However, the Company does
not in any respect guarantee or warrant that the Shares so acquired and
purchased by the Participant in the DRP will be at the lowest possible price.
Further, irrespective of the Company's ability to acquire Shares in the
Secondary Market or to complete a Future Registration for shares to be used in
the DRP, the Company is in no way obligated to do either, in its sole
discretion.

It is understood that reinvestment of Dividends does not relieve a
Participant of any income tax liability which may be payable on the Dividends.

5.  Share Certificates.  The ownership of the Shares purchased through
------------------                                                
the DRP will be in book-entry form only until the Company begins to issue
certificates for its outstanding common stock.

6.  Reports.  Within 90 days after the end of the Company's fiscal
-------                                                       
year, the Company shall provide each Shareholder with an individualized report
on his or her investment, including the purchase date(s), purchase price and
number of Shares owned, as well as the dates of Dividend distributions and
amounts of Dividends paid during the prior fiscal year.  In addition, the
Company shall provide to each Participant an individualized quarterly report at
the time of each Dividend payment showing the number of Shares owned prior to
the current Dividend, the amount of the current Dividend and the number of
Shares owned after the current Dividend.

7.  Commissions and Other Charges.  In connection with Shares sold
-----------------------------                                 
pursuant to the DRP, the Company will pay selling commissions of 7%; a dealer
manager fee of 2.5%; and, in the event that proceeds from the sale of DRP Shares
are used to acquire properties, acquisition and advisory fees and expenses of
3.5%, of the purchase price of the DRP Shares.

8.  Termination by Participant.  A Participant may terminate
--------------------------                              
participation in the DRP at any time, without penalty by delivering to the
Company a written notice.  Prior to listing of the Shares on a national stock
exchange or Nasdaq, any transfer of Shares by a Participant to a non-Participant
will terminate participation in the DRP with respect to the transferred Shares.
If a Participant terminates DRP participation, the Company will ensure that the
terminating Participant's account will reflect the whole number of shares in his
or her account and provide a check for the cash value of any fractional share in
such account.  Upon termination of DRP participation, Dividends will be
distributed to the Shareholder in cash.

B-2

9.  Amendment or Termination of DRP by the Company.  The Board of
----------------------------------------------               
Directors of the Company may by majority vote (including a majority of the
Independent Directors) amend or terminate the DRP for any reason upon 10 days'
written notice to the Participants.

10. Liability of the Company.  The Company shall not be liable for
------------------------                                      
any act done in good faith, or for any good faith omission to act, including,
without limitation, any claims or liability; (a) arising out of failure to
terminate a Participant's account upon such Participant's death prior to receipt
of notice in writing of such death; and (b) with respect to the time and the
prices at which Shares are purchased or sold for a Participant's account.  To
the extent that indemnification may apply to liabilities arising under the
Securities Act of 1933, as amended, or the securities act of a sate, the Company
has been advised that, in the opinion of the Commission and certain state
securities commissioners, such indemnification is contrary to public policy and,
therefore, unenforceable.

B-3

ALPHABETICAL INDEX                                                          Page
----

Additional Information....................................................   150
Conflicts of Interest.....................................................    48
Description of Properties.................................................    62
Description of Shares.....................................................   131
ERISA Considerations......................................................   126
Estimated Use of Proceeds.................................................    27
Experts...................................................................   149
Federal Income Tax Considerations.........................................   110
Financial Statements......................................................   151
Glossary..................................................................   150
Investment Objectives and Criteria........................................    52
Legal Opinions............................................................   148
Management................................................................    28
Management Compensation...................................................    44
Management's Discussion and Analysis of Financial Condition
And Results of Operations................................................    96
Plan of Distribution......................................................   142
Prior Performance Summary.................................................   100
Prior Performance Tables..................................................   242
Prospectus Summary........................................................     9
Questions and Answers About This Offering.................................     1
Risk Factors..............................................................    16
Suitability Standards.....................................................    25
Supplemental Sales Material...............................................   148
The Operating Partnership Agreement.......................................   140

Until March 19, 2000 (90 days after the date of this prospectus), all
dealers that affect transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is
in addition to the obligation of dealers to deliver a prospectus when acting as
soliciting dealers.

We have not authorized any dealer, salesperson or other individual to give
any information or to make any representations that are not contained in this
prospectus. If any such information or statements are given or made, you should
not rely upon such information or representation. This prospectus does not
constitute an offer to sell any securities other than those to which this
prospectus relates, or an offer to sell, or a solicitation of an offer to buy,
to any person in any jurisdiction where such an offer or solicitation would be
unlawful. You should not assume that the delivery of this prospectus or that any
sale made pursuant to this prospectus creates an implication that the
information contained in this prospectus will remain fully accurate and correct
as of any time subsequent to the date of this prospectus.

________________

WELLS REAL ESTATE
INVESTMENT TRUST, INC.
Up to 20,000,000 Shares
Of Common Stock      
Offered to the Public 

________________ 

PROSPECTUS

________________ 

WELLS INVESTMENT
SECURITIES, INC.

December 20, 1999    

WELLS REAL ESTATE INVESTMENT TRUST, INC.
SUPPLEMENT NO. 2 DATED MARCH 15, 2000 TO THE PROSPECTUS
DATED DECEMBER 20, 1999

This document supplements, and should be read in conjunction with, the
prospectus of Wells Real Estate Investment Trust, Inc. dated December 20, 1999.
This Supplement includes the information in and supersedes Supplement No. 1
dated January 5, 2000.  When we refer to the "prospectus" in this supplement, we
are also referring to any and all supplements to the prospectus.  Unless
otherwise defined in this supplement, capitalized terms used in this supplement
shall have the same meanings as set forth in the prospectus.

The purpose of this supplement is to describe the following:

(1)  The status of the offering of shares of common stock of Wells Real
Estate Investment Trust, Inc. (Wells REIT);

(2)  The acquisition of an office building in Plano, Texas (Cinemark
Building);

(3)  The acquisition of an office building in Tulsa, Oklahoma (Metris
Building);

(4)  The increase in the credit limit of the Bank of America loan;

(5)  The status of the Matsushita project;

(6)  The status of the ABB Richmond project;

(7)  Revisions to the "Description of Shares - Share Redemption Program"
section of the prospectus;

(8)  Revisions to the "Plan of Distribution" section of the prospectus;

(9)  Revisions to the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" section of the prospectus; and

(10) Unaudited pro forma financial statements of the Wells REIT relating to
the Cinemark Building and the Metris Building.

Status of the Offering

We commenced our initial public offering of common stock on January 30,
1998. Our initial public offering was terminated on December 20, 1999. We
received approximately $132,181,919 in gross offering proceeds from the sale of
13,218,192 shares in our initial public offering.

Pursuant to the prospectus, we commenced a second offering of common stock
on December 20, 1999. As of March 10, 2000, we had received an additional
$25,512,223 in gross offering proceeds from the sale of 2,551,222 shares in the
second offering. Accordingly, as of March 10, 2000, we had received in the
aggregate approximately $157,633,352 in gross offering proceeds from the sale of
15,763,335 shares of our common stock.

1

The Cinemark Building

Purchase of the Cinemark Building.  On December 21, 1999, Wells Operating
---------------------------------                                        
Partnership, L.P. (Wells OP), our operating partnership, purchased a five story
office building with approximately  118,108 rentable square feet located in
Plano, Collin County, Texas from CNMRK HQ Investors, L.P., a Texas limited
partnership (CNMRK), pursuant to that certain Agreement of Purchase and Sale of
Property between CNMRK and Wells OP.  CNMRK is not in any way affiliated with
the Wells REIT or its advisor.

The purchase price paid for the Cinemark Building was $21,800,000. Wells OP
also incurred additional acquisition expenses in connection with the purchase of
the Cinemark Building, including attorneys' fees, appraisal fees and other
closing costs, of approximately $26,900. The $21,826,900 required to close the
Cinemark Building consisted of $13,626,900 in cash funded from a capital
contribution by the Wells REIT and $8,200,000 in loan proceeds obtained from a
revolving credit facility established with SouthTrust Bank, N.A. (SouthTrust
Loan) whereby SouthTrust has agreed to loan up to $15,200,000 to Wells OP for
acquisitions of real property.

Description of the SouthTrust Loan.  The SouthTrust Loan requires monthly
----------------------------------                                       
payments of interest only and matures on December 31, 2000.  The interest rate
on the SouthTrust Loan is an annual variable rate equal to the London InterBank
Offered Rate for a thirty day period plus 200 basis points.  The current
interest rate under the SouthTrust Loan is 8.00%.  The SouthTrust Loan is
secured by a first mortgage against the PWC Building, which was purchased by
Wells OP on December 31, 1998.  As of March 10, 2000, the outstanding principal
balance of the SouthTrust Loan was $2,320,000.

Description of the Building and the Site.  The Cinemark Building is a five story
----------------------------------------                                        
office building containing approximately 118,108 rentable square feet.  The
Cinemark Building, which was completed in September 1999, has a brick exterior
and the interior is a high quality design with use of marble and glass in the
lobby areas.

The entire 118,108 rentable square feet of the Cinemark Building is
currently leased to two tenants. Cinemark USA, Inc. (Cinemark) occupies 66,024
rentable square feet of the Cinemark Building and The Coca-Cola Company (Coca-
Cola) occupies the remaining 52,084 rentable square feet of the Cinemark
Building. The landlord's interest in these two leases were assigned to Wells OP
at closing.

An independent appraisal of the Cinemark Building was prepared by CB
Richard Ellis, Inc., real estate appraisers, as of December 2, 1999, pursuant to
which the market value of the land and the leased fee interest subject to the
Cinemark and Coca-Cola leases was estimated to be $21,900,000. This value
estimate was based upon a number of assumptions, including that the Cinemark
Building will continue operating at a stabilized level with Cinemark and Coca-
Cola occupying 100% of the rentable area, and is not necessarily an accurate
reflection of the fair market value of the property or the net proceeds which
would result from an immediate sale of this property. Wells OP also obtained an
environmental report prior to closing evidencing that the environmental
condition of the land and the Cinemark Building were satisfactory.

The Cinemark Building is located on a 3.52 acre tract of land located at
3900 Dallas Parkway in Plano, Texas. The site is in a good location with quick
access to and visibility from the North Dallas Tollway.

2

The City of Plano is located approximately 20 miles north of downtown
Dallas and is the largest city in Collin County with a population of nearly
200,000 people. Collin County has experienced significant growth during the
1990s with 20% of its growth occurring in 1997. Plano is the nation's fifth
fastest growing city among those cities with a population of 100,000 or more.
Corporate relocations, new business start-ups, good schools and affordable new
housing are a few of the qualities that are attracting residents to Plano.

The Cinemark Lease.  Cinemark occupies 66,024 square feet of the 118,108 total
------------------                                                            
rentable square feet of the Cinemark Building pursuant to a lease agreement
dated December 21, 1999.  The initial term of the Cinemark lease is ten years
which commenced on December 21, 1999 and expires on December 20, 2009.  Cinemark
has the right to renew the lease for two additional periods of time upon 180
days notice.  The first renewal term shall be for five years and the second
renewal term shall be for ten years.

Cinemark, a privately-owned company, is one of the largest motion picture
exhibitors in North and South America. Cinemark currently operates in excess of
2,575 screens in 32 states within the United States and internationally in
countries such as Argentina, Brazil, Canada, Chile, Costa Rica, Ecuador, El
Salvador, Honduras, Nicaragua, Mexico and Peru. During fiscal year 1998,
Cinemark had net income of $11 million on revenues of over $571 million and a
net worth of nearly $76 million.

The base rent payable for the Cinemark lease and first renewal term is as
follows:

Lease Year             Yearly Base Rent          Monthly Base Rent
-------------------------------------------------------------------

1-7                  $1,366,491.25               $113,874.27  
-------------------------------------------------------------------
8-10                 $1,481,737.50               $123,478.13  
-------------------------------------------------------------------
11-15                 $1,567,349.00               $130,612.42  
-------------------------------------------------------------------

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

Under the Cinemark lease, Cinemark is required to pay as additional monthly
rent its pro-rata share of all electricity costs and all operating costs,
including, but not limited to, garbage and waste disposal, janitorial service,
security, insurance premiums, real estate taxes, assessments and other
governmental levies and such other operating costs with respect to the Cinemark
Building as are consistent with other owners of first-class office buildings in
Plano, Texas. In addition, Cinemark is responsible for all routine maintenance
and repairs to its portion of the Cinemark Building. Wells OP, as landlord, is
responsible for maintaining the common and service areas of the Cinemark
Building and the repair and replacement of the roof, foundation, exterior
windows, load bearing items, exterior surface walls, plumbing, pipes and
conduits located in the common and service areas, central heating, ventilation
and air conditioning systems, and electrical, mechanical and plumbing systems of
the Cinemark Building.

3

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

The Coca-Cola Lease.  Coca-Cola occupies the remaining 52,084 square feet of the
-------------------                                                             
118,108 total rentable square feet of the Cinemark Building pursuant to a lease
agreement dated April 27, 1999.  The initial term of the Coca-Cola lease is
seven years which commenced on December 1, 1999 and expires on November 30,
2006.  Coca-Cola has the right to renew the lease for one additional five year
period of time.  Coca-Cola must give written notice of its intention to exercise
the renewal option at least 240 days before the expiration of the lease term.

Coca-Cola is the global soft-drink industry leader with world headquarters
in Atlanta, Georgia. Coca-Cola manufactures and sells syrups, concentrates and
beverage bases for Coca-Cola, the company's flagship brand, and over 160 other
soft-drink brands in nearly 200 countries around the world. Approximately 70% of
Coca-Cola's volume and 80% of its profits come from outside the United States.
The company and its subsidiaries employ nearly 30,000 people around the world.
During the fiscal year 1998, Coca-Cola reported net income of in excess of $3.5
billion on revenues in excess of $18.8 billion and a net worth of in excess of
$8.4 billion.

The base rent payable for the Coca-Cola lease term is as follows:

Lease Year      Yearly Base Rent        Monthly Base Rent
---------------------------------------------------------

1             $1,250,016               $104,168.00   
---------------------------------------------------------
2             $1,302,100               $108,508.33   
---------------------------------------------------------
3             $1,354,184               $112,848.66   
---------------------------------------------------------
4             $1,406,268               $117,189.00   
---------------------------------------------------------
5             $1,458,352               $121,529.33   
---------------------------------------------------------
6             $1,510,436               $125,869.66   
---------------------------------------------------------
7             $1,562,520               $130,210.00   
--------------------------------------------------------- 

Within 30 days of the delivery of the renewal notice by Coca-Cola, Wells OP
shall notify Coca-Cola of the base rent payable during the renewal term, which
base rent shall be based upon the prevailing rental rates for space of similar
quality, size, utility, location, length of renewal term and credit standing of
the tenant.  Coca-Cola must notify Wells OP of its intent to renew the lease
within 30 days of delivery of the rental notice by Wells OP.

Under the Coca-Cola lease, Coca-Cola is required to pay as additional
monthly rent its pro-rata share of all electricity costs and all operating
costs, including, but not limited to, garbage and waste disposal, janitorial
service, security, insurance premiums, real estate taxes, assessments and other
governmental levies and such other operating costs with respect to the Cinemark
Building as are consistent with other owners of first-class office buildings in
Plano, Texas. In addition, Coca-Cola is responsible for all routine maintenance
and repairs to its portion of the Cinemark Building. Wells OP, as landlord, is
responsible for maintaining the common and service areas of the Cinemark
Building and the repair and replacement of the roof, foundation, exterior
windows, load bearing items, exterior surface walls, plumbing, pipes and
conduits located in the common and service areas, central heating, ventilation
and air conditioning systems, and electrical, mechanical

4

and plumbing systems of the Cinemark Building.

Property Management Fees.  Wells Management Company, Inc. (Wells Management), an
------------------------                                                        
affiliate of the advisor, has been retained to manage and lease the Cinemark
Building.  Wells OP will pay management and leasing fees to Wells Management in
the amount of 4.5% of gross revenues from the Cinemark Building.

The Metris Building

Purchase of the Metris Building.  On February 11, 2000, Wells OP purchased a
-------------------------------                                             
three story office building with approximately  101,100 rentable square feet
located in Tulsa, Tulsa County, Oklahoma from Meridian Tulsa, L.L.C., an
Oklahoma limited liability company (Meridian), pursuant to that certain
Agreement of Purchase and Sale of Property between Meridian and Wells Capital,
Inc., an affiliate of Wells OP.  At the closing, Wells Capital, Inc. assigned
the contract to Wells OP.  Meridian is not in any way affiliated with the Wells
REIT or its advisor.

The purchase price paid for the Metris Building was $12,700,000.  Wells OP
also incurred additional acquisition expenses in connection with the purchase of
the Metris Building, including loan closing fees, attorneys' fees, appraisal
fees and other closing costs, of approximately $40,000.  The $12,740,000
required to close the Metris Building consisted of $4,740,000 in cash funded
from a capital contribution by the Wells REIT and $8,000,000 in loan proceeds
from an existing revolving credit facility (Metris Loan).

Description of the Metris Loan.  The Metris Loan was originally established by
------------------------------                                                
Meridian with Richter-Schroeder Company, Inc., the predecessor in interest to
M&I Marshall Ilsley, a Wisconsin banking corporation (M&I), in connection with
Meridian's purchase of the Metris Building on April 8, 1999.  Wells OP assumed
and extended the original three-year term loan entered into by Meridian.  The
Metris Loan requires monthly payments of interest only and matures on February
11, 2003.  The interest rate on the Metris Loan is an annual variable rate equal
to the London InterBank Offered Rate for a thirty day period plus 175 basis
points.  The current interest rate under the Metris Loan is 7.75% per annum.
The Metris Loan is secured by a first mortgage against the Metris Building,
which was granted in connection with Meridian's original purchase of the Metris
Building, and assumed by Wells OP on the date of closing.

Description of the Building and the Site.  The Metris Building is a three story
----------------------------------------                                       
office building containing approximately 101,100 rentable square feet.  The
Metris Building, which was completed on January 14, 2000, utilizes a blend of
70% tinted glass and 30% masonry.  The first floor features a two story atrium,
daycare, cafeteria and conference facilities.

An independent appraisal of the Metris Building was prepared by Gray-
Lawrence-Ard and Associates, Incorporated, real estate appraisers, as of March
11, 1999, pursuant to which the market value of the land and the leased fee
interest subject to the Metris lease (as described below) was estimated to be
$12,900,000. This value estimate was based upon a number of assumptions,
including that the Metris Building will continue operating at a stabilized level
with Metris Direct, Inc. (Metris) occupying 100% of the rentable area, and is
not necessarily an accurate reflection of the fair market value of the property
or the net proceeds which would result from an immediate sale of this property.
Wells OP also obtained an environmental report from A&M Engineering and
Environmental Services, Inc. prior to closing evidencing that the environmental
condition of the land and the Metris Building were satisfactory.

5

The Metris Building is located on a 14.6 acre tract of land located at 4848
South 129th East Avenue in the Silos Corporate Center, a prominent 126 acre
mixed-use park owned by State Farm Insurance Companies.  The site is about 11
miles southeast of the Tulsa Commercial Business District and is bordered by the
Broken Arrow Expressway, the primary east-west thoroughfare linking the suburb
of Broken Arrow to downtown Tulsa.  State Farm has a 250,000 square foot
facility within the development and the remaining land is being marketed as
sites for office, hotel and retail uses.  Adjacent to the Silos Corporate Center
are offices for MetLife, the County of Tulsa and light industrial buildings
occupied by UPS and Ford Motor Company.

Tulsa's central location within the United States makes it well suited for
the rapidly expanding telecommunications and fiber optics industry, as well as
major operations of regional companies. In 1998, the population in Tulsa was
approximately 775,000 people. Tulsa's economy has continued to grow since the
collapse of the oil industry in the mid-1980s due to the ability of Tulsa's
government and business sectors to attract and promote new industry and to
expand existing industry.

The Metris Lease.  Metris occupies all 101,100 square feet of the Metris
----------------                                                        
Building pursuant to a lease agreement dated March 3, 1999, as amended on
January 21, 2000.  The initial term of the Metris lease is ten years which
commenced on February 1, 2000 and expires on January 31, 2010.  Metris has the
right to renew the lease for two additional five year periods upon one year's
advance notice.

Metris is a principal subsidiary of Metris Companies Inc. (Metris
Companies), a publicly traded company on the New York Stock Exchange and
guarantor of the Metris lease. Metris Companies is an information-based direct
marketer of consumer credit products and fee-based services primarily to
moderate income consumers. Metris Companies' consumer credit products are
primarily unsecured credit cards issued by its subsidiary, Direct Merchants
Credit Card Bank. The company's customers and prospects include individuals for
whom credit bureau information is available and existing customers of a former
affiliate, Fingerhut Corporation. Metris Companies markets its fee-based
services, including debt waiver programs (credit insurance for death or
disability), membership clubs, extended service plans, and third party
insurance, to its credit card customers.

On December 31, 1998, Metris Companies had approximately $3.0 million in
credit card accounts with over $5.3 billion in managed credit card loans.  As of
December 31, 1998, Metris Companies had net income of $56 million on revenues of
approximately $313 million and a net worth of approximately $433 million.

The base rent payable for the Metris lease is as follows:

Lease Year              Yearly Base Rent       Monthly Base Rent
----------------------------------------------------------------

1-5                  $1,187,925.00            $ 98,993.75
----------------------------------------------------------------
6-10                  $1,306,717.50            $108,893.13
----------------------------------------------------------------

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

6

Under the Metris lease, Metris is required to pay as additional monthly
rent all electricity costs and all operating costs, including, but not limited
to, garbage and waste disposal, janitorial service, security, insurance
premiums, ad valorem real estate taxes, assessments and other governmental
levies and such other operating costs with respect to the Metris Building. In
addition, Metris is responsible for all routine maintenance and repairs to the
Metris Building. Metris is responsible for maintaining the common and service
areas of the Metris Building and the repair and replacement of the roof,
foundation, exterior windows, load bearing items, exterior surface walls,
plumbing, pipes and conduits located in the common and service areas, central
heating, ventilation and air conditioning systems, and electrical, mechanical
and plumbing systems of the Metris Building.

Property Management Fees.  Wells Management, an affiliate of the advisor, has
------------------------                                                     
also been retained to manage and lease the Metris Building.  Wells OP will pay
management and leasing fees to Wells Management in the amount of 4.5% of gross
revenues from the Metris Building.

The Increase in the Credit Limit of the BOA Loan

On February 4, 1999, Wells OP obtained a loan in the amount of $6,425,000
from Bank of America, N.A. (BOA Loan), the net proceeds of which were used to
fund a portion of the purchase price of the AT&T Building (formerly the Vanguard
Cellular Building). On November 23, 1999, the BOA Loan was converted to a
revolving credit loan in the maximum principal amount of $9,825,000 for the
acquisition of real properties by Wells OP. On February 24, 2000, the credit
limit of the BOA Loan was increased further to $26,725,000. The BOA Loan
requires monthly payments of interest only and matures on February 1, 2001. The
interest rate on the BOA Loan is a variable rate per annum equal to the London
InterBank Offered Rate for a thirty day period plus 200 basis points. The
current interest rate under the BOA Loan is 8.00% per annum. The BOA Loan is
secured by first mortgages against both the AT&T Building and the Videojet
Building.

The Status of the Matsushita Project

As of March 10, 2000, Wells OP had spent approximately $18,100,000 towards
the construction of the approximately 130,000 square foot office building in
Lake Forest, California. The Matsushita project is substantially complete, and
the aggregate of all costs and expenses to be incurred by Wells OP with respect
to the acquisition and construction of the Matsushita project is not expected to
exceed the budget of $18,400,000.

The Status of the ABB Richmond Project

As of March 10, 2000, Wells REIT, LLC - VA I (Wells LLC), a limited
liability company wholly owned by Wells OP, had spent approximately $5,775,000
towards the construction of the approximately 100,000 square foot office
building in Richmond, Virginia. The ABB Richmond project is approximately 50%
complete and is expected to be completed in June 2000. We estimate that the
aggregate costs and expenses to be incurred by Wells LLC with respect to the
acquisition and construction of the ABB Richmond project will total
approximately $11,560,000.

7

Description of Shares - Share Redemption Program

The second full paragraph on page 136 in the "Description of Shares - Share
Redemption Program" section of the prospectus is revised by substituting the
following paragraph in lieu thereof:

If you have held your shares for the required one-year period, you may
redeem your shares for a purchase price equal to the lesser of (1) $10 per
share, or (2) the purchase price per share that you actually paid for your
shares of the Wells REIT. In the event that you are redeeming all of your
shares, shares purchased pursuant to our dividend reinvestment plan may be
excluded from the foregoing one-year holding period requirement, in the
discretion of the board of directors. In addition, the board of directors
reserves the right to reject any request for redemption and to change the
purchase price or amend the terms of our share redemption program in its
sole discretion at any time and from time to time as it deems appropriate.

Plan of Distribution

The information on page 148 in the "Plan of Distribution" section of the
prospectus is revised by the addition of the following paragraph prior to the
first full paragraph on that page:

In the event that a shareholder electing the deferred commission
option sells his shares pursuant to our share redemption program or
otherwise prior to the satisfaction of the remaining commission
obligations, the obligation of the Wells REIT and such selling shareholder
to make any further payments of deferred commissions under the deferred
commission option shall terminate, and participating broker-dealers will
not be entitled to receive any further portion of their deferred
commissions following any such sale.

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

The information contained on page 97 in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources" section of the prospectus is revised as of the date of this
supplement by the deletion of the first paragraph of that section and the
insertion of the following paragraph in lieu thereof:

We received approximately $132,181,919 in gross offering proceeds from
the sale of 13,218,192 shares of common stock in our initial public
offering, which commenced on January 30, 1998 and was terminated on
December 20, 1999. Of the $132,181,919 raised in the initial offering, we
invested a total of $111,032,812 in properties.

Pursuant to the prospectus, we commenced this second offering of
shares of our common stock on December 20, 1999. As of March 10, 2000, we
had received an additional $25,512,223 in gross offering proceeds from the
sale of 2,551,222 shares in the second offering.

As of March 10, 2000, we had received in the aggregate approximately
$157,633,352 in gross offering proceeds from the sale of 15,763,335 shares
of our common stock.  Out of this amount, we paid $5,517,167 in acquisition
and advisory fees and expenses, paid $19,704,169 in selling commissions and
organizational and offering 

8

expenses, invested $126,672,631 in properties and were holding net offering
proceeds of $5,741,385 available for investment in additional properties.

Financial Statements and Exhibits

The pro forma balance sheet of the Wells REIT as of September 30, 1999
relating to the Cinemark Building and the Metris Building, which is included as
part of this supplement, has not been audited.

9

INDEX TO FINANCIAL STATEMENTS

Page
----
Wells Real Estate Investment Trust, Inc.
Summary of Unaudited Pro Forma Balance Sheet             11    
Pro Forma Balance Sheet as of September 30, 1999         12

10

WELLS REAL ESTATE INVESTMENT TRUST, INC.

UNAUDITED PRO FORMA BALANCE SHEET

On December 21, 1999, pursuant to the Agreement of Purchase and Sale of Property
between CNMRK, the seller, and Wells Operating Partnership, L.P. ("Wells OP"),
Wells OP purchased the Cinemark Building. Wells OP is a Delaware limited
partnership that was organized to own and operate properties on behalf of the
Wells Real Estate Investment Trust, Inc. Wells Real Estate Investment Trust,
Inc. is the general partner of Wells OP. CNMRK is not in any way affiliated with
Wells OP or its advisor, Wells Capital, Inc., an affiliate of Wells OP.

The Cinemark Building is located in Plano, Texas, and is a five-story office
building containing approximately 118,108 rentable square feet. The Cinemark
Building was completed in September 1999. The purchase price of the Cinemark
Building was $21,800,000. Wells OP also incurred additional acquisition expenses
in connection with the purchase of the Cinemark Building, including attorneys'
fees, appraisal fees, and other closing costs, of approximately $26,900. In
order to finance a portion of the purchase price, Wells OP borrowed $8,200,000
from a revolving credit facility established with SouthTrust Bank, N.A.
("SouthTrust"). The SouthTrust loan requires monthly payments of interest only
and matures on December 31, 2000. The interest on the SouthTrust loan is an
annual variable rate equal to the London InterBank Offered Rate for a 30-day
period plus 200 basis points. The current interest rate on the SouthTrust loan
is 8%.

On February 11, 2000, Wells OP purchased a three-story office building with
approximately 101,100 rentable square feet located in Tulsa, Tulsa County,
Oklahoma, from Meridian Tulsa, L.L.C. ("Meridian"), an Oklahoma limited
liability company, pursuant to that certain Agreement of Purchase and Sale of
Property. Meridian is not in any way affiliated with Wells OP or its advisor.
The Metris Building was completed on January 14, 2000. The purchase price paid
for the Metris Building was $12,700,000. Wells OP also incurred additional
acquisition expenses in connection with the purchase of the Metris Building,
including loan closing fees, attorneys' fees, and other closing costs of
approximately $40,000. In order to finance a portion of the purchase price,
Wells OP assumed and extended the original three-year term loan entered into by
Meridian in the amount of $8,000,000 from a revolving credit facility ("Metris
Loan") established with Richter-Schroeder Company, Inc., the predecessor in
interest to M&I Marshall Ilsley, a Wisconsin banking corporation. The Metris
Loan requires monthly payments of interest only and matures on February 11,
2003. The interest rate on the Metris Loan is an annual variable rate equal to
the London InterBank Offered Rate for a 30-day period plus 175 basis points. The
current interest rate under the Metris Loan is 7.75%. The Metris Loan is secured
by a first mortgage against the Metris Building.
As of September 30, 1999, the date of the accompanying pro forma balance sheet,
Wells OP held cash of approximately $2,850,000. The additional proceeds used to
purchase the Cinemark Building and the Metris Building were raised through the
issuance of additional shares subsequent to September 30, 1999 but prior to the
acquisition of the Cinemark Building and the Metris Building. This balance is
reflected in due to affiliates in the accompanying pro forma balance sheet.

The following unaudited pro forma balance sheet as of September 30, 1999 has
been prepared to give effect to the acquisition of the Cinemark Building and the
Metris Building by Wells OP as if the acquisitions occurred on September 30,
1999.

11

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA BALANCE SHEET

SEPTEMBER 30, 1999

(Unaudited)

ASSETS

Wells Real          Pro Forma Adjustments
Estate
Investment      Cinemark           Metris           Pro Forma   
Trust, Inc.      Building          Building            Total     
------------  --------------    --------------      ------------- 

REAL ESTATE, at cost:                                                                                                             
Land                                                             $ 12,984,155  $  1,456,000 (a)    $  1,150,000 (a)  $ 15,698,739
60,667 (b)          47,917 (b)              
Building and improvements, less accumulated                        66,019,334    20,370,900 (a)      11,590,333 (a)    99,307,628
depreciation of $1,036,033                                                         845,807 (b)         481,254 (b)              
------------  ------------        ------------      ------------ 
Total real estate                                             79,003,489    22,733,374          13,269,504       115,006,367

INVESTMENTS IN JOINT VENTURES                                       29,617,140             0                   0        29,617,140

DUE FROM AFFILIATES                                                    546,602             0                   0           546,602

CASH AND CASH EQUIVALENTS                                            2,850,263    (2,850,263)(a)               0                 0

DEFERRED PROJECT COSTS                                                  19,431       (19,431)(b)               0                 0

DEFERRED OFFERING COSTS                                                749,369             0                   0           749,369

PREPAID EXPENSES AND OTHER ASSETS                                      946,847             0            (250,000)(a)       696,847
------------  ------------        ------------      ------------
Total assets                                                $113,733,141   $19,863,680         $13,019,504      $146,616,325 
============  ============        ============      ============

LIABILITIES AND SHAREHOLDERS' EQUITY

ACCOUNTS PAYABLE                                                  $    513,993   $         0         $         0      $    513,993  

NOTES PAYABLE                                                       16,926,057     8,200,000 (a)       8,000,000 (a)    33,126,057  

DUE TO AFFILIATES                                                      838,493    10,776,637 (a)       4,490,333 (a)    17,521,677  
887,043 (b)         529,171 (b)                

DIVIDENDS PAYABLE                                                    1,645,122             0                   0         1,645,122  

MINORITY INTEREST OF UNIT HOLDER IN OPERATING PARTNERSHIP              200,000             0                   0           200,000  
------------  ------------        ------------      ------------
Total liabilities                                             20,123,665    19,863,680          13,019,504        53,006,849
------------  ------------        ------------      ------------
COMMON SHARES, $.01 par value; 40,000,000 shares authorized,           108,469             0                   0           108,469  
10,846,930 shares issued and outstanding                                                                                           

ADDITIONAL PAID-IN CAPITAL                                          90,894,541             0                   0        90,894,541  

RETAINED EARNINGS                                                    2,606,466             0                   0         2,606,466
------------  ------------        ------------      ------------
Total shareholders' equity                                    93,609,476             0                   0        93,609,476  
------------  ------------        ------------      ------------
Total liabilities and shareholders' equity                  $113,733,141   $19,863,680         $13,019,504      $146,616,325
============  ============        ============      ============

(a) Reflects Wells Real Estate Investment Trust, Inc.'s purchase price related
to the building.

(b) Reflects deferred project costs allocated to the building at approximately
4.17% of the purchase price.

12

FILED PURSUANT TO
RULE 424(b)(3)
FILE NO: 333-83933

WELLS REAL ESTATE INVESTMENT TRUST, INC.
SUPPLEMENT NO. 3 DATED APRIL 25, 2000 TO THE PROSPECTUS
DATED DECEMBER 20, 1999

This document supplements, and should be read in conjunction with, the
prospectus of Wells Real Estate Investment Trust, Inc. dated December 20, 1999,
as supplemented and amended by Supplement No. 2 dated March 15, 2000. When we
refer to the "prospectus" in this supplement, we are also referring to any and
all supplements to the prospectus. Unless otherwise defined in this supplement,
capitalized terms used in this supplement shall have the same meanings as set
forth in the prospectus.

The purpose of this supplement is to describe the following:

(1)   The status of the offering of shares of common stock of Wells
Real Estate Investment Trust, Inc. (Wells REIT);

(2)   The acquisition of an office building in Scottsdale, Arizona
leased to Dial Corporation (Dial Building);

(3)   The acquisition of an office building in Tempe, Arizona leased to
ASM Lithography, Inc. (ASML Building);

(4)   The acquisition of an office building in Tempe, Arizona leased to
Motorola, Inc. (Motorola Building);

(5)   The status of the Matsushita project;

(6)   The status of the ABB Richmond project;

(7)   Revisions to the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section of the
prospectus;

(8)   Updated audited financial statements of the Wells REIT, audited
statements of revenue over operating expenses for the Dial
Building, the ASML Building and the Motorola Building and
unaudited pro forma financial information of the Wells REIT; and

(9)   Updated prior performance tables.

Status of the Offering

We commenced our initial public offering of common stock on January 30,
1998. Our initial public offering was terminated on December 20, 1999. We
received approximately $132,181,919 in gross offering proceeds from the sale of
13,218,192 shares in our initial public offering.

Pursuant to the prospectus, we commenced a second offering of common
stock on December 20, 1999. As of April 20, 2000, we had received an additional
$34,905,285 in gross offering proceeds from the sale of 3,490,528 shares in the
second offering. Accordingly, as of 

1

April 20, 2000, we had received in the aggregate approximately $167,087,204 in
gross offering proceeds from the sale of 16,708,720 shares of our common stock.

Acquisition of Real Properties

On March 29, 2000, Wells Operating Partnership, L.P. (Wells OP), our
operating partnership, purchased three office buildings located in the
Scottsdale/Tempe area from Ryan Companies US, Inc. (Ryan). Ryan is not in any
way affiliated with the Wells REIT or its advisor.

The city of Scottsdale is located eight miles northeast of the center
of Phoenix and is an integral part of metropolitan Phoenix. The city was
incorporated in June 1951, but has experienced most of its growth since 1960.
The city's expansion has been forced to the north, due to the physical
restrictions imposed on the west, south, and east by the city limits of Phoenix,
Tempe, and the Salt River Indian Reservation, respectively. Scottsdale is a
vibrant city with a national and international reputation. Further contributing
to Scottsdale's growth is its popularity as a destination stop for tourists.
Over 6 million people per year visit Scottsdale and provide an economic impact
of over $2 billion annually.

Tempe is the fifth largest city in Arizona and has developed from a
small college town and bedroom community into a thriving city with a strong
diversified economy. It is home to Arizona State University, the fourth largest
university in the nation. Known for its highly educated populace, Tempe is a
sophisticated city and a center for learning, culture and technology. Tempe has
developed a multifaceted economic base, including 750 manufacturing firms with
more than 32,000 employees that produce electronics, semiconductors, computers
and computer software. MircroAge, Avnet and America West Airlines all have their
corporate headquarters in Tempe.

The Dial Building

Purchase of the Dial Building. On March 29, 2000, Wells OP purchased a two story
-----------------------------
office building with approximately 129,689 rentable square feet located at 15501
N. Dial Boulevard, Scottsdale, Maricopa County, Arizona (Dial Building) from
Ryan pursuant to that certain Agreement of Purchase and Sale of Property between
Ryan and our advisor.

The rights under the Dial contract were assigned to Wells OP by our
advisor at closing. The purchase price paid for the Dial Building was
$14,250,000. Wells OP also incurred additional acquisition expenses in
connection with the purchase of the Dial Building, including attorneys' fees,
loan fees, recording fees and other closing costs, of approximately $35,712.

Description of the Building and the Site. As set forth above, the Dial Building
----------------------------------------
is a two story office building containing approximately 129,689 rentable square
feet. The Dial Building, which was completed in 1997, is located on an
approximately 8.8 acre tract of land within the Scottsdale Airpark Development.
The Airpark Development serves as headquarters for over 25 national and regional
companies and is the work place for more than 30,000 employees.

The Dial Building consists of 101,598 square feet on the first floor
and 28,091 square feet on the second floor. The Dial Building also contains a
1,481 square foot central plant. The building is constructed of painted concrete
tilt-up panels with a glass curtain wall at the main lobby entrance. The roofing
consists of a wood truss system with wood roof decking supported by steel
columns.

2

An independent appraisal of the Dial Building was prepared by CB
Richard Ellis, Inc., real estate appraisers, as of February 29, 2000, pursuant
to which the market value of the land and the leased fee interest subject to the
Dial lease (described below) was estimated to be $14,350,000, in cash or terms
equivalent to cash. This value estimate was based upon a number of assumptions,
including that the Dial Building will continue operating at a stabilized level
with Dial Corporation (Dial) occupying 100% of the rentable area, and is not
necessarily an accurate reflection of the fair market value of the property or
the net proceeds which would result from an immediate sale of this property.
Wells OP also obtained an environmental report and an engineering inspection
report prior to the closing evidencing that the condition of this land and the
Dial Building were satisfactory.

The Dial Lease. The entire 129,689 rentable square feet of the Dial Building is
--------------
currently under a net lease agreement with Dial. The landlord's interest in the
Dial lease was assigned to Wells OP at the closing. The Dial lease commenced on
August 14, 1997, and the initial term expires on August 31, 2008. Dial has the
right to extend the Dial lease for two additional five year periods of time at
95% of the then current fair market rental rate. The annual rent payable for the
initial term of the Dial lease is $1,387,672.

Under the Dial lease, Dial is required to pay as additional monthly
rent its electricity costs and all operating costs, including, but not limited
to, garbage and waste disposal, janitorial service, security, insurance
premiums, all taxes, assessments and other governmental levies and such other
operating costs with respect to the Dial Building. In addition, Dial is
responsible for all routine maintenance and repairs to its portion of the Dial
Building. Wells OP, as landlord, is responsible for maintaining the common and
service areas of the Dial Building and the repair and replacement of the roof,
foundation, exterior windows, load bearing items, exterior surface walls,
plumbing, pipes and conduits located in the common and service areas, central
heating, ventilation and air conditioning systems, and electrical, mechanical
and plumbing systems of the Dial Building. Additionally, the Dial lease grants
the tenant a right of first refusal to purchase the Dial Building if Wells OP
attempts to sell the property during the term of the lease.

Dial currently has its headquarters in the Dial Building and is one of
the leading consumer product manufacturers in the United States. Dial's brands
include Dial soap, Purex detergents, Renuzit air fresheners, Armour canned
meats, and a variety of other leading consumer products. During the fiscal year
1999, Dial had net income of $116 million on revenues of over $1.7 billion and a
net worth of over $411 million.

The ASML Building

Purchase of the ASML Building. On March 29, 2000, Wells OP purchased a
-----------------------------
two story office building with approximately 95,133 rentable square feet located
at 8555 South River Parkway, Tempe, Maricopa County, Arizona (ASML Building)
from Ryan pursuant to that certain Agreement of Purchase and Sale of Property
between Ryan and our advisor.

The rights under the ASML contract were assigned to Wells OP by our
advisor at closing. The purchase price paid for the ASML Building was
$17,355,000. Wells OP also incurred additional acquisition expenses in
connection with the purchase of the ASML Building, including attorneys' fees,
recording fees, loan fees, and other closing costs, of approximately $48,875.

3

Description of the Building and the Site. As set forth above, the ASML Building
----------------------------------------
is a two story office and warehouse building containing approximately 95,133
rentable square feet consisting of 60,953 square feet on the first floor and
34,180 square feet on the second floor. The ASML Building is constructed of
painted concrete tilt-up panels with glass curtain walls and an exterior
insulated finish system (EIFS) on a reinforced concrete foundation system. The
roofing system consists of a steel beam with steel roof decking system supported
by steel columns.

The ASML Building, which was completed in June 1995, is located on a
9.51 acre tract of land within the Arizona State University Research Park
(Research Park). The land upon which the ASML Building is situated is subject to
a long-term ground lease (as described below) with Price-Elliott Research Park,
Inc. (Price-Elliott). At closing, Wells OP was assigned and assumed all of the
tenant's rights, duties and obligations under the ASML ground lease.

An independent appraisal of the ASML Building was prepared by CB
Richard Ellis, Inc., real estate appraisers, as of March 1, 2000, pursuant to
which the market value of the land and the leased fee interest subject to the
ASML lease (described below) was estimated to be $17,500,000, in cash or terms
equivalent to cash. This value estimate was based upon a number of assumptions,
including that the ASML Building will continue operating at a stabilized level
with ASM Lithography, Inc. (ASML) occupying 100% of the rentable area, and is
not necessarily an accurate reflection of the fair market value of the property
or the net proceeds which would result from an immediate sale of this property.
Wells OP also obtained an environmental report and an engineering inspection
report prior to the closing evidencing that the condition of this land and the
ASML Building were satisfactory.

The ASML Lease. The entire 95,133 rentable square feet of the ASML Building is
--------------
currently under a net lease agreement with ASML. The landlord's interest in the
ASML lease was assigned to Wells OP at the closing. The ASML lease commenced on
June 4, 1998, and the initial term expires on June 30, 2013. ASML has the right
to extend the ASML lease for two additional five year periods of time at the
then prevailing market rental rate, but in no event less than the rate in force
at the end of the preceding lease term.

ASML is a wholly-owned subsidiary of ASM Lithography Holdings NV (ASML
Holdings), a Dutch multi-national corporation that supplies lithography systems
used for printing integrated circuit designs onto very thin disks of silicon,
commonly referred to as wafers. These systems are supplied to integrated circuit
manufacturers throughout the United States, Asia, and Western Europe. ASML
Holdings is 24% owned by Philips Electronics and has strategic partnerships with
a number of major companies including Lucent Technologies, Applied Materials,
Samsung, Hyundai and Motorola. During the fiscal year 1999, ASML Holdings had
net income of $81.3 million on revenues of over $1.2 Billion and a net worth of
over $615 million. ASML Holdings is the guarantor of the ASML lease.

The base rent payable for the ASML Building, out of which Wells OP will
be required to make the ground lease payments described below, is as follows:

-------------------------------------------------------------------------------
Lease Year                   Annual Base Rent          Monthly Base Rent
-------------------------------------------------------------------------------

1 thru 5                     $  1,927,788              $  160,649
-------------------------------------------------------------------------------
6 thru 10                    $  2,130,124              $  177,510
-------------------------------------------------------------------------------
11 thru 15                   $  2,354,021              $  196,168
-------------------------------------------------------------------------------

4

Under the ASML lease, ASML is required to pay as additional monthly
rent all utility costs, and operating costs, including, but not limited to,
insurance premiums, general and special real estate taxes, assessments, and
other governmental levies and such other operating costs with respect to the
ASML Building, including those pertaining to the ASML ground lease. In addition,
ASML is responsible for all routine maintenance and repairs to the ASML
Building. ASML is responsible for maintaining the common and service areas of
the ASML Building and ordinary repair and replacement of the roof, foundation,
exterior surface walls, plumbing, pipes and conduits located in the common and
service areas, central heating, ventilation and air conditioning systems, and
electrical, mechanical and plumbing systems of the ASML Building.
Notwithstanding the above, Wells OP is responsible for capital improvements,
alterations or expenditures, depreciation, damages due to fire or other
casualty, and repairs related to any defect in design, materials, or workmanship
of the ASML Building.

ASML has an expansion option which allows ASML the ability to expand
the building into at least an additional 30,000 rentable square feet, to be
constructed by Wells OP. If the expansion option exercised is for less than
30,000 square feet, Wells OP may reject the exercise at its sole discretion. In
the event that ASML exercises its expansion option after the first five years of
the initial lease term, such lease term will be extended to 10 years from the
date of such expansion.

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

---------------------------------------------------------------------------
Lease Years               Annual Rent
---------------------------------------------------------------------------

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

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

The Motorola Building

Purchase of the Motorola Building. On March 29, 2000, Wells OP purchased a two
---------------------------------
story office building with approximately 133,225 rentable square feet located at
8075 South River Parkway, Tempe, Maricopa County, Arizona (Motorola Building)
from Ryan pursuant to that certain Agreement of Purchase and Sale of Property
between Ryan and our advisor.

The rights under the Motorola contract were assigned to Wells OP by our
advisor at closing. The purchase price paid for the Motorola Building was
$16,000,000. Wells OP also incurred additional acquisition expenses in
connection with the purchase of the Motorola Building, including attorneys'
fees, recording fees, loan fees, and other closing costs, of approximately
$36,622.

5

Description of the Building and Site. As set forth above, the Motorola Building
------------------------------------
is a two story office building containing approximately 133,225 rentable square
feet with approximately 66,877 gross square feet on each floor. The Motorola
Building was completed in July 1998, and is located on a 12.44 acre tract of
land within the Research Park. The land upon which the Motorola building is
situated is subject to a long-term ground lease (as described below) with
Price-Elliott. At closing, Wells OP was assigned and assumed all of tenant's
rights, duties and obligations under the Motorola ground lease.

The Motorola Building is constructed using painted light-sand and fine
pebble exterior insulted finish system (EIFS) on steel framing with some
concrete masonry unit block. The Motorola Building also contains one-quarter
inch high-performance tinted glass covering approximately 50% of the Motorola
Building's exterior with several full height sections on a reinforced concrete
foundation system. The roofing system consists of steel beams with steel roof
decking system supported by steel columns.

An independent appraisal of the Motorola Building was prepared by CB
Richard Ellis, Inc., real estate appraisers, as of March 1, 2000, pursuant to
which the market value of the land and the leased fee interest subject to the
Motorola lease (described below) was estimated to be $16,150,000, in cash or
terms equivalent to cash. This value estimate was based upon a number of
assumptions, including that the Motorola Building will continue operating at a
stabilized level with Motorola, Inc. (Motorola) occupying 100% of the rentable
area, and is not necessarily an accurate reflection of the fair market value of
the property or the net proceeds which would result from an immediate sale of
this property. Wells OP also obtained an environmental report and an engineering
inspection report prior to the closing evidencing that the condition of this
land and the Motorola Building were satisfactory.

The Motorola Lease. The entire 133,225 rentable square feet of the Motorola
------------------
Building is currently under a net lease agreement with Motorola. The landlord's
interest in the Motorola lease was assigned to Wells OP at the closing. The
Motorola lease commenced on August 17, 1998, and the initial term expires on
August 31, 2005. Motorola has the right to extend the Motorola lease for four
additional five-year periods of time at the then prevailing market rental rate.

The Motorola Building is occupied by Motorola's Satellite
Communications Division (SATCOM). SATCOM is a worldwide developer and
manufacturer of space and ground communications equipment and systems. This
division is the prime contractor for the Iridium system and is primarily engaged
in computer design and development functions. Motorola, a New York Stock
Exchange Company, had net income of $891 million on revenues of $33.1 billion
for the fiscal year 1999, and has a net worth of over $18.7 billion.

The rent payable under the Motorola lease, out of which Wells OP will
be required to make the ground lease payments described below, is as follows:

----------------------------------------------------------------------------------
Lease Year                   Annual Base Rent          Monthly Base Rent
----------------------------------------------------------------------------------

1 thru 4                     $  1,843,834              $ 153,653
----------------------------------------------------------------------------------
5 thru 7                     $  2,054,329              $ 171,194
----------------------------------------------------------------------------------

Under the Motorola lease, Motorola is required to pay as additional
monthly rent all operating costs, including, but not limited to, garbage and
waste disposal, central heating, ventilation and air conditioning systems,
janitorial service, security, insurance premiums for comprehensive general
public liability insurance, real estate taxes, assessments and other

6

governmental levies and such other operating costs with respect to the Motorola
Building. In addition, Motorola is responsible for all routine maintenance and
repairs to the Motorola Building, including maintaining the common and service
areas. Wells OP is responsible for structural repair and replacement of the
roof, foundation, and exterior surface walls. Wells OP is also responsible for
maintaining property damage insurance for damage to the building by fire and
other risks.

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

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

----------------------------------------------------------------------------
Lease Years            Annual Rent
----------------------------------------------------------------------------

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

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

Property Management Fees.

Wells Management Company, Inc. (Wells Management), an affiliate of the
advisor, has been retained to manage and lease the Dial Building, the ASML
Building and the Motorola Building. Wells REIT shall pay management and leasing
fees to Wells Management in the amount of 4.5% of gross revenues from each of
these buildings.

Financing for the Arizona Buildings

The aggregate purchase price paid for the three Arizona buildings was
$47,605,000. The aggregate amount of $47,726,209 required to close the
acquisition of the Arizona buildings consisted of (a) $7,226,209 in cash funded
from a capital contribution by the Wells REIT, (b) $9,000,000 in loan proceeds
obtained from a revolving credit facility established with SouthTrust Bank, N.A.
(SouthTrust Loan), (c) $26,500,000 in loan proceeds obtained from a revolving
credit facility established with Bank of America, N.A. (BOA Loan), and (d)
$5,000,000 in loan proceeds provided by Ryan as seller financing in connection
with the purchase of the Motorola Building (Ryan Loan).

7

Description of SouthTrust Loan. The SouthTrust Loan requires monthly payments of
------------------------------
interest only and matures on December 31, 2000. The interest rate on the
SouthTrust Loan is an annual variable rate equal to the London InterBank Offered
Rate for a thirty day period plus 200 basis points. The current interest rate
under the SouthTrust Loan is 8.13% per annum. The SouthTrust Loan is secured by
a first mortgage against the PWC Building located in Tampa, Florida, which was
purchased by Wells OP on December 31, 1998. As of March 31, 2000, the
outstanding principal balance of the SouthTrust Loan was $11,320,000.

Description of BOA Loan. The BOA Loan requires monthly payments of interest only
-----------------------
and matures on February 1, 2001. The interest rate on the BOA Loan is an annual
variable rate equal to the London InterBank Offered Rate for a thirty day period
plus 200 basis points. The current interest rate under the BOA is 8.13% per
annum. The BOA Loan is secured by a first mortgage against the AT&T Building
(formerly the Vanguard Cellular Building) located in Harrisburg, Pennsylvania,
which was purchased by Wells OP on February 4, 1999, and the Videojet Building
located in Wood Dale, Illinois, which was purchased by Wells OP on September 10,
1999. As of March 31, 2000, the outstanding principal balance of the BOA Loan
was $26,660,798.

Description of Ryan Loan. The Ryan Loan requires monthly payments of interest
------------------------
only and matures on April 1, 2001. The interest rate on the Ryan Loan is 9.00%
per annum, and is secured by a first mortgage against the Motorola Building.

Status of the Matsushita Project

The construction of the Matsushita project consisting of the
approximately 150,000 square foot office building in Lake Forest, California is
complete. Matsushita Avionics Systems Corporation commenced its lease on
January 4, 2000 and is currently paying monthly base rent based upon the
budgeted construction amount of $18,400,000.

Status of the ABB Richmond Project

As of April 20, 2000, Wells REIT, LLC - VA I (Wells LLC), a limited
liability company wholly owned by Wells OP, had spent approximately $5,714,000
towards the construction of the approximately 100,000 square foot office
building in Richmond, Virginia. The ABB Richmond project is approximately 50%
complete and is expected to be completed in June 2000. We estimate that the
aggregate cost and expenses to be incurred by Wells LLC with respect to the
acquisition and construction of the ABB Richmond project will total
approximately $11,560,000.

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

The information contained on page 97 in the "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources" section of the prospectus is revised as of the date of this
supplement by the deletion of the first paragraph of that section and the
insertion of the following paragraphs in lieu thereof:

8

We received approximately $132,181,919 in gross offering
proceeds from the sale of 13,218,192 shares of common stock in our
initial public offering, which commenced on January 30, 1998 and was
terminated on December 20, 1999. Of the $132,181,919 raised in the
initial offering, we invested a total of $111,032,812 in properties.

Pursuant to the prospectus, we commenced this second offering
of shares of our common stock on December 20, 1999. As of April 20,
2000, we had received an additional $34,905,285 in gross offering
proceeds from the sale of 3,490,528 shares in the second offering.

As of April 20, 2000, we had received in the aggregate
approximately $167,087,204 in gross offering proceeds from the sale of
16,708,720 shares of our common stock. As of April 20, 2000, we had
repurchased 17,143 shares of common stock through our share redemption
program resulting in gross offering proceeds of $166,915,777 net of
such shares repurchased. Out of this amount, as of April 20, 2000, we
had paid $5,848,052 in acquisition and advisory fees and acquisition
expenses, had paid $20,885,901 in selling commissions and
organizational and offering expenses, had invested $128,842,937 in
properties and were holding net offering proceeds of $11,510,314
available for investment in additional properties.

Financial Statements and Prior Performance Tables

The financial statements of the Wells REIT as of December 31, 1999 and
1998, and for each of the years in the two year period ended December 31, 1999,
included in this supplement and elsewhere in the registration statement, have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included in this
supplement in reliance upon the authority of said firm as experts in giving said
report.

The statements of revenues over certain operating expenses of the Dial
Building, the ASML Building and the Motorola Building for the year ended
December 31, 1999, included in this supplement and elsewhere in the registration
statement, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included in this supplement in reliance upon the authority of said firm as
experts in giving said reports. The proforma financial information for the Wells
REIT as of December 31, 1999 and for the year ended December 31, 1999, which are
included in this supplement, have not been audited.

The prior performance tables dated as of December 31, 1999, which are
included in this supplement, have not been audited.

9

INDEX TO FINANCIAL STATEMENTS AND PRIOR PERFORMANCE TABLES

Page
----

Wells Real Estate Investment Trust, Inc. and Subsidiary
Audited Financial Statements
----------------------------
Report of Independent Public Accountants                             12

Consolidated Balance Sheets as of December 31, 1999 and
December 31, 1998                                                    13

Consolidated Statements of Income for the years ended 
December 31, 1999 and December 31, 1998                              14

Consolidated Statements of Shareholders' Equity for the
years ended December 31, 1999 and December 31, 1998                  15

Consolidated Statements of Cash Flows for the years ended
December 31, 1999 and December 31, 1998                              16

Notes to Consolidated Financial Statements                           17

Dial Building
Audited Financial Statements
----------------------------
Report of Independent Public Accountants                             40

Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1999                                 41

Notes to Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1999                        42

ASML Building
Audited Financial Statements
----------------------------
Report of Independent Public Accountants                             43

Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1999                                 44

Notes to Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1999                        45

Motorola Building
Audited Financial Statements
----------------------------
Report of Independent Public Accountants                             46

Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1999                                 47

Notes to Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1999                        48

10

Page
----

Wells Real Estate Investment Trust, Inc.
Unaudited Pro Forma Financial Statements
----------------------------------------
Summary of Unaudited Pro Forma Financial Statements                  49

Pro Forma Balance Sheet as of December 31, 1999                      50

Pro Forma Statement of Income for the year ended
December 31, 1999                                                    51

Prior Performance Tables                                                               52

11

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying consolidated balance sheets of WELLS REAL
ESTATE INVESTMENT TRUST, INC. (a Maryland corporation) AND SUBSIDIARY as of
December 31, 1999 and 1998 and the related consolidated statements of income,
shareholders' equity, and cash flows for each of the two years in the period
ended December 31, 1999. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Wells Real Estate
Investment Trust, Inc. and subsidiary as of December 31, 1999 and 1998 and the
results of their operations and their cash flows for each of the two years in
the period ended December 31, 1999 in conformity with accounting principles
generally accepted in the United States.

ARTHUR ANDERSEN LLP

/s/ Arthur Andersen LLP
-----------------------

Atlanta, Georgia
January 20, 2000

12

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 1999 AND 1998

ASSETS
1999             1998
-------------    ------------

REAL ESTATE ASSETS, at cost:
Land                                                                                $ 14,500,822     $ 1,520,834
Building, less accumulated depreciation of $1,726,103 and $0 at
December 31, 1999 and 1998, respectively                                           81,507,040      20,076,845
Construction in progress                                                              12,561,459               0
------------     -----------
Total real estate assets                                                    108,569,321      21,597,679

INVESTMENT IN JOINT VENTURES                                                             29,431,176      11,568,677

CASH AND CASH EQUIVALENTS                                                                 2,929,804       7,979,403

DEFERRED OFFERING COSTS                                                                     964,941         548,729

DEFERRED PROJECT COSTS                                                                       28,093         335,421

DUE FROM AFFILIATES                                                                         648,354         262,345

PREPAID EXPENSES AND OTHER ASSETS                                                         1,280,601         540,319
------------     -----------
Total assets                                                               $143,852,290     $42,832,573
============     ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES:
Accounts payable and accrued expenses                                               $    461,300     $   187,827
Notes payable                                                                         23,929,228      14,059,930

Dividends payable                                                                      2,166,701         408,176
Due to affiliate                                                                       1,079,466         554,953
------------     -----------
Total liabilities                                                            27,636,695      15,210,886
------------     -----------
COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST OF UNIT HOLDER IN OPERATING PARTNERSHIP                                   200,000         200,000
------------     -----------
SHAREHOLDERS' EQUITY:
Common shares, $.01 par value; 40,000,000 shares authorized, 13,471,085
shares issued and outstanding at December 31, 1999 and 3,154,136 shares
issued and outstanding at December 31, 1998                                           134,710          31,541
Additional paid-in capital                                                           115,880,885      27,056,112
Retained earnings                                                                              0         334,034
------------     -----------
Total shareholders' equity                                                  116,015,595      27,421,687
------------     -----------
Total liabilities and shareholders' equity                                 $143,852,290     $42,832,573
============     ===========

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

13

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

1999             1998
--------         --------                

REVENUES:
Rental income                                               $4,735,184       $ 20,994
Equity in income of joint ventures                           1,243,969        263,315
Interest income                                                502,993        110,869
Other income                                                    13,249              0
----------       --------
6,495,395        395,178
----------       --------
EXPENSES:
Depreciation                                                 1,726,103              0
Interest expense                                               442,029         11,033
Operating costs, net of reimbursements                         (74,666)             0
Management and leasing fees                                    257,744              0
General and administrative                                     123,776         29,943
Legal and accounting                                           115,471         19,552
Computer costs                                                  11,368            616
Amortization of organizational costs                             8,921              0
----------       --------
2,610,746         61,144
----------       --------
NET INCOME                                                      $3,884,649       $334,034
==========       ========
EARNINGS PER SHARE:
Basic and diluted                                           $     0.50       $   0.40
==========       ========

The accompanying notes are an integral part of these consolidated statements.

14

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

Common Stock                    Additional                                 Total 
-----------------------------          Paid-In              Retained          Shareholders'
Shares           Amount             Capital              Earnings             Equity
------------     ------------       --------------        -------------       -------------

BALANCE, December 31, 1997                       100       $         1        $         999         $          0      $       1,000

Issuance of common stock                3,154,036            31,540           31,508,820                    0         31,540,360
Net income                                      0                 0                    0              334,034            334,034
Dividends ($.31 per share)                      0                 0             (511,163)                   0           (511,163)
Sales commissions                               0                 0           (2,996,334)                   0         (2,996,334)
Other offering expenses                         0                 0             (946,210)                   0           (946,210)
-----------           -------          -----------             --------         ----------
BALANCE, December 31, 1998                 3,154,136            31,541           27,056,112              334,034         27,421,687

Issuance of common stock               10,316,949           103,169          103,066,321                    0        103,169,490
Net income                                      0                 0                    0            3,884,649          3,884,649
Dividends ($.70 per share)                      0                 0           (1,346,240)          (4,218,683)        (5,564,923)
Sales commissions                               0                 0           (9,801,197)                   0         (9,801,197)
Other offering expenses                         0                 0           (3,094,111)                   0         (3,094,111)
-----------       -----------        -------------         ------------      ------------- 
BALANCE, December 31, 1999                13,471,085       $   134,710        $ 115,880,885         $          0      $ 116,015,595
===========       ===========        =============         ============      =============

The accompanying notes are an integral part of these consolidated statements. 

15

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

1999                    1998
--------------           ------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                       $    3,884,649           $    334,034
--------------           ------------ 
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Equity in income of joint ventures                                              1,243,969)              (263,315) 
Depreciation                                                                    1,726,103                      0  
Amortization of organizational costs                                                8,921                      0  
Changes in assets and liabilities:                                                                                
Prepaid expenses and other assets                                             (749,203)              (540,319) 
Accounts payable and accrued expenses                                          273,473                187,827  
Due to affiliates                                                              108,301                  6,224  
--------------           ------------ 
Total adjustments                                                           123,626               (609,583) 
--------------           ------------ 
Net cash provided by (used in) operating activities                       4,008,275               (275,549) 
--------------           ------------ 
CASH FLOWS FROM INVESTING ACTIVITIES:                                                                                      
Investment in real estate                                                           (85,514,506)           (21,299,071) 
Investment in joint ventures                                                        (17,641,211)           (11,276,007) 
Deferred project costs paid                                                          (3,610,967)            (1,103,913) 
Distributions received from joint ventures                                            1,371,728                178,184  
--------------           ------------ 
Net cash used in investing activities                                  (105,394,956)           (33,500,807) 
--------------           ------------ 
CASH FLOWS FROM FINANCING ACTIVITIES:                                                                                      
Proceeds from notes payable                                                          40,594,463             14,059,930  
Repayments of notes payable                                                         (30,725,165)                     0  
Dividends paid to shareholders                                                       (3,806,398)              (102,987) 
Issuance of common stock                                                            103,169,490             31,540,360  
Sales commissions paid                                                               (9,801,197)            (2,996,334) 
Other offering costs paid                                                            (3,094,111)              (946,210) 
--------------           ------------ 
Net cash provided by financing activities                                96,337,082             41,554,759  
--------------           ------------ 
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                    (5,049,599)             7,778,403  

CASH AND CASH EQUIVALENTS, beginning of year                                             7,979,403                201,000  
--------------           ------------ 
CASH AND CASH EQUIVALENTS, end of year                                              $    2,929,804           $  7,979,403   
==============           ============ 
SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES:
Deferred project costs applied to real estate assets                             $    3,183,239           $    298,608 
==============           ============       
Deferred project costs contributed to joint ventures                             $      735,056           $    469,884  
==============           ============    
Deferred offering costs due to affiliate                                         $      416,212           $          0   
==============           ============ 

The accompanying notes are an integral part of these consolidated statements.

16

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1999 AND 1998

1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Wells Real Estate Investment Trust, Inc. (the "Company") is a Maryland
corporation that qualifies as a real estate investment trust ("REIT"). The
Company is conducting an offering for the sale of a maximum of 40,000,000
(exclusive of 2,200,000 shares available pursuant to the Company's dividend
reinvestment plan) shares of common stock, $.01 par value per share, at a
price of $10 per share. The Company will seek to acquire and operate
commercial properties, including, but not limited to, office buildings,
shopping centers, business and industrial parks, and other commercial and
industrial properties, including properties which are under construction,
are newly constructed, or have been constructed and have operating
histories. All such properties may be acquired, developed, and operated by
the Company alone or jointly with another party. The Company is likely to
enter into one or more joint ventures with affiliated entities for the
acquisition of properties. In connection with this, the Company may enter
into joint ventures for the acquisition of properties with prior or future
real estate limited partnership programs sponsored by Wells Capital, Inc.
(the "Advisor") or its affiliates.

Substantially all of the Company's business is conducted through Wells
Operating Partnership, L.P. (the "Operating Partnership"), a Delaware
limited partnership. During 1997, the Operating Partnership issued 20,000
limited partner units to the Advisor in exchange for $200,000. The Company
is the sole general partner in the Operating Partnership and possesses full
legal control and authority over the operations of the Operating
Partnership; consequently, the accompanying consolidated financial
statements of the Company include the amounts of the Operating Partnership.

The Operating Partnership owns the following properties directly: (i) the
PriceWaterhouseCoopers property (the "PwC Building"), a four-story office
building located in Tampa, Florida; (ii) the AT&T Building, a four-story
office building located in Harrisburg, Pennsylvania; (iii) the Marconi Data
Systems property (the "Marconi Building"), a two-story office building
located in Wood Dale, Illinois; and (iv) the Cinemark Building, a five-
story office building located in Plano, Texas.

The Company also owns interests in several properties through a joint
venture among the Operating Partnership, Wells Real Estate Fund IX, L.P.
("Wells Fund IX"), Wells Real Estate Fund X, L.P. ("Wells Fund X"), and
Wells Real Estate Fund XI, L.P. ("Wells Fund XI"). This joint venture is
referred to as the Fund IX, Fund X, Fund XI, and REIT Joint Venture ("Fund
IX, X, XI, and REIT Joint Venture"). In addition, the Company owns an
interest in several properties through a joint venture between Wells Fund
XI, Wells Real Estate Fund XII, L.P. ("Wells Fund XII"), and the Operating
Partnership, which is referred to as Wells Fund XI, XII and REIT Joint
Venture. The Company owns two properties through a joint venture between
the Operating Partnership and Fund X and XI Associates, a joint venture
between Wells Fund X and Wells Fund XI.

17

Through its investment in the Fund IX, X, XI, and REIT Joint Venture, the
Company owns interests in the following properties: (i) a three-story
office building in Knoxville, Tennessee (the "ABB Building"), (ii) a two-
story office building in Louisville, Colorado (the "Ohmeda Building"),
(iii) a three-story office building in Broomfield, Colorado (the "360
Interlocken Building"), (iv) a one-story warehouse facility in Ogden, Utah
(the "Iomega Building"), and (v) a one-story office building in Oklahoma
City, Oklahoma (the "Lucent Technologies Building").

The following properties are owned by the Company through its investment in
a joint venture with Fund X and XI Associates: (i) a one-story office and
warehouse building in Fountain Valley, California (the "Cort Furniture
Building") owned by Wells/Orange County Associates and (ii) a warehouse and
office building in Fremont, California (the "Fairchild Building") owned by
Wells/Fremont Associates.

Through its investment in the Wells Fund XI, XII, and REIT Joint Venture,
the Company owns interests in the following properties: (i) a two-story
manufacturing and office building in Greenville County, South Carolina (the
"EYBL CarTex Building"), (ii) a three-story office building Leawood, Kansas
(the "Sprint Building"), (iii) an office and warehouse building in Chester
County, Pennsylvania (the "Johnson Matthey Building"), and (iv) a two-story
office building in Ft. Myers, Florida (the "Gartner Building").

Use of Estimates and Factors Affecting the Company

The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.

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

Income Taxes

The Company has elected to be taxed as a REIT under the Internal Revenue
Code of 1986, as amended (the "Code"), commencing with the taxable year
ended December 31, 1998. As a result, the Company generally will not be
subject to federal income taxation at the corporate level to the extent it
distributes annually at least 95% of its REIT taxable income, as defined in
the Code, to its shareholders and satisfies certain other requirements.
Additionally, the Operating Partnership is not subject to federal or state
income taxes. Accordingly, no provision has been made for federal or state
income taxes in the accompanying consolidated financial statements for the
years ended December 31, 1999 and 1998.

Real Estate Assets

Real estate assets held by the Company and joint ventures are stated at
cost less accumulated depreciation. Major improvements and betterments are
capitalized when they extend the useful life of the related asset. All
repair and maintenance are expensed as incurred.

Management continually monitors events and changes in circumstances which
could indicate that carrying amounts of real estate assets may not be
recoverable. When events or changes in circumstances

18

are present which indicate that the carrying amounts of real estate assets
may not be recoverable, management assesses the recoverability of real
estate assets by determining whether the carrying value of such real estate
assets will be recovered through the future cash flows expected from the
use of the asset and its eventual disposition. Management has determined
that there has been no impairment in the carrying value of real estate
assets held by the Company or the joint ventures as of December 31, 1999.

Depreciation of building and improvements is calculated using the straight-
line method over 25 years. Tenant improvements are amortized over the life
of the related lease or the life of the asset, whichever is shorter.

Investment in Joint Ventures

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

Partners' Distributions and Allocations of Profit and Loss. Cash available
for distribution and allocations of profit and loss to the Operating
Partnership by the joint ventures are made in accordance with the terms of
the individual joint venture agreements. Generally, these items are
allocated in proportion to the partners' respective ownership interests.
Cash is paid from the joint ventures to the Operating Partnership on a
quarterly basis.

Deferred Lease Acquisition Costs. Costs incurred to procure operating
leases are capitalized and amortized on a straight-line basis over the
terms of the related leases.

Revenue Recognition

All leases on real estate assets held by the Company or the joint ventures
are classified as operating leases, and the related rental income is
recognized on a straight-line basis over the terms of the respective
leases.

Cash and Cash Equivalents

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

Earnings Per Share

Earnings per share is calculated based on the weighted average number of
common shares outstanding during each period. The weighted average number
of common shares outstanding is identical for basic and fully diluted
earnings per share, as there is no dilutive impact created from the
Company's stock option plan (Note 10) using the treasury stock method.

2.   DEFERRED PROJECT COSTS

The Company paid a percentage of shareholder contributions to the Advisor
for acquisition and advisory services. These payments, as stipulated in the
prospectus, can be up to 3.5% of shareholder contributions, subject to
certain overall limitations contained in the prospectus. Aggregate fees
paid

19

through December 31, 1999 were $4,714,880 and amounted to 3.5% of
shareholders' contributions received. These fees are allocated to specific
properties as they are purchased or developed and are included in
capitalized assets of the joint ventures or real estate assets. Deferred
project costs at December 31, 1999 and 1998 represent fees not yet applied
to properties.

3.   DEFERRED OFFERING COSTS

Organization and offering expenses, to the extent they exceed 3% of gross
offering proceeds, will be paid by the Advisor and not by the Company.
Organization and offering expenses do not include sales or underwriting
commissions but do include such costs as legal and accounting fees,
printing costs, and other offering expenses.

As of December 31, 1999, the Advisor paid organization and offering
expenses on behalf of the Company in the aggregate amount of $5,005,262, of
which the Advisor was reimbursed $4,040,321, which did not exceed the 5%
limitation. The unpaid portion of deferred offering costs is $964,941 and
is included in due to affiliate in the accompanying balance sheet.

4.   RELATED-PARTY TRANSACTIONS

Due from affiliates at December 31, 1999 represents the Operating
Partnership's share of the cash to be distributed from its joint venture
investments for the fourth quarter of 1999 and 1998 as follows:

1999        1998
---------   ---------
Fund IX, X, XI, and REIT Joint Venture        $  32,079   $  38,360
Wells/Orange County Associates                   75,953      77,123
Wells/Fremont Associates                        152,681     146,862
Fund XI, XII, and REIT                          387,641           0
---------   ---------
$ 648,354   $ 262,345
=========   =========

The Company entered into a property management agreement with Wells
Management Company, Inc. ("Wells Management"), an affiliate of the Advisor.
In consideration for supervising the management and leasing of the
Operating Partnership's properties, the Operating Partnership will pay
Wells Management management and leasing fees equal to the lesser of (a)
fees that would be paid to a comparable outside firm, or (b) 4.5% of the
gross revenues generally paid over the life of the lease plus a separate
competitive fee for the one-time initial lease-up of newly constructed
properties generally paid in conjunction with the receipt of the first
month's rent. In the case of commercial properties which are leased on a
long-term (ten or more years) net lease basis, the maximum property
management fee from such leases shall be 1% of the gross revenues generally
paid over the life of the leases except for a one-time initial leasing fee
of 3% of the gross revenues on each lease payable over the first five full
years of the original lease term.

The Operating Partnership's portion of the management and leasing fees and
lease acquisition costs paid to Wells Management by the joint ventures was
$336,517 for the year ended December 31, 1999.

The Advisor performs certain administrative services for the Operating
Partnership, such as accounting and other partnership administration, and
incurs the related expenses. Such expenses are allocated among the
Operating Partnership and the various Wells Real Estate Funds based on time
spent on each

20

fund by individual administrative personnel. In the opinion of management,
such allocation is a reasonable basis for allocating such expenses.

The Advisor is a general partner in various Wells Real Estate Funds. As
such, there may exist conflicts of interest where the Advisor, while
serving in the capacity as general partner for Wells Real Estate Funds, may
be in competition with the Operating Partnership for tenants in similar
geographic markets.

5.   INVESTMENT IN JOINT VENTURES

The Operating Partnership's investment and percentage ownership in joint
ventures at December 31, 1999 and 1998 are summarized as follows:

1999                          1998
-------------------------      --------------------------
Amount         Percent         Amount          Percent
------------      -------      -------------      -------

Fund IX, X, XI, and REIT Joint Venture              $  1,388,884         4%        $   1,443,378        4%
Wells/Orange County Associates                         2,893,112        44             2,958,617       44
Wells/Fremont Associates                               6,988,210        78             7,166,682       78
Fund XI, XII, and REIT Joint Venture                  18,160,970        57                     0        0
------------                    ------------
$ 29,431,176                    $ 11,568,677 
============                    ============

The following is a rollforward of the Operating Partnership's investment in
joint ventures for the years ended December 31, 1999 and 1998:

1999               1998
-----------        -----------

Investment in joint ventures, beginning of year                   $11,568,677        $         0
Equity in income of joint ventures                                  1,243,969            263,315
Contributions to joint ventures                                    18,376,267         11,745,890
Distributions from joint ventures                                  (1,757,737)          (440,528)
-----------        -----------                    
Investment in joint ventures, end of year                         $29,431,176        $11,568,677
===========        ===========

Fund IX, X, XI, and REIT Joint Venture

On March 20, 1997, Wells Fund IX and Wells Fund X entered into a joint
venture agreement. The joint venture, Fund IX and X Associates, was formed
to acquire, develop, operate, and sell real properties. On March 20, 1997,
Wells Fund IX contributed a 5.62-acre tract of real property in Knoxville,
Tennessee, and improvements thereon, known as the ABB Building, to the Fund
IX and X Associates joint venture. A 83,885-square-foot, three-story
building was constructed and commenced operations at the end of 1997.

On February 13, 1998, the joint venture purchased a two-story office
building, known as the Ohmeda Building, in Louisville, Colorado. On March
20, 1998, the joint venture purchased a three-story office building, known
as the 360 Interlocken Building, in Broomfield, Colorado. On June 11, 1998,
Fund IX and X Associates was amended and restated to admit Wells Fund XI
and the Operating Partnership. The joint venture was renamed the Fund IX,
X, XI, and REIT Joint Venture. On June 24, 1998, the new joint venture
purchased a one-story office building, known as the Lucent Technologies
Building, in Oklahoma City, Oklahoma. On April 1, 1998, Wells Fund X
purchased a one-story warehouse facility, known as

21

the Iomega Building, in Ogden, Utah. On July 1, 1998, Wells Fund X contributed
the Iomega Building to the Fund IX, X, XI, and REIT Joint Venture.

Following are the financial statements for the Fund IX, X, XI, and REIT Joint
Venture:

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Balance Sheets
December 31, 1999 and 1998

Assets

1999                   1998
----------------       ----------------

Real estate assets, at cost:
Land                                                                     $    6,698,020         $    6,454,213
Building and improvements, less accumulated depreciation of
$2,792,068 in 1999 and $1,253,156 in 1998                                 29,878,541             30,686,845
Construction in progress                                                              0                    990
--------------         --------------             
Total real estate assets                                           36,576,561             37,142,048
Cash and cash equivalents                                                         1,146,874              1,329,457
Accounts receivable                                                                 554,965                133,257
Prepaid expenses and other assets                                                   526,409                441,128
--------------         -------------- 
Total assets                                                   $   38,804,809         $   39,045,890
==============         ==============

Liabilities and Partners' Capital

Liabilities:
Accounts payable                                                         $      704,914         $      409,737
Due to affiliates                                                                 6,379                  4,406  
Partnership distributions payable                                               804,734              1,000,127  
--------------         -------------- 
Total liabilities                                                  1,516,027              1,414,270  
--------------         -------------- 
Partners' capital:                                                                                                  
Wells Real Estate Fund IX                                                   14,590,626             14,960,100     
Wells Real Estate Fund X                                                    18,000,869             18,707,139     
Wells Real Estate Fund XI                                                    3,308,403              2,521,003     
Wells Operating Partnership, L.P.                                            1,388,884              1,443,378     
--------------         --------------     
Total partners' capital                                           37,288,782             37,631,620
--------------         -------------- 
Total liabilities and partners' capital                       $   38,804,809         $   39,045,890     
==============         ==============

22

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Income (Loss)
for the Years Ended December 31, 1999, 1998, and 1997

1999                1998             1997
------------        ------------     ------------

Revenues:
Rental income                                                       $3,932,962          $2,945,980         $ 28,512
Interest income                                                        120,080              20,438                0      
----------          ----------         -------- 
4,053,042           2,966,418           28,512      
----------          ----------         -------- 
Expenses:                                                                                                                    
Depreciation                                                         1,538,912           1,216,293           36,863      
Management and leasing fees                                            286,139             226,643            1,711      
Operating costs, net of reimbursements                                 (43,501)           (140,506)          10,118      
Property administration expense                                         63,311              34,821                0      
Legal and accounting                                                    35,937              15,351                0      
----------          ----------         -------- 
1,880,798           1,352,602           48,692      
----------          ----------         -------- 
Net income (loss)                                                       $2,172,244          $1,613,816         $(20,180)     
==========          ==========         ========    
Net income (loss) allocated to Wells Real Estate Fund IX                $  850,072          $  692,116         $(10,145)     
==========          ==========         ========  
Net income (loss) allocated to Wells Real Estate Fund X                 $1,056,316          $  787,481         $(10,035)     
==========          ==========         ======== 
Net income allocated to Wells Real Estate Fund XI                       $  184,355          $   85,352                0     
==========          ==========         ========  
Net income allocated to Wells Operating Partnership, L.P.               $   81,501          $   48,867         $      0     
==========          ==========         ======== 

23

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Years Ended December 31, 1999, 1998, and 1997

Wells Real         Wells Real        Wells Real            Wells                Total
Estate             Estate            Estate            Operating             Partners'
Fund IX            Fund X            Fund XI        Partnership, L.P.        Capital
------------      --------------     --------------   -------------------    -------------

Balance, December 31, 1996                 $         0         $        0        $        0         $        0          $         0
Net loss                                    (10,145)           (10,035)                0                  0              (20,180)
Partnership contributions                 3,712,938          3,672,838                 0                  0            7,385,776 
-----------        -----------        ----------         ----------          -----------
Balance, December 31, 1997                   3,702,793          3,662,803                 0                  0            7,365,596 
Net income                                  692,116            787,481            85,352             48,867            1,613,816 
Partnership contributions                11,771,312         15,613,477         2,586,262          1,480,741           31,451,792 
Partnership distributions                (1,206,121)        (1,356,622)         (150,611)           (86,230)          (2,799,584)
-----------        -----------        ----------         ----------          -----------
Balance, December 31, 1998                  14,960,100         18,707,139         2,521,003          1,443,378           37,631,620 
Net income                                  850,072          1,056,316           184,355             81,501            2,172,244 
Partnership contributions                   198,989                  0           911,027                  0            1,110,016 
Partnership distributions                (1,418,535)        (1,762,586)         (307,982)          (135,995)          (3,625,098)
-----------        -----------        ----------         ----------          -----------
Balance, December 31, 1999                 $14,590,626        $18,000,869        $3,308,403         $1,388,884          $37,288,782
===========        ===========        ==========         ==========          ===========

24

The Fund IX, X, XI, and REIT Joint Venture
(A Georgia Joint Venture)
Statements of Cash Flows
for the Years Ended December 31, 1999, 1998, and 1997

1999               1998               1997
-----------        ------------     ------------

Cash flows from operating activities:
Net income (loss)                                            $ 2,172,244        $  1,613,816     $    (20,180)
-----------        ------------     ------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation                                            1,538,912           1,216,293           36,863
Changes in assets and liabilities:
Accounts receivable                                   (421,708)            (92,745)         (40,512)
Prepaid expenses and other assets                      (85,281)           (111,818)        (329,310)
Accounts payable                                       295,177              29,967          379,770
Due to affiliates                                        1,973               1,927            2,479
-----------        ------------     ------------
Total adjustments                                 1,329,073           1,043,624           49,290
-----------        ------------     ------------
Net cash provided by operating
activities                                    3,501,317           2,657,440           29,110
-----------        ------------     ------------
Cash flows from investing activities:
Investment in real estate                                       (930,401)        (24,788,070)      (5,715,847)
-----------        ------------     ------------
Cash flows from financing activities:
Distributions to joint venture partners                       (3,820,491)         (1,799,457)               0
Contributions received from partners                           1,066,992          24,970,373        5,975,908
-----------        ------------     ------------
Net cash (used in) provided by
financing activities                         (2,753,499)         23,170,916        5,975,908
-----------        ------------     ------------
Net (decrease) increase in cash and cash equivalents                (182,583)          1,040,286          289,171
Cash and cash equivalents, beginning of year                       1,329,457             289,171                0
-----------        ------------     ------------
Cash and cash equivalents, end of year                           $ 1,146,874        $  1,329,457     $    289,171
===========        ============     ============
Supplemental disclosure of noncash activities:
Deferred project costs contributed to joint venture          $    43,024        $  1,470,780     $    318,981
===========        ============     ============

Contribution of real estate assets to joint venture          $         0        $  5,010,639     $  1,090,887
===========        ============     ============

Wells/Orange County Associates

On July 27, 1998, the Operating Partnership entered into a joint venture
agreement with Wells Development Corporation, referred to as Wells/Orange County
Associates. On July 31, 1998, Wells/Orange County Associates acquired a
52,000-square-foot warehouse and office building located in Fountain Valley,
California, known as the Cort Furniture Building.

On September 1, 1998, Fund X and XI Associates acquired Wells Development
Corporation's interest in Wells/Orange County Associates which resulted in Fund
X and XI Associates becoming a joint venture partner with the Operating
Partnership in the ownership of the Cort Furniture Building.

25

Following are the financial statements for Wells/Orange County Associates:

Wells/Orange County Associates
(A Georgia Joint Venture)
Balance Sheets
December 31, 1999 and 1998

Assets

1999          1998
----------    ---------- 

Real estate assets, at cost:                                                        
Land                                                              $2,187,501    $2,187,501
Building, less accumulated depreciation of $278,652 in 1999                     
and $92,087 in 1998                                             4,385,463     4,572,028
----------    ---------- 
Total real estate assets                                 6,572,964     6,759,529
Cash and cash equivalents                                                176,666       180,895
Accounts receivable                                                       49,679        13,123
----------    ---------- 
Total assets                                            $6,799,309    $6,953,547
==========    ========== 

Liabilities and Partners' Capital                            

Liabilities:                                                                        
Accounts payable                                                  $        0    $    1,550
Partnership distributions payable                                    173,935       176,614
----------    ---------- 
Total liabilities                                          173,935       178,164
----------    ---------- 
Partners' capital:                                                                  
Wells Operating Partnership, L.P.                                  2,893,112     2,958,617
Fund X and XI Associates                                           3,732,262     3,816,766
----------    ---------- 
Total partners' capital                                  6,625,374     6,775,383
----------    ---------- 
Total liabilities and partners' capital                 $6,799,309    $6,953,547
==========    ========== 

26

Wells/Orange County Associates
(A Georgia Joint Venture)
Statements of Income
for the Years Ended December 31, 1999 and 1998

1999            1998
--------        -------- 

Revenues:                                                          
Rental income                                                  $795,545        $331,477
Interest income                                                       0             448
--------        -------- 
795,545         331,925
--------        -------- 
Expenses:                                                          
Depreciation                                                    186,565          92,087
Management and leasing fees                                      30,360          12,734
Operating costs, net of reimbursements                           22,229           2,288
Interest                                                              0          29,472
Legal and accounting                                              5,439           3,930
--------        -------- 
244,593         140,511
--------        -------- 
Net income                                                         $550,952        $191,414
========        ======== 

Net income allocated to Wells Operating Partnership, L.P.          $240,585        $ 91,978
========        ======== 

Net income allocated to Fund X and XI Associates                   $310,367        $ 99,436
========        ======== 

Wells/Orange County Associates
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Years Ended December 31, 1999 and 1998

Wells
Operating         Fund X           Total
Partnership,        and XI         Partners'
L.P.          Associates        Capital
------------      ----------      ----------

Balance, December 31, 1997                     $          0      $        0      $        0
Net income                                       91,978          99,436         191,414
Partnership contributions                     2,991,074       3,863,272       6,854,346
Partnership distributions                      (124,435)       (145,942)       (270,377)
------------      ----------      ---------- 
Balance, December 31, 1998                        2,958,617       3,816,766       6,775,383
Net income                                      240,585         310,367         550,952
Partnership distributions                      (306,090)       (394,871)       (700,961)
------------      ----------      ---------- 
Balance, December 31, 1999                     $  2,893,112      $3,732,262      $6,625,374
============      ==========      ========== 

27

Wells/Orange County Associates
(A Georgia Joint Venture)
Statements of Cash Flows
for the Years Ended December 31, 1999 and 1998

1999          1998
---------     -----------

Cash flows from operating activities:

Net income                                                                           $ 550,952     $   191,414
---------     -----------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation                                                                    186,565          92,087
Changes in assets and liabilities:
Accounts receivable                                                          (36,556)        (13,123)
Accounts payable                                                              (1,550)          1,550
---------     -----------
Total adjustments                                                         148,459          80,514
---------     -----------
Net cash provided by operating activities                                 699,411         271,928
---------     -----------
Cash flows from investing activities:
Investment in real estate                                                                    0      (6,563,700)
---------     -----------   
Cash flows from financing activities:
Issuance of note payable                                                                     0       4,875,000
Payment of note payable                                                                      0      (4,875,000)
---------     -----------
Distributions to partners                                                             (703,640)        (93,763)
Contributions received from partners                                                         0       6,566,430
---------     -----------
Net cash (used in) provided by financing activities                      (703,640)      6,472,667
---------     -----------
Net (decrease) increase in cash and cash equivalents                                        (4,229)        180,895
Cash and cash equivalents, beginning of year                                               180,895               0
---------     -----------
Cash and cash equivalents, end of year                                                   $ 176,666     $   180,895
=========     ===========
Supplemental disclosure of noncash activities:

Deferred project costs contributed to joint venture                                  $       0     $   287,916
=========     ===========

Wells/Fremont Associates

On July 15, 1998, the Operating Partnership entered into a joint venture
agreement with Wells Development Corporation, referred to as Wells/Fremont
Associates. On July 21, 1998, Wells/Fremont Associates acquired a
58,424-square-foot warehouse and office building located in Fremont, California,
known as the Fairchild Building.

On October 8, 1998, Fund X and XI Associates acquired Wells Development
Corporation's interest in Wells/Fremont Associates which resulted in Fund X and
XI Associates becoming a joint venture partner with the Operating Partnership in
the ownership of the Fairchild Building.

28

Following are the financial statements for Wells/Fremont Associates:

Wells/Fremont Associates
(A Georgia Joint Venture)
Balance Sheets
December 31, 1999 and 1998

Assets

1999              1998
----------        ----------

Real estate assets, at cost:                                               
Land                                                                   $2,219,251        $2,219,251
Building, less accumulated depreciation of $428,246 in 1999 and        
$142,720 in 1998                                                     6,709,912         6,995,439
----------        ----------
Total real estate assets                                      8,929,163         9,214,690
Cash and cash equivalents                                                     189,012           192,512
Accounts receivable                                                            92,979            34,742
----------        ----------
Total assets                                                 $9,211,154        $9,441,944
==========        ==========

Liabilities and Partners' Capital             

Liabilities:                                                               
Accounts payable                                                       $    2,015        $    3,565
Due to affiliate                                                            5,579             2,052
Partnership distributions payable                                         186,997           189,490
----------        ----------
Total liabilities                                               194,591           195,107
----------        ----------
Partners' capital:                                                         
Wells Operating Partnership, L.P.                                       6,988,210         7,166,682
Fund X and XI Associates                                                2,028,353         2,080,155
----------        ----------
Total partners' capital                                       9,016,563         9,246,837
----------        ----------
Total liabilities and partners' capital                      $9,211,154        $9,441,944
==========        ==========

29

Wells/Fremont Associates
(A Georgia Joint Venture)
Statements of Income
for the Years Ended December 31, 1999 and 1998

1999           1998
--------       -------- 

Revenues:                                                                          
Rental income                                                    $902,946       $401,058
Interest income                                                         0          3,896
--------       -------- 
902,946        404,954
--------       -------- 
Expenses:                                                                          
Depreciation                                                      285,526        142,720
Management and leasing fees                                        37,355         16,726
Operating costs, net of reimbursements                             16,006          3,364
Interest                                                                0         73,919
Legal and accounting                                                4,885          6,306
--------       -------- 
343,772        243,035
--------       -------- 
Net income                                                           $559,174       $161,919
========       ======== 

Net income allocated to Wells Operating Partnership, L.P.            $433,383       $122,470
========       ======== 

Net income allocated to Fund X and XI Associates                     $125,791       $ 39,449
========       ======== 

Wells/Fremont Associates
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Years Ended December 31, 1999 and 1998

Wells                              
Operating         Fund X          Total   
Partnership,       and XI        Partners' 
L.P.         Associates       Capital
------------     ----------     ---------- 

Balance, December 31, 1997                         $          0     $        0     $        0
Net income                                           122,470         39,449        161,919
Partner contributions                              7,274,075      2,083,334      9,357,409
Partnership distributions                           (229,863)       (42,628)      (272,491)
------------     ----------     ---------- 
Balance, December 31, 1998                            7,166,682      2,080,155      9,246,837
Net income                                           433,383        125,791        559,174
Partnership distributions                           (611,855)      (177,593)      (789,448)
------------     ----------     ---------- 
Balance, December 31, 1999                         $  6,988,210     $2,028,353     $9,016,563
============     ==========     ========== 

30

Wells/Fremont Associates
(A Georgia Joint Venture)
Statements of Cash Flows
for the Years Ended December 31, 1999 and 1998

1999             1998
---------       ----------- 

Cash flows from operating activities:
Net income                                                                          $ 559,174       $   161,919
---------       ----------- 
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation                                                                    285,526           142,720
Changes in assets and liabilities:
Accounts receivable                                                          (58,237)          (34,742)
Accounts payable                                                              (1,550)            3,565
Due to affiliate                                                               3,527             2,052
---------       ----------- 
Total adjustments                                                         229,266           113,595
---------       ----------- 
Net cash provided by operating activities                                 788,440           275,514
---------       ----------- 
Cash flows from investing activities:
Investment in real estate                                                                   0        (8,983,111)
---------       ----------- 
Cash flows from financing activities:
Issuance of note payable                                                                    0         5,960,000
Payment of note payable                                                                     0        (5,960,000)
Distributions to partners                                                            (791,940)          (83,001)
Contributions received from partners                                                        0         8,983,110
---------       ----------- 
Net cash (used in) provided by financing activities                      (791,940)        8,900,109
---------       ----------- 
Net (decrease) increase in cash and cash equivalents                                      (3,500)          192,512
Cash and cash equivalents, beginning of year                                             192,512                 0
---------       ----------- 
Cash and cash equivalents, end of year                                                 $ 189,012       $   192,512
=========       =========== 

Supplemental disclosure of noncash activities:
Deferred project costs contributed to joint venture                                 $       0       $   374,299
=========       =========== 

Fund XI, XII, and REIT Joint Venture

On May 1, 1999, the Operating Partnership entered into a joint venture with
Wells Fund XII and Wells Fund XI. On May 18, 1999, the joint venture purchased a
169,510-square-foot, two-story manufacturing and office building, known as EYBL
CarTex, in Fountain Inn, South Carolina. On July 21, 1999, the joint venture
purchased a 68,900 square-foot, three-story-office building, known as the Sprint
Building, in Leawood, Kansas. On August 17, 1999, the joint venture purchased a
130,000 square-foot office and warehouse building, known as the Johnson Matthey
Building, in Chester County, Pennsylvania. On September 20, 1999, the joint
venture purchased a 62,400 square-foot, two-story office building, known as the
Gartner Building, in Fort Myers, Florida.

31

Following are the financial statements for the Fund XI, XII, and REIT Joint
Venture:

The Fund XI, XII, and REIT Joint Venture
(A Georgia Joint Venture)
Balance Sheet
December 31, 1999

Assets

Real estate assets, at cost:
Land                                                                                               $ 5,048,797
Building and improvements, less accumulated depreciation of $506,582                                26,811,869
-----------
Total real estate assets                                                                  31,860,666
Cash and cash equivalents                                                                                  766,278
Accounts receivable                                                                                        133,777
Prepaid assets and other expenses                                                                           26,486
-----------
Total assets                                                                             $32,787,207
===========

Liabilities and Partners' Capital

Liabilities:
Accounts payable                                                                                   $   112,457
Partnership distributions payable                                                                      680,294
-----------
Total liabilities                                                                            792,751
-----------
Partners' capital:
Wells Real Estate Fund XI                                                                            8,365,852
Wells Real Estate Fund XII                                                                           5,467,634
Wells Operating Partnership, L.P.                                                                   18,160,970
-----------
Total partners' capital                                                                   31,994,456
-----------
Total liabilities and partners' capital                                                  $32,787,207
===========

32

The Fund XI, XII, and REIT Joint Venture
(A Georgia Joint Venture)
Statement of Income
for the Year Ended December 31, 1999

Revenues:                                                                                        
Rental income                                                                                   $1,443,446
Other income                                                                                            57
---------- 
1,443,503 
---------- 
Expenses:                                                                                        
Depreciation                                                                                       506,582
Management and leasing fees                                                                         59,230
Operating costs, net of reimbursements                                                               6,433
Property administration                                                                             14,185
Legal and accounting                                                                                 4,000
---------- 
590,430
---------- 
Net income                                                                                          $  853,073
========== 

Net income allocated to Wells Real Estate Fund XI                                                   $  240,031
==========  

Net income allocated to Wells Real Estate Fund XII                                                  $  124,542
==========  

Net income allocated to Wells Operating Partnership, L.P.                                           $  488,500
==========  

The Fund XI, XII, and REIT Joint Venture
(A Georgia Joint Venture)
Statement of Partners' Capital
for the Year Ended December 31, 1999

Wells
Wells Real      Wells Real        Operating           Total
Estate          Estate         Partnership,       Partners'
Fund XI         Fund XII           L.P.            Capital
----------      ----------       ------------      ----------- 

Balance, December 31, 1998                      $        0      $        0        $         0      $         0
Net income                                     240,031         124,542            488,500          853,073
Partnership contributions                    8,470,160       5,520,835         18,376,267       32,367,262
Partnership distributions                     (344,339)       (177,743)          (703,797)      (1,225,879)
----------      ----------       ------------      ----------- 
Balance, December 31, 1999                      $8,365,852      $5,467,634        $18,160,970      $31,994,456
==========      ==========       ============      =========== 

33

The Fund XI, XII, and REIT Joint Venture
(A Georgia Joint Venture)
Statement of Cash Flows
for the Year Ended December 31, 1999

Cash flows from operating activities:
Net income                                                                                         $   853,073
-----------
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation                                                                                    506,582
Changes in assets and liabilities:
Accounts receivable                                                                         (133,777)
Prepaid expenses and other assets                                                            (26,486)
Accounts payable                                                                             112,457
-----------
Total adjustments                                                                         458,776
-----------
Net cash provided by operating activities                                               1,311,849
-----------
Cash flows from financing activities:
Distributions to joint venture partners                                                               (545,571)
-----------
Net increase in cash and cash equivalents                                                                  766,278
Cash and cash equivalents, beginning of year                                                                     0
----------- 
Cash and cash equivalents, end of year                                                                 $   766,278
===========
Supplemental disclosure of noncash activities:
Deferred project costs contributed to joint venture                                                $ 1,294,686
===========

Contribution of real estate assets to joint venture                                                $31,072,562
===========

6.     INCOME TAX BASIS NET INCOME AND PARTNERS' CAPITAL

The Operating Partnership's income tax basis net income for the years ended
December 31, 1999 and 1998 are calculated as follows:

1999              1998
----------         --------

Financial statement net income                                                         $3,884,649         $334,034
Increase (decrease) in net income resulting from:
Depreciation expense for financial reporting purposes in excess of
amounts for income tax purposes                                                    949,631           82,618
Rental income accrued for financial reporting purposes in excess of
amounts for income tax purposes                                                   (789,599)         (35,427)
Expenses deductible when paid for income tax purposes, accrued for
financial reporting purposes                                                        49,906            1,634
----------         --------
Income tax basis net income                                              $4,094,587         $382,859
==========         ========

34

The Operating Partnership's income tax basis partners' capital at December
31, 1999 and 1998 is computed as follows:

1999                  1998
---------------       ------------

Financial statement partners' capital                                        $116,015,595         $27,421,687
Increase (decrease) in partners' capital resulting from:                   
Depreciation expense for financial reporting purposes in excess of     
amounts for income tax purposes                                          1,032,249              82,618
Capitalization of syndication costs for income tax purposes, which     
are accounted for as cost of capital for financial reporting        
purposes                                                                12,896,312           3,942,545
Accumulated rental income accrued for financial reporting purposes     
in excess of amounts for income tax purposes                              (825,026)            (35,427)
Accumulated expenses deductible when paid for income tax purposes,     
accrued for financial reporting purposes                                    51,540               1,634
Dividends payable                                                           2,166,701             408,176
------------         -----------
Income tax basis partners' capital                                           $131,337,371         $31,821,233
============         ===========

7.   RENTAL INCOME

The future minimum rental income due from the Operating Partnership's
direct investment in real estate or its respective ownership interest in
the joint ventures under noncancelable operating leases at December 31,
1999 is as follows:

Year ended December 31:
2000                          $  11,737,408
2001                             11,976,253  
2002                             12,714,291  
2003                             12,856,557  
2004                             12,581,882  
Thereafter                           54,304,092   
-------------
$ 116,170,483
=============

Three tenants contributed 32%, 16%, and 15% of rental income for the year
ended December 31, 1999. In addition, four tenants will contribute 34%,
20%, 17%, and 11% of future minimum rental income.

35

The future minimum rental income due the Fund IX, X, XI, and REIT Joint Venture
under noncancelable operating leases at December 31, 1999 is as follows:

Year ended December 31:
2000                              $  3,666,570
2001                                 3,595,686
2002                                 3,179,827
2003                                 3,239,080
2004                                 3,048,152
Thereafter                               5,181,003 
------------
$ 21,910,318
============

Four tenants contributed 25%, 18%, 13%, and 12% of rental income for the year
ended December 31, 1999. In addition, four tenants will contribute 28%, 22%,
15%, and 10% of future minimum rental income.

The future minimum rental income due Wells/Orange County Associates under
noncancelable operating leases at December 31, 1999 is as follows:

Year ended December 31:
2000                       $   758,964
2001                           809,580
2002                           834,888
2003                           695,740
-----------
$ 3,099,172
===========

One tenant contributed 100% of rental income for the year ended December 31,
1999 and will contribute 100% of future minimum rental income.

The future minimum rental income due Wells/Fremont Associates under
noncancelable operating leases at December 31, 1999 is as follows:

Year ended December 31:
2000                    $   869,492
2001                        895,577
2002                        922,444
2003                        950,118
2004                        894,833
-----------
$ 4,532,464
===========

36

One tenant contributed 100% of rental income for the year ended December
31, 1999 and will contribute 100% of future minimum rental income.

The future minimum rental income due from XI, XII and REIT under
noncancelable operating leases at December 31, 1999 is a follows:

Year ended December 31:
2000                   $  3,085,362
2001                      3,135,490
2002                      3,273,814
2003                      3,367,231
2004                      3,440,259
Thereafter                    9,708,895
------------
$ 26,011,051
============

Four tenants contributed approximately 34%, 22%, 22%, and 12% of rental
income for the year ended December 31, 1999. In addition, four tenants will
contribute approximately 30%, 27%, 22%, and 18% of future minimum rental
income.

8.   NOTES PAYABLE

At December 31, 1999, the Operating Partnership had outstanding debt of
$23,929,228. Of this amount, $11,430,696 was borrowed under a construction
loan with Bank of America in order to finance the construction of a new
building for Matsushita Avionics (the "Matsushita Project") and
improvements for the AT&T Building. This loan is secured by the Matsushita
Project and matures on May 10, 2001. The remaining $12,498,532 was borrowed
against the revolving line of credit from SouthTrust Bank, which is
collateralized by the PwC Building and matures on December 31, 2000.
Interest is paid monthly and accrued at a variable rate based on LIBOR plus
200 basis points for both of these debt instruments. During 1999, the
Company paid and capitalized interest costs of $847,451 and $463,873,
respectively. The estimated fair value of these notes approximates their
carrying value.

The Operating Partnership also has a $9,825,000 line of credit from Bank of
America, which bears interest at a variable rate based on LIBOR plus 200
basis points. No balance was outstanding at December 31, 1999 under this
line of credit.

9.   COMMITMENTS AND CONTINGENCIES

On February 18, 1999, the Operating Partnership entered into a rental
income guaranty agreement with Fund VIII and IX Associates (the "joint
venture"), whereby the Operating Partnership guaranteed that the joint
venture would receive rental income on the existing Matsushita Building,
equal to at least the rent and building expenses that the joint venture
would have received from Matsushita Avionics over the remaining term of the
existing lease. Matsushita Avionics vacated the building on January 3,
2000, while the existing lease term extends through September 2003. The
Company paid approximately $61,000 to the joint venture related to the
rental income and building expenses due from Matsushita Avionics for the
remainder of January 2000. Such payments are made from the Company's
operating cash flow and reduce cash available for dividends.

37

On July 22, 1999, the Operating Partnership purchased a 7.49 acre tract of
land located in Midlothian, Chesterfield County, Virginia for the purpose
of constructing a four-story, 100,000 rentable square foot office building
(the "ABB Project"). The Operating Partnership entered into an office lease
with ABB Power Generation, Inc. ("ABB"), pursuant to which ABB has agreed
to lease the ABB Project upon its completion.

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

10.  COMMON STOCK OPTION PLAN

The Wells Real Estate Investment Trust, Inc. Independent Director Stock
Option Plan ("the Plan") provides for grants of stock to be made to
independent nonemployee directors of the Company. Options to purchase 2,500
shares of common stock at $12 per share are granted upon initially becoming
an independent director of the Company. Of these shares, 20% are
exercisable immediately on the date of grant. An additional 20% of these
shares become exercisable on each anniversary following the date of grant
for a period of four years. Effective on the date of each annual meeting of
shareholders of the Company, beginning in 2000, each independent director
will be granted an option to purchase 1,000 additional shares of common
stock. These options vest at the rate of 500 shares per full year of
service thereafter. All options granted under the Plan expire no later than
the date immediately following the tenth anniversary of the date of grant
and may expire sooner in the event of the disability or death of the
optionee or if the optionee ceases to serve as a director.

The Company has adopted the disclosure provisions in SFAS No. 123,
"Accounting for Stock-Based Compensation." As permitted by the provisions
of SFAS No. 123, the Company applies Accounting Principles Board ("APB")
Opinion No. 25 and the related interpretations in accounting for its stock
option plans and, accordingly, does not recognize compensation cost.

A summary of the Company's stock option activity during 1999 is as follows:

Exercise 
Number            Price  
------          -------- 

Outstanding at December 31, 1998                                0          $      0 
Granted                                                 27,500                12 
------          -------- 
Outstanding at December 31, 1999                           27,500          $     12 
------          -------- 

Outstanding options exercisable as of December 31, 1999     5,500          $     12 
------          --------  

The weighted average remaining contractual life of options outstanding at
December 31, 1999 is approximately 9.5 years. Based on the terms of the
options, the fair value of the options granted during 1999 is $0.

38

11.  QUARTERLY RESULTS (UNAUDITED)

Presented below is a summary of the unaudited quarterly financial
information for the years ended December 31, 1999 and 1998:

1999 Quarters Ended                             
---------------------------------------------------------------  
March 31         June 30       September 30      December 31   
------------    -------------   -------------     -------------  

Revenues                                            $988,000       $1,204,938        $1,803,352       $2,499,105               
Net income                                           393,438          601,975         1,277,019        1,612,217               
Basic and diluted earnings per share                   $0.10            $0.09             $0.18            $0.13               
Dividends per share                                     0.17             0.17              0.18             0.18    

1998 Quarters Ended
-----------------------------------------------------------
March 31      June 30     September 30      December 31
--------------  ----------- ---------------  ---------------
Revenues                                                $   0       $10,917        $73,292          $310,969
Net income                                                  0        10,899         62,128           261,007
Basic and diluted earnings per share                    $0.00       $  0.16        $  0.06          $   0.18
Dividends per share                                      0.00          0.00           0.15              0.16

39

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the DIAL BUILDING for the year ended December 31, 1999. This
financial statement is the responsibility of management. Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. These standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit also
includes assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Dial
Building after acquisition by the Wells Operating Partnership, L.P. (on behalf
of Wells Real Estate Investment Trust, Inc.). The accompanying statement of
revenues over certain operating expenses was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the Dial
Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Dial Building for the year ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

/s/ Arthur Andersen LLP
-----------------------

Atlanta, Georgia
April 10, 2000

40

DIAL BUILDING

STATEMENT OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1999

RENTAL REVENUES                                     $1,388,868

OPERATING EXPENSES, net of reimbursements                    0
----------
REVENUES OVER CERTAIN OPERATING EXPENSES            $1,388,868
==========

The accompanying notes are an integral part of this statement.

41

DIAL BUILDING

NOTES TO STATEMENT OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1999

1.   ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On March 29, 2000, the Wells Operating Partnership L.P. ("Wells OP"), a Delaware
Limited Partnership formed to acquire, own, lease, operate and manage real
properties on behalf of the Wells Real Estate Investment Trust, Inc., acquired
the Dial Building from Ryan Companies US, Inc. ("Ryan"). Ryan is not an
affiliate of Wells OP. The purchase price of the Dial Building was $14,250,000.
Wells OP incurred additional acquisition expenses in connection with the
purchase of the Dial Building, including attorney's fees, recording fees, loan
fees, and other closing costs, of approximately $35,712. The funds used to
purchase the Dial Building consisted of cash and proceeds from Wells OP's lines
of credit with SouthTrust Bank, N.A. and Bank of America, N.A.

The entire 129,689 rentable square feet of the Dial Building is currently under
a net lease agreement (the "Lease") with Dial Corporation ("Dial"). The Lease
was assigned to Wells OP at closing. The Lease commenced on August 14, 1997 and
expires on August 31, 2008. Dial has the right to extend the Lease for two
additional five-year periods at 95% of the then-current fair market rental rate.
Under the Lease, Dial is required to pay as additional rent all real estate
taxes, special assessments, utilities, insurance, and other operating costs
associated with the Dial Building during the term of the Lease. In addition,
Dial is responsible for repair and maintenance of the roof, walls, structure,
and foundation, landscaping, and heating, ventilating, air conditioning,
mechanical, electrical, plumbing, and other systems.

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over the
life of the lease.

2.     BASIS OF ACCOUNTING

The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis. This statement has been prepared in accordance
with the applicable rules and regulations of the Securities and Exchange
Commission for real estate properties acquired. Accordingly, the statement
excludes certain historical expenses, such as depreciation, interest, and
management fees, not comparable to the operations of the Dial Building after
acquisition by Wells OP.

42

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the ASML BUILDING for the year ended December 31, 1999. This
financial statement is the responsibility of management. Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. These standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit also
includes assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the ASML
Building after acquisition by the Wells Operating Partnership, L.P. (on behalf
of Wells Real Estate Investment Trust, Inc.). The accompanying statement of
revenues over certain operating expenses was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the ASML
Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the ASML Building for the year ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

/s/  Arthur Andersen LLP
-------------------------

Atlanta, Georgia
April 10, 2000

43

ASML BUILDING

STATEMENT OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1999

REVENUES:

Rental income                              $1,849,908
Tenant reimbursements                         242,143
----------
Total revenues                    2,092,051
----------                

OPERATING EXPENSES:

Ground lease                                  206,625
Insurance                                       9,628
----------
Total operating expenses            216,253
----------

REVENUES OVER CERTAIN OPERATING EXPENSES       $1,875,798
==========

The accompanying notes are an integral part of this statement.

44

ASML BUILDING

NOTES TO STATEMENT OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1999

1.     ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On March 29, 2000, the Wells Operating Partnership L.P. ("Wells OP"), a Delaware
Limited Partnership formed to acquire, own, lease, operate, and manage real
properties on behalf of the Wells Real Estate Investment Trust, Inc., acquired
the ASML Building from Ryan Companies U.S., Inc. ("Ryan"). Ryan is not an
affiliate of Wells OP. The purchase price of the ASML Building was $17,355,000.
Wells OP incurred additional acquisition expenses in connection with the
purchase of the ASML Building, including attorney's fees, recording fees, loan
fees, and other closing costs, of approximately $48,875. The funds used to
purchase the ASML Building consisted of cash and proceeds obtained from Wells
OP's lines of credit with SouthTrust Bank, N.A. and Bank of America, N.A. Wells
OP also assumed a ground lease with Research Park on 9.51 acres. The ground
lease commenced August 22, 1997 and expires on December 31, 2082.

The entire 95,133 rentable square feet of the ASML Building is currently under a
net lease agreement (the "Lease") with ASML Lithography, Inc. ("ASML"). The
Lease was assigned to Wells OP at closing. The Lease commenced on June 4, 1998
and expires on June 30, 2013. ASML has the right to extend the Lease for two
additional five-year periods at the prevailing market rental rate, but in no
event less than the rate in force at the end of the preceding lease term. Under
the Lease, ASML is required to pay as additional rent the rent associated with
the ground lease described above and all real estate taxes, special assessments,
utilities, insurance, and other operating costs associated with the ASML
Building during the term of the Lease. In addition, ASML is responsible for
repair and maintenance of the roof, walls, structure, and foundation,
landscaping, and the heating, ventilating, air conditioning, mechanical,
electrical, plumbing, and other systems.

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over the
life of the lease.

2.     BASIS OF ACCOUNTING

The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis. This statement has been prepared in accordance
with the applicable rules and regulations of the Securities and Exchange
Commission for real estate properties acquired. Accordingly, the statement
excludes certain historical expenses, such as depreciation, interest, and
management fees, not comparable to the operations of the ASML Building after
acquisition by Wells OP.

45

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the MOTOROLA BUILDING for the year ended December 31, 1999. This
financial statement is the responsibility of management. Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. These standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit also
includes assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Motorola
Building after acquisition by the Wells Operating Partnership, L.P. (on behalf
of Wells Real Estate Investment Trust, Inc.). The accompanying statement of
revenues over certain operating expenses was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the Motorola
Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Motorola Building for the year ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

/s/ Arthur Andersen LLP
-----------------------

Atlanta, Georgia
April 10, 2000

46

MOTOROLA BUILDING

STATEMENT OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1999

REVENUES:

Rental income                                        $1,817,366
Tenant reimbursements                                   290,287
----------
Total revenues                              2,107,653
----------

OPERATING EXPENSES:

Ground lease                                            243,826
Insurance                                                11,951
----------   
Total operating expenses                      255,777
----------

REVENUES OVER CERTAIN OPERATING EXPENSES                 $1,851,876
==========

The accompanying notes are an integral part of this statement.

47

MOTOROLA BUILDING

NOTES TO STATEMENT OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1999

1.     ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On March 29, 2000, the Wells Operating Partnership L.P. ("Wells OP"), a Delaware
Limited Partnership formed to acquire, own, lease, operate and manage real
properties on behalf of the Wells Real Estate Investment Trust, Inc., acquired
the Motorola Building from Ryan Companies US, Inc. ("Ryan"). Ryan is not an
affiliate of Wells OP. The purchase price of the Motorola Building was
$16,000,000. Wells OP incurred additional acquisition expenses in connection
with the purchase of the Motorola Building, including attorney's fees, recording
fees, loan fees, and other closing costs, of approximately $36,622. The funds
used to purchase the Motorola Building consisted of cash and proceeds obtained
from Wells OP's lines of credit with SouthTrust Bank, N.A. and Bank of America,
N.A. In addition, $5,000,000 in loan proceeds were provided by Ryan as seller
financing. Wells OP also assumed a ground lease with Research Park on 12.44
gross acres. The ground lease commenced November 19, 1997 and expires on
December 31, 2082.

The entire 133,225 rentable square feet of the Motorola Building is currently
under a net lease agreement (the "Lease") with Motorola, Inc. ("Motorola"). The
Lease was assigned to Wells OP at closing. The initial term of the Lease is
seven years, which commenced on August 17, 1998 and expires on August 31, 2005.
Motorola has the right to extend the Lease for four additional five-year periods
at the prevailing market rental rate. Under the lease, Motorola is required to
pay as additional rent the rent associated with the ground lease described above
and all real estate taxes, special assessments, utilities, insurance, and other
operating costs associated with the Motorola Building during the term of the
Lease. In addition, Motorola's responsible for repair and maintenance of the
roof, walls, structure, and foundation, landscaping, and the heating,
ventilating, air conditioning, mechanical, electrical, plumbing, and other
systems.

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over the
life of the lease.

2.     BASIS OF ACCOUNTING

The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis. This statement has been prepared in accordance
with the applicable rules and regulations of the Securities and Exchange
Commission for real estate properties acquired. Accordingly, the statement
excludes certain historical expenses, such as depreciation, interest, and
management fees, not comparable to the operations of the Motorola Building after
acquisition by Wells OP.

48

WELLS REAL ESTATE INVESTMENT TRUST, INC.

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The following unaudited pro forma balance sheet as of December 31, 1999 has been
prepared to give effect to the acquisition of the Dial Building, the ASML
Building, and the Motorola Building by the Wells Operating Partnership, L.P.
("Wells OP"), as if each acquisition occurred as of December 31, 1999. The
following unaudited pro forma statement of income for the year ended December
31, 1999 has been prepared to give effect to the acquisition of the Dial
Building, the ASML Building, and the Motorola Building by the Wells OP as if
each acquisition occurred on January 1, 1999.

Wells OP is a Delaware limited partnership that was organized to own and operate
properties on behalf of the Wells Real Estate Investment Trust, Inc. Wells Real
Estate Investment Trust, Inc. is the general partner of the Wells OP.

These unaudited pro forma financial statements are prepared for informational
purposes only and are not necessarily indicative of future results or of actual
results that would have been achieved had the acquisitions been consummated at
the beginning of the period presented.

As of December 31, 1999, the date of the accompanying pro forma balance sheet,
Wells OP held cash of $2,929,804. The additional cash used to purchase the Dial
Building, the ASML Building, and the Motorola Building, including deferred
project costs paid to Wells Capital Inc. (an affiliate of the Wells OP), were
raised through the issuance of additional shares subsequent to December 31,
1999, but prior to the acquisition date of March 29, 2000. This balance is
reflected in due to affiliate in the accompanying pro forma balance sheet.

49

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA BALANCE SHEET

DECEMBER 31, 1999

(Unaudited)

Wells Real                Pro Forma Adjustments
Estate      ---------------------------------------------------        Pro
Investment          Dial            ASML             Motorola           Forma
Trust, Inc.        Building        Building           Building           Total
ASSETS:                                         -------------   ----------------   -------------     --------------   --------------

REAL ESTATE ASSETS, at cost:
Land                                         $ 14,500,822     $ 3,500,000(a)     $         0        $         0     $ 18,146,772
145,950(b)
Buildings less accumulated
depreciation of $1,726,103                   81,507,040      10,785,712(a)      17,403,875(a)      16,036,622(a)   127,577,482
449,764(b)         725,742(b)         668,727(b)
Construction in progress                        12,561,459               0                  0                  0       12,561,459
------------     -----------        -----------        -----------     ------------
Total real estate assets              108,569,321      14,881,426         18,129,617         16,705,349      158,285,713

INVESTMENT IN JOINT VENTURES                       29,431,176               0                  0                  0       29,431,176

CASH AND CASH EQUIVALENTS                           2,929,804        (878,941)(a)     (1,054,729)(a)       (996,134)(a)            0

DEFERRED OFFERING COSTS                               964,941               0                  0                  0          964,941

DEFERRED PROJECT COSTS                                 28,093          (8,428)(b)        (10,113)(b)         (9,552)(b)            0

DUE FROM AFFILIATES                                   648,354               0                  0                  0          648,354

PREPAID EXPENSES AND OTHER ASSETS                   1,280,601               0                  0                  0        1,280,601
------------     -----------        -----------        -----------     ------------
Total assets                         $143,852,290     $13,994,057        $17,064,775        $15,699,663     $190,610,785
============     ===========        ===========        ===========     ============

liabilities and shareholders' equity

LIABILITIES:
Accounts payable and accrued expenses         $    461,300     $         0        $         0        $         0     $    461,300
Notes payable                                   23,929,228      12,150,000(a)      14,580,000(a)      13,770,000(a)    64,429,228
Dividends payable                                2,166,701               0                  0                  0        2,166,701
Due to affiliate                                 1,079,466       1,256,771(a)       1,769,146(a)       1,270,488(a)     7,337,961
587,266(b)         715,629(b)         659,175(b)
------------     -----------        -----------        -----------     ------------
Total liabilities                      27,636,695      13,994,057         17,064,775         15,699,663       74,395,190
------------     -----------        -----------        -----------     ------------
COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST OF UNIT HOLDER IN
OPERATING PARTNERSHIP                              200,000               0                  0                  0          200,000
------------     -----------        -----------        -----------     ------------
SHAREHOLDERS' EQUITY:
Common shares, $.01 par value;
40,000,000 shares authorized,
13,471,085 shares issued and
outstanding                                     134,710               0                  0                  0          134,710
Additional paid-in capital                     115,880,885               0                  0                  0      115,880,885
Retained earnings                                        0               0                  0                  0                0
------------     -----------        -----------        -----------     ------------
Total shareholders' equity            116,015,595               0                  0                  0      116,015,595
============     ===========        ===========        ===========     ============
Total liabilities and
shareholders' equity              $143,852,290     $13,994,057        $17,064,775        $15,699,663     $190,610,785
============     ===========        ===========        ===========     ============

(a)  Reflects Wells Real Estate Investment Trust Inc.'s purchase price
for the building.

(b)  Reflects deferred project costs allocated to the building
at approximately 4.17% of the purchase price.

50

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 1999

(Unaudited)

Wells Real                   Pro Forma Adjustments
Estate       -------------------------------------------------      Pro
Investment         Dial              ASML          Motorola          Forma
Trust, Inc.       Building          Building        Building          Total
-------------    ------------    ---------------   ---------------  ------------

REVENUES:
Rental income                              $4,735,184       $1,388,868(a)    $1,849,908(a)    $1,817,366(a)    $ 9,791,326
Equity in income of joint ventures          1,243,969                0                0                0         1,243,969
Interest income                               502,993                0                0                0           502,993
Other income                                   13,249                0                0                0            13,249
----------       ----------       ----------       ----------       -----------
6,495,395        1,388,868        1,849,908        1,817,366        11,551,537
----------       ----------       ----------       ----------       -----------
EXPENSES:
Depreciation                                1,726,103          449,419(b)       724,185(b)       668,214(b)      3,568,921
Interest                                      442,029          944,055(c)     1,132,866(c)       681,429(c)      3,650,379
450,000(d)
Operating costs, net of
reimbursements                             (74,666)               0          (25,890)(e)      (34,510)(e)      (135,066)
Management and leasing fees                   257,744           83,332(f)       104,114(f)        94,670(f)        539,860
General and administrative                    123,776                0                0                0           123,776
Legal and accounting                          115,471                0                0                0           115,471
Computer costs                                 11,368                0                0                0            11,368
Amortization of organizational costs            8,921                0                0                0             8,921
----------       ----------       ----------       ----------       -----------
2,610,746        1,476,806        1,936,275        1,859,803         7,883,630
----------       ----------       ----------       ----------       -----------
NET INCOME                                    $3,884,649       $  (87,938)      $  (86,367)      $  (42,437)      $ 3,667,907
==========       ==========       ==========       ==========       ===========
HISTORICAL EARNINGS PER SHARE (BASIC
AND DILUTED)                               $     0.50
==========
PRO FORMA EARNINGS PER SHARE (BASIC AND
DILUTED)                                                                                                       $      0.23(g)
===========

(a)  Rental income recognized on a straight-line basis.

(b)  Depreciation expense on the building using the straight-line
method and a 25-year life.

(c)  Interest expense on the $9,000,000 line-of-credit with SouthTrust
Bank, N.A. and the $26,500,000 line-of-credit with Bank of
America N.A., which bear interest at 7.77%. Total proceeds from
both lines-of-credit and the seller financing have been allocated
based on the properties' pro-rata portion of the total purchase
price.

(d)  Interest expense on the $5,000,000 note payable with Ryan
Companies U.S. Inc., the seller, which bears interest at 9%. The
seller financing specifically relates to the Motorola Building;
consequently, all of the related interest expense is allocated to
the Motorola Building.

(e)  Consists of ground lease and insurance expense, which total
$216,253 (ASML) and $255,777 (Motorola), net of tenant
reimbursements.

(f)  Management and leasing fees equal approximately 6% of rental
income.

(g)  As of the property acquisition date of March 29, 2000, Wells Real
Estate Investment Trust, Inc. had 16,104,224 shares of common
stock outstanding; pro forma earnings per share is calculated as
if these shares were outstanding for the entire year ended
December 31, 1999.

51

PRIOR PERFORMANCE TABLES

The following prior performance tables (Tables) provide information
relating to real estate investment programs sponsored by the advisor and its
affiliates (Wells Public Programs) which have investment objectives
substantially similar to Wells Real Estate Investment Trust, Inc. (Wells REIT).
(See "Investment Objectives and Criteria.") All of the Wells Public Programs,
except for the Wells REIT, have used substantial amounts of capital, and no
acquisition indebtedness, to acquire their properties.

Prospective investors should read these Tables carefully together with
the summary information concerning the Wells Public Programs as set forth in the
"Prior Performance Summary" section of this prospectus.

Investors in the Wells REIT will not own any interest in the other
Wells Public Programs and should not assume that they will experience returns,
if any, comparable to those experienced by investors in the Wells Public
Programs.

The advisor is responsible for the acquisition, operation, maintenance
and resale of the real estate properties. The financial results of the Wells
Public Programs thus provide an indication of the advisor's performance of its
obligations during the periods covered. However, general economic conditions
affecting the real estate industry and other factors contribute significantly to
financial results.

The following tables are included in this Supplement to the Prospectus:

Table I - Experience in Raising and Investing Funds (As a Percentage of
Investment)

Table II - Compensation to Sponsor (in Dollars)

Table III - Annual Operating Results of Wells Public Programs

Table IV (Results of completed programs) and Table V (sales or
disposals of property) have been omitted since none of the Wells Public Programs
have sold any of their properties to date.

Additional information relating to the acquisition of properties by the
Wells Public Programs is contained in Table VI, which is included in Part II of
the registration statement which the Wells REIT has filed with the Securities
and Exchange Commission. As described above, no Wells Public Program has sold or
disposed of any property held by it. Copies of any or all information will be
provided to prospective investors at no charge upon request.

The following are definitions of certain terms used in the Tables:

"Acquisition Fees" shall mean fees and commissions paid by a Wells
Public Program in connection with its purchase or development of a property,
except development fees paid to a person not affiliated with the Wells Public
Program or with a general partner or advisor of the Wells Public Program in
connection with the actual development of a project after acquisition of the
land by the Wells Public Program.

"Organization Expenses" shall include legal fees, accounting fees,
securities filing fees, printing and reproduction expenses and fees paid to the
sponsor in connection with the planning and formation of the Wells Public
Program.

"Underwriting Fees" shall include selling commissions and wholesaling
fees paid to broker-dealers for services provided by the broker-dealers during
the offering.

52

TABLE I
(UNAUDITED)

EXPERIENCE IN RAISING AND INVESTING FUNDS

This Table provides a summary of the experience of the sponsors of
Wells Public Programs for which offerings have been completed since December 31,
1996. Information is provided with regard to the manner in which the proceeds of
the offerings have been applied. Also set forth is information pertaining to the
timing and length of these offerings and the time period over which the proceeds
have been invested in the properties. All figures are as of December 31, 1999.

Wells Real        Wells Real          Wells Real         Wells Real Estate
Estate Fund        Estate Fund         Estate Fund           Investment
IX, L.P.           X, L.P.            XI, L.P.             Trust, Inc.
-----------        -----------        ------------         ---------------

Dollar Amount Raised                           $35,000,000/(3)/  $ 27,128,912/(4)/   $ 16,532,802/(5)/    $ 132,181,919/(6)/
===========       ============        ============         ============= 

Percentage Amount Raised                             100.0%/(3)/          100%/(4)/           100%/(5)/             100%/(6)/  

Less Offering Expenses                                           

Underwriting Fees                                   10.0%              10.0%                9.5%                  9.5%      
Organizational Expenses                              5.0%               5.0%                3.0%                  3.0%      
Reserves/(1)/                                        0.0%               0.0%                0.0%                  0.0%      
----               ----                ----                  ----       
Percent Available for Investment                    85.0%              85.0%               87.5%                 87.5%      

Acquisition and Development Costs
Prepaid Items and Fees related to

Purchase of Property                               2.0%               5.4%                0.0%                  1.1%     
Cash Down Payment                                   67.1%              60.5%               84.0%                 82.0%     
Acquisition Fees/(2)/                                4.0%               4.0%                3.5%                  3.5%     
Development and Construction Costs                  11.9%              14.1%                0.0%                  0.3%     

Reserve for Payment of Indebtedness                    0.0%               0.0%                0.0%                  0.0%
----               ----                ----                  ----  

Total Acquisition and Development Cost                85.0%              84.0%               87.5%                 86.9%

Percent Leveraged                                      0.0%               0.0%                0.0%                 17.6%
====               ====                ====  

Date Offering Began                               01/05/96           12/31/96            12/31/97              01/30/98

Length of Offering                                      12 mo.             12 mo.              12 mo.                23 mo.

Months to Invest 90% of Amount Available
for Investment (Measured from Beginning of              
Offering)                                               14 mo.             19 mo.              20 mo.                21 mo. 

Number of Investors as of 12/31/99                   2,120              1,812               1,345                 3,839

(1)      Does not include general partner contributions held as part of
reserves. 
(2)      Includes acquisition fees, real estate commissions,
general contractor fees and/or architectural fees paid to affiliates of
the general partners.
(3)      Total dollar amount registered and available to be offered was
$35,000,000. Wells Real Estate Fund IX, L.P. closed its offering on
December 30, 1996, and the total dollar amount raised was $35,000,000.
(4)      Total dollar amount registered and available to be offered was
$35,000,000. Wells Real Estate Fund X, L.P. closed its offering on
December 30, 1997, and the total dollar amount raised was $27,128,912.
(5)      Total dollar amount registered and available to be offered was
$35,000,000. Wells Real Estate Fund XI, L.P. closed its offering on
December 30, 1998, and the total dollar amount raised was $16,532,802.
(6)      Total dollar amount registered and available to be offered was
$165,000,000. Wells Real Estate Investment Trust, Inc. closed its
initial offering on December 20, 1999, and the total dollar amount
raised in its initial offering was $132,181,919.

53

TABLE II
(UNAUDITED)
COMPENSATION TO SPONSOR

The following sets forth the compensation received by our advisor or
their affiliates, including compensation paid out of offering proceeds and
compensation paid in connection with the ongoing operations of Wells Public
Programs having similar or identical investment objectives, including our
initial public offering the offerings of which have been completed since
December 31, 1996. None of these Wells Public Programs have sold or refinanced
any of its properties to date. All figures are as of December 31, 1999.

Wells Real
Wells Real    Wells Real     Wells Real      Estate          Other
Estate Fund   Estate Fund    Estate Fund   Investment       Public
IX, L.P.       X, L.P.       XI, L.P.     Trust, Inc.    Programs/(1)/
--------       -------       --------     ----------     -----------

Date Offering Commenced                          01/05/96      12/31/96       12/31/97        01/30/98             --

Dollar Amount Raised                           $35,000,000   $ 27,128,912   $ 16,532,802  $132,181,919   $206,241,095
to Sponsor from Proceeds of Offering:
Underwriting Fees/(2)/                       $   309,556   $    260,748   $    151,911  $  1,530,882   $    924,156
Acquisition Fees
Real Estate Commissions                              --             --             --            --             --
Acquisition and Advisory Fees/(3)/          $ 1,400,000   $  1,085,157   $    578,648  $  4,626,367   $ 10,159,399

Dollar Amount of Cash Generated from                                                                                  
Operations Before Deducting Payments 
to Sponsor/(4)/                                $ 7,064,631   $  4,262,319   $  2,133,705  $  8,002,132   $ 38,076,886 

Amount Paid to Sponsor from Operations:
Property Management Fee(1)                    $   169,661   $    105,410   $     22,200  $    129,208   $  1,434,957
Partnership Management Fee                             --             --             --            --             --
Reimbursements                                $   133,784   $    105,132   $     61,058  $    101,605   $  1,613,725
Leasing Commissions                           $   260,082   $    176,108   $     33,492  $    129,208   $  1,580,482
General Partner Distributions                          --             --             --            --             --
Other                                                  --             --             --            --             --

Dollar Amount of Property Sales and
Refinancing

Payments to Sponsors:                                                                                                
Cash                                                  --             --             --            --             -- 
Notes                                                 --             --             --            --             -- 

Amount Paid to Sponsor from Property Sales
and Refinancing:

Real Estate Commissions                               --             --             --            --             --
Incentive Fees                                        --             --             --            --             --
Other                                                 --             --             --            --             --

(1)      Includes compensation paid to general partners from Wells Real Estate
Fund I, Wells Real Estate Fund II, Wells Real Estate Fund II-OW, Wells
Real Estate Fund III, L.P., Wells Real Estate Fund IV, L.P., Wells Real
Estate Fund V, L.P., Wells Real Estate Fund VI, L.P., Wells Real Estate
Fund VII, L.P. and Wells Real Estate Fund VIII, L.P. during the past
three years. In addition to the amounts shown, affiliates of the
general partners of Wells Real Estate Fund I are entitled to certain
property management and leasing fees but have elected to defer the
payment of such deferred fees until a later year on properties owned by
Wells Real Estate Fund I. At December 31, 1999, the amount of such fees
due the general partners totaled $2,397,266.
(2)      Includes net underwriting compensation and commissions paid to Wells
Investment Securities, Inc. in connection with the offering which was
not reallowed to participating broker-dealers.
(3)      Fees paid to the advisor and its affiliates for acquisition and
advisory services in connection with the review and evaluation of
potential real property acquisitions.

54

(4)      Includes $487,134 in net cash provided by operating activities,
$6,013,970 in distributions to limited partners and $563,527 in
payments to sponsor for Wells Real Estate Fund IX, L.P.; $400,825 in
net cash provided by operating activities, $3,474,844 in distributions
to limited partners and $386,650 in payments to sponsor for Wells Real
Estate Fund X, L.P.; $(150,720) in net cash used by operating
activities, $2,167,675 in distributions to limited partners and
$116,750 in payments to sponsor for Wells Real Estate Fund XI, L.P.;
$3,732,726 in net cash provided by operating activities, $3,909,385 in
dividends and $360,021 in payments to sponsor for Wells Real Estate
Investment Trust, Inc.; and $2,167,163 in net cash provided by
operating activities, $31,280,559 in distributions to limited partners
and $4,629,164 in payments to sponsor for other public programs.

55

TABLE III
(UNAUDITED)

The following six tables set forth operating results of Wells Public
Programs the offerings of which have been completed since December 31, 1994. The
information relates only to public programs with investment objectives similar
to those of the Wells REIT. All figures are as of December 31 of the year
indicated.

56

TABLE III (UNAUDITED)
OPERATING RESULTS OF WELLS PUBLIC PROGRAMS
WELLS REAL ESTATE FUND VII, L.P.

1999            1998            1997        1996          1995
----            ----            ----        ----          ----

Gross Revenues/(1)/                                         $   982,630     $   846,306    $   816,237   $  543,291   $    925,246
Profit on Sale of Properties                                         --              --             --           --             --
Less: Operating Expenses/(2)/                                    85,273          85,722         76,838       84,265        114,953
Depreciation and Amortization/(3)/                          1,562           6,250          6,250        6,250          6,250
-----------     -----------    -----------   ----------   ------------ 
Net Income GAAP Basis/(4)/                                  $   895,795     $   754,334    $   733,149   $  452,776   $    804,043
===========     ===========    ===========   ==========   ============ 
Taxable Income: Operations                                  $ 1,255,666     $ 1,109,096    $ 1,008,368   $  657,443   $    812,402
===========     ===========    ===========   ==========   ============
Cash Generated (Used By):                                                                                                         
Operations                                                    (82,763)        (72,194)       (43,250)      20,883        431,728
Joint Ventures                                              1,777,010       1,770,742      1,420,126      760,628        424,304
-----------     -----------    -----------   ----------   ------------
$ 1,694,247     $ 1,698,548    $ 1,376,876   $  781,511   $    856,032
Less Cash Distributions to Investors:                                                                                             
Operating Cash Flow                                         1,688,290       1,636,158      1,376,876      781,511        856,032
Return of Capital                                                  --              --          2,709       10,805         22,064
Undistributed Cash Flow from Prior Year Operations                 --              --                          --          9,643
-----------     -----------    -----------   ----------   ------------
Cash Generated (Deficiency) after Cash Distributions        $     5,957     $    62,390    $    (2,709)  $  (10,805)  $    (31,707)

Special Items (not including sales and financing):                                                                                
Source of Funds:                                                                                                                
General Partner Contributions                                     --              --             --           --             --
Increase in Limited Partner Contributions                $        --     $        --      $      --   $       --   $    805,212
-----------     -----------    -----------   ----------   ------------
$     5,957     $    62,390     $   (2,709)  $  (10,805)  $    773,505
Use of Funds:                                                                                                                     
Sales Commissions and Offering Expenses                            --              --             --           --   $    244,207
Return of Original Limited Partner's Investment                    --              --             --           --            100
Property Acquisitions and Deferred Project Costs                    0         181,070        169,172      736,960     14,971,002
Cash Generated (Deficiency) after Cash                      -----------     -----------    -----------   ----------   ------------
Distributions and Special Items                           $     5,957     $  (118,680)   $  (171,881)  $ (747,765)  $(14,441,804)
===========     ===========    ===========   ==========   ============
Net Income and Distributions Data per $1,000 Invested:                                                                             
Net Income on GAAP Basis:                                                                                                        
Ordinary Income (Loss)                                            93              85             86           62             57 
- Operations Class A Units                                     (248)           (224)          (168)         (98)           (20)
- Operations Class B Units                                       --              --             --           --             -- 
Capital Gain (Loss)                                                                                                             
Tax and Distributions Data per $1,000 Invested:                                                                                    
Federal Income Tax Results:                                                                                                      
Ordinary Income (Loss)                                            89              82             78           55             55 
- Operations Class A Units                                     (144)           (134)          (111)         (58)           (16)
- Operations Class B Units                                       --              --             --           --             -- 
Capital Gain (Loss)                                                                                                             
Cash Distributions to Investors:                                                                                                   
Source (on GAAP Basis)                                              83              81             70           43             52 
- Investment Income Class A Units                                  --              --             --           --             -- 
- Return of Capital Class A Units                                  --              --             --           --             -- 
- Return of Capital Class B Units                                                                                                
Source (on Cash Basis)                                              83              81             70           42             51 
- Operations Class A Units                                         --              --             --            1              1
- Return of Capital Class A Units                                  --              --             --           --             --
- Operations Class B Units                                                                                                      
Source (on a Priority Distribution Basis)/(5)/                       67              65             54           29             30
- Investment income Class A Units                                   16              16             16           14             22
- Return of Capital Class A Units                                   --              --             --           --             --
- Return of Capital Class B Units                                                                                                
Amount (in Percentage Terms) Remaining Invested in                                                                                
Program Properties at the end of the Last Year                                                                                    
Reported in the Table                                               100%                                                          

57

(1)  Includes $403,325 in equity in earnings of joint ventures and $521,921 from
investment of reserve funds in 1995, $457,144 in equity in earnings of
joint ventures and $86,147 from investment of reserve funds in 1996,
$785,398 in equity in earnings of joint ventures and $30,839 from
investment of reserve funds in 1997, $839,037 in equity in earnings of
joint ventures and $7,269 from investment of reserve funds in 1998, and
$981,104 in equity in earnings of joint ventures and $1,526 from investment
of reserve funds in 1999. At December 31, 1999, the leasing status was 97%
including developed property in initial lease up.
(2)  Includes partnership administrative expenses.
(3)  Included in equity in earnings of joint ventures in gross revenues is
depreciation of $140,533 for 1995, $605,247 for 1996, $877,869 for 1997,
$955,245 for 1998, and $982,052 for 1999.
(4)  In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $950,826 to Class A Limited
Partners, $(146,503) to Class B Limited Partners and $(280) to the General
Partners for 1995; $1,062,605 to Class A Limited Partners, $(609,829) to
Class B Limited Partners and $0 to the General Partners for 1996;
$1,615,965 to class A Limited Partners, $(882,816) to Class B Limited
Partners and $0 to the General Partners for 1997; $1,704,213 to Class A
Limited Partners, $(949,879) to Class B Limited Partners and $0 to the
General Partners for 1998; and $1,879,410 to Class A Limited Partners,
$(983,615) to Class B Limited Partners and $0 to the General Partners for
1999.
(5)  Pursuant to the terms of the partnership agreement, an amount equal to the
cash distributions paid to Class A Limited Partners is payable as priority
distributions out of the first available net proceeds from the sale of
partnership properties to Class B Limited Partners. The amount of cash
distributions paid per unit to Class A Limited Partners is shown as a
return of capital to the extent of such priority distributions payable to
Class B Limited Partners. As of December 31, 1999, the aggregate amount of
such priority distributions payable to Class B Limited Partners totaled
$1,680,730.

58

TABLE III (UNAUDITED)
OPERATING RESULTS OF WELLS PUBLIC PROGRAMS
WELLS REAL ESTATE FUND VIII, L.P.

1999           1998          1997           1996           1995
----           ----          ----           ----           ----

Gross Revenues/(1)/                                        $ 1,360,497    $  1,362,513  $  1,204,018    $  1,057,694    $  402,428
Profit on Sale of Properties                                        --              --            --              --            --
Less: Operating Expenses/(2)/                                   87,301          87,092        95,201         114,854       122,264
Depreciation and Amortization/(3)/                         6,250           6,250         6,250           6,250         6,250
-----------    ------------  ------------    ------------    ---------- 
Net Income GAAP Basis/(4)/                                   1,266,946       1,269,171  $  1,102,567    $    936,590       273,914
===========    ============  ============    ============    ==========
Taxable Income: Operations                                   1,672,844       1,683,192  $  1,213,524    $  1,001,974       404,348
===========    ============  ============    ============    ==========
Cash Generated (Used By):            
Operations                                                   (87,298)        (63,946)        7,909         623,268       204,790
Joint Ventures                                             2,558,623       2,293,504     1,229,282         279,984        20,287
-----------    ------------  ------------    ------------    ---------- 
$ 2,471,325    $  2,229,558  $  1,237,191    $    903,252       225,077
Less Cash Distributions to Investors:
Operating Cash Flow                                        2,379,215       2,218,400     1,237,191         903,252            --
Return of Capital                                                 --              --       183,315           2,443            --
Undistributed Cash Flow from Prior Year                           --              --            --         225,077            --
-----------    ------------  ------------    ------------    ---------- 
Operations                                                 $    92,110    $     11,158  $   (183,315)   $   (227,520)      225,077
Cash Generated (Deficiency) after Cash
Distributions

Special Items (not including sales and financing):

Source of Funds:                                       
General Partner Contributions                                    --              --            --              --            -- 
Increase in Limited Partner Contributions/(5)/                   --              --            --       1,898,147    30,144,542
-----------    ------------  ------------    ------------    ---------- 
$              $     11,158  $   (183,315)   $  1,670,627    30,369,619
-----------

Use of Funds:                                                        
Sales Commissions and Offering Expenses                           --              --            --         464,760     4,310,028
Return of Limited Partner's Investment                            --              --         8,600              --            -- 
Property Acquisitions and Deferred                                 
Project Costs                                                    0       1,850,859    10,675,811       7,931,566     6,618,273 
-----------    ------------  ------------    ------------    ----------  
Cash Generated (Deficiency) after Cash                    
Distributions and Special Items                            $    92,110    $ (1,839,701) $(10,867,726)   $ (6,725,699)   19,441,318 
===========    ============  ============    ============    ==========
Net Income and Distributions Data per
$1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                      91              91            73              46            28
- Operations Class B Units                                    (247)           (212)         (150)            (47)           (3)
Capital Gain (Loss)                                              --              --            --              --            --

Tax and Distributions Data per $1,000                                
Invested:                                                            
Federal Income Tax Results:                                        
Ordinary Income (Loss)                                           88              89            65              46            17
- Operations Class A Units                                     154            (131)          (95)            (33)           (3)
- Operations Class B Units                                      --              --            --              --            --
Capital Gain (Loss)                                               

Cash Distributions to Investors:                                     
Source (on GAAP Basis)                                              
- Investment Income Class A Units                                 87              83            54              43            --
- Return of Capital Class A Units                                 --              --            --              --            --
- Return of Capital Class B Units                                 --              --            --              --            --
Source (on Cash Basis)                                              
- Operations Class A Units                                        87              83            47              43            --
- Return of Capital Class A Units                                 --              --             7               0            --
- Operations Class B Units                                        --              --            --              --            --
Source (on a Priority Distribution Basis)/(5)/                        
- Investment Income Class A Units                                  70              67            42              33            --
- Return of Capital Class A Units                                  17              16            12              10            --
- Return of Capital Class B Units                                  --              --            --              --            --

Amount (in Percentage Terms) Remaining
Invested in Program Properties at the end                          100%
of the Last Year Reported in the Table

59

(1)  Includes $28,377 in equity in earnings of joint ventures and $374,051 from
investment of reserve funds in 1995, $241,819 in equity in earnings of
joint ventures and $815,875 from investment of reserve funds in 1996,
$1,034,907 in equity in earnings of joint ventures and $169,111 from
investment of reserve funds in 1997, $1,346,367 in equity in earnings of
joint ventures and $16,146 from investment of reserve funds in 1998, and
$1,360,494 in equity in earnings of joint ventures and $3 from investment
of reserve funds in 1999. At December 31, 1999, the leasing status was 98%
including developed property in initial lease up.
(2)  Includes partnership administrative expenses.
(3)  Included in equity in earnings of joint ventures in gross revenues is
depreciation of $14,058 for 1995, $265,259 for 1996, $841,666 for 1997,
$1,157,355 for 1998, and $1,209,171 for 1999.
(4)  In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $294,221 to Class A Limited
Partners, $(20,104) to Class B Limited Partners and $(203) to the General
Partners for 1995; $1,207,540 to Class A Limited Partners, $(270,653) to
Class B Limited Partners and $(297) to the General Partners for 1996;
$1,947,536 to Class A Limited Partners, $(844,969) to Class B Limited
Partners and $0 to the General Partners for 1997; $2,431,246 to Class A
Limited Partners, $(1,162,075) to Class B Limited Partners and $0 to the
General Partners for 1998; and $2,481,559 to Class A Limited Partners,
$(1,214,613) to Class B Limited Partners and $0 to the General Partners for
1999.
(5)  Pursuant to the terms of the partnership agreement, an amount equal to the
cash distributions paid to Class A Limited Partners is payable as priority
distributions out of the first available net proceeds from the sale of
partnership properties to Class B Limited Partners. The amount of cash
distributions paid per unit to Class A Limited Partners is shown as a
return of capital to the extent of such priority distributions payable to
Class B Limited Partners. As of December 31, 1999, the aggregate amount of
such priority distributions payable to Class B Limited Partners totaled
$1,464,810.

60

TABLE III (UNAUDITED)
OPERATING RESULTS OF WELLS PUBLIC PROGRAMS
WELLS REAL ESTATE FUND IX, L.P.

1999           1998            1997             1996         1995
----           ----            ----             ----         ----

Gross Revenues/(1)/                                   $ 1,593,734    $ 1,561,456    $  1,199,300     $   406,891       N/A
Profit on Sale of Properties                                    -              -               -               -
Less: Operating Expenses/(2)/                              90,903        105,251         101,284         101,885
Depreciation and Amortization/(3)/                   12,500          6,250           6,250           6,250
-----------    ------------     -----------
Net Income GAAP Basis/(4)/                            $ 1,490,331    $ 1,449,955    $  1,091,766     $   298,756
===========    ===========    ============     ===========
Taxable Income: Operations                            $ 1,924,542    $ 1,906,011    $  1,083,824     $   304,552
===========    ===========    ============     ===========
Cash Generated (Used By):
Operations                                          $   (94.403)   $    80,147    $    501,390     $   151,150
Joint Ventures                                        2,814,870      2,125,489         527,390               -
-----------    -----------    ------------     -----------
$ 2,720,467    $ 2,205,636    $  1,028,780     $   151,150
Less Cash Distributions to Investors:                                               
Operating Cash Flow                                   2,720,467      2,188,189       1,028,780         149,425
Return of Capital                                        15,528              -    $     41,834     $         -
Undistributed Cash Flow From Prior Year Operations       17,447              -           1,725               -
-----------    -----------    ------------     -----------
Cash Generated (Deficiency) after Cash Distributions  $   (32,975)   $    17,447    $    (43,559)    $     1,725

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                -              -               -               -
Increase in Limited Partner Contributions                    -              -               -      35,000,000
-----------    -----------    ------------     -----------
$   (32,975)   $    17,447    $    (43,559)    $35,001,725
Use of Funds:                                         
Sales Commissions and Offering Expenses                       -              -         323,039       4,900,321
Return of Original Limited Partner's Investment               -              -             100               -
Property Acquisitions and Deferred Project Costs        190,853      9,455,554      13,427,158       6,544,019
-----------    -----------    ------------     -----------
Cash Generated (Deficiency) after Cash                   
Distributions and Special Items                     $  (223,828)   $(9,438,107)   $(13,793,856)    $23,557,385
===========    ===========    ============     ===========

Net Income and Distributions Data per $1,000
Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)                                
- Operations Class A Units                                 89             88              53              28 
- Operations Class B Units                               (272)          (218)            (77)            (11) 
Capital Gain (Loss)                                          -              -               -               -   

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                 86             85              46              26
- Operations Class B Units                               (164)          (123)            (47)            (48)
Capital Gain (Loss)                                          -              -               -               -

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                            88             73              36              13
- Return of Capital Class A Units                             2              -               -               -
- Return of Capital Class B Units                             -              -               -               -
Source (on Cash Basis )
- Operations Class A Units                                   89             73              35              13
- Return of Capital Class A Units                             1              -               1               -
- Operations Class B Units                                    -              -               -               -
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                             77             61              29              10
- Return of Capital Class A Units                             13             12               7               3
- Return of Capital Class B Units                              -              -               -               -

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year
Reported in the Table                                         100%

61

(1)  Includes $23,007 in equity in earnings of joint ventures and $383,884 from
investment of reserve funds in 1996, and $593,914 in equity in earnings of
joint ventures and $605,386 from investment of reserve funds in 1997,
$1,481,869 in equity in earnings of joint ventures and $79,587 from
investment of reserve funds in 1998, and $1,593,734 in equity in earnings
of joint ventures and $0 from investment of reserve funds in 1999. At
December 31, 1999, the leasing status was 100% including developed property
in initial lease up.

(2)  Includes partnership administrative expenses.

(3)  Included in equity in earnings of joint ventures in gross revenues is
depreciation of $25,286 for 1996, $469,126 for 1997, $1,143,407 for 1998,
and $1,210,939 for 1999.

(4)  In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $330,270 to Class A Limited
Partners, $(31,220) to Class B Limited Partners and $(294) to the General
Partners for 1996; $1,564,778 to Class A Limited Partners, $(472,806) to
Class B Limited Partners and $(206) to the General Partners for 1997;
$2,597,938 to Class A Limited Partners, $(1,147,983) to Class B Limited
Partners and $0 to the General Partners for 1998; and $2,713,636 to Class A
Limited Partners, $(1,223,305) to Class B Limited Partners and $0 to the
General Partners for 1999.

(5)  Pursuant to the terms of the partnership agreement, an amount equal to the
cash distributions paid to Class A Limited Partners is payable as priority
distributions out of the first available net proceeds from the sale of
partnership properties to Class B Limited Partners. The amount of cash
distributions paid per unit to Class A Limited Partners is shown as a
return of capital to the extent of such priority distributions payable to
Class B Limited Partners. As of December 31, 1999, the aggregate amount of
such priority distributions payable to Class B Limited Partners totaled
$993,010.

62

TABLE III (UNAUDITED)
OPERATING RESULTS OF WELLS PUBLIC PROGRAMS
WELLS REAL ESTATE FUND X, L.P.

1999             1998            1997           1996         1995        
----             ----            ----           ----         ----       

Gross Revenues/(1)/                              $  1,309,281    $  1,204,597    $    372,507            N/A          N/A       
Profit on Sale of Properties                               --              --              --                                   
Less: Operating Expenses/(2)/                          98,213          99,034          88,232                                   
Depreciation and Amortization/(3)/               18,750          55,234           6,250                                   
------------    ------------    ------------                                     
Net Income GAAP Basis(4)                         $  1,192,318    $  1,050,329    $    278,025                                   
============    ============    ============                                   
Taxable Income: Operations                       $  1,449,771    $  1,277,016    $    382,543                                   
============    ============    ============                                   
Cash Generated (Used By):                                                                                                       
Operations                                          (99,862)   $    300,019    $    200,668                                   
Joint Ventures                                    2,175,915         886,846              --                                   
------------    ------------    ------------                                     
2,076,053    $  1,186,865    $    200,668                                   
Less Cash Distributions to Investors:                                                                                           
Operating Cash Flow                               2,067,801       1,186,865              --                                   
Return of Capital                                        --          19,510              --                                   
Undistributed Cash Flow From Prior Year                  --         200,668              --                                   
------------    ------------    ------------                                     
Operations                                       $      8,252    $   (220,178)   $    200,668                                   
Cash Generated (Deficiency) after Cash                                                                                          
Distributions                                                                                                                   

Special Items (not including sales and                                                                                          
financing):                                                                                                                     
Source of Funds:                                                                                                              
General Partner Contributions                           --              --              --                                   
Increase in Limited Partner Contributions               --              --      27,128,912                                     
------------    ------------    ------------                                   
$      8,252    $   (220,178)   $ 27,329,580                                   

Use of Funds:                                                                                                                      
Sales Commissions and Offering Expenses                  --         300,725       3,737,363                                      
Return of Original Limited Partner's                                                                                            
Investment                                              --              --             100                                      
Property Acquisitions and Deferred Project                0      17,613,067       5,188,485                                       
------------    ------------    ------------    
Costs                                                                                             
Cash Generated (Deficiency) after Cash           $      8,252    $(18,133,970    $ 18,403,632     
============    ============    ============     
Distributions and Special Items

Net Income and Distributions Data per $1,000               
Invested:                                                                                                                       
Net Income on GAAP Basis:                                                                                                      
Ordinary Income (Loss)                                    97              85              28                                     
- Operations Class A Units                              (160)           (123)             (9)                                     
- Operations Class B Units                                --              --              --                                      
Capital Gain (Loss)                                                                                                            

Tax and Distributions Data per $1,000                                                                                           
Invested:                                                                                                                       
Federal Income Tax Results:                                                                                                    
Ordinary Income (Loss)                                                                                                             
- Operations Class A Units                                92              78              35                                       
- Operations Class B Units                              (100)            (64)              0                                       
Capital Gain (Loss)                                        --              --              --                                       

Cash Distributions to Investors:                                                                                                
Source (on GAAP Basis)                                                                                                         
- Investment Income Class A Units                         95              66              --                                    
- Return of Capital Class A Units                         --              --              --                                    
- Return of Capital Class B Units                         --              --              --                                    
Source (on Cash Basis)                                                                                                          
- Operations Class A Units                                95              56              --                                    
- Return of Capital Class A Units                         --              10              --                                    
- Operations Class B Units                                --              --              --                                    
Source (on a Priority Distribution Basis)/(5)/                                                                                   
- Investment Income Class A Units                         71              48              --                                    
- Return of Capital Class A Units                         24              18              --                                    
- Return of Capital Class B Units                         --              --              --                                    

Amount (in Percentage Terms) Remaining                                                                                          
Invested in Program Properties at the end                                                                                        
of the Last Year Reported in the Table                    100% 

63

(1)  Includes $(10,035) in equity in earnings of joint ventures and $382,542
from investment of reserve funds in 1997, $869,555 in equity in earnings of
joint ventures, $120,000 in rental income and $215,042 from investment of
reserve funds in 1998, and $1,309,281 in equity in earnings of joint
ventures and $0 from investment of reserve funds in 1999. At December 31,
1999, the leasing status was 100% including developed property in initial
lease up.
(2)  Includes partnership administrative expenses.
(3)  Included in equity in earnings of joint ventures in gross revenues is
depreciation of $18,675 for 1997, $674,986 for 1998, and $891,911 for 1999.
(4)  In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $302,862 to Class A Limited
Partners, $(24,675) to Class B Limited Partners and $(162) to the General
Partners for 1997, $1,779,191 to Class A Limited Partners, $(728,524) to
Class B Limited Partners and $(338) to General Partners for 1998; and
$2,084,229 to Class A Limited Partners, ($891,911) to Class B Limited
Partners and $0 to the General Partners for 1999.
(5)  Pursuant to the terms of the partnership agreement, an amount equal to the
cash distributions paid to Class A Limited Partners is payable as priority
distributions out of the first available net proceeds from the sale of
partnership properties to Class B Limited Partners. The amount of cash
distributions paid per unit to Class A Limited Partners is shown as a
return of capital to the extent of such priority distributions payable to
Class B Limited Partners. As of December 31, 1999, the aggregate amount of
such priority distributions payable to Class B Limited Partners totaled
$909,527.

64

TABLE III (UNAUDITED)
OPERATING RESULTS OF WELLS PUBLIC PROGRAMS
WELLS REAL ESTATE FUND XI, L.P.

1999            1998        1997          1996         1995
----            ----        ----          ----         ----

Gross Revenues/(1)/                                    $   766,586     $     262,729     N/A           N/A          N/A
Profit on Sale of Properties                                    --                --
Less: Operating Expenses/(2)/                              111,058           113,184
Depreciation and Amortization/(3)/                    25,000             6,250
-------------
Net Income GAAP Basis/(4)/                             $   630,528     $     143,295
===========     =============
Taxable Income: Operations                             $   704,108     $     177,692
-----------     -------------
Cash Generated (Used By):
Operations                                                40,906           (50,858)
Joint Ventures                                           705,394           102,662
-------------
746,300            51,804
Less Cash Distributions to Investors:
Operating Cash Flow                                      746,300            51,804
Return of Capital                                         49,761            48,070
Undistributed Cash Flow From Prior Year                       --               --
-----------     -------------
Operations                                             $   (49,761)    $     (48,070)
Cash Generated (Deficiency) after Cash
Distributions

Special Items (not including sales and financing):

Source of Funds:                                     
General Partner Contributions                                --                --

Increase in Limited Partner Contributions                              16,532,801 
-----------     -------------
$   (49,761)    $  16,484,731

Use of Funds:                                        
Sales Commissions and Offering Expenses                  214,609         1,779,661     
Return of Original Limited Partner's Investment              100                --                          
Property Acquisitions and Deferred Project Costs       9,005,979         5,412,870
-----------     -------------
Cash Generated (Deficiency) after Cash
Distributions and Special Items                        $ 9,270,449     $   9,292,200
===========     =============

Net Income and Distributions Data per
$1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)                                       77                50
- Operations Class A Units                                (112)              (77)
- Operations Class B Units                                  --                --
Capital Gain (Loss)

Tax and Distributions Data per $1,000
Invested:
Federal Income Tax Results:
Ordinary Income (Loss)                                       71                18
- Operations Class A Units                                 (73)              (17)
- Operations Class B Units                                  --                --
Capital Gain (Loss)

Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                             60                14
- Return of Capital Class A Units                             --                --
- Return of Capital Class B Units                             --                --
Source (on Cash Basis)
- Operations Class A Units                                    56                 7
- Return of Capital Class A Units                              4                 7
- Operations Class B Units                                    --                --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                              46                11
- Return of Capital Class A Units                              14                 3
- Return of Capital Class B Units                              --                --

Amount (in Percentage Terms) Remaining
Invested in Program Properties at the end                      100%
of the Last Year Reported in the Table

65

(1)  Includes $142,163 in equity in earnings of joint ventures and $120,566 from
investment of reserve funds in 1998, and $607,579 in equity in earnings of
joint ventures and $159,007 from investment of reserve funds for 1999. At
December 31, 1999, the leasing status was 100% including developed property
in initial lease up.
(2)  Includes partnership administrative expenses.
(3)  Included in equity in earnings of joint ventures in gross revenues is
depreciation of $105,458 for 1998, and $353,840 for 1999.
(4)  In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $254,862 to Class A Limited
Partners, $(111,067) to Class B Limited Partners and $(500) to General
Partners for 1998; and $1,009,368 to Class A Limited Partners, $(378,840)
to Class B Limited Partners and $0 to the General Partners for 1999.
(5)  Pursuant to the terms of the partnership agreement, an amount equal to the
cash distributions paid to Class A Limited Partners is payable as priority
distributions out of the first available net proceeds from the sale of
partnership properties to Class B Limited Partners. The amount of cash
distributions paid per unit to Class A Limited Partners is shown as a
return of capital to the extent of such priority distributions payable to
Class B Limited Partners. As of December 31, 1999, the aggregate amount of
such priority distributions payable to Class B Limited Partners totaled
$213,006.

66

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Items 31 through 35 and Item 37 of Part II are incorporated by reference to the
Registrant's Registration Statement, as amended to date, Commission File No.
333-83933.

Item 36        Financial Statements and Exhibits.
--------------------------------- 

(a)  Financial Statements:
-------------------- 

The following financial statements of Wells Real Estate
Investment Trust, Inc. are filed as part of this
Registration Statement and included in the Prospectus:

Audited Financial Statements
----------------------------

(1)  Report of Independent Public Accountants,
(2)  Consolidated Balance Sheets as of December 31,
1998 and December 31, 1997,
(3)  Consolidated Statement of Income for the year
ended December 31, 1998,
(4)  Consolidated Statement of Stockholders' Equity for
the year ended December 31, 1998,
(5)  Consolidated Statement of Cash Flows for the year
ended December 31, 1998, and
(6)  Notes to Consolidated Financial Statements.

Interim (Unaudited) Financial Statements
----------------------------------------

(1)  Balance Sheets as of September 30, 1999 and
December 31, 1998,
(2)  Statements of Income for the three months ended
September 30, 1999 and 1998, the nine months ended
September 30, 1999 and the four months ended
September 30, 1998,
(3)  Statements of Shareholders' Equity for the nine
months ended September 30, 1999 and the year ended
December 31, 1998,
(4)  Statements of Cash Flows for the nine months ended
September 30, 1999 and the four months ended
September 30, 1998, and
(5)  Condensed Notes to Financial Statements.

The following financial statements of Fund IX and X
Associates are filed as part of this Registration Statement
and are included in the Prospectus:

(1)  Report of Independent Public Accountants,
(2)  Balance Sheets as of March 31, 1998 (Unaudited)
and December 31, 1997 (Audited),
(3)  Statements of Income (Loss) for the three months
ended March 31, 1998 (Unaudited) and the period
from inception (March 20, 1997) to December 31,
1997 (Audited),

II-1

(4)   Statements of Partners' Capital for the three months
ended March 31, 1998 (Unaudited) and the period from
inception (March 20, 1997) to December 31, 1997
(Audited),
(5)   Statements of Cash Flows for the three months ended
March 31, 1998 (Unaudited) and the period from
inception (March 20, 1997) to December 31, 1997
(Audited), and
(6)   Notes to Financial Statements.

The following financial statements relating to the acquisition of
the Lucent Building by the Fund IX-X-XI-REIT Joint Venture are
filed as part of this Registration Statement and are included in
the Prospectus:

(1)   Statement of Revenues Over Certain Operating Expenses
for the three months ended March 31, 1998 (Unaudited),
and
(2)   Notes to Statement of Revenues Over Certain Operating
Expenses for the three months ended March 31, 1998
(Unaudited).

The following financial statements relating to the acquisition of
the Iomega Building by the Fund IX-X-XI-REIT Joint Venture are
filed as part of this Registration Statement and are included in
the Prospectus:

(1)   Report of Independent Public Accountants,
(2)   Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1997 (Audited) and for
the six months ended June 30, 1998 (Unaudited), and
(3)   Notes to Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1997
(Audited) and for the six months ended June 30, 1998
(Unaudited).

The following financial statements relating to the acquisition of
the Fairchild Building by Wells/Fremont Associates are filed as
part of this Registration Statement and are included in the
Prospectus:

(1)   Report of Independent Public Accountants,
(2)   Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1997 (Audited) and for
the six months ended June 30, 1998 (Unaudited), and
(3)   Notes to Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1997
(Audited) and for the six months ended June 30, 1998
(Unaudited).

II-2

The following financial statements relating to the acquisition of
the Cort Furniture Building by Wells/Orange County Associates are
filed as part of this Registration Statement and are included in
the Prospectus:

(1)   Report of Independent Public Accountants,
(2)   Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1997 (Audited) and for
the six months ended June 30, 1998 (Unaudited), and
(3)   Notes to Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1997
(Audited) and for the six months ended June 30, 1998
(Unaudited).

The following financial statements relating to the acquisition of
the Vanguard Cellular Building by Wells Operating Partnership,
L.P. are filed as part of this Registration Statement and are
included in the Prospectus:

(1)   Report of Independent Public Accountants,
(2)   Statement of Revenues Over Certain Operating Expenses
for the period from inception (November 16, 1998) to
December 31, 1998, and
(3)   Notes to Statement of Revenues Over Certain Operating
Expenses for the period from inception (November 16,
1998) to December 31, 1998.

The following financial statements relating to the acquisition of
the EYBL CarTex Building by the Fund XI-FundXII-REIT Joint
Venture are filed as part of this Registration Statement and are
included in the Prospectus:

(1)   Report of Independent Public Accountants,
(2)   Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1998 (Audited) and for
the three months ended March 31, 1999 (Unaudited), and
(3)   Notes to Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1998
(Audited) and for the three months ended March 31,
1999 (Unaudited).

The following financial statements relating to the acquisition of
the Sprint Building by the Fund XI-FundXII-REIT Joint Venture are
filed as part of this Registration Statement and are included in
the Prospectus:

(1)   Report of Independent Public Accountants,
(2)   Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1998 (Audited) and for
the three months ended March 31, 1999 (Unaudited), and
(3)   Notes to Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1998
(Audited) and for the three months ended March 31,
1999 (Unaudited).

II-3

The following financial statements relating to the acquisition of
the Johnson Matthey Building by the Fund XI-FundXII-REIT Joint
Venture are filed as part of this Registration Statement and are
included in the Prospectus:

(1)   Report of Independent Public Accountants,
(2)   Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1998 (Audited) and for
the six months ended June 30, 1999 (Unaudited), and
(3)   Notes to Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1998
(Audited) and for the six months ended June 30, 1999
(Unaudited).

The following financial statements relating to the acquisition of
the Videojet Building by Wells OP are filed as part of this
Registration Statement and are included in the Prospectus:

(1)   Report of Independent Public Accountants,
(2)   Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1998 (Audited) and for
the six months ended June 30, 1999 (Unaudited), and
(3)   Notes to Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1998
(Audited) and for the six months ended June 30, 1999
(Unaudited).

The following financial statements relating to the acquisition of
the Gartner Building by the Fund XI-FundXII-REIT Joint Venture
are filed as part of this Registration Statement and are included
in the Prospectus:

(1)   Report of Independent Public Accountants,
(2)   Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1998 (Audited) and for
the six months ended June 30, 1999 (Unaudited), and
(3)   Notes to Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1998
(Audited) and for the six months ended June 30, 1999
(Unaudited).

The following unaudited pro forma financial statements of Wells
Real Estate Investment Trust, Inc. are filed as part of this
Registration Statement and are included in the Prospectus:

(1)   Summary of Unaudited Pro Forma Financial Statements,
(2)   Pro Forma Balance Sheet as of September 30, 1999,
(3)   Pro Forma Statement of Income for the year ended
December 31, 1998, and
(4)   Pro Forma Statement of Income for the nine month
period ended September 30, 1999.

II-4

The following unaudited pro forma financial statements of Wells
Real Estate Investment Trust, Inc. relating to the Cinemark
Building and the Metris Building are filed as part of this
Registration Statement and are included in Supplement No. 2 to
the Prospectus:

(1)   Summary of Unaudited Pro Forma Balance Sheet, and
(2)   Pro Forma Balance Sheet as of September 30, 1999.

The following financial statements of Wells Real Estate
Investment Trust, Inc. are filed as part of this Registration
Statement and are included in Supplement No. 3 to the Prospectus:

Audited Financial Statements
----------------------------

(1)   Report of Independent public Accountants.
(2)   Consolidated Balance Sheets as of December 31, 1999
and December 31, 1998,
(3)   Consolidated Statements of Income for the years ended 
December 31, 1999 and December 31, 1998,
(4)   Consolidated Statements of Shareholders' Equity for
the years ended December 31, 1999 and December 31,
1998,
(5)   Consolidated Statements of Cash Flows for the years 
ended December 31, 1999 and December 31, 1998 and 
(6)   Notes to Consolidated Financial Statements.

The following financial statements relating to the acquisition of
the Dial Building by Wells OP are filed as part of this
Registration Statement and are included in Supplement No. 3 to
the Prospectus:

(1)   Report of Independent Public Accountants,
(2)   Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1999, and
(3)   Notes to Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1999.

The following financial statements relating to the acquisition of
the ASML Building by Wells OP are filed as part of this
Registration Statement and are included in Supplement No. 3 to
the Prospectus:

(1)   Report of Independent Public Accountants,
(2)   Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1999, and
(3)   Notes to Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1999.

II-5

The following financial statements relating to the
acquisition of the Motorola Building by Wells OP are filed
as part of this Registration Statement and are included in
Supplement No. 3 to the Prospectus:

(1)  Report of Independent Public Accountants,
(2)  Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1999, and
(3)  Notes to Statement of Revenues Over Certain
Operating Expenses for the year ended December 31,
1999.

The following unaudited pro forma financial statements of
Wells Real Estate Investment Trust, Inc. are filed as part
of this Registration Statement and are included in
Supplement No. 3 to the Prospectus:

(1)  Summary of Unaudited Pro Forma Financial
Statements,
(2)  Pro Forma Balance Sheet as of December 31, 1999,
and
(3)  Pro Forma Statement of Income for the year ended
December 31, 1999.

(b)  Exhibits (See Exhibit Index):
---------------------------- 

Exhibit No.    Description
-----------    -----------

1.1            Form of Dealer Manager Agreement (previously filed in and
incorporated by reference to Amendment No. 1 to the Registrant's
Registration Statement on Form S-11, Commission File No. 333-
83933, filed on November 3, 1999)

1.2            Form of Warrant Purchase Agreement (previously filed in and out
by reference to Amendment No. 1 to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed on
November 3, 1999)

3.1            Amended and Restated Articles of Incorporation (previously filed
in and incorporated by reference to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed on
July 28, 1999)

3.2            Form of Bylaws (previously filed in and incorporated by reference
to Amendment No. 4 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-32099, filed on January 23,
1998)

3.3            Amendment No. 1 to Bylaws (previously filed in and incorporated
by to Post-Effective Amendment No. 5 to the Registrant's
Registration Statement on Form S-11, Commission File No. 333-
32099, filed on April 15, 1999)

4.1            Form of Subscription Agreement and Subscription Agreement
Signature Page (included as Exhibit A to Prospectus)

4.2            Amended and Restated Dividend Reinvestment Plan (included as
Exhibit B to Prospectus)

II-6

5.1       Opinion of Holland & Knight LLP as to legality of securities
(previously filed in and incorporated by reference to Amendment No. 1
to the Registrant's Registration Statement on Form S-11, Commission
File No. 333-83933, filed on November 3, 1999)

8.1       Opinion of Holland & Knight LLP as to tax matters (previously filed in
and incorporated by reference to Amendment No. 1 to the Registrant's
Registration Statement on Form S-11, Commission File No. 333-83933,
filed on November 3, 1999)

8.2       Opinion of Holland & Knight LLP as to ERISA matters (previously filed
in and incorporated by reference to Amendment No. 1 to the
Registrant's Registration Statement on Form S-11, Commission File No.
333-83933, filed on November 3, 1999)

10.1      Agreement of Limited Partnership of Wells Operating Partnership, L.P.
(previously filed in and incorporated by reference to Amendment No. 4
to the Registrant's Registration Statement on Form S-11, Commission
File No. 333-32099, filed on January 23, 1998)

10.2      Escrow Agreement between Registrant and Bank of America, N.A.
(previously filed in and incorporated by reference to Amendment No. 1
to the Registrant's Registration Statement on Form S-11, Commission
File No. 333-83933, filed on November 3, 1999)

10.3      Advisory Agreement dated January 30, 1999 (previously filed in and
incorporated by reference to Post-Effective Amendment No. 5 to the
Registrant's Registration Statement on Form S-11, Commission File No.
333-32099, filed on April 15, 1999)

10.4      Management Agreement between Registrant and Wells Management Company,
Inc. (previously filed in and incorporated by reference to
Registrant's Registration Statement on Form S-11, Commission File No.
333-83933, filed on July 28, 1999)

10.5      Leasing and Tenant Coordinating Agreement between Registrant and Wells
Management Company, Inc. (previously filed in and incorporated by
reference to Registrant's Registration Statement on Form S-11,
Commission File No. 333-83933, filed on July 28, 1999)

10.6      Amended and Restated Joint Venture Agreement of The Fund IX, Fund X,
Fund XI and REIT Joint Venture (previously filed in and incorporated
by reference to Post-Effective Amendment No. 2 to the Registrant's
Registration Statement on Form S-11, Commission File No. 333-32099,
filed on July 9, 1998)

10.7      Lease Agreement for the ABB Building (previously filed as Exhibit
10(kk) and incorporated by reference to Post-Effective Amendment No.
13 to Form S-11 Registration Statement of Wells Real Estate Fund VIII,
L.P. and Wells Real Estate Fund IX, L.P., Commission File No. 33-
83852, filed on December 27, 1996)

10.8      Net Lease Agreement for the Lucent Building (previously filed as
Exhibit 10(l) and incorporated by reference to Post-Effective
Amendment No. 2 to Form S-11 Registration Statement of Wells Real
Estate Fund X, L.P. and Wells Real Estate Fund XI, L.P., Commission
File No. 333-7979, filed on June 17, 1997)

10.9      First Amendment to Net Lease Agreement for the Lucent Building
(previously filed in and incorporated by reference to Post-Effective
Amendment No. 2 to the Registrant's 

II-7

Registration Statement on Form S-11, Commission File No. 333-32099,
filed on July 9, 1998)

10.10     Lease Agreement for the Iomega Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 3 to the
Registrant's Registration Statement on Form S-11, Commission File No.
333-32099, filed on August 14, 1998)

10.11     Joint Venture Agreement of Wells/Fremont Associates (previously filed
in and incorporated by reference to Post-Effective Amendment No. 3 to
the Registrant's Registration Statement on Form S-11, Commission File
No. 333-32099, filed on August 14, 1998)

10.12     Lease Agreement for the Fairchild Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 3 to the
Registrant's Registration Statement on Form S-11, Commission File No.
333-32099, filed on August 14, 1998)

10.13     Joint Venture Agreement of Wells/Orange County Associates (previously
filed in and incorporated by reference to Post-Effective Amendment No.
3 to the Registrant's Registration Statement on Form S-11, Commission
File No. 333-32099, filed on August 14, 1998)

10.14     Amended and Restated Promissory Note for $15,500,000 relating to the
PWC Building (previously filed in and incorporated by reference to
Post-Effective Amendment No. 4 to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-32099, filed on
January 15, 1999)

10.15     Amendment No. 1 to Mortgage and Security Agreement and other Loan
Documents securing the PWC Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 4 to the
Registrant's Registration Statement on Form S-11, Commission File No.
333-32099, filed on January 15, 1999)

10.16     Lease Agreement for the PWC Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 4 to the
Registrant's Registration Statement on Form S-11, Commission File No.
333-32099, filed on January 15, 1999)

10.17     Promissory Note for $6,425,000 to Bank of America, N.A. relating to
the AT&T Building (formerly the Vanguard Cellular Building)
(previously filed in and incorporated by reference to Post-Effective
Amendment No. 5 to the Registrant's Registration Statement on Form S-
11, Commission File No. 333-32099, filed on April 15, 1999)

10.18     Open-End Mortgage, Assignment of Leases and Rents, Security Agreement
and Financing Statement securing the AT&T Building (formerly the
Vanguard Cellular Building) (previously filed in and incorporated by
reference to Post-Effective Amendment No. 5 to the Registrant's
Registration Statement on Form S-11, Commission File No. 333-32099,
filed on April 15, 1999)

10.19     Build-To-Suit Office Lease Agreement for the AT&T Building (formerly
the Vanguard Cellular Building) (previously filed in and incorporated
by reference to Post-Effective Amendment No. 5 to the Registrant's
Registration Statement on Form S-11, Commission File No. 333-32099,
filed on April 15, 1999)

II-8

10.20     Amendment No. 1 to Build-To-Suit Office Lease Agreement for the AT&T
Building (formerly the Vanguard Cellular Building) (previously filed
in and incorporated by reference to Post-Effective Amendment No. 5 to
the Registrant's Registration Statement on Form S-11, Commission File
No. 333-32099, filed on April 15, 1999)

10.21     Amendment No. 2 to Build-To-Suit Office Lease Agreement for the AT&T
Building (formerly the Vanguard Cellular Building) (previously filed
in and incorporated by reference to Post-Effective Amendment No. 5 to
the Registrant's Registration Statement on Form S-11, Commission File
No. 333-32099, filed on April 15, 1999)

10.22     Build-To-Suit Office Lease Agreement Guaranty Payment and Performance
for the AT&T Building (formerly the Vanguard Cellular Building)
(previously filed in and incorporated by reference to Post-Effective
Amendment No. 5 to the Registrant's Registration Statement on Form S-
11, Commission File No. 333-32099, filed on April 15, 1999)

10.23     Development Agreement for the Matsushita Project (previously filed in
and incorporated by reference to Post-Effective Amendment No. 5 to the
Registrant's Registration Statement on Form S-11, Commission File No.
333-32099, filed on April 15, 1999)

10.24     Office Lease for the Matsushita Project (previously filed in and
incorporated by reference to Post-Effective Amendment No. 5 to the
Registrant's Registration Statement on Form S-11, Commission File No.
333-32099, filed on April 15, 1999)

10.25     Guaranty of Lease for the Matsushita Project (previously filed in and
incorporated by reference to Post-Effective Amendment No. 5 to the
Registrant's Registration Statement on Form S-11, Commission File No.
333-32099, filed on April 15, 1999)

10.26     Rental Income Guaranty Agreement relating to the Bake Parkway Building
(previously filed in and incorporated by reference to Post-Effective
Amendment No. 5 to the Registrant's Registration Statement on Form S-
11, Commission File No. 333-32099, filed on April 15, 1999)

10.27     Agreement of Sale and Purchase relating to the EYBL CarTex Building
(previously filed in and incorporated by reference to Post-Effective
Amendment No. 6 to the Registrant's Registration Statement on Form S-
11, Commission File No. 333-32099, filed on July 15, 1999)

10.28     Amended and Restated Joint Venture Partnership Agreement of The Wells
Fund XI - Fund XII - REIT Joint Venture (previously filed in and
incorporated by reference to Amendment No. 1 to the Registrant's
Registration Statement on Form S-11, Commission File No. 333-83933,
filed on November 17, 1999)

10.29     Fifth Amendment to Lease for the Johnson Matthey Building (previously
filed as Exhibit 10.7 and incorporated by reference to Post-Effective
Amendment No. 1 to the Registration Statement of Wells Real Estate
Fund XII, L.P. on Form S-11, Commission File No. 33-66657, filed on
September 1, 1999)

10.30     Agreement for the Purchase and Sale of Real Property for the ABB
Richmond Property (previously filed in and incorporated by reference
to Post-Effective Amendment No. 7 to

II-9

Registrant's Registration Statement on Form S-11, Commission File No.
333-32099, filed on October 14, 1999)

10.31     Development Agreement for the ABB Richmond Project (previously filed
in and incorporated by reference to Post-Effective Amendment No. 7 to
Registrant's Registration Statement on Form S-11, Commission File No.
333-32099, filed on October 14, 1999)

10.32     Owner-Contractor Agreement for the ABB Richmond Project (previously
filed in and incorporated by reference to Post-Effective Amendment No.
7 to Registrant's Registration Statement on Form S-11, Commission File
No. 333-32099, filed on October 14, 1999)

10.33     Lease Agreement for the ABB Richmond Project (previously filed in and
incorporated by reference to Post-Effective Amendment No. 7 to
Registrant's Registration Statement on Form S-11, Commission File No.
333-32099, filed on October 14, 1999)

10.34     Second Amendment to Lease Agreement for the ABB Richmond Project
(previously filed in and incorporated by reference to Amendment No. 1
to the Registrant's Registration Statement on Form S-11, Commission
File No. 333-83933, filed on November 17, 1999)

10.35     Agreement for Purchase and Sale for the Videojet Building (previously
filed in and incorporated by reference to Post-Effective Amendment No.
7 to Registrant's Registration Statement on Form S-11, Commission File
No. 333-32099, filed on October 14, 1999)

10.36     Lease Agreement for the Gartner Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 7 to
Registrant's Registration Statement on Form S-11, Commission File No.
333-32099, filed on October 14, 1999)

10.37     Advisory Agreement dated January 30, 2000 (previously filed in and
incorporated by reference to Post-Effective Amendment No. 1 to
Registrant's Registration Statement on Form S-11, Commission File No.
333-83933, filed on March 15, 2000)

10.38     Agreement for the Purchase and Sale of Property for the Cinemark
Building (previously filed in and incorporated by reference to Post-
Effective Amendment No. 17 to Registrant's Registration Statement on
Form S-11, Commission File No. 333-83933, filed on March 15, 2000)

10.39     Lease Agreement with Cinemark USA, Inc. for a portion of the Cinemark
Building (previously filed in and incorporated by reference to Post-
Effective Amendment No. 1 to Registrant's Registration Statement on
Form S-11, Commission File No. 333-83933, filed on March 15, 2000)

10.40     Lease Agreement with The Coca-Cola Company for a portion of the
Cinemark Building (previously filed in and incorporated by reference
to Post-Effective Amendment No. 1 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed on March
15, 2000)

II-10

10.41     Agreement for the Purchase and Sale of Property for the Metris
Building (previously filed in and incorporated by reference to Post-
Effective Amendment No. 1 to Registrant's Registration Statement on
Form S-11, Commission File No. 333-83933, filed on March 15, 2000)

10.42     Assumption and Modification Agreement for the Metris Loan (previously
filed in and incorporated by reference to Post-Effective Amendment No.
1 to Registrant's Registration Statement on Form S-11, Commission File
No. 333-83933, filed on March 15, 2000)

10.43     Lease Agreement for the Metris Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 1 to
Registrant's Registration Statement on Form S-11, Commission File No.
333-83933, filed on March 15, 2000)

10.44     Promissory Note for $26,725,000 for the Bank of America Loan
(previously filed in and incorporated by reference to Post-Effective
Amendment No. 1 to Registrant's Registration Statement on Form S-11,
Commission File No. 333-83933, filed on March 15, 2000)

10.45     Mortgage, Assignment and Security Agreement for the Videojet Building
securing the Bank of America Loan (previously filed in and
incorporated by reference to Post-Effective Amendment No. 1 to
Registrant's Registration Statement on Form S-11, Commission File No.
333-83933, filed on March 15, 2000)

10.46     Agreement for the Purchase and Sale of Property for the Dial Building

10.47     Lease Agreement for the Dial Building

10.48     First Amendment to Lease Agreement for the Dial Building

10.49     Agreement for the Purchase and Sale of Property for the ASML Building

10.50     First Amendment to Agreement for the Purchase and Sale of Property for
the ASML Building

10.51     Lease Agreement for the ASML Building

10.52     First Amendment to Lease Agreement for the ASML Building

10.53     Ground Lease Agreement for the ASML Building

10.54     First Amendment to Ground Lease Agreement for the ASML Building

10.55     Agreement for the Purchase and Sale of Property for the Motorola
Building

10.56     Lease Agreement for the Motorola Building

10.57     First Amendment to Lease Agreement for the Motorola Building

10.58     Ground Lease Agreement for the Motorola Building

II-11

10.59     Promissory Note for $5,000,000 to Ryan Companies US, Inc. relating to
the Motorola Building

10.60     Purchase Money Deed of Trust, Assignment of Leases and Rents, Fixture
Filing and Security Agreement securing the Motorola Building

10.61     Joint Venture Partnership Agreement of Wells Fund XII-REIT Joint
Venture Partnership dated April 10, 2000 (previously filed as Exhibit
10.11 and incorporated by reference to Post-Effective Amendment No. 2
to Form S-11 Registration Statement of Wells Real Estate Fund XII,
L.P., Commission File No. 33-66657, filed on April 25, 2000)

23.1      Consent of Holland & Knight LLP (included in exhibits 5.1, 8.1 and
8.2)

23.2      Consent of Arthur Andersen LLP

24.1      Power of Attorney

II-12          

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-11 and has duly caused this Post-Effective
Amendment No. 2 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Norcross, and State of
Georgia, on the 7th day of June, 2000.

WELLS REAL ESTATE INVESTMENT TRUST, INC.
A Maryland corporation
(Registrant)

By:/s/ Douglas P. Williams
-------------------------------------------------
Douglas P. Williams, Executive Vice President

Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 2 to Registration Statement has been signed below on
June 7, 2000 by the following persons in the capacities indicated.

Name                                                                                       Title
----                                                                                       -----

/s/ Leo F. Wells, III                                                    *                President and Director
-----------------------------------------------------------------------
Leo F. Wells, III (By Douglas P. Williams, as Attorney-in-fact)                           (Principal Executive Officer)

/s/ Douglas P. Williams                                                                   Executive Vice President (Principal
-----------------------------------------------------------------------
Douglas P. Williams                                                                       Financial and Accounting Officer)

/s/ John L. Bell                                                         *                Director
-----------------------------------------------------------------------
John L. Bell (By Douglas P. Williams, as Attorney-in-fact)

/s/ Richard W. Carpenter                                                 *                Director
-----------------------------------------------------------------------
Richard W. Carpenter (By Douglas P. Williams, as Attorney-in-fact)

/s/ Bud Carter                                                           *                Director
-----------------------------------------------------------------------
Bud Carter (By Douglas P. Williams, as Attorney-in-fact)

/s/ William H. Keogler, Jr.                                              *                Director
-----------------------------------------------------------------------
William H. Keogler, Jr. (By Douglas P. Williams, as Attorney-in-fact)

/s/ Donald S. Moss                                                       *                Director
-----------------------------------------------------------------------
Donald S. Moss (By Douglas P. Williams, as Attorney-in-fact)

/s/ Walter W. Sessoms                                                    *                Director
-----------------------------------------------------------------------
Walter W. Sessoms (By Douglas P. Williams, as Attorney-in-fact)

/s/ Neil H. Strickland                                                   *                Director
-----------------------------------------------------------------------
Neil H. Strickland (By Douglas P. Williams, as Attorney-in-fact)

*    By Douglas P. Williams, as Attorney-in-fact, pursuant to Power of Attorney 
dated July 30, 1999 and included as Exhibit 24.1 herein.

EXHIBIT INDEX

Exhibit No.    Description
-----------    -----------

1.1            Form of Dealer Manager Agreement (previously filed in and
incorporated by reference to Amendment No. 1 to the Registrant's
Registration Statement on Form S-11, Commission File No. 333-
83933, filed on November 3, 1999)

1.2            Form of Warrant Purchase Agreement (previously filed in and
incorporated by reference to Amendment No. 1 to the Registrant's
Registration Statement on Form S-11, Commission File No. 333-
83933, filed on November 3, 1999)

3.1            Amended and Restated Articles of Incorporation (previously filed
in and incorporated by reference to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed on
July 28, 1999)

3.2            Form of Bylaws (previously filed in and incorporated by reference
to Amendment No. 4 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-32099, filed on January 23,
1998)

3.3            Amendment No. 1 to Bylaws (previously filed in and incorporated
by reference to Post-Effective Amendment No. 5 to the
Registrant's Registration Statement on Form S-11, Commission File
No. 333-32099, filed on April 15, 1999)

4.1            Form of Subscription Agreement and Subscription Agreement
Signature Page (included as Exhibit A to Prospectus)

4.2            Amended and Restated Dividend Reinvestment Plan (included as
Exhibit B to Prospectus)

5.1            Opinion of Holland & Knight LLP as to legality of securities
(previously filed in and incorporated by reference to Amendment
No. 1 to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-83933, filed on November 3, 1999)

8.1            Opinion of Holland & Knight LLP as to tax matters (previously
filed in and incorporated by reference to Amendment No. 1 to the
Registrant's Registration Statement on Form S-11, Commission File
No. 333-83933, filed on November 3, 1999)

8.2            Opinion of Holland & Knight LLP as to ERISA matters (previously
filed in and incorporated by reference to Amendment No. 1 to the
Registrant's Registration Statement on Form S-11, Commission File
No. 333-83933, filed on November 3, 1999)

10.1           Agreement of Limited Partnership of Wells Operating Partnership,
L.P. (previously filed in and incorporated by reference to
Amendment No. 4 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-32099, filed on January 23,
1998)

10.2           Escrow Agreement between Registrant and Bank of America, N.A.
(previously filed in and incorporated by reference to Amendment
No. 1 to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-83933, filed on November 3, 1999)

10.3           Advisory Agreement dated January 30, 1999 (previously filed in
and incorporated by reference to Post-Effective Amendment No. 5
to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on April 15, 1999)

10.4           Management Agreement between Registrant and Wells Management
Company, Inc. (previously filed in and incorporated by reference
to Registrant's Registration Statement on Form S-11, Commission
File No. 333-83933, filed on July 28, 1999)

10.5           Leasing and Tenant Coordinating Agreement between Registrant and
Wells Management Company, Inc. (previously filed in and
incorporated by reference to Registrant's Registration Statement
on Form S-11, Commission File No. 333-83933, filed on July 28,
1999)

10.6           Amended and Restated Joint Venture Agreement of The Fund IX, Fund
X, Fund XI and REIT Joint Venture (previously filed in and
incorporated by reference to Post-Effective Amendment No. 2 to
the Registrant's Registration Statement on Form S-11, Commission
File No. 333-32099, filed on July 9, 1998)

10.7           Lease Agreement for the ABB Building (previously filed as Exhibit
10(kk) and incorporated by reference to Post-Effective Amendment
No. 13 to Form S-11 Registration Statement of Wells Real Estate
Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., Commission
File No. 33-83852, filed on December 27, 1996)

10.8           Net Lease Agreement for the Lucent Building (previously filed as
Exhibit 10(l) and incorporated by reference to Post-Effective
Amendment No. 2 to Form S-11 Registration Statement of Wells Real
Estate Fund X, L.P. and Wells Real Estate Fund XI, L.P.,
Commission File No. 333-7979, filed on June 17, 1997)

10.9           First Amendment to Net Lease Agreement for the Lucent Building
(previously filed in and incorporated by reference to Post-
Effective Amendment No. 2 to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-32099, filed on
July 9, 1998)

10.10          Lease Agreement for the Iomega Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 3 to
the Registrant's Registration Statement on Form S-11, Commission
File No. 333-32099, filed on August 14, 1998)

10.11          Joint Venture Agreement of Wells/Fremont Associates (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 3 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-32099, filed on August 14,
1998)

10.12          Lease Agreement for the Fairchild Building (previously filed in
and incorporated by reference to Post-Effective Amendment No. 3
to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on August 14, 1998)

10.13          Joint Venture Agreement of Wells/Orange County Associates
(previously filed in and incorporated by reference to Post-
Effective Amendment No. 3 to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-32099, filed on
August 14, 1998)

10.14          Amended and Restated Promissory Note for $15,500,000 relating to
the PWC Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form S-11, Commission File No. 333-
32099, filed on January 15, 1999)

10.15          Amendment No. 1 to Mortgage and Security Agreement and other Loan
Documents securing the PWC Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 4 to
the Registrant's Registration Statement on Form S-11, Commission
File No. 333-32099, filed on January 15, 1999)

10.16          Lease Agreement for the PWC Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 4 to
the Registrant's Registration Statement on Form S-11, Commission
File No. 333-32099, filed on January 15, 1999)

10.17          Promissory Note for $6,425,000 to Bank of America, N.A. relating
to the AT&T Building (formerly the Vanguard Cellular Building)
(previously filed in and incorporated by reference to Post-
Effective Amendment No. 5 to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-32099, filed on
April 15, 1999)

10.18          Open-End Mortgage, Assignment of Leases and Rents, Security
Agreement and Financing Statement securing the AT&T Building
(formerly the Vanguard Cellular Building) (previously filed in
and incorporated by reference to Post-Effective Amendment No. 5
to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on April 15, 1999)

10.19          Build-To-Suit Office Lease Agreement for the AT&T Building
(formerly the Vanguard Cellular Building) (previously filed in
and incorporated by reference to Post-Effective Amendment No. 5
to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on April 15, 1999)

10.20          Amendment No. 1 to Build-To-Suit Office Lease Agreement for the
AT&T Building (formerly the Vanguard Cellular Building)
(previously filed in and incorporated by reference to Post-
Effective Amendment No. 5 to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-32099, filed on
April 15, 1999)

10.21          Amendment No. 2 to Build-To-Suit Office Lease Agreement for the
AT&T Building (formerly the Vanguard Cellular Building)
(previously filed in and incorporated by reference to Post-
Effective Amendment No. 5 to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-32099, filed on
April 15, 1999)

10.22          Build-To-Suit Office Lease Agreement Guaranty Payment and
Performance for the AT&T Building (formerly the Vanguard Cellular
Building) (previously filed in and incorporated by reference to
Post-Effective Amendment No. 5 to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-32099, filed on
April 15, 1999)

10.23          Development Agreement for the Matsushita Project (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 5 to the Registrant's Registration Statement on
Form S-11, Commission File No. 333-32099, filed on April 15,
1999)

10.24          Office Lease for the Matsushita Project (previously filed in and
incorporated by reference to Post-Effective Amendment No. 5 to
the Registrant's Registration Statement on Form S-11, Commission
File No. 333-32099, filed on April 15, 1999)

10.25          Guaranty of Lease for the Matsushita Project (previously filed in
and incorporated by reference to Post-Effective Amendment No. 5
to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-32099, filed on April 15, 1999)

10.26          Rental Income Guaranty Agreement relating to the Bake Parkway
Building (previously filed in and incorporated by reference to
Post-Effective Amendment No. 5 to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-32099, filed on
April 15, 1999)

10.27          Agreement of Sale and Purchase relating to the EYBL CarTex
Building (previously filed in and incorporated by reference to
Post-Effective Amendment No. 6 to the Registrant's Registration
Statement on Form S-11, Commission File No. 333-32099, filed on
July 15, 1999)

10.28          Amended and Restated Joint Venture Partnership Agreement of The
Wells Fund XI - Fund XII - REIT Joint Venture (previously filed
in and incorporated by reference to Amendment No. 1 to the
Registrant's Registration Statement on Form S-11, Commission File
No. 333-83933, filed on November 17, 1999)

10.29          Fifth Amendment to Lease for the Johnson Matthey Building
(previously filed as Exhibit 10.7 and incorporated by reference
to Post-Effective Amendment No. 1 to the Registration Statement
of Wells Real Estate Fund XII, L.P. on Form S-11, Commission File
No. 33-66657, filed on September 1, 1999)

10.30          Agreement for the Purchase and Sale of Real Property for the ABB
Richmond Property (previously filed in and incorporated by
reference to Post-Effective Amendment No. 7 to Registrant's
Registration Statement on Form S-11, Commission File No. 333-
32099, filed on October 14, 1999)

10.31          Development Agreement for the ABB Richmond Project (previously
filed in and incorporated by reference to Post-Effective
Amendment No. 7 to Registrant's Registration Statement on Form S-
11, Commission File No. 333-32099, filed on October 14, 1999)

10.32          Owner-Contractor Agreement for the ABB Richmond Project
(previously filed in and incorporated by reference to Post-
Effective Amendment No. 7 to Registrant's Registration Statement
on Form S-11, Commission File No. 333-32099, filed on October 14,
1999)

10.33          Lease Agreement for the ABB Richmond Project (previously filed in
and incorporated by reference to Post-Effective Amendment No. 7
to Registrant's Registration Statement on Form S-11, Commission
File No. 333-32099, filed on October 14, 1999)

10.34          Second Amendment to Lease Agreement for the ABB Richmond Project
(previously filed in and incorporated by reference to Amendment
No. 1 to the Registrant's Registration Statement on Form S-11,
Commission File No. 333-83933, filed on November 17, 1999)

10.35          Agreement for Purchase and Sale for the Videojet Building
(previously filed in and incorporated by reference to Post-
Effective Amendment No. 7 to Registrant's Registration Statement
on Form S-11, Commission File No. 333-32099, filed on October 14,
1999)

10.36          Lease Agreement for the Gartner Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 7 to
Registrant's Registration Statement on Form S-11, Commission File
No. 333-32099, filed on October 14, 1999)

10.37          Advisory Agreement dated January 30, 2000 (previously filed in
and incorporated by reference to Post-Effective Amendment No. 1
to Registrant's Registration Statement on Form S-11, Commission
File No. 333-83933, filed on March 15, 2000)

10.38          Agreement for the Purchase and Sale of Property for the Cinemark
Building (previously filed in and incorporated by reference to
Post-Effective Amendment No. 17 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed on
March 15, 2000)

10.39          Lease Agreement with Cinemark USA, Inc. for a portion of the
Cinemark Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 1 to Registrant's
Registration Statement on Form S-11, Commission File No. 333-
83933, filed on March 15, 2000)

10.40          Lease Agreement with The Coca-Cola Company for a portion of the
Cinemark Building (previously filed in and incorporated by
reference to Post-Effective Amendment No. 1 to Registrant's
Registration Statement on Form S-11, Commission File No. 333-
83933, filed on March 15, 2000)

10.41          Agreement for the Purchase and Sale of Property for the Metris
Building (previously filed in and incorporated by reference to
Post-Effective Amendment No. 1 to Registrant's Registration
Statement on Form S-11, Commission File No. 333-83933, filed on
March 15, 2000)

10.42          Assumption and Modification Agreement for the Metris Loan
(previously filed in and incorporated by reference to Post-
Effective Amendment No. 1 to Registrant's Registration Statement
on Form S-11, Commission File No. 333-83933, filed on March 15,
2000)

10.43          Lease Agreement for the Metris Building (previously filed in and
incorporated by reference to Post-Effective Amendment No. 1 to
Registrant's Registration Statement on Form S-11, Commission File
No. 333-83933, filed on March 15, 2000)

10.44          Promissory Note for $26,725,000 for the Bank of America Loan
(previously filed in and incorporated by reference to Post-
Effective Amendment No. 1 to Registrant's Registration Statement
on Form S-11, Commission File No. 333-83933, filed on March 15,
2000)

10.45          Mortgage, Assignment and Security Agreement for the Videojet
Building securing the Bank of America Loan (previously filed in
and incorporated by reference to Post-Effective Amendment No. 1
to Registrant's Registration Statement on Form S-11, Commission
File No. 333-83933, filed on March 15, 2000)

10.46          Agreement for the Purchase and Sale of Property for the Dial
Building

10.47          Lease Agreement for the Dial Building

10.48          First Amendment to Lease Agreement for the Dial Building

10.49          Agreement for the Purchase and Sale of Property for the ASML
Building

10.50          First Amendment to Agreement for the Purchase and Sale of
Property for the ASML Building

10.51          Lease Agreement for the ASML Building

10.52          First Amendment to Lease Agreement for the ASML Building

10.53          Ground Lease Agreement for the ASML Building

10.54          First Amendment to Ground Lease Agreement for the ASML Building

10.55          Agreement for the Purchase and Sale of Property for the Motorola
Building

10.56          Lease Agreement for the Motorola Building

10.57          First Amendment to Lease Agreement for the Motorola Building

10.58          Ground Lease Agreement for the Motorola Building

10.59          Promissory Note for $5,000,000 to Ryan Companies US, Inc.
relating to the Motorola Building

10.60          Purchase Money Deed of Trust, Assignment of Leases and Rents,
Fixture Filing and Security Agreement securing the Motorola
Building

10.61          Joint Venture Partnership Agreement of Wells Fund XII-REIT Joint
Venture Partnership dated April 10, 2000 (previously filed as
Exhibit 10.11 and incorporated by reference to Post-Effective
Amendment No. 2 to Form S-11 Registration Statement of Wells Real
Estate Fund XII, L.P., Commission File No. 33-66657, filed on
April 25, 2000)

23.1           Consent of Holland & Knight LLP (included in exhibits 5.1, 8.1
and 8.2)

23.2           Consent of Arthur Andersen LLP, filed herewith

24.1           Power of Attorney, file herewith

EXHIBIT 10.46

AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY

FOR THE DIAL BUILDING

AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY
-----------------------------------------------

THIS AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY (the "Agreement"), is
made and entered into as of the 23rd day of February, 2000, by and between RYAN
COMPANIES US, INC., a Minnesota corporation ("Seller") and WELLS CAPITAL, INC.,
a Georgia corporation ("Purchaser").

W I T N E S S E T H:
- - - - - - - - - - 

WHEREAS, Seller desires to sell and Purchaser desires to purchase the
Property (as hereinafter defined) subject to the terms and conditions
hereinafter set forth.

NOW, THEREFORE, for and in consideration of the premises, the mutual
agreements contained herein, the sum of Ten Dollars ($10.00) in hand paid by
Purchaser to Seller at and before the sealing and delivery of these presents and
for other good and valuable consideration, the receipt, adequacy, and
sufficiency which are hereby expressly acknowledged by the parties hereto, the
parties hereto do hereby covenant and agree as follows:

1.   Purchase and Sale of Property. Subject to and in accordance with the
-----------------------------                                       
terms and provisions of this Agreement, Seller hereby agrees to sell to
Purchaser and Purchaser hereby agrees to purchase from Seller, the Property,
which term "Property" shall mean and include the following:

(a)  All that tract or parcel of land (the "Land") known as Lots 4 and
5, Scottsdale Airpark North, per Book 390 of Maps, page 33, records of
Maricopa County, Arizona, containing approximately 8.8375 acres, having an
address of 15501 N. Dial Boulevard, Scottsdale, Arizona, and being more
particularly described on Exhibit "A" hereto; and
-----------            

(b)  All right, title and interest of Seller in and to all rights,
privileges, and easements appurtenant to the Land, including all water
rights, mineral rights, reversions, or other appurtenances to said Land,
and all right, title, and interest of Seller, if any, in and to any land
lying in the bed of any street, road, alley, or right-of-way, open or
proposed, adjacent to or abutting the Land; and

(c)  All right, title and interest of Seller in and to all buildings,
structures, and improvements situated on the Land, including, without
limitation, that certain two story office building containing approximately
129,689 square feet of leasable space, the parking areas containing
approximately 523 parking spaces and other amenities located on the Land,
and all apparatus, built-in appliances, equipment, pumps, machinery,
plumbing, heating, air conditioning, electrical and other fixtures located
on the Land (all of which are herein collectively referred to as the
"Improvements"); and

(d)  all personal property now owned by Seller and located on or to be
located on or in, or used in connection with, the Land and Improvements
("Personal Property"); and

(e)  all of Seller's right, title, and interest, as landlord or

lessor, in and to that certain Single Tenant Lease Agreement with The Dial
Corporation, a Delaware corporation (the "Tenant") dated March 21, 1997, as
amended by letter dated August 7, 1997 (the"Lease"); and

(f)  all of Seller's right, title, and interest in and to the plans
and specifications with respect to the Improvements and any guarantees,
trademarks, rights of copyright, warranties, or other rights related to the
ownership of or use and operation of the Land, Personal Property, or
Improvements, all governmental licenses and permits, and all intangibles
associated with the Land, Personal Property, and Improvements, including
the name of the Improvements and the logo therefor, if any.

2.   Earnest Money. Within two (2) business days after the full execution 
-------------                                                        
of this Agreement, Purchaser shall deliver to Old Republic Title Agency ("Escrow
Agent"), whose offices are at 3200 North Central Avenue, Suite 100, Phoenix, AZ
85012, Purchaser's check, payable to Escrow Agent, in the amount of $100,000
(the "Earnest Money"), which Earnest Money shall be held and disbursed by Escrow
Agent in accordance with this Agreement. The Earnest Money shall be paid by
Escrow Agent to Seller at Closing (as hereinafter defined) and shall be applied
as a credit to the Purchase Price (as hereinafter defined), or shall otherwise
be paid to Seller or refunded to Purchaser in accordance with the terms of this
Agreement. All interest and other income from time to time earned on the Earnest
Money shall belong to Purchaser and shall be disbursed to Purchaser at any time
or from time to time as Purchaser shall direct Escrow Agent. In no event shall
any such interest or other income be deemed a part of the Earnest Money.

3.   Purchase Price. Subject to adjustment and credits as otherwise
--------------                                                
specified in this Agreement, the purchase price (the "Purchase Price") to be
paid by Purchaser to Seller for the Property shall be FOURTEEN MILLION TWO
HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($14,250,000.00). The Purchase Price
shall be paid by Purchaser to Seller at the Closing (as hereinafter defined) by
cashier's check or by wire transfer of immediately available federal funds, less
the amount of Earnest Money and subject to prorations, adjustments and credits
as otherwise specified in this Agreement.

4.   Purchaser's Inspection and Review Rights. Subject to the rights of the
----------------------------------------                              
Tenant, Purchaser and its agents, engineers, or representatives, with Seller's
reasonable, good faith cooperation, shall have the privilege of going upon the
Property as needed to inspect, examine, test, and survey the Property at all
reasonable times and from time to time. Purchaser hereby agrees to hold Seller
harmless from any liens, claims, liabilities, and damages incurred through the
exercise of such privilege, and Purchaser further agrees to repair any damage to
the Property caused by the exercise of such privilege. At all reasonable times
prior to the Closing (as hereinafter defined), Seller shall make available to
Purchaser, or Purchaser's agents and representatives, for review and copying,
all books, records, and files in Seller's possession relating to the ownership
and operation of the Property, including, without limitation, title matters,
surveys, tenant files, service and maintenance agreements, and other contracts,
books, records, operating statements, and other information relating to the
Property. Seller further agrees to in good faith assist and cooperate with
Purchaser in coming to a thorough understanding of the books, records, and files
relating to the Property. 

2

Seller further agrees to provide to Purchaser (to the extent the same have not
previously been provided to Purchaser) prior to the date which is five (5) days
after the effective date of this Agreement (a) the most current boundary and 
"as-built" surveys of the Land and Improvements and any title insurance
policies, appraisals, occupancy permits, building inspection reports and
environmental reports relating thereto and in the possession or under the
control of Seller, and (b) a statement setting forth all revenues from the
Property and setting forth all costs and expenses of operating, maintaining, and
repairing the Property (and the costs of replacing component parts thereof)
incurred by Seller, in each case during the entire period from February 1, 1998,
through January 31, 2000, which statement shall be certified by Seller to the
best of Seller's knowledge after diligent inquiry and review of records, to be
complete and accurate in all material respects. Seller acknowledges that
Purchaser may be required by the Securities and Exchange Commission to file
audited financial statements for one to three years with regard to the Property.
At no cost or liability to Seller, Seller shall (i) cooperate with Purchaser,
its counsel, accountants, agents, and representatives, provide them with access
to Seller's books and records with respect to the ownership, management,
maintenance, and operation of the Property for the applicable period, and permit
them to copy the same, (ii) execute a form of "rep" letter in form and substance
reasonably satisfactory to Seller, and (iii) furnish Purchaser with such
additional information concerning the same as Purchaser shall reasonably
request. Purchaser will pay the costs associated with any such audit.

5.   Special Condition to Closing. Purchaser shall have thirty (30) days
----------------------------                                       
from the effective date of this Agreement (the "Inspection Period") to make
investigations, examinations, inspections, market studies, feasibility studies,
lease reviews, and tests relating to the Property and the operation thereof in
order to determine, in Purchaser's sole opinion and discretion, the suitability
of the Property for acquisition by Purchaser. Purchaser shall have the right to
terminate this Agreement at any time prior to the expiration of the Inspection
Period by giving written notice to Seller of such election to terminate. In the
event Purchaser so elects to terminate this Agreement, Seller shall be entitled
to receive and retain the sum of Twenty-Five Dollars ($25.00) of the Earnest
Money, and the balance of the Earnest Money shall be promptly refunded by Escrow
Agent to Purchaser, whereupon, except as expressly provided to the contrary in
this Agreement, no party hereto shall have any other or further rights or
obligations under this Agreement. Seller acknowledges that the sum of $25.00 is
good and adequate consideration for the termination rights granted to Purchaser
hereunder.

6.   General Conditions Precedent to Purchaser's Obligations Regarding the
---------------------------------------------------------------------
Closing. In addition to the conditions to Purchaser's obligations set forth in
-------                                                                       
Paragraph 5 above, the obligations and liabilities of Purchaser hereunder shall
in all respects be conditioned upon the satisfaction of each of the following
conditions, any of which may be waived by written notice from Purchaser to
Seller:

(a)  Seller shall have complied in all material respects with and
otherwise performed in all material respects each of the covenants and
obligations of Seller set forth in this Agreement, as of the date of
Closing (as hereinafter defined).

3

(b)  All representations and warranties of Seller as set forth in this
Agreement shall be true and correct in all material respects as of the date
of Closing.

(c)  There shall have been no adverse change to the title to the
Property which has not been cured and the Title Company (as hereinafter
defined) shall have issued the Title Commitment (as hereinafter defined) on
the Land and Improvements without exceptions other than as described in
paragraph 7 and the Title Company shall be prepared to issue to Purchaser
upon the Closing a leasehold owner's title insurance policy on the Land and
Improvements pursuant to such Title Commitment.

(d)  Purchaser shall have received the Tenant Estoppel Certificate
referred to in Paragraph 9(c) hereof, duly executed by the Tenant at least
five (5) days prior to the end of the Inspection Period.

(e)  Purchaser shall have received the Estoppel Certificate Regarding
Declaration referred to in Paragraph 9(d) hereof, duly executed by the
declarant thereunder at least five (5) days prior to the end of the
Inspection Period.

7.   Title and Survey. Seller covenants and agrees that Seller, at its sole
----------------  
cost and expense, shall, on or before ten (5) days after the Effective Date of
this Agreement, cause Old Republic National Title Insurance Company, or such
other such title insurance company acceptable to Purchaser (herein referred to
as the "Title Company"), to deliver to Purchaser its commitment (herein referred
to as the "Title Commitment") to issue to Purchaser, upon the recording of the
Special Warranty Deed, the payment of the Purchase Price, and the payment to the
Title Company of the policy premium therefor, an owner's policy of title
insurance, in the amount of the Purchase Price, insuring good and marketable
record title to the Property to be in Purchaser subject only to the Permitted
Exceptions (as hereinafter defined), with affirmative coverage over any
mechanic's, materialman's and subcontractor's liens and with full extended
coverage over all general exceptions, and containing the following endorsements:
zoning (including affirmative coverage against any violations of recorded
covenants and restrictions), survey, and access.  Such Title Commitment shall
not contain any exception for rights of parties in possession other than an
exception for the right of the Tenant under the Lease. If the Title Commitment
shall contain an exception for the state of facts which would be disclosed by a
survey of the Property or an "area and boundaries" exception, the Title
Commitment shall provide that such exception will be deleted upon the
presentation of an ALTA/ASCM  survey acceptable to Title Company, in which case
the Title Commitment shall be amended to contain an exception only for the
matters shown on the as-built survey which Seller shall obtain at its sole cost
and expense for the benefit of Purchaser.  Said survey shall include a
certification that the Property is zoned in a classification which will permit
the operating of the Property as an office building and any conditions to the
granting of such zoning have been satisfied.  Seller shall also cause to be
delivered to Purchaser together with such Title Commitment, legible copies of
all documents and instruments referred to therein. Purchaser, upon receipt of
the Title Commitment and the copies of the documents and instruments referred to
therein, shall then have ten (10) days during which to examine the same, after
which Purchaser shall notify Seller of 

4

any defects or objections affecting the marketability of the title to the
Property. Seller shall then have until the Closing to cure such defects and
objections and shall, in good faith, exercise reasonable diligence to cure such
defects and objections.

8.   Representations and Warranties of Seller. Seller hereby makes the
----------------------------------------                         
following representations and warranties to Purchaser, each of which shall be
deemed material:

(a)  Lease. Seller has delivered to Purchaser a true, correct and
-----                                                       
complete copy of the Lease, together with all modifications and amendments
thereto herein referred. Seller is the "landlord" under the Lease and owns
unencumbered legal and beneficial title to the Lease and the rents and
other income thereunder, subject only to the collateral assignment of the
Lease and the rents thereunder in favor of the holder of an existing
mortgage or deed of trust encumbering the Property, which mortgage or deed
of trust shall be canceled and satisfied by Seller at the Closing. The term
of the Lease commenced on August 14, 1997, and expires on August 31, 2008.
The Tenant currently leases and occupies 100% of the rentable area of the
Improvements.

(b)  Lease - Assignment. To the best of Seller's knowledge, the
------------------                                         
Tenant has not assigned its interest in the Lease or sublet any portion   of the
premises leased to the Tenant under the Lease.

(c)  Lease - Default. (i) Seller has not received any notice of
---------------                                           
termination or default under the Lease, (ii) there are no existing or
uncured defaults by Seller or by the Tenant under the Lease, (iii) to the
best of Seller's knowledge, there are no events which with the passage of
time or notice, or both, would constitute a default by Seller or by the
Tenant, and Seller has complied with each and every undertaking, covenant,
and obligation of Seller under the Lease, and (iv) Tenant has not asserted
any defense, set-off, or counterclaim with respect to its tenancy or its
obligation to pay rent, additional rent, or other charges pursuant to the
Lease.

(d)  Lease - Rents and Special Consideration. Tenant: (i) has not
---------------------------------------                     
prepaid rent for more than the current month under the Lease, (ii) has not
received and is not entitled to receive any rent concession in connection
with its tenancy under the Lease other than as described in the Lease,
(iii) is not entitled to any special work (not yet performed), or
consideration (not yet given) in connection with its tenancy under the
Lease, and (iv) does not have any deed, option, or other evidence of any
right or interest in or to the Property, except for the Tenant's tenancy as
evidenced by the express terms of the Lease.

(e)  Lease - Commissions. No rental, lease, or other commissions with
-------------------                                             
respect to the Lease are payable to Seller, any partner of Seller, any
party affiliated with or related to Seller or any partner of Seller or any
third party whatsoever. All commissions payable under, relating to, or as a
result of the Lease have been cashed-out and paid and satisfied in full by
Seller or by Seller's predecessor in title to the Property.

5

(f)  Lease - Acceptance of Premises. (i) Tenant has accepted its 
------------------------------                              
leased premises located within the Property, including any and all work
performed therein or thereon pursuant to the Lease, (ii) Tenant is in full
and complete possession of its premises under the Lease, and (iii) Seller
has not received notice from the Tenant that the Tenant's premises are not
in full compliance with the terms and provisions of Tenant's Lease or are
not satisfactory for Tenant's purposes.

(g)  No Other Agreements. Other than the Lease and the Permitted
-------------------                                        
Exceptions, there are no leases, service contracts, management agreements,
or other agreements or instruments in force and effect, oral or written, to
which Seller is a party and that grant to any person whomsoever or any
entity whatsoever any right, title, interest or benefit in or to all or any
part of the Property or any rights relating to the use, operation,
management, maintenance, or repair of all or any part of the Property.

(h)  No Litigation. There are no actions, suits, or proceedings
-------------                                             
pending, or, to the best of Seller's knowledge, threatened by any
organization, person, individual, or governmental agency against Seller
with respect to the Property or against the Property, nor does Seller know
of any basis for such action. Seller has no knowledge of any pending or
threatened application for changes in the zoning applicable to the Property
or any portion thereof.

(i)  Condemnation. No condemnation or other taking by eminent domain 
------------                                                    
of the Property or any portion thereof has been instituted and, to the best
of Seller's knowledge, there are no pending or threatened condemnation or
eminent domain proceedings (or proceedings in the nature or in lieu
thereof) affecting the Property or any portion thereof or its use.

(j)  Proceedings Affecting Access. The Property is served by curb cuts
----------------------------                                     
for direct vehicular access to and from Dial Boulevard & Greenway-Hayden
Parkway adjoining the Property.  Said street(s) are public streets.  There
are no pending or, to the best of Seller's knowledge, threatened
proceedings that could have the effect of impairing or restricting access
between the Property and either of such adjacent public roads.

(k)  Intentionally Omitted.
----------------------

(l)  Condition of Improvements.  Seller is not aware of any structural
-------------------------                                        
or other defects, in the Improvements. The heating, ventilating, air
conditioning, electrical, plumbing, water, elevator(s), roofing, storm
drainage and sanitary sewer systems at or servicing the Land and
Improvements are, to the best of the Seller's knowledge, in good condition
and working order and Seller is not aware of any defects or deficiencies,
latent or otherwise, therein. The Improvements have been constructed in
compliance with applicable provisions of the Lease, City of Scottsdale
building regulations, and any recorded covenants, conditions and
restrictions.

(m)  Certificates. To the best of Seller's knowledge, there are
------------                                              
presently in effect permanent certificates of occupancy, licenses, and

6

permits as may be required for the Property, and the present use and
occupation of the Property is in compliance and conformity with the
certificates of occupancy and all licenses and permits. There has been no
notice or request of any municipal department, insurance company or board
of fire underwriters (or organization exercising functions similar
thereto), or mortgagee directed to Seller and requesting the performance of
any work or alteration to the Property which has not been complied with.

(n)  Violations. To the best of Seller's knowledge, there are no
----------                                                 
violations of law, municipal or county ordinances, or other legal
requirements with respect to the Property, and the Improvements thereon
comply with all applicable legal requirements with respect to the use,
occupancy, and construction thereof. The Property is zoned in a
classification which permits the use thereof in the present manner.  The
Property is not located in a flood hazard area.

(o)  Intentionally Omitted.
--------------------- 

(p)  Bankruptcy. Seller is "solvent" as said term is defined by
----------                                                
bankruptcy law and has not made a general assignment for the benefit of
creditors nor been adjudicated a bankrupt or insolvent, nor has a receiver,
liquidator, or trustee for any of Seller's properties (including the
Property) been appointed or a petition filed by or against Seller for
bankruptcy, reorganization, or arrangement pursuant to the Federal
Bankruptcy Act or any similar Federal or state statute, or any proceeding
instituted for the dissolution or liquidation of Seller.

(q)  Pre-existing Right to Acquire.  No person or entity has any right
-----------------------------                                    
or option to acquire the Property or any portion thereof which will have
any force or effect after the execution of this Agreement, other than
Purchaser and the Tenant.

(r)  Effect of Certification. To the best of Seller's knowledge,
-----------------------                                    
neither this Agreement nor the transactions contemplated herein will
constitute a breach or violation of, or default under, or will be modified,
restricted, or precluded by the Lease or the Permitted Exceptions.

(s)  Authorization. Seller is a duly organized and validly existing
-------------                                                 
corporation under the laws of the State of Minnesota. This Agreement has
been duly authorized and executed on behalf of Seller and constitutes the
valid and binding agreement of Seller, enforceable in accordance with its
terms, and all necessary action on the part of Seller to authorize the
transactions herein contemplated has been taken, and no further action is
necessary for such purpose.

(t)  Seller Not a Foreign Person. Seller is not a "foreign person"
---------------------------                                  
which would subject Purchaser to the withholding tax provisions of Section
1445 of the Internal Revenue Code of 1986, as amended.

7

(u)  Hazardous Substances. Seller hereby warrants and represents,
--------------------                                        
to the best of Seller's knowledge, and except as otherwise disclosed in
that certain Phase I Environmental Site Assessment of Lots 4 and 5,
Scottsdale Airpark North, by Liesch Southwest, Inc., dated September 22,
1998 that (i) no "hazardous substances", as that term is defined in the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. Section 9601, et. seq., the Resource
--  ---               
Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 et. seq.,
--  ---  
and the rules and regulations promulgated pursuant to these acts, any so-
called "super-fund" or "super-lien" laws or any applicable state or local
laws, nor any other   pollutants, toxic materials, or contaminants have
been or shall prior to Closing be discharged, disbursed, released, stored,
treated, generated, disposed of, or allowed to escape on the Property, (ii)
no asbestos or asbestos containing materials have been installed, used,
incorporated into, or disposed of on the Property, (iii) no polychlorinated
biphenyls are located on or in the Property, in the form of electrical
transformers, fluorescent light fixtures with ballasts, cooling oils, or
any other device or form, (iv) no underground storage tanks are located on
the Property or were located on the Property and subsequently removed or
filled, (v) no investigation, administrative order, consent order and
agreement, litigation, or settlement with respect to Hazardous Substances
is proposed, threatened, anticipated or in existence with respect to the
Property, and (vi) the Property has not previously been used as a landfill,
cemetery, or as a dump for garbage or refuse. Seller hereby indemnifies
Purchaser and holds Purchaser harmless from   and against any loss, cost,
damage, liability or expense due to or arising out of the breach of any
representation or warranty contained in this Paragraph.

EXCEPT AS EXPRESSLY PROVIDED TO THE CONTRARY HEREIN, PURCHASER IS ACQUIRING THE
PROPERTY IN ITS "AS IS" CONDITION AS OF THE DATE OF THE CLOSING.

9.   Seller's Additional Covenants. Seller does hereby further covenant and
-----------------------------  
agree as follows:

(a)  Operation of Property.  Seller hereby covenants that, from the
---------------------                                         
date of this Agreement up to and including the date of Closing, Seller
shall: (i) not negotiate with any third party respecting the sale of the
Property or any interest therein, (ii) not modify, amend, or terminate the
Lease, or enter into any new lease, contract, or other agreement respecting
the Property, (iii) not grant or otherwise create or consent to the
creation of any easement, restriction, lien, assessment, or encumbrance
respecting the Property, and (iv) cause the Property to be operated,
maintained, and repaired in the same manner as the Property is currently
being operated, maintained, and repaired.

(b)  Preservation of Lease. Seller shall, from and after the date of
---------------------                                          
this Agreement to the date of Closing, use its good faith efforts to
perform and discharge all of the duties and obligations and shall otherwise
comply with every covenant and agreement of the landlord under the Lease,
at Seller's expense, in the manner and within the time limits required
thereunder. Furthermore, Seller shall, for the same period of 

8

time, use diligent and good faith efforts to cause the Tenant under the
Lease to perform all of its duties and obligations and otherwise comply
with each and every one of its covenants and agreements under such Lease
and shall take such actions as are reasonably necessary to enforce the
terms and provisions of the Lease.

(c)  Tenant Estoppel Certificate.  At least five (5) days prior to
---------------------------                                  
expiration of the Inspection Period, Seller shall obtain and deliver to
Purchaser a fully completed estoppel certificate with respect to the Lease
in substantially the form of Exhibit "B" (the "Tenant Estoppel
-----------                      
Certificate"), duly executed by the Tenant thereunder. The Tenant Estoppel
Certificate shall be executed as of a date not more than thirty (30) days
prior to Closing.

(d)  Estoppel Certificate Regarding Declaration.  At least five (5)
------------------------------------------                    
days prior to expiration of the Inspection Period, Seller shall obtain and
deliver to Purchaser a fully completed estoppel certificate with respect to
the Declaration of Easements, Covenants, Conditions and Restrictions
recorded as document number 94-0684650, Maricopa County Records, in
substantially the form of Exhibit "E" to the Lease (the "Estoppel
-----------                            
Certificate Regarding Declaration"), duly executed by the Declarant
thereunder. Said certificate shall be executed as of a date not more than
thirty (30) days prior to Closing, shall contain updated information and
shall be addressed to Purchaser and its assigns and any lender making a
loan secured by the Property.

(e)  Insurance. From and after the date of this Agreement to the date
---------                                                       
and time of Closing, Seller shall, at its expense, continue to maintain the
all risk fire and extended coverage insurance policy covering the Property
which is currently in force and effect.

10.  Closing.  Provided that all of the conditions set forth in this
-------                                                        
Agreement are theretofore fully satisfied or performed, it being fully
understood and agreed, however, that Purchaser may expressly waive in writing,
at or prior to Closing, any conditions that are unsatisfied or unperformed at
such time, the consummation of the sale by Seller and purchase by Purchaser of
the Property (herein referred to as the "Closing") shall be held at 2:00 p.m.,
local time, on the first business day which is at least five (5) days after the
end of the Inspection Period, at the offices of Escrow Agent, or at such earlier
time as shall be designated by Purchaser in a written notice to Seller not less
than two (2) business days prior to Closing.

11.  Seller's Closing Documents.  For and in consideration of, and as a
--------------------------                                        
condition precedent to, Purchaser's delivery to Seller of the Purchase Price
described in Paragraph 3 hereof, Seller shall obtain or execute, at Seller's
expense, and deliver to Purchaser at Closing the following documents (all of
which shall be duly executed, acknowledged, and notarized where required and
shall survive the Closing):

(a)  Special Warranty Deed.  A Special Warranty Deed in substantially
---------------------                                           
the form of Exhibit "C";
----------  

(b)  Bill of Sale. A Bill of Sale conveying to Purchaser 
------------                                                  

9

marketable title to the Personal Property in the form and substance of
Exhibit "D";
----------- 

(c)  Blanket Transfer. A Blanket Transfer and Assignment in the form
----------------                                               
and substance of Exhibit "E";
----------  

(d)  Assignment and Assumption of Lease. An Assignment and Assumption
----------------------------------                              
of Lease in the form and substance of Exhibit "F", assigning to Purchaser
-----------                        
all of Seller's right, title, and interest in and to the Lease and the
rents thereunder (and which shall provide among other things that Seller
shall remain liable for its environmental indemnity to Tenant under the
Lease);

(e)  Seller's Affidavit. A customary seller's affidavit in the form
------------------                                            
required by the Title Company to satisfy the requirements of its commitment
and the endorsements contemplated by paragraph 7 hereof;

(f)  FIRPTA Certificate. A FIRPTA Certificate in such form as 
------------------                                       
Purchaser shall reasonably approve;

(g)  Certificates of Occupancy. The original Certificates of occupancy
-------------------------                                        
for all space within the Improvements;

(h)  Marked Title Commitment. The Title Commitment, marked to change
-----------------------                                        
the effective date thereof through the date and time of recording the
Special Warranty Deed, to reflect that Purchaser is vested with a fee
simple interest in the Land and the Improvements, and to reflect that all
requirements for the issuance of the final title policy pursuant to such
Title Commitment have been satisfied;

(i)  Keys and Records. All of the keys to any doors or locks on the
----------------                                              
Property and the original tenant files and other books and records relating
to the Property in Seller's possession;

(j)  Tenant Notice. Notice from Seller to the Tenant of the sale of 
-------------                                                  
the Property to Purchaser in such form as Purchaser shall reasonably
approve;

(k)  Settlement Statement. A settlement statement setting forth the
--------------------                                          
amounts paid by or on behalf of and/or credited to each of Purchaser and
Seller pursuant to this Agreement;

(l)  Other Documents. Such other documents as shall be reasonably
---------------                                              
required by Purchaser's counsel.

12.  Purchaser's Closing Documents. Purchaser shall obtain or execute and
-----------------------------                                       
deliver to Seller at Closing the following documents, all of which shall be duly
executed and acknowledged where required and shall survive the Closing:

(a)  Blanket Transfer. The Blanket Transfer and Assignment;
----------------                                      

(b)  Assignment and Assumption of Lease. The Assignment and Assumption
----------------------------------                               
of Lease;

10

(c)  Settlement Statement. A settlement statement setting forth the
--------------------                                          
amounts paid by or on behalf of and/or credited to each of Purchaser and Seller
pursuant to this Agreement; and

(d)  Other Documents. Such other documents as shall be reasonably
---------------                                             
required by Seller's counsel.

13.  Closing Costs.  Seller shall pay the cost of the Title Commitment,
-------------                                                     
including the cost of the examination of title to the Property made in
connection therewith, the premium for the owner's policy of title insurance
issued pursuant thereto, the cost of any transfer or documentary tax imposed by
any jurisdiction in which the Property is located, the cost of the as-built
survey, the attorneys' fees of Seller, and all other costs and expenses incurred
by Seller in closing and consummating the purchase and sale of the Property
pursuant hereto. Purchaser shall pay the attorneys' fees of Purchaser, and all
other costs and expenses incurred by Purchaser in closing and consummating the
purchase and sale of the Property pursuant hereto.  Each party shall pay one-
half of any escrow fees.

14.  Prorations.  The following items shall be prorated and/or credited
----------                                                        
between Seller and Purchaser as of Midnight preceding the date of Closing:

(a)  Rents. Rents, additional rents, and other income of the Property
-----                                                           
(other than security deposits, which shall be assigned and paid over to
Purchaser) collected by Seller from Tenant for the month of Closing.
Purchaser shall also receive a credit against the Purchase Price payable by
Purchaser to Seller at Closing for any rents or other sums (not including
security deposits) prepaid by Tenant for any period following the month of
Closing, or otherwise.

(b)  Property Taxes. To the extent the same are not paid by Tenant,
--------------                                                
City, state, county, and school district ad valorem taxes based on the ad
valorem tax bills for the Property, if then available, or if not, then on
the basis of the latest available tax figures and information. Should such
proration be based on such latest available tax figures and information and
prove to be inaccurate upon receipt of the ad valorem tax bills for the
Property for the year of Closing, either Seller or Purchaser, as the case
may be, may demand at any time after Closing a payment from the other
correcting such malapportionment. In addition, if after Closing there is an
adjustment or reassessment by any governmental authority with respect to,
or affecting, any ad valorem taxes for the Property for the year of Closing
or any prior year, any additional tax payment for the Property required to
be paid with respect to the year of Closing shall be prorated between
Purchaser and Seller and any such additional tax payment for the Property
for any year prior to the year of Closing shall be paid by Seller. This
agreement shall expressly survive the Closing.

(c)  Utility Charges. Except for utilities which are the 
---------------                                     
responsibility of Tenant, Seller shall pay all utility bills received prior
to Closing and shall be responsible for utilities furnished to the Property
prior to Closing. Purchaser shall be responsible for the payment of all
bills for utilities furnished to the Property subsequent

11

to the Closing. Seller and Purchaser hereby agree to prorate and pay their
respective shares of all utility bills received subsequent to Closing,
which agreement shall survive Closing.

15.  Purchaser's Default. In the event of default by Purchaser under the
-------------------                                                
terms of this Agreement, Seller's sole and exclusive remedy shall be to receive
the Earnest Money as liquidated damages and thereafter the parties hereto shall
have no further rights or obligations hereunder whatsoever. It is hereby agreed
that Seller's damages will be difficult to ascertain and that the Earnest Money
constitutes a reasonable liquidation thereof and is intended not as a penalty,
but as fully liquidated damages. Seller agrees that in the event of default by
Purchaser, it shall not initiate any proceeding to recover damages from
Purchaser, but shall limit its recovery to the retention of the Earnest Money.

Seller's Initial /s/ DB             Purchaser's Initials /s/ LW
-----------------                       -----------------

16.  Seller's Default.  In the event of default by Seller under the terms
----------------                                                    
of this Agreement, including, without limitation, the failure of Seller to cure
any title defects or objections, except as otherwise specifically set forth
herein, at Purchaser's option: (i) if any such defects or objections arose by,
through, or under Seller or if any such defects or objections consist of taxes,
mortgages, deeds of trust, deeds to secure debt, mechanic's or materialman's
liens, or other such monetary encumbrances, Purchaser shall have the right to
cure such defects or objections, in which event the Purchase Price shall be
reduced by an amount equal to the costs and expenses incurred by Purchaser in
connection with the curing of such defects or objections, and upon such curing,
the Closing hereof shall proceed in accordance with the terms of this Agreement;
or (ii) Purchaser shall have the right to terminate this Agreement by giving
written notice of such termination to Seller, whereupon Escrow Agent shall
promptly refund all Earnest Money to Purchaser, and Purchaser and Seller shall
have no further rights, obligations, or liabilities hereunder, except as may be
expressly provided to the contrary herein; or (iii) Purchaser shall have the
right to accept title to the Property subject to such defects and objections
with no reduction in the Purchase Price, in which event such defects and
objections shall be deemed "Permitted Exceptions"; or (iv) Purchaser may elect
to seek specific performance of this Agreement.

17.  Condemnation.  If, prior to the Closing, all or any part of the
------------                                                   
Property is subjected to a bona fide threat of condemnation by a body having the
power of eminent domain or is taken by eminent domain or condemnation (or sale
in lieu thereof), or if Seller has received notice that any condemnation action
or proceeding with respect to the Property is contemplated by a body having the
power of eminent domain, Seller shall give Purchaser immediate written notice of
such threatened or contemplated condemnation or of such taking or sale, and
Purchaser may by written notice to Seller given within thirty (30) days of the
receipt of such notice from Seller, elect to cancel this Agreement. If Purchaser
chooses to cancel this Agreement in accordance with this Paragraph 17, then the
Earnest Money shall be returned immediately to Purchaser by Escrow Agent and the
rights, duties, obligations, and liabilities of the parties hereunder shall
immediately terminate and be of no further force and effect. If Purchaser does
not elect to cancel this Agreement 

12

in accordance herewith, this Agreement shall remain in full force and effect and
the sale of the Property contemplated by this Agreement, less any interest taken
by eminent domain or condemnation, or sale in lieu thereof, shall be effected
with no further adjustment and without reduction of the Purchase Price, and at
the Closing, Seller shall assign, transfer, and set over to Purchaser all of the
right, title, and interest of Seller in and to any awards that have been or that
may thereafter be made for such taking.

18.  Damage or Destruction.  If any of the Improvements shall be destroyed
---------------------                                                
or damaged prior to the Closing, and the estimated cost of repair or replacement
exceeds $100,000.00 or if the Lease shall terminate as a result of such damage,
Purchaser may, by written notice given to Seller within twenty (20) days after
receipt of written notice from Seller of such damage or destruction, elect to
terminate this Agreement, in which event the Earnest Money shall immediately be
returned by Escrow Agent to Purchaser and except as expressly provided herein to
the contrary, the rights, duties, obligations, and liabilities of all parties
hereunder shall immediately terminate and be of no further force or effect. If
Purchaser does not elect to terminate this Agreement pursuant to this Paragraph
18, or has no right to terminate this Agreement (because the damage or
destruction does not exceed $100,000.00 and the Lease remains in full force and
effect), and the sale of the Property is consummated, Purchaser shall be
entitled to receive all insurance proceeds paid or payable to Seller by reason
of such destruction or damage under the insurance required to be maintained by
Seller pursuant to Paragraph 9(d) hereof (less amounts of insurance theretofore
received and applied by Seller to restoration). If the amount of said casualty
or rent loss insurance proceeds is not settled by the date of Closing, Seller
shall execute at Closing all proofs of loss, assignments of claim, and other
similar instruments to ensure that Purchaser shall receive all of Seller's
right, title, and interest in and under said insurance proceeds.

19.  Assignment.  Purchaser's rights and duties under this Agreement shall
----------                                                           
not be assignable except to an affiliate of Purchaser without the consent of
Seller which consent shall not be unreasonably withheld.

20.  Broker's Commission.  Seller has by separate agreement agreed to pay a
-------------------                                                   
brokerage commission to CB Commercial Real Estate Group (the "Broker").
Purchaser and Seller hereby represent each to the other that they have not
discussed this Agreement or the subject matter hereof with any real estate
broker or agent other than Broker so as to create any legal right in any such
broker or agent to claim a real estate commission with respect to the conveyance
of the Property contemplated by this Agreement. Seller shall and does hereby
indemnify and hold harmless Purchaser from and against any claim, whether or not
meritorious, for any real estate sales commission, finder's fees, or like
compensation in connection with the sale contemplated hereby and arising out of
any act or agreement of Seller, including any claim asserted by Brokers and any
broker or agent claiming under Broker.  Likewise, Purchaser shall and does
hereby indemnify and hold harmless Seller from and against any claim, whether or
not meritorious, for any real estate sales commission, finder's fees, or like
compensation in connection with the sale contemplated hereby and arising out of
any act or agreement of Purchaser, except any such claim asserted by Broker and
any broker or agent claiming under Broker. This Paragraph 21 shall survive the
Closing or any termination of this Agreement.

13

21.  Notices.  Wherever any notice or other communication is required or
-------                                                            
permitted hereunder, such notice or other communication shall be in writing and
shall be delivered by telecopy, overnight courier, by hand, or sent by U.S.
registered or certified mail, return receipt requested, postage prepaid, to the
addresses set out below or at such other addresses as are specified by written
notice delivered in accordance herewith:

PURCHASER:          c/o Wells Capital, Inc.
6200 The Corners Parkway, Suite 250
Norcross, Georgia 30092
Attn: Chief Investment Officer

with a copy to:     O'Callaghan & Stumm LLP
127 Peachtree Street, N. E., Suite 1330
Atlanta, Georgia 30303
Attn: William L. O'Callaghan, Esq.

SELLER:             Ryan Companies US, Inc.
700 International Centre
900 Second Avenue South
Minneapolis, MN 55402-3387
Attn: Timothy M. Gray

with a copy to:     Ryan Companies US, Inc.
700 International Centre
900 Second Avenue South
Minneapolis, MN 55402-3387
Attn: Dennis Buratti

Any notice or other communication mailed as herein above provided shall be
deemed effectively given or received on the date of delivery, if delivered by
telecopy, hand or by overnight courier, or otherwise on the third (3rd) business
day following the postmark date of such notice or other communication.

22.  Possession.  Possession of the Property shall be granted by Seller to
----------                                                           
Purchaser on the date of Closing, subject only to the Lease and the Permitted
Exceptions.

23.  Time Periods.  If the time period by which any right, option, or
------------                                                    
election provided under this Agreement must be exercised, or by which any act
required hereunder must be performed, or by which the Closing must be held,
expires on a Saturday, Sunday, or holiday, then such time period shall be
automatically extended through the close of business on the next regularly
scheduled business day.

24.  Survival of Provisions.  All covenants, warranties, and agreements set
----------------------                                                
forth in this Agreement shall survive the execution or delivery of any and all
deeds and other documents at any time executed or delivered under, pursuant to,
or by reason of this Agreement, and shall survive the payment of all monies made
under, pursuant to, or by reason of this Agreement for a period of two years
from Closing except with respect to paragraphs 8(u) and 32 which shall survive
for an unlimited time.

14

25.  Severability.  This Agreement is intended to be performed in
------------                                                
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules, and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby but rather shall be enforced to the greatest extent permitted
by law.

26.  Authorization.  Purchaser represents to Seller that this Agreement has
-------------                                                         
been duly authorized and executed on behalf of Purchaser and constitutes the
valid and binding agreement of Purchaser, enforceable in accordance with its
terms, and all necessary action on the part of Purchaser to authorize the
transactions herein contemplated has been taken, and no further action is
necessary for such purpose.

27.  General Provisions.  No failure of either party to exercise any power
------------------                                                   
given hereunder or to insist upon strict compliance with any obligation
specified herein, and no custom or practice at variance with the terms hereof,
shall constitute a waiver of either party's right to demand exact compliance
with the terms hereof. This Agreement contains the entire agreement of the
parties hereto, and no representations, inducements, promises, or agreements,
oral or otherwise, between the parties not embodied herein shall be of any force
or effect. Any amendment to this Agreement shall not be binding upon the parties
hereto unless such amendment is in writing and executed by all parties hereto.
The provisions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors, and assigns. Time is of the essence of this Agreement. This
Agreement may be executed in multiple counterparts, each of which shall
constitute an original, but all of which taken together shall constitute one and
the same agreement. The headings inserted at the beginning of each paragraph are
for convenience only, and do not add to or subtract from the meaning of the
contents of each paragraph. This Agreement shall be construed and interpreted
under the laws of the State of Arizona. Except as otherwise provided herein, all
rights, powers, and privileges conferred hereunder upon the parties shall be
cumulative but not restrictive to those given by law. All personal pronouns used
in this Agreement, whether used in the masculine, feminine, or neuter gender
shall include all genders, and all references herein to the singular shall
include the plural and vice versa.

29.  Effective Date.  The "effective date" of this Agreement shall be
--------------                                                  
deemed to be the date set forth in the preamble of this Agreement.

30.  Contingency Regarding Other Contracts. Simultaneously with the 
------------------------------------- 
execution hereof, the parties have entered into other purchase agreements which 
are listed on Exhibit "G" hereto, and it shall be a condition of the parties 
obligations hereunder that the closings with respect to the properties described
therein shall occur simultaneously with the closing herein.

31.  Duties as Escrow Agent. In performing its duties hereunder, Escrow
----------------------
Agent shall not incur any liability to anyone for any damages, losses or
expenses, except for its gross negligence or willful misconduct, and it shall
accordingly not incur any such liability with respect to any action taken or
omitted in good faith upon advice of its counsel or in reliance upon

15

any instrument, including any written notice or instruction provided for in this
Agreement, not only as to its due execution and the validity and effectiveness
of its provision, but also as to the truth and accuracy of any information
contained therein that Escrow Agent shall in good faith believe to be genuine,
to have been signed or presented by a proper person and to conform to the
provisions of this Agreement. Seller and Purchaser hereby agree to indemnify and
hold harmless Escrow Agent against any and all losses, claims, damages,
liabilities and expenses, including reasonable costs of investigation and legal
fees and disbursements, that may be imposed upon Escrow Agent or incurred by
Escrow Agent in connection with its acceptance or performance of its duties
hereunder as escrow agent, including without limitation, any litigation arising
out of this Agreement. If any dispute shall arise between Seller and Purchaser
sufficient in the discretion of Escrow Agent to justify its doing so, Escrow
Agent shall be entitled to tender into the registry or custody of the clerk of
the Court for the county in which the Property is located or the clerk for the
United States District Court having jurisdiction over the county in which the
Property is located, any or all money (less any sums required to pay Escrow
Agent's attorneys' fees in filing such action), property or documents in its
hands relating to this Agreement, together with such pleadings as it shall deem
appropriate, and thereupon be discharged from all further duties under this 
Agreement. Seller and Purchaser shall bear all costs and expenses of any such
legal proceedings.

32.  Expansion.  If Buyer proposes to expand the building which is a part
---------
of the Property, it will negotiate in good faith with Seller to provide
design/build services with respect to such expansion and will contract with
Seller for such work if its proposal therefore is competitive and is otherwise
approved by the Tenant.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day, month and year first above written.

"SELLER":

RYAN COMPANIES US, INC.

By: /s/ Dennis Buratti
--------------------------------

Its: Vice President
-------------------------------

"PURCHASER":

WELLS CAPITAL, INC.

By: /s/ Leo F. Wells
-------------------------------

Its: President
------------------------------

"ESCROW AGENT":

OLD REPUBLIC TITLE AGENCY

By: /s/ Gary Johnson
--------------------------------

Its: Vice President    2/24/00
------------------------------

16

EXHIBIT 10.47

LEASE AGREEMENT

FOR THE DIAL BUILDING

Ryan Companies US, Inc.
Landlord

and

The Dial Corporation
Tenant

__________________________

SINGLE TENANT LEASE AGREEMENT

__________________________

Dated as of March 21, 1997

TABLE OF CONTENTS
-----------------

1.  Leased Property..........................................  1

2.  Lease Term...............................................  1

2.1  Lease Term..........................................  1
2.2  Commencement Date...................................  2
2.3  Rental Commencement Date............................  2
2.4  Failure to Deliver..................................  2
2.5  Early Entry.........................................  3

3.  Basic Rent...............................................  3

3.1  Basic Rent..........................................  3
3.2  Manner of Payment...................................  3

4.  AdditionaL Rent..........................................  3

5.  Net Lease................................................  4

6.  Condition and Use of Property............................  4

7.  Maintenance and Repairs..................................  5

8.  Alterations and Additions................................  7

9.  Tenant's Equipment.......................................  7

10.  Utility Services.........................................  7

11.  No Claims Against Landlord...............................  8

12.  Indemnities..............................................  8

13.  Inspection...............................................  9

14.  Payment of Taxes.........................................  9

15.  Compliance with Legal and Insurance Requirements.........  9

16.  Mechanic's Liens......................................... 10

i

TABLE OF CONTENTS
(continued)

[CAPTION] 

Page 
----  

17.  Permitted Contests.......................................  10

18.  Insurance................................................  11

18.1  Risks to be Insured................................  11
18.2  Policy Provisions..................................  11
18.3  Delivery of Policies; Insurance Certificates.......  12
18.4  Mutual Waiver of Insurable Claims..................  12

19.  Hazardous Materials......................................  12

19.1  Definitions........................................  12
19.2  Warranties and Obligations.........................  13
19.3  Provisions Survive Termination.....................  14
19.4  Controlling Provisions.............................  14

20.  Damage to or Destruction of Property.....................  14

20.1  Tenant to Give Notice..............................  14
20.2  Restoration........................................

14
20.3  Total Destruction..................................  14
20.4  Tenant's Right to Terminate........................  15
20.5  Abatement of Rent..................................  15
20.6  Application of Insurance Proceeds..................  15
20.7  Waiver of Statutory Provisions.....................  16

21.  Taking of Property.......................................  16

21.1  Tenant to Give Notice..............................  16
21.2  Partial Taking.....................................  16
21.3  Total Taking.......................................  16
21.4  Application of Awards..............................  17

22.  Estoppel Certificates....................................  17

22.1  Estoppel Certificate of Tenant.....................  17  
22.2  Estoppel Certificate of Landlord...................  17
22.3  Financial Statements...............................  18

23.  Right of Landlord to Perform Tenant's Covenants, etc.....  18

ii

TABLE OF CONTENTS
(continued)

Page
----      

24.  Assignments, Subleases, Mortgages........................  19

24.1  Assignments and Subleases by Tenant................  19
24.2  Assignments and Mortgages by Landlord..............  19

25.  Events of Default; Termination...........................  20

26.  Remedies.................................................  21

27.  [INTENTIONALLY OMITTED]..................................  22

28.  No Waiver................................................  22

29.  Remedies Cumulative......................................  22

30.  [INTENTIONALLY OMITTED]..................................  22

31.  Surrender................................................  22

32.  Notices..................................................  23

33.  Short Form or Memorandum.................................  23

34.  Quiet Enjoyment..........................................  24

35.  Miscellaneous............................................  24

36.  Option to Extend.........................................  24

36.1  Exercise of Option.................................  24
36.2  Option Term Rent...................................  25
36.3  Fair Market Rent...................................  25
36.4  Appraisal..........................................  25

37.  Reasonable Approval Standard.............................  26

38.  Right of First Offer.....................................  26

38.1  Grant of Right.....................................  26
38.2  Notice of Sale.....................................  27        

iii 

TABLE OF CONTENTS
(continued)

Page      
----

38.3  Response by Tenant.................................  27
38.4  No Response........................................  27
38.5  Termination........................................  27
38.6  Continuation of Rights.............................  27
38.7  Exempted Sales.....................................  27

39.  Tenant's Consent to New Contract Affecting the Property..  28

40.  Landlord's Default.......................................  28

40.1  Events of Default..................................  28  
40.2  Tenant's Remedies..................................  28

41.  Parking..................................................  29

42.  Signage..................................................  29

43.  Authority................................................  29

44.  Title....................................................  29

45.  Non-Disturbance Agreement................................  29

46.  Holding Over.............................................  30

47.  Definitions..............................................  30

48.  CC&Rs Estoppel Certificate...............................  33

iv

LEASE AGREEMENT
---------------

THIS LEASE AGREEMENT (the "Lease"), dated for reference purposes only
as of March 21, 1997, between Ryan Companies US, Inc., a Minnesota corporation,
formerly known as Ryan Construction Companies of Minnesota, Inc., a Minnesota
corporation (hereinafter referred to as "Landlord"), and The Dial Corporation, a
Delaware corporation (hereinafter referred to as "Tenant").  Each defined term
used hereinbelow shall have the meaning ascribed to such term in Section 47
below.

In consideration of the mutual agreements contained in this Lease,
Landlord and Tenant agree with each other as follows:

1.  Leased Property.  Upon and subject to the conditions and
---------------                                           
limitations set forth below, Landlord hereby leases to Tenant, and Tenant hereby
leases and rents from Landlord, the following real property ("Property")
situated in the City of Scottsdale, County of Maricopa, State of Arizona,
described as follows:

(a) Those certain parcels of real property consisting of
approximately 8.8375 acres, more particularly described in Exhibit "A" attached
hereto, together with the exclusive use of all parking areas (except as
otherwise provided in Section 41 hereof), access and perimeter roads, driveways,
sidewalks, landscape areas, service areas, trash disposal facilities, and
similar areas now or hereafter located thereon, together with all rights and
easements appurtenant thereto now or hereafter existing (collectively, the
"Parcels");

(b) That certain existing two story building (the "Building") with
mezzanine located on one of the Parcels at the general location shown on the
Site Plan attached hereto as Exhibit "B" containing approximately 129,689 square
feet of Gross Building Area, consisting of approximately 102,000 square feet of
Gross Building Area on the first floor and 27,689 square feet of Gross Building
Area on the second floor mezzanine (subject to remeasurement as provided herein)
and other improvements to the Building and on the Parcels be constructed by
Landlord ("Landlord Work", as defined in the Improvement Agreement) in
accordance with the provisions of the Improvement Agreement attached hereto as
Exhibit "C" (the "Improvement Agreement"), together with all other buildings,
improvements and structures now or hereafter located on the Property.

The Building and the Landlord Work are collectively referred to in
this Lease as the "Improvements".  During the Lease Term, Tenant shall have
access to the Property and into the interior of the Improvements 24 hours per
day, 7 days per week.

2.  Lease Term.
----------   

2.1  Lease Term.  The term of this Lease (the "Lease Term") shall
----------     
commence on the Commencement Date (as defined below) and shall expire at
midnight on the last calendar day of the one hundred twenty sixth (126th) month
following the calendar month 

in which the Rental Commencement Date (as defined below) occurs, unless this
Lease shall sooner terminate as provided herein or shall be extended, as
provided in Section 36 below. Within five (5) days after the Commencement Date
and the Rental Commencement Date become ascertainable, as provided in Sections
2.2 and 2.3 below, Landlord and Tenant shall execute a written amendment to this
Lease specifying the Commencement Date, the Rental Commencement Date and the
date on which the Lease Term shall end, subject to the provisions of Section 36
below, a copy of which is attached hereto as Exhibit "F".

2.2  Commencement Date.  As used in this Lease, the term
-----------------                                    
"Commencement Date" shall mean the date when Landlord delivers to Tenant the
Property with the Landlord Work being Substantially Completed (as defined in the
Improvement Agreement) in a clean and tidy state, with vacant possession.
Landlord shall give Tenant at least thirty (30) days prior written notice of the
date when the Commencement Date shall occur.

2.3  Rental Commencement Date.  As used in this Lease, the term
------------------------                                    
"Rental Commencement Date" shall mean the date six (6) months following the
Commencement Date, unless the Rental Commencement Date is delayed pursuant to
Section 2.4 below, in which case it shall mean such delayed date.

2.4  Failure to Deliver.  The target date for the Commencement
------------------ 
Date (the "Target Commencement Date") is July 15, 1997. For each day beyond
August 14, 1997 up to, but not including, September 15, 1997, that Landlord is
unable to deliver possession of the Property to Tenant with the Landlord Work
being Substantially Completed for any reason other than Excused Delay (as
defined in the Improvement Agreement), the Rental Commencement Date shall be
delayed on (1) day. For each day from and beyond September 15, 1997 up to, but
not including, October 15, 1997, that Landlord is unable to deliver possession
of the Property to Tenant with the Landlord Work being Substantially Completed
for any reason other than Excused Delay, the Rental Commencement Date shall be
delayed one and one-half (1 1/2) days. For each day from and beyond October 15,
1997 up to, but not including, November 14, 1997 that Landlord is unable to
deliver possession of the Property to Tenant with the Landlord Work being
Substantially Completed for any reason other than Excused Delay, the Rental
Commencement Date shall be delayed two (2) days. Notwithstanding the occurrence
of any Excused Delay (as defined in the Improvement Agreement, but excepting
from that definition any delays resulting solely from change orders requested by
Tenant, delays in Tenant's delivery of any plans or specifications to Landlord
beyond the date therefor set forth in the Improvement Agreement and delays in
Tenant's review of any plans and specifications submitted to Tenant for review
beyond the period for such review set forth in the Improvement Agreement, each
category of which delays shall extend the date set forth immediately below in
this Section 2.4 on a day for day basis, but only following Landlord's written
notice to Tenant of such delay as provided in the definition of Excused Delay in
the Improvement Agreement), if Landlord is unable to deliver possession of the
Property with the Landlord Work Substantially Completed on or before November
14, 1997, then Tenant shall have the right to terminate this Lease by giving
written notice of termination to Landlord at any time after such date, but prior
to the time that Landlord had delivered possession of the Property with the
Landlord Work Substantially 

2

Completed to Tenant. Any such termination shall be in addition to any other
rights or remedies that Tenant may have under this Lease, at law or in equity,
unless Landlord's failure to cause the Landlord Work to be Substantially
Completed on or before November 14, 1997 is due primarily (i.e., more than 50%
of such delay) to Excused Delay, in which event Landlord's total liability to
Tenant resulting from such termination and delay shall be limited to an amount
equal to all documented, out-of-pocket costs incurred by Tenant (including,
without limitation, fees and costs of design and construction professionals,
consultants and attorneys) in connection with the negotiation and drafting of
this Lease, the diligence review of the Property and the space planning and
design of any of the Improvements.

2.5  Early Entry.  Tenant shall be permitted to occupy the
-----------
Property four (4) weeks prior to the anticipated Commencement Date for the
purpose of installing Tenant's Equipment (including, without limitation,
telephone room equipment, computer cabling and work station furniture systems),
provided such early entry shall be at Tenant's sole risk and subject to all the
terms and provisions hereof, except for the payment of Basic Rent or Additional
Rent which shall commence on the Rental Commencement Date. Notwithstanding the
foregoing, Landlord shall use commercially reasonable efforts to take all
necessary precautions to protect such equipment from damage or theft during the
construction process. Tenant agrees that such early access shall not materially
interfere with the Landlord Work and shall not result in any additional costs to
Landlord, and Landlord and Tenant shall instruct their construction
professionals to coordinate their activities to this end.

3.  Basic Rent.
----------   

3.1  Basic Rent.  Basic rent ("Basic Rent") shall be payable
---------- 
monthly during the Lease Term commencing on the Rental Commencement Date in an
amount equal to the product of Ten and 70/100 Dollars ($10.70) per square foot
multiplied by the number of square feet of Gross Building Area contained within
the Improvements.

3.2  Manner of Payment.  The Basic Rent and all other sums payable
-----------------
to Landlord hereunder shall be payable in such currency of the United States of
America as at time of payment shall be legal tender for the payment of public
and private debts and shall be paid to Landlord at Landlord's address set forth
below or to such other person or address as Landlord from time to time may
designate.

4.  Additional Rent.  Tenant will also pay, from time to time on or
---------------                                                  
after the Rental Commencement Date, as provided in this Lease or on demand of
Landlord, as additional rent (the "Additional Rent") (a) all other amounts,
liabilities and obligations that Tenant herein expressly assumes or agrees to
pay, (b) together with each installment of Basic Rent, the amount of any
transaction privilege tax that is assessed against or payable by Landlord solely
as a result of this Lease, and (c) if the amounts specified in clauses (i) or
(ii) below, as applicable, are not paid to Landlord within five (5) days
following the delivery of written notice from Landlord to Tenant that such
amounts were not received when due (provided that such written notice shall be a
condition precedent to imposing such interest only one time in any twelve (12)
calendar 

3

month period), then interest at the Interest Rate on (i) such of the
foregoing amounts, liabilities and obligations as are payable by Tenant but are
not paid when due and that Landlord shall have paid on behalf of Tenant in
accordance with its rights under Section 23 of this Lease, from the date of
payment thereof by Landlord until paid by Tenant and (ii) all overdue
installments of Basic Rent.

5.  Net Lease.  Except as otherwise expressly provided in this Lease
---------                                                         
including, without limitation, Section 40 hereof, this Lease is a net lease, and
the Basic Rent, Additional Rent and all other sums payable hereunder shall be
paid without setoff or deduction.  Except as otherwise expressly provided in
this Lease including, without limitation, Sections 6, 19, 20, 21 and 40 hereof,
Tenant shall at all times remain bound by this Lease and shall at all times
remain obligated to pay the stated rentals required by this Lease.  Except as
specifically set forth in this Lease to the contrary, including, without
limitation, Sections 2, 20, 21 and 39 hereof, Tenant shall in no event have any
right to terminate this Lease.

6.  Condition and Use of Property.  Subject to the provisions of the
-----------------------------                                     
Improvement Agreement and except as expressly provided below, Tenant, upon
acceptance of possession of the Property, acknowledges that Tenant will be fully
familiar with the physical condition of the Property and has received the same
in good and clean order and condition, and that the Property complies in all
respects with all requirements of this Lease.  Notwithstanding the foregoing to
the contrary, Landlord makes the following representations and warranties to
Tenant as of the Commencement Date:

(a) There are no material physical, mechanical or other defects in
the design, construction or operation of any portion of the Improvements
(including, without limitation, the Building Systems) and all of the
Improvements (including, without limitation, the Building Systems) are in good
operating condition and repair;

(b) The Property is in full compliance with all applicable Legal
Requirements including, without limitation, the Americans With Disabilities Act
of 1990, building codes, zoning and land use laws and environmental laws;

(c) There are no condemnation, environmental, zoning or other 
land-use regulation proceedings, either instituted or, to Landlord's actual
knowledge without investigation, planned to be instituted against the Property;

(d) All water, sewer, gas, electric, telephone, and drainage
facilities and all other utilities required by Legal Requirements or by the
normal use and operation of the Property, are all connected pursuant to valid
permits, and are and will be adequate to service the Property for general office
purposes and to permit full compliance with all Legal Requirements and normal
usage of the Property by Tenant;

(e) Landlord has obtained all licenses, permits, easements and
rights of way, including proof of dedication, required from all governmental
authorities having 

4

jurisdiction over the Property or from private parties for the normal use and
operation of the Property and to insure vehicular and pedestrian ingress to and
egress from the Property over adjacent public highways, streets and roads and to
provide parking as required in this Lease;

(f) There is no litigation pending or threatened against the
Property (or against Landlord, if such litigation against Landlord would
materially and adversely affect the Property);

(g) Landlord is a Minnesota corporation, duly organized and
validly existing and in good standing under the laws of the State of Minnesota
and is in good standing under the laws of the State of Arizona;

(h) The terms of this Lease or the Improvement Agreement do not
and will not violate any provisions of any agreement or judicial order to which
Landlord is a party or to which Landlord or the Property is subject; and

(i) There are no persons or entities in occupancy or with a
possessory right in or to all or any portion of the Property and, to Landlord's
actual knowledge without investigation, there are no unrecorded easements or
claims of encroachment or prescriptive easements affecting the Property.

Notwithstanding the foregoing representations and warranties, Landlord
shall not be deemed to have breached any such representation or warranty solely
as a result of conditions of the Property resulting from Tenant's design of the
Tenant Improvements.  All of the foregoing representations and warranties shall
survive termination of this Lease for a period of three years.  During the Lease
Term Landlord shall be responsible promptly to remedy at its sole cost any
violations of any of the foregoing representations and warranties to the extent
that Tenant's use or occupancy of the property shall be impaired as determined
by Tenant in its sole good faith judgment.  In addition, Base Rent and
Additional Rent shall be abated during the period between the date of such
discovery and the date such violation is fully remedied in proportion to the
degree to which Tenant's occupancy or use of the Property is so impaired.
Tenant may use the Property for any legal purpose and will not do or permit any
act or thing that is contrary to any Legal Requirement or Insurance Requirement,
or that may impair the value or utility of the Property or any part thereof, or
that constitutes a public or private nuisance or waste of the Property or any
part thereof.  Notwithstanding the foregoing, if Tenant proposes to change the
use of the Property from general office purposes to any other use that would
materially increase the use of Hazardous Materials (as defined in Section 19.1
below) upon the Property, Tenant shall not permit such change of use to occur
without Landlord's prior written consent, which consent shall not be
unreasonably withheld or delayed.

7.  Maintenance and Repairs.  Except as provided below, Tenant at its
-----------------------                                        
expense will keep the Property and the adjoining sidewalks, curbs, landscaping
and all means of access to the Property in good and clean order and condition
(including painting the exterior of the Building at least one time every four
years following the Rental Commencement Date), subject 

5

to ordinary wear and tear, and will promptly, at its own expense, make all
necessary or appropriate repairs, replacements and renewals thereof, whether
interior or exterior, ordinary or extraordinary, foreseen or unforeseen. All
repairs, replacements and renewals shall be at least equal in quality, utility
and class to the original condition of the Property. Not less frequently than
annually, Tenant shall cause an inspection of the Building Systems to occur and
shall cause any customary annual maintenance to be performed to the Building
Systems. At Landlord's request, Tenant shall deliver to Landlord reasonable
evidence that any such inspection or maintenance has occurred for the most
recent annual period. Notwithstanding the foregoing, Landlord, at its expense,
shall:

(a) keep and maintain the structural elements of the Building in
good order, condition and repair, except to the extent any maintenance or repair
thereof is required because of the negligence or willful misconduct of Tenant
(and Landlord does not receive insurance proceeds therefor). (As used herein,
the term "structural elements of the Building" shall include, without
limitation, foundations, footings, floor slabs, walls, structural or exterior
roof structure, roofing and roof membrane);

(b) enforce roof guaranties to maintain in good order and repair,
including replacing, as necessary, the roofing and roof membrane for a period of
ten (10) years commencing on the Commencement Date;

(c) repair any latent defects in the Improvements;

(d) perform any repairs or replacements, as necessary, to remedy
any violation of any warranty provided in Section 6 hereof;

(e) perform any capital repairs, capital replacements and capital
improvements (as defined by GAAP) required to maintain the Building Systems;

(f) so long as Landlord is also the owner of any land over which
any easements appurtenant to the Property are located, maintain such easement
areas located on land owned by Landlord in good order, condition and repair; and

(g) so long as Landlord is also the owner of any land adjacent to
the Property, maintain such adjacent land owned by Landlord in a safe and
presentable condition.

In addition to all of the foregoing, if Tenant is otherwise obligated
under this Section 7 to bear the cost of any capital improvement item whose
useful life (as determined in accordance with GAAP) exceeds the remainder of the
Lease Term (excluding extensions thereof unless Tenant shall have previously
exercised its extension option pursuant to Section 36 hereof), then,
notwithstanding any other provision of this Lease to the contrary, the cost of
such improvement item shall be prorated over its reasonably estimated useful
life, and the portion that is attributable to the period of time after
expiration of the Lease Term (excluding extensions thereof unless Tenant shall
have previously exercised its extension option pursuant to Section 

6

36 hereof) shall be borne by Landlord and paid to Tenant promptly following
Tenant's written demand therefor. Prior to incurring any such cost for any
capital item, Tenant shall deliver written notice to Landlord that Tenant is
considering incurring such capital cost, and Tenant shall consult with Landlord
before incurring such cost. The foregoing sentence is a requirement that Tenant
consult with Landlord only, and shall not be understood to provide Landlord with
any approval right over Tenant's incurring any such capital cost.

Landlord shall assign to Tenant for the term of this Lease the benefit
of all assignable warranties available to Landlord which would reduce the cost
of performing the obligations of Tenant to make repairs under this Section 7.
Landlord shall cooperate with Tenant in the enforcement of such warranties.
Notwithstanding any provision hereinabove to the contrary, Tenant shall have the
right, with respect to any repair obligations imposed on Landlord, to perform
such repair in lieu of Landlord and to be reimbursed by Landlord, upon demand,
for the costs of such repair.

8.  Alterations and Additions.  Tenant at its expense may make
-------------------------                                   
alterations of and additions to the Property or any part thereof; provided,
however, that any such alteration or addition (a) shall not materially and
adversely change the general character of the Improvements located on the
Property, or materially reduce the fair market value of any such Improvements
immediately before such alteration or addition (assuming the Property was then
being maintained in accordance with the terms of this Lease), (b) shall be
effected with due diligence, in a good and workmanlike manner and in compliance
with all Legal Requirements, Insurance Requirements and the provisions of
Section 15 hereof, and (c) (except as may be permitted pursuant to Section 17
hereof) shall be fully paid for by Tenant upon its construction or installation
on the Property.  All alterations of and additions to the Improvements, other
than alterations and additions which Tenant elects to remove at the end of the
Term in accordance with its rights below, shall become the property of Landlord
upon termination of this Lease and shall remain on and constitute a part of the
Property.  Notwithstanding any provision hereinabove to the contrary, Tenant may
elect to (but shall not be obligated to) remove any alteration, addition or
improvement, other than the Improvements or other improvements paid for by
Landlord, at the end of the Lease Term and repair any damage caused by such
removal.

9.  Tenant's Equipment.  All Tenant's Equipment shall remain the
-------------------                                          
property of Tenant at all times during the Lease Term.  Tenant will immediately
repair at its expense all damage to the Property caused by any removal of any of
the same from the Property.

10. Utility Services.  Tenant will pay or cause to be paid all
----------------                                            
charges of any nature for utilities, communications and other similar services
used by Tenant at the Property.  Landlord shall cause all applicable utilities
to be separately metered to the Property.  All utilities (including, without
limitation, HVAC service) shall be available to Tenant 24 hours per day, 7 days
per week, provided that Tenant pays the applicable charges to the applicable
public utilities providing such services to maintain such services in place.

7

11.  No Claims Against Landlord.  Nothing contained in this Lease
--------------------------
shall constitute any consent or request by Landlord or any Mortgagee, express or
implied, for the performance of any labor or services or the furnishing of any
materials or other property in respect of the Property or any part thereof, nor
as giving Tenant any right, power or authority to contract for or permit the
performance of any labor or services or the furnishing of any materials or other
property in such fashion as would permit the making of any claim against
Landlord or any Mortgagee in respect thereof. The foregoing sentence shall not
be understood to refer to statutory, inchoate mechanics' liens, unless the same
shall ripen into actual claims of lien, in which event the provisions of Section
17 shall apply.

12.  Indemnities.  Tenant will (to the full extent permitted by
-----------
applicable Legal Requirements) protect, indemnify and save harmless Landlord,
any beneficiary of Landlord, any officer, director or shareholder of any of the
foregoing and Mortgagee of the Property (each an "Indemnified Landlord Party")
from and against all liabilities, obligations, claims, damages, penalties,
causes of action, costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) imposed upon or incurred by or asserted against
any Indemnified Landlord Party or against the Property or any interest of such
Indemnified Landlord Party therein by reason of the occurrence or existence of
any of the following, during the term of this Lease, except to the extent caused
by the willful misconduct or negligence of such Indemnified Landlord Party or
the failure of any of the same to perform or comply with any term of this Lease:
(a) any accident, injury to or death of any person or persons or loss of or
damage to property occurring on or about the Property or any part thereof, or
any adjoining sidewalks, curbs, streets or ways, (b) Tenant's use of the
Property or any part thereof, or of the adjoining sidewalks, curbs, streets or
ways, (c) any failure on the part of Tenant to perform or comply with any of the
terms of this Lease, (d) any negligent or tortuous act on the part of Tenant or
any of its agents, contractors, servants, employees, licensees or invitees, or
(e) any negligent or tortious act on the part of any assignee or sublessee of
Tenant, or of any agents, contractors, servants, employees, licensees or
invitees of any assignee or sublessee of Tenant. Landlord will (to the full
extent permitted by applicable Legal Requirements) protect, indemnify and save
harmless Tenant, any beneficiary of Tenant, and any of Tenant's Agents, invitees
or licensees ("Indemnified Tenant Party") from and against all liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses) imposed
upon or incurred by or asserted against such Indemnified Tenant Party to the
extent caused by the willful misconduct or negligence of Landlord or any
Indemnified Landlord Party or the failure of any of the same to perform or
comply with any term of this Lease. Any party seeking indemnification in
accordance with the foregoing shall be referred to hereinafter as an
"Indemnified Party". Any Indemnified Party shall use due diligence to give
notice to the other party of the existence of any claim giving rise to the need
for such indemnification within thirty (30) Business Days after the date on
which such Indemnified Party shall have obtained actual knowledge of such claim
(but the failure to provide such notice shall not release any party from its
obligations to indemnify hereunder). In case any action, suit or proceeding is
brought against any Indemnified Party by reason of any occurrence referred to
above, the other party, at its expense, upon the request of such Indemnified
Party, will resist and defend such action, suit or proceeding or cause the same
to be resisted and 

8

defended by counsel designated by the defending party and reasonably acceptable
to such Indemnified Party.

13. Inspection.  Landlord and its authorized representatives may enter
----------
the Property, subject to Tenant's security requirements, at all reasonable times
(provided that no such entry shall be made without forty-eight (48) hours
advance written notice or shall unreasonably interfere with the conduct of
Tenant's business) for the purpose of (a) inspecting the same, (b) exhibiting
the Property for the purpose of sale or mortgage or other financing, (c) at any
time within six (6) months prior to the expiration of the term of this Lease,
exhibiting the Property for the purpose of leasing same, and (d) at any time
after Tenant shall have abandoned the Property and there shall be an Event of
Default in respect of Tenant's rental obligations hereunder, displaying thereon
advertisements for sale or letting. Landlord shall not have any duty to make any
such inspection and shall not incur any liability or obligation for not making
any such inspection. No such entry shall constitute an eviction of Tenant.

14. Payment of Taxes.  Subject to the provisions of Section 17 hereof,
----------------
Tenant will pay, prior to the date when the same would otherwise become
delinquent, all taxes (including, without limitation, real estate taxes,
personal or other property taxes and all sales, value added, gross receipts,
excise, use and similar taxes payable by Landlord to any governmental authority,
but only to the extent arising out of the fact that Landlord owns the Property
and the Property is subject to this Lease (without any effect on the calculation
of any such amount based upon any other real property that Landlord may own or
any other revenues that Landlord may receive), assessments (including, without
limitation, all assessments for public improvements or benefits, whether or not
commenced or completed prior to the date hereof and whether or not to be
completed within the term hereof) installments of which are payable with respect
to time periods during the Lease Term and subsequent to the Rental Commencement
Date, water, sewer or other rents, rates and charges, review, license fees,
permit fees, or any future inspection fees and other authorization fees which
may be created or imposed and other charges, in each case whether general or
special, ordinary or extraordinary, or foreseen or unforeseen, of every
character that may be assessed, levied, confirmed or imposed on or in respect of
the Property or any rent therefrom with respect to the period of time during the
Lease Term, and subsequent to the Rental Commencement Date (all of the foregoing
being hereinafter collectively referred to as "Taxes"). Notwithstanding the
foregoing or any other provision of this Lease, Tenant shall not be required to
pay any income, profits or revenue tax upon the net income of Landlord, nor any
franchise, excise, corporate, estate, inheritance, succession, capital levy or
transfer tax of Landlord, nor any interest, additions to tax or penalties in
respect thereof, unless such tax is imposed, levied or assessed in substitution
for any Taxes that Tenant is required to pay pursuant to this Section 14. Tenant
will furnish to Landlord, upon request, official receipts or other proof
reasonably satisfactory to Landlord evidencing payment of any Taxes in
accordance with the requirements of this Section 14. Landlord agrees not to
consent to the imposition of any future special assessment without obtaining
Tenant's consent thereto.

15. Compliance with Legal and Insurance Requirements.  Subject to the
------------------------------------------------ 
terms of the Improvement Agreement and the provisions of Sections 6, 7, 16 and
17 hereof, Tenant

9

at its expense will promptly (a) comply with all Legal Requirements and
Insurance Requirements arising from Tenant's use and occupancy of the Property
on or after the Commencement Date, and (b) procure, maintain and comply with all
permits, licenses and other authorizations required for the use to which the
Property will be put by Tenant on or after the Commencement Date.
Notwithstanding the foregoing to the contrary, Landlord shall be required to
bear, and to pay to Tenant promptly following written demand therefor, that
portion of the cost of any capital improvements which must be made by Tenant to
the Property under the provisions of this Section 15 as follows, if such capital
improvement item shall not be necessary solely as a result of Tenant's
particular use (other than general office use) of the Property. The cost of any
such improvement item shall be prorated over its reasonably estimated useful
life, and the portion that is attributable to the period of time after
expiration of the Lease Term (excluding extensions thereof unless Tenant shall
have previously exercised its extension option pursuant to Section 36 hereof)
shall be borne by Landlord and paid to Tenant promptly following Tenant's
written demand therefor. Prior to incurring any such cost for any capital item,
Tenant shall deliver written notice to Landlord that Tenant is considering
incurring such capital cost, and Tenant shall consult with Landlord before
incurring such cost. The foregoing sentence is a requirement that Tenant consult
with Landlord only, and shall not be understood to provide Landlord with any
approval right over Tenant's incurring any such capital cost.

16. Mechanic's Liens.  Tenant shall indemnify Landlord with respect to
----------------     
any liens or encumbrances created by reason of any labor or services performed
for materials used by or furnished to Tenant, or any assignee or sublessee of
Tenant, or any contractor employed by Tenant, or any assignee or sublessee of
Tenant, with respect to the Property or any part thereof. If any lien arising
out of any work performed, materials furnished or obligations incurred by Tenant
(or any such other party) is filed against the Property, within thirty (30) days
following the notice to Tenant of the same Tenant shall cause such lien to be
discharged of record or, if Tenant desires to contest the lien, Tenant shall
post security in an amount sufficient to ensure release of the lien if a final
nonappealable judgment establishing the validity of the lien is entered at a
later date.

17. Permitted Contests.  Tenant at its expense may contest by
------------------  
appropriate legal proceedings conducted in good faith and with due diligence,
the amount or validity or application, in whole or in part, of any Taxes or lien
therefor or any Legal Requirement or Insurance Requirement or the application of
any instrument of record affecting the Property or any part thereof, provided
that Tenant shall first have either (i) paid the disputed amount under protest,
or (ii) furnished to Landlord such security as Landlord may deem reasonably
necessary to insure the ultimate payment of the contested amount and to prevent
the forfeiture of the Property or any sums payable to Landlord or any Mortgagee
hereunder, or the accrual of penalties and interest to the extent not paid
directly by Tenant. Tenant shall give prompt written notice to Landlord of the
commencement of any contest referred to in the preceding sentence, providing a
reasonably detailed description thereof, and Landlord shall, at Tenant's
expense, cooperate with Tenant with respect to any such contest. Subject to the
last sentence of this Section 17, Tenant shall indemnify and save Landlord and
any Mortgagee harmless from and against any and all losses, judgments, decrees
and costs (including, without limitation,

10

reasonable attorneys' fees and expenses) incurred in connection therewith.
Tenant agrees that it will, promptly after final determination of each such
contest, fully. pay and discharge the amounts which shall finally be levied,
assessed, charged or imposed or determined to be payable, together with all
penalties, fines, interest, costs and expenses incurred in connection therewith,
and perform all acts the performance of which shall be finally ordered or
decreed as a result thereof. Nothing in this Section 17 shall be interpreted to
require Tenant to contest or protest any matters. In addition, notwithstanding
the foregoing to the contrary, Tenant shall not be obligated to pay any judgment
with respect to any matter for which Landlord would otherwise be liable under
this Lease without such contest or protest.

18. Insurance.
---------     

18.1   Risks to be Insured.  Tenant, at its expense, will
-------------------                                 
maintain with insurers authorized to issue insurance in the State of Arizona and
having an A.M. Best rating of "B+" or better or otherwise approved by Landlord
and any Mortgagee (a) insurance with respect to the Improvements against loss or
damage by fire, lightning and other risks from time to time included under "all-
risk" policies and against loss or damage by sprinkler leakage, water damage,
collapse, vandalism and malicious mischief and in an amount equal to 100% of the
actual replacement cost of the Improvements (initially determined as of the date
on which such insurance is originally issued, and subsequently re-determined on
the basis on an annual review of the actual replacement cost of the Improvement)
(such insurance shall also include at least nine (9) months rental loss
coverage), (b) comprehensive general liability insurance against claims arising
out of or connected with the possession, use, leasing, operation or occupancy of
the Property in with a combined single limit coverage of not less than
$5,000,000 for any single injury to a person and $10,000,000 for all claims with
respect to property damage and personal injury and death with respect to any one
occurrence, provided that Landlord shall have the right to require Tenant to
increase the amount of coverage of such liability insurance to the amount
reasonably necessary to bring such coverage into conformity with the level of
coverage commonly carried by similar properties in Scottsdale, which right
Landlord may exercise no more frequently than once every five (5) years, (c)
explosion insurance in respect of any steam and pressure boilers and similar
apparatus located on the Property in amounts not less than those required by
subdivision (b) above, and (d) in the event that the Property shall at any time
be used as anything other than for general office purposes, such other insurance
against such risks and in such amounts as Landlord shall reasonably request.
Notwithstanding the foregoing to the contrary, Tenant may self-insure with
respect to workers' compensation insurance to the extent permitted by the State
of Arizona, and any or all insurance required under this Section 18.1 may be
effected under one or more blanket policy or policies covering the Property and
other property and assets not constituting part of the Property, provided,
however, that any such blanket policy or policies shall specify the portion of
the total coverage of such policy or policies that is allocated to the Property
and shall, in all other respects, comply with the requirements of this Section
18.

18.2   Policy Provisions.  All insurance maintained by Tenant
-----------------
pursuant to Section 18.1 hereof shall (a) name Landlord, Tenant and any
Mortgagee as insured parties, 

11

(b) provide that all insurance proceeds for losses of less than $300,000 shall
(except in the case of comprehensive general liability insurance and workers'
compensation insurance) be adjusted by and be payable to Tenant to be used by
Tenant, to the extent necessary, for Restoration, (c) provide that all insurance
proceeds for losses of $300,000 or more shall (except in the case of
comprehensive general liability insurance and workers' compensation insurance)
be adjusted by Landlord and Tenant jointly and shall be payable to any Mortgagee
by means of a standard mortgagee loss payable endorsement if so required by such
Mortgagee (or to Landlord, if there is no Mortgagee), to be held in trust
pursuant to the terms of this Lease, and (d) provide that if all or any part of
such policy is canceled, terminated or expires, the insurer will forthwith give
notice thereof to each named insured party and loss payee and that no
cancellation, reduction in amount or material reduction in coverage thereof
shall be effective until at least 30 days after delivery to each named insured
party and loss payee of written notice thereof.

18.3   Delivery of Policies; Insurance Certificates.  Tenant
--------------------------------------------           
will deliver to Landlord and any Mortgagee certified copies of the originals of
all insurance policies or certificates thereof, and any amendments or
supplements thereto, with respect to the Property that Tenant is required to
maintain pursuant to this Section 18, together with evidence as to the payment
of all premiums then due thereon, and not later than 10 days prior to the
expiration of any policy, a certificate of the insurer evidencing the
replacement or renewal thereof.

18.4   Mutual Waiver of Insurable Claims.  Notwithstanding
---------------------------------                    
anything contained herein to the contrary, Tenant and Landlord hereby mutually
release each other and each other's agents and employees from any liability for
loss or damage by fire or other casualty coverable by the types of insurance
required to be maintained under this Lease or otherwise in force at the time of
such loss or damage, whether or not the loss or damage resulted from negligence.

19.  Hazardous Materials.
-------------------   

19.1   Definitions.  As used herein, the term "Hazardous
-----------
Materials" shall mean any substance: (i) the presence of which requires
investigation or remediation under any federal, state or local statute,
regulation, ordinance, order, action, policy or common law; (ii) which is or
becomes defined as a "hazardous waste," "hazardous substance," pollutant or
contaminant under any federal, state or local statute, regulation, rule or
ordinance or amendments thereto including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601
et seq.) and/or the Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et seq.); (iii) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is
or becomes regulated by any governmental authority, department, commission,
board, agency or instrumentality of the United States, the State of Arizona or
any political subdivision thereof; (iv) the presence of which on the Property
poses or threatens to pose a known material risk to the health or safety of
persons on or about the Property; (v) without limitation which contains
gasoline, diesel fuel or other petroleum hydrocarbons; (vi) without limitation
which 

12

contains polychlorinated biphenyls (PCBs), asbestos or urea formaldehyde foam
insulation; or (vii) without limitation radon gas.

19.2   Warranties and Obligations.  Landlord hereby warrants that
--------------------------
neither Landlord, nor, to Landlord's actual knowledge without investigation, any
third party, has used, manufactured, generated, treated, stored, disposed of, or
released any Hazardous Material on, under or about the Property or real estate
in the vicinity of the Property or transported any Hazardous Material over the
Property and that neither Landlord nor, to Landlord's actual knowledge without
investigation, any third party has installed, used or removed any storage tank
on, from or in connection with the Property, and to Landlord's actual knowledge
without investigation, there are no storage tanks or wells (whether exiting or
abandoned) located on, under or about the Property and that no Hazardous
Materials have been incorporated into the construction of the Improvements.
Landlord, at its sole cost, shall comply with all Legal Requirements which
impose liability or responsibility upon either Landlord or Tenant to
investigate, remediate or otherwise take any action with respect to any
Hazardous Materials existing in, or under or about the Property as of the date
of delivery of possession to Tenant. Landlord shall defend, protect, hold
harmless and indemnify Tenant and Tenant's Agents with respect to all actions or
claims by federal, state, and local governmental agencies or by other third
parties for fines, penalties, fees (including, but not limited to, reasonable
attorneys' and consultants' fees), costs, damages, liabilities, losses,
remediation costs, investigation costs, response costs and other expenses
arising out of, resulting from, or caused by a condition which is a violation of
any of the foregoing warranties or Landlord's failure to perform the foregoing
obligations in this Section 19.2 or the introduction onto the Property by
Landlord or Landlord's Agents of any Hazardous Materials. In addition to the
foregoing remedies, if, under applicable Legal Requirements, Tenant is prevented
from occupying or using all or any portion of the Improvements due to the
subsequently found presence or removal of any Hazardous Materials on or from the
Improvements, Basic Rent and Additional Rent shall be abated during the period
between the date of such discovery and the date such discovered Hazardous
Materials are fully removed from the Improvements in proportion to the degree to
which Tenant's occupancy or use of the Property is so prevented by such presence
or removal or such Hazardous Materials. Tenant shall not release or authorize
any other party to release any Hazardous Materials upon, above or beneath the
Property for any purpose, except for customary quantities of office and
janitorial supplies used for customary purposes which may, technically, fall
within the definition of Hazardous Materials. Tenant, at its sole cost, shall
comply with all Legal Requirements which impose liability or responsibility upon
either Landlord or Tenant to investigate, remediate or otherwise take any action
with respect to any Hazardous Materials that Tenant, or any other party acting
at Tenant's direction, or any assignee or sublessee of Tenant, causes to be
released upon the Property in violation of applicable Legal Requirements
pertaining to Hazardous Materials or which requires remediation under applicable
Legal Requirements. Tenant shall defend, protect, hold harmless and indemnify
Landlord and Landlord's Agents with respect to all actions or claims by federal,
state, and local governmental agencies or by other third parties for fines,
penalties, fees (including, but not limited to, reasonable attorneys' and
consultants' fees), costs, damages, liabilities, losses, remediation costs,
investigation costs, response costs

13

and other expenses arising out of, resulting from, or caused by the introduction
of any Hazardous Materials onto the Property by Tenant or Tenant's Agents.

19.3   Provisions Survive Termination.  The provisions of this
------------------------------
Section 19 shall survive the expiration or termination of this Lease or Tenant's
non-occupancy of the Property notwithstanding the continuation of this Lease.

19.4   Controlling Provisions.  The provisions of this Section 19
----------------------  
are intended to govern the rights and liabilities of Landlord and Tenant with
respect to Hazardous Materials to the exclusion of any other provision in this
Lease that might otherwise be deemed applicable. The provisions of this Section
19 shall be controlling with respect to any provisions in this Lease that are
inconsistent with this Section 19.

20.  Damage to or Destruction of Property.
------------------------------------   

20.1   Tenant to Give Notice.  In case of any damage to or
---------------------                                
destruction of the Improvements located on the Property (or any part of such
Improvements), the Restoration of which is reasonably estimated to cost more
than $10,000.00, Tenant will promptly give notice thereof to Landlord, generally
describing the nature and extent of such damage or destruction and setting forth
Tenant's best estimate of the cost of Restoration.

20.2   Restoration.  Except as provided below, in case of any
-----------
damage to or destruction of the Improvements located on the Property, Landlord,
whether or not the insurance proceeds, if any, on account of such damage or
destruction shall be sufficient for the purpose (but provided that Tenant in
fact carries the policy or policies of insurance required to be carried by
Tenant under the provisions of Section 18.l(a) of this Lease and makes any
proceeds thereof available to Landlord for the purpose of such Restoration),
will promptly commence and diligently prosecute to completion Restoration of
such Improvements.

20.3   Total Destruction.  In case of (a) the destruction during
-----------------
the last year of the Lease Term of all of the Improvements located on the
Property, or (b) the destruction during the last year of the Lease Term, if the
cost of Restoration exceeds seventy percent (70%) of the then actual replacement
cost of the Improvements (any such destruction being hereinafter referred to as
a "Total Destruction"), Landlord may, by notice to Tenant given within 60 days
after the date of such destruction, terminate this Lease, provided any such
termination by Landlord shall be effective only if Landlord does not within the
two hundred forty (240) day period following such date of damage or destruction
enter into any discussions or negotiations with respect to any rebuilding on the
Parcels or with any prospective tenants on the Parcels, and further provided
that Landlord may not terminate this Lease pursuant to this Section 20.3 if
Tenant, at the time of such damage, has an express written option to further
extend the term of this Lease and Tenant exercises such option to so further
extend the Lease Term within thirty (30) days following the date of Landlord's
termination notice.

14

20.4   Tenant's Right to Terminate.  If the Improvements are
---------------------------                            
damaged by any peril and Landlord elects not to terminate this Lease pursuant to
Section 20.3, then as soon as reasonably practicable, Landlord shall furnish
Tenant with the written opinion of Landlord's architect or construction
consultant as to when the Restoration work required of Landlord may be
completed.  Tenant shall have the option to terminate this Lease in the event
any of the following occurs, which option. may be exercised only by delivery to
Landlord of a written notice of election to terminate within thirty (30) days
after Tenant receives from or delivers to Landlord, as applicable, the estimate
of the time needed to complete such Restoration with respect to (a) and (b)
below, or within ten (10) days after expiration of the applicable time period
with respect to (c) and (d) below:

(a)  The Improvements are damaged by any peril and the
Restoration of the Improvements reasonably cannot be substantially completed
within one hundred eighty (180) days after the date of damage or destruction.

(b)  The Improvements are damaged by any peril within two
(2) years of the last day of the Lease Term and the Restoration of the
Improvements reasonably cannot be substantially completed within ninety (90)
days after the date of such damage.

(c)  If the Restoration of the Improvements is not
substantially completed within two hundred forty (240) days after the date of
the damage or destruction.

(d)  If Landlord does not commence Restoration of the
Improvements within thirty (30) days following the receipt of insurance
proceeds.

20.5   Abatement of Rent.  In the event of damage to the
-----------------
Property, the Basic Rent and Additional Rent shall be temporarily abated during
the period between the date of damage and the date of Restoration of the
Improvements in proportion to the degree to which Tenant's use of the Property
is impaired by such damage.

20.6   Application of Insurance Proceeds.  Tenant hereby
---------------------------------
irrevocably assigns to Landlord any insurance proceeds to which Tenant may
become entitled by reason of Tenant's interest in the Improvements if the
Improvements or any part thereof is damaged or destroyed by fire or other
casualty. Any insurance payment of more than $300,000 shall be paid to and held
in trust in an interest bearing account and disbursed to pay the-costs of
Restoration in accordance with customary procedures by Mortgagee or, if there is
no Mortgagee or if Mortgagee does not require that it hold such compensation, by
Landlord (to be held in trust pursuant to the terms of this Lease); provided,
however, that any such insurance proceeds which is not in excess of $300,000
shall be paid directly to Tenant (if no Event of Default then exists hereunder)
and shall be expended by Tenant in connection with the Restoration of the
Property (with the balance of such proceeds, if any, being retained by Tenant
upon the completion of such Restoration).

15

20.7   Waiver of Statutory Provisions.  Landlord and Tenant
------------------------------
hereby waive any statutory provisions pertaining to rights of rental abatement
or lease termination in the event of damage or destruction of real property
subject to a lease, to the extent that any such provisions are contrary to those
contained in this Section 20, and Landlord and Tenant agree that the provisions
of this Section 20 shall control in the event of any such damage or destruction
on or to any portion of the Property.

21.  Taking of Property.
------------------   

21.1   Tenant to Give Notice.  In case of a Taking, or the
---------------------                                
commencement of any proceedings or negotiations that might result in a Taking,
in respect of which the Restoration of the Property is reasonably estimated to
cost more than $10,000, Tenant will promptly give notice thereof to Landlord,
generally describing the nature and extent of such Taking or the nature of such
proceedings or negotiations and the nature and extent of the Taking that might
result therefrom.

21.2   Partial Taking.  In the case of a Taking other than a
--------------                                         
Total Taking, (a) this Lease shall remain in effect only as to the portion of
the Property remaining immediately after such Taking, (b) from and after the
Date of Taking, Basic Rent, Additional Rent and any other sum payable under this
Lease shall be reduced in proportion to the degree to which Tenant's use of the
Property is impaired by such Partial Taking, and (c) Tenant shall receive from
the Award the portions of the Award attributable to Tenant's Equipment and the
unamortized value of all alterations, additions or improvements to the Property
paid for by Tenant (other than from the Improvement Allowance, as defined in the
Improvement Agreement) and located in the part of the Property taken by the
Partial Taking (but not any amount attributable to the value of Tenant's
leasehold estate) and Landlord shall receive from the Award those portions
thereof applicable to the Parcels and the unamortized value of the Improvements
and other improvements paid for by Landlord (including, without limitation, from
the Improvement Allowance) (with all such unamortized values to be determined
based on the useful life of the particular improvement), and (d) Landlord,
whether or not the Awards shall be sufficient for the purpose, at its expense
will promptly commence and diligently prosecute to completion Restoration of the
Property (including, without limitation, restoration of the Improvements to an
architecturally whole unit, to the extent practicable), except for any reduction
in area of the Property caused by such Taking; provided, however, that in case
of Taking for temporary use ("temporary use" being defined for all purposes
herein as any taking for less than nine consecutive months) Landlord shall not
be required to effect any Restoration until such Taking is terminated.

21.3   Total Taking.  In case of the Taking during the Lease
------------                                           
Term of the Property in its entirety (or all of the Improvements located
thereon) or the Taking during the Lease Term (other than for temporary use) of
such a substantial part of the Property (or the Improvements located thereon)
that, in the sole good faith judgment of Tenant, either (a) the portion of the
Property (or the Improvements located thereon) remaining after such Taking is
(and after Restoration would be) unsuitable for use by Tenant in the operation
of its business, 

16

or (b) Restoration of the Property (or the Improvements located thereon) is not
economically feasible (any such Taking being hereinafter referred to as a "Total
Taking"), this Lease shall terminate as of the date of such Total Taking and
Tenant shall receive from the Award those portions of the Award attributable to
Tenant's Equipment, the unamortized value of all alterations, additions or
improvements to the Property paid for by Tenant (other than from the Improvement
Allowance), loss of Tenant's good will and moving expenses of Tenant (but not
any amount attributable to the value of Tenant's leasehold estate) and Landlord
shall receive from the Award those portions thereof applicable to the Parcels
and the unamortized value of the Improvements and other improvements paid for by
Landlord (including, without limitation, from the Improvement Allowance) (with
such all unamortized values to be determined based on the useful life of the
particular improvement).

21.4   Application of Awards.  The parties agree that in the 
---------------------                                  
event of a Taking, all rights between them in and to an Award shall be as set
forth herein.  Each party agrees that each shall make separate claims for an
Award from the condemning Person.

22.  Estoppel Certificates.
---------------------   

22.1   Estoppel Certificate of Tenant.  Tenant will deliver to
------------------------------
Landlord within fifteen (15 ) business days following Landlord's written request
therefor (but in no event more often than three times in any twelve-month
period) (a) an Estoppel Certificate of Tenant stating (i) that this Lease is
unmodified and in full force and effect (or, if there have been modifications,
that this Lease is in full force and effect, as modified, and stating the
modifications), (ii) the date to which the Basic Rent has been paid and that all
Additional Rent payable on or before the date of such Estoppel Certificate has
been paid, or if any Additional Rent has not been paid, specifying the nature of
such non-payment, and (iii) that no Event of Default exists hereunder, or, if
any such Event of Default exists, specifying the nature and period of existence
thereof and what action Tenant is taking or has taken with respect thereto, and
(b) such information with respect to the Lease as from time to time may
reasonably be requested.

22.2   Estoppel Certificate of Landlord. Within fifteen (15) days
--------------------------------
following Tenant's written request therefor, but in no event more often than
three times in any twelve-month period (which request shall (i) state that it is
made pursuant to this Section 22.2 and, if applicable, that Tenant proposes,
pursuant to Section 24.1 hereof, to assign its interest in this Lease or sublet
a portion of the Property to a Person identified in such request, and (ii) be
accompanied by a copy of this Lease and each modification hereof or amendment
hereto, if any, to and including the date of such request) Landlord will deliver
to Tenant an Estoppel Certificate of Landlord stating (a) that this Lease is
unmodified and in full force and effect (or, if there have been modifications,
that this Lease is in full force and effect, as modified, and stating the
modifications), (b) the date to which Basic Rent and Additional Rent have been
paid hereunder and (c) whether or not an Event of Default exists hereunder and,
if an Event of Default exists, specifying the nature and period of existence
thereof, it being agreed that (and any such Estoppel Certificate shall state
that) no rights or remedies of Landlord hereunder or

17

otherwise resulting from any condition, event or circumstance that would, with
the giving of notice and/or the passing of time, result in an Event of Default
hereunder shall be waived, impaired or diminished in any respect by reason of
any such Estoppel Certificate or any statement made therein. No failure of
Landlord to deliver any such Estoppel Certificate shall release, discharge or
otherwise affect any of Tenant's or Landlord's rights or obligations hereunder.

22.3   Financial Statements.  The provisions of this Section 22.3
--------------------
shall not apply at any time that Tenant hereunder is a company subject to
reporting requirements under the Securities Exchange Act of 1934, as amended. If
any potential purchaser of the Property, Mortgagee or purchaser of an interest
in Landlord, as part of its good faith diligence review of the Property, desires
to review any financial statements of Tenant, Landlord shall so notify Tenant in
writing. Such writing shall include a written undertaking from such potential
purchaser or Mortgagee to keep such financial statements and the information
contained therein in confidence, and to return such financial statements, and
all copies of such statements and any information extracted therefrom, to Tenant
promptly following such party's analysis thereof. Within fifteen (15) days
following Tenant's receipt of such written request from Landlord and such
written undertaking signed by the party to whom such financial statements would
be delivered, Tenant shall deliver directly to such potential purchaser or
Mortgagee its most recently prepared balance sheet and income statement, if any
exists. Tenant shall have no obligation to prepare any balance sheet or
financial statement in response to any such request.

23.  Right of Landlord to Perform Tenant's Covenants, etc.  If Tenant 
----------------------------------------------------       
shall fail to make any payment or perform any act required to be made or
performed by it hereunder, Landlord, upon thirty (30) days prior written notice
(unless a longer period is reasonably required by Tenant to perform the act in
question, in which event Tenant shall be permitted such longer period of time to
perform such act, so long as Tenant commences to perform such act within such
thirty-day period and thereafter diligently prosecutes the same to completion)
to Tenant (except in cases of emergency that threaten bodily injury or material
property damage), but without waiving or releasing any obligation or default,
may make such payment or perform such act for the account and at the expense of
Tenant, and may enter upon the Property or any part thereof for such purpose and
take all such action thereon as, in the reasonable opinion of Landlord, may be
necessary or appropriate therefor. No such entry shall constitute an eviction of
Tenant. All reasonable payments so made by Landlord and all reasonable costs and
expenses (including, without limitation, attorneys' fees and expenses) incurred
in connection therewith or in connection with the performance by Landlord of any
such act shall constitute Additional Rent hereunder.

18

24.  Assignments, Subleases, Mortgages.
---------------------------------   

24.1   Assignments and Subleases by Tenant.  If no Event of
-----------------------------------
Default shall have occurred and be continuing, Tenant may, after obtaining the
prior written consent of Landlord, not to be unreasonably withheld or delayed,
at any time and from time to time sublet the Property or any part thereof, and
may assign its interest in this Lease; provided however, that Tenant may,
without Landlord's prior written consent, assign its interest in the Lease or
sublet the Property or a portion thereof to (i) a related entity parent company,
subsidiary, affiliate, division or corporation controlled by or under common
control with Tenant; (ii) a successor corporation related to Tenant by merger,
consolidation, non-bankruptcy reorganization or government action; or (iii) a
purchaser of substantially all of the Tenant's assets; and further provided,
however, that (a) Tenant shall, in all cases, deliver to Landlord a fully
executed counterpart of each such sublease or assignment promptly after
execution thereof, and (b) no assignment, whether by operation of law,
consolidation, merger, a sale of stock or otherwise, shall be effective prior to
the execution by the assignee and delivery to Landlord of an instrument,
reasonably satisfactory in form and substance to Landlord, assuming all of the
obligations of Tenant under this Lease. No assignment or sublease made as
permitted by this Section 24.1 shall affect or reduce any obligations of Tenant
or any rights of Landlord hereunder, and all obligations of the Tenant
originally named hereunder shall continue in full force and effect as the
obligations of a principal and not of a guarantor or surety, to the same extent
as though no assignment or subletting had been made.

24.2   Assignments and Mortgages by Landlord.  The interest of
-------------------------------------
Landlord in this Lease and in and to the Property or any part thereof may, at
any time and from time to time, be sold, conveyed, assigned or otherwise
transferred, without the prior written consent of Tenant, and upon any sale or
conveyance of the Property as an entirety or any assignment or other transfer
(other than for the purpose of securing indebtedness) by any party lessor of its
interest in this Lease and in and to the Property, such party lessor shall be
completely relieved of and from any and all obligations not theretofore accrued
under this Lease or otherwise with respect to the Property, and such party
lessor shall have no further obligations whatsoever to any party lessee,
provided that any funds in the hands of Landlord or the then grantor at the time
of such transfer that were deposited by Tenant, and in which Tenant has an
interest, shall be turned over to the grantee and Tenant receives a copy of a
written assumption agreement whereby the transferee assumes the obligations of
Landlord under this Lease to be performed after the date of such transfer or
conveyance, except to the extent that any such obligation accrued prior to the
date of such sale, conveyance, assignment or transfer, and Tenant shall
thereupon look only to the then owner of Landlord's estate in the Property for
the performance of any obligations of Landlord hereunder. Landlord may also from
time to time mortgage or assign, by way of pledge or otherwise, any or all of
the rights, in whole or in part, of Landlord under this Lease to any Person as
security for the indebtedness or other obligations of Landlord. From and after
any such mortgage or assignment and to the extent provided in the instrument
effecting such mortgage or assignment, (a) such Mortgagee may enforce any and
all of the terms of this Lease to the extent so assigned as though such
Mortgagee had been a party hereto, (b) no action or failure to act on the part
of Landlord shall adversely affect or limit any rights of such

19

Mortgagee provided that, (c) no such assignment shall constitute an assumption
of any such obligations on the part of such Mortgagee, and (d) a copy of all
notices, demands, consents, approvals and other instruments given by Tenant
hereunder shall also be delivered to such Mortgagee, if such Mortgagee shall
have provided Tenant with written notice of its address for such purposes.
Notwithstanding the foregoing provisions in this Section 24, the parties agree
that the foregoing provisions shall not be interpreted to limit any of Tenant's
rights otherwise available under this Lease, including any offset rights or
termination rights that are expressly provided under the terms of this Lease.

25.  Events of Default; Termination.  If any one or more of the
------------------------------                              
following events ("Events of Default") shall occur (whatever the reason
therefor, and whether voluntary or involuntary or by operation of law or
pursuant to or in compliance with any judgment, decree or order of any court of
any rule or regulation of any administrative or governmental body):

(a)  if Tenant shall fail to pay any installment of Basic Rent or
Additional Rent, or other sum required to be paid by Tenant hereunder on the
date the same becomes due and payable and such failure continues for more than
five (5) Business Days after written notice thereof is given to Tenant; or

(b)  if Tenant shall fail to perform or comply with any term of
this Lease (other than those referred to in clause (a) above) or any term of any
instrument related hereto pursuant to which Tenant undertakes obligations or
makes agreements for the benefit of Landlord or any Mortgagee and, in any such
case, such failure shall continue for more than 30 days after Tenant receives
written notice from Landlord; provided, however, that in the case of any such
failure that is susceptible of being cured but that cannot with diligence be
cured within such 30-day period, if Tenant shall promptly commence to cure the
same and shall thereafter prosecute the curing thereof with diligence, the
period within which such failure may be cured shall be extended for such further
period as shall be necessary for the curing thereof with diligence; or

(c)  if Tenant shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall take any corporate action to authorize any of the
foregoing; or

(d)  if an involuntary case or other proceeding shall be
commenced against Tenant seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain

20

undischarged and unstayed for a period of 90 days, or if an order for relief
shall be entered against Tenant under the federal bankruptcy laws as now or
hereafter in effect which is not fully stayed within seven (7) business days
after the entry thereof;

then, and in any such event, Landlord may at any time thereafter, during the
continuance of any such Event of Default, give a written termination notice to
Tenant specifying a date (not less than five days from the date on which such
notice is given) on which this Lease shall terminate, and, on such date, the
term of this Lease shall terminate and all rights of Tenant under this lease
shall cease. All reasonable costs and expenses incurred by or on behalf of
Landlord (including, without limitation, reasonable attorneys' fees and
expenses) occasioned by and following any Event of Default by Tenant under this
Lease shall constitute Additional Rent hereunder.

26.  Remedies. Upon the occurrence of an Event of Default, prior to 
--------
the cure thereof, Landlord shall have the following remedies, to which Landlord
may resort in the alternative:

(i)       Landlord may continue this Lease in full force 
and effect, and this Lease shall continue in full force and effect as long as
Landlord does not terminate this Lease, and Landlord shall have the right to
collect Basic Rent and Additional Rent when due. During the continuation of such
Event of Default, Landlord may enter the Property and relet it, or any part of
it, to third parties for Tenant's account, to be set off against amounts owing
from Tenant to Landlord hereunder, with any surplus to be delivered to Tenant at
the end of the Lease Term. Tenant shall be liable to Landlord for all costs
Landlord incurs in reletting the Property or any part thereof, including,
without limitation, reasonable broker's commissions, expenses of cleaning and
redecorating the Property required by the reletting and like costs. No act by
Landlord other than giving written notice to Tenant shall terminate this Lease.

(ii)      Landlord may by written notice terminate Tenant's 
right to possession of the Property at any time and relet the Property or any
part thereof Acts of maintenance, efforts to relet the Property or the
appointment of a receiver on Landlord's initiative to protect Landlord's
interest under this Lease shall not constitute a termination of Tenant's right
to possession. On termination, Landlord has the right to remove all of Tenant's
personal property and store same at Tenant's cost and to recover from Tenant:

(a)  the worth at the time of award of the unpaid
Basic Rent and Additional Rent which had been earned at the time of termination
including interest at the Interest Rate;

(b)  the worth at the time of award of the amount
by which the unpaid Basic Rent and Additional Rent which would have been earned
after termination until the time of award exceeds the amount of such rental loss
that Tenant proves could have been reasonably avoided, including interest at the
Interest Rate;

21

(c)  the worth at the time of award of the amount
by which unpaid Basic Rent and Additional Rent for the balance of the term after
the time of award exceeds the amount of such rental loss for the same period
that Tenant proves could be reasonably avoided, discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent (1%);

(d)  any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to perform
its obligations under this Lease or which in the ordinary course of things would
be likely to result therefrom; and

(e)  as used in subparagraphs (a) through (c)
above, the term "time of award" shall mean the date of entry of a judgment or
award against Tenant in an action or proceeding arising out of Tenant's Event of
Default.

Tenant waives redemption or relief from forfeiture under any other
present or future law, in the event Tenant is evicted or Landlord takes
possession of the Property by reason of any Event of Default of Tenant
hereunder.

27.  [INTENTIONALLY OMITTED]

28.  No Waiver. No failure by Landlord or Tenant to insist upon
---------                                                    
the strict performance of any term hereof or to exercise any right, power or
remedy consequent upon a breach thereof, and no acceptance of full or partial
rent during the continuance of any such breach, shall constitute a waiver of any
such breach or of any such term. No waiver of any breach shall affect or alter
this Lease, which shall continue in full force and effect, or the rights of
Landlord or Tenant with respect to any other then existing or subsequent breach.
No foreclosure, sale or other proceedings under any mortgage or other security
arrangement with respect to the Property shall discharge or otherwise affect the
obligations of Tenant hereunder.

29.  Remedies Cumulative. Each right, power and remedy of
-------------------                                    
Landlord or Tenant provided for in this Lease or now or hereafter existing at
law or in equity or by statute or otherwise shall be cumulative and concurrent
and shall be in addition to every other right, power or remedy provided for in
this Lease or now or hereafter existing at law or in equity or by statute or
otherwise, and the exercise or attempted exercise by Landlord or Tenant of any
one or more of the rights, powers or remedies provided for in this Lease or now
or hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by Landlord or Tenant of any or all
such other rights, powers or remedies.

30.  [INTENTIONALLY OMITTED]

31.  Surrender. Upon the expiration or earlier termination of this 
---------
Lease, Tenant, at its expense, shall quit and surrender to Landlord the Property
in good order and condition, ordinary wear and tear, damage by casualty and
repair and maintenance obligations for which Landlord is responsible under this
Lease excepted and, if requested by Landlord, shall

22

remove therefrom, at Tenant's expense, all of Tenant's Equipment which is not
affixed to the Property and shall repair, at Tenant's expense, all damage caused
by such removal.

32.  Notices.  All notices, offers, acceptances, rejections, consents
-------
and other communications hereunder shall be in writing and shall be sent by
certified mail, postage prepaid, return receipt requested, or by a nationally
recognized overnight courier service, or by telecopy with an original by regular
mail:

If to Landlord:

c/o Ryan Companies US, Inc.
700 International Centre
900 Second Avenue South
Minneapolis, Minnesota 55402-3387
Attn: Mr. John P. Kelly, Jr.

with a copy to:

Ryan Companies US, Inc.
3200 East Camelback Road, Suite 250
Phoenix, Arizona 85016-2319
Attn: Mr. John Strittmatter

or at such other address as Landlord shall have furnished to Tenant in writing;
and
If to Tenant:

The Dial Corporation
1850 North Central Avenue
Phoenix, Arizona 85004-4525
Attn: Vice President of Real Estate

or at such other address as Tenant shall have furnished to Landlord in writing.

Any notice given by certified mail shall be deemed to have been given
when seventy-two (72) hours have elapsed from the time such notice was deposited
in the United States mails, certified and postage prepaid, return receipt
requested, addressed to the party to be served at the last address given by that
party to the other party under the provisions of this Section 32. Any notice
given by means other than certified mail shall be deemed to have been given to
the party to be served when delivered to the last address given by that party to
the other party under the provisions of this Section 32.

33.  Short Form or Memorandum.  Promptly following the execution of 
------------------------
this Lease, Landlord and Tenant shall execute, acknowledge and deliver a short
form or

23

memorandum of this Lease, including the extension options provided in Section 36
of this Lease and the right of first offer provided in Section 38 of this Lease,
satisfactory in form and substance to Landlord and Tenant, for recording in the
property records of Maricopa County, Arizona and to enable Tenant to acquire a
leasehold policy of title insurance issued by a title company of its choosing
and in a form acceptable to Tenant in its sole discretion. Promptly following
the expiration of the Lease Term, or any other termination of this Lease for any
reason, Tenant shall deliver to Landlord a quitclaim deed or other appropriate
title-clearing instrument in recordable form pertaining to the Property, in a
form acceptable to Landlord in its sole discretion for the purpose of removing
the memorandum of this Lease as a recorded exception against the Property.

34.  Quiet Enjoyment.  So long as Tenant shall pay the Basic Rent and
---------------                                          
Additional Rent and any other sums payable hereunder as the same become due and
shall fully comply with all of the terms of this Lease and fully perform its
obligations hereunder, Tenant (and any subtenant of Tenant permitted pursuant to
the terms of this Lease) shall peaceably and quietly have, hold and enjoy the
Property for the term hereof, subject, however, to all the terms of this Lease.
Notwithstanding anything contained in this Lease to the contrary, it is
specifically understood and agreed that neither Landlord nor any beneficiary of
Landlord, nor any officer, director or shareholder of any of the foregoing, or
any Mortgagee, shall have any personal liability in respect of any of the terms,
covenants, conditions or provisions of this Lease. Nothing contained in this
Section 34 shall prohibit Landlord, or any Mortgagee, or their respective
authorized representatives, from entering the Property at reasonable times to
inspect the same in accordance with the provisions of Section 13 hereof.

35.  Miscellaneous.  All rights, powers and remedies provided
-------------                                             
herein may be exercised only to the extent that the exercise thereof does not
violate any applicable provision of any Legal Requirement, and are intended to
be limited to the extent necessary so that they will not render this Lease
invalid, illegal or unenforceable under the provisions of any applicable Legal
Requirement. If any term of this Lease or any application thereof shall be
invalid or unenforceable, the remainder of this Lease and any other application
of such term shall not be affected thereby. This Lease may be changed, waived,
discharged or terminated only by an instrument in writing, signed by each of the
parties hereto. Subject to Section 24 hereof, this Lease shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
permitted assigns of the parties hereto. This Lease shall be construed and
enforced in accordance with and governed by the laws of the State of Arizona.
The headings in this lease are for the purposes of reference only and shall not
limit or otherwise affect the meaning hereof. This Lease may be executed in
several counterparts, each of which shall be an original, but all of which
together shall constitute one and the same instrument.

36.  Option to Extend.
----------------   

36.1  Exercise of Option. Provided that no uncured Event of
------------------
Default shall exist under this Lease at the time of exercise of the hereinafter
described options, Tenant shall have two (2) options to extend the term of this
Lease, each for a period of five (5) years

24

("Option Term(s)"). Said options shall be exercised only by written notice
delivered to Landlord not later than six (6) months prior to the expiration date
of the then existing term of this Lease. In all respects, the terms, covenants
and conditions of this Lease shall remain unchanged during each of the Option
Terms, except that the Basic Rent payable during each Option Term shall be
revised in accordance with Section 36.2 below, and except that there shall be no
further option to extend the term of this Lease at the end of the second Option
Term.

36.2  Option Term Rent.  The Basic Rent payable during each of 
----------------
the Option Terms shall be ninety-five percent (95%) of the Fair Market Rent as
defined in Section 36.3 below for the Property for the Option Term in question.

36.3  Fair Market Rent.  For the purposes of this Section 36, the
----------------  
term "Fair Market Rent" shall mean the going market rental and any adjustment or
adjustments to such rental at such time(s) in such amount or using such formula
as is prevailing at the time of the commencement of the Option Term in question,
for comparably equipped second generation office space in buildings containing
comparable square feet, located within the immediate area of the Property, and
in a condition comparable to the then existing condition of the Property, taking
into account all legal uses for which the Property could be used without
material alteration thereto and the value of all Improvements and other
improvements on the Property paid for by Landlord for a tenant proposing to sign
a lease for a similar term and having financial qualifications similar to Tenant
and using as a guide equivalent space of similar size, age, construction,
quality and location. There shall be excluded from any determination of "Fair
Market Rent" the rental value attributable to any improvements or alterations
constructed by Tenant with its own funds (other than from the Improvement
Allowance). Any determination of "Fair Market Rent" shall take into account
rental concessions and other economic inducements then prevailing in the market.
Also, if there is no leasing commission payable by Landlord in connection with
Tenant's exercise of an option to extend, then There shall be excluded from any
determination of "Fair Market Rent" the rental value attributable to a standard
leasing commission customarily paid by a lessor in connection with a five (5)
year lease amortized on a straight line basis over the five (5) year Option Term
in question.

36.4  Appraisal. Promptly following exercise of any option to
---------                                                 
extend, the parties shall meet and endeavor to agree upon the Fair Market Rent
of the Property for the Option Term in question. If within thirty (30) days
after exercise of the option, the parties cannot agree upon the Fair Market
Rent, the parties shall submit the matter to binding appraisal in accordance
with the following procedure: Within thirty (30) days after exercise of the
option, the parties shall either (1) jointly appoint an appraiser for this
purpose or (2) failing this joint action, separately designate a disinterested
appraiser. No person shall be appointed or designated an appraiser unless he or
she has at least five (5) years experience in appraising major commercial
property in Maricopa County and is a member of a recognized society of real
estate appraisers. If, within thirty (30) days after their appointment, the two
appraisers reach agreement on the Fair Market Rent, that value shall be binding
and conclusive upon the parties. If the two appraisers thus appointed cannot
reach agreement on the question presented within thirty (30) days after their
appointment, then the appraisers thus appointed shall appoint a third

25

disinterested appraiser having like qualifications. Within thirty (30) days
after the appointment of the third appraiser, the two appraisers appointed by
the parties shall each submit to the third appraiser and to the parties their
independent appraisal of the Fair Market Rent of the Property for the Option
Term in question. Within thirty (30) days after receipt of the two independent
appraisals, the third appraiser shall select one of the two appraisals submitted
by the two appraisers appointed by the parties as the appraisal closest to the
Fair Market Rent of the Property. The appraisal of the Fair Market Rent so
selected by the third appraiser shall be binding and conclusive upon the
parties. Each party shall pay the fees and expenses of the appraiser appointed
by it and shall share equally the fees and expenses of the third appraiser. If
the two appraisers appointed by the parties cannot agree on the appointment of
the third appraiser, they or either of them shall give notice of such failure to
agree to the parties and if the parties fail to agree upon the selection of such
third appraiser within ten (10) days after the appraisers appointed by the
parties give such notice, then either of the parties, upon notice to the other
party may request such appointment by the American Arbitration Association, or
on its failure, refusal or inability to act, may apply for such appointment to
the presiding judge of the Superior Court of Maricopa County, Arizona.

37.  Reasonable Approval Standard.  Whenever in this Lease the
----------------------------                               
review, acceptance, approval or consent of either Landlord or Tenant ("Reviewing
Party") is required or desired for the taking of or refraining from taking any
action under the Lease, or to the manner of performing or observing any covenant
or condition of the Lease (collectively "Matter"), the favorable review,
acceptance, approval or consent (collectively "Approval") as to any such Matter
shall neither be unreasonably withheld nor unduly delayed by the Reviewing
Party, and if the Reviewing Part desires to deny or withhold its Approval as to
any such matter, the Reviewing Party shall, by written notice to the other party
given within the time period for the giving of such Approval as provided herein
or elsewhere in this Lease, state with particularity the basis for the denial or
withholding by such Reviewing Party of such Approval. Provided the request made
of the Reviewing Party for the Approval references this Section 37 and indicates
to the effect that a lack of an appropriate response within thirty (30) days (or
within such other period of time for response if the Lease otherwise expressly
provides a specific period for such Approval) will be deemed to constitute
Approval, then the failure of the Reviewing Party to so respond in writing
(including stating with particularity the basis for any denial or withholding of
such Approval) to any Matter within thirty (30) days of receipt of the written
request of the other party (or within such other period of time for response if
the Lease otherwise expressly provides a specific period for such Approval),
shall be deemed to constitute the Approval by such Reviewing Party as to the
Matter.

38.  Right of First Offer.
--------------------   

38.1  Grant of Right.  Subject to the provisions of Section
--------------                                         
38.7 hereof, Landlord shall not, at any time during the term of this Lease,
offer to sell or accept an offer to purchase (collectively herein called an
"offer to sell") the Property or any part thereof without first giving to Tenant
at least thirty (30) days prior written notice of Landlord's election to sell
the Property, which notice is hereinafter referred to as the "Notice of Sale".

26

38.2      Notice of Sale. The Notice of Sale shall include the
--------------                                         
price and other terms and conditions reasonably appropriate to a sales
transaction on which Landlord is willing to sell the Property.

38.3      Response by Tenant. For a period of fifteen (15) days
------------------                                 
after receipt by Tenant of the Notice of Sale, and only during such period,
Tenant shall have the right to accept the offer of sale set forth in the Notice
of Sale only by doing all of the following prior to the expiration of said
fifteen (15) day period: (i) giving written notice of acceptance to Landlord,
which notice shall state that Tenant agrees to purchase the Property on the same
terms, price and conditions as set forth in the Notice of Sale and (ii)
delivering to Landlord at the same time the full amount of any reasonable
earnest money deposit specified in the Notice of Sale.

38.4      No Response. In the event that Landlord does not 
-----------                                        
receive written notice of Tenant's acceptance of the offer to sell and the
earnest money deposit within said fifteen (15) day period, there shall be a
conclusive presumption that Tenant has elected not to exercise Tenant's right to
purchase the Property pursuant to this Section 38, and Landlord may sell the
Property to a third party within six (6) months thereafter so long as the
purchase price paid by the third party purchaser is not materially less (with
any purchase price less than 98.5% of the purchase price set forth in the
Notice of Sale deemed to be materially less) than the purchase price specified
in the Notice of Sale and the other terms and conditions of the sale to the
third party are the same as or more onerous to the purchaser than those
specified in the Notice of Sale.

38.5      Termination. The foregoing right of first offer shall
-----------                                       
terminate:

(a)  upon expiration or other termination of the term
of this Lease; or

(b)  subject to the provisions of Section 38.7 hereof,
in the event Tenant fails to exercise its rights under this Section 38 and a
sale to a person or entity consistent with the requirements of this Section 38
is thereafter consummated, then upon the date of the closing of such sale.

38.6      Continuation of Rights. Unless terminated in accordance
----------------------                         
with Section 38.5 above, Tenant's rights under this Section 38 shall continue in
full force and effect (as to all future contemplated sales of the Property or
any part thereof).

38.7      Exempted Sales. Notwithstanding the provisions of
--------------  
Section 38.1 above, in the event that Landlord offers to sell the Property or
any part thereof to a Permitted Affiliate (as defined below) or as part of a
package of three or more separate real properties (but only if the aggregate
fair market value of all real properties contained in such package equals or
exceeds an amount equal to twice the then fair market value of the Property)
also owned by Landlord, then such offer to sell shall not be subject to Tenant's
right of first offer as set forth 

27

in Sections 38.1 through 38.4 of this Lease. Notwithstanding the provisions of
Section 38.5 above, any transfer of title to the Property or any part thereof
pursuant to the foregoing provisions of this Section 38.7 shall not cause
Tenant's right of first offer under this Section 38 to terminate, and the right
of first offer set forth in this Section 38 shall remain in full force and
effect with respect to the Property following any such transfer. As used above,
the term "Permitted Affiliate" means (i) any entity controlling, controlled by
or under common control with Landlord; (ii) any (a) officer or director of or
(b) member, partner, shareholder or other equity holder, in either such event
with an equity interest of ten percent (10%) or more in, any of the foregoing
entities or (ii) any combination of (i) and (ii).

39.  Tenant's Consent to New Contract Affecting the Property. Landlord
-------------------------------------------------------    
shall not, after the date of execution of this Lease, enter into or provide
consent for any other party to enter into, without Tenant's written consent
which shall not be unreasonably withheld or delayed, any contract or agreement
pertaining to the Property which may be reasonably expected to adversely
interfere with any of Tenant's rights under this Lease. In the event that any
contract or agreement which interferes with any of Tenant's rights under this
lease is entered into by Landlord, then Tenant shall have the unilateral right
to terminate this Lease.

40.  Landlord's Default.
------------------   

40.1      Events of Default. A "Landlord Event of Default" under
-----------------                                  
this Lease shall exist if any of the following events shall occur:

(a)  Landlord shall have failed to pay any sum required
to be paid hereunder within fifteen (15) days after receipt of written notice
from Tenant that such amount is past due; or

(b)  If Landlord shall have failed to perform any term,
covenant or condition of this Lease, except those requiring the payment of
money, and Landlord shall have failed to cure such breach within thirty (30)
days after written notice from Tenant where such breach could reasonably be
cured within such thirty (30) day period; provided, however, that where such
failure could not reasonably be cured within such thirty (30) day period, that
Landlord shall not be in default if it has commenced such performance within the
thirty (30) day period and diligently thereafter prosecutes the same to
completion.

Tenant shall use commercially reasonable efforts to cause a copy of any notice
of default delivered to Landlord as provided above likewise to be delivered to
any Mortgagee, written notice of the name and address of which has then
previously been provided to Tenant by Landlord, at approximately the same time
that such notice of default is delivered to Landlord.

40.2      Tenant's Remedies. Upon a Landlord Event of Default,
-----------------                                      
Tenant shall have the following remedies, in addition to all other rights and
remedies provided by law (except to the extent waived by Tenant herein) or
otherwise provided in this Lease, to which Tenant may resort cumulatively or in
the alternative:

28

(a)  Tenant may offset amounts owed by Landlord against
Basic Rent and Additional Rent by giving Landlord written notice of such offset.

(b)  Tenant may take such acts as it deems reasonably
necessary to cure Landlord's default. It Tenant spends any funds in connection
with such cure, Landlord shall pay to Tenant within fifteen (15) days after
written request the amount of funds so spent by Tenant. Tenant shall be entitled
to interest on the funds expended by Tenant at the Interest Rate from the end of
Landlord's applicable cure period. If Landlord fails to make such payment within
such fifteen (15) day period, Tenant may offset such funds and all interest
accrued thereon from Basic Rent and Additional Rent by giving Landlord written
notice of such offset.

41.  Parking. Tenant shall be provided on an exclusive basis and at 
-------                                                   
no additional cost with five hundred twenty-six (526) automobile parking spaces;
fifty (50) of these spaces shall be covered. The location of these spaces is
shown on the Site Plan attached hereto as Exhibit "B".

42.  Signage. Landlord shall provide for prominent building exterior
-------                                                  
Tenant identification signs and a signage allowance of $20,000. The design and
specifications of such signage shall be mutually acceptable to Landlord, Tenant
and the City of Scottsdale.

43.  Authority. The undersigned parties hereby warrant that they have
---------                                                
proper authority and are empowered to execute this Lease on behalf of Landlord
and Tenant, respectively.

44.  Title. This Lease is made subject to all matters of public record
-----                                                        
affecting title to the Property as described in the 3rd Amended Commitment for
Title Insurance dated February 26, 1997 prepared by Chicago Title Insurance
Company, Order No. 9700394, a copy of which is attached hereto as Exhibit "D"
(including all interlineated changed marked thereon, the Title Report), as shown
on Schedule B-Section 1 thereof. Chicago Title Insurance Company (or another
title insurance company reasonably acceptable to Tenant) shall be irrevocably
committed to issue to Tenant a leasehold owner's ALTA Extended Coverage Policy
of Title Insurance, together with such endorsements as Tenant may reasonably
require, showing Tenant as the owner of the leasehold estate under this Lease,
subject only to such exceptions to title as Tenant may approve, at standard
premium rates, as a condition precedent to Tenant's obligations under this
Lease. Landlord shall use due diligence to enforce all rights and easements
which are appurtenant to the Property.

45.  Non-Disturbance Agreement. If either at the time of execution of
-------------------------                             
this Lease or the recording of a short form memorandum of this Lease pursuant to
Section 33 hereof, there is then a Mortgage existing as a lien against title to
the Property (hereinafter referred to as an "Existing Mortgage"), Landlord shall
cause the Mortgagee under the Existing Mortgage to execute and deliver to Tenant
within thirty (30) days after the date of execution of this Lease, a Non-
Disturbance Agreement in form and content reasonably acceptable to both Tenant
and the Mortgagee under the Existing Mortgage, pursuant to which the Mortgagee
shall agree that in the 

29

event of foreclosure of the Existing Mortgage, such Mortgagee (or any purchaser
at any foreclosure sale) shall agree that so long as there is not then an
uncured Event of Default on the part of Tenant under this Lease, as the same may
be amended in the future, this Lease shall remain in full force and effect and
such beneficiary (or any purchaser at any foreclosure sale) shall recognize the
tenancy of Tenant on the terms and conditions contained in this Lease,
including, without limitation, Tenant's right of first offer in Section 38
hereof, and shall further expressly acknowledge that absent an Event of Default
by Tenant under this Lease or termination of this Lease, any insurance proceeds
associated, with any damage or destruction. of the Property shall be made
available for Restoration of the Property in accordance with the provisions of
Section 20 of this Lease ("Non-Disturbance Agreement"). The recordation of such
Non-Disturbance Agreement in the Office of the Recorder of Maricopa County,
Arizona, shall be a condition precedent to Tenant's obligations under this
Lease. In addition, this Lease, as it may be amended in the future, shall not be
subordinate to any future Mortgage unless the Mortgagee under such future
Mortgage shall execute a Non-Disturbance Agreement.

46.  Holding Over. Tenant shall have the right to remain on the 
------------                                                 
Property for up to three (3) months after expiration of the Lease Term on the
same terms and conditions, including Basic Rent, as applicable upon the
expiration. Tenant may terminate this holdover earlier than the expiration of
such three (3) month period by providing at least sixty (60) days prior notice.
At any time from and after the date that is three (3) months prior to the
expiration of the Lease Term, Landlord may deliver written notice to Tenant
asking whether Tenant will avail itself of its right to hold over as set forth
above. Within twenty (20) days following Tenant's receipt of such written
request from Landlord, Tenant shall deliver written notice to Landlord stating
whether or not Tenant plans to avail itself of such right.

47.  Definitions. As used in this Lease, the following terms shall 
-----------                                               
have the following respective meanings, applicable both to the singular and
plural forms of the terms so defined:

Additional Rent: the meaning specified in Section 4 hereof.
----------------                         

Award: the amount of any award made, consideration paid, or damages
------                                                              
ordered as a result of a Taking.

Basic Rent: the meaning specified in Section 3 hereof.
-----------                                            

Building: the meaning specified in Section I hereof.
---------                                            

Building Systems: HVAC, electrical, plumbing, mechanical and fire
-----------------                                                
safety systems in or serving the Improvements.

Business Day: any day other than a day on which banking institutions
-------------                                                        
in the State of Arizona are authorized by law to close.

30

CC&Rs: that certain Declaration of Easements, Covenants, Conditions
------                                                              
and Restrictions for Scottsdale Airpark North dated as of September 14, 1994 by
Broadmoor Enterprises, Inc., as declarant, as recorded in the Official Records
of the Maricopa County Recorder on September 16, 1994, as Instrument No. 94-
0684650.

Commencement Date: the meaning specified in Section 2 hereof.
-----------------                                             

Date of Taking: the date upon which the title to the Property, or a
---------------                                                     
portion thereof, passes to and vests in the condemnor or the effective date of
any order for possession if issued prior to the date title vests in the
condemnor.

Estoppel Certificate: with respect to any corporation, a certificate
---------------------                                                
of such corporation signed by an authorized officer of such corporation.

Event of Default: the meaning specified in Section 25 hereof.
-----------------                                             

Gross Building Area: the meaning specified in the Improvement 
--------------------                                          
Agreement.

Hazardous Materials: the meaning specified in Section 19 hereof.
--------------------                                             

Improvement Agreement: the improvement agreement attached to the Lease
----------------------                                                
as Exhibit "C".

Improvements: the meaning specified in Section 1 hereof.
-------------                                           

Indemnified Landlord Party: the meaning specified in Section 12
---------------------------                                    
hereof.

Indemnified Party: the meaning specified in Section 12 hereof.
------------------                                            

Indemnified Tenant Party: the meaning specified in Section 12 hereof.
-------------------------                                            

Insurance Requirements: all terms of any insurance policy covering
-----------------------                                            
Tenant or covering or applicable to the Property or any part thereof, all
requirements of the issuer of any such policy, and all orders, rules,
regulations and other requirements of the national Board of First Underwriters
(or any other body exercising similar functions) applicable to or affecting the
Property or any part thereof or any use or condition of the Property or any part
thereof.

Interest Rate: the lower of (i) the annual rate of interest as
--------------                                                 
publicly announced from time to time by Banc One Corp. as its prime or reference
rate plus two percent (2%) or (ii) the maximum rate of interest permitted by
law.

Landlord: the party specified in the initial paragraph of this Lease,
---------                                                             
together with all permitted successors or assigns of such party.

31

Landlord's Agents: Landlord's authorized agents, together with any
------------------                                                 
partners and any subsidiary, parent and affiliate corporations of Landlord, and
any directors, officers, shareholders and employees of Landlord or of any such
agents, parties, or subsidiary, parent or affiliate corporations.

Landlord Event of Default: the meaning specified in Section 40
--------------------------                                     
hereof.

Landlord Work: the meaning specified in Section 1 hereof.
--------------                                            

Lease Term: the meaning specified in Section 2 hereof.
-----------                                            

Legal Requirements: all laws, statutes, codes, acts, ordinances,
-------------------                                              
orders, judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations, the CC&Rs, directions and requirements of all governments,
departments, commissions, boards, courts, authorities (including, without
limitations, environmental protection, planning and zoning authorities),
agencies (and other governmental or quasi-governmental units, whether Federal,
state, county, district, municipal, city or other), and any officials and
officers thereof, foreseen or unforeseen, ordinary or extraordinary, which now
or at any time hereafter may be applicable to Tenant with respect to the
Property or any part thereof (including any which may apply to the repair, use
or maintenance of the Property or any part thereof), or any of the adjoining
sidewalks, curbs, vaults and vault space, if any, streets or ways, or any use or
condition of the Property or any part thereof.

Mortgage: any mortgage, deed of trust or other similar instrument
---------                                                         
from time to time providing for the assignment as security of Landlord's
interest in the Property or this Lease by the holder thereof.

Mortgagee: the mortgagee or beneficiary under any Mortgage.
----------                                                  

Option Term: the meaning specified in Section 36 hereof.
------------                                            

Parcels: the meaning specified in Section 1 hereof.
--------                                            

Person: a corporation, an association, a partnership, a limited
-------                                                         
liability company, an organization, a trust, an individual, a government or
political subdivision thereof or a governmental agency.

Property: the meaning specified in Section 1 hereof.
---------                                            

Rental Commencement Date: the meaning specified in Section 2 hereof.
-------------------------                                            

Restoration: in case of damage to or destruction of the Property or of
----------- 
the Improvements located thereon, the restoration, replacement or rebuilding of
the Property or the Improvements as nearly as possible to its value, condition
and character immediately prior to 

32

such damage, destruction or Taking, together with any temporary repairs and
property protection which may be required pending completion of such work.

Site Plan: the site plan attached to the Lease as Exhibit "B".
----------                                     

Substantially Completed: the meaning specified in the Improvement
------------------------                                          
Agreement.

Taking: a temporary or permanent taking by a government or political
-------                                                              
subdivision thereof or by a governmental agency during the term hereof of all or
part of the Property, or any interest therein or right accruing thereto, as the
result of or in lieu of or in anticipation of the exercise of the right of
condemnation or eminent domain.

Target Commencement Date: the meaning specified in Section 2 hereof.
-------------------------                                            

Taxes: the meaning specified in Section 14 hereof.
------                                             

Tenant: the party specified in the initial paragraph of this Lease,
-------                                                             
together with any permitted successors or assigns of such party.

Tenant's Agents: Tenant's authorized agents together with any partners
----------------                                              
and any subsidiary, parent and affiliate corporations of Tenant and any
employees, officers, directors, or shareholders of Tenant or of any such agents,
partners or subsidiary, parent or affiliate corporations.

Tenant's Equipment: Tenant's furniture, fixtures, trade fixtures,
-------------------                                               
equipment, appliances and personal property.

Total Destruction: the meaning specified in Section 20 hereof.
------------------                                             

Total Taking: the meaning specified in Section 21 hereof.
-------------                                             

48.  CC&Rs Estoppel Certificate. A condition precedent to Tenant's
--------------------------                                      
obligations under this lease shall be Tenant's receipt of an estoppel
certificate duly executed by

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

33

the declarant under the CC&Rs in the form attached hereto as Exhibit "E" and
dated within a period of time not more than thirty (30) days prior to the date
of this Lease.

IN WITNESS WHEREOF, the parties hereto have caused this Lease to be duly
executed as of the date first set forth above.

LANDLORD                                 TENANT
Ryan Companies, US Inc.,                 The Dial Corporation,
a Minnesota corporation                  a Delaware corporation

By:  /s/ John Strittmatter               By:  /s/ Malcolm Jozoff
------------------------                 ----------------------------
John Strittmatter                        Malcolm Jozoff  

Its:     VP                              Its: Chairman, President and
------------------------                 ----------------------------
Chief Executive Officer

34

EXHIBIT 10.48

FIRST AMENDMENT TO LEASE AGREEMENT

FOR THE DIAL BUILDING

FIRST AMENDMENT TO LEASE

This First Amendment to Lease, dated as of August 23, 1999 (First Amendment),
between Ryan Companies US, Inc., formerly before the name change known as Ryan
Construction Company of Minnesota, Inc. (Landlord) and The Dial Corporation
(Tenant).

WITNESSETH, that:

WHEREAS, Landlord and Tenant have entered into a Lease dated March 21, 1997
(Lease) for approximately 129,689 square feet of area, whereby Landlord has
leased to Tenant certain Premises located in the City of Scottsdale, State of
Arizona, consisting of the Premises, as such Premises are defined in the Lease;
and

NOW, THEREFORE, Landlord and Tenant desire and intend hereby to amend the
Lease as specifically hereinafter set forth and provided:

1.   The Lease Term commenced on August 14, 1997.
2.   The Lease Term shall expire on August 31, 2008.
3.   The Rental Commencement Date shall commence on February 14, 1998.
4.   The Annual Base Rent shall be for the period from February 14, 1998
through August 31, 2008 shall be One Million Three Hundred Eighty
Seven Thousand Six Hundred Seventy Two and 30/100 Dollars
($1,387,672.30), payable in equal monthly installments of One Hundred
Fifteen Thousand Six Hundred Thirty Nine and 36/100 Dollars
($115,639.36).

EXCEPT as expressly amended or supplemented herein, the Lease shall remain
and continue in full force and effect in all respects.

IN WITNESS WHEREOF, the Lease Amendment is hereby executed and delivered
effective as of the date and year first above written.

LANDLORD:    RYAN COMPANIES US, INC.

BY: /s/ John Strittmatter
------------------------

Its: VP
------------------------

TENANT:      THE DIAL CORPORATION

BY: /s/ Malcom Jozoff
------------------------

Its: 
________________________

EXHIBIT 10.49

AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY

FOR THE ASML BUILDING

AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY
-----------------------------------------------

THIS AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY (the "Agreement"), is
made and entered into as of the 23rd day of February, 2000, by and between
RYAN COMPANIES US, INC., a Minnesota corporation ("Seller") and WELLS CAPITAL,
INC., a Georgia corporation ("Purchaser").

W I T N E S S E T H:
- - - - - - - - - - 

WHEREAS, Seller desires to sell and Purchaser desires to purchase the
Property (as hereinafter defined) subject to the terms and conditions
hereinafter set forth.

NOW, THEREFORE, for and in consideration of the premises, the mutual
agreements contained herein, the sum of Ten Dollars ($10.00) in hand paid by
Purchaser to Seller at and before the sealing and delivery of these presents and
for other good and valuable consideration, the receipt, adequacy, and
sufficiency which are hereby expressly acknowledged by the parties hereto, the
parties hereto do hereby covenant and agree as follows:

1.   Purchase and Sale of Property. Subject to and in accordance with the
-----------------------------                                       
terms and provisions of this Agreement, Seller hereby agrees to sell to
Purchaser and Purchaser hereby agrees to purchase from Seller, the Property,
which term "Property" shall mean and include the following:

(a)  the tenant's interest under that certain ASU Research Park Lease
dated August 22, 1997, as amended by First Amendment dated February 24,
1998, (the "Ground Lease") between Price-Elliot Research Park, Inc.
("Lessor"), as Landlord, and Seller, as Tenant in and to all that tract or
parcel of land (the "Land") located in the Southeast quarter of Section 13,
Township 1 South, Range 4 East of the Gila and Salt river Base and
Meridian, Maricopa County, Arizona, containing approximately 9.507 acres,
having an address of 8555 South River Parkway, Tempe, Arizona, and being
more particularly described on Exhibit "A" hereto; and
-----------            

(b)  the tenant's interest under the Ground Lease in and to all
rights, privileges, and easements appurtenant to the Land, including all
water rights, mineral rights, reversions, or other appurtenances to said
Land, and all right, title, and interest of Seller, if any, in and to any
land lying in the bed of any street, road, alley, or right-of-way, open or
proposed, adjacent to or abutting the Land; and

(c)  the tenant's interest under the Ground Lease in and to all
buildings, structures, and improvements situated on the Land, including,
without limitation, that certain two story office building containing
approximately 95,133 square feet of leasable space, the parking areas
containing approximately 376 parking spaces and other amenities located on
the Land, and all apparatus, built-in appliances, equipment, pumps,
machinery, plumbing, heating, air conditioning, electrical and other
fixtures located on the Land (all of which are herein collectively referred
to as the "Improvements"); and

(d)  all personal property now owned by Seller and located on or to be
located on or in, or used in connection with, the Land and Improvements
("Personal Property"); and

(e)  all of Seller's right, title, and interest, as landlord or
lessor, in and to that certain Lease Agreement with ASM LITHOGRAPHY, INC.,
a Delaware corporation (the "Tenant"), dated August 15, 1997, as amended by
First Amendment to Lease dated January 6, 2000 (the"Lease"); and

(f)  all of Seller's right, title, and interest in and to the plans
and specifications with respect to the Improvements and any guarantees,
trademarks, rights of copyright, warranties, or other rights related to the
ownership of or use and operation of the Land, Personal Property, or
Improvements, all governmental licenses and permits, and all intangibles
associated with the Land, Personal Property, and Improvements, including
the name of the Improvements and the logo therefor, if any.

2.   Earnest Money. Within two (2) business days after the full execution
-------------                                                       
of this Agreement, Purchaser shall deliver to Old Republic Title Agency ("Escrow
Agent"), whose offices are at 3200 North Central Avenue, Suite 100, Phoenix, AZ
85012, Purchaser's check, payable to Escrow Agent, in the amount of $100,000
(the "Earnest Money"), which Earnest Money shall be held and disbursed by Escrow
Agent in accordance with this Agreement. The Earnest Money shall be paid by
Escrow Agent to Seller at Closing (as hereinafter defined) and shall be applied
as a credit to the Purchase Price (as hereinafter defined), or shall otherwise
be paid to Seller or refunded to Purchaser in accordance with the terms of this
Agreement. All interest and other income from time to time earned on the Earnest
Money shall belong to Purchaser and shall be disbursed to Purchaser at any time
or from time to time as Purchaser shall direct Escrow Agent. In no event shall
any such interest or other income be deemed a part of the Earnest Money.

3.   Purchase Price. Subject to adjustment and credits as otherwise
--------------                                                
specified in this Agreement, the purchase price (the "Purchase Price") to be
paid by Purchaser to Seller for the Property shall be SEVENTEEN MILLION FIVE
HUNDRED THOUSAND AND 00/100 DOLLARS ($17,500,000.00). The Purchase Price shall
be paid by Purchaser to Seller at the Closing (as hereinafter defined) by
cashier's check or by wire transfer of immediately available federal funds, less
the amount of Earnest Money and subject to prorations, adjustments and credits
as otherwise specified in this Agreement.

4.   Purchaser's Inspection and Review Rights. Subject to the rights of the
----------------------------------------                              
Tenant, Purchaser and its agents, engineers, or representatives, with Seller's
reasonable, good faith cooperation, shall have the privilege of going upon the
Property as needed to inspect, examine, test, and survey the Property at all
reasonable times and from time to time. Purchaser hereby agrees to hold Seller
harmless from any liens, claims, liabilities, and damages incurred through the
exercise of such privilege, and Purchaser further agrees to repair any damage to
the Property caused by the exercise of such privilege. At all reasonable times
prior to the Closing (as hereinafter defined), Seller shall make available to
Purchaser, or Purchaser's agents and representatives, for review and copying,
all books, records, and files in Seller's possession relating to the ownership
and operation of the Property, including, without limitation, title matters,
surveys, tenant files, service and maintenance agreements, and other contracts,
books, records, operating statements, and other information relating to the
Property. 

Seller further agrees to in good faith assist and cooperate with Purchaser in
coming to a thorough understanding of the books, records, and files relating to
the Property. Seller further agrees to provide to Purchaser (to the extent the
same have not previously been provided to Purchaser) prior to the date which is
five (5) days after the effective date of this Agreement (a) the most current
boundary and "as-built" surveys of the Land and Improvements and any title
insurance policies, appraisals, occupancy permits, building inspection reports
and environmental reports relating thereto and in the possession or under the
control of Seller, and (b) a statement setting forth all revenues from the
Property and setting forth all costs and expenses of operating, maintaining, and
repairing the Property (and the costs of replacing component parts thereof)
incurred by Seller, in each case during the entire period from June 1, 1998,
through January 31, 2000, which statement shall be certified by Seller to the
best of Seller's knowledge after diligent inquiry and review of records, to be
complete and accurate in all material respects. Seller acknowledges that
Purchaser may be required by the Securities and Exchange Commission to file
audited financial statements for one to three years with regard to the Property.
At no cost or liability to Seller, Seller shall (i) cooperate with Purchaser,
its counsel, accountants, agents, and representatives, provide them with access
to Seller's books and records with respect to the ownership, management,
maintenance, and operation of the Property for the applicable period, and permit
them to copy the same, (ii) execute a form of "rep" letter in form and substance
reasonably satisfactory to Seller, and (iii) furnish Purchaser with such
additional information concerning the same as Purchaser shall reasonably
request. Purchaser will pay the costs associated with any such audit.

5.   Special Condition to Closing. Purchaser shall have thirty (30) days
----------------------------                                       
from the effective date of this Agreement (the "Inspection Period") to make
investigations, examinations, inspections, market studies, feasibility studies,
lease reviews, and tests relating to the Property and the operation thereof in
order to determine, in Purchaser's sole opinion and discretion, the suitability
of the Property for acquisition by Purchaser. Purchaser shall have the right to
terminate this Agreement at any time prior to the expiration of the Inspection
Period by giving written notice to Seller of such election to terminate. In the
event Purchaser so elects to terminate this Agreement, Seller shall be entitled
to receive and retain the sum of Twenty-Five Dollars ($25.00) of the Earnest
Money, and the balance of the Earnest Money shall be promptly refunded by Escrow
Agent to Purchaser, whereupon, except as expressly provided to the contrary in
this Agreement, no party hereto shall have any other or further rights or
obligations under this Agreement. Seller acknowledges that the sum of $25.00 is
good and adequate consideration for the termination rights granted to Purchaser
hereunder.

6.   General Conditions Precedent to Purchaser's Obligations Regarding the
---------------------------------------------------------------------
Closing. In addition to the conditions to Purchaser's obligations set forth in
-------                                                                       
Paragraph 5 above, the obligations and liabilities of Purchaser hereunder shall
in all respects be conditioned upon the satisfaction of each of the following
conditions, any of which may be waived by written notice from Purchaser to
Seller:

(a)  Seller shall have complied in all material respects with and
otherwise performed in all material respects each of the covenants and
obligations of Seller set forth in this Agreement, as of the date of
Closing (as hereinafter defined).

(b)  All representations and warranties of Seller as set forth in 

this Agreement shall be true and correct in all material respects as of the
date of Closing.

(c)  There shall have been no adverse change to the title to the
Property which has not been cured and the Title Company (as hereinafter
defined) shall have issued the Title Commitment (as hereinafter defined) on
the Land and Improvements without exceptions other than as described in
paragraph 7 and the Title Company shall be prepared to issue to Purchaser
upon the Closing a leasehold owner's title insurance policy on the Land and
Improvements pursuant to such Title Commitment.

(d)  Purchaser shall have received the Tenant Estoppel   Certificate
referred to in Paragraph 9(c) hereof, duly executed by the Tenant at least
five (5) days prior to the end of the Inspection Period.

(e)  Purchaser shall have received the Lessor Estoppel Certificate
referred to in Paragraph 9(d) hereof, duly executed by the Lessor at least
five (5) days prior to the end of the Inspection Period.

7.   Title and Survey.  Seller covenants and agrees that Seller, at its
----------------                                                  
sole cost and expense, shall, on or before ten (5) days after the Effective Date
of this Agreement, cause Old Republic National Title Insurance Company, or such
other such title insurance company acceptable to Purchaser (herein referred to
as the "Title Company"), to deliver to Purchaser its commitment (herein referred
to as the "Title Commitment") to issue to Purchaser, upon the recording of the
Assignment and Assumption of ASU Research Park Lease, the payment of the
Purchase Price, and the payment to the Title Company of the policy premium
therefor, an owner's policy of title insurance, in the amount of the Purchase
Price, insuring good and marketable record title to the Property to be in
Purchaser subject only to the Permitted Exceptions (as hereinafter defined),
with affirmative coverage over any mechanic's, materialman's and subcontractor's
liens and with full extended coverage over all general exceptions, and
containing the following endorsements: zoning (including affirmative coverage
against any violations of recorded covenants and restrictions), survey, and
access.  Such Title Commitment shall not contain any exception for rights of
parties in possession other than an exception for the right of the Tenant under
the Lease. If the Title Commitment shall contain an exception for the state of
facts which would be disclosed by a survey of the Property or an "area and
boundaries" exception, the Title Commitment shall provide that such exception
will be deleted upon the presentation of an ALTA/ASCM  survey acceptable to
Title Company, in which case the Title Commitment shall be amended to contain an
exception only for the matters shown on the as-built survey which Seller shall
obtain at its sole cost and expense for the benefit of Purchaser.  Said survey
shall include a certification that the Property is zoned in a classification
which will permit the operating of the Property as an office building and any
conditions to the granting of such zoning have been satisfied.  Seller shall
also cause to be delivered to Purchaser together with such Title Commitment,
legible copies of all documents and instruments referred to therein. Purchaser,
upon receipt of the Title Commitment and the copies of the documents and
instruments referred to therein, shall then have ten (10) days during which to
examine the same, after which Purchaser shall notify Seller of any defects or
objections affecting the marketability of the title to the Property. Seller
shall then have until the Closing to cure such defects and objections and shall,
in good faith, exercise reasonable diligence to cure such defects and
objections.

8.   Representations and Warranties of Seller. Seller hereby makes the
----------------------------------------                         
following representations and warranties to Purchaser, each of which shall be
deemed material:

(a)  Lease. Seller has delivered to Purchaser a true, correct and
-----                                                       
complete copy of the Lease, together with all modifications and amendments
thereto herein referred. Seller is the "landlord" under the Lease and owns
unencumbered legal and beneficial title to the Lease and the rents and
other income thereunder, subject only to the collateral assignment of the
Lease and the rents thereunder in favor of the holder of an existing
mortgage or deed of trust encumbering the Property, which mortgage or deed
of trust shall be canceled and satisfied by Seller at the Closing. The term
of the Lease commenced on June 14, 1998, and expires on June 30, 2013. The
Tenant currently leases and occupies 100% of the rentable area of the
Improvements.

(b)  Lease - Assignment. To the best of Seller's knowledge, the
------------------                                         
Tenant has not assigned its interest in the Lease or sublet any portion   of the
premises leased to the Tenant under the Lease.

(c)  Lease - Default. (i) Seller has not received any notice of
---------------                                           
termination or default under the Lease, (ii) there are no existing or
uncured defaults by Seller or by the Tenant under the Lease, (iii) to the
best of Seller's knowledge, there are no events which with the passage of
time or notice, or both, would constitute a default by Seller or by the
Tenant, and Seller has complied with each and every undertaking, covenant,
and obligation of Seller under the Lease, and (iv) Tenant has not asserted
any defense, set-off, or counterclaim with respect to its tenancy or its
obligation to pay rent, additional rent, or other charges pursuant to the
Lease.

(d)  Lease - Rents and Special Consideration. Tenant: (i) has not
---------------------------------------                     
prepaid rent for more than the current month under the Lease, (ii) has not
received and is not entitled to receive any rent concession in connection
with its tenancy under the Lease other than as described in the Lease,
(iii) is not entitled to any special work (not yet performed), or
consideration (not yet given) in connection with its tenancy under the
Lease, and (iv) does not have any deed, option, or other evidence of any
right or interest in or to the Property, except for the Tenant's tenancy as
evidenced by the express terms of the Lease.

(e)  Lease - Commissions. No rental, lease, or other commissions with
-------------------                                             
respect to the Lease are payable to Seller, any partner of Seller, any
party affiliated with or related to Seller or any partner of Seller or any
third party whatsoever. All commissions payable under, relating to, or as a
result of the Lease have been cashed-out and paid and satisfied in full by
Seller or by Seller's predecessor in title to the Property.

(f)  Lease - Acceptance of Premises. (i) Tenant has accepted its 
------------------------------
leased premises located within the Property, including any and all work
performed therein or thereon pursuant to the Lease, (ii) Tenant is in full
and complete possession of its premises under the Lease, and (iii) Seller
has not received notice from the Tenant that the Tenant's 

premises are not in full compliance with the terms and provisions of
Tenant's Lease or are not satisfactory for Tenant's purposes.

(g)  No Other Agreements. Other than the Lease and the Permitted
-------------------                                        
Exceptions, there are no leases, service contracts, management agreements,
or other agreements or instruments in force and effect, oral or written, to
which Seller is a party and that grant to any person whomsoever or any
entity whatsoever any right, title, interest or benefit in or to all or any
part of the Property or any rights relating to the use, operation,
management, maintenance, or repair of all or any part of the Property.

(h)  No Litigation. There are no actions, suits, or proceedings
-------------                                             
pending, or, to the best of Seller's knowledge, threatened by any
organization, person, individual, or governmental agency against Seller
with respect to the Property or against the Property, nor does Seller know
of any basis for such action. Seller has no knowledge of any pending or
threatened application for changes in the zoning applicable to the Property
or any portion thereof.

(i)  Condemnation. No condemnation or other taking by eminent domain 
------------  
of the Property or any portion thereof has been instituted and, to the best
of Seller's knowledge, there are no pending or threatened condemnation or
eminent domain proceedings (or proceedings in the nature or in lieu
thereof) affecting the Property or any portion thereof or its use.

(j)  Proceedings Affecting Access. The Property is served by curb cuts
---------------------------- 
for direct vehicular access to and from South River Parkway adjoining the
Property. Said street is a public street. There are no pending or, to the best
of Seller's knowledge, threatened proceedings that could have the effect of
impairing or restricting access between the Property and such adjacent public
road.

(k)  Intentionally Omitted.
----------------------

(l)  Conditions of Improvements. Seller is not aware of any structural
-------------------------- 
or other defects, in the Improvements. The heating, ventilating, air
conditioning, electrical, plumbing, water, elevator(s), roofing, storm drainage
and sanitary sewer systems at or servicing the Land and Improvements are, to the
best of the Seller's knowledge, in good condition and working order and Seller
is not aware of any defects or deficiencies, latent or otherwise, therein. The
Improvements have been constructed in compliance with applicable provisions of
the Lease, Ground Lease, ABR Lease, City of Tempe building regulations, and any
recorded covenants, conditions and restrictions.

(m)  Certificates. To the best of Seller's knowledge, there are
------------                                              
presently in effect permanent certificates of occupancy, licenses, and permits
as may be required for the Property, and the present use and occupation of the
Property is in compliance and conformity with the certificates of occupancy and
all licenses and permits. There has been no notice or request of any municipal
department, insurance company or board of fire underwriters (or organization
exercising functions similar thereto), or mortgagee directed to Seller and
requesting the performance of any work or alteration to the Property which has
not been complied with.

(n)  Violations. To the best of Seller's knowledge, there are no
----------                                                 
violations of law, municipal or county ordinances, or other legal
requirements with respect to the Property, and the Improvements thereon
comply with all applicable legal requirements with respect to the use,
occupancy, and construction thereof. The Property is zoned in a
classification which permits the use thereof in the present manner.  The
Property is not located in a flood hazard area.

(o)  Underlying Leases. Seller has delivered to Purchaser a true,
-----------------                                           
correct and complete copy of the Ground Lease and the Arizona State
University Ground Lease between The Arizona Board of Regents acting for and
on behalf of Arizona State University, as landlord, and Lessor, as tenant
(the "ABR Lease", dated October 8, 1984, and all amendments thereto (the
"Underlying Leases"). (i) Seller has not received any notice of termination
or default under the Underlying Leases, (ii) to the best of Seller's
knowledge, there are no existing or uncured defaults by any party to the
Underlying Leases, (iii) Seller has no direct obligation under the ABR
Lease, and (iv) Sellers only obligations under the Ground Lease are to pay
(A) rent in the amount of $15,531.00 per month (increasing to $22,728.00
per month on January 1, 2012, and thereafter further increasing as provided
therein), which amount is not passed through to the Tenant; (B) a Municipal
Service Fee, currently estimated to be $741.56 per month, which amount is
passed through to the Tenant; (c) Common Area Maintenance charges,
currently estimated to be $3,001.09 per month, which amount is passed
through to Tenant, and (d) insurance, the cost of which is passed through
to Tenant.

(p)  Bankruptcy. Seller is "solvent" as said term is defined by
----------                                                
bankruptcy law and has not made a general assignment for the benefit of
creditors nor been adjudicated a bankrupt or insolvent, nor has a receiver,
liquidator, or trustee for any of Seller's properties (including the
Property) been appointed or a petition filed by or against Seller for
bankruptcy, reorganization, or arrangement pursuant to the Federal
Bankruptcy Act or any similar Federal or state statute, or any proceeding
instituted for the dissolution or liquidation of Seller.

(q)  Pre-existing Right to Acquire.  No person or entity has any right
-----------------------------                                    
or option to acquire the Property or any portion thereof which will have
any force or effect after the execution of this Agreement, other than
Purchaser.

(r)  Effect of Certification. To the best of Seller's knowledge,
-----------------------                                    
neither this Agreement nor the transactions contemplated herein will
constitute a breach or violation of, or default under, or will be modified,
restricted, or precluded by the Lease or the Permitted Exceptions.

(s)  Authorization. Seller is a duly organized and validly existing
-------------                                                 
corporation under the laws of the State of Minnesota. This Agreement has
been duly authorized and executed on behalf of Seller and constitutes the
valid and binding agreement of Seller, enforceable in accordance with its
terms, and all necessary action on the part of Seller to authorize the
transactions herein contemplated has been taken, and no further action is
necessary for such purpose.

(t)  Seller Not a Foreign Person. Seller is not a "foreign person"
---------------------------                                  
which would subject Purchaser to the withholding tax provisions of Section
1445 of the Internal Revenue Code of 1986, as amended.

(u)  Hazardous Substances. Seller hereby warrants and represents,
--------------------                                        
to the best of Seller's knowledge, and except as otherwise disclosed in
that certain Phase I Environmental Site Assessment of Lots 44, ASU Research
Park, by Liesch Southwest, Inc., dated September 22, 1998, that (i) no
"hazardous substances", as that term is defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
42 U.S.C. Section 9601, et. seq., the Resource Conservation and Recovery
--  ---                                         
Act, as amended, 42 U.S.C. Section 6901 et. seq., and the rules and
--  ---                    
regulations promulgated pursuant to these acts, any so-called "super-fund"
or "super-lien" laws or any applicable state or local laws, nor any other
pollutants, toxic materials, or contaminants have been or shall prior to
Closing be discharged, disbursed, released, stored, treated, generated,
disposed of, or allowed to escape on the Property, (ii) no asbestos or
asbestos containing materials have been installed, used, incorporated into,
or disposed of on the Property, (iii) no polychlorinated biphenyls are
located on or in the Property, in the form of electrical transformers,
fluorescent light fixtures with ballasts, cooling oils, or any other device
or form, (iv) no underground storage tanks are located on the Property or
were located on the Property and subsequently removed or filled, (v) no
investigation, administrative order, consent order and agreement,
litigation, or settlement with respect to Hazardous Substances is proposed,
threatened, anticipated or in existence with respect to the Property, and
(vi) the Property has not previously been used as a landfill, cemetery, or
as a dump for garbage or refuse. Seller hereby indemnifies Purchaser and
holds Purchaser harmless from and  against any loss, cost, damage,
liability or expense due to or arising out of the breach of any
representation or warranty contained in this Paragraph.

EXCEPT AS EXPRESSLY PROVIDED TO THE CONTRARY HEREIN, PURCHASER IS ACQUIRING THE
PROPERTY IN ITS "AS IS" CONDITION AS OF THE DATE OF THE CLOSING.

9.   Seller's Additional Covenants.  Seller does hereby further covenant
-----------------------------                                      
and agree as follows:

(a)  Operation of Property.  Seller hereby covenants that, from the
---------------------                                         
date of this Agreement up to and including the date of Closing, Seller
shall: (i) not negotiate with any third party respecting the sale of the
Property or any interest therein, (ii) not modify, amend, or terminate the
Lease or Ground Lease, or enter into any new lease, contract, or other
agreement respecting the Property, (iii) not grant or otherwise create or
consent to the creation of any easement, restriction, lien, assessment, or
encumbrance respecting the Property, and (iv) cause the Property to be
operated, maintained, and repaired in the same manner as the Property is
currently being operated, maintained, and repaired.

(b)  Preservation of Lease and Ground Lease. Seller shall, from and
--------------------------------------                        
after the date of this Agreement to the date of Closing, use its good faith
efforts to perform and discharge all of the duties and obligations and
shall otherwise comply with every covenant and agreement 

of the landlord under the Lease and of the tenant under the Ground Lease,
at Seller's expense, in the manner and within the time limits required
thereunder. Furthermore, Seller shall, for the same period of time, use
diligent and good faith efforts to cause the Tenant under the Lease to
perform all of its duties and obligations and otherwise comply with each
and every one of its covenants and agreements under such Lease and shall
take such actions as are reasonably necessary to enforce the terms and
provisions of the Lease.

(c)  Tenant Estoppel Certificate.  At least five (5) days prior to
---------------------------                                  
expiration of the Inspection Period, Seller shall obtain and deliver to
Purchaser a fully completed estoppel certificate with respect to the Lease
in substantially the form of Exhibit "B" (the "Tenant Estoppel
-----------                      
Certificate"), duly executed by the Tenant thereunder. The Tenant Estoppel
Certificate shall be executed as of a date not more than thirty (30) days
prior to Closing.

(d)  Lessor Estoppel Certificate.  At least five (5) days prior
---------------------------                               
to expiration of the Inspection Period, Seller shall obtain and deliver to
Purchaser a fully completed estoppel certificate with respect to the Ground
Lease in substantially the form of Exhibit "C" (the "Lessor Estoppel
-----------                      
Certificate"), duly executed by the Lessor thereunder. The Lessor Estoppel
Certificate shall be executed as of a date not more than thirty (30) days
prior to Closing.

(e)  Insurance. From and after the date of this Agreement to the date
---------                                                       
and time of Closing, Seller shall, at its expense, continue to maintain the
all risk fire and extended coverage insurance policy covering the Property
which is currently in force and effect.

10.  Closing.  Provided that all of the conditions set forth in this
-------                                                        
Agreement are theretofore fully satisfied or performed, it being fully
understood and agreed, however, that Purchaser may expressly waive in writing,
at or prior to Closing, any conditions that are unsatisfied or unperformed at
such time, the consummation of the sale by Seller and purchase by Purchaser of
the Property (herein referred to as the "Closing") shall be held at 2:00 p.m.,
local time, on the first business day which is at least five (5) days after the
end of the Inspection Period, at the offices of Escrow Agent, or at such earlier
time as shall be designated by Purchaser in a written notice to Seller not less
than two (2) business days prior to Closing.

11.  Seller's Closing Documents.  For and in consideration of, and as a
--------------------------                                        
condition precedent to, Purchaser's delivery to Seller of the Purchase Price
described in Paragraph 3 hereof, Seller shall obtain or execute, at Seller's
expense, and deliver to Purchaser at Closing the following documents (all of
which shall be duly executed, acknowledged, and notarized where required and
shall survive the Closing):

(a)  Assignment and Assumption of Ground Lease.  An Assignment and
-----------------------------------------                    
Assumption of Ground Lease in substantially the form of Exhibit "D";
----------  
(b)  Bill of Sale. A Bill of Sale conveying to Purchaser marketable
------------                                                  
title to the Personal Property in the form and substance of Exhibit "E";
----------- 

(c)  Blanket Transfer. A Blanket Transfer and Assignment in the form
----------------                                               
and substance of Exhibit "F";
----------  

(d)  Assignment and Assumption of Lease. An Assignment and Assumption
----------------------------------                              
of Lease in the form and substance of Exhibit "G", assigning to Purchaser
-----------                        
all of Seller's right, title, and interest in and to the Lease and the
rents thereunder (and which shall provide among other things that Seller
shall remain liable for its environmental indemnity to Tenant under the
Lease);

(e)  Seller's Affidavit. A customary seller's affidavit in the form
------------------                                            
required by the Title Company to satisfy the requirements of its commitment
and the endorsements contemplated by paragraph 7 hereof;

(f)  FIRPTA Certificate. A FIRPTA Certificate in such form as 
------------------
Purchaser shall reasonably approve;

(g)  Certificates of Occupancy. The original Certificates of occupancy
-------------------------                                        
for all space within the Improvements;

(h)  Marked Title Commitment. The Title Commitment, marked to change
-----------------------                                        
the effective date thereof through the date and time of recording the
Assignment and Assumption of Ground Lease, to reflect that Purchaser is
vested with a subleasehold interest in the Land and the Improvements, and
to reflect that all requirements for the issuance of the final title policy
pursuant to such Title Commitment have been satisfied;

(i)  Keys and Records. All of the keys to any doors or locks on the
----------------                                              
Property and the original tenant files and other books and records relating
to the Property in Seller's possession;

(j)  Tenant Notice. Notice from Seller to the Tenant of the sale of 
-------------
the Property to Purchaser in such form as Purchaser shall reasonably
approve;

(k)  Settlement Statement. A settlement statement setting forth the
--------------------                                          
amounts paid by or on behalf of and/or credited to each of Purchaser and
Seller pursuant to this Agreement;

(l)  Other Documents. Such other documents as shall be reasonably
---------------                                              
required by Purchaser's counsel.

12.  Purchaser's Closing Documents. Purchaser shall obtain or execute and
-----------------------------                                       
deliver to Seller at Closing the following documents, all of which shall be duly
executed and acknowledged where required and shall survive the Closing:

(a)  Assignment and Assumption of Ground Lease. The Assignment
-----------------------------------------                
and Assumption of Ground Lease;

(b)  Blanket Transfer. The Blanket Transfer and Assignment;
----------------                                      

(c)  Assignment and Assumption of Lease. The Assignment and Assumption
----------------------------------                               
of Lease;

(d)  Settlement Statement. A settlement statement setting forth 
--------------------                                          

the amounts paid by or on behalf of and/or credited to each of Purchaser and
Seller pursuant to this Agreement; and

(e)  Other Documents. Such other documents as shall be reasonably
---------------                                             
required by Seller's counsel.

13.  Closing Costs. Seller shall pay the cost of the Title Commitment,
-------------                                                    
including the cost of the examination of title to the Property made in
connection therewith, the premium for the owner's policy of title insurance
issued pursuant thereto, the cost of any transfer or documentary tax imposed by
any jurisdiction in which the Property is located, the cost of the as-built
survey, the attorneys' fees of Seller, and all other costs and expenses incurred
by Seller in closing and consummating the purchase and sale of the Property
pursuant hereto. Purchaser shall pay the attorneys' fees of Purchaser, and all
other costs and expenses incurred by Purchaser in closing and consummating the
purchase and sale of the Property pursuant hereto.  Each party shall pay one-
half of any escrow fees.

14.  Prorations.  The following items shall be prorated and/or credited
----------                                                        
between Seller and Purchaser as of Midnight preceding the date of Closing:

(a)  Rents. Rents, additional rents, and other income of the Property
-----                                                           
(other than security deposits, which shall be assigned and paid over to
Purchaser) collected by Seller from Tenant for the month of Closing.
Purchaser shall also receive a credit against the Purchase Price payable by
Purchaser to Seller at Closing for any rents or other sums (not including
security deposits) prepaid by Tenant for any period following the month of
Closing, or otherwise. All rents and other amounts paid by Seller pursuant
to the Ground Lease for the month of Closing.

(b)  Property Taxes. To the extent the same are not paid by Tenant,
--------------                                                
City, state, county, and school district ad valorem taxes based on the ad
valorem tax bills for the Property, if then available, or if not, then on
the basis of the latest available tax figures and information. Should such
proration be based on such latest available tax figures and information and
prove to be inaccurate upon receipt of the ad valorem tax bills for the
Property for the year of Closing, either Seller or Purchaser, as the case
may be, may demand at any time after Closing a payment from the other
correcting such malapportionment. In addition, if after Closing there is an
adjustment or reassessment by any governmental authority with respect to,
or affecting, any ad valorem taxes for the Property for the year of Closing
or any prior year, any additional tax payment for the Property required to
be paid with respect to the year of Closing shall be prorated between
Purchaser and Seller and any such additional tax payment for the Property
for any year prior to the year of Closing shall be paid by Seller. This
agreement shall expressly survive the Closing.

(c)  Utility Charges. Except for utilities which are the 
--------------- 
responsibility of Tenant, Seller shall pay all utility bills received prior
to Closing and shall be responsible for utilities furnished to the Property
prior to Closing. Purchaser shall be responsible for the payment of all
bills for utilities furnished to the Property subsequent to the Closing.
Seller and Purchaser hereby agree to prorate and pay

their respective shares of all utility bills received subsequent to
Closing, which agreement shall survive Closing.

15.  Purchaser's Default. In the event of default by Purchaser under the
-------------------                                                
terms of this Agreement, Seller's sole and exclusive remedy shall be to receive
the Earnest Money as liquidated damages and thereafter the parties hereto shall
have no further rights or obligations hereunder whatsoever. It is hereby agreed
that Seller's damages will be difficult to ascertain and that the Earnest Money
constitutes a reasonable liquidation thereof and is intended not as a penalty,
but as fully liquidated damages. Seller agrees that in the event of default by
Purchaser, it shall not initiate any proceeding to recover damages from
Purchaser, but shall limit its recovery to the retention of the Earnest Money.

Seller's Initial /s/ DB             Purchaser's Initials /s/ LW
-----------------                       -----------------

16.  Seller's Default.  In the event of default by Seller under the terms
----------------                                                    
of this Agreement, including, without limitation, the failure of Seller to cure
any title defects or objections, except as otherwise specifically set forth
herein, at Purchaser's option: (i) if any such defects or objections arose by,
through, or under Seller or if any such defects or objections consist of taxes,
mortgages, deeds of trust, deeds to secure debt, mechanic's or materialman's
liens, or other such monetary encumbrances, Purchaser shall have the right to
cure such defects or objections, in which event the Purchase Price shall be
reduced by an amount equal to the costs and expenses incurred by Purchaser in
connection with the curing of such defects or objections, and upon such curing,
the Closing hereof shall proceed in accordance with the terms of this Agreement;
or (ii) Purchaser shall have the right to terminate this Agreement by giving
written notice of such termination to Seller, whereupon Escrow Agent shall
promptly refund all Earnest Money to Purchaser, and Purchaser and Seller shall
have no further rights, obligations, or liabilities hereunder, except as may be
expressly provided to the contrary herein; or (iii) Purchaser shall have the
right to accept title to the Property subject to such defects and objections
with no reduction in the Purchase Price, in which event such defects and
objections shall be deemed "Permitted Exceptions"; or (iv) Purchaser may elect
to seek specific performance of this Agreement.

17.  Condemnation.  If, prior to the Closing, all or any part of the
------------                                                   
Property is subjected to a bona fide threat of condemnation by a body having the
power of eminent domain or is taken by eminent domain or condemnation (or sale
in lieu thereof), or if Seller has received notice that any condemnation action
or proceeding with respect to the Property is contemplated by a body having the
power of eminent domain, Seller shall give Purchaser immediate written notice of
such threatened or contemplated condemnation or of such taking or sale, and
Purchaser may by written notice to Seller given within thirty (30) days of the
receipt of such notice from Seller, elect to cancel this Agreement. If Purchaser
chooses to cancel this Agreement in accordance with this Paragraph 17, then the
Earnest Money shall be returned immediately to Purchaser by Escrow Agent and the
rights, duties, obligations, and liabilities of the parties hereunder shall
immediately terminate and be of no further force and effect. If Purchaser does
not elect to cancel this Agreement in accordance herewith, this Agreement shall
remain in full force and effect and the sale of the Property contemplated by
this Agreement, less any interest taken by eminent domain or condemnation, or
sale in lieu thereof, shall be 

effected with no further adjustment and without reduction of the Purchase Price,
and at the Closing, Seller shall assign, transfer, and set over to Purchaser all
of the right, title, and interest of Seller in and to any awards that have been
or that may thereafter be made for such taking.

18.  Damage or Destruction.  If any of the Improvements shall be destroyed
---------------------                                                
or damaged prior to the Closing, and the estimated cost of repair or replacement
exceeds $100,000.00 or if the Lease shall terminate as a result of such damage,
Purchaser may, by written notice given to Seller within twenty (20) days after
receipt of written notice from Seller of such damage or destruction, elect to
terminate this Agreement, in which event the Earnest Money shall immediately be
returned by Escrow Agent to Purchaser and except as expressly provided herein to
the contrary, the rights, duties, obligations, and liabilities of all parties
hereunder shall immediately terminate and be of no further force or effect. If
Purchaser does not elect to terminate this Agreement pursuant to this Paragraph
18, or has no right to terminate this Agreement (because the damage or
destruction does not exceed $100,000.00 and the Lease remains in full force and
effect), and the sale of the Property is consummated, Purchaser shall be
entitled to receive all insurance proceeds paid or payable to Seller by reason
of such destruction or damage under the insurance required to be maintained by
Seller pursuant to Paragraph 9(d) hereof (less amounts of insurance theretofore
received and applied by Seller to restoration). If the amount of said casualty
or rent loss insurance proceeds is not settled by the date of Closing, Seller
shall execute at Closing all proofs of loss, assignments of claim, and other
similar instruments to ensure that Purchaser shall receive all of Seller's
right, title, and interest in and under said insurance proceeds.

19.  Assignment.  Purchaser's rights and duties under this Agreement shall
----------                                                           
not be assignable except to an affiliate of Purchaser without the consent of
Seller which consent shall not be unreasonably withheld.

20.  Broker's Commission.  Seller has by separate agreement agreed to pay a
-------------------                                                   
brokerage commission to CB Commercial Real Estate Group (the "Broker").
Purchaser and Seller hereby represent each to the other that they have not
discussed this Agreement or the subject matter hereof with any real estate
broker or agent other than Broker so as to create any legal right in any such
broker or agent to claim a real estate commission with respect to the conveyance
of the Property contemplated by this Agreement. Seller shall and does hereby
indemnify and hold harmless Purchaser from and against any claim, whether or not
meritorious, for any real estate sales commission, finder's fees, or like
compensation in connection with the sale contemplated hereby and arising out of
any act or agreement of Seller, including any claim asserted by Brokers and any
broker or agent claiming under Broker.  Likewise, Purchaser shall and does
hereby indemnify and hold harmless Seller from and against any claim, whether or
not meritorious, for any real estate sales commission, finder's fees, or like
compensation in connection with the sale contemplated hereby and arising out of
any act or agreement of Purchaser, except any such claim asserted by Broker and
any broker or agent claiming under Broker. This Paragraph 21 shall survive the
Closing or any termination of this Agreement.

21.  Notices.  Wherever any notice or other communication is required or
-------                                                            
permitted hereunder, such notice or other communication shall be in writing and
shall be delivered by telecopy, overnight courier, by hand, or sent by U.S.
registered or certified mail, return receipt requested, postage prepaid, 

to the addresses set out below or at such other addresses as are specified by
written notice delivered in accordance herewith:

PURCHASER:          c/o Wells Capital, Inc.
6200 The Corners Parkway, Suite 250
Norcross, Georgia 30092
Attn: Chief Investment Officer

with a copy to:     O'Callaghan & Stumm LLP
127 Peachtree Street, N. E., Suite 1330
Atlanta, Georgia 30303
Attn: William L. O'Callaghan, Esq.

SELLER:             Ryan Companies US, Inc.
700 International Centre
900 Second Avenue South
Minneapolis, MN 55402-3387
Attn: Timothy M. Gray

with a copy to :    Ryan Companies US, Inc.
700 International Centre
900 Second Avenue South
Minneapolis, MN 55402-3387
Attn: Dennis Buratti

Any notice or other communication mailed as herein above provided shall be
deemed effectively given or received on the date of delivery, if delivered by
telecopy, hand or by overnight courier, or otherwise on the third (3rd) business
day following the postmark date of such notice or other communication.

22.  Possession.  Possession of the Property shall be granted by Seller to
----------                                                           
Purchaser on the date of Closing, subject only to the Lease and the Permitted
Exceptions.

23.  Time Periods.  If the time period by which any right, option, or
------------                                                    
election provided under this Agreement must be exercised, or by which any act
required hereunder must be performed, or by which the Closing must be held,
expires on a Saturday, Sunday, or holiday, then such time period shall be
automatically extended through the close of business on the next regularly
scheduled business day.

24.  Survival of Provisions.  All covenants, warranties, and agreements set
----------------------                                                
forth in this Agreement shall survive the execution or delivery of any and all
deeds and other documents at any time executed or delivered under, pursuant to,
or by reason of this Agreement, and shall survive the payment of all monies made
under, pursuant to, or by reason of this Agreement for a period of two years
from Closing except with respect to paragraphs 8(u) and 32 which shall survive
for an unlimited time.

25.  Severability.  This Agreement is intended to be performed in
------------                                                
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules, and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and 

to any extent be invalid or unenforceable, the remainder of this Agreement and
the application of such provision to other persons or circumstances shall not be
affected thereby but rather shall be enforced to the greatest extent permitted
by law.

26.  Authorization. Purchaser represents to Seller that this Agreement has
-------------                                                        
been duly authorized and executed on behalf of Purchaser and constitutes the
valid and binding agreement of Purchaser, enforceable in accordance with its
terms, and all necessary action on the part of Purchaser to authorize the
transactions herein contemplated has been taken, and no further action is
necessary for such purpose.

27.  General Provisions. No failure of either party to exercise any power
------------------                                                  
given hereunder or to insist upon strict compliance with any obligation
specified herein, and no custom or practice at variance with the terms hereof,
shall constitute a waiver of either party's right to demand exact compliance
with the terms hereof. This Agreement contains the entire agreement of the
parties hereto, and no representations, inducements, promises, or agreements,
oral or otherwise, between the parties not embodied herein shall be of any force
or effect. Any amendment to this Agreement shall not be binding upon the parties
hereto unless such amendment is in writing and executed by all parties hereto.
The provisions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors, and assigns. Time is of the essence of this Agreement. This
Agreement may be executed in multiple counterparts, each of which shall
constitute an original, but all of which taken together shall constitute one and
the same agreement. The headings inserted at the beginning of each paragraph are
for convenience only, and do not add to or subtract from the meaning of the
contents of each paragraph. This Agreement shall be construed and interpreted
under the laws of the State of Arizona. Except as otherwise provided herein, all
rights, powers, and privileges conferred hereunder upon the parties shall be
cumulative but not restrictive to those given by law. All personal pronouns used
in this Agreement, whether used in the masculine, feminine, or neuter gender
shall include all genders, and all references herein to the singular shall
include the plural and vice versa.

29.  Effective Date.  The "effective date" of this Agreement shall be
--------------                                                  
deemed to be the date set forth in the preamble of this Agreement.

30. Contingency Regarding Other Contracts. Simultaneously with the
-------------------------------------                         

execution hereof, the parties have entered into other purchase agreements which
are listed on Exhibit "H" hereto, and it shall be a condition of the parties
obligations hereunder that the closings with respect to the properties described
therein shall occur simultaneously with the closing herein.

31.  Duties as Escrow Agent.  In performing its duties hereunder, Escrow
----------------------                                             
Agent shall not incur any liability to anyone for any damages, losses or
expenses, except for its gross negligence or willful misconduct, and it shall
accordingly not incur any such liability with respect to any action taken or
omitted in good faith upon advice of its counsel or in reliance upon any
instrument, including any written notice or instruction provided for in this
Agreement, not only as to its due execution and the validity and effectiveness
of its provision, but also as to the truth and accuracy of any information
contained therein that Escrow Agent shall in good faith believe to be genuine,
to have been signed or presented by a proper person and to conform to the
provisions of this Agreement.  Seller and Purchaser hereby agree to indemnify
and hold harmless Escrow Agent against any and all losses, claims, damages,
liabilities and expenses, including reasonable costs of investigation 

and legal fees and disbursements, that may be imposed upon Escrow Agent or
incurred by Escrow Agent in connection with its acceptance or performance of its
duties hereunder as escrow agent, including without limitation, any litigation
arising out of this Agreement. If any dispute shall arise between Seller and
Purchaser sufficient in the discretion of Escrow Agent to justify its doing so,
Escrow Agent shall be entitled to tender into the registry or custody of the
clerk of the Court for the county in which the Property is located or the clerk
for the United States District Court having jurisdiction over the county in
which the Property is located, any or all money (less any sums required to pay
Escrow Agent's attorneys' fees in filing such action), property or documents in
its hands relating to this Agreement, together with such pleadings as it shall
deem appropriate, and thereupon be discharged from all further duties under this
Agreement. Seller and Purchaser shall bear all costs and expenses of any such
legal proceedings.

32.  Expansion.  If Buyer proposes to expand the building which is a part
---------                                                           
of the Property, it will negotiate in good faith with Seller to provide
design/build services with respect to such expansion and will contract with
Seller for such work if its proposal therefor is competitive and is otherwise
approved by the Tenant.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day, month and year first above written.

"SELLER":

RYAN COMPANIES US, INC.

By:  /s/ Dennis Buratti
-----------------------------------
Its: Vice President
-----------------------------------

"PURCHASER":

WELLS CAPITAL, INC.

By:  /s/ Leo F. Wells
-----------------------------------
Its: President
-----------------------------------
"ESCROW AGENT":

OLD REPUBLIC TITLE AGENCY

By:  /s/ Gary Johnson
-----------------------------------
Its: Vice President
-----------------------------------

EXHIBIT 10.50

FIRST AMENDMENT TO AGREEMENT FOR THE PURCHASE

AND SALE OF PROPERTY FOR THE ASML BUILDING

FIRST AMENDMENT TO
------------------
AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY
------------------------------------------------

THIS FIRST AMENDMENT TO AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY
(the "First Amendment"), is made and entered into as of the 21/st/ day of March,
2000 by and between Ryan Companies US, Inc. ("Seller") and Wells Capital, Inc.
("Purchaser").

W I T N E S S E T H:
- - - - - - - - - - 

WHEREAS, Seller and Purchaser entered into that certain Agreement for the
Purchase and Sale of Property, dated February 23, 2000 (the "Purchase
Agreement"), relating to property located at 8555 South river Parkway, Tempe,
Arizona; and

WHEREAS, Seller and Purchaser desire to amend the Purchase Agreement as
provided herein;

NOW, THEREFORE, for and in consideration of the premises, the mutual
agreements contained herein and for other good and valuable consideration, the
receipt, adequacy, and sufficiency of which are hereby expressly acknowledged by
the parties hereto, the parties hereto do hereby covenant and agree as follows:

1.   Capitalized terms used herein shall have the meaning given to them in
the Purchase Agreement, except as otherwise provided in this First Amendment.

2.   The Purchase Price, as defined in paragraph 3 of the Agreement, shall
be $17,355,000.00.

3.   This First Amendment may be signed in counterparts, each of which
shall be deemed an original and which taken together shall constitute one
instrument.

4.   All other terms and conditions of the Purchase Agreement not
inconsistent with this First Amendment shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be duly executed and their respective seals to be affixed hereunto as of the
day, month and year first above written.

"SELLER":

Ryan Companies US, Inc.

By:  /s/ Dennis Buratti
--------------------------------
Name:  Dennis Buratti
-------------------------------
Title:  Vice President 
------------------------------

"PURCHASER":

Wells Capital, Inc.

By:  /s/ Douglas P. Williams
--------------------------------
Name:  Douglas P. Williams
--------------------------------

Title: Senior Vice President
------------------------------

EXHIBIT 10.51

LEASE AGREEMENT

FOR THE ASML BUILDING

LEASE AGREEMENT
(Single Tenant)

LEASE AGREEMENT (this "Lease"), made this 15TH day of August, 1997, between
RYAN COMPANIES US, INC., a Minnesota corporation ("Landlord"), and ASM
LITHOGRAPHY, INC., a Delaware corporation ("Tenant").

1.   PREMISES:
-------- 

Landlord, subject to the terms and conditions hereof, hereby leases to
Tenant the premises (the "Premises") at Arizona State University Research Park,
Lot 44, comprising approximately 97,963 square feet of area in the building with
street address of 8555 South River Parkway, Tempe, Arizona (the "Building") to
be used by Tenant for any use permitted under Article II of the Declaration of
Covenants, Conditions and Restrictions for Arizona State University Research
Park (the "Declaration"), which is attached hereto as Exhibit A, but excluding
the specific illustrated uses permitted under Article II B(6), and for no other
purpose.  Without limiting the generality of the foregoing limitation on the
permitted use of the Premises, Tenant shall not conduct any unlimited
manufacturing operations in the Premises or conduct any activities which create
the risk of a release of a Hazardous Material on, in, under or about the
Premises or the Property or into the environment in violation of the Hazardous
Material Laws or otherwise expose Landlord, Tenant, the Property or the Premises
to action by any governmental authority or third parties under the Hazardous
Materials Laws.  The foregoing shall not be construed to prevent the use by
Tenant of the Hazardous Materials described in Exhibit B, provided that use
thereof is in full compliance with applicable Hazardous Materials Laws pursuant
to any governmental or other regulatory permits or consents required by the
Hazardous Materials Laws.  The Building, the land underlying and contiguous
thereto (which is described on Exhibit C), and all improvements thereon are
hereinafter referred to as the "Property".

Tenant shall have the exclusive right to use and occupy the Leased Premises
throughout the Lease Term (and any Renewal Terms), 24 hours each day.

-1-

2.   TERM:
---- 

Tenant takes the Premises from Landlord, upon the terms and conditions
herein contained, to have and to hold the same for the term ("Lease Term") of
approximately one hundred eighty (180) months commencing on July 31, 1998,
subject to the provisions of the next sentence and of paragraph 13, and ending
on the last day of the one hundred eightieth (180th) calendar month thereafter,
unless sooner terminated or extended as herein provided.  The foregoing
commencement date is a reasonable projection as of the date of this Lease,
subject to change as set forth in the following paragraph.

Notwithstanding the foregoing projected date, the Lease Term will commence
on the third (3rd) business day after Landlord notifies Tenant that all
certificates of occupancy (or equivalent governmental approvals of completion)
have been issued for the Building and the Tenant Improvements by the appropriate
governmental agency, at which time the Premises will be deemed "ready for
occupancy."  The certificate of occupancy (or equivalent governmental approval
of completion) may contain stipulations and conditions to be fulfilled by
Landlord so long as it permits Tenant to take occupancy of the Premises and to
use the Premises for the purposes contemplated by this Lease.  Tenant shall take
possession of the Premises no later than three (3) business days after Landlord
notifies Tenant that all certificates of occupancy (or equivalent governmental
approvals of completion) have been issued.  Within five (5) days after
commencement of this Lease, Landlord and Tenant shall execute a written
statement specifying (a) the commencement date and (b) the termination date of
this Lease.

Notwithstanding the foregoing, Tenant shall be entitled to enter the
Premises or portions thereof from time to time prior to commencement of the
Lease Term, without the payment of rent or any other sums under this Lease, for
the purpose of installing Tenant's furniture, fixtures and equipment.  Tenant
shall use reasonable care in connection with such entry, and shall not
materially interfere with construction of the Tenant Improvements in connection
with such entry.

3.   BASE RENT:
--------- 

Tenant shall pay to Landlord during the Lease Term without any set-off or
deduction (except only as otherwise expressly provided in this Lease) annual
base rent as follows:

-2-

For years one (1) through five (5) of the Lease Term, annual base rent
shall be calculated as follows:

(Total Project Cost x Rental Constant) + Subground Lease Annual Payment

(a)  Total Project Cost is defined as the total of the costs and
expenses incurred by Landlord in the design, development and construction
of the Building as described in paragraph 30 including the Allowance for
the Tenant Improvements (but not any excess Tenant Improvements Cost if the
actual cost of the Tenant Improvements exceeds the Allowance unless
otherwise agreed by Landlord and Tenant as provided in paragraph 30.4) and
a three percent (3%) real estate development fee and a six percent (6%)
contractor's fee payable to Landlord.  Total Project Cost shall include
those items set forth in the pro forma statement dated June 19, 1997
showing Landlord's estimate as of that date of $15,954,295 as the Total
Project Cost.  The pro forma is for informational purposes and remains
subject to adjustment.

(b)  Rental Constant equals .105

(c)  Subground Lease Annual Payment is defined as the applicable
annual rent payable under the Subground Lease (as defined in paragraph 28
below) for the corresponding year of the Lease Term.

As an example of the calculation of annual base rent using the above
formula, if the Total Project Cost is $15,954,295.00, then using the Rental
Constant of .105 and a Subground Lease Annual Payment of $190,728.00, the annual
base rent for each of years one (1) through five (5) of the Lease Term would be
$1,865,928.98 for a monthly base rent of $155,494.08.

For each of years six (6) through ten (10) of the Lease Term, the annual
base rent shall be calculated using the above formula but with a Rental Constant
of .1172 (e.g., if the Total Project Cost is $15,954,295.00, then using the
Rental Constant of .1172 and a Subground Lease Annual Payment of $190,728.00,
the annual base rent for each of years six (6) through ten (10) of the Lease
Term would be $2,060,571.37 for a monthly base rent of $171,714.28).

For each of years eleven (11) through fifteen (15) of the Lease Term, the
annual base rent shall be calculated using the 

-3-

above formula but with a Rental Constant of .1307 (e.g., if the Total Project
Cost is $15,954,295.00, then using the Rental Constant of .1307 and a Subground
Lease Annual Payment of $190,728.00, the annual base rent for each of years
eleven (11) through fifteen (15) of the Lease Term would be $2,275,954.36 for a
monthly base rent of $189,662.86).

Annual base rent shall be payable for each year of the Lease Term in twelve
(12) equal installments, each monthly installment to be payable on the first day
of each month in advance at the office of Landlord at 900 Second Avenue South,
Suite 700, Minneapolis, Minnesota 55402, or at such other place as may from time
to time be designated by Landlord.

Landlord and Tenant will memorialize each rental calculation in writing.

If the Lease Term commences on a day other than the first day of a calendar
month, then the rental for such month shall be prorated on a daily basis, based
on the number of days in effect during such month, and paid on or before the
commencement of the Lease Term.

Prior to the date the Lease Term commences Landlord will notify Tenant in
writing of the final square footage of the Premises.  Tenant's written approval
thereof shall not be unreasonably withheld or delayed.

Notwithstanding anything to the contrary herein, Tenant shall have the
right, exercisable in Tenant's discretion, to begin operation of its business,
prior to commencement of the Lease Term, in the informational technology space
(the "IT Space") and/or the office space (the "Office Space") as shown,
respectively, crosshatched and hatched on Exhibit D (whether one or both, the
"Early Use Space") so long as lawful for Tenant to occupy and commence business
within the Early Use Space.  Landlord shall use its best, reasonable efforts to
have the IT Space available for Tenant's early use by May 29, 1998 and the
Office Space available by June 26, 1998.  If Tenant so commences business in any
portion of the Office Space, then base rent shall commence for the Office Space
as of such time and Tenant shall with respect to the Office Space comply with
all of the terms and conditions of this Lease.  Rent for the early use of the
Office Space shall be calculated using the above formula for annual base rent
for years 1 through 5 of the Lease Term using Landlord's good faith estimate of
the Total Project Cost and prorated based on the ratio of the square footage of
the Office 

-4-

Space to the total square footage of the Building (as estimated in good faith by
Landlord if not then known); no rent shall be charged prior to commencement of
the Lease Term for Tenant's early use of the IT Space. Rent for the early use of
the Office Space shall subsequently be adjusted retroactively as necessary to
reflect the final Total Project Cost and the Building and the Office Space
square footages when known. Tenant shall use reasonable care in connection with
Tenant's use of the Early Use Space so as not to materially interfere with
Landlord's construction of the Tenant Improvements. Tenant's use of and the
commencement of base rent on a pro rata basis for the early use of the Office
Space shall not affect the date on which the Lease Term otherwise is determined
to commence under paragraph 2 above.

4.   OPERATING COSTS:
--------------- 

Tenant shall, for the entire Lease Term, pay to Landlord as additional
rent, without any set-off or deduction therefrom (except as otherwise expressly
provided in this Lease), one hundred percent (100%) of Operating Costs incurred
by Landlord in maintaining and operating the Property.  Operating Costs shall be
based on a one hundred percent (100%)-occupied building, whether or not the
entire Building is actually occupied.

"Operating Costs" are hereby defined to include, but shall not be limited
to:  (i) real estate taxes and assessments, general or special, (ii) insurance
premiums and costs (including deductibles) for the all-risk property and
casualty insurance that Landlord maintains pursuant to the provisions of this
Lease (which may include rent loss and difference-in-conditions coverages),
(iii) the yearly amortization of capital costs incurred by Landlord for
improvements or structural repairs to the Property required to comply with any
laws, rules or regulations of any governmental authority having jurisdiction
over the Property which are enacted after the commencement date of this Lease,
or with any changes in laws, rules or regulations of any governmental authority
having jurisdiction over the Property which existed on the commencement date of
this Lease, but which changes were enacted after the commencement date of this
Lease, or the application of either, or for the purposes of reducing Operating
Costs, which costs shall be amortized over the useful life of such improvements
or repairs, as reasonably estimated by Landlord, (iv) regular painting of the
exterior of the Building, (v) reasonable costs of routine and ordinary service
and maintenance of the roof (including reasonable 

-5-

preventive care, but excluding capital repairs/replacements), unless Landlord at
its election transfers to Tenant responsibility for routine and ordinary service
and maintenance of the roof (including reasonable preventive care) and the cost
thereof, (vi) all fees, charges, and assessments including, without limitation,
any common area maintenance charges levied or assessed against, or charged to,
the Property or any part thereof, or to Landlord in respect to the Property or
any part thereof, pursuant to the Ground Lease, the Subground Lease or the
Declaration, including, without limitation, any fee, charge, or assessment
arising out of the operation and maintenance of Arizona State University
Research Park, together with any applicable transaction privilege or similar
tax; and (vii) all Intergovernmental Agreement Service Fees payable to City of
Tempe, together with any applicable transaction privilege or similar tax.

Notwithstanding the foregoing, Landlord, on request of Tenant, will outline
Landlord's insurance program and be responsive to Tenant's input but Landlord's
own good faith determination of the Property insurance needs will have
precedence.

Painting of the exterior of the Building will be done at reasonable
intervals, subject to any further requirement in the Ground Lease, the Subground
Lease, or the Declaration.

Notwithstanding the foregoing, if the Property qualifies for a real estate
tax abatement, and then only to the extent of the abatement, Operating Costs
will not include any abated real estate tax. Landlord is making no
representations or warranties or covenants to Tenant as to the nature or extent
of any real estate tax abatement and this Lease is not contingent on any real
estate tax abatement, nor are Tenant's obligations to Landlord under this Lease
dependent on such an abatement.

In no event (except only as provided in the preceding subparagraph or in
paragraph 8) will Operating Costs include, nor will Tenant be obligated to pay
for, (A) any capital improvements, alterations or expenditures, except HVAC
(including, without limitation, reroofing of the roof or resurfacing on the
parking lot), (B) depreciation, (C) Landlord's overhead or management fees, (D)
repairs, alterations, additions, improvements or replacements made to rectify or
correct any defect in the design, materials or workmanship of the Building or
the Property or to comply with any requirements of any governmental authority,
(E) damage and 

-6-

repairs attributable to fire or other casualty; (F) damage and repairs paid for
under any insurance policy carried by Landlord in connection with the Property;
(G) costs incurred due to violation by Landlord of the terms and conditions of
this Lease; (H) legal fees, brokerage commissions, advertising costs or other
related expenses incurred in connection with leasing; (I) accountants' fees; (J)
sculptures or artwork; (K) fees and costs incurred in connection with the
defense of Landlord's title or interest in the Property or the Building or any
part thereof; (L) rent and other costs payable under any ground lease; and (M)
principal, interest and other amounts paid pursuant to any loan secured by the
Property or the Building or any part thereof.

As soon as reasonably practicable prior to the commencement of each
calendar year during the Lease Term, Landlord shall furnish to Tenant an
estimate of Tenant's share of Operating Costs for the ensuing calendar year and
Tenant shall pay, as additional rent hereunder together with each installment of
monthly base rent, one-twelfth (1/12th) of its estimated annual share of such
Operating Costs.  As soon as reasonably practicable (but in no event later than
forty-five (45) days) after the end of each calendar year during the Lease Term,
Landlord shall furnish to Tenant a statement of the actual Operating Costs for
the previous calendar year, including Tenant's share of such amount, and within
thirty (30) days thereafter Tenant shall pay to Landlord, or Landlord to Tenant,
as the case may be, the difference between such actual and estimated Operating
Costs paid by Tenant.  Tenant's share of such Operating Costs for the years in
which this Lease commences and terminates shall be prorated based upon the dates
of commencement and termination of the Lease Term.

The annual statement of actual Operating Costs shall be prepared in
accordance with GAAP and shall be certified to be correct by Landlord.  Landlord
shall maintain full and accurate books and records with respect to all Operating
Costs for a period of not less than one (1) year.

Tenant shall have the right at any time during normal business hours and
upon reasonable prior notice to Landlord to inspect and audit Landlord's books
and records with respect to Operating Costs.  Tenant shall not have the right,
however, to inspect and audit Landlord's books and records with respect to the
Operating Costs of any given year following the first (1st) anniversary of
Tenant's receipt of the statement of the actual Operating Costs for the year in
question.

-7-

5.   ADDITIONAL TAXES:
---------------- 

Tenant shall pay as additional rent to Landlord, together with each
installment of monthly base rent, or within ten (10) days after demand, Tenant's
share of Operating Costs and any other payment made by Tenant under this Lease,
the amount of any gross receipts tax, transaction privilege or sales tax or
similar tax (but excluding therefrom any income tax) payable, or which will be
payable, by Landlord, by reason of the receipt of the monthly base rent,
Tenant's share of Operating Costs and any other payment made by Tenant under
this Lease, and adjustments thereto.

6.   ASSIGNMENT, SUBLETTING:
---------------------- 

Except for an assignment or subletting to an affiliate or a wholly owned
subsidiary of Tenant (any such entity is referred to herein as a "Tenant
Affiliate"), Tenant may not assign this Lease, or sublet all or any part of the
Premises, without the Landlord's prior written consent, which consent shall not
be unreasonably withheld, or delayed.  Landlord reserves the right, should the
Tenant request such assignment or subletting, to terminate this Lease and
recapture the Premises and the Landlord shall have ten (10) days to make such
determination.  Should the Landlord exercise this "recapture" right in writing,
Tenant's obligations under this Lease shall terminate thirty (30) days after
Landlord gives Tenant written notice of recapture.  Until such termination, the
Tenant will, however, remain liable for the performance of all the terms and
conditions hereof.  Notwithstanding the foregoing, it shall be a condition to
any assignment or subletting (including, without limitation, one to a Tenant
Affiliate) that the assignee or sublessee shall assume in writing the
obligations of Tenant under this Lease, and such assignment or subletting shall
not relieve Tenant of its obligations to Landlord under this Lease.

7.   UTILITIES:
--------- 

Landlord shall provide mains and conduits to supply phone, gas, water,
electricity (including main panel with breakers) and sanitary sewage to the
Premises.  Landlord will also provide the conduit from the street to the
Building to accommodate Fiber Optics.  Tenant shall pay, when due, all charges
for sewer usage or rental, garbage disposal, refuse removal, water, electricity,
telephone and/or other utility services or energy source furnished to the
Premises during the term of this Lease, or any renewal or extension thereof.

-8-

8.   CARE AND REPAIR OF PREMISES:
--------------------------- 

Tenant shall, at all times throughout the terms of this Lease, including
renewals and extensions, and at its sole expense, keep and maintain the interior
of the Premises in good repair and in a clean, safe, orderly, sanitary and first
class condition in compliance with all applicable laws, codes, ordinances, rules
and regulations, free of any accumulation of dirt and rubbish, and Tenant shall
arrange its own trash removal.  Tenant's obligations extend to the entirety of
the Property and shall also include but not be limited to the maintenance,
repair, and replacement, if necessary, of all interior lighting, HVAC, parking
lot, driveways located on the Property, sidewalks, loading docks and exterior
--                                                    
light fixtures located on the Property, landscaping on the Property, electrical
and plumbing systems including without limitation all sewer lines, fixtures and
equipment, all restrooms, all interior walls and ceilings, partitions, and doors
and windows, including the regular painting of the interior of the Building, and
the replacement of all broken glass from doors and windows unless breakage is
due to a defect in the design, materials or workmanship of the Building or the
Property (excluding Tenant's design errors), to a breach of Landlord's own
repair and maintenance obligations under this Lease, or to Landlord's
negligence.  When used in this provision, the term "repairs" shall include
ordinary and customary replacements or renewals when necessary, and all such
repairs made by the Tenant shall be equal in quality and class to the original
work.

Tenant shall specifically not be required to perform or pay for any
structural changes or capital expenditures on the Property in order to comply
with (i) any law, ordinance, rule or regulation; or (ii) with any recommendation
of Landlord's insurance rating organization, unless the same is required as the
direct result of Tenant's particular use of the Premises (as opposed to Tenant's
mere occupancy of the Premises or Tenant's conduct of business, generally),
except to the extent that Tenant is required to pay to Landlord Tenant's pro
------                                                                      
rata share of certain amortized capital expenditures as provided in paragraph 4.

If Tenant fails, refuses or neglects to maintain or repair the Premises and
the Property as required in this Lease for ten (10) days after notice shall have
been given Tenant, Landlord may make such repairs without liability to Tenant
for any loss or damage that may accrue to Tenant's merchandise, fixtures or
other property or to Tenant's business by reason thereof (except 

-9-

that Landlord shall be liable for its own negligence or willful misconduct), and
upon completion thereof, Tenant shall pay to Landlord all costs plus 5% for
overhead incurred by Landlord in making such repairs within ten (10) days after
Tenant receives from Landlord the bill therefor.

Landlord shall be responsible for maintenance, repair and replacement of
the structural elements of the roof and shall keep the foundation (concrete slab
floor), exterior walls, and all other structural portions of the Property and
the Building (not otherwise designated to be maintained and repaired by Tenant)
in good repair and in a clean, safe, sanitary and first class condition and in
compliance with all applicable laws, codes, ordinances, rules and regulations,
and if necessary or required by proper governmental authority, make
modifications or replacements thereof, except that Landlord shall not be
required to make any such repairs, modifications or replacements which become
necessary or desirable by reason of the negligence or willful misconduct of
Tenant, its agents, servants or employees, by reason of anyone illegally
entering or upon the Premises, which repairs, modifications or replacements
shall be made by Tenant at its sole expense.  Landlord shall also remedy, at
Landlord's sole expense, any latent defects in the Building and the Tenant
Improvements, as well as any damage to the Premises caused by the willful act or
negligence of Landlord or its agents; Landlord shall also repair any defects or
failures in building systems to the extent the same were not constructed in
accordance with the terms of this Lease or applicable law.  Notwithstanding the
foregoing, Landlord shall have no liability under this paragraph for any repair,
maintenance or replacement required because of Tenant's own design error, and
nothing in this paragraph will alter Tenant's obligation to pay Operating Costs
to Landlord under paragraph 4 even though this paragraph may impose on Landlord
the obligation of performing the necessary maintenance, repair or replacement.

9.   COVENANTS OF TENANT:
------------------- 

Tenant agrees that it shall:

(a)  Observe such reasonable and customary rules and regulations as from
time to time may be put in effect by Landlord, provided that Tenant has received
reasonable prior notice of the same, for the general safety of Landlord and the
occupants of the Building and for the integrity and reputation of the Property.

-10-

(b) Give Landlord access to the Premises at all reasonable times, and upon
reasonable prior notice (but not less than one (1) business day, except in case
of emergency) from Landlord, without change or diminution of rent so long as
Landlord complies with the terms of this Lease, to enable Landlord to examine
the same and to make such repairs, additions and alterations as Landlord is
entitled or required to make under the terms of this Lease, and to exhibit the
Premises to prospective purchaser of the Property or lenders thereon; and during
the one hundred twenty (120) days prior to the expiration of the term, to
exhibit the Premises to prospective tenants and to place upon the door or in the
windows of the Premises any usual or ordinary "For Lease" signs. Landlord will
schedule such entries with Tenant and will use reasonable efforts to minimize
any disruption to Tenant's business caused by such entry and Landlord will
comply with Tenant's reasonable security procedures in connection with such
entry. All of Landlord's entries and the performance of Landlord's work shall be
done during non-business hours of Tenant. Tenant will have the right to be
present whenever Landlord comes on the Premises under this paragraph.

(c) Except in an emergency, Tenant may require reasonable verification of
Landlord's or its agent's identity prior to allowing entry into the Premises.
Tenant may designate certain portions of the Premises as "Security Areas" for
the purpose of securing certain valuable property or confidential information.
Landlord may only enter such Security Areas when accompanied by a representative
of Tenant upon not less than two (2) business days' notice to Tenant, which
notice shall specify the date and time of such entry by Landlord; provided,
however, that Landlord may enter the Security Areas, without notice to Tenant,
in the event of an emergency, in which case Landlord shall provide Tenant with
notice of such entry promptly thereafter.

(d) Keep the Premises and the Property in good order and condition and
replace all glass broken by Tenant with glass of the same quality as that
broken, save only glass broken by fire or other casualty covered by standard all
risk insurance, and commit no waste on the Premises.

(e) Pay for all electric lamps, starters and ballasts used in the Premises.

(f) Upon the termination of this Lease in any manner whatsoever, remove
Tenant's furniture, fixtures and equipment, generators, computers, telephones
and switches, and 

-11-

telecommunications equipment (to the extent the same was installed by Tenant)
and Tenant's other goods and effects and those of any other person claiming
under Tenant, and quit and deliver the Premises and the Property to Landlord
peaceably and quietly in as good order and condition as the same are now in or
hereafter may be put in by Landlord or Tenant, reasonable use and wear thereof
and repairs which are Landlord's obligation excepted. Furniture, fixtures,
equipment, goods and effects not removed by Tenant at the termination of this
Lease, however terminated, shall be considered abandoned and Landlord may
dispose of the same as it deems expedient.

(g) Not place signs on or about the Premises or the Property without first
obtaining Landlord's written consent thereto, which consent will not be
unreasonably withheld or delayed.  All signs must comply with applicable laws
and ordinances, covenants, conditions and restrictions, and Landlord's
reasonable sign criteria.  Notwithstanding the foregoing, Landlord's consent
will be deemed given to any sign that complies not only with City of Tempe
requirements but also with the Declaration.

(h) Not overload, damage or deface the Premises or do any act which may
make void or voidable any insurance on the Premises or the Building, or which
may render an increased or extra premium payable for insurance.

(i) Not place any additional locks on any of Tenant's doors without the
written consent of the Landlord, which consent shall not be unreasonably
withheld or delayed.

(j) Not make any alterations or additions to the Property the cost of which
would exceed Two Hundred Fifty Thousand Dollars ($250,000.00) for any single
alteration or addition or Five Hundred Thousand Dollars ($500,000.00)
cumulatively without obtaining the prior written approval of Landlord thereto,
which consent shall not be unreasonably withheld or delayed.   Tenant shall
submit to Landlord with Tenant's request for Landlord's consent, or as soon
thereafter as possible, copies of plans and specifications for the alteration or
addition for which Tenant requests Landlord's consent.  In addition, for any
alteration or addition for which Landlord's consent is not required, Tenant
shall still provide to Landlord notice of Tenant's intention to make the
alteration or addition and, when available, copies of the plans and
specifications for such alteration or addition.  All alterations, additions or
improvements (including carpeting or other floor covering which has been glued
or otherwise 

-12-

affixed to the floor) which may be made by Landlord or Tenant upon the Property,
except movable office furniture, equipment and generators, computers, telephone
and telecommunication systems, and other technology shall be the property of
Landlord, and shall remain upon and be surrendered with the Premises, as a part
thereof, at the termination of this Lease.

(k) Keep the Premises and the Property free from any mechanics',
materialmen's, contractors' or other liens arising from, or any claims for
damages growing out of, any work performed, materials furnished or obligations
incurred by or on behalf of Tenant.  Provided, however, that Tenant shall have
the right to contest any such lien, in which event such lien shall not be
considered a default under this Lease until the existence of the lien has been
finally adjudicated and all appeal periods have expired.  Tenant shall
indemnify, defend, and hold harmless Landlord for, from and against any such
lien, or claim or action thereon, reimburse Landlord within ten (10) business
days after demand therefor by Landlord for costs of suit and reasonable
attorneys' fees incurred by Landlord in connection with any such lien, claim or
action, and, upon written request of Landlord, provide Landlord with a bond in
an amount and under circumstances necessary to obtain a release of the Premises
or the Property from such lien.  Notwithstanding the foregoing, Tenant will have
no responsibility for the liens of contractors or others hired exclusively by
and for Landlord.

(l) Cause to be performed by a competent service company, preventive
maintenance of all HVAC units serving the Premises, as recommended by the
equipment manufacturer.

(m) Indemnify, defend and hold Landlord harmless for, from and against all
claims, obligations, liabilities, costs, expenses and reasonable attorneys' fees
and court costs which Landlord may suffer or incur by reason of Tenant's breach
of this Lease, or by reason of the negligence or willful misconduct of Tenant or
its employees, agents, invitees or licensees on or about the Premises or the
Property.  Subject to the provisions of paragraph 8, Tenant shall comply with
all applicable laws, regulations, ordinances and other legal requirements in
connection with its particular use and occupancy of the Premises.

Tenant's obligations under this paragraph 9 to do or not to do a specified
act shall extend to and include Tenant's obligations to see to it that Tenant's
employees, agents and invitees shall do or shall not do such acts, as the case
may be.

-13-

Landlord shall indemnify, defend and hold Tenant harmless for, from and
against all claims, obligations, liabilities, costs, expenses and reasonable
attorneys' fees and court costs which Tenant may suffer or incur by reason of
Landlord's breach of this Lease, or by reason of the negligence or willful
misconduct of Landlord or its employees, agents, invitees or licensees on or
about the Premises or the Property.  Landlord shall comply with all applicable
laws, regulations, ordinances and other legal requirements in connection with
performing its obligations under this Lease and its entry onto the Premises or
the Property.

Landlord's obligations under this paragraph 9 to do or not to do a
specified act shall extend to and include Landlord's obligations to see to it
that Landlord's employees, agents and invitees shall do or shall not do such
acts, as the case may be.

10.  PARKING AND DRIVES:
------------------ 

Subject to the refinements, if any, in paragraph 1 of the Rider to this
Lease, Tenant, its employees, and invitees shall have the exclusive right to use
all interior driveways and parking lots located on the Property.  The use of
such driveways and parking facilities is subject to such customary and
reasonable rules and regulations as Landlord may impose.  Landlord will be under
no obligation to police the driveways and parking lots.  Tenant may employ all
reasonable and lawful means to police these areas and prevent unauthorized
visitors from using same including, without limitation, employees of businesses
adjacent to the Property, which means may include towing to the extent lawful.
The Tenant further agrees not to use, or permit the use by its employees, the
driveways, parking or truck-loading areas for the overnight or any other
storage, or for the maintenance or repair or cleaning, of automobiles or other
vehicles without the written permission of Landlord.  Tenant shall not place or
store goods, materials, supplies, equipment, automobiles or other vehicles, or
other property of Tenant in the driveways or parking lots or anywhere else in
the Property or in the Building, excepting wholly within the Premises.

11.  CASUALTY LOSS:
------------- 

In case of damage to the Premises or the Building by fire or other
casualty, Tenant shall give immediate notice to Landlord, who shall thereupon
cause the damage (including any damage to the Tenant Improvements) to be
repaired with 

-14-

reasonable speed, at the expense of the Landlord, subject to reasonable delays
caused by force majeure events and other similar delays beyond the reasonable
control of Landlord. All rent and other charges payable by Tenant hereunder
shall abate proportionately during any period in which, by reason of such
casualty, Tenant reasonably determines that there is interference with the
operation of Tenant's business in the Premises. Such abatement shall continue
for the period commencing with the date of such damage or destruction and ending
with the date that business may be fully resumed on the Premises, as reasonably
determined by Tenant. If Tenant determines that continuation of business is not
practical or secure pending reconstruction, all rent and other charges due and
payable hereunder shall be fully abated until business is resumed. In the event
such damage resulted solely from the act, fault or neglect of Tenant, Tenant's
employees or agents, there shall be no abatement of rent.

In the event the cost to repair the damage shall exceed twenty-five percent
(25%) of the full replacement value of the Building, or if the damage shall be
so extensive that repairs cannot be completed within one hundred twenty (120)
days from the date of issuance of required permits (permitting to take no more
than 60 days and Landlord to use diligent efforts to obtain same),  then either
Landlord or Tenant shall have the right to terminate this Lease, as of the date
of such damage, by notice given to the other party within thirty (30) days
following the casualty loss.  If this Lease is terminated, the rent and
Operating Costs shall be adjusted to the date of such damage and Tenant shall
vacate the Premises within ninety (90) days after the date of such casualty.  If
neither party shall elect to terminate this Lease, then the provisions of the
first paragraph of this paragraph 11 shall control. Tenant hereby waives any
statutory right to terminate this Lease or to have a reduction of rent in the
event of casualty loss or destruction, the rights of tenant in such instance to
be determined by this paragraph.  Notwithstanding the foregoing, Landlord shall
have no obligation to repair or rebuild the Premises unless Landlord has
received sufficient insurance proceeds for that purpose free of any claim by any
lender on the Property.

12.  CONDEMNATION:
------------ 

If all or a portion or the Premises or the Property is taken by eminent
domain or transferred under threat of such taking, this Lease shall
automatically terminate as of the date of taking only with respect to the
portion of the Premises or 

-15-

Property so taken. If such portion of the Premises or the Property is taken by
eminent domain, such that the Premises are no longer suitable for Tenant's
intended use, in Tenant's good faith discretion, Tenant shall have the right to
terminate this Lease as of the date of taking by giving written notice thereof
to Landlord within ten (10) days after such date of taking. If Tenant does not
elect to terminate this Lease, Landlord shall, at its expense, promptly restore
the Premises and the Property (including the Tenant Improvements), exclusive of
any improvements or other changes made therein by Tenant, to as near the
condition which existed immediately prior to the date of taking as reasonably
possible, and the rent and other charges payable under this Lease shall abate in
the same manner as described in paragraph 11. All damages awarded for a taking
of the Property under the power of eminent domain shall belong to and be the
exclusive property of Landlord, whether such damages be awarded as compensation
for diminution in value of the leasehold estate hereby created or to the fee of
the Property; provided, however, that Landlord shall not be entitled to any
separate award made to Tenant for the value and cost of Tenant's personal
property, fixtures and moving expenses.

13.  DELAY IN POSSESSION:
------------------- 

If the Premises shall, on the scheduled date of commencement of the Lease
Term, not be ready for occupancy by the Tenant for any reason other than
Tenant's default under this Lease, Landlord shall continue to use due diligence
to complete such construction, building operations, repair or remodeling and to
deliver possession of the Premises to Tenant.  Notwithstanding any provision in
this Lease to the contrary, but subject to the provisions of paragraph 30.3:

(a) If the Premises are not ready for occupancy by Tenant on or before July
31, 1998 (the "Delivery Date") for any reason other than solely as a result of
Tenant's negligent or willful acts or as set forth below in this paragraph 13,
then Tenant's sole and exclusive remedy will be to receive one (1) day of free
rent for each day from the thirtieth (30th) day after the Delivery Date for
ninety (90) days; provided, however, if Tenant has taken possession of and
commenced business in any of the Early Use Space, then the free rent shall be
prorated on a square footage basis so that Tenant receives free rent only for
that portion of the Building not occupied and being used under the early use
provisions of paragraph 3; and

-16-

(b) If the Premises are not ready for occupancy by Tenant on or before the
one hundred twentieth (120th) day after the Delivery Date, then Tenant shall
have the right to cancel this Lease as its sole and exclusive remedy, excepting
an action for specific performance, by notice given to Landlord on or before ten
(10) days thereafter.

14.  MUTUAL RELEASE/WAIVER OF SUBROGATION:
------------------------------------ 

Landlord and Tenant each hereby release the other from any and all
liability or responsibility for any direct or consequential loss, injury or
damage during the term of this Lease, to the extent such loss, injury or damage
is covered by the terms of any insurance policy maintained by Landlord or
Tenant.  Inasmuch as the above mutual waivers will preclude the assignment of
any claim by way of subrogation (or otherwise) to an insurance company (or any
other person), each party hereto agrees if required by said policies to give to
each insurance company which has issued to it all risk and other property
insurance, written notice of the terms of said mutual waivers, and to have said
insurance policies properly endorsed, if necessary, to prevent the invalidation
of said insurance coverage by reason of said waivers.

Tenant shall not carry any stock of goods or do anything in or about said
Premises which will increase insurance rates on said Premises or the Building in
which the same are located.  If Landlord shall consent to such use, Tenant
agrees to pay as additional rental any increase in premiums for all risk
insurance resulting from the business carried on in the Premises by Tenant.
Tenant shall, at its own expense, comply with the requirements of insurance
underwriters and insurance rating bureaus and governmental authorities having
jurisdiction, except to the extent this Lease requires Landlord to comply with
the same.

The Tenant shall maintain in full force and effect during the term hereof,
a policy of public liability insurance under which Landlord and Tenant shall be
named insureds.  The minimum limits of liability of such insurance shall be
$2,000,000.00 combined single limit as to bodily injury and property damage.

Tenant may provide any coverage required under this Lease through blanket
policies.

Landlord shall, during the term hereof, keep in full force and effect the
following insurance:

-17-

(a) Standard form property insurance insuring the Building and the Premises
(including all installations and fixtures, but excluding Tenant's personal
property) against loss or damage due to the perils of fire and other casualties
covered within the classification of fire and extended coverage, vandalism,
malicious mischief, special extended coverage (All Risk), sprinkler leakage and
water damage. Such policy or policies shall provide for loss payable to
Landlord. Such policies will include coverage equal to the full replacement cost
of the Building, including the Premises (replacement cost new, including
coverage for the cost of debris removal and coverage for the cost of complying
with building, zoning, safety, land use and other laws as a result of any
casualty or loss) and so as to prevent the application of co-insurance
provisions.

Property insurance required to be carried by Landlord hereunder shall be
obtained from companies maintaining at the commencement of the policy term a
"General Policyholders Rating" of at least B+ and a financial rating of at least
Class V, as set forth in the most current issue of "Best's Insurance Guide."

The party with a duty to maintain insurance hereunder (the "Insured Party")
agrees to deliver to the other party certificates of insurance evidencing such
coverage.  Each such policy shall contain a provision requiring thirty (30) days
written notice to both parties before cancellation of the policy can be
effected.  The Insured Party shall endeavor to provide the other party, at least
15 days prior to the expiration of such policies, with evidence of renewals or
"insurance binders" evidencing renewal thereof.

15.  HAZARDOUS MATERIALS:
------------------- 

(a) As used in this Lease, the term "Hazardous Material" means any
explosives, radioactive materials or substances defined as or included in the
definition of "hazardous substances", "hazardous wastes", "infectious wastes",
"hazardous materials" or "toxic substances" now or subsequently regulated under
any federal, state or local laws or regulations or ordinances ("Hazardous
Materials Laws") including, without limitation, oil, petroleum-based products,
paints, solvents, lead, mercury, cyanide, DDT, acids, pesticides, asbestos,
radon, PCBs and similar compounds.

(b) Except for ordinary office products in customary quantities, and those
Hazardous Materials listed in Exhibit B attached hereto, which shall be used,
stored, and disposed of in 

-18-

full compliance with applicable Hazardous Materials Laws pursuant to any permit
or consent required under the Hazardous Materials Laws or by other governmental
or regulatory authority, Tenant shall not cause or permit any Hazardous Material
to be generated, produced, brought upon, used, stored, treated, discharged,
released, spilled or disposed of on, in, under or about the Premises or the
Property, or into the groundwater or the environment, by Tenant, its affiliates,
agents, employees, contractors, sublessees, assignees or invitees. Tenant shall
and does hereby indemnify, defend and hold Landlord harmless for, from and
against any and all actions (including, without limitation, remedial or
enforcement actions of any kind, administrative or judicial proceedings, and
orders or judgments arising out of or resulting therefrom), costs, claims,
damages (but excluding consequential or punitive damages), expenses (including
without limitation, attorneys', consultants' and experts' fees, court costs and
amounts paid in settlement of any claims or actions), fines, forfeitures or
other civil, administrative or criminal penalties, injunctive or other relief
(whether or not based upon personal injury, property damage, or contamination
of, or adverse effects upon, the environment, water tables or natural
resources), liabilities or losses arising from a breach of this provision of the
Lease.

(c) In the event that Hazardous Materials are discovered upon, in, or under
the Property, and any governmental agency or entity having jurisdiction over the
Property requires the removal or remediation of such Hazardous Materials, (i)
Tenant shall be responsible for removing and remediating those Hazardous
Materials arising out of or related to any breach of the provisions of clause
(b) above, and (ii) in all other circumstances, Landlord shall be responsible
for removing and remediating the Hazardous Materials, at Landlord's expense.
Notwithstanding the foregoing, Tenant shall not take any remedial action in or
about the Premises or the Property without first notifying Landlord of Tenant's
intention to do so and affording Landlord the opportunity to protect Landlord's
interest with respect thereto.  Each party immediately shall notify the other
party in writing of:  (i) any spill, release, discharge or disposal of any
Hazardous Material in, on or under the Premises, the Property or any portion
thereof except from the use of ordinary office products or materials in the
ordinary course of Tenant's business which is not otherwise a reportable event
under applicable Hazardous Materials Laws; (ii) any enforcement, cleanup,
removal or other governmental or regulatory action instituted, contemplated, or
threatened (if Tenant has notice thereof) pursuant to any Hazardous Materials

-19-

Laws; (iii) any claim made or threatened by any person against Tenant, the
Premises, or the Property relating to damage, contribution, cost recovery,
compensation, loss or injury resulting from or claimed to result from any
Hazardous Materials; and (iv) any reports made to any governmental agency or
entity arising out of or in connection with any Hazardous Materials in, on,
under or about or removed from the Premises or the Property, including any
complaints, notices, warnings, reports or asserted violations in connection
therewith.  Tenant also shall supply to Landlord as promptly as possible, and in
any event within five (5) business days after Tenant first receives or sends the
same, copies of all claims, reports, complaints, notices, warnings or asserted
violations relating in any way to the Premises, the Property or Tenant's use or
occupancy thereof.

(d) Without limiting the foregoing indemnity, Tenant shall be responsible
to pay for, or reimburse Landlord for, the cost of any investigations, studies,
cleanup or corrective action initiated or undertaken on account of any action or
inaction of Tenant in violation of any Hazardous Materials Laws at or affecting
the Premises and/or Property, or by reason of any other act or omission of
Tenant in breach of this Lease.

(e) Landlord represents and warrants to Tenant that the Building and the
Premises contain no significant amounts of asbestos or other Hazardous Materials
as a result of Landlord's development of the Property, excepting insubstantial
amounts thereof, if any, in quantities not having materially adverse effects on
the environment or upon the health and safety of persons.

(f) The respective rights and obligations of Landlord and Tenant under this
paragraph 15 shall survive the expiration or termination of this Lease or
Tenant's non-occupancy of the Premises.

16.  DEFAULT:
------- 

In the event Tenant fails to keep and perform any of the terms or
conditions hereof (but excluding the payment of rental or other monetary sums
due under this Lease) and such failure continues for thirty  (30) days after
written notice of default from Landlord (provided, however, that if such failure
cannot reasonably be corrected, even by prompt and diligent action, within
thirty (30) days, where Tenant fails to commence curing such failure within such
30-day period and thereafter diligently 

-20-

pursue the same to completion), or in the event Tenant fails to pay any rental
or other sum of money due hereunder and such failure continues for ten (10)
business days after notice thereof to Tenant, time being declared to be of the
essence, and no further notice of default being required, Landlord may resort to
any and all legal remedies or combination of remedies which Landlord may desire
to assert including but not limited to one or more of the following: (1) re-
enter the Premises in the manner provided by law, (2) declare the Lease at an
end and terminated, (3) sue for the rent due and to become due under the Lease,
and for any damages sustained by Landlord and (4) continue the Lease in effect
and relet the Premises on such terms and conditions as Landlord may deem
reasonably advisable with Tenant remaining liable for the monthly rent and all
other sums payable under this Lease, plus the reasonable cost of obtaining
possession of the Premises and of reletting the Premises, including broker's
commissions, and of any repairs and alterations necessary to prepare the
Premises for reletting, less the rentals actually received from such reletting,
if any. Landlord shall use reasonable efforts to mitigate damages and relet the
Premises. Any recovery of future rent from Tenant, will be discounted by
applying the Federal Reserve rate of the Federal Reserve Bank in San Francisco
at the time of award, plus three percent (3%). No action of Landlord shall be
construed as an election to terminate the Lease or to accept a surrender of the
Premises unless written notice of such intention be given to Tenant. Tenant
agrees to pay as additional rental all reasonable attorneys' fees and other
costs and expenses incurred by Landlord in enforcing any of Tenant's obligations
under this Lease. The mention in this Lease of any remedies shall not be deemed
to be a waiver by Landlord of any other or further remedies available at law or
in equity from time to time, all of which are expressly preserved and shall be
available to Landlord.

The prevailing party in any dispute arising under this Lease shall be
entitled to recover from the other party all reasonable attorneys' fees and
other costs and expenses incurred by the prevailing party, such fees to be set
by a court and not a jury.  Any amount due from either party hereunder which is
not paid when due shall bear interest at the rate of 12% per annum from the due
date until paid.  The mention in this Lease of any remedies shall not be 

-21-

deemed to be a waiver by Tenant of any other or further remedies available at
law or in equity from time to time, all of which are expressly preserved and
shall be available to Tenant.

Neither acceptance of rent by Landlord, with or without knowledge of
breach, nor failure of Landlord to take action on account of any breach hereof
or to enforce its rights hereunder shall be deemed a waiver of any breach, and
absent written notice or consent, said breach shall be a continuing one.

If Landlord defaults under this Lease, Tenant shall give Landlord written
notice of the default and Landlord shall have (a) ten (10) days to correct the
same, if the default can be corrected by the payment of money, and (b) thirty
(30) days to correct the same, if the default cannot be corrected by the payment
of money, provided that if a non-monetary default cannot reasonably be cured
within such 30-day period, and if Landlord is proceeding with due diligence to
cure the default, Landlord will have such additional time as may be reasonably
necessary to cure the default so long as Landlord promptly commences such cure
within the 30-day period.  The holder of any mortgage or deed of trust on the
Property shall have  the right to cure any default of Landlord with equal cure
periods.  Such lender's cure period will begin to run upon its receipt of
written notice from Tenant setting forth the alleged default of Landlord,
provided Landlord or such lender has given Tenant written notice of the lender's
address.  If Landlord or its lender fails to pay any amounts due Tenant within
the applicable time period or to otherwise cure any default of Landlord within
the time period specified above, then Tenant shall have as its exclusive remedy
the right to cure any default at Landlord's expense and seek recovery of such
sum from Landlord by an action at law.  Nothing herein shall limit Tenant's
right to equitable relief (including injunction or specific performance) in the
event Landlord and its lender fail to cure within the applicable time period.
Tenant shall have a qualified right of offset if neither Landlord nor its lender
protests the claimed default of Landlord by sending Tenant written notice of
protest within ten (10) days after receipt by Landlord and its lender of
Tenant's notice of default to Landlord, and if neither Landlord nor its lender
thereafter cures the alleged default of Landlord within the applicable time
period.

Tenant agrees to look solely to Landlord's interest in the Property for the
recovery of any judgment from Landlord or the payment of any obligation,
liability or claim under, arising out of, or relating to this Lease, it being
hereby agreed that, except to the extent of Landlord's interest in the Property,
Landlord, the assets of Landlord, or if Landlord is a partnership, its partners
whether general or limited, or if Landlord is a corporation, Landlord, its
directors, officers or 

-22-

shareholders, or if Landlord is a limited liability company, Landlord and its
members and managers shall never be liable for any judgments, claims,
obligations or liabilities under, arising out of, or relating to this Lease. The
foregoing will not apply to any claim of Tenant against Landlord based upon any
misrepresentation or breach of warranty by Landlord under paragraph 30.6 for
which Tenant gives Landlord written notice of the claimed misrepresentation or
breach of warranty no later than the end of the five hundred fortieth (540th)
day after the commencement date of the Lease Term. Thereafter, the above
limitation on claims by Tenant shall apply to all claims of Tenant, including
claims based upon a misrepresentation or breach of warranty by Landlord under
paragraph 30.6.

17.  NOTICES:
------- 

All bills, statements, notices or communications which Landlord may desire
or be required to give to Tenant shall be deemed sufficiently given or rendered
if in writing and either delivered to Tenant personally or sent by a nationally
recognized overnight courier service, or sent by registered or certified U.S.
mail, postage prepaid, return receipt requested,  addressed to Tenant at the
address set forth below and the time of rendition thereof of the giving of such
notice or communication shall be deemed to be (i) the time when the same is
delivered to Tenant, if delivered personally, (ii) the next business day, if
sent by overnight courier, or (iii) three (3) business days after deposit in the
mail as herein provided.  Notices to Tenant shall be sent to the following
address:

Tenant:

ASM Lithography, Inc.
8555 South River Parkway
Tempe, Arizona 85284
Attn: Controller

Landlord:

Ryan Companies US, Inc.
3200 East Camelback Road, Suite 129
Phoenix, Arizona 85018
Attn: John L. Strittmatter

Any notice by Tenant to Landlord must be given in the same manner, but addressed
to Landlord at the address set forth 

-23-

above, or in case of subsequent change upon notice given, to the latest address
furnished.

18.  HOLDING OVER:
------------ 

Should Tenant continue to occupy the Premises after expiration of the Lease
Term or any renewal or renewals thereof, such tenancy shall be from month to
month, and basic monthly rent shall continue to be due at the monthly rent in
effect for the last month of the Lease Term, prorated on a daily basis and based
upon a thirty-day month.  Either Landlord or Tenant may terminate such continued
tenancy upon thirty (30) days' written notice to the other party.

19.  SUBORDINATION:
------------- 

This Lease and the rights of Tenant shall be and are subject and
subordinate at all times to the lien of any first mortgage or deed of trust now
or hereafter in force against the Property, provided, however, that (i) in the
case of any mortgage or deed of trust encumbering the Property as of the date of
this Lease, Landlord will obtain, prior to the commencement of the Lease Term,
an agreement between the beneficiary or mortgagee thereof and Tenant that so
long as no default exists hereunder and Tenant attorns to Landlord's successor
pursuant to the provisions of this Lease, no termination of such encumbrance (or
any proceeding in connection therewith) shall disturb Tenant's possession of the
Premises and this Lease shall remain in full force and effect; and (ii) in the
case of any first mortgage or deed of trust encumbering the Property after the
date hereof, the beneficiary or mortgagee thereof agrees, either in such
encumbrance or in a separate agreement with Tenant, that so long as no default
exists under this Lease and Tenant attorns pursuant to Landlord's successor
pursuant to the provisions of this Lease, no foreclosure of such encumbrance (or
any proceeding in connection therewith) shall disturb Tenant's possession of the
Premises and this Lease shall remain in full force and effect. Tenant shall
execute such further instruments confirming the subordination of this Lease to
the lien of any such first mortgage or deed of trust as shall be requested by
Landlord.

20.  ESTOPPEL CERTIFICATE:
-------------------- 

Tenant shall at any time and from time to time, upon not less than fifteen
(15) days prior written notice from Landlord, execute, acknowledge and deliver
to Landlord and any other 

-24-

parties designated by Landlord, a statement in writing certifying (a) that this
Lease is in full force and effect and is unmodified and that Tenant has taken
possession of the Premises and has accepted and approved the condition of the
Premises and the Tenant Improvements (or, if modified, or disapproved, stating
the nature of such modification or disapproval), (b) the date to which the
rental and other charges payable hereunder have been paid in advance, if any,
and (c) that there are, to Tenant's knowledge, no uncured defaults on the part
of Landlord hereunder (or specifying such defaults if any are claimed). Any such
statement may be furnished to and relied upon by any prospective purchaser,
tenant or encumbrancer of all or any portion of the Property and shall include
any further statement that a good faith purchaser, tenant or encumbrancer would
reasonably require.

Landlord shall at any time and from time to time, upon not less than thirty
(30) days prior written notice from Tenant, execute, acknowledge and deliver to
Tenant and any other parties designated by Tenant, a statement in writing
certifying (a) that this Lease is in full force and effect and is unmodified
(or, if modified, stating the nature of such modification), (b) the date to
which the rental and other charges payable hereunder have been paid in advance,
if any, and (c) that there are, to Landlord's knowledge, no uncured defaults on
the part of Tenant hereunder (or specifying such defaults if any are claimed).
Any such statement may be furnished to and relied upon by any prospective
sublessee, assignee or encumbrancer of all or any portion of Tenant's interest
in the Property and shall include any further statement that a good faith
sublessee, assignee or encumbrancer would reasonably require.

21.  SERVICE CHARGE:
-------------- 

Tenant agrees to pay a service charge equal to one percent (1%) per month
or any portion thereof of any payment of monthly base rent payable by Tenant
hereunder which is not paid within ten (10) business days from the date due, or
of $5.00 per month or portion thereof, whichever is greater.  Such service
charge shall only be assessed against Tenant if Tenant has failed to pay the
monthly base rent within ten (10) business days of the date due more than twice
in a 12-month period during the Lease Term, and Landlord has delivered to Tenant
notice of such failure more than twice in such 12-month period.

-25-

22.  BINDING EFFECT:
-------------- 

The word "Tenant", wherever used in this Lease, shall be construed to mean
tenants in all cases where there is more than one tenant, and the necessary
grammatical changes required to make the provisions hereof apply to
corporations, partnerships, limited liability companies, or individuals, men or
women, shall in all cases be assumed as though in each case fully expressed.
Each provision hereof shall extend to and shall, as the case may require, bind
and inure to the benefit of Landlord and Tenant and their respective heirs,
legal representatives, successors and assigns, provided that this Lease shall
not inure to the benefit of any heir, legal representative, transferee or
successor of Tenant except as expressly provided in this Lease.

Landlord may assign its right, title, and interest in the Property and
under this Lease, and such assignment shall thereupon automatically terminate
Landlord's obligations under this Lease, provided that the assignee shall
assume, in writing,  the Landlord's obligations under this Lease arising from
the date of assignment.

23.  MEMORANDUM:
---------- 

Landlord and Tenant shall execute and deliver a short form or memorandum of
this Lease, satisfactory in form and substance to Landlord and Tenant, for
recording in the proper office or offices in the county in which the Property is
located.

24.  QUIET ENJOYMENT:
--------------- 

So long as Tenant is not in default under this Lease (after expiration of
any applicable notice and cure periods), Tenant (and any subtenant or assignee
of Tenant permitted pursuant to the terms of this Lease) shall peaceably and
quietly have, hold and enjoy the Premises 24 hours each day during the term
hereof, subject to force majeure, casualty, condemnation and other similar
events beyond Landlord's reasonable control (but subject to Landlord's
obligations under this Lease).  Notwithstanding the foregoing, defects in
Landlord's title, or foreclosure or other enforcement of Landlord's lender's
lien shall not be excluded from Landlord's covenant of Tenant's quiet enjoyment.

25.  BROKER:
------ 

In connection with the lease of the Premises from Landlord to Tenant,
Landlord shall pay brokers' commissions to CB 

-26-

Commercial Real Estate Group, Inc. (Greg White) pursuant to a separate
agreement. With the exception of such commission, Landlord and Tenant each
represent to the other that it has not entered into any agreement or incurred
any obligation which might result in the obligation to pay a leasing or
brokerage commission or finder's fee with respect to this transaction. Landlord
and Tenant each agree to indemnify, defend, protect and hold the other harmless
from and against any and all losses, claims, damages, costs or expenses
(including reasonable attorneys' fees) which the other may incur as a result of
any claim made by any person to a right to a leasing or brokerage commission or
finder's fee in connection with this transaction to the extent such claim is
based, or purportedly based, on the acts or omissions of Landlord or Tenant, as
the case may be.

26.  RIDER:
----- 

If a rider is attached to this Lease, the provisions therein shall be an
integral part of this Lease.

IN WITNESS WHEREOF, the respective parties hereto have caused this Lease to
be executed the day and year first above written.

RYAN COMPANIES US, INC.,
a Minnesota corporation

By: /s/ John Strittmatter
------------------------------
Its: VP
----------------------------

LANDLORD

ASM LITHOGRAPHY, INC., a
Delaware corporation

By: /s/ Christina Larson
------------------------------
Its: Secretary / Treasurer
----------------------------

TENANT

-27-

RIDER TO LEASE AGREEMENT
DATED AUGUST 15th, 1997
BETWEEN
RYAN COMPANIES US, INC., AS LANDLORD,
AND
ASM LITHOGRAPHY, INC., AS TENANT

THIS RIDER is an integral part of the attached Lease Agreement between Ryan
Companies US, Inc., as Landlord, and ASM Lithography, Inc., as Tenant.  In the
event of any conflict between the two, the terms of this Rider will govern.
This Rider and the attached Lease Agreement are called the "Lease."

27.  PARKING:
------- 

At no additional charge to Tenant, Landlord will provide Tenant with three
hundred forty-eight (348) employee and visitor vehicular parking spaces in the
general parking areas appurtenant to the Building.  Landlord has no obligation
to provide covered parking.  The parking spaces will be available to Tenant
twenty-four (24) hours a day, during each day of the Term hereof, except that
Landlord has no duty to police the parking spaces, and such availability will be
subject to force majeure, casualty, condemnation and other similar events beyond
Landlord's reasonable control.

28.  DECLARATION, GROUND LEASE, AND SUBGROUND LEASE:
---------------------------------------------- 

The Property, the Building, and the Premises are subject to the terms and
conditions of the Declaration attached hereto as Exhibit A. Tenant's use of the
Property, the Building, and the Premises shall be in full compliance with the
terms and conditions of the Declaration. Without limitation, Tenant acknowledges
that Tenant's use of the Property, Building and Premises is strictly regulated
by the Declaration. Tenant represents and warrants to Landlord that Tenant has
reviewed, understands, and agrees to use the Property, Building and Premises in
full compliance with the requirements of the Declaration at all times.

This Lease is also subject and subordinate to (a) the Arizona State
University Research Park Ground Lease dated October 8, 1984 between the Arizona
Board of Regents and Price-Elliott Research Park, Inc. (the "Ground Lease"), and
(b) 

-28-

the Subground Lease between Price-Elliott Research Park, Inc. and Landlord dated
August ___, 1997 (the "Subground Lease").

29.  FINANCIAL INFORMATION:
--------------------- 

Tenant represents and warrants to Landlord that the financial information
provided to Landlord before the execution of this Lease accurately states the
financial condition of Tenant as set forth therein and that such information is
true and accurate as presented.  Tenant further represents and warrants to
Landlord that there has been no material adverse change in the financial
condition of Tenant between the effective date of the information delivered to
Landlord and the date of this Lease.  Tenant acknowledges that, but for the
truth and completeness of the financial information given to Landlord, as well
as the truth of the foregoing representations, Landlord would not have entered
into this Lease with Tenant.

30.  TENANT IMPROVEMENTS AND OTHER INCENTIVES:
---------------------------------------- 

30.1  Landlord shall provide, at Landlord's sole cost and expense, the base
Building with parking lot, driveways, sidewalks, exterior lighting and
landscaping. Landlord shall also provide an Allowance for the Tenant
Improvements to the Building not to exceed $86.20 per square foot. The base
Building and the other improvements described above will consist of the basic
structure with no specific or particular improvements intended for Tenant.

30.2  Landlord will use reasonable efforts to cause the Building and
related improvements and the Tenant Improvements to be constructed as
economically as possible, and will use competitive bidding where practicable.

30.3  Landlord will construct the Tenant Improvements based upon
specifications mutually agreed upon by Landlord and Tenant. Landlord and Tenant
shall work together cooperatively to produce a preliminary site plan and floor
plans by no later than August 22, 1997 (the "Preliminary Plan Approval Date")
and final plans and specifications by no later than November 10, 1997 (the
"Final Plan Approval Date"). If Landlord and Tenant are unable to determine
either the preliminary site plan and floor plans by the Preliminary Plan
Approval Date or the final plans and specifications by the Final Plan Approval
Date, every day of delay will operate to extend the Delivery Date under
paragraph 13 by one (1) day. Further, if all approvals required under the
Declaration, the Ground Lease and the Subground Lease

-29-

are not obtained by September 21, 1997, every day of delay will operate to
extend the Delivery Date under paragraph 13 by one (1) day. Additionally, if
Landlord, acting diligently, is unable to obtain from the City of Tempe a site
permit by October 1, 1997 and, subsequently, the shell building permit by
October 31, 1997, then every day of delay thereafter in obtaining either permit
will operate to extend the Delivery Date by one (1) additional day. The Building
and the Tenant Improvements will be constructed in a good and workmanlike
manner, free of mechanics' and materialmen's liens, in accordance with the terms
of this Lease and all applicable laws, rules and regulations.

Landlord and Tenant will agree on the architect designing the Tenant
Improvements. Landlord will be required to construct or provide no additional
improvements, except as provided below. Landlord will commence and complete
construction of the Tenant Improvements with all reasonable diligence subject,
however, to the provisions of paragraph 30.1. The construction work for the
Building and the Tenant Improvements will be done by an affiliate of Landlord,
and Landlord shall cause such affiliate to solicit bids for each major
subcontract from qualified, licensed subcontractors.

30.4  If the actual cost of the Tenant Improvements exceeds the Allowance,
Tenant will pay the difference by a cash payment made to Landlord within ten
(10) business days following the issuance of the certificates of occupancy for
the Building and the Tenant Improvements unless Landlord and Tenant agree
instead to include the excess Tenant Improvements costs in the Total Project
Cost so as to amortize the excess by an increase in base rent through the Lease
Term.

30.5  The Tenant Improvements will be the property of Landlord and upon
expiration or termination of this Lease, Tenant will deliver the Building,
including the Tenant Improvements, to Landlord in good condition, normal wear
and tear excepted and except for damage to be repaired by Landlord pursuant to
the provisions of this Lease.

30.6  Landlord hereby represents and warrants to Tenant the following with
respect to the Premises, which shall be true and correct upon completion of the
Building and the Tenant Improvements:

(a)   the Building is structurally sound and mechanical and electrical
systems of the Building are in good working order;

-30-

(b) the Property (including the Building) complies with all legal
requirements (including without limitation the Americans With Disabilities Act
of 1990), regulatory standards and codes for its current use and the current use
of the Building and the Property is in conformance with all applicable
ordinances and zoning, excepting Tenant's own design error;

(c) Landlord has no actual knowledge (without any investigation) of any
requirements by any jurisdictional or environmental agency or department of any
work which is required to be done at the Property;

(d) Landlord has no actual knowledge (without any investigation) that there
is, or ever has been, any Hazardous Materials located on, in or around the
Property, nor to Landlord's actual knowledge (without any investigation) has
there occurred a violation of any Hazardous Materials Laws at the Property; and

(e) Landlord has no actual knowledge (without any investigation) of any
claims, disputes or litigation of any kind, pending or threatened, with respect
to the Property.

31.  RENEWAL OPTION(S):
----------------- 

Provided that Tenant is not in default under this Lease either at the time
it exercises the Renewal Options set forth below, or at the date a Renewal Term
begins, Tenant will have the right to renew this Lease for two (2) successive
five-year terms (the "Renewal Terms") by giving notice of exercise of the
Renewal Option to Landlord at least six (6) months before the end of the Lease
Term and the first Renewal Term, as the case may be.  If Tenant fails to deliver
timely written notice of exercise of a Renewal Option to Landlord, the Renewal
Options shall lapse and Tenant will have no further privilege to extend the term
of this Lease.

Each Renewal Term shall be on the same terms and conditions of this Lease
(unless by their very nature inapplicable), except that the base rent payable by
Tenant to Landlord during each Renewal Term shall be based on the prevailing
"market rental rate" for comparable space in competing buildings of similar
size, type, quality and location as reasonably calculated by Landlord for each
Renewal Term, but in no event less than the rate in force at the end of the
--- -- -- ----- ----                                         
preceding term.

-31-

In the event Landlord and Tenant are unable to mutually agree on the
"market rental rate" to be applied to the Property, Landlord and Tenant shall
mutually select an MAI commercial real estate appraiser, and the opinion of such
appraiser shall be binding upon both Landlord and Tenant.  If Landlord and
Tenant fail to mutually select such an MAI appraiser, the president of the
Arizona Chapter of the Appraisal Institute shall select the appraiser.

In addition to paying the base rent determined pursuant to this paragraph,
Tenant will continue to pay all other sums required under the Lease.

If this Lease or Tenant's right to possession of the Building shall expire
or terminate for any reason whatsoever before Tenant exercises the Renewal
Options, or if Tenant has sublet or assigned all or any portion of the Building,
other than to a Tenant Affiliate, then immediately upon such expiration or
termination, subletting or assignment, the Renewal Options shall simultaneously
terminate and become null and void.  The Renewal Options are personal to Tenant.
Under no circumstances shall a subtenant or an assignee have the right to
exercise the Renewal Options, other than a Tenant Affiliate.  Time is of the
essence of this provision.

32.  EXPANSION:
--------- 

32.1  Although Tenant does not now wish to have constructed a larger
facility, Tenant may in the future desire to expand the Building.  Landlord is
willing to permit the construction of additional space (the "Expansion Space")
to the Building and will agree to construct, or to cause the construction of,
the Expansion Space requested by Tenant, all in accordance with and subject to
the following terms and conditions of this paragraph 32.

32.2  If Tenant decides it would like to have the Building expanded at any
time prior to expiration of the Lease Term, Tenant shall deliver a written
notice to Landlord not later than one (1) year before the Lease Term expires
specifying the number of additional square feet requested, the general
configuration of the Expansion Space, the tenant improvements requested by
Tenant to be installed by Landlord in the Expansion Space and the target date
for completion of the Expansion Space.

32.3  If Tenant's notice to Landlord is delivered within the first two (2)
years of the Lease Term and if Ryan Companies US,

-32-

Inc. is still the Landlord, then within sixty (60) days following receipt of
Tenant's written request for such expansion, Landlord will deliver to Tenant a
written response which will either (A) set forth (i) Landlord's good faith
estimate of the total cost to construct the Expansion Space in adherence to the
same construction standards set forth in this Lease for the Building plus a 6%
fee to Landlord; (ii) Landlord's good faith estimate of the increase in monthly
base rent expected to result from the Expansion Space, calculated using the
applicable rental constant under paragraph 3; and (iii) the expected time to
complete the Expansion Space, including the projected time to prepare and agree
upon plans and specifications and the time to obtain necessary financing,
permits, consents and approvals; or (B) advise Tenant that Landlord elects not
to construct the Expansion Space for any of the reasons set forth in paragraph
32.5 below. If Landlord provides a response under subparagraph (A) above, then
Tenant will notify Landlord within thirty (30) days of Tenant's receipt of
Landlord's response whether Tenant desires to proceed with the expansion.

32.4  If Tenant's notice to Landlord is delivered after the first two (2)
years of the Lease Term or if Ryan Companies US, Inc. is not still the Landlord,
then within sixty (60) days following receipt of Tenant's written request for
such expansion, Landlord will deliver to Tenant a written response which will
either (A) set forth (i) Landlord's good faith estimate of the total cost to
construct the Expansion Space in adherence to the same construction standards
set forth in this Lease for the Building plus a 6% fee to Landlord; (ii)
Landlord's good faith estimate of the increase in monthly base rent expected to
result from the Expansion Space, calculated using the applicable rental constant
under paragraph 3; and (iii) the expected time to complete the Expansion Space,
including the projected time to prepare and agree upon plans and specifications
and the time to obtain necessary financing, permits, consents and approvals; or
(B) advise Tenant that Landlord elects not to construct the Expansion Space for
any reason whatsoever, including without limitation, the reasons set forth in
paragraph 32.5 below. If Landlord provides a response under subparagraph (A)
above, then Tenant will notify Landlord within sixty (60) days of Tenant's
receipt of Landlord's response whether Tenant desires Landlord to proceed with
the expansion, during which time Tenant, in its sole discretion, may elect to
obtain competitive bids.

-33-

32.5  Landlord may decline to construct the Expansion Space requested by
Tenant if:

(a) Landlord is unable to obtain financing on terms and conditions
satisfactory to Landlord.

(b) The Expansion Space is less than 30,000 square feet.

(c) The Expansion Space is not permitted by applicable law, the
Ground Lease, the Subground Lease or any recorded covenants,
conditions and restrictions (including without limitation, the
Declaration).

(d) Tenant's financial condition has, in the sole opinion of
Landlord, adversely changed since the date of the Lease so as to
not be acceptable to Landlord.

(e) Tenant is, or has been during the Lease term, in default under
this Lease or any event has occurred which with the giving of
notice or passage of time, or both, would constitute an event of
default on the part of Tenant.

32.6  If Landlord is to proceed with construction of the Expansion Space
under either paragraph 32.3 or 32.4 above, then the parties will enter into a
written amendment to the Lease setting forth the terms and conditions applicable
to the Expansion Space, including without limitation the following:

(a) If the Expansion Space is "ready for occupancy" (as defined in
paragraph 2 above) after the first five (5) years of the Lease
Term, then the initial Lease Term for the Property (including the
Expansion Space) will be extended so that it expires ten (10)
years from the date the Expansion Space is "ready for occupancy".
This extension is independent of and in addition to the Renewal
Options set forth in paragraph 31.

(b) Base rent for the Expansion Space will be calculated using the
applicable Rental Constant as set forth in paragraph 3 (but with
the applicable Subground Lease Annual Payment included only once
in calculating base rent in

-34-

the aggregate for both the original Building and the Expansion
Space). If the initial Lease Term is extended as provided above,
then (i) the Rental Constant for calculating annual base rent for
years 16 through 20, or portion thereof, and, if applicable, for
years 21 through 25, or portion thereof, shall be computed on the
basis of a 2% yearly increase compounded annually in base rent
over years 11 through 15 for calculating base rent for years 16
through 20 and then, if applicable, over years 16 through 20 for
calculating base rent for years 21 through 25, and (ii) the
Subground Lease Annual Payment shall be equal to the applicable
annual rent payable under the Subground Lease for the
corresponding year of the Lease Term.

The amendment will further state that, except as specifically provided to
the contrary in this paragraph 32, all of the terms and conditions of the Lease
shall apply to the Expansion Space.  If the parties cannot agree upon the
amendment in sufficient time for Landlord to commence and complete the Expansion
Space by the target completion date, then Landlord shall not be obligated
thereafter to proceed with construction of the Expansion Space.

32.7  If Landlord elects under subpart (B) of either paragraphs 32.3 or
32.4 not to construct or have constructed the Expansion Space, or if Tenant is
not satisfied with Landlord's proposal for the Expansion Space, Tenant shall
have the right to construct the Expansion Space at its own expense in accordance
with the terms of this paragraph 32. If Tenant elects to construct the Expansion
Space, all construction must be performed in accordance with plans mutually
acceptable to Landlord and Tenant and complying with all applicable laws, rules
and regulations, the Ground Lease, the Subground Lease and recorded covenants,
conditions and restrictions (including without limitation, the Declaration).
Tenant will be responsible for obtaining at Tenant's expense all necessary
permits, consents and approvals, and Landlord shall cooperate with and assist
Tenant as necessary to enable Tenant to complete the desired construction.
Tenant agrees to carry insurance in commercially reasonable coverages and
amounts with respect to the construction satisfactory to Landlord. Tenant shall
also obtain payment and performance bonds to insure for the benefit of Landlord
the completion and payment for the construction work and shall, prior to
beginning construction, record a bond

-35-

satisfying the statutory requirements for keeping the Premises lien free with
respect to Tenant's construction of the Expansion Space. If the construction is
undertaken and paid for by Tenant, Tenant will not be required to pay base
monthly rent with respect to the Expansion Space for any period during the Lease
Term as extended, including during any Renewal Terms, but shall pay Operating
Costs. Under no circumstances shall Landlord be required to obligate itself or
encumber the Premises for financing to pay the costs for Tenant's construction
of the Expansion Space.

32.8  The duties and obligations of Landlord under this paragraph 32 shall
not be binding upon and need not be performed by any mortgagee, trust deed
beneficiary or other holder of a financing lien on the Premises or their
successors and assigns; provided, however, the foregoing shall not impair or
otherwise prejudice Tenant's right under paragraph 32.7 to construct the
Expansion Space.

33.  AGENCY DISCLAIMER.
-----------------

Landlord and Tenant acknowledge and agree that CB Commercial Real Estate
Group, Inc. is representing Tenant (ASM Lithography, Inc.) in this build-to-
suite lease transaction although CB Commercial Real Estate Group, Inc. is also
representing Landlord (Ryan Companies US, Inc.) in the separate ground lease
transaction between Price-Elliot Research Park, Inc., an Arizona nonprofit
corporation, and Ryan Companies US, Inc.

34.  PROVISIONS REGARDING GROUND LEASE AND SUBGROUND LEASE.
----------------------------------------------------- 

34.1  Landlord is the lessee and Price-Elliott Research Park, Inc. (Price-
Elliott), is the lessor under the Subground Lease pursuant to which Landlord
acquired (or shall acquire) its interest in the Premises.  Price-Elliott is the
lessee and The Arizona Board of Regents ("Regents") is the lessor under the
Ground Lease pursuant to which Price-Elliott acquired its interest in the
Premises.  Regents, Price-Elliott and Landlord also have entered into (or shall
enter into) a Recognition, Nondisturbance and Attornment Agreement (the "RNA
Agreement") for the benefit of Landlord.

34.2  Landlord represents, warrants and covenants that:

(a)  Landlord had (or shall have upon execution and delivery) full
power, right and authority to

-36-

execute and deliver the Subground Lease and the RNA Agreement.

(b)  Landlord shall maintain the Subground Lease in full force and
effect and in good and current standing at all times during the
Lease Term and any extensions of the Lease Term.

(c)  Landlord shall perform and observe, in timely fashion, all
covenants, conditions, obligations and agreements of Landlord
under the Subground Lease and the RNA Agreement, except to the
extent that Tenant is required under this Lease to perform such
obligations.

(d)  Landlord shall not waive, execute any agreement that would be
interpreted as waiving, or in any manner release or discharge
any covenants, conditions, obligations or agreements under or
related to (1) the Subground Lease to be performed or observed
by Price-Elliott or (2) the RNA Agreement to be performed or
observed by Regents, or condone any nonperformance of either
such agreement.

34.3  Landlord hereby authorized Tenant, upon the occurrence of any default
under the Subground Lease, to: (i) enforce Landlord's rights under the Subground
Lease and to receive any performance of Price-Elliott thereunder, and or (ii)
pay or perform such obligations of Landlord under the Subground Lease in such
manner and to such extent as it may deem necessary.  If Tenant elects to take
any action as set forth in the preceding sentence, Tenant shall notify Landlord
and any lender of Landlord (but not more than one such lender) of the action it
will undertake.  Landlord hereby authorizes and directs Price-Elliott, upon such
default by Landlord and election by Tenant, to make and render all acts and
performances required of Price-Elliott under the Subground Lease directly to
Tenant, and to accept from Tenant all acts and performances required of Landlord
under the Subground Lease.  Landlord hereby relieves Tenant and Price-Elliott
from any liabilities to Landlord by virtue of their actions in accordance with
this paragraph.  The exercise of any right or authority herein granted shall not
cure nor waive any default by Landlord nor invalidate any act done hereunder
because of any default.

-37-

34.4  Landlord does hereby make, constitute and appoint Tenant and its
successors and assigns Landlord's true and lawful attorney in fact, in
Landlord's name, place and stead, or otherwise, upon the occurrence of any
default by Landlord under this Subground Lease, and at any time while such
default is continuing, to do all acts and to execute, acknowledge, obtain and
deliver any and all instruments, documents, items or things necessary, proper or
required as a term, condition or provision of the Subground Lease or in order to
exercise any rights of Landlord under the Subground Lease or to receive and
enforce any performance due Landlord under the Subground Lease.  The power of
attorney given herein is a power coupled with an interest and shall be
irrevocable so long as this Lease remains in effect.

34.5  In addition to the rights set forth in paragraph 34.3 above, which
are exercisable in the manner set forth therein, the occurrence of a default by
Landlord under the Subground Lease shall constitute a default hereunder that
shall entitle Tenant to exercise all of its other rights and remedies hereunder
in the manner set forth herein.

34.6  No change, amendment or modification shall be made to the Subground
Lease without the prior written approval of Tenant, which approval Tenant shall
not unreasonably withhold. Notwithstanding the previous sentence, Landlord shall
have the right without Tenant's consent to enter into modifications of the
Subground Lease which would not (i) materially impair Landlord's rights or
privileges under the Subground Lease, or (ii) materially increase Landlord's
duties or obligations under the Subground Lease; provided that any increase in
the rent or other monetary payments required by Landlord under the Subground
Lease shall be deemed material.

34.7  Landlord shall immediately (i) notify Tenant in writing of any
default or breach under the Subground Lease or of any failure of performance or
other condition that would become an actual default or breach if notice was
given and such failure of performance or other condition was not cured within
the required time period, and (ii) deliver to Tenant true and complete copies of
all communications respecting a default or breach, alleged default or breach,
failure of performance, or other condition which with lapse of time or after
additional notice, or both, could become a default or breach by Landlord under
the Subground Lease, or otherwise relating to Landlord's good standing with
respect to the Subground Lease.

[SIGNATURES ON NEXT PAGE]

-38-

RYAN COMPANIES US, INC.,
a Minnesota corporation

By: /s/ John Stritmatter
----------------------------
Its:  VP
---------------------------    
LANDLORD

ASM LITHOGRAPHY, INC.,
a Delaware corporation

By: /s/ Christina Larson
------------------------
Its: SECRETARY/TREASURER
----------------------
TENANT

-39-

EXHIBIT 10.52

FIRST AMENDMENT TO LEASE AGREEMENT

FOR THE ASML BUILDING

FIRST AMENDMENT TO LEASE

This First Amendment to Lease, dated as of January 6, 2000 ("First Amendment"),
between Ryan Companies US, Inc. ("Landlord") and ASM Lithography, Inc.
("Tenant").

WITNESSETH, that:

WHEREAS, Landlord and Tenant have entered into a Lease dated August 15,
1997 ("Lease") for approximately 95,133 square feet of area, whereby Landlord
has leased to Tenant certain Premises located in the City of Tempe, State of
Arizona, consisting of the Premises, as such Premises are defined in the Lease;
and

NOW, THEREFORE, Landlord and Tenant desire and intend hereby to amend the
Lease as specifically hereinafter set forth and provided:

1.  The Lease Term commences on June 4, 1998.
2.  The Lease Term expires on June 30, 2013.
3.  The Annual Base Rent, including the Subground Lease Payment of $186,372
annually, shall be: for the period beginning June 4, 1998 through June
30, 2003, the sum of One Million Nine Hundred Twenty Seven Thousand
Seven Hundred Eighty Eight and 28/100 Dollars ($1,927,788.28), payable
in equal monthly installments of One Hundred Sixty Thousand Six Hundred
Forty Nine and 02/100 Dollars ($160,649.02);
for the period from July 1, 2003 through June 30, 2008, the sum of Two
Million One Hundred Thirty Thousand One Hundred Twenty Four and 27/100
Dollars ($2,130,124.27), payable in equal monthly installments of One
Hundred Seventy Seven Thousand Five Hundred Ten and 36/100 Dollars
($177,510.36);
the period from July 1, 2008 through June 30, 2013, the sum of Two
Million Three Hundred Fifty Four Thousand Twenty and 65/100 Dollars
($2,354,020.65), payable in equal monthly installments of One Hundred
Ninety Six Thousand One Hundred Sixty Eight and 39/100 Dollars
($196,168.39).

EXCEPT as expressly amended or supplemented herein, the Lease shall remain
and continue in full force and effect in all respects.

IN WITNESS WHEREOF, the Lease Amendment is hereby executed and delivered
effective as of the date and year first above written.

LANDLORD:    RYAN COMPANIES US, INC.

BY: /s/ John Strittmatter
---------------------------
Its: VP
---------------------------

TENANT:      ASM LITHOGRAPHY, INC.

BY: /s/ Christina Larson
---------------------------
Its:    Secretary
---------------------------

EXHIBIT 10.53

GROUND LEASE AGREEMENT

FOR THE ASML BUILDING

ASU RESEARCH PARK 
LEASE

FUNDAMENTAL LEASE PROVISIONS
----------------------------

DATE:                              August 22, 1997

LANDLORD:                          PRICE-ELLIOTT RESEARCH PARK, INC.,
an Arizona nonprofit corporation

TENANT:                            RYAN COMPANIES US, INC.

DEMISED PREMISES:                  Lot 44 containing approximately 9.5076 net,
acres 14.3207 gross acres and 414,151 net 
square feet (623,810 gross square feet). See 
Exhibits A and A-1.

LEASE TERM:                        From the date hereof through December 31,
2082 subject to Tenant's right to terminate
the Term, as provided in Section 2.

RENT COMMENCEMENT DATE:            See Section 3.

ANNUAL RENT:                       See Section 3.

MUNICIPAL SERVICE
FEE:                               $0.08337 per square foot of Floor Area
constructed on the Demised Premises per year,
payable in twelve equal monthly installments,
subject to adjustments as provided in 
Section 6(d).

COMMON AREA EXPENSES:              Allocable Share payable monthly beginning on
the Rent Commencement Date.

INFRASTRUCTURE
ASSESSMENT:                        Approximately $248,490.61 based upon $.60 per
net square foot of land area.

SECURITY DEPOSIT:                  None Required.

PERMITTED USES:                    Those uses permitted under the Restrictions
attached hereto as Exhibit F. Unlimited 
manufacturing is prohibited 
(A.R.S. (s)15-1636).

RESTRICTIONS:                      Attached hereto as Exhibit F.

ADDRESS OF LANDLORD:               8750 South Science Drive, 
Tempe, Arizona 85284

ADDRESS OF TENANT:                 3200 E. Camelback Road
Suite 129
Phoenix, Arizona 85018
Attn: John L. Strittmatter

The foregoing Fundamental Lease Provisions are an integral part of this Lease,
and each reference in the body of the Lease to any Fundamental Lease Provisions
shall be construed to incorporate all of the terms set forth above with respect
to such Provisions.

INDEX

Section                                                                  Page

1.  DEMISED PREMISES....................................................   1

2.  TERM................................................................   1

3.  RENT................................................................   1

4.  ADDITIONAL CHARGES..................................................   3

5.  NO COUNTERCLAIM OR ABATEMENT OF ADDITIONAL CHARGES..................   3

6.  RENTAL TAXES, UTILITIES, REAL ESTATE TAXES AND MANAGEMENT FEE.......   4

7.  USE OF DEMISED PREMISES.............................................   8

8.  CONSTRUCTION BY TENANT..............................................   8

9.  INFRASTRUCTURE ASSESSMENT...........................................   9

10. MAINTENANCE AND REPAIRS.............................................   9

11. REGULATORY REQUIREMENTS.............................................   9

12. INDEMNIFICATION.....................................................  11

13. INSURANCE...........................................................  12

14. LIENS...............................................................  12

15. DAMAGE OR DESTRUCTION...............................................  13

16. EMINENT DOMAIN......................................................  13

17. DEFAULTS AND REMEDIES...............................................  14

18. ASSIGNMENT AND SUBLETTING...........................................  16

19. HYPOTHECATION OF LEASEHOLD ESTATE...................................  17

20. SUBORDINATION.......................................................  19

21. ESTOPPEL CERTIFICATE................................................  19

22. CONFLICT OF LAWS....................................................  20

23. STATUS OF TENANT....................................................  19 

24. SUCCESSORS AND ASSIGNS..............................................  20

25. ATTORNEYS' FEES.....................................................  20

26. PERFORMANCE BY TENANT...............................................  20

27. MORTGAGEE PROTECTION................................................  21

28. WAIVER..............................................................  21

29. EXAMINATION OF LEASE................................................  21

30. TIME................................................................  21

31. PRIOR AGREEMENTS, AMENDMENTS........................................  21

32. SEVERABILITY........................................................  22

33. RECORDING...........................................................  22

34. LIMITATION ON LIABILITY.............................................  22

35. NONSUBORDINATED SUBLEASE............................................  22

36. CONSENT OF LANDLORD AND TENANT......................................  22

37. DARK PERIOD.........................................................  22

38. TITLE TO BUILDINGS AND IMPROVEMENTS.................................  23

39. SURRENDER...........................................................  23

40. RESTRICTIONS - AMENDMENTS...........................................  24

41. QUIET POSSESSION....................................................  24

42. WATER RESOURCES.....................................................  24

43. NOTICES.............................................................  24

44. BROKERS.............................................................  25

45. NET LEASE...........................................................  25

46. TENANT'S TITLE INSURANCE............................................  25

47. SHARED DRIVEWAYS....................................................  24

48. HEIGHT RESTRICTIONS.................................................  25

Exhibit A         Legal Description of the Demised Premises                     
Exhibit A-1       Site Plan of the Demised Premises                             
Exhibit B         Site Plan of the Research Park                                
Exhibit C         Preliminary Plan Package                                      
Exhibit D         Recognition, Non-Disturbance and Attornment Agreement
Exhibit E         Memorandum of Lease                                           
exhibit F         Restrictions       

ASU RESEARCH PARK
LEASE

1.   DEMISED PREMISES
----------------

Subject to the covenants and conditions herein contained, Landlord
hereby leases to Tenant, and Tenant leases from Landlord (this "Lease"), the
land situated in the City of Tempe, Maricopa County, Arizona, legally described
on Exhibit A attached hereto and graphically depicted on Exhibit A-1 attached
hereto (the "Land"). Said Land and all buildings and other improvements to be
constructed by or for Tenant thereon (the "Improvements") are hereinafter
referred to collectively as the "Demised Premises". The Demised Premises is a
part of an integrated research park development located within the City of
Tempe, Arizona ("Research Park") which is graphically depicted on the Site Plan
attached hereto as Exhibit B. It is acknowledged that Landlord has an interest
in the Research Park as a ground lessee under that certain Ground Lease dated
October 8, 1984, and all amendments thereto ("Ground Lease"), wherein the
Arizona Board of Regents, acting for and on behalf of Arizona State University,
appears as Lessor ("Ground Lessor"). This Lease is a sublease under the Ground
Lease

2.   TERM
----

(a)  The term of this Lease ("Term") shall commence as of the
date hereof and shall expire on December 31, 2082, unless the Term shall be
sooner terminated as hereinafter provided.

(b)  The term "year" as used in this Lease shall mean each period
of twelve (12) consecutive months commencing on each January 1 and ending at
midnight on the next succeeding December 31, except that any partial year at
the beginning of the Term shall constitute the first year of the Lease, in which
event the first year of the Term will be shorter than twelve months.

(c)  Tenant shall have the right to terminate this Lease prior to
expiration of the 30th year and prior to expiration of each subsequent 10-year
period. In order to exercise the termination right, Tenant must provide Landlord
with written notice of Tenant's termination election not more than 360 nor less
than 180 days prior to the expiration of the 30th year. If this termination
right is not exercised prior to the 30th year, the termination right shall then
correspond to the expiration of each successive 10th year (i.e., the 40th, 50th,
60th, 70th and 80th years) subject to being exercised in the manner herein
described.

3.   RENT
----  

(a)  Upon the Rent Commencement Date (as defined below), Tenant
agrees to pay Annual Rent to Landlord, without demand, in twelve (12) equal
monthly installments in advance on the first day of each month, as follows:

1

Lease Years        Per Net Sq. Foot          Annual              Monthly 
-----------        ----------------          ------              -------

1-15               $0.45                     $190,727            $15,894
16-25              $0.66                     $279,733            $23,311
26-35              $0.86                     $364,500            $30,375 
36-85              See (b) below      

(b)  During the 35th year and again during the 65th year,
Landlord shall have the option, in each such case, to cause the fair market
value of the Land (as an improved parcel of land but subject to the
Restrictions) to be determined by appraisal as set forth below. In each such
case, the Annual Rent applicable to the Demised Premises for the ensuing ten-
year period shall be equal to 10% of the fair market value of the Land. Annual
Rent so determined shall be in effect for the years 36-45. Annual Rent shall
then be adjusted every ten years so that Annual Rent for the years 46-55 and 56-
65 shall reflect cumulative non-compounded increases of three percent (3%) per
year over the Annual Rent in effect for the previous ten year period. Likewise,
Annual Rent shall be established by appraisal as set forth herein during the
65th year for the years 66-75. Annual Rent shall then be adjusted after ten
years so that Annual Rent for the years 76-85 shall reflect non-compounded
cumulative increases of three percent (3%) per year over the Annual Rent in
effect for the previous ten-year period.

In order to invoke the appraisal procedure, Landlord shall
provide to Tenant at least 270 days but not more than 360 days prior to
expiration of the 35th year (or 65th year as the case may be) an appraisal of
the Land. Tenant shall have 30 days after receipt of Landlord's appraisal either
to accept Landlord's appraisal or to submit to Landlord an appraisal of the Land
establishing a different fair market value. Failure to provide Landlord with an
appraisal before expiration of the 30 day period shall be deemed Tenant's
acceptance of Landlord's appraisal. If Tenant submits its own appraisal,
Landlord shall have 30 days within which to notify Tenant that it accepts or
rejects Tenant's appraisal. Failure to provide such notice within the 30 day
period shall constitute acceptance by Landlord of Tenant's appraisal.

If Landlord rejects Tenant's appraisal, then the appraisers
previously selected by Landlord and Tenant shall select a third appraiser,
except that if the valuations of the two appraisals are less than 10% apart, the
valuations shall be averaged and the resulting amount shall be the fair market
value. If the appraisers are unable to agree on a third appraiser within ten
(10) days, either party, by giving ten (10) days notice to the other party may
apply to the American Arbitration Association for the purpose of selecting a
third appraiser.

Within 30 days after the selection of the third appraiser, the
third appraiser shall submit to Landlord and Tenant an appraisal of the Land. A
valuation agreed upon by two of the three appraisers shall be binding upon
Landlord and Tenant If none of the appraisers agree, the values determined by
the two appraisers whose valuations are closer (in absolute dollar terms, not
percentage terms) shall be averaged and the resulting amount shall be the fair
market value. If one valuation is equally close (in absolute dollar terms, not
percentage terms) to the other two, the middle valuation shall be the fair
market value.

2

Landlord and Tenant each shall bear the cost of its own appraiser
and shall bear one-half of the cost of the third appraiser. All appraisers shall
be members of the American Institute of Real Estate Appraisers (M.A.I.) or, if
such Institute shall not then exist, members of its successor or a substantially
equivalent organization.

(c)  All sums to be paid by Tenant to Landlord pursuant to this
Lease shall be paid in lawful money of the United States to Landlord at its
address, or at such other place as Landlord may from time to time designate in
writing.

(d)  The "Rent Commencement Date" shall be the earlier to occur
of (i) the first anniversary of the date of this Lease as set forth in the
Fundamental Lease Provisions or (ii) the date Tenant obtains a certificate of
occupancy for the Improvements.

(e)  All payments of Annual Rent and "Additional Charges" (as
defined in Section 4) shall be considered delinquent if not received by Landlord
on or before the 10th day after the date any such payment originally became due.
Tenant shall pay to Landlord a late charge equal to five percent (5%) of any
amount of delinquent Annual Rent or Additional Charges. In addition, interest
shall accrue on any amount of delinquent Annual Rent or Additional Charges at an
annual rate equal to two (2) percentage points (2%) in excess of the annual
interest rate published from time to time in the Wall Street Journal under the
masthead "Money Rates" as the Prime Rate in effect as of the payment due date
(or, if such Prime Rate ceases to be published, a reasonably equivalent index
selected by Landlord) such interest to be adjusted quarterly and to accrue from
the date such amount was originally due until the date such amount is actually
paid.

4.   ADDITIONAL CHARGES
------------------

All taxes, assessments, insurance premiums, charges, costs and
expenses which Tenant assumes or agrees to pay hereunder, together with all
interest and penalties that may accrue thereon in the event of Tenant's failure
to pay the same as herein provided, and all other damages, costs and expenses
which Landlord may suffer or incur, and any and all other sums which may become
due, by reason of any default of Tenant or failure on Tenant's part to comply
with the agreements, terms, covenants and conditions of this Lease on Tenant's
part to be performed shall be referred to herein as "Additional Charges," and,
in the event of their nonpayment, Landlord shall have with respect thereto all
rights and remedies herein provided the same as though Tenant failed to pay
Annual Rent.

5.   NO COUNTERCLAIM OR ABATEMENT OF ADDITIONAL CHARGES
--------------------------------------------------

Except to the extent expressly provided otherwise in this Lease, the
Annual Rent and all Additional Charges payable by Tenant hereunder shall be paid
without notice, demand, counterclaim, setoff, recoupment, deduction or defense
of any kind or nature and without abatement, suspension, deferment, diminution
or reduction, and, except to the extent expressly provided otherwise in this
Lease, the obligations and liabilities of Tenant hereunder shall in no way be
released, discharged or otherwise affected by reason of (i) any damage to or
destruction of any buildings or improvements on the Demised Premises; (ii) any
taking of the Demised Premises

3

or any part thereof, or (iii) any restriction or prevention of or interference
with any use of the Demised Premises or any part thereof not the result of a
breach of this Lease by Landlord.

6.   RENTAL TAXES, UTILITIES, REAL ESTATE TAXES AND MANAGEMENT FEE
-------------------------------------------------------------
MANAGEMENT FEE
--------------

(a)  Any excise, transaction privilege or rental occupancy tax
now or hereafter actually Imposed by any government or governmental agency upon
Landlord on account of, attributed to, or measured by rent or other charges
payable by Tenant to Landlord shall be paid by Tenant to Landlord in addition to
and along with the annual Rent and Additional Charges payable hereunder.

(b)  Tenant shall not be required to pay, or reimburse Landlord
for (i) any local, state or federal capital levy, franchise tax, revenue tax,
income tax, or profits tax of Landlord unless and to the extent such levy, tax
or impost is in lieu of or a substitute for any other levy, tax or impost now or
later in existence upon or with respect to the Demised Premises which, if such
other levy, tax or impost were in effect, would be payable by Tenant under the
provisions hereof, or (ii) any estate, inheritance, devolution, succession or
transfer tax which may be imposed upon or with respect to any transfer (other
than taxes in connection with a conveyance by Landlord to Tenant) of Landlord's
interest in the Demised Premises.

(c)  During the Term, Tenant shall pay prior to delinquency all
taxes assessed against and levied upon fixtures, furnishings, equipment and all
other personal property of Tenant situated on or within the Demised Premises,
and when possible Tenant shall cause said fixtures, furnishings, equipment and
other personal property to be assessed and billed separately from the real
property demised to Tenant. Tenant shall pay and discharge punctually, as and
when the same shall become due and payable without penalty, all business,
occupation and occupational license taxes.

(d)  The City of Tempe requires that Tenant be assessed and pay
a municipal service fee (the "Municipal Service Fee") as hereinafter provided to
reimburse the City for the cost of providing municipal services to the Research
Park. The annual amount of the Municipal Service Fee payable by Tenant shall be
calculated by multiplying the aggregate number of square feet of Floor Area
constructed, or to be constructed, on the Demised Premises from time to time by
the "Multiplier" (determined as set forth below) in effect from time to time.
With regard to new construction of Floor Area, assessment of the Municipal
Service Fee shall commence at the beginning of the calendar quarter following
issuance of a Building Permit. For the fiscal year beginning July 1, 1996, the
Multiplier shall be the amount of $0.08337. Thereafter, the Multiplier shall be
adjusted annually as of each July I ("Adjustment Date") to reflect the
percentage of change in the Metropolitan Phoenix Consumer Price Index as
published by Arizona State University, College of Business, Center for Business
Research ("Index"), for the calendar year ended December 31 immediately
preceding said Adjustment Date as compared to the Index for the calendar year
ended December 31 one year earlier. Annual percentage changes shall be applied
to the Multiplier in effect for the previous year. The Multiplier thus adjusted
shall be rounded to the nearest tenth of a cent. So long as the City of Tempe
requires the assessment of 

4

the Municipal Service Fee, Tenant shall pay to Landlord on a monthly basis, on
or before the first day of each month during the Term, a sum equal to one-
twelfth (1/12th) of the then annual Municipal Service Fee due and payable to the
City of Tempe calculated as set forth above for the Floor Area constructed, or
to be constructed, on the Demised Premises. The term "Floor Area" as used in
this Lease shall have the same meaning as provided in the City of Tempe Building
Code in effect from time to time. The aggregate number of square feet of Floor
Area constructed, or to be constructed, on the Demised Premises shall be the
aggregate amount of Floor Area as set forth on building permits issued by the
City of Tempe to Tenant.

(e)  Landlord represents and warrants to Tenant that, to the
extent of Landlord's actual knowledge, the fee estate of Ground Lessor is
presently exempt from ad valorem taxes, and the leasehold interest of Landlord
as lessee under the Ground Lease is not currently being taxed. In the event of a
change in the law such that said ad valorem tax exempt status of Ground Lessor
is no longer recognized by taxing authorities, or in the event of a change in
the law such that Landlord's possessory interest shall be taxed, then Tenant
shall fully pay and punctually discharge its proportionate share of all
Impositions as and when they are due and payable, as provided in Section 6(g)
below. "Impositions" shall include but are not limited to any and all ad valorem
taxes, assessments (excluding special improvement district assessments) and
other governmental taxes, impositions and charges of every kind and nature
measured or calculated based on the value of the property involved,
extraordinary or ordinary, general or special, unforeseen or foreseen, which at
any time during the Term shall become due and payable by either Ground Lessor or
Landlord.

(f)  In the event any obligation to pay Impositions accrues under
Section 6(e) above and if the Demised Premises constitute a separate tax parcel
for purposes of assessing and levying such Impositions, Tenant shall have the
right to contest the amount or validity of any Impositions by appropriate legal
proceedings, diligently pursued, in the name of Landlord if required by any law,
rule or regulation, provided that (i) Tenant shall first make all contested
payments, under protest if it desires, but if payment under protest is not
permitted by the taxing authority, such contested payment need not be made, (ii)
neither the Demised Premises, any part thereof, nor any interest therein shall
be in any danger of being sold, forfeited, lost or interfered with, (iii) Tenant
shall have furnished such security, if any, as may be required in the
proceedings or reasonably requested by Landlord, and (iv) all expenses incurred
in connection with such proceedings shall be paid by Tenant.

(g)  In the event any obligation to pay Impositions accrues under
Section 6(e) above and if the Demised Premises are not separately assessed, but
are part of a larger tract or parcel for assessment purposes, then Tenant shall
pay to Landlord Tenant's proportionate share of such Impositions determined as
follows:

(i)  With respect to any ad valorem taxes on the land
area of the larger land parcel including the Demised Premises, but not
with respect to special or extraordinary assessments, Tenant shall pay
that portion of such taxes which the total number of square feet of
land area within the Demised Premises bears to the number of square
feet of land area within such larger land parcel.

5

(ii)  With respect to any special or extraordinary
assessments on the larger land parcel including the Demised Premises,
Tenant shall pay only that portion of such assessments which would have
been levied upon the Demised Premises had the Demised Premises been
separately assessed based upon the methods of assessments utilized for
such assessments.

Tenant shall pay such sums to Landlord within thirty (30) days of the receipt of
a written statement from Landlord indicating the amount of such Impositions as
so determined and showing in reasonable detail the manner in which such
Impositions were determined. Landlord, upon Tenant's request, shall furnish
Tenant, within twenty (20) days thereafter, proof of Landlord's payment of said
Impositions. However, in no event shall Tenant be required to make such payments
more than fifteen (15) days in advance of the date such payments would be
delinquent if they were to be made directly to the taxing authorities. The right
to contest Impositions attributable to the Demised Premises, if not a separate
tax parcel, shall initially belong to Landlord but may be exercised by Tenant at
its own expense if Landlord fails to contest any Imposition after written
request from Tenant to do so.

(h)  Landlord represents and warrants to Tenant that: (i) this
Lease is issued on lands owned by the Arizona Board of Regents; and (ii) the
Demised Premises is part of a "Research Park" as such term is now defined in
A.R.S. (S) 35-701. In the event any existing or future property classification
or assessment ratio which treats the Demised Premises and the Improvements to be
constructed thereon more favorably for property tax purposes than they otherwise
might be treated is lost or is no longer applicable due to the occurrence of an
event or condition within the reasonable control of Landlord or Ground Lessor,
then the Landlord shall be responsible for that portion of the Impositions (as
defined in Section 6(e)) thereafter measured by the value of the Land, and
Tenant shall be responsible for that portion of the Impositions measured by the
value of the Improvements, and title to the Improvements shall automatically
revert to Tenant unless Tenant, at its sole option exercisable within one
hundred twenty (120) days after Tenant learns of the loss of the favorable
property classification or assessment ratio, elects that title to the
Improvements shall remain with the Ground Lessor. The parties agree that a
change in the law regarding the taxation of interests in land or improvements
located within the Research Park shall not be deemed to be an event or condition
within the reasonable control of Landlord or Ground Lessor except as otherwise
provided in the preceding paragraph.

(i)  All entrance and exit areas, open space, landscaped space,
easements, lighting, street furniture, water bodies, jogging paths, pedestrian
walkways, bicycling paths, equestrian trails, parking areas, and other similar
facilities furnished by Landlord in the Research Park (hereinafter referred to
collectively as "Common Area") are dedicated public easements for said purposes
and shall at all times be subject to the joint control and management of
Landlord and the City of Tempe, and Landlord shall have the right from time to
time to establish, modify and enforce reasonable non-discriminatory rules and
regulations with respect to the same as long as they do not materially interfere
with Tenant's normal conduct of its business on the Demised Premises. Landlord
shall have the right to construct, maintain and operate lighting facilities on
all said Common Area; to police the same; from time to time to change the area,
grade, location and arrangement thereof; to confine to the Demised Premises all
parking by

6

Tenant, its officers, agents, customers and employees; to close temporarily all
or any portion thereof, and to do and perform such other acts in and to said
area as in Landlord's judgment is reasonably advisable as long as such does not
unreasonably affect Tenant's use and enjoyment of the Demised Premises. Landlord
is contractually bound to the City of Tempe to operate and maintain the Common
Area and will do so in such a manner as the common areas in similar first-class
business and industrial parks located in the southwestern United States are
operated and maintained.

(j)  Subject to the standards as provided in Section 6(i) above,
the term "Common Area Expenses" as used herein shall mean all sums expended by
Landlord and Ground Lessor in connection with the operation, maintenance, repair
or replacement of the Common Area, including premiums paid for adequate public
liability and property damage insurance (which insurance Landlord is hereby
required to maintain throughout the Term); provided, however, that Common Area
Expenses shall not include Landlord's overhead, administrative and general
office expenses except as may be incurred relative to persons directly employed
to perform Common Area operation, maintenance, repair or replacement services,
expense for any work which Landlord performs for any other tenant of the
Research Park, expenses for repairs or other work to correct original
construction defects or occasioned by condemnation or by fire, windstorm, or
other insurable casualty, expenses incurred in leasing or procuring new tenants
for the Research Park, legal expenses incurred in enforcing the terms of any
lease pertaining to the Research Park, interest or amortization payments on any
mortgage or deed of trust pertaining to the Research Park, gross or net income
taxes imposed on Landlord or on any rental revenue received by Landlord,
expenses directly payable by any tenant of the Research Park, any costs, fines
and the like due to Landlord's violation of any governmental rule or regulation;
or the cost of any items for which Landlord is reimbursed by third parties, but
only to the extent of such reimbursement. Any Common Area Expenses that are
required to be capitalized, in accordance with generally accepted accounting
principles, shall be amortized and charged in accordance with generally accepted
accounting practices. Only the annual amortized amounts of any such expenses
shall be included in Common Area Expenses. The cost of any capital improvements
not in repair or replacement of existing improvements shall not be included in
Common Area Expenses. Landlord may cause any or all of said operation and
management responsibilities to be performed by an independent contractor or
contractors. Tenant shall pay to Landlord Tenant's pro rata share of such Common
Area Expenses in the following manner:

(1)  Commencing on the Rent Commencement Date, and
thereafter on the first day of each calendar month of the Term, Tenant
shall pay to Landlord an amount estimated by Landlord to be Tenant's
share of Common Area Expenses. Landlord may adjust the monthly Common
Area charge of Tenant at the end of any calendar quarter on the basis
of Landlord's experience and reasonably anticipated costs.

(2)  Prior to the expiration of each year, Landlord shall
deliver to Tenant a statement covering the fiscal year of Landlord just
expired, certified as correct by an authorized but independent
representative of Landlord, showing the Common Area Expenses for such
fiscal year, the amount of Tenant's pro rata share of such expenses for

7

such fiscal year and the payments made by Tenant with respect to such
fiscal year as set forth in subparagraph (1) immediately above. If
Tenant's pro rata share of such Common Area Expenses exceeds Tenant's
payments so made, Tenant shall pay Landlord the deficiency within
thirty (30) days after receipt of such statement. If said payments
exceed Tenant's pro rata share of such Common Area Expenses, Landlord
shall refund the excess to Tenant within thirty (30) days following
delivery of the aforesaid statement. If Landlord fails to furnish
Tenant the required statement as provided herein, Landlord shall be
deemed to have waived any right to payment from Tenant for any Common
Area Expenses for the preceding fiscal year in excess of that
previously paid by Tenant for such fiscal year.

(3)  Tenant's pro rata share of the Common Area Expenses
shall be that portion of all such expenses which the number of square
feet of land area within the Demised Premises bears to the total number
of square feet of leaseable land area within the Research Park
(presently 9,010,380 square feet) which is from time to time under
lease; provided, however, the latter number shall never be less than
90% (presently 8,109,342 square feet) of the total number of square
feet of leaseable land area within the Research Park. There shall be an
appropriate adjustment of Tenant's share of the Common Area Expenses as
of the expiration of the Term of this Lease.

(k)  Landlord shall save, hold harmless and indemnify Tenant from
and against all liabilities, obligations, claims, suits, damages, penalties,
causes of action, costs and expenses (including without limitation, reasonable
attorneys' fees and expenses) imposed or asserted against Tenant by reason of
any accident, injury to or death of persons, or loss or damage to property
occurring on the Common Areas to the extent the same is a result of the
negligence of Landlord or its agents, servants, contractors or employees.

(l)  Tenant shall pay and discharge punctually all charges for
utility services used by it.

7.   USE OF DEMISED PREMISES
-----------------------

Landlord hereby consents to and Tenant may only use the Demised
Premises for those uses described in the Fundamental Lease Provisions
("Permitted Uses"). Tenant represents, warrants and covenants to Landlord that
the Demised Premises shall be used only for Permitted Uses.

8.   CONSTRUCTION BY TENANT
----------------------

(a)  Tenant shall construct a building on the Demised Premises,
consisting of approximately 97,963 square feet of Floor Area. Such construction,
which is subject to Tenant's compliance with the Restrictions, shall commence
within one (1) year from final Plan approval as set forth in said Restrictions.
Submittals toward Plan approval shall promptly commence.

8

(b)  Plan submittals as well as construction in connection with
any Improvements, once commenced, and all required reviews by Landlord, shall be
diligently pursued to substantial completion. Attached hereto as Exhibit C is a
listing of documents constituting Tenant's "Preliminary Plan Package." All
further plan or driveway submittals required by the Restrictions will be
approved by Landlord so long as they are substantially consistent with the
Preliminary Plan Package. Tenant, at its expense and subject to compliance with
the Restrictions and all applicable building regulations, may from time to time
remodel or demolish any Improvements, or construct other Improvements on the
Demised Premises and remodel or demolish such other Improvements. Tenant may
construct, remodel, or demolish the interior of the Improvements as it may
desire from time to time and nothing in the Restrictions shall be construed to
require any approval of Landlord with respect thereto.

9.   INFRASTRUCTURE ASSESSMENT
-------------------------

Tenant shall pay to Landlord upon execution of this Lease an
infrastructure assessment of $248,490.61 as Tenant's share of Landlord's cost of
constructing and installing on and off-site infrastructure facilities which
serve or will serve the Demised Premises in common with other premises.

10.  MAINTENANCE AND REPAIRS
-----------------------

Tenant shall at all times during the Term keep and maintain in good
order and repair the Land as well as the exterior of all Improvements, howsoever
the necessity or desirability of maintenance or repairs may occur. Tenant waives
any right created by any law now or hereafter in force to maintain or make
repairs to any portion of the Demised Premises at Landlord's expense, it being
understood that neither Ground Lessor nor Landlord shall in any event be
required to maintain or make any alterations, rebuildings, restorations,
replacements, changes, additions, improvements or repairs to the Demised
Premises. Nothing in the Lease shall be construed to require the Tenant to
maintain the interior of the Improvements beyond the extent necessary to comply
with applicable laws.

11.  REGULATORY REQUIREMENTS
-----------------------

(a)  Tenant shall promptly observe and comply with all present
and future laws, ordinances, requirements, orders, directions, rules and
regulations of all governmental authorities having or claiming jurisdiction over
the Demised Premises or any part thereof and of all insurance companies writing
policies covering the Demised Premises or any part thereof Without limiting the
generality of the foregoing, Tenant shall also procure each and every permit,
license, certificate or other authorization required in connection with the
lawful and proper use of the Demised Premises or required in connection with any
building or improvement now or hereafter erected thereon.

(b)  Tenant covenants and agrees to pay all costs and expenses
associated with enforcement, removal, remedial or other governmental or
regulatory actions, agreements or orders threatened, instituted or completed
pursuant to any Hazardous Materials Laws, and all audits, tests, investigations,
cleanup, reports and other such items incurred in

9

connection with any efforts to complete, satisfy or resolve any matters, issues
or concerns, whether governmental or otherwise, arising out of or in any way
related to the use, generation, release, management, treatment, manufacture,
storage or disposal of, on, under or about, or transport to or from (any of the
foregoing hereinafter a "Use") the Demised Premises of any Hazardous Materials
in any amount by Tenant, its employees, agents, invitees, subtenants, licensees,
assignees or contractors. For purposes of this Lease (1) the term "Hazardous
Materials" shall include but not be limited to asbestos, urea formaldehyde,
polychlorinated biphenyls, oil, petroleum products, pesticides, radioactive
materials, hazardous wastes, toxic substances and any other related or
dangerous, toxic or hazardous chemical, material or substance defined as
hazardous or regulated or as a pollutant or contaminant in, or the Use of or
exposure to which is prohibited, limited, governed or regulated by, any
Hazardous Materials Laws; and (2) the term "Hazardous Materials Laws" shall mean
any federal, state, county, municipal, local or other statute, law, ordinance or
regulation now or hereafter enacted which may relate to or deal with the
protection of human health or the environment, including but not limited to the
Comprehensive Environment Response, Compensation and Liability Act of 1980, 
42 U.S.C. Section 9601, et seq.; the Hazardous Materials Transportation Act, 
--         
49 U.S.C. Section 1801, et seq.; the Resource Conservation and Recovery Act, 
--
42 U.S.C. Section 6901, et seq.; the Federal Water Pollution Control Act, 
--
33 U.S.C. Section 1251, et seq. the Toxic Substances Control Act of 1976, 
--
15 U.S.C. Section 2601, et seq.; Ariz. Rev. Stat. Ann., Title 49 (the "Arizona
--
Environmental Quality Act of 1986"); and any rules, regulations or guidelines
adopted or promulgated pursuant to any of the foregoing as they may be amended
or replaced from time to time.

(c)  Upon reasonable advance notice to Tenant, Landlord shall
have the right, from time to time during Tenant's regular business hours, to
enter upon and, as accompanied by a representative of Tenant, inspect the
Demised Premises for purposes of satisfying itself as to whether Tenant is in
compliance with the requirements of Section 11 (a) above.

(d)  Tenant acknowledges that Landlord has provided to Tenant an
environmental assessment report on the Research Park (excluding Lots 3, 4, 8, 9,
10, 11, 12, 19, 32, 39, 42 and 44) prepared by Foree & Vann, Inc., dated October
13, 1993 ("Report"). Except as otherwise disclosed in said Report, Landlord, to
the extent of its current actual knowledge, knows of no Hazardous Materials
contamination of the Research Park or the Demised Premises.

(e)  Landlord covenants and agrees to pay all costs and expenses
associated with enforcement, removal, remedial or other governmental or
regulatory actions, agreements or orders threatened, instituted or completed
pursuant to any Hazardous Materials Laws, and all audits, tests, investigations,
cleanup, reports and other such items incurred in connection with any efforts to
complete, satisfy or resolve any matters, issues or concerns, whether
governmental or otherwise, arising out of or in any way related to the Use of
Hazardous Materials in any amount by Landlord, its employees, agents, invitees,
predecessors in interest, licensees, assignees or contractors.

10

(f)  Landlord covenants and agrees diligently to enforce against
other tenants of the Research Park those provisions of applicable tenant leases
which pertain to Hazardous Materials and Hazardous Materials Laws.

12.  INDEMNIFICATION
---------------

(a)  Except to the extent caused by the gross negligence of
Ground Lessor or Landlord, or their agents, contractors, servants or employees,
Tenant shall save, hold harmless and indemnify Ground Lessor, Landlord and their
agents, employees and contractors performing management functions for the
Research Park from and against all liabilities, obligations, claims, causes of
action, suits, damages, penalties, assessments, taxes, fees, costs and expenses
(including without limitation, reasonable attorneys' fees and expenses) imposed
upon or asserted against Ground Lessor or Landlord by reason of (i) any use,
nonuse or condition of the Demised Premises or any part thereof, (ii) any
accident, injury to or death of persons (including workmen) or loss of or damage
to property occurring on the Demised Premises or any part thereof, (iii) any
failure on the part of Tenant to perform or comply with any of the terms of this
Lease, (iv) performance of any labor or services or the furnishing of any
materials or other property in respect of the Demised Premises or any part
thereof by, on behalf of or at the request of Tenant, (v) any accident, injury
to or death of persons (including workmen) or loss of or damage to property
arising from or in any way related to construction of the Improvements, (vi) any
failure on the part of Tenant to comply with any of the matters set forth in
Section 7 and Section I 1; and (vii) any violation or breach by Tenant of the
Restrictions or the Declaration of Height Limitations referred to in Section 48
below.

(b)  Landlord shall save, hold harmless and indemnify Tenant and
its agents, employees and contractors from and against all liabilities,
obligations, claims, suits, damages, penalties, costs and expenses (including
without limitation, reasonable attorneys' fees and expenses) imposed upon or
asserted against Tenant by reason of (i) the gross negligence of Landlord or its
agents, contractors, servants or employees, or (ii) any failure on the part of
Landlord to perform or comply with any of the terms of this Lease including any
failure on the part of Landlord to comply with any of the matters set forth in
Section I1.

(c)  In the event any indemnified party should be made a
defendant in any action, suit or proceeding brought by reason of any act or
omission of the indemnifying party, the indemnifying party shall at its own
expense resist and defend such action, suit or proceeding by counsel reasonably
approved by the indemnified party. If any such action, suit or proceeding should
result in a final judgment against the indemnified party, the indemnifying party
shall promptly satisfy and discharge such judgment or shall cause such judgment
to be promptly satisfied and discharged. The obligations of the indemnifying
party under this Section arising by reason of any such occurrence taking place
while this Lease is in effect shall survive any termination of this Lease

11

13.  INSURANCE
---------

(a)  Without limiting Tenant's indemnify obligations set forth in
this Lease (but subject to the waiver of subrogation provided in Section 13(c)
below), Tenant shall, at its sole cost and expense, procure and maintain
throughout the Term commercial general liability insurance in the amount of
$10,000,000 combined single limit (CSL).

(b)  All policies of insurance required under Section 13 (a)
above will name the Ground Lessor and Landlord and its managing agent(s) as
additional insureds, and certificates thereof will be delivered to Landlord
within ten (10) days after delivery of possession of the Demised Premises to
Tenant and within 30 days prior to the expiration of the term of each policy.
All policies of insurance required hereunder must contain a provision that the
insurance carrier will notify in writing the insured and Landlord thirty (30)
days in advance of any cancellation or lapse or the effective date of a
reduction in the amount of insurance. All policies of insurance required
hereunder shall be written as primary policies. The Tenant further covenants and
agrees to increase liability insurance in additional amounts as Landlord may
reasonably require. All policies of insurance required hereunder shall be issued
by responsible insurance companies qualified to do business in the State of
Arizona with a Best's Rating Guide rating of at least A-Class VIII.

(c)  In the event any liability indemnified against under 
Section 12 or elsewhere in this Lease is also insured against under Section 13
or otherwise, the indemnification obligation shall only extend to the portion of
the liability exceeding the amount of insurance proceeds, if any, received by
the party being indemnified, the parties hereby waiving all rights of
subrogation to the extent permitted by any applicable insurance policies.

(d)  Tenant may procure, but shall not be required to procure,
property damage and/or casualty insurance. In the event Tenant does so, Tenant
shall be the sole owner thereof and Landlord shall have no interest or rights
therein.

14.  LIENS
-----

(a)  Tenant shall have no power to do any act or make any
contract which may create or be the basis for any lien, mortgage or other
encumbrance upon the interest of Landlord in the Demised Premises. Under no
circumstances shall the interest of Ground Lessor in and to the Demised Premises
be subject to any such lien, mortgage or other encumbrance.

(b)  If, because of any act or omission or alleged act or
omission of Tenant, any mechanics', materialmen's or other lien, charge or order
for the payment of money shall be filed or recorded against Ground Lessor,
Landlord or the Demised Premises (whether or not such lien, charge or order is
valid or enforceable as such), Tenant shall, at its own expense, cause the same
to be released and discharged of record within thirty (30) days after Tenant
shall have received notice of the filing or recording thereof, or Tenant may,
within said period, record a surety bond pursuant to Section 33-1004, Arizona
Revised Statutes, in the case of a mechanics' or materialmen's lien, or furnish
to Landlord a bond satisfactory to Landlord against any other

12

lien, charge or order, in which case Tenant shall have the right in good faith
to contest the validity or amount thereof

15.  DAMAGE OR DESTRUCTION
---------------------

In the event any portion of the Demised Premises is damaged by fire or
any other peril, Tenant, at its election, either (a) shall promptly commence and
proceed diligently with the work of restoring the same, or (b) shall raze all
damaged Improvements and return the Demised Premises to their condition
preceding execution of this Lease. If Tenant elects to do the latter, Tenant may
terminate this Lease upon completion by Tenant of such work.

16.   EMINENT DOMAIN
--------------

(a)  If the whole of the Demised Premises shall be taken or
condemned under the right of eminent domain or if such a substantial part of the
Demised Premises shall be taken as shall result in the portion remaining being
unsuitable for the use being made thereof at the time of such taking, then this
Lease shall terminate as of the date upon which title shall vest in such
condemning authority. The net awards or payments on account of any taking shall
be apportioned as follows:

(i)  Ground Lessor shall receive that portion of the award
attributable to the value of the Land.

(ii) Tenant shall receive that portion of the award
attributable to the value of the Improvements.

(b)  If only a part of the Demised Premises shall be so taken
or condemned and the part not so taken can, in Tenant's reasonable judgment, be
adapted for the use then being made thereof, this Lease shall remain in full
force and effect without any abatement or reduction in rent except as provided
in Section 16(c), and Tenant, whether or not its portion of the awards or
payments, if any, on account of such taking shall be sufficient for the purpose,
at its own expense shall promptly commence and complete the restoration of the
Improvements on the Demised Premises as nearly as possible to their value,
condition and character immediately prior to such taking or condemnation. Tenant
shall have no entitlement to any rent reduction for any taking or condemnation
of Land which does not result in a reduction in the net square footage of the
Demised Premises.

(c)  In the event that a taking or condemnation results in a
reduction of the net square footage of the Land, the Annual Rent and Additional
Charges payable by Tenant hereunder shall be reduced, effective as of the date
of Tenant's loss of use thereof, by a fraction the numerator of which shall be
the total reduction in the net square footage of the Land and the denominator of
which shall be the total net square footage of the Land as originally set forth
in the Fundamental Lease Provisions.

(d)  If the award or payments on account of any taking shall
not be divided or apportioned by the court or the condemning authority into the
portions set forth in 

13

Section 16(a), and if Landlord and Tenant shall be unable to agree on such
apportionment, then such apportionment shall be determined by appraisers.
Landlord and Tenant shall each appoint an appraiser, and the two appraisers so
appointed shall promptly appoint a third appraiser. Within thirty (30) days
after the appointment of the third appraiser, the two appraisers appointed by
Landlord and Tenant shall each determine and report to the third appraiser the
appropriate apportionment. Within ten (10) days thereafter, the third appraiser
shall determine which of the two apportionments determined by the appraisers
appointed by Landlord and Tenant is the more appropriate apportionment and the
apportionment chosen by the third appraiser shall be binding upon the parties.
All appraisers shall be members of the American Institute of Real Estate
Appraisers (M.A.I.) or, if such Institute shall not then exist, members of its
successor organization or an organization of substantially equivalent stature.
The fees of the appraisers shall be borne equally by Landlord and Tenant.

17.  DEFAULTS AND REMEDIES
---------------------

(a)  The occurrence of any one or more of the following events
shall constitute a "Default" hereunder by Tenant:

(1)  The failure by Tenant to make any payment of Annual
Rent or any Additional Charges required to be paid by Tenant hereunder on
the date such payment was due (and expiration if any applicable grace
period), where such failure shall continue for a period of thirty (30) days
after written notice thereof from Landlord to Tenant.

(2)  The failure by Tenant or any sublessee of Tenant to
observe or perform the covenant set forth in Section 7 where such failure
shall continue for a period of sixty (60) days after written notice thereof
from Landlord to Tenant.

(3)  The failure by Tenant to observe or perform any express
or implied covenant or provision of this Lease to be observed or performed
by Tenant, other than as specified in (1) and (3) above, where such failure
shall continue for a period of sixty (60) days after written notice thereof
from Landlord to Tenant; provided, however, that if the nature of Tenant's
default is such that it is capable of being cured but more than sixty (60)
days are reasonably required for its cure, then Tenant shall not be deemed
to be in Default if Tenant shall commence such cure within said sixty (60)
day period and thereafter diligently prosecute such cure to completion.

(b)  In the event of a Default by Tenant, in addition to any
other remedies available to Landlord at law or in equity, Landlord may, without
notice or demand of any kind to Tenant, have any one or more of the following
described remedies:

(1)  Landlord shall have the right, at its election, to
reenter the Demised Premises, or any part thereof, either with or without
process of law, and to expel, remove and put out Tenant and persons
occupying the Demised Premises under Tenant, using such force as may be
necessary in so doing, to take full possession of and control over the
Demised Premises and to have, hold and enjoy the same and to receive all

14

rental income of and from the same. No reentry by Landlord shall be deemed
an acceptance of a surrender of this Lease, nor shall it absolve or
discharge Tenant from any liability under this Lease. No reentry by
Landlord shall be deemed to effect a termination of this Lease unless so
stated by Landlord in a written notice delivered to Tenant.

(2)  Landlord shall have the right, at its election, with or
without reentry as provided in subparagraph (1) immediately above, to give
written notice to Tenant stating that this Lease and the Term hereby
demised shall terminate on the date specified by such notice, and upon the
date specified in such notice this Lease and the Term hereby demised and
all rights of Tenant hereunder shall terminate. Upon such termination,
Tenant shall quit and peacefully surrender to Landlord the Demised Premises
and the Improvements then situated hereon.

(3)  At any time and from time to time after such reentry,
Landlord may relet the Demised Premises, or any part thereof, in the name
of Landlord or otherwise, for such term or terms (which may be greater or
less than the period which would otherwise have constituted the balance of
the Term of this Lease), and on such conditions (which may include
concessions or free rental) as Landlord, in its reasonable discretion, may
determine and may collect and receive the rental therefor. However, in no
event shall Landlord be under any obligation to relet the Demised Premises
or any part thereof, and Landlord shall in no way be responsible or liable
for any failure to relet or for any failure to collect any rental due upon
any such reletting. Even though it may relet the Demised Premises, Landlord
shall have the right thereafter to terminate this Lease and all of the
fights of Tenant in or to the Demised Premises.

(4)  Unless Landlord shall have notified Tenant in writing
that it has elected to terminate this Lease, no such reentry or action in
lawful detainer or otherwise to obtain possession of the Demised Premises
shall relieve Tenant of its liability and obligations under this Lease; and
all such liability and obligations shall survive any such reentry. In the
event of any such reentry, whether or not the Demised Premises, or any part
thereof, shall have been relet, Tenant shall pay to Landlord the entire
rental and all other charges required to be paid by Tenant up to the time
of such reentry of this Lease, and thereafter Tenant, until the end of what
would have been the Term of this Lease in the absence of such reentry,
shall be liable to Landlord, and shall pay to Landlord, as and for
liquidated and agreed damages for Tenant's Default:

(i)  The amount of Annual Rental and Additional Charges
which would be payable under this lease by Tenant if this Lease were
still in effect, less

(ii) The net proceeds of any reletting, after deducting
all of Landlord's reasonable expenses in connection with such
reletting, including without limitation all reasonable repossession
costs, brokerage commissions, legal expenses, attorneys' fees,
alteration and repair costs and expenses of preparation for such
reletting.

15

Tenant shall pay such damages to Landlord monthly as and when payments of Annual
Rent are due, and Landlord shall be entitled to recover from Tenant monthly as
the same shall arise. Tenant shall be liable for such damages on a monthly
basis, where or not in any prior year or years the net proceeds described in
subparagraph (ii) above shall have exceeded the Annual Rent and Additional
Charges described in subparagraph (i) above.

(5)  In the event of any breach or threatened breach by
Tenant of any of the terms, covenants or agreements contained in this
Lease, Landlord shall have, in addition to any specific remedies provided
in this Lease, the right to invoke any right or remedy allowed by law or in
equity or by statute or otherwise, including the right to enjoin such
breach or threatened breach.

(6)  Each right and remedy of Landlord provided for in this
Lease shall be cumulative and in addition to every other right or remedy
provided for in this Lease or now or hereafter existing at law or in equity
or by statute or otherwise; and the exercise or beginning of the exercise
by Landlord of any one or more of such rights or remedies shall not
preclude the simultaneous or later exercise by Landlord of any or all other
rights or remedies provided for in this Lease or now or hereafter existing
at law or in equity or by statute or otherwise.

(c)  No waiver or breach of any term of this Lease shall be
construed as a waiver of any succeeding breach of the same or any other term.

18.  ASSIGNMENT AND SUBLETTING
-------------------------

(a)  Tenant shall not, either voluntarily or by operation of law,
sell, hypothecate or transfer this Lease, or sublet the Demised Premises or any
part thereof, or permit the Demised Premises or any part thereof to be occupied
by anyone other than Tenant or Tenant's employees or invitees (all of the
foregoing collectively referred to in this Section 18 as an "Transfer"), without
providing Landlord at least 30 days advance notice of such Assignment and
without the prior written consent of Landlord, such consent not to be
unreasonably withheld.

(b)  No Transfer, even with the consent of Landlord, shall
relieve Tenant of its obligation to pay the Annual Rent and the Additional
Charges and to perform all the other obligations to be performed by Tenant
hereunder. The acceptance by Landlord of any payment of Annual Rent or
Additional Charges from any other person shall not be deemed to be a waiver by
Landlord of any provision of this Lease or to be a consent to any Assignment.

(c)  Each Transfer shall be by a written instrument executed by
the assignor, sublessor or transferor, and by which the assignee, sublessee or
transferee shall agree in writing for the benefit of Landlord: (i) if a
sublessee, to abide by and in its use and occupancy of the Demised Premises to
comply with the terms and conditions of this Lease, or (ii) if an assignee of
Tenant's interest, to assume, to be bound by, and to perform the terms,
covenants and conditions of this Lease to be done, kept and performed by Tenant.
One executed copy of such written instrument shall be delivered to Landlord.

16

(d)  Tenant has informed Landlord that Tenant is negotiating to
sublet all or a portion of the Demised Premises to ASM Lithography, Inc. Tenant
represents and warrants to Landlord that ASM Lithography, Inc. intends to use
the Demised Premises for the following purposes: United States corporate
headquarters, research and development and training facility. Based upon the
foregoing representation, Landlord confirms that the foregoing described use is
a "Permitted Use" under this Lease as well as a "Statutory Use" (as that term is
defined in Article 38 below).

19.  HYPOTHECATION OF LEASEHOLD ESTATE
---------------------------------

(a)  Tenant is hereby given the right, at any time and from time
to time, to mortgage its leasehold estate in the Demised Premises (but in no
event the fee or Landlord's leasehold estate), provided that any such leasehold
mortgage shall be subject and subordinate to the rights of Landlord hereunder.
As used in this Section and throughout this Lease, the noun "mortgage" shall
include a deed of trust, the verb "mortgage" shall include the creation of a
deed of trust, the word "mortgagee" shall include the beneficiary under a deed
of trust, and the terms "foreclose" or "foreclosure" shall include a trustee's
sale under a deed of trust as well as a foreclosure by judicial process.

(b)  If a mortgagee shall have given Landlord, before any Default
shall have occurred hereunder, a written notice specifying the name and mailing
address of the mortgagee, then Landlord shall not terminate this Lease by reason
of the occurrence of any Default hereunder unless Landlord shall have given the
mortgagee a copy of its notice to Tenant of such Default addressed to the
mailing address last furnished by the mortgagee, and such Default shall not have
been cured by said mortgagee as provided in Sections 19 (c) or 19 (d) below.

(c)  Tenant irrevocably directs that Landlord accept, and
Landlord agrees to accept, performance by any such mortgagee of any term,
covenant, agreement, provision, condition or limitation on Tenant's part to be
performed or observed as though performed or observed by Tenant, provided such
performance by said mortgagee shall occur within the time prescribed therefor in
this Lease, plus an additional grace period of thirty (30) days thereafter or,
if said Default is curable but not within said thirty (30) day period, then
within such additional time as may be necessary to cure the same provided the
mortgagee commences the curing thereof within such thirty (30) day period and
thereafter prosecutes the curing of such Default to completion with all due
diligence; provided, however, with respect to any Default hereunder which cannot
be cured by said mortgagee until it obtains possession of the Demised Premises,
the provisions of Section 19 (d) shall apply.

(d)  In the event of a Default by Tenant under this Lease which
annot be cured by a mortgagee without first obtaining possession of the Demised
Premises, then, and notwithstanding any other provision contained in this Lease,
Landlord shall not terminate this Lease by reason of such Default if (i) said
mortgagee, within the thirty (30) day grace period set forth in Section 19(c)
shall have commenced, and thereafter diligently proceeds with, an appropriate
proceeding to foreclose such mortgage or otherwise obtains possession of the

17

Demised Premises, and (ii) said mortgagee shall have cured such Default within
30 days following its obtaining possession of the Demised Premises (or, if said
Default is curable but not within said thirty [30] day period, then within such
additional time as may be necessary to cure the same provided the mortgagee
commences the curing thereof within such thirty [30] day period and thereafter
prosecutes the curing of such Default to completion with all due diligence).

(e)  During the pendency of any foreclosure proceedings,
mortgagee shall fully perform all the obligations of Tenant under this Lease
that can be performed by such mortgagee without possession of the Demised
Premises (including, but not limited to, payment of all Rent, all Additional
Charges, and any and all other monies due and payable by Tenant hereunder)-
provided, however, that if such mortgagee obtains possession of the Demised
Premises during the time that it is enforcing its foreclosure remedy or as a
result thereof, then such mortgagee shall perform fully all of Tenant's
obligations under this Lease. In the event such mortgagee or any purchaser at a
judicial or non-judicial foreclosure sale ("purchaser") acquires title to the
leasehold estate through such a foreclosure proceeding, or otherwise, it shall
thereupon become subrogated to all the rights of the Tenant under this Lease
whereupon:

(i)  Tenant shall have no further right hereunder; and

(ii) Such mortgagee or purchaser shall forthwith be
obligated to assume and perform each and all of Tenant's obligations
and covenants hereunder.

(f)  In the event such mortgagee or purchaser acquires title to
the leasehold estate of Tenant, then, at any time thereafter when said mortgagee
or purchaser is not then in default under this Lease, Landlord shall, upon
written request of mortgagee or purchaser deliver a new lease of the Demised
Premises to mortgagee or purchaser. The new lease (whether it be granted to the
mortgagee or purchaser) shall have a term equal to the remainder of the Term of
this Lease and shall be upon the terms and conditions herein contained, except
for requirements which are no longer applicable or have already been performed.
Mortgagee or purchaser shall have the right to a new lease as set forth above
provided that mortgagee or purchaser shall reimburse Landlord for all of
Landlord's expenses, including reasonable attorneys' fees, incident to such
efforts.

(g)  Upon the written request of any mortgagee or prospective
mortgagee, and for the benefit of said mortgagee or its nominee, Landlord will
promptly deliver to said mortgagee a certificate setting forth the matters set
forth in Section 21.

(h)  Notwithstanding anything to the contrary contained in this
Section 19, the mortgagee, on or after acquiring ownership of Tenant's leasehold
estate, may assign this Lease without the necessity of obtaining Landlord's
consent and, upon any such assignment, provided such assignee shall assume and
agree to perform and be bound by all of the terms hereof, be released from all
liability hereunder except for obligations occurring during its ownership of
said leasehold estate.

18

20.  SUBORDINATION
-------------

(a)  This Lease shall be subject and subordinate at all times to
the Ground Lease, and to the lien of any mortgages or deeds of trust in any
amount or amounts whatsoever now or hereafter placed on or against the Demised
Premises, the Ground Lease, or Landlord's leasehold estate in this Lease without
the necessity of the execution and delivery of any further instruments on the
part of Tenant to effectuate such subordination; provided, however, that so long
as no Default exists, the terms of this Lease shall not be affected by
termination proceedings in respect to the Ground Lease or by foreclosure or
other proceedings under such mortgages or deeds of trust, Tenant hereby
agreeing, at the written request of the Ground Lessor, or the purchaser in such
foreclosure or other proceedings, to attorn to the Ground Lessor, or to such
purchaser, as applicable (provided the Ground Lessor or such purchaser agrees to
recognize Tenant's leasehold estate and not disturb Tenant's tenancy so long as
Tenant is not in Default under any of the terms, covenants or conditions of this
Lease), or, at Ground Lessor's or such purchaser's option, as the case may be,
to enter into a new lease for the balance of the term hereof upon the same terms
and provisions as are contained in this Lease. Notwithstanding the foregoing,
Tenant shall execute and deliver such further instrument or instruments
evidencing such subordination of this Lease to the Ground Lease, or the lien of
any such mortgage or mortgages or deeds of trust as may be requested by Landlord
within twenty (20) days from Tenant's receipt of such request provided such
instrument also evidences Tenant's rights of recognition and non-disturbance.

(b)  Any transfer by Landlord of its leasehold estate under this
Lease shall be subject to the rights and obligations of Tenant hereunder; and
Tenant shall attorn to Landlord's transferee. Upon any such transfer and the
assumption of liability therefor by Landlord's transferee, and written notice of
such transfer to Tenant, Landlord shall be and is hereby entirely freed and
released of all liability under any and all of its covenants and obligations
contained in or derived from this Lease arising out of any act or omission
related to the Project or this Lease occurring after the consummation of such
transfer.

(c)  To evidence the agreements set forth in paragraphs (a) and
(b) above, simultaneously with the execution of this Lease, Ground Lessor,
Landlord and Tenant shall execute and record a Recognition, Non-Disturbance and
Attornment Agreement in the form of Exhibit D attached hereto.

21.  ESTOPPEL CERTIFICATE
--------------------

(a)  Upon receipt of a written request from the other, Landlord
and Tenant shall each, from time to time, and within twenty (20) days from
receipt of such request, execute, acknowledge and deliver a statement in writing
(i) certifying that this Lease is unmodified and in full force and effect (or,
if modified, stating the nature of such modification and certifying that this
Lease as so modified, is in full force and effect) and the dates to which the
rental and other charges are paid in advance, if any, and (ii) acknowledging
that there are not, to its knowledge, any uncured defaults on the part of the
other hereunder, or specifying such defaults 

19

if any are claimed. Any such statement may be relied upon by a prospective
purchaser or encumbrance of all or any portion of an estate in the Demised
Premises.

(b)  Failure to deliver such statement within such time shall be
conclusive (i) that this lease is in full force and effect, without modification
except as may be represented by the party requesting the certificate, (ii) that
there are no uncured defaults in performance by the party requesting the
certificate, and (iii) that all Annual Rent and Additional Charges have been
paid as of the date set forth in such certificate.

22.  CONFLICT OF LAWS
----------------

The Lease shall be governed by and construed pursuant to the laws
of the State of Arizona and it is agreed that the venue of any legal suit or
action for enforcement of any obligation contained herein shall be Maricopa
County, Arizona. This Lease shall not be construed either for or against
Landlord or Tenant, but rather shall be interpreted in accordance with the
general terms of the language in an effort to reach an equitable result.

23.  STATUS OF TENANT
----------------

Tenant covenants that it is a valid and existing corporation
under the laws of the State of Minnesota, that it is duly authorized to transact
business in the State of Arizona, and that it has full right and authority to
enter into this Lease.

24.  SUCCESSORS AND ASSIGNS
----------------------

Except as otherwise provided in this Lease, all of the covenants,
conditions and provision of this Lease shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.

25.  ATTORNEYS' FEES
---------------

In the event that either Landlord or Tenant bring suit against the
other because of the breach of any provision of this Lease, then all costs and
expenses, including reasonable attorneys' fees, incurred by the prevailing party
therein shall be paid by the other party, which obligation on the part of the
other party shall be deemed to have accrued on the date of the commencement of
such action and shall be enforceable whether or not the action is prosecuted to
judgment.

26.  PERFORMANCE BY TENANT
---------------------

All covenants to be performed by Tenant shall be performed at Tenant's
sole cost and expense and without any abatement of Annual Rent or Additional
Charges. If Tenant shall fail to pay any sum of money, other than Annual Rent,
required to be paid by it hereunder or shall fail to perform any other act on
its part to be performed hereunder, and such failure shall continue for ten (10)
days after notice thereof by Landlord, Landlord may, without releasing Tenant
from any obligations, but shall not be obligated to, make any such payment or
perform any such other act

20

on Tenant's part to be made or performed. All sums so paid by Landlord, and all
necessary incidental costs shall bear interest thereon at an annual rate of two
(2) percentage points above the annual interest rate published from time to time
by The Wall Street Journal under the masthead "Money Rates" as the Prime Rate in
effect at the due date (and thereafter adjusted quarterly, but not more than the
maximum contractual rate permissible by law), from the date of such payment by
Landlord and shall be payable to Landlord on demand. In the event that The Wall
Street Journal ceases to publish a Prime Rate, then interest shall be calculated
with reference to a equivalent index selected by Landlord.

27.  MORTGAGEE PROTECTION
--------------------

In the event of any default on the part of Landlord, Tenant will give
notice by registered or certified mail to any beneficiary of a deed of trust or
mortgagee of a mortgage covering Landlord's leasehold estate under this Lease
whose address shall have been furnished it, and shall offer such beneficiary or
mortgagee a reasonable opportunity to cure the default, including time to obtain
possession of the Demised Premises by power of sale or a judicial foreclosure,
if such should prove necessary to effect a cure.

28.  WAIVER
------

The waiver by either Landlord or Tenant of any breach of any term
herein contained shall not be deemed to be a waiver of any subsequent breach of
the same or any other term herein contained, nor shall any custom or practice
which may grow up between the parties in the administration of the terms hereof
be deemed a waiver of, or in any way affect, the rights of either Landlord or
Tenant to insist upon the performance by the other in strict accordance with
said terms. The subsequent acceptance of Annual Rent or any Additional Charges
by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant
of any term of this Lease, other than the failure of Tenant to pay the Annual
Rent or Additional Charges so accepted, regardless of Landlord's knowledge of
such preceding breach at the time of acceptance of such Annual Rent or
Additional Charges.

29.  EXAMINATION OF LEASE
--------------------

Submission of this instrument for examination or signature by Tenant
does not constitute a reservation of or option for Lease, and it is not
effective as a Lease or otherwise until execution by and delivery to both
Landlord and Tenant.

30.  TIME
----

Time is of the essence with respect to the performance of every
provision of this Lease in which time or performance is a factor.

31.  PRIOR AGREEMENTS, AMENDMENTS
----------------------------

This Lease contains all of the agreements of the parties hereto with
respect to any matter covered or mentioned in this Lease, and no prior agreement
or understanding pertaining to 

21

any such matter shall be effective for any purpose. No provision of this Lease
may be amended or added to except by an agreement in writing signed by the
parties hereto or their respective successors in interest.

32.  SEVERABILITY
------------

Any provision of this Lease which shall prove to be invalid, void or
illegal in no way affects, impairs or invalidates any other provision hereof,
and such other provision shall remain in full force and effect.

33.  RECORDING
---------

A Memorandum of Lease in the form attached hereto as Exhibit E shall
be executed and recorded promptly after the full execution of this Lease.

34.  LIMITATION ON LIABILITY
-----------------------

In consideration of the benefits accruing hereunder, Tenant and all
successors and assigns covenant and agree that, in the event of any actual or
alleged failure, breach or default hereunder by Landlord, Tenant shall not have
recourse against any of the assets of Landlord except Landlord's leasehold
estate under this Lease and Landlord's leasehold estate under the Ground
Sublease.

35.  NONSUBORDINATED SUBLEASE
------------------------

This is a nonsubordinated sublease. Neither Ground Lessor nor Landlord
is obligated to subordinate its rights in the Demised Premises to any loan or
money encumbrance that Tenant shall place against Tenant's subleasehold
interest.

36.  CONSENT OF LANDLORD AND TENANT
------------------------------

In the event of the failure of Landlord or Tenant to give any consent
or approval required herein, if it is either provided herein or held to be that
any such consent or approval shall not be unreasonably withheld or delayed, the
requesting party shall be entitled to seek specific performance at law and shall
have such other remedies as are reserved to it under this Lease, but in no event
shall Landlord or Tenant be responsible for damages to anyone for such failure
to give consent or approval.

37.  DARK PERIOD
-----------

In the event the Demised Premises are not occupied with at least 25%
of the Floor Area of the Demised Premises being actively used for a period of
730 consecutive days ("Dark Period"), then Landlord after notice to Tenant as
provided below and to any trust deed beneficiary or mortgagee as provided in
Section 27 above (a "Lender"), shall have the right, but not the obligation, to
terminate this Lease and retake possession of the Demised Premises unless within
(sixty) 60 days after the giving of Landlord's notice of intent to terminate:

22

a.   The Demised Premises are occupied with at least 25% of the
Floor Area of the Demised Premises being actively used, or

b.   Tenant provides to Landlord reasonable evidence that Tenant
is actively and diligently exercising such rights or remedies available to
Tenant to cause a sublessee or sublessees approved by Landlord pursuant to
Section 18 above (an "Approved Sublessee") to end the Park Period, or

C.   Tenant or any Approved Sublessee provides to Landlord
reasonable evidence that the Approved Sublessee is actively and diligently
exercising commercially reasonable efforts to assign or sublease its interest in
the Demised Premises and such efforts thereafter are diligently continued to end
the Dark Period, or

d.   Tenant or any Lender provides Landlord with reasonable
evidence that the Lender is actively and diligently exercising its rights and
remedies under its deed of trust or mortgage to cause Tenant pursuant to Section
18 above to end the Dark Period (the foregoing notice and cure rights provided
to a Lender are not in limitation of the rights provided to a Lender under
Section 27 above); and

e.   At all times Tenant shall continue to maintain or cause the
Demised Premises to be maintained in accordance with the standards prescribed in
this Lease and in the Restrictions. 

Upon such termination, Tenant shall have no further fights or obligations under
this Lease.

38.  TITLE TO BUILDINGS AND IMPROVEMENTS
-----------------------------------

It being the intent of the parties that, at all times, Tenant shall
have only a leasehold interest in the Demised Premises, including the
Improvements, ownership of all Improvements shall automatically be vested in
Ground Lessor. Notwithstanding the foregoing, neither Landlord nor Ground Lessor
shall be entitled to claim depreciation on the Improvements for income taxation
purposes. Landlord and Tenant agree that title to the Improvements shall remain
vested in Ground Lessor only for so long as the Demised Premises are used for
uses enumerated in A.R.S. (S). 15-1636 ("Statutory Uses") as now existing or as
hereafter amended, or any successor provision. In the event Tenant or any
sublessee of Tenant engages in a use of the Demised Premises which is not a
Statutory Use, then, at Landlord's sole election, title to the Improvements
shall be deemed vested in Tenant effective as of the date Tenant (or a sublessee
of Tenant) engaged in a use which is not a Statutory Use and shall remain vested
in Tenant for the remainder of the Term.

39.  SURRENDER
---------

Upon the expiration or other termination of the Term, Tenant shall
quit and surrender to Landlord the Demised Premises, including all Improvements,
buildings, replacements, changes, additions and other improvements thereon, with
all non-trade fixtures and equipment in or appurtenant thereto in their then
existing condition (but excluding any personal 

23

property of Tenant) or, if requested by Landlord, shall clear the land, putting
the same into the same condition as existed prior to the execution of this
Lease.

40.  RESTRICTIONS - AMENDMENTS
-------------------------

Tenant agrees that its construction, use, maintenance, ownership and
operation of the Demised Premises are subject to the Restrictions. Subject to
the limitations set forth in Section 6(I), Tenant specifically acknowledges and
agrees that Landlord may effect amendments to the Restrictions without the prior
written consent of Tenant so long as any such amendments (i) shall apply equally
and without discrimination to all persons entitled to the use and occupancy of
land within the Research Park, (ii) shall not prohibit or adversely affect the
use then being made of the Demised Premises or any use of the Demised Premises
permitted at the time of execution of this Lease, (iii) shall not permit uses
within the Research Park which are not then common to first class research parks
located within the southwestern United States, and (iv) do not, in Tenant's
reasonable judgment, impose an excessive financial burden on Tenant. Tenant
further agrees upon reasonable advance written notice to allow Landlord to enter
upon and inspect the Demised Premises during Tenant's normal working hours for
purposes of monitoring Tenant's compliance with said Restrictions.

41.  QUIET POSSESSION
----------------

Landlord agrees that Tenant, upon paying the rent, Additional Charges
and performing all other covenants and conditions of this Lease, may quietly
have, hold and enjoy the Demised Premises during the Term hereof or any renewal
thereof. It is further the intention of the parties hereto that the covenants of
this Lease be independent of each other.

42.   WATER RESOURCES
---------------

It is the announced policy of the State of Arizona, that groundwater
resources be conserved and therefore, with respect to any landscaped area of the
Demised Premises as required by the Restrictions, Tenant will use only those
plants and planting materials that have been approved for use in the Research
Park by the Arizona Department of Water Resources. Upon request, Landlord will
furnish Tenant with a listing of such approved plants and planting materials.
Furthermore, Tenant will not allocate more than 15% of its landscaped area to
turf. Furthermore, no more than 20% of the turned area developed by Tenant will
be overseeded with any seed variety during the winter dormancy period for
Bermuda grass. Furthermore, no outdoor water bodies such as fountains and
reflecting ponds will be installed by Tenant. For purposes of this Section 42,
"landscaped area" shall mean all areas of the Demised Premises not improved with
Improvements, parking areas and driveways.

43.  NOTICES
-------

Any notice required or permitted to be given hereunder must be in
writing and may be given by personal delivery or by mail, and if given by mail
shall be deemed given if sent by registered or certified mail addressed to
Tenant, or to Landlord at the addresses set forth in the 

24

Fundamental Lease Provisions. Either may, by written notice to the other,
specify a different address for notice purposes.

44.  BROKERS
-------

(a) Except as set forth in (b) and (c) below, each party warrants
to the other party that the warranting party had no dealings with any real
estate broker or agent in connection with the negotiation of this Lease, and
that it knows of no real estate broker or agent who is or might be entitled to a
commission in connection with this Lease and agrees to hold the other party
harmless from any claims of any brokers claiming a commission on account of any
actions of the warranting party.

(b) Landlord and Tenant acknowledge that CB Commercial Real Estate 
Group, Inc. (Gregory S. White) ("Broker") has been retained, pursuant to a
separate agreement, as a real estate broker in connection with this transaction.
The commission payable to Broker shall be paid by Landlord upon completion of 
this transaction.

(c) Landlord has informed Tenant that Landlord is represented by
P.C.I. Associates, Ltd., and by Sunbelt Holdings Management, Inc., pursuant to
an asset management agreement with Landlord. Landlord shall be solely
responsible for all fees payable to said entities as a result of the closing of
this lease transaction.

45.  NET LEASE
---------

It is the intention of the parties hereto that, except as otherwise
provided in this Lease, this Lease shall be a net lease and that Landlord shall
receive the rents herein reserved and all sums which shall or may become payable
hereunder by Tenant free from all taxes, charges and expenses of every kind or
sort whatsoever (exclusive of rentals due under either the Ground Lease or the
Ground Sublease) and that Tenant shall and will and hereby expressly agrees to
pay all such sums which, except for the execution and delivery of this Lease,
would have been chargeable against the Demised Premises and payable by Landlord.

46.  TENANT'S TITLE INSURANCE
------------------------

At Tenant's option and at Tenant's sole expense, Tenant may obtain a
policy of title insurance insuring Tenant's subleasehold interest in the Demised
Premises.  Tenant's obligations under this Lease shall not be contingent upon
the form or content of any such policy of title insurance.

47.  SHARED DRIVEWAYS
----------------

Tenant acknowledges that the driveways which provide access to the 
Demised Premises from River Parkway and from Science Drive are part of the 
Common Area and that Tenant may use such driveways on a non-exclusive basis 
with all other persons or entities entitled to the use of the Common Area.

25

48.  HEIGHT RESTRICTIONS
-------------------

Tenant acknowledges that it has received a copy of that certain
Declaration of Height Limitations ("Declaration") recorded at Document No. 96-
0774295, Official Records of Maricopa County, Arizona. Tenant agrees to comply
with said Declaration.

[SIGNATURES ON FOLLOWING PAGE]

26

IN WITNESS WHEREOF, the parties have executed this Lease as of the day
and year first above written.

PRICE-ELLIOTT RESEARCH PARK, INC.,
an Arizona nonprofit corporation

By:  /s/ A. J. Pfister
----------------------------
A. J. Pfister
Its: President

LANDLORD

RYAN COMPANIES US, INC.,
a Minnesota corporation

By:   /s/ John Strittmatter
---------------------------
Name: John Strittmatter
---------------------------
Title:             VP
---------------------------

TENANT

27

EXHIBIT 10.54

FIRST AMENDMENT TO GROUND LEASE AGREEMENT

FOR THE ASML BUILDING

FIRST AMENDMENT TO ASU RESEARCH PARK LEASE
------------------------------------------

THIS FIRST AMENDMENT TO ASU RESEARCH PARK LEASE (the "Amendment") is
entered into as of February 24, 1998 by and between PRICE-ELLIOTT RESEARCH PARK,
INC., as Landlord, and RYAN COMPANIES US, INC., as Tenant.

Recitals:

A.   Landlord and Tenant entered into that certain ASU Research Park Lease
dated August 22, 1997 (the "Lease") for the "Demised Premises" as defined in the
Lease and generally referred to as Lot 44 of the ASU Research Park.

B.   While the net square footage of the Demised Premises is correctly
stated in the definition of the term "Demised Premises" as 414,151 net square
feet, the calculation in Section 3(a) of the Lease of annual and monthly rent
based on such net square footage is incorrect.

C.   Landlord and Tenant now wish to correct the annual and the monthly
rent figures in Section 3(a) of the Lease.

Covenants:

NOW, THEREFORE, for good and valuation consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:

1.   The annual and monthly rent figures set forth in Section 3(a) in the
table at the top of page 2 are corrected and replaced by the following:

Lease Years     Per Net Sq. Foot     Annual         Monthly    
-----------     ----------------     ------         -------    

1-15            $0.45                $186,368       $15,531    
16-25           $0.66                $273,340       $22,778    
26-35           $0.86                $356,170       $29,681     
36-85           See (b) below            

2.   Except as corrected and amended above, all other provisions of the
Lease remain in full force and effect without change.

[SIGNATURES ON NEXT PAGE]

IN WITNESS WHEREOF, the parties have executed this First Amendment as of
the day and year first above written.

PRICE-ELLIOTT RESEARCH PARK, INC.,
An Arizona nonprofit corporation

By:    A.J. Pfister           
-------------------------- 
A.J. Pfister                  
Its President                 

LANDLORD 

RYAN COMPANIES US, INC.,      
a Minnesota corporation       

By:    John Strittmatter      
-------------------------- 
John Strittmatter              
Its Vice President          

TENANT    

EXHIBIT 10.55

AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY

FOR THE MOTOROLA BUILDING

AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY
-----------------------------------------------

THIS AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY (the "Agreement"), is
made and entered into as of the 23/rd/ day of February, 2000, by and between
RYAN COMPANIES US, INC., a Minnesota corporation ("Seller") and WELLS CAPITAL,
INC., a Georgia corporation ("Purchaser").

W I T N E S S E T H:
- - - - - - - - - - 

WHEREAS, Seller desires to sell and Purchaser desires to purchase the
Property (as hereinafter defined) subject to the terms and conditions
hereinafter set forth.

NOW, THEREFORE, for and in consideration of the premises, the mutual
agreements contained herein, the sum of Ten Dollars ($10.00) in hand paid by
Purchaser to Seller at and before the sealing and delivery of these presents and
for other good and valuable consideration, the receipt, adequacy, and
sufficiency which are hereby expressly acknowledged by the parties hereto, the
parties hereto do hereby covenant and agree as follows:

1.   Purchase and Sale of Property. Subject to and in accordance with the
-----------------------------                                       
terms and provisions of this Agreement, Seller hereby agrees to sell to
Purchaser and Purchaser hereby agrees to purchase from Seller, the Property,
which term "Property" shall mean and include the following:

(a) the tenant's interest under that certain ASU Research Park Lease
dated November 19, 1997, (the "Ground Lease")between Price-Elliot Research
Park, Inc. ("Lessor"), as Landlord, and Seller, as Tenant in and to all
that tract or parcel of land (the "Land") located in the Northeast quarter
of Section 13, Township 1 South, Range 4 East of the Gila and Salt river
Base and Meridian, Maricopa County, Arizona, containing approximately 12.44
acres, having an address of 8075 South River Parkway, Tempe, Arizona, and
being more particularly described on Exhibit "A" hereto; and
-----------            

(b) the tenant's interest under the Ground Lease in and to all rights,
privileges, and easements appurtenant to the Land, including all water
rights, mineral rights, reversions, or other appurtenances to said Land,
and all right, title, and interest of Seller, if any, in and to any land
lying in the bed of any street, road, alley, or right-of-way, open or
proposed, adjacent to or abutting the Land; and

(c) the tenant's interest under the Ground Lease in and to all
buildings, structures, and improvements situated on the Land, including,
without limitation, that certain two story office building containing
approximately 133,225 square feet of leasable space, the parking areas
containing approximately 800 parking spaces and other amenities located on
the Land, and all apparatus, built-in appliances, equipment, pumps,
machinery, plumbing, heating, air conditioning, electrical and other
fixtures located on the Land (all of which are herein collectively referred
to as the "Improvements"); and

(d) all personal property now owned by Seller and located on or to be
located on or in, or used in connection with, the Land and Improvements
("Personal Property"); and

(e) all of Seller's right, title, and interest, as landlord or lessor,
in and to that certain lease agreement with Motorola, Inc., a Delaware
corporation (the "Tenant"), dated November 17, 1997, as amended by First
Amendment to Lease dated November 17, 1999 (the"Lease"); and

(f) all of Seller's right, title, and interest in and to the plans and
specifications with respect to the Improvements and any guarantees,
trademarks, rights of copyright, warranties, or other rights related to the
ownership of or use and operation of the Land, Personal Property, or
Improvements, all governmental licenses and permits, and all intangibles
associated with the Land, Personal Property, and Improvements, including
the name of the Improvements and the logo therefor, if any.

2.   Earnest Money. Within two (2) business days after the full execution
-------------                                                       
of this Agreement, Purchaser shall deliver to Old Republic Title Agency ("Escrow
Agent"), whose offices are at 3200 North Central Avenue, Suite 100, Phoenix, AZ
85012, Purchaser's check, payable to Escrow Agent, in the amount of $100,000
(the "Earnest Money"), which Earnest Money shall be held and disbursed by Escrow
Agent in accordance with this Agreement. The Earnest Money shall be paid by
Escrow Agent to Seller at Closing (as hereinafter defined) and shall be applied
as a credit to the Purchase Price (as hereinafter defined), or shall otherwise
be paid to Seller or refunded to Purchaser in accordance with the terms of this
Agreement. All interest and other income from time to time earned on the Earnest
Money shall belong to Purchaser and shall be disbursed to Purchaser at any time
or from time to time as Purchaser shall direct Escrow Agent. In no event shall
any such interest or other income be deemed a part of the Earnest Money.

3.   Purchase Price. Subject to adjustment and credits as otherwise
--------------                                                
specified in this Agreement, the purchase price (the "Purchase Price") to be
paid by Purchaser to Seller for the Property shall be SIXTEEN MILLION AND 00/100
DOLLARS ($16,000,000.00). The Purchase Price shall be paid by Purchaser to
Seller at the Closing (as hereinafter defined) by (a) the execution and delivery
of a purchase money promissory note in the amount of $5,000,000.00, bearing
interest at the rate of nine percent (9%) per annum, payable in installments of
interest only beginning 30 days after Closing and on the same day of each month
thereafter with the outstanding balance being due and payable on or before the
first anniversary of Closing and allowing for prepayment at any time (the
"Note") and (b) the balance by cashier's check or by wire transfer of
immediately available federal funds, less the amount of Earnest Money and
subject to prorations, adjustments and credits as otherwise specified in this
Agreement. The Note shall be secured by a purchase money deed of trust (the
"Mortgage"), which shall be a first lien on the Property. The parties shall
agree upon the form of the Note and Mortgage on or before the end of the
Inspection Period (as hereinafter defined).

4.   Purchaser's Inspection and Review Rights. Subject to the rights of the
----------------------------------------                              
Tenant, Purchaser and its agents, engineers, or representatives, with Seller's
reasonable, good faith cooperation, shall have the privilege of going upon the
Property as needed to inspect, examine, test, and survey the Property at all
reasonable times and from time to time. Purchaser hereby agrees to hold Seller
harmless from any liens, claims, liabilities, and damages incurred through the
exercise of such privilege, and Purchaser further agrees to repair any damage to
the Property caused by the exercise of such privilege. At all reasonable times
prior to the Closing (as hereinafter defined), Seller shall 

2

make available to Purchaser, or Purchaser's agents and representatives, for
review and copying, all books, records, and files in Seller's possession
relating to the ownership and operation of the Property, including, without
limitation, title matters, surveys, tenant files, service and maintenance
agreements, and other contracts, books, records, operating statements, and other
information relating to the Property. Seller further agrees to in good faith
assist and cooperate with Purchaser in coming to a thorough understanding of the
books, records, and files relating to the Property. Seller further agrees to
provide to Purchaser (to the extent the same have not previously been provided
to Purchaser) prior to the date which is five (5) days after the effective date
of this Agreement (a) the most current boundary and "as-built" surveys of the
Land and Improvements and any title insurance policies, appraisals, occupancy
permits, building inspection reports and environmental reports relating thereto
and in the possession or under the control of Seller, and (b) a statement
setting forth all revenues from the Property and setting forth all costs and
expenses of operating, maintaining, and repairing the Property (and the costs of
replacing component parts thereof) incurred by Seller, in each case during the
entire period from September 1, 1998, through January 31, 2000, which statement
shall be certified by Seller to the best of Seller's knowledge after diligent
inquiry and review of records, to be complete and accurate in all material
respects. Seller acknowledges that Purchaser may be required by the Securities
and Exchange Commission to file audited financial statements for one to three
years with regard to the Property. At no cost or liability to Seller, Seller
shall (i) cooperate with Purchaser, its counsel, accountants, agents, and
representatives, provide them with access to Seller's books and records with
respect to the ownership, management, maintenance, and operation of the Property
for the applicable period, and permit them to copy the same, (ii) execute a form
of "rep" letter in form and substance reasonably satisfactory to Seller, and
(iii) furnish Purchaser with such additional information concerning the same as
Purchaser shall reasonably request. Purchaser will pay the costs associated with
any such audit.

5.   Special Condition to Closing. Purchaser shall have thirty (30) days
----------------------------                                       
from the effective date of this Agreement (the "Inspection Period") to make
investigations, examinations, inspections, market studies, feasibility studies,
lease reviews, and tests relating to the Property and the operation thereof in
order to determine, in Purchaser's sole opinion and discretion, the suitability
of the Property for acquisition by Purchaser. Purchaser shall have the right to
terminate this Agreement at any time prior to the expiration of the Inspection
Period by giving written notice to Seller of such election to terminate. In the
event Purchaser so elects to terminate this Agreement, Seller shall be entitled
to receive and retain the sum of Twenty-Five Dollars ($25.00) of the Earnest
Money, and the balance of the Earnest Money shall be promptly refunded by Escrow
Agent to Purchaser, whereupon, except as expressly provided to the contrary in
this Agreement, no party hereto shall have any other or further rights or
obligations under this Agreement. Seller acknowledges that the sum of $25.00 is
good and adequate consideration for the termination rights granted to Purchaser
hereunder.

6.   General Conditions Precedent to Purchaser's Obligations Regarding the
---------------------------------------------------------------------
Closing. In addition to the conditions to Purchaser's obligations set forth in
-------                                                                       
Paragraph 5 above, the obligations and liabilities of Purchaser hereunder shall
in all respects be conditioned upon the satisfaction of each of the following
conditions, any of which may be waived by written notice from 

3

Purchaser to Seller:

(a) Seller shall have complied in all material respects with and
otherwise performed in all material respects each of the covenants and
obligations of Seller set forth in this Agreement, as of the date of
Closing (as hereinafter defined).

(b) All representations and warranties of Seller as set forth in this
Agreement shall be true and correct in all material respects as of the date
of Closing.

(c) There shall have been no adverse change to the title to the
Property which has not been cured and the Title Company (as hereinafter
defined) shall have issued the Title Commitment (as hereinafter defined) on
the Land and Improvements without exceptions other than as described in
paragraph 7 and the Title Company shall be prepared to issue to Purchaser
upon the Closing a leasehold owner's title insurance policy on the Land and
Improvements pursuant to such Title Commitment.

(d)  Purchaser shall have received the Tenant Estoppel Certificate
referred to in Paragraph 9(c) hereof, duly executed by the Tenant at least
five (5) days prior to the end of the Inspection Period.

(e) Purchaser shall have received the Lessor Estoppel Certificate
referred to in Paragraph 9(d) hereof, duly executed by the Lessor at least
five (5) days prior to the end of the Inspection Period.

7.   Title and Survey.  Seller covenants and agrees that Seller, at its
----------------                                                  
sole cost and expense, shall, on or before ten (5) days after the Effective Date
of this Agreement, cause Old Republic National Title Insurance Company, or such
other such title insurance company acceptable to Purchaser (herein referred to
as the "Title Company"), to deliver to Purchaser its commitment (herein referred
to as the "Title Commitment") to issue to Purchaser, upon the recording of the
Assignment and Assumption of ASU Research Park Lease, the payment of the
Purchase Price, and the payment to the Title Company of the policy premium
therefor, an owner's policy of title insurance, in the amount of the Purchase
Price, insuring good and marketable record title to the Property to be in
Purchaser subject only to the Permitted Exceptions (as hereinafter defined),
with affirmative coverage over any mechanic's, materialman's and subcontractor's
liens and with full extended coverage over all general exceptions, and
containing the following endorsements: zoning (including affirmative coverage
against any violations of recorded covenants and restrictions), survey, and
access.  Such Title Commitment shall not contain any exception for rights of
parties in possession other than an exception for the right of the Tenant under
the Lease. If the Title Commitment shall contain an exception for the state of
facts which would be disclosed by a survey of the Property or an "area and
boundaries" exception, the Title Commitment shall provide that such exception
will be deleted upon the presentation of an ALTA/ASCM  survey acceptable to
Title Company, in which case the Title Commitment shall be amended to contain an
exception only for the matters shown on the as-built survey which Seller shall
obtain at its sole cost and expense for the benefit of Purchaser.  Said survey
shall include a certification that the Property is zoned in a classification
which will permit the operating of the Property as an office building and any
conditions to the granting of such zoning have been satisfied.  Seller shall
also cause to be 

4

delivered to Purchaser together with such Title Commitment, legible copies of
all documents and instruments referred to therein. Purchaser, upon receipt of
the Title Commitment and the copies of the documents and instruments referred to
therein, shall then have ten (10) days during which to examine the same, after
which Purchaser shall notify Seller of any defects or objections affecting the
marketability of the title to the Property. Seller shall then have until the
Closing to cure such defects and objections and shall, in good faith, exercise
reasonable diligence to cure such defects and objections.

8.   Representations and Warranties of Seller. Seller hereby makes the
----------------------------------------                         
following representations and warranties to Purchaser, each of which shall be
deemed material:

(a) Lease. Seller has delivered to Purchaser a true, correct and
-----                                                       
complete copy of the Lease, together with all modifications and amendments
thereto herein referred. Seller is the "landlord" under the Lease and owns
unencumbered legal and beneficial title to the Lease and the rents and
other income thereunder, subject only to the collateral assignment of the
Lease and the rents thereunder in favor of the holder of an existing
mortgage or deed of trust encumbering the Property, which mortgage or deed
of trust shall be canceled and satisfied by Seller at the Closing. The term
of the Lease commenced on August 17, 1998, and expires on August 31, 2005.
The Tenant currently leases and occupies 100% of the rentable area of the
Improvements.

(b) Lease - Assignment. To the best of Seller's knowledge, the
------------------                                         
Tenant has not assigned its interest in the Lease or sublet any portion   of the
premises leased to the Tenant under the Lease.

(c) Lease - Default. (i) Seller has not received any notice of
---------------                                           
termination or default under the Lease, (ii) there are no existing or
uncured defaults by Seller or by the Tenant under the Lease, (iii) to the
best of Seller's knowledge, there are no events which with the passage of
time or notice, or both, would constitute a default by Seller or by the
Tenant, and Seller has complied with each and every undertaking, covenant,
and obligation of Seller under the Lease, and (iv) Tenant has not asserted
any defense, set-off, or counterclaim with respect to its tenancy or its
obligation to pay rent, additional rent, or other charges pursuant to the
Lease.

(d) Lease - Rents and Special Consideration. Tenant: (i) has not
---------------------------------------                     
prepaid rent for more than the current month under the Lease, (ii) has not
received and is not entitled to receive any rent concession in connection
with its tenancy under the Lease other than as described in the Lease,
(iii) is not entitled to any special work (not yet performed), or
consideration (not yet given) in connection with its tenancy under the
Lease, and (iv) does not have any deed, option, or other evidence of any
right or interest in or to the Property, except for the Tenant's tenancy as
evidenced by the express terms of the Lease.

(e) Lease - Commissions. No rental, lease, or other commissions with
-------------------                                             
respect to the Lease are payable to Seller, any partner of Seller, any
party affiliated with or related to Seller or any partner of Seller or any
third party whatsoever. All commissions payable under, relating to, or as a
result of the Lease have been cashed-out and paid and 

5

satisfied in full by Seller or by Seller's predecessor in title to the
Property.

(f) Lease - Acceptance of Premises. (i) Tenant has accepted its leased
------------------------------                                    
premises located within the Property, including any and all work performed
therein or thereon pursuant to the Lease, (ii) Tenant is in full and
complete possession of its premises under the Lease, and (iii) Seller has
not received notice from the Tenant that the Tenant's premises are not in
full compliance with the terms and provisions of Tenant's Lease or are not
satisfactory for Tenant's purposes.

(g) No Other Agreements. Other than the Lease and the Permitted
-------------------                                        
Exceptions, there are no leases, service contracts, management agreements,
or other agreements or instruments in force and effect, oral or written, to
which Seller is a party and that grant to any person whomsoever or any
entity whatsoever any right, title, interest or benefit in or to all or any
part of the Property or any rights relating to the use, operation,
management, maintenance, or repair of all or any part of the Property.

(h) No Litigation. There are no actions, suits, or proceedings
-------------                                             
pending, or, to the best of Seller's knowledge, threatened by any
organization, person, individual, or governmental agency against Seller
with respect to the Property or against the Property, nor does Seller know
of any basis for such action. Seller has no knowledge of any pending or
threatened application for changes in the zoning applicable to the Property
or any portion thereof.

(i) Condemnation. No condemnation or other taking by eminent domain of
------------                                                      
the Property or any portion thereof has been instituted and, to the best of
Seller's knowledge, there are no pending or threatened condemnation or
eminent domain proceedings (or proceedings in the nature or in lieu
thereof) affecting the Property or any portion thereof or its use.

(j) Proceedings Affecting Access. The Property is served by curb 
----------------------------         
cuts for direct vehicular access to and from Research Drive and South River
Parkway adjoining the Property. Said street(s) are public streets. There are no
pending or, to the best of Seller's knowledge, threatened proceedings that could
have the effect of impairing or restricting access between the Property and
either of such adjacent public roads.

(k) Intentionally Omitted.
----------------------

(l) Conditions of Improvements.  Seller is not aware of any structural
--------------------------                                        
or other defects, in the Improvements. The heating, ventilating, air
conditioning, electrical, plumbing, water, elevator(s), roofing, storm
drainage and sanitary sewer systems at or servicing the Land and
Improvements are, to the best of the Seller's knowledge, in good condition
and working order and Seller is not aware of any defects or deficiencies,
latent or otherwise, therein. The Improvements have been constructed in
compliance with applicable provisions of the Lease, Ground Lease, ABR
Lease, City of Tempe building regulations, and any recorded covenants,
conditions and restrictions.

(m) Certificates. To the best of Seller's knowledge, there are
------------                                              

6

presently in effect permanent certificates of occupancy,licenses, and
permits as may be required for the Property, and the present use and
occupation of the Property is in compliance and conformity with the
certificates of occupancy and all licenses and permits. There has been no
notice or request of any municipal department, insurance company or board
of fire underwriters (or organization exercising functions similar
thereto), or mortgagee directed to Seller and requesting the performance of
any work or alteration to the Property which has not been complied with.

(n) Violations. To the best of Seller's knowledge, there are no
----------                                                 
violations of law, municipal or county ordinances, or other legal
requirements with respect to the Property, and the Improvements thereon
comply with all applicable legal requirements with respect to the use,
occupancy, and construction thereof. The Property is zoned in a
classification which permits the use thereof in the present manner.  The
Property is not located in a flood hazard area.

(o) Underlying Leases. Seller has delivered to Purchaser a true,
-----------------                                           
correct and complete copy of the Ground Lease and the Arizona State
University Ground Lease between The Arizona Board of Regents acting for and
on behalf of Arizona State University, as landlord, and Lessor, as tenant
(the "ABR Lease", dated October 8, 1984, and all amendments thereto (the
"Underlying Leases"). (i) Seller has not received any notice of termination
or default under the Underlying Leases, (ii) to the best of Seller's
knowledge, there are no existing or uncured defaults by any party to the
Underlying Leases, (iii) Seller has no direct obligation under the ABR
Lease, and (iv) Sellers only obligations under the Ground Lease are to pay
(A) rent in the amount of $20,320.44 per month (increasing to $29,803.31
per month on January 1, 2012, and thereafter further increasing as provided
therein), which amount is not passed through to the Tenant; (B) a Municipal
Service Fee, currently estimated to be $977.04 per month, which amount is
passed through to the Tenant; (c) Common Area Maintenance charges,
currently estimated to be $3,925.71 per month, which amount is passed
through to Tenant, and (d) insurance, the cost of which is passed through
to Tenant.

(p) Bankruptcy. Seller is "solvent" as said term is defined by
----------                                                
bankruptcy law and has not made a general assignment for the benefit of
creditors nor been adjudicated a bankrupt or insolvent, nor has a receiver,
liquidator, or trustee for any of Seller's properties (including the
Property) been appointed or a petition filed by or against Seller for
bankruptcy, reorganization, or arrangement pursuant to the Federal
Bankruptcy Act or any similar Federal or state statute, or any proceeding
instituted for the dissolution or liquidation of Seller.

(q) Pre-existing Right to Acquire.  No person or entity has any right
-----------------------------                                    
or option to acquire the Property or any portion thereof which will have
any force or effect after the execution of this Agreement, other than
Purchaser.

(r) Effect of Certification. To the best of Seller's knowledge,
-----------------------                                    
neither this Agreement nor the transactions contemplated herein will
constitute a breach or violation of, or default under, or will be 

7

modified, restricted, or precluded by the Lease or the Permitted Exceptions.

(s) Authorization. Seller is a duly organized and validly existing
-------------                                                 
corporation under the laws of the State of Minnesota. This Agreement has
been duly authorized and executed on behalf of Seller and constitutes the
valid and binding agreement of Seller, enforceable in accordance with its
terms, and all necessary action on the part of Seller to authorize the
transactions herein contemplated has been taken, and no further action is
necessary for such purpose.

(t) Seller Not a Foreign Person. Seller is not a "foreign person"
---------------------------                                  
which would subject Purchaser to the withholding tax provisions of Section
1445 of the Internal Revenue Code of 1986, as amended.

(u) Hazardous Substances. Seller hereby warrants and represents,
--------------------                                        

to the best of Seller's knowledge, and except as otherwise disclosed in
that certain Phase I Environmental Site Assessment of Lots 35, 36 & 37, ASU
Research Park, by Liesch Southwest, Inc., dated September 22, 1998, that
(i) no "hazardous substances", as that term is defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
42 U.S.C. Section 9601, et. seq., the Resource Conservation and Recovery
--  ---                                         
Act, as amended, 42 U.S.C. Section 6901 et. seq., and the rules and
--  ---                    
regulations promulgated pursuant to these acts, any so-called "super-fund"
or "super-lien" laws or any applicable state or local laws, nor any other
pollutants, toxic materials, or contaminants have been or shall prior to
Closing be discharged, disbursed, released, stored, treated, generated,
disposed of, or allowed to escape on the Property, (ii) no asbestos or
asbestos containing materials have been installed, used, incorporated into,
or disposed of on the Property, (iii) no polychlorinated biphenyls are
located on or in the Property, in the form of electrical transformers,
fluorescent light fixtures with ballasts, cooling oils, or any other device
or form, (iv) no underground storage tanks are located on the Property or
were located on the Property and subsequently removed or filled, (v) no
investigation, administrative order, consent order and agreement,
litigation, or settlement with respect to Hazardous Substances is proposed,
threatened, anticipated or in existence with respect to the Property, and
(vi) the Property has not previously been used as a landfill, cemetery, or
as a dump for garbage or refuse. Seller hereby indemnifies Purchaser and
holds Purchaser harmless from and  against any loss, cost, damage,
liability or expense due to or arising out of the breach of any
representation or warranty contained in this Paragraph.

EXCEPT AS EXPRESSLY PROVIDED TO THE CONTRARY HEREIN, PURCHASER IS ACQUIRING THE
PROPERTY IN ITS "AS IS" CONDITION AS OF THE DATE OF THE CLOSING.

9.   Seller's Additional Covenants.  Seller does hereby further covenant
-----------------------------                                      
and agree as follows:

(a) Operation of Property.  Seller hereby covenants that, from the
---------------------                                         
date of this Agreement up to and including the date of Closing, Seller
shall: (i) not negotiate with any third party respecting the sale of the
Property or any interest therein, (ii) not modify, amend, or terminate the
Lease or Ground Lease, or enter into any new lease, 

8

contract, or other agreement respecting the Property, (iii) not grant or
otherwise create or consent to the creation of any easement, restriction,
lien, assessment, or encumbrance respecting the Property, and (iv) cause
the Property to be operated, maintained, and repaired in the same manner as
the Property is currently being operated, maintained, and repaired.

(b) Preservation of Lease and Ground Lease. Seller shall, from and
--------------------------------------                        
after the date of this Agreement to the date of Closing, use its good faith
efforts to perform and discharge all of the duties and obligations and
shall otherwise comply with every covenant and agreement of the landlord
under the Lease and of the tenant under the Ground Lease, at Seller's
expense, in the manner and within the time limits required thereunder.
Furthermore, Seller shall, for the same period of time, use diligent and
good faith efforts to cause the Tenant under the Lease to perform all of
its duties and obligations and otherwise comply with each and every one of
its covenants and agreements under such Lease and shall take such actions
as are reasonably necessary to enforce the terms and provisions of the
Lease.

(c) Tenant Estoppel Certificate.  At least five (5) days prior to
---------------------------                                  
expiration of the Inspection Period, Seller shall obtain and deliver to
Purchaser a fully completed estoppel certificate with respect to the Lease
in substantially the form of Exhibit "B" (the "Tenant Estoppel
-----------                      
Certificate"), duly executed by the Tenant thereunder. The Tenant Estoppel
Certificate shall be executed as of a date not more than thirty (30) days
prior to Closing.

(d) Lessor Estoppel Certificate.  At least five (5) days prior
---------------------------                               

to expiration of the Inspection Period, Seller shall obtain and deliver to
Purchaser a fully completed estoppel certificate with respect to the Ground
Lease in substantially the form of Exhibit "C" (the "Lessor Estoppel
-----------                      
Certificate"), duly executed by the Lessor thereunder. The Lessor Estoppel
Certificate shall be executed as of a date not more than thirty (30) days
prior to Closing.

(e) Insurance. From and after the date of this Agreement to the date
---------                                                       
and time of Closing, Seller shall, at its expense, continue to maintain the
all risk fire and extended coverage insurance policy covering the Property
which is currently in force and effect.

10.  Closing.  Provided that all of the conditions set forth in this
-------                                                        
Agreement are theretofore fully satisfied or performed, it being fully
understood and agreed, however, that Purchaser may expressly waive in writing,
at or prior to Closing, any conditions that are unsatisfied or unperformed at
such time, the consummation of the sale by Seller and purchase by Purchaser of
the Property (herein referred to as the "Closing") shall be held at 2:00 p.m.,
local time, on the first business day which is at least five (5) days after the
end of the Inspection Period, at the offices of Escrow Agent, or at such earlier
time as shall be designated by Purchaser in a written notice to Seller not less
than two (2) business days prior to Closing.

11.  Seller's Closing Documents.  For and in consideration of, and as a
--------------------------                                        
condition precedent to, Purchaser's delivery to Seller of the Purchase Price
described in Paragraph 3 hereof, Seller shall obtain or execute, at Seller's

9

expense, and deliver to Purchaser at Closing the following documents (all of
which shall be duly executed, acknowledged, and notarized where required and
shall survive the Closing):

(a) Assignment and Assumption of Ground Lease.  An Assignment and
-----------------------------------------                    
Assumption of Ground Lease in substantially the form of Exhibit "D";
----------  

(b) Bill of Sale. A Bill of Sale conveying to Purchaser marketable
------------                                                  
title to the Personal Property in the form and substance of Exhibit "E";
----------- 

(c) Blanket Transfer. A Blanket Transfer and Assignment in the form
----------------                                               
and substance of Exhibit "F";
----------  

(d) Assignment and Assumption of Lease. An Assignment and Assumption
----------------------------------                              
of Lease in the form and substance of Exhibit "G", assigning to Purchaser
-----------                        
all of Seller's right, title, and interest in and to the Lease and the
rents thereunder (and which shall provide among other things that Seller
shall remain liable for its environmental indemnity to Tenant under the
Lease);

(e) Seller's Affidavit. A customary seller's affidavit in the form
------------------                                            
required by the Title Company to satisfy the requirements of its commitment
and the endorsements contemplated by paragraph 7 hereof;

(f) FIRPTA Certificate. A FIRPTA Certificate in such form as Purchaser
------------------                                                
shall reasonably approve;

(g) Certificates of Occupancy. The original Certificates of occupancy
-------------------------                                        
for all space within the Improvements;

(h) Marked Title Commitment. The Title Commitment, marked to change
-----------------------                                        
the effective date thereof through the date and time of recording the
Assignment and Assumption of Ground Lease, to reflect that Purchaser is
vested with a subleasehold interest in the Land and the Improvements, and
to reflect that all requirements for the issuance of the final title policy
pursuant to such Title Commitment have been satisfied;

(i) Keys and Records. All of the keys to any doors or locks on the
----------------                                              
Property and the original tenant files and other books and records relating
to the Property in Seller's possession;

(j) Tenant Notice. Notice from Seller to the Tenant of the sale of the
-------------                                                     
Property to Purchaser in such form as Purchaser shall reasonably approve;

(k) Settlement Statement. A settlement statement setting forth the
--------------------                                          
amounts paid by or on behalf of and/or credited to each of Purchaser and
Seller pursuant to this Agreement;

(l)  Other Documents. Such other documents as shall be reasonably
---------------                                              
required by Purchaser's counsel.

12.  Purchaser's Closing Documents. Purchaser shall obtain or execute and
-----------------------------                                       
deliver to Seller at Closing the following documents, all of which shall be duly
executed and acknowledged where required and shall survive the 

10

Closing:

(a) Assignment and Assumption of Ground Lease. The Assignment
-----------------------------------------                
and Assumption of Ground Lease;

(b) Blanket Transfer. The Blanket Transfer and Assignment;
----------------                                      

(c) Assignment and Assumption of Lease. The Assignment and Assumption
----------------------------------                               
of Lease;

(d) Settlement Statement. A settlement statement setting forth the
--------------------                                          
amounts paid by or on behalf of and/or credited to each of Purchaser and Seller
pursuant to this Agreement;

(e) Note. The Note;
----           

(f) Mortgage. The Mortgage; and
--------                   

(g) Other Documents. Such other documents as shall be reasonably
---------------                                             
required by Seller's counsel.

13.  Closing Costs. Seller shall pay the cost of the Title Commitment,
-------------                                                    
including the cost of the examination of title to the Property made in
connection therewith, the premium for the owner's policy of title insurance
issued pursuant thereto, the cost of any transfer or documentary tax imposed by
any jurisdiction in which the Property is located, the cost of the as-built
survey, the attorneys' fees of Seller, and all other costs and expenses incurred
by Seller in closing and consummating the purchase and sale of the Property
pursuant hereto. Purchaser shall pay the cost of recording the Mortgage, the
attorneys' fees of Purchaser, and all other costs and expenses incurred by
Purchaser in closing and consummating the purchase and sale of the Property
pursuant hereto.  Each party shall pay one-half of any escrow fees.

14.  Prorations.  The following items shall be prorated and/or credited
----------                                                        
between Seller and Purchaser as of Midnight preceding the date of Closing:

(a) Rents. Rents, additional rents, and other income of the Property
-----                                                           
(other than security deposits, which shall be assigned and paid over to
Purchaser) collected by Seller from Tenant for the month of Closing.
Purchaser shall also receive a credit against the Purchase Price payable by
Purchaser to Seller at Closing for any rents or other sums (not including
security deposits) prepaid by Tenant for any period following the month of
Closing, or otherwise. All rents and other amounts paid by Seller pursuant
to the Ground Lease for the month of Closing.

(b) Property Taxes. To the extent the same are not paid by Tenant,
--------------                                                
City, state, county, and school district ad valorem taxes based on the ad
valorem tax bills for the Property, if then available, or if not, then on
the basis of the latest available tax figures and information. Should such
proration be based on such latest available tax figures and information and
prove to be inaccurate upon receipt of the ad valorem tax bills for the
Property for the year of Closing, either Seller or Purchaser, as the case
may be, may demand at any time after Closing a payment from the other
correcting such malapportionment. In 

11

addition, if after Closing there is an adjustment or reassessment by any
governmental authority with respect to, or affecting, any ad valorem taxes
for the Property for the year of Closing or any prior year, any additional
tax payment for the Property required to be paid with respect to the year
of Closing shall be prorated between Purchaser and Seller and any such
additional tax payment for the Property for any year prior to the year of
Closing shall be paid by Seller. This agreement shall expressly survive the
Closing.

(c) Utility Charges. Except for utilities which are the responsibility
---------------                                                   
of Tenant, Seller shall pay all utility bills received prior to Closing and
shall be responsible for utilities furnished to the Property prior to
Closing. Purchaser shall be responsible for the payment of all bills for
utilities furnished to the Property subsequent to the Closing. Seller and
Purchaser hereby agree to prorate and pay their respective shares of all
utility bills received subsequent to Closing, which agreement shall survive
Closing.

15.  Purchaser's Default. In the event of default by Purchaser under the
-------------------                                                
terms of this Agreement, Seller's sole and exclusive remedy shall be to receive
the Earnest Money as liquidated damages and thereafter the parties hereto shall
have no further rights or obligations hereunder whatsoever. It is hereby agreed
that Seller's damages will be difficult to ascertain and that the Earnest Money
constitutes a reasonable liquidation thereof and is intended not as a penalty,
but as fully liquidated damages. Seller agrees that in the event of default by
Purchaser, it shall not initiate any proceeding to recover damages from
Purchaser, but shall limit its recovery to the retention of the Earnest Money.

Seller's Initial /s/ DB            Purchaser's Initials /s/ LW
-----------------                      -----------------

16.  Seller's Default.  In the event of default by Seller under the terms
----------------                                                    
of this Agreement, including, without limitation, the failure of Seller to cure
any title defects or objections, except as otherwise specifically set forth
herein, at Purchaser's option: (i) if any such defects or objections arose by,
through, or under Seller or if any such defects or objections consist of taxes,
mortgages, deeds of trust, deeds to secure debt, mechanic's or materialman's
liens, or other such monetary encumbrances, Purchaser shall have the right to
cure such defects or objections, in which event the Purchase Price shall be
reduced by an amount equal to the costs and expenses incurred by Purchaser in
connection with the curing of such defects or objections, and upon such curing,
the Closing hereof shall proceed in accordance with the terms of this Agreement;
or (ii) Purchaser shall have the right to terminate this Agreement by giving
written notice of such termination to Seller, whereupon Escrow Agent shall
promptly refund all Earnest Money to Purchaser, and Purchaser and Seller shall
have no further rights, obligations, or liabilities hereunder, except as may be
expressly provided to the contrary herein; or (iii) Purchaser shall have the
right to accept title to the Property subject to such defects and objections
with no reduction in the Purchase Price, in which event such defects and
objections shall be deemed "Permitted Exceptions"; or (iv) Purchaser may elect
to seek specific performance of this Agreement.

17.  Condemnation.  If, prior to the Closing, all or any part of the
------------                                                   
Property is subjected to a bona fide threat of condemnation by a body having 

12

the power of eminent domain or is taken by eminent domain or condemnation (or
sale in lieu thereof), or if Seller has received notice that any condemnation
action or proceeding with respect to the Property is contemplated by a body
having the power of eminent domain, Seller shall give Purchaser immediate
written notice of such threatened or contemplated condemnation or of such taking
or sale, and Purchaser may by written notice to Seller given within thirty (30)
days of the receipt of such notice from Seller, elect to cancel this Agreement.
If Purchaser chooses to cancel this Agreement in accordance with this Paragraph
17, then the Earnest Money shall be returned immediately to Purchaser by Escrow
Agent and the rights, duties, obligations, and liabilities of the parties
hereunder shall immediately terminate and be of no further force and effect. If
Purchaser does not elect to cancel this Agreement in accordance herewith, this
Agreement shall remain in full force and effect and the sale of the Property
contemplated by this Agreement, less any interest taken by eminent domain or
condemnation, or sale in lieu thereof, shall be effected with no further
adjustment and without reduction of the Purchase Price, and at the Closing,
Seller shall assign, transfer, and set over to Purchaser all of the right,
title, and interest of Seller in and to any awards that have been or that may
thereafter be made for such taking.

18.  Damage or Destruction.  If any of the Improvements shall be destroyed
---------------------                                                
or damaged prior to the Closing, and the estimated cost of repair or replacement
exceeds $100,000.00 or if the Lease shall terminate as a result of such damage,
Purchaser may, by written notice given to Seller within twenty (20) days after
receipt of written notice from Seller of such damage or destruction, elect to
terminate this Agreement, in which event the Earnest Money shall immediately be
returned by Escrow Agent to Purchaser and except as expressly provided herein to
the contrary, the rights, duties, obligations, and liabilities of all parties
hereunder shall immediately terminate and be of no further force or effect. If
Purchaser does not elect to terminate this Agreement pursuant to this Paragraph
18, or has no right to terminate this Agreement (because the damage or
destruction does not exceed $100,000.00 and the Lease remains in full force and
effect), and the sale of the Property is consummated, Purchaser shall be
entitled to receive all insurance proceeds paid or payable to Seller by reason
of such destruction or damage under the insurance required to be maintained by
Seller pursuant to Paragraph 9(d) hereof (less amounts of insurance theretofore
received and applied by Seller to restoration). If the amount of said casualty
or rent loss insurance proceeds is not settled by the date of Closing, Seller
shall execute at Closing all proofs of loss, assignments of claim, and other
similar instruments to ensure that Purchaser shall receive all of Seller's
right, title, and interest in and under said insurance proceeds.

19.  Assignment.  Purchaser's rights and duties under this Agreement shall
----------                                                           
not be assignable except to an affiliate of Purchaser without the consent of
Seller which consent shall not be unreasonably withheld.

20.  Broker's Commission.  Seller has by separate agreement agreed to pay a
-------------------                                                   
brokerage commission to CB Commercial Real Estate Group (the "Broker").
Purchaser and Seller hereby represent each to the other that they have not
discussed this Agreement or the subject matter hereof with any real estate
broker or agent other than Broker so as to create any legal right in any such
broker or agent to claim a real estate commission with respect to the conveyance
of the Property contemplated by this Agreement. Seller shall and does hereby
indemnify and hold harmless Purchaser from and against any claim, 

13

whether or not meritorious, for any real estate sales commission, finder's fees,
or like compensation in connection with the sale contemplated hereby and arising
out of any act or agreement of Seller, including any claim asserted by Brokers
and any broker or agent claiming under Broker. Likewise, Purchaser shall and
does hereby indemnify and hold harmless Seller from and against any claim,
whether or not meritorious, for any real estate sales commission, finder's fees,
or like compensation in connection with the sale contemplated hereby and arising
out of any act or agreement of Purchaser, except any such claim asserted by
Broker and any broker or agent claiming under Broker. This Paragraph 21 shall
survive the Closing or any termination of this Agreement.

21.  Notices.  Wherever any notice or other communication is required or
-------                                                            
permitted hereunder, such notice or other communication shall be in writing and
shall be delivered by telecopy, overnight courier, by hand, or sent by U.S.
registered or certified mail, return receipt requested, postage prepaid, to the
addresses set out below or at such other addresses as are specified by written
notice delivered in accordance herewith:

PURCHASER:          c/o Wells Capital, Inc.
6200 The Corners Parkway, Suite 250
Norcross, Georgia 30092
Attn: Chief Investment Officer

with a copy to:     O'Callaghan & Stumm LLP
127 Peachtree Street, N. E., Suite 1330
Atlanta, Georgia 30303
Attn: William L. O'Callaghan, Esq.

SELLER:             Ryan Companies US, Inc.
700 International Centre
900 Second Avenue South
Minneapolis, MN 55402-3387
Attn: Timothy M. Gray

with a copy to :    Ryan Companies US, Inc.
700 International Centre
900 Second Avenue South
Minneapolis, MN 55402-3387
Attn: Dennis Buratti

Any notice or other communication mailed as herein above provided shall be
deemed effectively given or received on the date of delivery, if delivered by
telecopy, hand or by overnight courier, or otherwise on the third (3rd) business
day following the postmark date of such notice or other communication.

22.  Possession.  Possession of the Property shall be granted by Seller to
----------                                                           
Purchaser on the date of Closing, subject only to the Lease and the Permitted
Exceptions.

23.  Time Periods.  If the time period by which any right, option, or
------------                                                    
election provided under this Agreement must be exercised, or by which any act
required hereunder must be performed, or by which the Closing must be held,
expires on a Saturday, Sunday, or holiday, then such time period shall 

14

be automatically extended through the close of business on the next regularly
scheduled business day.

24.  Survival of Provisions.  All covenants, warranties, and agreements set
----------------------                                                
forth in this Agreement shall survive the execution or delivery of any and all
deeds and other documents at any time executed or delivered under, pursuant to,
or by reason of this Agreement, and shall survive the payment of all monies made
under, pursuant to, or by reason of this Agreement for a period of two years
from Closing except with respect to paragraphs 8(u) and 32 which shall survive
for an unlimited time.

25.  Severability.  This Agreement is intended to be performed in
------------                                                
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules, and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby but rather shall be enforced to the greatest extent permitted
by law.

26.  Authorization. Purchaser represents to Seller that this Agreement has
-------------                                                        
been duly authorized and executed on behalf of Purchaser and constitutes the
valid and binding agreement of Purchaser, enforceable in accordance with its
terms, and all necessary action on the part of Purchaser to authorize the
transactions herein contemplated has been taken, and no further action is
necessary for such purpose.

27.  General Provisions. No failure of either party to exercise any power
------------------                                                  
given hereunder or to insist upon strict compliance with any obligation
specified herein, and no custom or practice at variance with the terms hereof,
shall constitute a waiver of either party's right to demand exact compliance
with the terms hereof. This Agreement contains the entire agreement of the
parties hereto, and no representations, inducements, promises, or agreements,
oral or otherwise, between the parties not embodied herein shall be of any force
or effect. Any amendment to this Agreement shall not be binding upon the parties
hereto unless such amendment is in writing and executed by all parties hereto.
The provisions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors, and assigns. Time is of the essence of this Agreement. This
Agreement may be executed in multiple counterparts, each of which shall
constitute an original, but all of which taken together shall constitute one and
the same agreement. The headings inserted at the beginning of each paragraph are
for convenience only, and do not add to or subtract from the meaning of the
contents of each paragraph. This Agreement shall be construed and interpreted
under the laws of the State of Arizona. Except as otherwise provided herein, all
rights, powers, and privileges conferred hereunder upon the parties shall be
cumulative but not restrictive to those given by law. All personal pronouns used
in this Agreement, whether used in the masculine, feminine, or neuter gender
shall include all genders, and all references herein to the singular shall
include the plural and vice versa.

29.  Effective Date.  The "effective date" of this Agreement shall be
--------------                                                  
deemed to be the date set forth in the preamble of this Agreement.

30.  Contingency Regarding Other Contracts. Simultaneously with the
-------------------------------------                         
execution hereof, the parties have entered into other purchase agreements which
are listed on Exhibit "H" hereto, and it shall be a condition of the parties
obligations hereunder that the closings with respect to the properties 

15

described therein shall occur simultaneously with the closing herein.

31.  Duties as Escrow Agent.  In performing its duties hereunder, Escrow
----------------------                                             
Agent shall not incur any liability to anyone for any damages, losses or
expenses, except for its gross negligence or willful misconduct, and it shall
accordingly not incur any such liability with respect to any action taken or
omitted in good faith upon advice of its counsel or in reliance upon any
instrument, including any written notice or instruction provided for in this
Agreement, not only as to its due execution and the validity and effectiveness
of its provision, but also as to the truth and accuracy of any information
contained therein that Escrow Agent shall in good faith believe to be genuine,
to have been signed or presented by a proper person and to conform to the
provisions of this Agreement.  Seller and Purchaser hereby agree to indemnify
and hold harmless Escrow Agent against any and all losses, claims, damages,
liabilities and expenses, including reasonable costs of investigation and legal
fees and disbursements, that may be imposed upon Escrow Agent or incurred by
Escrow Agent in connection with its acceptance or performance of its duties
hereunder as escrow agent, including without limitation, any litigation arising
out of this Agreement.  If any dispute shall arise between Seller and Purchaser
sufficient in the discretion of Escrow Agent to justify its doing so, Escrow
Agent shall be entitled to tender into the registry or custody of the clerk of
the Court for the county in which the Property is located or the clerk for the
United States District Court having jurisdiction over the county in which the
Property is located, any or all money (less any sums required to pay Escrow
Agent's attorneys' fees in filing such action), property or documents in its
hands relating to this Agreement, together with such pleadings as it shall deem
appropriate, and thereupon be discharged from all further duties under this
Agreement.  Seller and Purchaser shall bear all costs and expenses of any such
legal proceedings.

32.  Expansion.  If Buyer proposes to expand the building which is a part
---------                                                           
of the Property, it will negotiate in good faith with Seller to provide
design/build services with respect to such expansion and will contract with
Seller for such work if its proposal therefor is competitive and is otherwise
approved by the Tenant.

[The remainder of this page is intentionally left blank]

16

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day, month and year first above written.

"SELLER":

RYAN COMPANIES US, INC.

By:  /s/ Dennis Buratti
___________________________________

Its: Vice President

"PURCHASER":

WELLS CAPITAL, INC.

By:  /s/ Leo F. Wells
_____________________________________

Its: President

"ESCROW AGENT":

OLD REPUBLIC TITLE AGENCY

By:  /s/ Gary Johnson
_______________________________

Its: Vice President 2/24/00

17

EXHIBIT 10.56

LEASE AGREEMENT FOR THE MOTOROLA BUILDING

LEASE

BY AND BETWEEN

RYAN COMPANIES U.S., INC.,
a Minnesota corporation, as Landlord

and

MOTOROLA, INC.,
a Delaware corporation, as Tenant

TABLE OF CONTENTS

Section                                                             Page Number

1.  Premises........................................................   1
2.  Term............................................................   1
3.  Rent............................................................   2
4.  Building Shell/Tenant Improvements and Allowances...............   3
5.  Permitted Uses..................................................   6
6.  Condition.......................................................   6
7.  Compliance......................................................   6
8.  No Waste or Damage..............................................   7
9.  Changes, Alterations And Additions..............................   7
10.  Ingress and Egress..............................................   7
11.  Abandonment.....................................................   8
12.  Repairs and Maintenance.........................................   8
13.  Interior Mechanical Equipment (Hvac System).....................   9
14.  Utilities and Services..........................................   10
15.  Inspection......................................................   10
16.  Damage or Destruction Of Premises...............................   10
17.  Condemnation....................................................   11
18.  Landlord's Liability............................................   12
19.  Default.........................................................   12
20.  Indemnification.................................................   16
21.  Insurance.......................................................   16
22.  Mechanic's Liens................................................   17
23.  Assignment or Subletting........................................   17
24.  Run With The Land...............................................   18
25.  Option to Extend................................................   18
26.  Expansion.......................................................   20
27.  Tri-party Agreement.............................................   25
28.  Holdover........................................................   25
29.  Intentionally Omitted...........................................   25
30.  Alternative Dispute Resolution..................................   25
31.  Environmental...................................................   26
32.  Brokers.........................................................   27
33.  Notices.........................................................   27
34.  Waiver..........................................................   28

i

35.  Amendments....................................................  28
36.  Quiet Enjoyment...............................................  28
37.  Intentionally Omitted.........................................  28
38.  Short Form Lease..............................................  28
39.  Construction of Language......................................  28
40.  Entire Agreement..............................................  29
41.  Severability..................................................  29
42.  Estoppel Certificate..........................................  29
43.  Signs.........................................................  29
44.  Warranties....................................................  29
45.  Tenant's Operations...........................................  30
46.  Measurement to Determine Rentable Area........................  31
47.  Additional Rent-operating Costs...............................  31
48.  Tenant Expense Waiver.........................................  33
49.  Landlord's Compliance With Federal Laws.......................  33
50.  Intentionally Omitted.........................................  34
51.  No Party To Be Deemed Drafter.................................  34
52.  No Intended Third Party Beneficiary...........................  34
53.  Counterparts..................................................  35
54.  Governing Law.................................................  35
55.  Subordination.................................................  35
56.  Declaration, Ground Lease and Subground Lease.................  35

Exhibit A - Legal Description of Land
Exhibit B - Building Shell Outline Specifications
Exhibit C - Schedule
Exhibit D - Building Shell Soft Costs and Fees
Exhibit E - Building Shell General Conditions
Exhibit F - Tenant Improvements General Conditions
Exhibit G - Declaration
Exhibit H - Building Shell Expansion Soft Costs and Fees
Exhibit I - Building Shell Expansion General Conditions
Exhibit J - Expansion Space Tenant Improvements General Conditions
Exhibit K - Tri-Party Agreement

ii

LEASE

THIS LEASE ("Lease"), is made and entered into as of this 17th day of
November, 1997, by and between RYAN COMPANIES U.S., INC., a Minnesota
corporation, having an address at 3200 East Camelback Road, Suite 129, Phoenix,
Arizona, 85018 (herein called "Landlord") and MOTOROLA, INC., a Delaware
corporation, having an office at 3102 North 56th Street, Phoenix, Arizona
85018, Attention:  Asset Manager - Real Estate (herein called "Tenant").

1.   Premises.
-------- 

For and in consideration of the agreements contained herein and under and
subject to the terms and conditions hereof, Landlord hereby leases and demises
unto Tenant and Tenant hereby leases from Landlord that certain land located at
the Arizona State University Research Park in the City of Tempe, County of
Maricopa, State of Arizona and legally described in Exhibit A, attached hereto
(the "Land") together with the building (the "Building") containing at least
125,000 usable square feet and approximately 133,754 rentable square to be
constructed thereon and all other improvements located or to be constructed
thereon.  The Land, the Building and all such other improvements are hereinafter
called the "Premises."

2.   Term.
----    

A.   The term of this Lease shall be for a period of seven (7) years, which
term shall commence on July 1, 1998 (the "Commencement Date") and end on June
30, 2005 (the "Termination Date") (such period herein referred to as the
"Initial Term"), subject to extensions pursuant to agreement of the parties or
any option hereinafter set forth (the Initial Term and all such extensions, if
any, being hereafter referred to as the "Term").

B.   In the event possession of the Premises is delivered to Tenant after
the Commencement Date, the Initial Term shall be deemed to commence on the date
possession is delivered to Tenant and the Termination Date shall be extended by
the number of days between the Commencement Date and the date possession is
delivered to Tenant, but in the event the new Termination Date would occur other
than the last day of a calendar month, the Termination Date shall be on the last
day of that month.

C.   In the event the Premises are ready for occupancy prior to the
Commencement Date, Tenant shall have the right, but not the obligation, to
occupy the same.  If Tenant does elect to so occupy the Premises, such occupancy
shall be subject to all of the provisions of this Lease, and the Base Rent
payable during the period of early occupancy shall be a rate equal to one
hundred percent (100%) of the Base Rent provided for in Section 3.A of this
Lease.  Such early occupancy shall not advance the Termination Date.

3.   Rent.
---- 

A.   During the Term, on the first day of each month, Tenant will pay,
without offset, deduction, or abatement, unless otherwise expressly permitted in
this Lease, rent to Landlord at the office of Landlord or at such other place as
Landlord from time to time may notify Tenant in writing a total monthly base
rent ("Base Rent") equal to the actual number of rentable square feet in the
Premises as measured an determined pursuant to Section 46 of this Lease (the
"Actual Rentable Square Feet") multiplied by a monthly rental rate determined in
accordance with Section 3.B of this Lease (the "Base Monthly Rental Rate"), with
proration of rent on a daily basis if the Initial Term should commence on a date
other than the first day of a calendar month or end on a date other than the
last day of a calendar month and net of the Operating Costs payable under
Section 47 of this Lease.  Upon determination of the Actual Rentable Square Feet
and the Base Monthly Rental Rate, Landlord and Tenant shall enter into an
addendum to this Lease memorializing in writing the Actual Rentable Square Feet,
the Base Monthly Rental Rate and the resulting dollar amount of the monthly Base
Rent.

B.   Provided the Building Shell Construction Cost, as determined pursuant
to Section 4.B of this Lease, is Forty Eight Dollars ($48.00) per rentable
square foot in the Premises as measured and determined pursuant to Section 46 of
this Lease, then the Base Monthly Rental Rate shall be $1.0491667 per rentable
square foot (equivalent to an annual rental rate of Twelve Dollars Fifty Nine
Cents ($12.59) per rentable square foot), for the first through the fourth years
of the Initial Term, of $1.180833 per rentable square (equivalent to an annual
rental rate of Fourteen Dollars Seventeen Cents ($14.17) per rentable square
foot), for the fifth through the seventh years of the Initial Term.  If the
Building Shell Construction Cost, as determined pursuant to Section 4.B of this
Lease, is not Forty Eight Dollars ($48.00) per rental square foot, then the Base
Monthly Rental Rate shall be adjusted, up or down, according to the following
formula:

BMRR = (BSCC - $48.00) x 0.105 / 12

Where BMRR is the increase (if positive) or decrease (if negative) in the Base
Monthly Rental Rate and BSCC is the actual Building Shell Construction Cost, as
determined pursuant to Section 4.B, per rentable square foot in the Premises as
measured and determined pursuant to Section 46 of this Lease.

C.   Tenant also shall pay to Landlord, in conjunction with the payment of
Base Rent, the payments in respect of Operating Costs as provided in Section 47
of this Lease, and all transaction privilege taxes or sales taxes on the Base
Rent and other amounts payable to Landlord under this Lease.

2

4.   Building Shell/Tenant Improvements and Allowances.
------------------------------------------------- 

A.   Building Shell Construction.  Landlord shall construct a Building
---------------------------                                      
shell as provided in this Section 4.A and meeting the specification set forth
in, and in accordance with, the Outline Specification for the Design and
Construction of the Building Shell for the Motorola/Ryan - ASU Research Park
Semiconductor Components Group facility attached hereto as Exhibit A (the
"Building Shell Outline Specifications").  Landlord will provide six (6) parking
spaces per 1,000 rentable square feet as part of the construction of the
Building shell.  (Tenant acknowledges that under current City of Tempe building
regulations and no more than 835 parking spaces may be allowed for the Premises,
including the Expansion Space referred to in Section 26 of this Lease).  Fifteen
percent (15%) of the parking spaces will be covered parking as part of the
Building shell.  Landlord shall use subcontractors to construct the Building
shell and shall purchase the necessary materials from suppliers.  For each
portion of the work, Landlord shall make a good faith attempt to obtain bids
from at least three subcontractors or suppliers which (i) are properly licensed
(in the case of subcontractors) to construct the respective portion of the
Building shell on which such subcontractors are bidding, (ii) are not affiliated
with Landlord, and (ii) Landlord believes are reputable, competent and
efficient.  Landlord shall submit all such bids to Tenant for Tenant's review
together with Landlord's recommendation as to which subcontractor or supplier
should be selected to construct each portion of the Building shell or supply the
necessary materials.  Tenant shall designate which subcontractor or supplier is
to construct each portion of the Building shell or supply the necessary
materials (the "Designated Building Shell Subcontractor").  Landlord promptly
shall employ the Designated Building Shell Subcontractor to do so.  Thereafter,
Landlord shall cause the Designated Building Shell Subcontractor to prosecute
the construction of such Designated Building Shell Subcontractor's portion of
the Building shell diligently to completion or furnish the materials to be
supplied by such Designated Building Shell Subcontractor pursuant to the
"Motorola Schedule" in Exhibit C, attached hereto (the "Schedule") and in
conformance with the Building Shell Outline Specifications and in compliance
with all applicable laws, statutes, orders, ordinances, rules and regulations.

B.   Building Shell Construction Cost.  By December 31, 1997, Landlord
--------------------------------                                 
shall submit to Tenant a detailed itemization for the total development cost of
constructing the Building shell (the "Building Shell Construction Cost"), which
shall consist of (i) the costs and fees pertaining to the construction of the
Building shell set forth on Exhibit D attached hereto (the "Building Shell Soft
Costs and Fees"), (ii) the amount authorized by Tenant to be paid to the
Designated Building Shell Subcontractors for construction of the Building shell
or supply of materials, including, without limitation, labor, materials and
equipment, (iii) Landlord's "general conditions" associated with such
construction set forth on Exhibit E attached hereto (the "Building Shell General
Conditions") and (iv) an amount equal to eight percent (8%) of the amount
specified in the foregoing clause (ii) of this Section 4.B as Landlord's
Building shell construction fee.  If the Building Shell Construction Cost is
other than Forty Eight Dollars ($48.00) per rentable square foot 

3

in the Premises as measured and determined pursuant to the Section 46 of this
Lease, then the Base Monthly Rental Rate shall be adjusted, up and down, as
provided in Section 3 of this Lease.

C.   Tenant Improvements Allowance.  Landlord shall provide Tenant with an
-----------------------------                                        
allowance (the "Tenant Improvements Allowance") equal to the Actual Rentable
Square Feet multiplied by Thirty-Seven Dollars and Ten Cents ($37.10) per
rentable square foot.  The Tenant Improvements Allowance is to be used as an
allowance towards the cost of the Tenant Improvements described in Section 4.D
of this Lease and for moving expenses (not to exceed Two Dollars ($2.00) per
rentable square foot) and for space planning expenses (not to exceed Ten Cents
($0.10) per rentable square foot).

D.   Construction of Tenant Improvements.  Within thirty (30) days after
-----------------------------------                                
the execution this Lease, Tenant shall deliver to Landlord such drawings and
specifications (the "Tenant Improvements Drawings and Specifications") as are
reasonably necessary to describe the improvements to the Premises which Tenant
desires to have made (the "Tenant Improvements").  The Tenant Improvements are
subject to Landlord's approved, which approval shall not be unreasonably
withheld or delayed.  Landlord shall diligently proceed to have the Tenant
Improvements constructed as set forth in this Section 4.D and to have issued all
necessary certificates of occupancy and all other permits required to occupy the
Premises (the "Occupancy Permits") pursuant to the Schedule.  Landlord shall use
subcontractors to construct the Tenant Improvements.  For each portion of the
work, Landlord shall make a good faith attempt to obtain bids from at least
three subcontractors which (i) are properly licensed to construct the respective
portion of the Tenant Improvements on which such subcontractors are bidding,
(ii) are not affiliated with Landlord, and (ii) Landlord believes are reputable,
competent and efficient.  Landlord shall submit all such bids to Tenant for
Tenant's review together with Landlord's recommendation as to which
subcontractor should be selected to construct each portion of the Tenant
Improvements.  Tenant shall designate which subcontractor is to construct each
portion of the Tenant Improvements (the "Designated Tenant Improvements
Subcontractor").  Landlord promptly shall employ the Designated Tenant
Improvements Subcontractor to do so.  Thereafter, Landlord shall cause the
Designated Tenant Improvements Subcontractor to prosecute the construction of
such Designated Tenant Improvements diligently to completion in conformance with
the Tenant Improvements Drawings and Specifications and in compliance with all
applicable laws, statutes, orders, ordinances, rules and regulations.  Subject
to Section 4.F of this Lease, Landlord shall cause the Tenant Improvements to be
so constructed and all Occupancy Permits to be issued in accordance with the
Schedule.

E.   Tenant Improvements Cost.  Within thirty (30) days after completion of
------------------------                                              
construction of the Tenant Improvements and issuance of all Occupancy Permits as
provided in Section 4.D of this Lease, or as soon thereafter as reasonably
possible, 

4

Landlord shall submit to Tenant a detailed itemization of the total development
cost of constructing the Tenant Improvements (the "Tenant Improvements Cost"),
which shall consist of (i) the amount authorized by Tenant to be paid to the
Designated Tenant Improvements Subcontractors for construction of the Tenant
Improvements, including, without limitation, labor, materials and equipment,
(ii) the reasonable expenses actually incurred by Landlord for its "general
conditions" associated with such construction in the categories set forth on
Exhibit F attached hereto (the "Tenant Improvements General Conditions") and
(iii) an amount equal to eight percent (8%) of the amount specified in the
foregoing clause (i) of this Section 4.E as Landlord's Tenant Improvements
construction fee. If the Tenant Improvements Cost exceeds the Tenant
Improvements Allowance, the difference shall be paid by Tenant to Landlord
within thirty (30) days after submission of such detailed itemization. If the
Tenant Improvements Allowance exceeds the Tenant Improvements Cost, the
difference shall be paid by Landlord to Tenant within thirty (30) days after
submission of such detailed itemization, or, at Landlord's election, the
difference will be credited to the first payments of Base Rent falling due on a
dollar for dollar basis until the difference is exhausted.

F.   Excusable Delay.  Landlord shall maintain, or shall cause each of the
---------------                                                      
Designated Building Shell Subcontractors and Designated Tenant Improvements
Subcontractors (collectively "Designated Subcontractors") to maintain, adequate
insurance for personal injury and for property damage which may occur as a
result of construction of the Building shell and Tenant Improvements.  In the
event that Landlord or any of the Designated Subcontractors shall be delayed or
hindered in or prevented from constructing the Building shell and Tenant
Improvements by reason of (i) strikes, lockouts, or other labor troubles, (ii)
war, whether declared or undeclared, (iii) riot or insurrection, (iv) acts of
God, (v) embargoes, (vi) delays in transportation, (vii) inability to procure
materials, labor, or the permits contemplated by the Schedule (viii) failure of
power, (ix) restrictive governmental laws or regulations, whether valid or not,
or (x) any other reason, other than financial, beyond the reasonable control of
Landlord or the Designated Subcontractors, and not the fault of Landlord or the
Designated Subcontractors, including, without limitation, any delay in the
Schedule not the fault of Landlord, then the construction of the Building shell
and Tenant Improvements shall be excused for the period of delay, and the period
for the construction of the Building shell and Tenant Improvements shall be
extended for a period equivalent to the period of such delay.  Landlord shall
promptly give written notice to Tenant of the cause and extent of such delay.
Notwithstanding the foregoing, in the event the construction of the Tenant
Improvements is not completed within ninety (90) days of the date specified in
Section 4.D of this Lease, then, unless Tenant has caused such delayed
completion, Tenant may, upon written notice to Landlord, terminate this Lease,
as Tenant's sole and exclusive remedy on account of such delayed completion.

G.   Unrestricted Allowance.  On the date possession of the Premises is
----------------------                                            
delivered to Tenant, Landlord shall pay to Tenant Fifty Thousand Dollars
($50,000) 

5

in fulfillment of Landlord's obligation under that certain letter agreement
dated August 27, 1997 between Landlord and CB Commercial Real Estate Group, Inc.

H.   Ownership of Improvements/Possessory Interest.  It is the intent of
---------------------------------------------                      
the parties that, at all times, Landlord and Tenant shall have only a possessory
interest in the Premises in accordance with the provisions of Section 38 of the
Subground Lease (as defined in Section 56 of this Lease).  Ownership of the
Building and all other improvements constructed on the Land shall automatically
vest in the Board of Regents as and when constructed, subject to devolution as
provided in Section 38 of the Subground Lease.

I.   Open Book.  Until fifteen (15) days after Landlord has delivered the
---------                                                           
detailed itemization required under Section 4.B of this Lease and until ninety
(90) days after Landlord has delivered the detailed itemization required under
Section 4.E of this Lease, all elements and components of the Building Shell
Construction Cost and the Tenant Improvements Cost, respectively, incurred by
Landlord shall be subject to examination, inspection and audit by Tenant at
Tenant's sole cost and expense.  Until the expiration of such periods, Landlord
shall make its books and records freely and openly available to Tenant for such
purposes upon reasonable advance notice and during normal business hours.

5.   Permitted Uses.
-------------- 

Tenant shall have the right to use the Premises for any lawful purpose
permitted by applicable zoning ordinances, and without limiting the generality
of the foregoing, for regional or national headquarters of Lessee or its
subsidiaries, offices, laboratories and research and development facilities and
activities associated with any of the foregoing, provided such use is permitted
under Article II of the Declaration of Covenants, Conditions and Restrictions
for Arizona State University Research Park (the "Declaration"), attached hereto
as Exhibit G, but excluding the specific illustrated uses permitted under
Article II B(6).

6.   Condition.
--------- 

Landlord represents and warrants that, as of the Commencement Date, the
Premises will be properly constructed, will comply with all applicable laws,
statutes, orders, ordinances, rules and regulations, and will be in good repair
and condition, but excepting design defects in the Drawings and Specifications
or which otherwise are caused by Tenant or its own architects, consultants or
representatives.

7.   Compliance.
---------- 

Tenant shall confirm the use Tenant makes of the Premises to the
Declaration and to all applicable laws, statutes, orders, ordinances, rules and
regulations of all federal, state or political subdivisions having jurisdiction
over the Premises, now in force or that may be enacted hereafter, provided that
the 

6

provisions of this Section 7 shall not require the Tenant to rebuild, repair
or alter the Premises to make it comply with any such laws, statutes, orders,
ordinances, rules or regulations.

8.   No Waste or Damage.
------------------ 

Tenant shall not commit any waste upon or do any damage to the Premises.
Tenant shall not use or permit the use of the Premises for any unlawful purpose.
Tenant shall not permit any rubbish, refuse or garbage to accumulate or create a
fire hazard in or about the Premises.

9.   Changes, Alterations and Additions.
---------------------------------- 

No material changes, alterations or additions shall be made to the Premises
by Tenant without the prior approval of Landlord, which approval shall not be
unreasonably withheld.  Any structural change, alteration or addition will be
deemed "material."  Prior to making any such changes, alterations or additions,
Tenant shall subject written plans and drawings respecting same to Landlord and
Landlord shall approve or disapprove same within fifteen (15) days after receipt
thereof, and if Landlord fails to disapprove such plans and drawings by notice
in writing to Tenant within such time, they shall be deemed approved.  All
changes alterations and additions shall comply with all applicable laws,
statues, orders, ordinances, rules and regulations.  Landlord agrees, if
necessary and at no cost to Landlord, to join in any applications to
governmental authorities for such permits as may be required to do the work
contemplated in this Section 9.  Any permanent additions to or alterations of
the Premises which cannot be removed without material damage to the Premises,
except removable paneling and wall fixtures and furniture and trade fixtures
(and further excluding all signs, and goods and materials used in the Tenant's
business) shall become a part of the realty and belong to Landlord unless
otherwise agreed by Landlord and Tenant.  Tenant's removable paneling and wall
fixtures and furniture, trade fixtures, signs, goods and materials used in
Tenant's business shall at all times remain personal property and may be removed
from time to time by Tenant or other occupants of the Premises, provided,
however, that Tenant shall be responsible for the cost of repair of any physical
injury to the Premises caused by the removal of any such property, but not for
any diminution in value of the Premises caused by the absence of the property
removed or by any necessity for replacing such property.

10.  Ingress and Egress.
------------------ 

Subject to the Declaration, the Ground Lease and the Sub-Ground Lease,
Landlord grants to Tenant the nonexclusive right to ingress and egress to the
Premises over all easements and rights of way providing a means of access from
public streets and highways to the Premises.  Landlord represents and warrants
to Tenant that, based on Landlord's actual knowledge, without inquiry, Landlord
has no reason to believe that Tenant will not have full and unimpaired access
from 

7

public streets and highways to the Premises at all times except as provided
in Sections 12, 16 and 17 of this Lease.  Landlord will not interrupt or disturb
any entrances, and will use all reasonable means within Landlord's control to
prevent any interruption, disturbance or deprivation by any third party.  Tenant
will rely on title insurance to be obtained at Tenant's own cost to provide
assurance of legal access from the Premises to a public right of way.

11.  Abandonment.
----------- 

Tenant shall endeavor to continuously occupy the Premises and not vacate or
abandon the Premises at any time during the Term for more than thirty (30)
consecutive days unless required to do so by duly authorized legal authority or
other cause beyond Tenant's reasonable control.  Notwithstanding the foregoing,
in the event Tenant fails to occupy the Premises for period of thirty (30)
consecutive days or longer but is still making rent payments to Landlord as
required under this Lease, Tenant's failure to occupy the Premises shall not be
deemed to be an abandonment or vacation of the Premises or a default under the
Lease.

12.  Repairs and Maintenance.
----------------------- 

A.   Tenant, at all times throughout the Term, and at its sole expense,
shall keep and maintain the Premises in good repair and in clean, safe, orderly,
sanitary and first class condition in compliance with all applicable laws,
codes, ordinances, rules and regulations, free of any accumulation of dirt and
rubbish, and Tenant shall arrange its own trash removal.  Tenant's obligations
extend to the entirety of the Premises and shall also include but not be limited
to the maintenance, repair, and replacement, if necessary, of all interior
lighting, HVAC, parking lot, driveways located on the Premises, sidewalks,
loading docks and exterior light fixtures located on the Premises, landscaping
on the Premises, electrical and plumbing systems including without limitation
all sewer lines, fixtures and equipment, all restrooms, all interior walls and
ceilings, partitions, and doors and windows, including the regular painting of
the interior of the Building, and the replacement of all broken glass from all
doors and windows unless breakage is due to a defect in the design, materials or
workmanship of the Building or the Premises (excluding Tenant's design errors),
to a breach of Landlord's own repair and maintenance obligations under this
Lease, or to Landlord's negligence.  When used in this provision, the term
"repairs" shall include ordinary and customary replacements or renewals when
necessary, and all such repairs made by the Tenant shall be equal in quality and
class to the original work.

B.   Notwithstanding anything in Section 12.A of this Lease, Tenant shall
specifically not be required to perform or pay for any structural changes or
capital expenditures on the Premises in order to comply (i) any law, ordinance,
rule or regulation; or (ii) with any recommendation of Landlord's insurance
rating organization, unless the same is required as the direct result of
Tenant's particular use of the Premises (as opposed to Tenant's mere occupancy
of the Premises or 

8

Tenant's conduct of business, generally), except to the extent that Tenant is
required to pay to Landlord Tenant's pro rata share of certain amortized capital
expenditures as provided in Section 47 of this Lease.

C.   If Tenant fails, refuses or neglects to maintain or repair the
Premises as required in Section 12.A of this Lease for thirty (30) days after
notice shall have been given Tenant, Landlord may make such repairs without
liability to Tenant for any loss or damage that may accrue to Tenant's
merchandise, fixtures or other property or to Tenant's business by reason
thereof (except that Landlord shall be liable for its own negligence or willful
misconduct), and upon completion thereof, Tenant shall pay to Landlord all
reasonable costs plus 10% for overhead incurred by Landlord in making such
repairs within fifteen (15) business days after Tenant receives from Landlord
the bill therefor with supporting documentation.

D.   Landlord shall be responsible for maintenance, repair and replacement
of the structural elements of the roof and shall keep the foundation (concrete
slab floor), exterior walls, and all other structural portions of the Premises
and the Building (not otherwise designated to be maintained and repaired by
Tenant) in good repair and in a clean, safe, sanitary and first class condition
and in compliance with all applicable laws, codes, ordinances, rules and
regulations, and if necessary or required by proper governmental authority, make
modifications or replacements thereof, except that Landlord shall not be
required to make any such repairs, modifications or replacements which become
necessary to desirable by reason of the negligence or willful misconduct of
Tenant, its agents, servants or employees, or by reason of anyone illegally
entering or upon the Premises, which repairs, modifications or replacements
shall be made by Tenant at is sole expense.  Landlord shall also remedy, at
Landlord's sole expense, any latent defects in the Building and the Tenant
Improvements, as well as any damage to the Premises caused by the willful act or
negligence of Landlord or its agents.  Landlord shall also repair any defects or
failures in building systems to the extent the same were not constructed in
accordance with the terms of this Lease or applicable law.  Notwithstanding the
foregoing, Landlord shall have no liability under this paragraph for any repair,
maintenance or replacement required because of Tenant's own design error, and
nothing in this Section 12.D will alter Tenant's obligation to pay Operating
Costs to Landlord under Section 47 of this Lease even though this Section 12.D
may impose on Landlord the obligation of performing the necessary maintenance,
repair or replacement.

13.  Interior Mechanical Equipment (HVAC System).
------------------------------------------- 

A.   Landlord represents and warrants to Tenant that the heating and air
conditioning equipment serving the Premises installed by Landlord shall meet
Tenant's specifications for such equipment.

B.   During the Term of this Lease, Tenant at its expense, shall provide
proper, periodic and normal maintenance and inspection for all heating and air

9

conditioning equipment as exists upon the Premises.  If this equipment requires
repairs or replacement of parts, or both, of a major or substantial nature
(i.e., in excess of proper, periodic and normal maintenance and inspection),
these repairs or replacements, or both, shall be made by Tenant at its expense.
If any heating and air conditioning equipment is installed as part of the Tenant
Improvements, Landlord shall transfer to Tenant all warranties received from the
manufacturers, dealers and/or installers of such heating and air conditioning
and other mechanical equipment, and agrees to assist Tenant, to a reasonable
degree, in enforcing any such warranty.

14.  Utilities and Services.
---------------------- 

Tenant shall pay for all sewer, water, heat, gas, fuel, electricity,
telephone service and all other services in the nature of utility services
supplied to the Premises for use by Tenant as well as services supplied to
Tenant in the operation of its business, together with any taxes thereon.
Tenant shall have the right to operate all electrical heating, ventilating, air
conditioning and other systems which are part of the Premises twenty four hours
per day every day during the Term.

15.  Inspection.
---------- 

Tenant will allow Landlord access to the Premises at reasonable times
during normal working hours for the purpose of examining the same or making
repairs Landlord is required to make and for exhibiting the Premises to any
prospective purchaser of the Premises or lenders thereon, and, during the one
hundred twenty (120) days prior to the expiration of the Term, to prospective
tenants.  During those times, Landlord may place "For Lease" or "For Sale" signs
on the Premises.

16.  Damage or Destruction of Premises.
--------------------------------- 

A.   In the event of damage to the Building by any cause which renders the
Building untenantable in part but Tenant is able in its reasonable judgment to
conduct its business therein and Tenant continues to occupy the Building in part
("Minor Damage"), the rent shall be apportioned and reduced from the date the
damage occurs in the proportion that the unoccupied portion of the Building
bears to the entire Building until the damage has been repaired.  In the event
of damage (including destruction) to the Building by any cause which renders the
Building untenantable in whole or in such part that Tenant in its reasonable
judgment deems it impracticable to conduct its business therein ("Major
Damage"), the rent shall wholly abate and be apportioned by the date the damage
occurs until the damage has been repaired.

B.   In the event of damage to the Premises by any cause, Landlord (except
as provided in Section 16.D of this Lease) shall commence, as soon as reasonable
possible, but in any event within ten (10) days after Landlord obtains a
building permit, to restore the damage portion of the Premises to its condition
immediately 

10

prior to such damage and shall pursue such restoration with diligence and
dispatch to conclusion.

C.   In the event that damage or destruction of the Premises shall (a) not
be repaired by Landlord within sixty (60) days from the date the damage occurs
in the case of Minor Damage (or, in the event a building permit is required
prior to repair, within sixty (60) days from the date of issuance of the
building permit, which Landlord shall pursue with diligence) or within one
hundred twenty (120) days from the date the damage occurs in the case of Major
Damage (or, in the event a building permit is required prior to repair, within
one hundred twenty (120) days from the date the damage occurs in the case of
Major Damage (or in the event a building permit is required prior to repair,
within one hundred twenty (120) days from the date of issuance of the building
permit, which Landlord shall pursue with diligence), or (b) occur during the
last twelve (12) months of the Initial Term or during the last twelve (12)
months of any extension term, Tenant shall have the right to terminate this
Lease by giving Landlord, no later than thirty (30) days after such right to
terminate arises, written notice of termination.

D.   In the event of damage or destruction to the Premises by any cause (i)
to such an extent that the cost of restoration, as reasonably estimated by
Landlord, will equal or exceed fifty percent (50%) of the replacement cost of
the Building (excluding the foundations) in its condition as of the date of such
damage or destruction, or (ii) during the last twelve (12) months of the Initial
Term or during the last twelve (12) months of any extension term, Landlord shall
have the right, in lieu of restoring the Premises, to terminate this Lease by
giving Tenant written notice within sixty (60) days of such damage or
destruction.  In such event, this Lease shall terminate as of the date of such
damage or destruction and Tenant shall surrender possession of the Premises
within a reasonable time thereafter and the total monthly rent then payable
under this Lease shall be apportioned as of the date of such termination and any
such rent paid for any period beyond said date shall be refunded to Tenant.
Notwithstanding the previous two sentences, if within thirty (30) days of
receipt of such notice from Landlord, Tenant gives written notice to Landlord
that Tenant elects to remain in the Premises, then this Lease shall not
terminate, but Landlord shall be excused from its obligation to restore the
Premises and the abatement of rent provided by Section 16.B of this Lease shall
cease effective as of the date of such written notice from Tenant.

E.   Tenant waives any statutory right to cancel this Lease or receive rent
abatement because of damage to the Premises.

17.  Condemnation.
------------ 

A.   If the whole or any substantial part of the Premises shall be taken or
condemned by any competent authority for any public use or purpose, such that
Tenant in its reasonable judgment deems it impracticable to conduct its business
therein, the Term of this Lease shall end upon, and not before, the date when
the possession of the part so taken shall actually be required for such use or
purpose.  Current rent shall thereupon be apportioned as of the date of such
termination.

11

B.   If only an insubstantial part of the Premises shall be taken or
condemned, and Tenant is able, in its judgment, to continue to operate its
business in the Premises, this Lease shall continue in full force and effect,
and the rental due thereunder shall abate proportionately to the extent that
Tenant is deprived of usable area either in the Premises or otherwise, and as of
the date of such deprivation.  If Tenant is not able, in its judgment, to
continue normal business operation, Tenant may terminate this Lease immediately
upon written notice to Landlord.  In the event this Lease is not terminated
under this Section 17.B, Landlord, to the extent practicable and at its sole
cost and expense, shall (i) restore the remaining portion of the Premises to the
extent necessary to render them reasonably suitable for the purposes for which
they were leased, and (ii) make all repairs to the Premises to the extent
necessary to constitute the premises a complete architectural unit.

C.   In any such case, whether this Lease is terminated or not, all damages
or restitution awarded for such taking or condemnation shall belong to Landlord,
provided that Tenant shall be entitled to any separate aware made for the value
of Tenant's personal property, fixtures and moving expenses (but not the value
of the Tenant Improvements and the leasehold estate).

18.  Landlord's Liability.
-------------------- 

Landlord shall not be liable for damage to property to Tenant in the
Premises or for injury to person unless such damage or injury is caused by (A)
Landlord's failure to make repairs or perform any obligations which Landlord is
obligated to make under this Lease or (B) is caused by the fault or negligence
of Landlord, or Landlord's agents, employees, contractors, subcontractors or
invitees.

19.  Default.
------- 

A.   Default by Tenant.  Each of the following shall be deemed an event of
-----------------                                                    
default by Tenant and a material breach of this Lease:

(1) Failure to pay all or any portion of any monthly Base Rent when
due and such failure shall continue for ten (10) days after written notice to
Tenant specifying such failure;

(2) Failure to pay any additional rent or other payments required
under this Lease as the same shall become due and payable to Landlord and such
failure shall continue for fifteen (15) days after written notice to Tenant
specifying such failure;

(3) Failure to do so, observe, keep and perform any of the other
terms, covenants, conditions, agreements and provisions of this Lease to be done
observed, kept or performed by Tenant and such failure shall continues for
thirty (30) days 

12

after written notice to Tenant specifying such failure, unless such failure is
one which cannot reasonably be cured within such period so long as Tenant has
commenced to cure such failure within such period and thereafter continues its
efforts to cure such failure with reasonable diligence;

(4) The filing by Tenant of a voluntary petition in bankruptcy or the
making by Tenant of a general assignment for the benefit of its creditors;

(5) The taking by execution or judgment or other process or law of all
or any part of the leasehold interest of Tenant, the adjudication of Tenant to
be a bankrupt, the appointment of a receiver of all or any of Tenant's interest
in the Premises in any action, suit or proceeding by or against Tenant, the
filing against Tenant of an involuntary petition in bankruptcy, which, in any of
the foregoing cases, is not dismissed, reversed or stayed within ninety (90)
days of its occurrence.

B.   Remedies of Landlord.  In the event of a default by Tenant, Landlord,
--------------------                                                 
in addition to any other remedies available to it at law or in equity, at its
option and, without further notice or demand of any kind to Tenant or any other
person, may:

(1) Terminate the Lease and reenter the Premises and take possession
thereof and remove all persons therefrom without liability therefore, and Tenant
shall have no further claim thereon or under this Lease; or

(2) Without terminating the Lease, reenter the Premises and relet the
whole or any part thereof for and on account of Tenant and collect any unpaid
rentals, which have become payable, or which may thereafter become payable,
together with the reasonable cost of obtaining possession of the Premises and of
reletting the Premises, including any broker's commissions, and the cost of any
repairs and alterations necessary to prepare the Premises for reletting, less
the sum of any rentals actually received from such reletting; or

(3) Even though it may have initially reentered the Premises without
termination of the Lease, thereafter elect to terminate the Lease and all of the
rights of Tenant in or to the Premises.

Should Landlord reenter the Premises under the provisions of clause (2) of this
Section 19.B, Landlord shall not be deemed to have terminated the Lease, or the
liability of Tenant to pay any total monthly rental or additional rent
thereafter accruing, or to have terminated Tenant's liability for damages under
any of the provisions hereof, by any such reentry of the Premises or the
exclusion of Tenant therefrom, unless Landlord shall have notified Tenant in
writing that it has so elected to terminate the Lease.  In the event of any
entry or taking possession of the Premises as aforesaid, Landlord shall have the
right, but not the obligation, to remove therefrom all or any part of the
personal property located therein and may place the same in storage at public
warehouse at the expense and risk of Tenant.  No action of Landlord shall be
construed as an election to terminate the Lease or to 

13

accept a surrender of the Premises unless written notice of such intention be
given to Tenant. Tenant agrees to pay as additional rental all-reasonable
attorneys' fees and other costs and expenses incurred by Landlord in enforcing
any of Tenant's obligations under this Lease.

C.   Default by Landlord.  Each of the following shall be deemed an event
-------------------                                                 
of default by Landlord and a material breach of this Lease:

(1) Failure to pay any monies required under this Lease as the same
shall become due and payable to Tenant and such failure shall continue for
twenty (20) days after written notice to Landlord (and any mortgagee identified
pursuant to Section 19.H of this Lease) specifying such failure;

(2) Failure to do, observe, keep and perform any of the other terms,
covenants, conditions, agreements and provisions of this Lease to be done
observed, kept or performed by Landlord and such failure shall continues for
thirty (30) days after written notice to Landlord (and any mortgagee identified
pursuant to Section 19.H of this Lease) specifying such failure, unless such
failure is one which cannot reasonably be cured within such period so long as
Landlord has commenced to cure such failure within such period and thereafter
continues its efforts to cure such failure with reasonable diligence.

D.   Remedies of Tenant.  In the event of a default by Landlord, Tenant, in
------------------                                                    
addition to any other remedies available to it at law or in equity or by this
Lease (other than the remedy of termination of this Lease, except where
expressly provided otherwise in this Lease), at its option and, without further
notice or demand of any kind to Landlord or any other person, may:

(1) Withhold rent equal to the amount due from Landlord to Tenant and
offset the same against any amounts due from Tenant to Landlord under this
Lease;

(2) Obtain damages or injunctive relief.

E.   Self Help.  Should either of the parties at any time fail or omit to
---------                                                           
do any act or thing provided under this Lease to be done by such party, then the
other party may, in its sole discretion, itself do or cause to be done such act
or thing after the giving of any applicable notice and the expiration of any
applicable grace period.  Any monies paid in connection with the performance of
such act or thing shall, if paid by Landlord, constitute so much additional rent
due under this Lease to be due and payable upon notice given by Landlord of the
nature and amount thereof, with the next monthly installment of rent, and if
paid by Tenant, shall constitute advance rent and shall, upon notice given by
Tenant of the nature and amount thereof, be credited against the next monthly
installment of rent and subsequent installments until credited in full or
recovered by Tenant from Landlord as damages.

14

F.   Non-Waiver.  Landlord or Tenant may restrain by any judicial means any
----------                                                            
breach or threatened breach of any covenant, agreement, term, provision or
condition of this Lease.  The mention herein of any particular remedy shall not
preclude Landlord or Tenant from any other remedy it might have either at law,
in equity or otherwise.  All the rights or remedies of Landlord or Tenant
pursuant to the terms of this Lease, or any other rights or remedies that
Landlord or Tenant may have at law, in equity or otherwise upon breach of any
covenant, agreement, term, provision or condition of this Lease shall be
distinct, separate and cumulative rights or remedies, and no one of them,
whether exercised by Landlord or Tenant or not, shall be deemed to be in
exclusion of any other.  Neither acceptance of rent by Landlord, payment of rent
or other sum by Tenant, nor failure by Landlord or Tenant to complain of any
action, non-action or default of the other, or to declare the other in default,
whether singular or repetitive, shall constitute a waiver of any of Landlord's
or Tenant's, as the case my be, rights under this Lease.  Waiver by Landlord or
Tenant of any right upon any default of the other shall not constitute a waiver
of any right for either a subsequent default of the same obligation or any
other default. Time is the essence with respect to the performance of every
provisions of this Lease in which time of performance is a factor.

G.   Prevailing Party's Right to Costs.  In the event of a dispute between
---------------------------------                            
the parties which requires a party hereto to seek redress through an action at
law or in equity the losing party shall pay, upon demand, all of the prevailing
party's costs, charges and expenses, including reasonable attorneys' fees,
incurred by such prevailing party in connection with the resolution of such
dispute; provided, however, attorneys' fees shall be due and payable only if the
prevailing party is required to file suit due to default by the losing party.
For purposes of this Section 19-G, the term "losing party" shall mean the party
which obtains substantially less relief than originally sought by such party in
the legal or equitable action and the term "prevailing party" shall mean the
party which obtained substantially the relief sought by such party in the legal
or equitable action.

H.   Notice to Mortgagee and Right to Cure.  If there is any mortgagee or
--------------------------------------                           
beneficiary of a deed of trust on Landlord's estate or its interest in this
Lease (a "mortgagee"), and provided that Landlord has given Tenant, in
accordance with the notice provisions of Section 33 of this Lease, the name and
address of any such mortgagee, Tenant may not exercise its remedies under this
Section 19 unless Tenant gave the required notice to the mortgagee and no
mortgagee elected to cure Landlord's default within the same time period as
Landlord is allowed to cure the default. Upon receipt of the required notice,
any mortgagee may, but is not obligated to, enter the Premises and cure
Landlord's default.

20.  Indemnification.
--------------- 

Tenant shall indemnify, defend and hold Landlord harmless from and against
all loss, damage, cost, expense or liability (including reasonable attorneys'
fees, expenses and disbursements) incurred by Landlord arising out of or in

15

connection with any injury to, or death of, any person, or damage to, or
destruction of, property occurring in, on, or about the Premises which injury,
death, damage or destruction is caused by the acts or omissions of Tenant or
Tenant's employees, agents, contractors or invitees or by Tenant's breach of
this Lease.  Landlord shall indemnify, defend and hold Tenant harmless from and
against all loss, damage, cost, expense or liability (including reasonable
attorneys' fees, expenses and disbursements) incurred by Tenant arising out of
or in connection with any injury to, or death of, any person, or damage to, or
destruction of, property occurring in, on, or about the Premises which injury,
death, damage or destruction is caused by the acts or omissions of Landlord or
Landlord's employees, agents, contractors or invitees or by Landlord's breach of
this Lease.  A party's obligation under this Section 20 to indemnify and hold
the other party harmless shall be limited to the sum that exceeds the amount of
insurance proceeds, if any, received by the party being indemnified.

21.  Insurance.
--------- 

A.   Landlord's Insurance.  Landlord shall obtain at competitive rates and
--------------------                                                 
shall maintain during the Term property damage insurance against damage to the
Building by fire and other risks now or hereafter embraced in all risk coverage
property damage insurance, in amounts sufficient to prevent Landlord from
becoming a co-insurer, but in no event less than eighty percent (80%) of the
Building's then replacement value (exclusive of the cost of excavations,
foundations and footings).  Landlord shall obtain at competitive rates and shall
maintain during the Term public liability insurance against liability arising as
a result of bodily injury to or death of any person or damage to other person's
property now or hereafter embraced in comprehensive general public liability
insurance, in amounts of at least $2,000,000 combined single limit.

B.   Tenant's Insurance.  Tenant shall obtain, at Tenant's sole cost and
------------------                                                 
expense, and shall maintain during the Term public liability insurance against
liability arising as a result of bodily injury to or death of any person or
damage to other person's property now or hereafter embraced in comprehensive
general public liability insurance, in amounts of at least $2,000,000 combined
single limit.

C.   All policies of insurance required to be maintained by Landlord and
Tenant pursuant to this Lease, shall name the other party as an additional
insured as their respective interests may appear (and if requested by Landlord
shall bear appropriate endorsements to protect Landlord's mortgagee, if any) and
shall be for the mutual and joint benefit and protection of Landlord and Tenant.
Certificates of such insurance shall be delivered by the party obtaining such
insurance to the other party within ten (10) days after execution of this Lease.
All such certificates shall provide that termination of the insurance evidenced
by the certificate shall be effective only after thirty (30) days prior written
notice to Landlord and Tenant.

16

D.   The parties release each other, and their respective employees and
agents, from any claims for damage to any person or to the Premises and to the
fixtures, personal property, Tenant's improvements, and alterations of either
Landlord or Tenant in or on the Premises that are caused by or result from risks
insured against under any insurance policies carried by the parties and in force
at the time of any such damage.

F.   Each party shall cause each insurance policy obtained by it to provide
that the insurance company waives all right of recovery by way of subrogation
against either party in connection with any damage covered by any policy.
Neither party shall be liable to the other for any damage caused by fire or any
of the risks insured against under any insurance policy required by this Lease.

22.  Mechanic's Liens.
---------------- 

Tenant will not permit any mechanic's or materialmen's or other liens to
stand against the Premises for any labor or material furnished Tenant in
connection with work of any character performed on the Premises by or at the
direction of Tenant.  Landlord will not permit any mechanic's or materialmen's
or other liens to stand against the Premises for any labor or material furnished
Landlord in connection with work of any character performed on the Premises by
or at the direction of Landlord.  However, Landlord and Tenant shall
respectively have the right to contest the validity or amount of any such lien,
but upon the final determination of such questions shall immediately pay any
adverse judgment rendered with all proper costs and charges and shall have the
lien released at the contestant's own expense.  If Landlord or Tenant desires to
contest any such lien, then prior to commencing such contest it will furnish the
other party with a bond, if requested, to secure the payment of such obligation,
per the requirements of the applicable Arizona statutes.

23.  Assignment or Subletting.
------------------------ 

A.   Assignment or Subletting by Tenant.  Upon the prior written consent of
----------------------------------                                    
Landlord, which shall not be unreasonably withheld or delayed, Tenant may assign
this Lease or sublease the Premises or any part thereof or mortgage, pledge or
hypothecate its leasehold interest (collectively, "transfer").  Notwithstanding
the previous sentence, Tenant may transfer this Lease without Landlord's consent
to any person which is the parent or subsidiary of or controls or is controlled
by Tenant, or to a person resulting from any reorganization or merger to which
Tenant or its parent or any of its subsidiaries or any person controlled by it
is a party, provided that the transferee expressly assumes the obligations of
Tenant under this Lease.  Any attempt to transfer this Lease without Landlord's
consent, where such consent is required, shall be void.  Tenant shall notify
Landlord in writing of any proposed transfer requiring Landlord's consent, and
Landlord shall have ten (10) business days following receipt of such notice and
financial statements of the proposed transferee to disapprove of such transfer
or Landlord's consent to such 

17

transfer shall be deemed given. Notwithstanding any transfer by Tenant or any
consent which may be granted by Landlord, Tenant shall remain liable for all
sums and obligations due hereunder, unless Landlord agrees in writing to release
Tenant from such liability. Consent by Landlord to a particular transfer shall
not be deemed a consent to any other or subsequent transfer.

B.   Assignment by Landlord.  Landlord shall have the right to transfer, in
----------------------                                                
whole or in part, its interest in this Lease or the Premises.  No such transfer
shall require Tenant to deal with more than one person as Landlord under this
Lease and, in the event of any transfer by Landlord resulting in more than one
person being a Landlord, such persons shall appoint a single person to exercise
all the powers of Landlord under this Lease.  In the event of any such transfer
by Landlord, Tenant shall attorn to Landlord's transferee and such transferee
shall assume and agree to perform all Landlord's obligations under this Lease
and recognize and not disturb Tenant's estate.  Landlord shall notify Tenant of
any transfer of Landlord's interest in the Premises.  Upon such transfer by
Landlord, Landlord shall be released from the obligations to be performed by
Landlord after the transfer.

24.  Run With The Land.
----------------- 

The covenants and conditions herein contained shall be construed as running
with the land, apply to and bind the parties hereto, and their respective heirs,
representatives, executors, administrators, successors and assigns.

25.  Option to Extend.
---------------- 

A.   If Tenant is not currently in default in the performance of any of its
obligations under this Lease, Tenant shall have the right to extend the Term for
four (4) consecutive five (5) year terms (the "Option Periods") commencing at
the expiration of the Initial Term in the case of the first Option Period and at
the expiration of the previous Option Period in the case of each succeeding
Option Period.  The Lease of the Premises during any Option Period shall be upon
the same terms and conditions as set forth in this Lease, excepting the Base
Rent which shall be determined as set forth in Section 25.B of this Lease.  If
Tenant does not exercise such option by giving written notice to Landlord of
Tenant's exercise of the option (the "Option Notice") by the date at least one
hundred eighty (180) days prior to the expiration of (i) the Initial Term in the
case of the first Option Period, or (ii) the previous Option Period in the case
of each succeeding Option Period, then all rights of Tenant under this Section
25 shall automatically terminate.  If this Lease or Tenant's right to possession
of the Premises shall expire or terminate for any reason whatsoever before
Tenant exercises its options, then, immediately upon such expiration or
termination, these options shall simultaneously terminate and become null and
void.

B.   The Base Rent payable by Tenant to Landlord during each Option Period
shall be equal to the Actual Rentable Square Feet multiplied by the then-

18

current "Market Rate" for the Premises, defined as the then-current fair market
rental value (expressed as a per rentable square foot-monthly rental rate) for
comparable space in competing buildings of similar size, type, quality and
location, but in no event less than the Base Rent payable during (i) the Initial
Term in the case of the first Option Period or (ii) the previous Option Period
in the case of each succeeding Option Period. The Base Rent and/or Market Rate
shall be determined as follows:

1.   Promptly following receipt by Landlord the Option Notice,
Landlord and Tenant shall attempt to reach agreement on the Base Rent for the
Option Period. If Landlord and Tenant are able to agree on the Base Rent for the
Option Period, Landlord and Tenant shall execute an amendment to this Lease
stating the agreed upon Base Rent.

2.   If the parties are unable to agree on the Base Rent for the
Option Period within thirty (30) days following the Option Notice, then each
party, at its cost and by giving notice to the other party, shall have ten (10)
days within which to appoint an MAI full-time commercial real estate appraiser
with at least five (5) years experience to appraise and determine the Market
Rate for the Premises during the Option Period. Within sixty (60) days following
the Option Notice, each appraiser shall appraise and determine the Market Rate
for the Option Period. The appraisers shall arrange for (a) the simultaneous
exchange of each appraiser's determination of the Market Rate for the other
appraiser's determination of the Market Rate and (b) the communication of both
determinations of Market Rate to Landlord and Tenant. If the difference between
the two determinations of Market Rate is less than or equal to ten percent (10%)
of the higher of the two determinations of Market Rate, then the Market Rate
shall be the average of the two determinations of Market Rate and the appraisers
shall notify Landlord and Tenant of the Market Rate so determined. If the
difference between the two determinations of Market Rate is more than ten
percent (10%) of the higher of the two determinations of Market Rate, then the
Market Rate shall be determined as set forth in Section 25.B.3 of this Lease. If
a party does not appoint an appraiser within such ten (10) day period or the
appraiser appointed by a party does not appraise and determine the Market Rate
within such sixty (60) day period, the determination of the Market Rate by the
single appraiser appointed by the other party shall be the Market Rate for the
Option Period. Each of the parties shall bear the cost of its own appraiser.

3.   In the event the operation of Section 25.B.2 of this Lease
results in the Market Rate being determined by this Section 25.B.3, then, within
seventy (70) days following the Option Notice, the two appraisers appointed by
the parties shall meet to select a third appraiser. Each appraiser shall
nominate no more than three such appraisers (with qualifications as described
Section 25.B.2 of this Lease and with the added qualification that each such
nominee shall be a person who has not within the previous three years acted in
any capacity for either party). The two appraisers shall either agree on the
third appraiser from among the nominees or, if they are unable to agree, select
the third appraiser by lot from among the nominees 

19

and notify Landlord and Tenant of the third appraiser so selected. Within 
eighty-five (85) days following the Option Notice, the third appraiser shall
review the work product of the two appraisers appointed by the parties and
determine which of the two determinations of Market Rate made by such appraisers
is, in the judgment of the third appraiser, the more accurate determination of
Market Rate and shall notify Landlord and Tenant of such determination. The
third appraiser may select only one of the two determinations of Market Rate
made by the two appraisers appointed by the parties and may not select another
rate. Each of the parties shall bear one-half (1/2) of the cost of the third
appraiser.

26.  Expansion.
--------- 

A.   Expansion Option.  If Tenant is not currently in default in the
----------------                                               
performance of any of its obligations under this Lease, Tenant shall have the
right (the "Expansion Option") to have Landlord expand the Building to add a
minimum of an additional fifteen thousand (15,000) usable square feet and a
maximum of an additional forty thousand (40,000) usable square feet (the
"Expansion Space") and additional parking spaces.  If Tenant does not exercise
the Expansion Option by giving written notice to Landlord of Tenant's exercise
of the Expansion Option (the "Expansion Option Notice") on or before the third
anniversary of the Commencement Date, then all rights of Tenant under this
Section 26 shall automatically terminate.

B.   Effect on Term.  If the Expansion Option Notice is given on or before
--------------                                                       
the first anniversary of the Commencement Date, there shall be no adjustment to
the Initial Term.  If the Expansion Option Notice is given after the first
anniversary of the Commencement Date but on or before the second anniversary of
the Commencement Date, the Initial Term shall be extended by one year, unless
Tenant elects not to give a Notice to Proceed as provided in Section 26.C. If
the Expansion Option Notice is given after the second anniversary of the
Commencement Date but on or before the third anniversary of the Commencement
Date, the Initial Term shall be extended by two years, unless Tenant elects not
to give a Notice to Proceed as provided in Section 26.C. The Base Rent
applicable during the Initial Term shall continue to be applicable during any
extension of the Initial Term resulting from the operation of this Section 26.B.

C.   Notice to Proceed.  In addition to exercising the Expansion Option in
-----------------                                                    
the Expansion Option Notice, Tenant shall also specify in the Expansion Option
Notice the number of additional usable square feet desired, the general
configuration of the Expansion Space, and the target date for completion of the
Expansion Space.  Within thirty (30) days of receipt of the Expansion Option
Notice, Landlord shall deliver to Tenant a written response which shall either
(i) set forth Landlord's good faith estimates of the total cost of construction
of the Expansion Space (including Landlord's "soft costs" and "general
conditions" as described in Sections 26.G and 26.H of this Lease), the increase
in the Base Rent and the schedule for the construction of the Expansion Space
(the "Expansion Schedule") or (ii) notify 

20

Tenant that construction of the Expansion Space is not permitted by applicable
law or regulations or the Declaration. If Landlord provides a- response under
clause (i), then, within fifteen (15) days of receipt of Landlord's response,
Tenant will notify Landlord whether Tenant elects to proceed with construction
of the Expansion Space (the "Notice to Proceed"). If Landlord provides a
response under clause (ii), then Landlord and Tenant shall meet with one another
and confer in good faith to determine what, if anything, can be done to permit
the construction of the Expansion Space and, if a solution is found, for
Landlord to advise Tenant of the estimated cost, increase in Base Rent and time
to complete construction after which, if Tenant elects to proceed, Tenant shall
issue a Notice to Proceed to Landlord.

D.   Expansion Plans.  Upon receipt of the Notice to Proceed, Landlord
---------------                                                  
promptly shall have an architect prepare drawings and specifications for the
construction of the additional Building shell to contain the Expansion Space
(the "Building Shell Expansion") and additional parking spaces at the ratio of
six parking space per 1000 rentable square feet of the Expansion Space with 15%
of such spaces being covered parking (the "Building Shell Expansion Plans and
Additional Parking Spaces Plans") and shall submit them to Tenant within thirty
(30) days of receipt of the Notice to Proceed. (Tenant acknowledges that under
current City of Tempe building regulations no more than 835 parking spaces may
be allowed for the Premises, including the Expansion Space.) The Building Shell
Expansion shall meet the same specifications as that set forth in the Building
Shell Outline Specifications, Exhibit B hereto. Within ten (10) days of receipt,
Tenant shall review and approve the Building Shell Expansion Plans and
Additional Parking Spaces Plans or advise Landlord of the specific changes
reasonably necessary to the Building Shell Expansion Plans and Additional
Parking Spaces Plans to make the Expansion Space and additional parking suitable
for Tenant.

E.   Construction of Building Shell Expansion and Additional Parking.
---------------------------------------------------------------  
After revising the Building Shell Expansion Plans and Additional Parking Spaces
Plans to the extent necessary, Landlord shall promptly seek all necessary
permits for the construction of the Building Shell Expansion and the additional
parking and shall pursue the construction thereof with all due diligence and
dispatch. Landlord shall use subcontractors to construct the Building Shell
Expansion and the additional parking and shall purchase the necessary materials
from suppliers. For each portion of the work, Landlord shall make a good faith
attempt to obtain bids from at least three subcontractors or suppliers which (i)
are properly licensed (in the case of subcontractors) to construct the
respective portion of the Building Shell Expansion and the additional parking on
which such subcontractors are bidding, (ii) are not affiliated with Landlord,
and (ii) Landlord believes are reputable, competent and efficient. Landlord
shall submit all such bids to Tenant for Tenant's review together with
Landlord's recommendation as to which subcontractor or supplier should be
selected to construct each portion of the Building Shell Expansion and the
additional parking or supply the necessary materials. Tenant shall designate
which subcontractor or supplier is to construct each portion of the Building
Shell Expansion and the additional parking or supply the necessary materials
(the

21

"Designated Building Shell Expansion Subcontractor"). Landlord promptly shall
employ the Designated Building Shell Expansion Subcontractor to do so.
Thereafter, Landlord shall cause the Designated Building Shell Expansion
Subcontractor to prosecute the construction of such Designated Building Shell
Expansion Subcontractor's portion of the Building Shell Expansion and the
additional parking diligently to completion or furnish the materials to be
supplied by such Designated Building Shell Expansion Subcontractor pursuant to
the Expansion Schedule and in conformance with the Building Shell Outline
Specifications and in compliance with all applicable laws, statutes, orders,
ordinances, rules and regulations. The first three sentences of Section 4.F of
this Lease and all of Section 4.H of this Lease shall apply to the construction
of the Building Shell Expansion and additional parking.

F.   Construction of Expansion Space Tenant Improvements.  Landlord shall
----------------------------------------------------                 
provide Tenant with an allowance (the "Expansion Space Tenant Improvements
Allowance") equal to the actual rentable square feet of the Expansion Space,
measured in accordance with Section 46 of this Lease, multiplied by Thirty-Seven
Dollars and Ten Cents ($37.10) per rentable square foot. The Expansion Space
Tenant Improvements Allowance is to be used as an allowance towards the cost of
the Expansion Space Tenant Improvements described in this Section 26.F and for
space planning expenses (not to exceed Ten Cents ($0.10) per rentable square
foot). Within thirty (30) days after finalization by Landlord of the Building
Shell Expansion Plans and Additional Parking Spaces Plans, Tenant shall deliver
to Landlord such drawings and specifications (the "Expansion Space Tenant
Improvements Drawings and Specifications") as are reasonably necessary to
describe the improvements which Tenant desires to have made to the Expansion
Space (the "Expansion Space Tenant Improvements"). The Expansion Space Tenant
Improvements are subject to Landlord's approval, which approval shall not be
unreasonably withheld or delayed. Landlord shall diligently proceed to have the
Expansion Space Tenant Improvements constructed as set forth in this Section
26.F and to have issued all necessary certificates of occupancy and all other
permits required to occupy the Expansion Space and use the additional parking
(the "Expansion Space Occupancy Permits") pursuant to the Expansion Schedule.
Landlord shall use subcontractors to construct the Expansion Space Tenant
Improvements. For each portion of the work, Landlord shall make a good faith
attempt to obtain bids from at least three subcontractors which (i) are properly
licensed to construct the respective portion of the Expansion Space Tenant
Improvements on which such subcontractors are bidding, (ii) are not affiliated
with Landlord, and (ii) Landlord believes are reputable, competent and
efficient. Landlord shall submit all such bids to Tenant for Tenant's review
together with Landlord's recommendation as to which subcontractor should be
selected to construct each portion of the Expansion Space Tenant Improvements.
Tenant shall designate which subcontractor is to construct each portion of the
Expansion Space Tenant Improvements (the "Designated Expansion Space Tenant
Improvements Subcontractor"). Landlord promptly shall employ the Designated
Expansion Space Tenant Improvements Subcontractor to do so. Thereafter, Landlord
shall cause the Designated Expansion Space Tenant Improvements Subcontractor to
prosecute the

22

construction of such Designated Expansion Space Tenant Improvements
Subcontractor's portion of the Expansion Space Tenant Improvements diligently to
completion in conformance with the Expansion Space Tenant Improvements Drawings
and Specifications and in compliance with all applicable laws, statutes, orders,
ordinances, rules and regulations. The first three sentences of Section 4.F of
this Lease and all of Section 4.H of this Lease shall apply to the construction
of the Expansion Space Tenant Improvements.

G.   Increase in Base Rent.  Within forty-five (45) days after receipt of
---------------------                                               
the Notice to Proceed, Landlord shall submit to Tenant a detailed itemization of
the total development cost of constructing the Expansion Space (the "Expansion
Space Construction Cost"), which shall consist of (i) the reasonable costs
actually incurred by Landlord and the reasonable Landlord fees pertaining to the
construction of the Building Shell Expansion and the additional parking in the
categories set forth on Exhibit H attached hereto (the "Building Shell Expansion
Soft Costs and Fees"), (ii) the amount authorized by Tenant to be paid to the
Designated Building Shell Expansion Subcontractors for construction of the
Building Shell Expansion and the additional parking or supply of materials,
including, without limitation, labor, materials and equipment, (iii) the
reasonable expenses actually incurred by Landlord for its "general conditions"
associated with such construction in the categories set forth on Exhibit I
attached hereto (the "Building Shell Expansion General Conditions"), (iv) an
amount equal to eight percent (8%) of the amount specified in the foregoing
clause (ii) of this Section 4.B as Landlord's Building Shell Expansion
construction fee, and (v) the Expansion Space Tenant Improvements Allowance.
Upon issuance of the Expansion Space Occupancy Permits the Base Rent shall
increase by an amount determined by the following formula:

IBR = ESCC x 0.105 / 12

Where IBR is the increase in the monthly Base Rent and ESCC is the Expansion
Space Construction Cost, as defined above. No additional land costs shall be
included in ESCC. The parties shall promptly enter into a written amendment to
this Lease memorializing the increase in the Base Rent and, if applicable, the
extension of the Initial Term. Until fifteen (15) days after Landlord has
delivered the detailed itemization required under this Section 26.G, all
elements and components of ESCC shall be subject to examination, inspection and
audit by Tenant at Tenant's sole cost and expense. Until the expiration of such
period, Landlord shall make its books and records freely and openly available to
Tenant for such purposes upon reasonable advance notice and during normal
business hours.

H.   Expansion Space Tenant Improvements Cost.  Within thirty (30) days
----------------------------------------                          
after completion of construction of the Expansion Space Tenant Improvements as
provided in Section 26-F of this Lease and issuance of all Expansion Space
Occupancy Permits, or as soon thereafter as reasonably possible, Landlord shall
submit to Tenant a detailed itemization of the total development cost of
constructing the Expansion Space Tenant Improvements (the "Expansion Space
Tenant

23

Improvements Cost"), which shall consist of (i) the amount authorized by Tenant
to be paid to the Designated Expansion Space Tenant Improvements Subcontractors
for construction of the Expansion Space Tenant Improvements, including, without
limitation, labor, materials and equipment, (ii) the reasonable expenses
actually incurred by Landlord for its "general conditions" associated with such
construction in the categories set forth on Exhibit J attached hereto (the
"Expansion Space Tenant Improvements General Conditions") and (iii) an amount
equal to eight percent (8%) of the amount specified in the foregoing clause (i)
of this Section 26.H as Landlord's Expansion Space Tenant Improvements
construction fee. If the Expansion Space Tenant Improvements Cost exceeds the
Expansion Space Tenant Improvements Allowance, the difference shall be paid by
Tenant to Landlord within thirty (30) days after submission of such detailed
itemization. If the Expansion Space Tenant Improvements Allowance exceeds the
Expansion Space Tenant Improvements Cost, the difference shall be paid by
Landlord to Tenant within thirty (30) days after submission of such detailed
itemization, or, at Landlord's election, the difference will be credited to the
first payments of Base Rent falling due on a dollar for dollar basis until the
difference is exhausted. Until ninety (90) days after Landlord has delivered the
detailed itemization required under this Section 26.H, all elements and
components of the Expansion Space Tenant Improvements Cost shall be subject to
examination, inspection and audit by Tenant at Tenant's sole cost and expense.
Until the expiration of such period, Landlord shall make its books and records
freely and openly available to Tenant for such purposes upon reasonable advance
notice and during normal business hours.

I.   Successor Liability.  The obligations of Landlord under this Section
-------------------                                                 
26 shall be binding on any successor of Landlord or Landlord's interest in the
Premises or this Lease, except (i) any person who is a successor as the result
of foreclosure of a mortgage or deed of trust, exercise of the trustee's power
of sale under a deed of trust encumbering any such interest of Landlord, or
conveyance in lieu of foreclosure or (ii) the Regents, Price-Elliott or any of
their successors who are successors to any such interest of Landlord as the
result of termination of the Subground Lease (as such terms are defined in
Section 57 of this Lease).

J.   Construction by Tenant.  If Landlord (or any successor to Landlord,
----------------------                                             
including a successor referred to in clause (i) or (ii) of Section 26.1) fails
to construct the Expansion Space, Tenant, in addition to all its other rights
and remedies including damages and specific performance (but excluding any right
to terminate this Lease), may do so through a licensed contractor and there
shall be no increase in Base Rent.

24

27.  Tri-Party Agreement.
------------------- 

Contemporaneously with the execution and delivery of this Lease, Landlord
and Tenant shall execute and deliver, and Landlord shall cause Price-Elliott to
execute and deliver the Tri-Party Agreement substantially in the form attached
hereto as Exhibit K.

28.  Holdover.
-------- 

Any holding over after the expiration of the Term of this Lease or any
extension thereof, with the consent of Landlord, shall be construed to be a
tenancy from month-to-month, at the same Base Rent as paid during the last month
of the Term and shall otherwise be on the terms and conditions herein specified
so far as applicable. Any holding over after the expiration of the Term of this
Lease or any extension thereof, without the consent of Landlord, shall be
terminable immediately and Tenant shall be liable to Landlord for rent at the
rate of one hundred twenty five percent (125%) of the Base Rent payable during
the last month of the Term.

29.  Intentionally Omitted.
--------------------- 

[This section intentionally omitted.]

30.  Alternative Dispute Resolution.
------------------------------ 

Landlord and Tenant shall attempt to settle any claim or controversy
arising out of this Lease, but excepting Tenant's failure to pay Base Rent,
through consultation and negotiation in the spirit of mutual friendship and
cooperation. If such attempts fail, then the dispute shall first be submitted to
a mutually acceptable neutral advisor for mediation, fact-finding or other form
of alternate dispute resolution. Neither of the parties may unreasonably
withhold acceptance of such an advisor, and his or her selection will be made
within thirty (30) days after notice by the other party demanding such
mediation. Cost of such mediation or any other alternate dispute resolution
agreed upon by the parties shall be shared equally by Landlord and Tenant. Any
dispute which cannot be so resolved between the parties within ninety (90) days
of the date of the initial demand by either party for such mediation, shall be
finally determined by the courts. The use of such a procedure shall not be
construed to affect adversely the rights of either party under the doctrines of
laches, waiver or estoppel. Nothing in this Section 30 shall prevent either
party from pursuing judicial proceedings if (a) good faith efforts to resolve a
dispute under these procedures have been unsuccessful or (b) interim resort to a
court is necessary to prevent serious and irreparable injury to a party, to
others, to the Premises, or to the environment.

25

31.  Environmental.
------------- 

A.   As used herein, the following terms shall have the following meanings:
(1) "Hazardous Substances" shall be as defined in the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section 9601
et seq.) (CERCLA), and any regulations promulgated pursuant thereto; (2)
-- ---                                                                  
"Hazardous Wastes" shall be as defined in the Resource Conservation and Recovery
Act (42 U.S.C. Section 6901 et seq.) (RCRA), and any regulations promulgated
-- --- 
pursuant thereto; (3) "Pollutants" shall be as defined in the Clean Water Act
(33 U.S.C. Section 1251 et seq.), and any regulations promulgated pursuant
-- ---                                            
thereto; (4) "Environmental Hazards" shall mean Hazardous Substances, Hazardous
Wastes, Pollutants, asbestos, polychlorinated biphenyls (PCBs), petroleum or
other fuels (including crude oil or any fraction or derivative thereof) and
underground storage tanks; (5) "Indemnified Events" shall mean: (a) any
governmental action, order, directive, administrative proceeding or ruling; (b)
personal or bodily injuries (including death) or damage (including loss of use)
to any property (public or private); (c) cleanup, remediation, investigation or
monitoring of any pollution or contamination of or adverse effects on human
health or the environment; or (d) any violation or alleged violation of laws,
statutes, ordinances, orders, rules or regulations of any governmental entity or
agency; and (6) "Liabilities" shall mean any and all liabilities, penalties,
fines, forfeitures, demands, damages, losses, claims, causes of action, suits,
judgments, and costs and expenses incidental thereto (including cost of defense,
settlement, reasonable attorney's fees, reasonable consultant's fees and
reasonable expert fees).

B.   Landlord agrees to defend, indemnify and hold harmless Tenant,
Tenant's successors and assigns and Tenant's present and future officers,
directors, employees and agents (collectively "Tenant Indemnitees") from and
against Liabilities which Tenant or any or all of the Tenant Indemnitees may
hereafter suffer, incur, be responsible for or disburse as a result of any
Indemnified Event directly or indirectly caused by or arising out of any
Environmental Hazards existing on or about the Premises prior to the date Tenant
takes occupancy of the Premises except to the extent that any such existence is
caused by the activities of Tenant, or its agents, contractors, employees, or
invitees on the Premises. This provision shall survive termination of the Lease.

C.   Tenant agrees to defend, indemnify and hold harmless Landlord,
Landlord's successors and assigns and Landlord's present and future officers,
directors, employees and agents (collectively "Landlord Indemnitees") from and
against Liabilities which Landlord or any or all of the Landlord Indemnitees may
hereafter suffer, incur, be responsible for or disburse as a result of any
Indemnified Event directly or indirectly caused by or arising out of any
Environmental Hazards existing on or about the Premises but only to the extent
that any such existence is caused by the activities of Tenant, or Tenant's
assignees or sublessees, or their agents, contractors, employees, or invitees on
the Premises. This provision shall survive termination of the Lease.

26

D.   Tenant and Landlord each acknowledge receipt of a copy of the Phase I
Environmental Site Assessment dated October 13, 1993 prepared for the Regents
and Price-Elliott, as defined in Section 56 of this Lease, by Foree & Vann, Inc.
covering a portion of the Research Park, including the Land and a copy of the
Phase One/Limited Phase Two Environmental Site Assessment dated October 17, 1997
prepared for Landlord by B. A. Liesch Associates, Inc. covering the Land. Except
as otherwise disclosed in such assessments, Landlord, to the extent of its
current actual knowledge, knows of no Hazardous Materials contamination of the
Land.

32.  Brokers.
------- 

The parties agree that CB Commercial Real Estate Group, Inc. ("Broker") is
the sole broker who brought about this Lease. Landlord shall pay the commission
of Broker pursuant to the terms of a separate agreement, including any
additional commission payable in the event the Expansion Space is constructed by
Landlord under Section 26 of this Lease. Tenant represents and warrants that
Tenant has not dealt with any other real estate broker in connection with the
leasing of the Premises, and Tenant shall indemnify, defend and hold Landlord
harmless against any and all claims of any other brokers with whom Tenant has
had any such dealings. Landlord represents and warrants that Landlord has not
dealt with any other real estate broker in connection with the leasing of the
Premises, and Landlord shall indemnify, defend and hold Tenant harmless against
any and all claims of any other brokers with whom Landlord has had any such
dealings.

33.  Notices.
------- 

All notices, approvals or requests in connection with this Lease shall be
sent by certified mail, telephone facsimile transmission, personal delivery, or
via overnight carrier with delivery charges prepaid or with delivery not
conditioned upon payment of charges, except notices concerning repairs and
replacements which may be given orally or by any other means which might
reasonably be expected to give the other party notice; provided, however, that
no notice other than by personal delivery, certified mail or overnight carrier
shall constitute a notice of default. The date notice is effective shall be the
date on which the notice is delivered if notice is given by personal delivery,
the date on which the notice is received, if notice is given by facsimile
transmission or commercial air courier service, or three (3) days following
deposit in the mail, if notice is sent through the United States mail. Notices
to the Landlord shall be addressed to Landlord at the address of the Landlord
set forth on the first page of this Lease, or, in the event Landlord is no
longer the Landlord under this Lease and the new Landlord has failed to specify
an address for notices, then to the person to whom the rent was last paid at the
address to which such payment was sent in accordance with Section 3 of this
Lease. Notices to the Tenant shall be addressed to Motorola, Inc., 3102 North
56th Street, Phoenix, Arizona 85018, Attention: Asset Manager - Real Estate.
Either party may at any time designate by written notice to the other a change
of address.

27

34.  Waiver.
------ 

Failure or delay on the part of Landlord or Tenant to exercise any right,
remedy, power or privilege under this Lease shall not operate as a waiver
thereof. A waiver, to be effective, must be in writing and must be signed by the
party making the waiver. A written waiver of a default shall not operate as a
waiver of any other default or of the same type of default on a future occasion.

35.  Amendments.
---------- 

No revision of this Lease shall be valid unless made in writing and signed
by duly authorized representatives of both parties.

36.  Quiet Enjoyment.
--------------- 

If Tenant performs the terms of this Lease, Landlord will warrant and
defend Tenant in the quiet and peaceful enjoyment and possession of the Premises
during the Term hereof and any extension without interruption by Landlord or any
person claiming under Landlord. Landlord represents and warrants to Tenant,
based on Landlord's actual knowledge, without inquiry, that subleasehold title
to the Premises is vested in Landlord subject to no liens or encumbrances except
those of record.

37.  Intentionally Omitted.
--------------------- 

[This Section intentionally omitted.]

38.  Short Form Lease.
---------------- 

The parties will at any time at the request of either one, promptly execute
duplicate originals of an instrument, in recordable form, which will constitute
a short form or memorandum of lease setting forth a description of the Premises,
the Term of this Lease and any other portions hereof, excepting the rental
provisions, as either party may request.

39.  Construction of Language.
------------------------ 

The terms Lease, lease agreement or agreement shall be inclusive of each
other, and include renewals, extensions or modifications of the Lease. Words of
any gender used in this Lease shall be held to include any other gender, and
words in the singular shall be held to include the plural and the plural to
include the singular, when the sense requires. Paragraph and section headings
and titles in this Lease are used only for convenience in finding the subject
matters and shall have no effect upon the construction or interpretation of any
part hereof.

28

40.  Entire Agreement.
---------------- 

This Lease constitutes the final expression of the agreement of the
parties. It is intended as a complete and exclusive statement of their
agreement, and it supersedes all prior and concurrent promises, representations,
negotiations, discussions and agreements that may have been made with respect to
the subject matter hereof.

41.  Severability.
------------ 

If any provision of this Lease, or the application thereof to any person or
circumstance, shall be held invalid or unenforceable by any court of competent
jurisdiction, the remainder of this Lease or the application of such provisions
to persons or circumstances, other than those as to which it is held invalid or
unenforceable, shall not be affected thereby.

42.  Estoppel Certificate.
-------------------- 

Either party shall, from time to time upon not less than fifteen (15) days'
prior written request by the other party, deliver to the requesting party a
statement in writing stating upon the receiving party's knowledge and belief:
(a) that this Lease is unmodified and in full force and effect or, that there
have been modifications, that the Lease as modified is in full force and effect;
(b) the dates to which Base Rent and other charges have been paid; and (c) that
the requesting party is not in default under any provision of this Lease or, if
in default, a detailed description thereof. Failure to deliver the certificate
within fifteen (15) days shall be conclusive upon the receiving party, for the
benefit of the requesting party and its successors, that this Lease is in full
force and effect and has not been modified except as may be represented by the
requesting party.

43.  Signs.
----- 

Tenant shall not exhibit, inscribe, paint or affix any sign on the exterior
of the Building or in any window of the Building without Landlord's prior
written consent, which shall not be unreasonably withheld or delayed. Landlord
shall provide to Tenant, at Landlord's sole cost and expense, signage on terms
and conditions reasonably acceptable to Tenant, which shall satisfy City of
Tempe signage regulations and the provisions of the Declaration.

44.  Warranties.
---------- 

Tenant's continuing possession of the Premises shall not constitute a
waiver of any warranty or of any defect in regard to workmanship or material of
the Premises (a "Defect"). Tenant shall have one year after the commencement
date within which to notify Landlord of any Defect. Landlord shall have thirty
(30) days

29

after the notification in which to commence correction of any Defect and shall
thereafter pursue such work diligently to completion.

45.  Tenant's Operations.
------------------- 

Tenant agrees for itself, its employees, agents, clients, customers,
invitees and guests, to comply fully with the following:

A.   Except for service animals, no animals or pets shall be brought or
permitted to be in the Building or on the Premises.

B.   Upon termination of this Lease or of Tenant's possession of the
Premises, Tenant shall surrender all keys for door locks and other locks in or
about the Premises and shall make known to Landlord the combination of all
locks, safes, cabinets and vaults which are not removed by Tenant.

C.   Tenant assumes full responsibility for protecting the Building from
theft, robbery and pilferage.  Except during Tenant's normal business hours,
Tenant shall keep all doors to the Building locked and other means of entry to
the Building closed and secured.

D.   Tenant shall not install or operate any machinery or mechanical
devices of a nature not directly related to Tenant's ordinary use of the
Premises and shall keep all such machinery free of vibration, noise and air
waves which may be transmitted beyond the Premises.

E.   Tenant shall not overload any driveway, parking area or any floor and
shall not install any heavy objects, safes, machines or other equipment without
having received Landlord's prior written consent as to size, maximum weight,
routing and location thereof.

F.   Tenant shall not in any manner deface or damage the Building.

G.   Tenant shall not bring into the Premises any Environmental Hazards
in violation of any environmental laws.

H.   Tenant shall ascertain from Landlord the maximum amount of electrical
current which can safely be used in the Building, taking into account the
capacity of the electric wiring in the Building and shall not use more than such
safe capacity.  Landlord's consent to the installation of electric equipment
shall not relieve Tenant from the obligation not to use more electricity than
such safe capacity.

I.   Tenant shall not burn any trash or refuse in the Building or on the
Premises.

30

Tenant shall be responsible for the observance of all of the foregoing by
Tenant's employees, agents, clients, customers, invitees and guests. Landlord
and Tenant agree that Landlord's remedy for violation of any of the foregoing by
Tenant (or any person or entity under Tenant's authority or control) shall be a
payment by Tenant to Landlord an amount equal to the reasonably substantiated
actual damages suffered or incurred by Landlord on account of such violation.

46.  Measurement to Determine Rentable Area.
-------------------------------------- 

The rentable area of the Building shall be determined by measurement from
the outside face of the exterior walls of the Building.

47.  Additional Rent-Operating Costs.
------------------------------- 

A.   Tenant shall, for the entire Term, pay to Landlord as additional rent,
without any set-off or deduction therefrom (except as otherwise expressly
provided in this Lease), one hundred percent (100%) of Operating Costs incurred
by Landlord in maintaining and operating the Premises.  Operating Costs shall be
based on a one hundred percent (100%)-occupied building, whether or not the
entire Building is actually occupied.

B.   "Operating Costs" are hereby defined to include, but shall not be
limited to: (i) real estate taxes and assessments, general or special, (ii)
insurance premiums and costs (including deductibles) for the all-risk property
and casualty insurance (which may include differences in conditions coverage,
and rent loss coverage) that Landlord maintains pursuant to Section 21-A of this
Lease, (iii) the yearly amortization of capital costs incurred by Landlord for
improvements or structural repairs to the Premises required to comply with any
laws, rules or regulations of any governmental authority having jurisdiction
over the Premises which are enacted after the commencement date of this Lease,
or with any changes in laws, rules or regulations of any governmental authority
having jurisdiction over the Premises which existed on the commencement date of
this Lease, but which changes were enacted after the, commencement date of this
Lease, or the application of either, or for the purposes of reducing Operating
Costs, which costs shall be amortized over the useful life of such improvements
or repairs, as reasonably estimated by Landlord, (iv) regular painting of the
exterior of the Building, (v) reasonable costs of routine and ordinary service
and maintenance of the roof (including reasonable preventive care, but excluding
capital repairs/replacements), unless Landlord at its election transfers to
Tenant responsibility for routine and ordinary service and maintenance of the
roof (including reasonable preventive care) and the cost thereof, (vi) all fees,
charges, and assessments including, without limitation, any common area
maintenance charges levied or assessed against, or charged to, the Premises or
any part thereof, or to Landlord in respect to the Premises or any part thereof,
pursuant to the Ground Lease, the Subground Lease or the Declaration, including,
without limitation, any fee, charge, or assessment arising out of the operation
and maintenance of Arizona 

31

State University Research Park, together with any applicable transaction
privilege or similar tax; and (vii) all Intergovernmental Agreement Service Fees
payable to City of Tempe, together with any applicable transaction privilege or
similar tax. Painting of the exterior of the Building will be done at reasonable
intervals, subject to any further requirement in the Ground Lease, the Subground
Lease, or the Declaration.

C.   Notwithstanding Sections 47.A and 47.B of this Lease, if the Premises
qualifies for a real estate tax abatement, and then only to the extent of the
abatement, Operating Costs will not include any abated real estate tax.  Except
as set forth below, Landlord is making no representations or warranties or
covenants to Tenant as to the nature or extent of any real estate tax abatement
and this Lease is not contingent on any real estate tax abatement, nor are
Tenant's obligations to Landlord under this Lease dependent on such an
abatement.  Notwithstanding the foregoing, the parties contemplate that the
Premises will enjoy the real estate tax abatement afforded by Ariz.  Rev.  Stat.
Sections 15-1636, 35-701 and 42-162(A)(11)(e).  Landlord represents and warrants
to Tenant that pursuant to Section 38 of the Subground Lease, ownership of the
Building and all other improvements constructed on the Land shall automatically
vest in the Regents as and when constructed.  The terms Regents, Price-Elliott,
Ground Lease and Subground Lease are defined in Section 56 of this Lease.  As
set forth in Section 56.D of this Lease, Landlord shall refrain from taking the
actions specified therein which could result in subjection of the Premises to ad
valorem taxes or the loss of the current real estate tax abatement applicable to
the Premises.

D.   Notwithstanding Sections 47.A and 47.B of this Lease, in no event will
Operating Costs include, nor will Tenant be obligated to pay for, (i) any
capital improvements (except only as provided in Section 47.B(iii) of this
Lease), alterations or expenditures, except HVAC (including, without limitation,
reroofing of the roof or resurfacing on the parking lot), (ii) depreciation,
(iii) Landlord's overhead or management fees, (iv) repairs, alterations,
additions, improvements or replacements made to rectify or correct any defect in
the design, materials or workmanship of the Building or the Premises or to
comply with any requirements of any governmental authority, (v) damage and
repairs attributable to fire or other casualty; (vi) damage and repairs paid for
under any insurance policy carried by Landlord in connection with the Premises;
(vii) costs incurred due to violation by Landlord of the terms and conditions of
this Lease; (viii) legal fees, brokerage commissions, advertising costs or other
related expenses incurred in connection with leasing; (ix) accountants' fees;
(x) sculptures or artwork; (xi) fees and costs incurred in connection with the
defense of Landlord's title or interest in the Premises or the Building or any
part thereof; (xii) rent and other costs payable under any ground lease; and
(xiii) principal, interest and other amounts paid pursuant to any loan secured
by the Premises or the- Building or any part thereof.

E.   As soon as reasonably practicable prior to the commencement of each
calendar year during the Term, Landlord shall furnish to Tenant an estimate of
Tenant's share of Operating Costs for the ensuing calendar year and Tenant shall

32

pay, as additional rent hereunder together with each installment of monthly base
rent, one-twelfth (1/12th) of its estimated annual share of such Operating
Costs.  As soon as reasonably practicable (but in no event later than sixty (60)
days) after the end of each calendar year during the Term, Landlord shall
furnish to Tenant a statement of the actual Operating Costs for the previous
calendar year, including Tenant's share of such amount, and within thirty (30)
days thereafter Tenant shall pay to Landlord, or Landlord shall pay to Tenant,
as the case may be, the difference between such actual and estimated Operating
Costs paid by Tenant.  Tenant's share of such Operating Costs for the years in
which this Lease commences and terminates shall be prorated based upon the dates
of commencement and termination of the Term.  The annual statement of actual
Operating Costs shall be prepared in accordance with GAAP and shall be certified
to be correct by Landlord.  Landlord shall maintain full and accurate books and
records with respect to all Operating Costs for a period of not less than one
(1) year.  Tenant shall have the right at any time during normal business hours
and upon reasonable prior notice to Landlord to inspect and audit Landlord's
books and records with respect to Operating Costs.  Tenant shall not have the
right, however, to inspect and audit Landlord's books and records with respect
to the Operating Costs of any given year following the first (lst) anniversary
of Tenant's receipt of the statement of the actual Operating Costs for the year
in question.

F.   Within ten (10) days after Landlord receives any notice of assessment
of property value or any other similar notice pertaining to the Premises from
any governmental authority which levies real estate taxes, Landlord shall send a
copy of such notice to Tenant.  Tenant shall have the right to contest at its
expense the amount or validity of any real estate taxes or assessments against
the Premises by appropriate proceedings, in the name of Landlord if required by
law, rule or regulation and paying such taxes under protest.

48.  Tenant Expense Waiver.
--------------------- 

In the event Landlord fails to submit to Tenant the statement of the actual
Operating Costs within the time specified in Section 47.E, and in the event
Landlord still fails to submit to Tenant such statement within fifteen (15) days
after Tenant notifies Landlord in writing that Landlord has failed to submit to
Tenant the statement of the actual Operating Costs, Tenant shall not be liable
for payment of any such additional expenses or charges, it being expressly
agreed by the parties that Landlord shall be deemed to have waived its right to
collect such expenses or charges from Tenant for such calendar year.

49.  Landlord's Compliance With Federal Laws.
--------------------------------------- 

Notwithstanding anything to the contrary contained in this Lease, Landlord
is and shall be solely responsible for ensuring that the Premises at all times
complies in full with Title III of the Americans With Disabilities Act (42
U.S.C. (S) 12101 et seq. - hereinafter the "ADA"), as now or hereafter amended,
-- ---                                                        
and all regulations now or 

33

hereafter promulgated pursuant thereto (the "Regulations"). Except for
remodeling or alterations done to the Premises after the Commencement Date of
the Lease by Tenant or Tenant's representatives due to Tenant's election to
remodel (as opposed to any requirement pursuant to this Lease for Tenant to
remodel), Landlord is and shall be solely responsible for all costs and expenses
associated with ADA compliance, and Landlord shall not charge for, or seek
reimbursement from Tenant for any expenditures, capital or otherwise, associated
with conforming the Premises to the requirements of the ADA and/or the
Regulations. Landlord agrees to indemnify and saves and hold harmless Tenant
from and against any and all claims, demands, causes of action, suits, losses,
costs and expenses (including, without limitation, attorney's fees and
litigation costs), damages, penalties and fines asserted against, suffered or
incurred by Tenant in any way relating to or arising from, in whole or in part,
an actual or asserted claim that any portion of the Premises for which Landlord
is responsible pursuant to this Section 49, is in violation of the ADA or the
Regulations. Notwithstanding the foregoing, Landlord shall have no
responsibility under this Section 49 for the acts or omissions of Tenant, any
assignee or sublessee of Tenant, or the employees, agents, invitees, licensees
or representatives of the foregoing, including, without limitation, any
noncompliance with ADA for any design, construction, alteration, improvement, or
remodeling by Tenant, or by the employees, agents, invitees, licensees or
representatives of Tenant.

50.  Intentionally Omitted.
--------------------- 

[This Section intentionally omitted.]

51.  No Party To Be Deemed Drafter.
----------------------------- 

Landlord and Tenant have both had the opportunity to have counsel examine
this Lease and to propose changes to clarify any ambiguities.  Accordingly, in
any interpretation of this Lease, an ambiguity shall not be resolved by
interpreting the Lease against the drafter.  The language of this Lease shall be
interpreted according to the fair meaning and not for or against either party.

52.  No Intended Third Party Beneficiary.
----------------------------------- 

Landlord and Tenant may each, separately, deal with other persons in
connection with the Premises or with other matters that may also relate to or be
the subject of this Lease.  Landlord and Tenant do not intend to make any such
third person with whom each of them may deal an intended third party beneficiary
under this Lease.  There is no third person who is an intended third party
beneficiary under this Lease.  No incidental beneficiary (whatever relationship
such person may have with Landlord or Tenant) shall have any right to bring an
action or suit, or to assert any claim against Landlord or Tenant under this
Lease.

34

53.  Counterparts.
------------ 

This Lease may be executed in one or more counterparts, all of which, taken
together, shall constitute one and the same instrument.

54.  Governing Law.
------------- 

This Agreement shall be governed by and construed in accordance with the
laws of the state in which the Premises is located.

55.  Subordination.
------------- 

This Lease and the rights of Tenant shall be and are subject and
subordinate at all times to the lien of any first mortgage or deed of trust now
or hereafter in force against the Premises, provided, however, that (i) in the
case of any mortgage or deed of trust encumbering the Premises as of the date of
this Lease, Landlord will obtain, prior to the commencement of the Term, an
agreement between the beneficiary or mortgagee thereof and Tenant that so long
as no default exists hereunder and Tenant attorns to Landlord's successor
pursuant to the provisions of this Lease, no termination of such encumbrance (or
any proceeding in connection therewith) shall disturb Tenant's possession of the
Premises and this Lease shall remain in full force and effect; and (ii) in the
case of any first mortgage or deed of trust encumbering the Premises after the
date hereof, the beneficiary or mortgagee thereof agrees, either in such
encumbrance or in a separate agreement with Tenant, that so long as no default
exists under this Lease and Tenant attorns pursuant to Landlord's successor
pursuant to the provisions of this Lease, no foreclosure of such encumbrance (or
any proceeding in connection therewith) shall disturb Tenant's possession of the
Premises and this Lease shall remain in full force and effect. Tenant shall
execute such further instruments confirming the subordination of this Lease to
the lien of any such first mortgage or deed of trust as shall be reasonably
requested by Landlord.

56.  Declaration, Ground Lease and Subground Lease.
--------------------------------------------- 

A.   The Premises are subject to the terms and conditions of the
Declaration attached hereto as Exhibit G. Tenant's use of the Premises shall be
in full compliance with the terms and conditions of the Declaration.  Without
limitation, Tenant acknowledges that Tenant's use of the Premises is strictly
regulated by the Declaration.  Tenant represents and warrants to Landlord that
Tenant has reviewed, understands, and agrees to use the Premises in full
compliance with the requirements of the Declaration at all times.

B.   This Lease is also subject and subordinate to (a) the Arizona State
University Research Park Ground Lease dated October 8, 1984 between the Arizona
Board of Regents ("Regents") and Price-Elliott Research Park, Inc. ("Price-
Elliott")  the "Ground Lease"), and (b) the Subground Lease between Price-
Elliott Research Park, Inc. and Landlord of substantially even date herewith
(the "Subground 

35

Lease"). Regents, Price-Elliott and Landlord also have entered into (or shall
enter into) a Recognition, Nondisturbance and Attornment Agreement (the "RNA
Agreement") for the benefit of Landlord.

C. Landlord represents, warrants and covenants that:

(i)   Landlord had (or shall have upon execution and delivery) full power,
right and authority to execute and deliver the Subground Lease and the RNA
Agreement.

(ii)  Landlord shall maintain the Subground Lease in full force and effect
and in good and current standing at all times during this Term and any
extensions of the Term.

(iii) Landlord shall perform and observe, ii-i timely fashion, all
covenants, conditions, obligations and agreements of Landlord tinder the
Subground Lease and the RNA Agreement, except to the extent that Tenant is
required under this Lease to perform such obligations.

(iv)  Landlord shall not waive, execute any agreement that would be
interpreted as waiving, or in any manner release or discharge any covenants,
conditions, obligations or agreements under or related to (1) the Subground
Lease to be performed or observed by Price-Elliott or (2) the RNA Agreement to
be performed or observed by Regents, or condone any nonperformance of either
such agreement.

D. Landlord shall not agree (i) to any amendment to Sections 7 or 38 of the
Subground Lease or to any amendment to Section 6 of the Subground Lease which
could reasonably have the effect of increasing Operating Costs, (ii) to any
other modification to the Subground Lease which would have the effect of
overriding Sections 6, 7 or 38 of the Subground Lease, or (iii) to any
modification to the Subground Lease which would vest title to the improvements
constructed on the Land to any person other than the Regents.

E. Landlord hereby assigns to Tenant (i) the representation and warranties
made to Landlord by Price-Elliott pursuant to Sections 6(e) and 6(h) of the
Subground Lease and (ii) Landlord's rights under Section 6(f) and 6(g) of the
Subground Lease.

F. Landlord shall faithfully observe and perform all of its obligations
(as tenant) under the Subground Lease.  Any default by Landlord of any of its
obligations (as tenant) under the Subground Lease shall be a default by Landlord
under this Lease.  Landlord hereby grants Tenant the right to cure any of
Landlord's defaults (as tenant) under the Subground Lease.  Tenant may effect
such cure without waiting for the expiration of any period under the Subground
Lease which Landlord has for effecting such cure.  Any monies spent by Tenant in
effecting such cure may be deemed by Tenant to be advance payments of rent.

36

G.   Landlord shall furnish to Tenant a complete copy of the Subground
Lease and all exhibits thereto promptly after it is executed and delivered by
Landlord and Price-Elliott.

IN WITNESS WHEREOF, the parties hereto have executed these presents, in
duplicate, the day and year first above-written.

LANDLORD                                 TENANT

RYAN COMPANIES U.S., INC.,               MOTOROLA, INC.,
a Minnesota corporation                  a Delaware corporation

By: /s/ John Strittmatter                By: /s/ James Heironimus
---------------------------              ---------------------------------
Print Name: John Strittmatter            Name:  James Heironimus
Its: Vice President                      Its: Vice President and Director
Sector Services

37

EXHIBIT 10.57

FIRST AMENDMENT TO LEASE AGREEMENT

FOR THE MOTOROLA BUILDING

FIRST AMENDMENT TO LEASE

This First Amendment to Lease, dated as of November 17, 1999 (First Amendment),
between Ryan Companies US, Inc. (Landlord) and Motorola, Inc. (Tenant).

WITNESSETH, that:

WHEREAS, Landlord and Tenant have entered into a Lease dated November 17,
1997 (Lease) for approximately 133,754 square feet of area, whereby Landlord has
leased to Tenant certain Premises located in the City of Tempe, State of
Arizona, consisting of the Premises, as such Premises are defined in the Lease;
and

NOW, THEREFORE, Landlord and Tenant desire and intend hereby to amend Lease
as specifically hereinafter set forth and provided:

1.   The Premises contains 133,225 square feet.
2.   The Lease Term commenced on August 17, 1998.
3.   The Lease Term shall expire on August 31, 2005.
4.   The Annual Base Rent shall be:
the period from August 17, 1998 through August 31, 2002 the sum of One
Million Eight Hundred Forty Three Thousand Eight Hundred Thirty Four
and 00/100 Dollars ($1,843,834.75), payable in equal monthly
installments of One Hundred Fifty Three Thousand Six Hundred Fifty two
and 83/100 Dollars ($153,652.83);
the period from September 1, 2002 through August 31, 2005, the sum of
Two Million Fifty Four Thousand Three Hundred Twenty Nine and 50/100
Dollars ($2,054,329.50) payable in equal monthly installments of One
Hundred Seventy One Thousand One Hundred Ninety Four and 13/100
Dollars ($171,194.13).

EXCEPT as expressly amended or supplemented herein, the Lease shall remain
and continue in full force and effect in all respects.

IN WITNESS WHEREOF, the Lease Amendment is hereby executed and delivered
effective as of the date and year first above written.

LANDLORD:    RYAN COMPANIES US, INC.

by:    John Strittmatter
------------------------------------

Its:       VP
------------------------------------

TENANT:      MOTOROLA, INC.

by:     Rick Kriva
------------------------------------

Its:    Rick Kriva, Director
------------------------------------
CE REAL ESTATE & DEVELOPMENT

EXHIBIT 10.58

GROUND LEASE AGREEMENT

FOR THE MOTOROLA BUILDING

ASU RESEARCH PARK

LEASE

BETWEEN

PRICE-ELLIOT RESEARCH PARK, INC. ("LANDLORD")

AND

RYAN COMPANIES US, INC. ("TENANT")

ASU RESEARCH PARK
LEASE

FUNDAMENTAL LEASE PROVISIONS
----------------------------

DATE:                          November 19, 1997

LANDLORD:                      PRICE-ELLIOTT RESEARCH PARK, INC., an Arizona
nonprofit corporation

TENANT:                        RYAN COMPANIES US, INC.

DEMISED PREMISES:              Lots 35, 36, and 37, containing approximately
12.44 net acres (19.115 gross acres), 541,878.4
net square feet (832,673.7 gross square feet).
See Exhibits A and A-1.

LEASE TERM:                    From the date hereof through December 31,  
2082, subject to Tenant's right to terminate the 
Term, as provided in Section 2.

RENT COMMENCEMENT DATE:        See Section 3.

ANNUAL RENT:                   See Section 3.

MUNICIPAL SERVICE
FEE:                           $0.08337 per square foot of Floor Area 
constructed on the Demised Premises per year, 
payable in twelve equal monthly installments, 
subject to adjustments as provided in Section 
6(d).

COMMON AREA EXPENSES:          Allocable Share payable monthly beginning on 
the Rent Commencement Date.

INFRASTRUCTURE
ASSESSMENT:                    Approximately $325,127.04 based upon $.60 
per net square foot of land area.

i

SECURITY DEPOSIT:              None Required.

PERMITTED USES:                Those uses permitted under the Restrictions
attached hereto as Exhibit F. Unlimited
manufacturing is prohibited (A.R.S. (S)15-1636).

RESTRICTIONS:                  Attached hereto as Exhibit F.

ADDRESS OF LANDLORD:           8750 South Science Drive
Tempe, Arizona 85284

ADDRESS OF TENANT:             3200 E. Camelback Road
Suite 129
Phoenix, Arizona 85018
Attn: John L. Strittmatter

The foregoing Fundamental Lease Provisions are an integral part of this Lease,
and each reference in the body of the Lease to any Fundamental Lease Provisions
shall be construed to incorporate all of the terms set forth above with respect
to such Provisions.

ii

INDEX

Section                                                                Page

1.  DEMISED PREMISES...............................................     1

2.  TERM...........................................................     1

3.  RENT...........................................................     1

4.  ADDITIONAL CHARGES.............................................     3

5.  NO COUNTERCLAIM OR ABATEMENT OF ADDITIONAL CHARGES.............     3

6.  RENTAL TAXES, UTILITIES, REAL ESTATE TAXES AND MANAGEMENT FEE..     4

7.  USE OF DEMISED PREMISES........................................     8

8.  CONSTRUCTION BY TENANT.........................................     9

9.  INFRASTRUCTURE ASSESSMENT......................................     9

10.  MAINTENANCE AND REPAIRS........................................     9

11.  REGULATORY REQUIREMENTS........................................     9

12.  INDEMNIFICATION................................................    11

13.  INSURANCE......................................................    12

14.  LIENS..........................................................    12

15.  DAMAGE OR DESTRUCTION..........................................    13

16.  EMINENT DOMAIN.................................................    13

17.  DEFAULTS AND REMEDIES..........................................    14

18.  ASSIGNMENT AND SUBLETTING......................................    16

19.  HYPOTHECATION OF LEASEHOLD ESTATE..............................    17

20.  SUBORDINATION..................................................    19

21.  ESTOPPEL CERTIFICATE...........................................    20

iii

22.  CONFLICT OF LAWS............................................   20

23.  STATUS OF TENANT............................................   20

24.  SUCCESSORS AND ASSIGNS......................................   20

25.  ATTORNEYS' FEES.............................................   21

26.  PERFORMANCE BY TENANT.......................................   21

27.  MORTGAGEE PROTECTION........................................   21

28.  WAIVER......................................................   21

29.  EXAMINATION OF LEASE........................................   22

30.  TIME........................................................   22

31.  PRIOR AGREEMENTS, AMENDMENTS................................   22

32.  SEVERABILITY................................................   22

33.  RECORDING...................................................   22

34.  LIMITATION ON LIABILITY.....................................   22

35.  NONSUBORDINATED SUBLEASE....................................   22

36.  CONSENT OF LANDLORD AND TENANT..............................   23

37.  DARK PERIOD.................................................   23

38.  TITLE TO BUILDINGS AND IMPROVEMENTS.........................   24

39.  SURRENDER...................................................   24

40.  RESTRICTIONS - AMENDMENTS...................................   24

41.  QUIET POSSESSION............................................   24

42.  WATER RESOURCES.............................................   25

43.  NOTICES.....................................................   25

44.  BROKERS.....................................................   25

45.  NET LEASE...................................................   25

iv

46. TENANT'S TITLE INSURANCE............................    26

47. HEIGHT RESTRICTIONS.................................    26

Exhibit A      Legal Description of the Demised Premises
Exhibit A- 1   Site Plan of the Demised Premises
Exhibit B      Site Plan of the Research Park
Exhibit C      Preliminary Plan Package
Exhibit D      Recognition, Non-Disturbance and Attornment Agreement
Exhibit E      Memorandum of Lease
Exhibit F      Restrictions

v

ASU RESEARCH PARK
LEASE

1.   DEMISED PREMISES
----------------

Subject to the covenants and conditions herein contained, Landlord hereby
leases to Tenant, and Tenant leases from Landlord (this "Lease"), the land
situated in the City of Tempe, Maricopa County, Arizona, legally described on
Exhibit A attached hereto and graphically depicted on Exhibit A-1 attached
hereto (the "Land").  Said Land and all buildings and other improvements to be
constructed by or for Tenant thereon (the "Improvements") are hereinafter
referred to collectively as the "Demised Premises."  The Demised Premises is a
part of an integrated research park development located within the City of
Tempe, Arizona ("Research Park") which is graphically depicted on the Site Plan
attached hereto as Exhibit B. It is acknowledged that Landlord has an interest
in the Research Park as a ground lessee under that certain Ground Lease dated
October 8, 1984, and all amendments thereto ("Ground Lease"), wherein the
Arizona Board of Regents, acting for and on behalf of Arizona State University,
appears as Lessor ("Ground Lessor").  This Lease is a sublease under the Ground
Lease.

2.   TERM
----

(a)  The term of this Lease ("Term") shall commence as of the date
hereof and shall expire on December 31, 2082, unless the Term shall be sooner
terminated as hereinafter provided.

(b)  The term "year" as used in this Lease shall mean each period of
twelve (12) consecutive months commencing on each January 1 and ending at
midnight on the next succeeding December 31, except that any partial year at the
beginning of the Term shall constitute the first year of the Lease, in which
event the first year of the Term will be shorter than twelve months.

(c)  Tenant shall have the right to terminate this Lease prior to
expiration of the 30th year and prior to expiration of each subsequent 10-year
period. In order to exercise the termination right, Tenant must provide Landlord
with written notice of Tenant's termination election not more than 360 nor less
than 180 days prior to the expiration of the 30th year. If this termination
right is not exercised prior to the 30th year, the termination right shall then
correspond to the expiration of each successive 10th year (i.e., the 40th, 50th,
60th, 70th and 80th years) subject to being exercised in the manner herein
described.

3.   RENT
----

(a)  Upon the Rent Commencement Date (as defined below), Tenant agrees
to pay Annual Rent to Landlord, without demand, in twelve (12) equal monthly
installments in advance on the first day of each month, as follows:

1

Lease Years         Per Net Sq. Foot      Annual              Monthly
-----------         ----------------      ------              -------

1-15                $0.45                 [$243,825.28]       [$20,320.44]
16-25               $0.66                 [$357,639.74]       [$29,803.31]
26-35               $0.86                 [$466,015.42]       [$38,834.62]
36-85               See (b) below        

(b)  During the 35th year and again during the 65th year, Landlord
shall have the option, in each such case, to cause the fair market value of the
Land (as an improved parcel of land but subject to the Restrictions) to be
determined by appraisal as set forth below. In each such case, the Annual Rent
applicable to the Demised Premises for the ensuing ten-year period shall be
equal to 10% of the fair market value of the Land. Annual Rent so determined
shall be in effect for the years 36-45. Annual Rent shall then be adjusted every
ten years so that Annual Rent for the years 46-55 and 56-65 shall reflect
cumulative non-compounded increases of three percent (3%) per year over the
Annual Rent in effect for the previous ten-year period. Likewise, Annual Rent
shall be established by appraisal as set forth herein during the 65th year for
the years 66-75. Annual Rent shall then be adjusted after ten years so that
Annual Rent for the years 76-85 shall reflect non-compounded cumulative
increases of three percent (3%) per year over the Annual Rent in effect for the
previous ten-year period.

In order to invoke the appraisal procedure, Landlord shall provide to
Tenant at least 270 days but not more than 360 days prior to expiration of the
35th year (or 65th year as the case may be) an appraisal of the Land. Tenant
shall have 30 days after receipt of Landlord's appraisal either to accept
Landlord's appraisal or to submit to Landlord an appraisal of the Land
establishing a different fair market value. Failure to provide Landlord with an
appraisal before expiration of the 30-day period shall be deemed Tenant's
acceptance of Landlord's appraisal. If Tenant submits its own appraisal,
Landlord shall have 30 days within which to notify Tenant that it accepts or
rejects Tenant's appraisal. Failure to provide such notice within the 30-day
period shall constitute acceptance by Landlord of Tenant's appraisal.

If Landlord rejects Tenant's appraisal, then the appraisers previously
selected by Landlord and Tenant shall select a third appraiser, except that if
the valuations of the two appraisals are less than 10% apart, the valuations
shall be averaged and the resulting amount shall be the fair market value. If
the appraisers are unable to agree on a third appraiser within ten (10) days,
either party, by giving ten (10) days notice to the other party may apply to the
American Arbitration Association for the purpose of selecting a third appraiser.

Within 30 days after the selection of the third appraiser, the third
appraiser shall submit to Landlord and Tenant an appraisal of the Land. A
valuation agreed upon by two of the three appraisers shall be binding upon
Landlord and Tenant If none of the appraisers agree, the values determined by
the two appraisers whose valuations are closer (in absolute dollar terms, not
percentage terms) shall be averaged and the resulting amount shall be the fair
market

2

value. If one valuation is equally close (in absolute dollar terms, not
percentage terms) to the other two, the middle valuation shall be the fair
market value.

Landlord and Tenant each shall bear the cost of its own appraiser and
shall bear one-half of the cost of the third appraiser. All appraisers shall be
members of the American Institute of Real Estate Appraisers (M.A.I.) or, if such
Institute shall not then exist, members of its successor or a substantially
equivalent organization.

(c)  All sums to be paid by Tenant to Landlord pursuant to this Lease
shall be paid in lawful money of the United States to Landlord at its address,
or at such other place as Landlord may from time to time designate in writing.

(d)  The "Rent Commencement Date" shall be the earlier to occur of (i)
the first anniversary of the date of this Lease as set forth in the Fundamental
Lease Provisions or (ii) the date Tenant obtains a certificate of occupancy for
the Improvements.

(e)  All payments of Annual Rent and "Additional Charges" (as defined
in Section 4) shall be considered delinquent if not received by Landlord on or
before the 10th day after the date any such payment originally became due.
Tenant shall pay to Landlord a late charge equal to five percent (5%) of any
amount of delinquent Annual Rent or Additional Charges. In addition, interest
shall accrue on any amount of delinquent Annual Rent or Additional Charges at an
annual rate equal to two (2) percentage points (2%) in excess of the annual
interest rate published from time to time in the Wall Street Journal under the
masthead "Money Rates" as the Prime Rate in effect as of the payment due date
(or, if such Prime Rate ceases to be published, a reasonably equivalent index
selected by Landlord) such interest to be adjusted quarterly and to accrue from
the date such amount was originally due until the date such amount is actually
paid.

4.   ADDITIONAL CHARGES
------------------

All taxes, assessments, insurance premiums, charges, costs and expenses
which Tenant assumes or agrees to pay hereunder, together with all interest and
penalties that may accrue thereon in the event of Tenant's failure to pay the
same as herein provided, and all other damages, costs and expenses which
Landlord may suffer or incur, and any and all other sums which may become due,
by reason of any default of Tenant or failure on Tenant's part to comply with
the agreements, terms, covenants and conditions of this Lease on Tenant's part
to be performed shall be referred to herein as "Additional Charges," and, in the
event of their nonpayment, Landlord shall have with respect thereto all rights
and remedies herein provided the same as though Tenant failed to pay Annual
Rent.

5.   NO COUNTERCLAIM OR ABATEMENT OF ADDITIONAL CHARGES
------------------------------------------ -------

Except to the extent expressly provided otherwise in this Lease, the
Annual Rent, and all Additional Charges payable by Tenant hereunder shall be
paid without notice, demand,

3

counterclaim, setoff, recoupment, deduction or defense of any kind or nature and
without abatement, suspension, deferment, diminution or reduction, and, except
to the extent expressly provided otherwise in this Lease, the obligations and
liabilities of Tenant hereunder shall in no way be released, discharged or
otherwise affected by reason of (i) any damage to or destruction of any
buildings or improvements on the Demised Premises; (ii) any taking of the
Demised Premises or any part thereof, or (iii) any restriction or prevention of
or interference with any use of the Demised Premises or any part thereof not the
result of a breach of this Lease by Landlord.

6.   RENTAL TAXES, UTILITIES, REAL ESTATE TAXES AND MANAGEMENT FEE
-------------------------------------------------------------

(a)  Any excise, transaction privilege or rental occupancy tax now or
hereafter actually imposed by any government or governmental agency upon
Landlord on account of, attributed to, or measured by rent or other charges
payable by Tenant to Landlord shall be paid by Tenant to Landlord in addition to
and along with the Annual Rent and Additional Charges payable hereunder.

(b)  Tenant shall not be required to pay, or reimburse Landlord for
(i) any local, state or federal capital levy, franchise tax, revenue tax, income
tax, or profits tax of Landlord unless and to the extent such levy, tax or
impost is in lieu of or a substitute for any other levy, tax or impost now or
later in existence upon or with respect to the Demised Premises which, if such
other levy, tax or impost were in effect, would be payable by Tenant under the
provisions hereof, or (ii) any estate, inheritance, devolution, succession or
transfer tax which may be imposed upon or with respect to any transfer (other
than taxes in connection with a conveyance by Landlord to Tenant) of Landlord's
interest in the Demised Premises.

(c)  During the Term, Tenant shall pay prior to delinquency all taxes
assessed against and levied upon fixtures, furnishings, equipment and all other
personal property of Tenant situated on or within the Demised Premises, and when
possible Tenant shall cause said fixtures, furnishings, equipment and other
personal property to be assessed and billed separately from the real property
demised to Tenant. Tenant shall pay and discharge punctually, as and when the
same shall become due and payable without penalty, all business, occupation and
occupational license taxes.

(d)  The City of Tempe requires that Tenant be assessed and pay a
municipal service fee (the "Municipal Service Fee") as hereinafter provided to
reimburse the City for the cost of providing municipal services to the Research
Park. The annual amount of the Municipal Service Fee payable by Tenant shall be
calculated by multiplying the aggregate number of square feet of Floor Area
constructed, or to be constructed, on the Demised Premises from time to time by
the "Multiplier" (determined as set forth below) in effect from time to time.
With regard to new construction of Floor Area, assessment of the Municipal
Service Fee shall commence at the beginning of the calendar quarter following
issuance of a Building Permit. For the fiscal year beginning July 1, 1996, the
Multiplier shall be the amount of $0.08337. Thereafter, the Multiplier shall be
adjusted annually as of each July I ("Adjustment Date") to reflect the
percentage of change in the Metropolitan Phoenix Consumer Price Index as
published 

4

by Arizona State University, College of Business, Center for Business Research
("Index"), for the calendar year ended December 31 immediately preceding said
Adjustment Date as compared to the Index for the calendar year ended December 31
one year earlier. Annual percentage changes shall be applied to the Multiplier
in effect for the previous year. The Multiplier thus adjusted shall be rounded
to the nearest tenth of a cent. So long as the City of Tempe requires the
assessment of the Municipal Service Fee, Tenant shall pay to Landlord on a
monthly basis, on or before the first day of each month during the Term, a sum
equal to one-twelfth (1/12th) of the then annual Municipal Service Fee due and
payable to the City of Tempe calculated as set forth above for the Floor Area
constructed, or to be constructed, on the Demised Premises. The term "Floor
Area" as used in this Lease shall have the same meaning as provided in the City
of Tempe Building Code in effect from time to time. The aggregate number of
square feet of Floor Area constructed, or to be constructed, on the Demised
Premises shall be the aggregate amount of Floor Area as set forth on building
pen-nits issued by the City of Tempe to Tenant.

(e)  Landlord represents and warrants to Tenant that, to the extent of
Landlord's actual knowledge, the fee estate of Ground Lessor is presently exempt
from ad valorem taxes, and the leasehold interest of Landlord as lessee under
the Ground Lease is not currently being taxed. In the event of a change in the
law such that said ad valorem tax exempt status of Ground Lessor is no longer
recognized by taxing authorities, or in the event of a change in the law such
that Landlord's leasehold interest shall be taxed, then Tenant shall fully pay
and punctually discharge its proportionate share of all Impositions as and when
they are due and payable, as provided in Section 6(g) below. "Impositions" shall
include but are not limited to any and all ad valorem taxes, assessments
(excluding special improvement district assessments) and other governmental
taxes, impositions and charges of every kind and nature measured or calculated
based on the value of the property involved, extraordinary or ordinary, general
or special, unforeseen or foreseen, which at any time during the Term shall
become due and payable by either Ground Lessor or Landlord.

(f)  In the event any obligation to pay Impositions accrues under
Section 6(e) above and if the Demised Premises constitute a separate tax parcel
for purposes of assessing and levying such Impositions, Tenant shall have the
right to contest the amount or validity of any Impositions by appropriate legal
proceedings, diligently pursued, in the name of Landlord if required by any law,
rule or regulation, provided that (1) Tenant shall first make all contested
payments, under protest if it desires, but if payment under protest is not
permitted by the taxing authority, such contested payment need not be made, (ii)
neither the Demised Premises, any part thereof, nor any interest therein shall
be in any danger of being sold, forfeited, lost or interfered with, (iii) Tenant
shall have furnished such security, if any, as may be required in the
proceedings or reasonably requested by Landlord, and (iv) all expenses incurred
in connection with such proceedings shall be paid by Tenant.

(g)  In the event any obligation to pay Impositions accrues under
Section 6(e) above and if the Demised Premises are not separately assessed, but
are part of a larger tract or parcel for assessment purposes, then Tenant shall
pay to Landlord Tenant's proportionate share of such Impositions determined as
follows:

5

(i)   With respect to any ad valorem taxes on the land area of
the larger land parcel including the Demised Premises, but not with respect
to special or extraordinary assessments, Tenant shall pay that portion of
such taxes which the total number of square feet of land area within the
Demised Premises bears to the number of square feet of land area within
such larger land parcel.

(ii)  With respect to any special or extraordinary assessments on
the larger land parcel including the Demised Premises, Tenant shall pay
only that portion of such assessments which would have been levied upon the
Demised Premises had the Demised Premises been separately assessed based
upon the methods of assessments utilized for such assessments.

Tenant shall pay such sums to Landlord within thirty (30) days of the receipt of
a written statement from Landlord indicating the amount of such Impositions as
so determined and showing in reasonable detail the manner in which such
Impositions were determined.  Landlord, upon Tenant's request, shall furnish
Tenant, within twenty (20) days thereafter, proof of Landlord's payment of said
Impositions.  However, in no event shall Tenant be required to make such
payments more than fifteen (15) days in advance of the date such payments would
be delinquent if they were to be made directly to the taxing authorities.  The
right to contest Impositions attributable to the Demised Premises, if not a
separate tax parcel, shall initially belong to Landlord but may be exercised by
Tenant at its own expense if Landlord fails to contest any Imposition after
written request from Tenant to do so.

(h)  Landlord represents and warrants to Tenant that: (1) this Lease
is issued on lands owned by the Arizona Board of Regents; and (ii) the Demised
Premises is part of a "Research Park" as such term is now defined in A.R.S. (S)
35-701. In the event any existing or future property classification or
assessment ratio which treats the Demised Premises and the Improvements to be
constructed thereon more favorably for property tax purposes than they otherwise
might be treated is lost or is no longer applicable due to the occurrence of an
event or condition within the reasonable control of Landlord or Ground Lessor,
then the Landlord shall be responsible for that portion of the Impositions (as
defined in Section 6(e)) thereafter measured by the value of the Land, and
Tenant shall be responsible for that portion of the Impositions measured by the
value of the Improvements, and title to the Improvements shall automatically
revert to Tenant unless Tenant, at its sole option exercisable within one
hundred twenty (120) days after Tenant learns of the loss of the favorable
property classification or assessment ratio, elects that title to the
Improvements shall remain with the Ground Lessor. The parties agree that a
change in the law regarding the taxation of interests in land or improvements
located within the Research Park shall not be deemed to be an event or condition
within the reasonable control of Landlord or Ground Lessor except as otherwise
provided in the preceding paragraph.

(i)  All entrance and exit areas, open space, landscaped space,
easements, lighting, street furniture, water bodies, jogging paths, pedestrian
walkways, bicycling paths, equestrian trails, parking areas, and other similar
facilities furnished by Landlord in the Research Park (hereinafter referred to
collectively as "Common Area") are dedicated public

6

easements for said purposes and shall at all times be subject to the joint
control and management of Landlord and the City of Tempe, and Landlord shall
have the right from time to time to establish, modify and enforce reasonable 
non-discriminatory rules and regulations with respect to the same as long as
they do not materially interfere with Tenant's normal conduct of its business on
the Demised Premises. Landlord shall have the right to construct, maintain and
operate lighting facilities on all said Common Area; to police the same; from
time to time to change the area, grade, location and arrangement thereof-, to
confine to the Demised Premises all parking by Tenant, its officers, agents,
customers and employees; to close temporarily all or any portion thereof, and to
do and perform such other acts in and to said area as in Landlord's judgment is
reasonably advisable as long as such does not unreasonably affect Tenant's use
and enjoyment of the Demised Premises. Landlord is contractually bound to the
City of Tempe to operate and maintain the Common Area and will do so in such a
manner as the common areas in similar first-class business and industrial parks
located in the southwestern United States are operated and maintained.

(j)  Subject to the standards as provided in Section 6(i) above, the
term "Common Area Expenses" as used herein shall mean all sums expended by
Landlord and Ground Lessor in connection with the operation, maintenance, repair
or replacement of the Common Area, including premiums paid for adequate public
liability and property damage insurance (which insurance Landlord is hereby
required to maintain throughout the Term); provided, however, that Common Area
Expenses shall not include Landlord's overhead, administrative and general
office expenses except as may be incurred relative to persons directly employed
to perform Common Area operation, maintenance, repair or replacement services,
expense for any work which Landlord performs for any other tenant of the
Research Park, expenses for repairs or other work to correct original
construction defects or occasioned by condemnation or by fire, windstorm, or
other insurable casualty, expenses incurred in leasing or procuring new tenants
for the Research Park, legal expenses incurred in enforcing the terms of any
lease pertaining to the Research Park, interest or amortization payments on any
mortgage or deed of trust pertaining to the Research Park, gross or net income
taxes imposed on Landlord or on any rental revenue received by Landlord,
expenses directly payable by any tenant of the Research Park, any costs, fines
and the like due to Landlord's violation of any governmental rule or regulation;
or the cost of any items for which Landlord is reimbursed by third parties, but
only to the extent of such reimbursement. Any Common Area Expenses that are
required to be capitalized, in accordance with generally accepted accounting
principles, shall be amortized and charged in accordance with generally accepted
accounting practices. Only the annual amortized amounts of any such expenses
shall be included in Common Area Expenses. The cost of any capital improvements
not in repair or replacement of existing improvements shall not be included in
Common Area Expenses. Landlord may cause any or all of said operation and
management responsibilities to be performed by an independent contractor or
contractors. Tenant shall pay to Landlord Tenant's pro rata share of such Common
Area Expenses in the following manner:

(1)  Commencing on the Rent Commencement Date, and thereafter on
the first day of each calendar month of the Term, Tenant shall pay to
Landlord an amount estimated by Landlord to be Tenant's share of Common
Area

7

Expenses. Landlord may adjust the monthly Common Area charge of Tenant at the
end of any calendar quarter on the basis of Landlord's experience and reasonably
anticipated costs.

(2)  Prior to the expiration of each year, Landlord shall deliver
to Tenant a statement covering the fiscal year of Landlord just expired,
certified as correct by an authorized but independent representative of
Landlord, showing the Common Area Expenses for such fiscal year, the amount
of Tenant's pro rata share of such expenses for such fiscal year and the
payments made by Tenant with respect to such fiscal year as set forth in
subparagraph (1) immediately above. If Tenant's pro rata share of such
Common Area Expenses exceeds Tenant's payments so made, Tenant shall pay
Landlord the deficiency within thirty (30) days after receipt of such
statement. If said payments exceed Tenant's pro rata share of such Common
Area Expenses, Landlord shall refund the excess to Tenant within thirty
(30) days following delivery of the aforesaid statement. If Landlord falls
to furnish Tenant the required statement as provided herein, Landlord shall
be deemed to have waived any right to payment from Tenant for any Common
Area Expenses for the preceding fiscal year in excess of that previously
paid by Tenant for such fiscal year.

(3)  Tenant's pro rata share of the Common Area Expenses shall be
that portion of all such expenses which the number of square feet of land
area within the Demised Premises bears to the total number of square feet
of leaseable land area within the Research Park (presently 9,010,380 square
feet) which is from time to time under lease; provided, however, the latter
number shall never be less than 90% (presently 8,109,342 square feet) of
the total number of square feet of leaseable land area within the Research
Park. There shall be an appropriate adjustment of Tenant's share of the
Common Area Expenses as of the expiration of the Term of this Lease.

(k)  Landlord shall save, hold harmless and indemnify Tenant from and
against all liabilities, obligations, claims, suits, damages, penalties, causes
of action, costs and expenses (including without limitation, reasonable
attorneys' fees and expenses) imposed or asserted against Tenant by reason of
any accident, injury to or death of persons, or loss or damage to property
occurring on the Common Areas to the extent the same is a result of the
negligence of Landlord or its agents, servants, contractors or employees.

(l)  Tenant shall pay and discharge punctually all charges for utility
services used by it.

7.   USE OF DEMISED PREMISES
-----------------------

Landlord hereby consents to and Tenant may only use the Demised Premises
for those uses described in the Fundamental Lease Provisions ("Permitted Uses").
Tenant represents, warrants and covenants to Landlord that the Demised Premises
shall be used only for Permitted Uses.

8

8.   CONSTRUCTION BY TENANT
----------------------

(a)  Tenant shall construct a building on the Demised Premises,
consisting of approximately ______ Square feet of Floor Area. Such construction,
which is subject to Tenant's compliance with the Restrictions, shall commence
within one (1) year from final Plan approval as set forth in said Restrictions.
Submittals toward Plan approval shall promptly commence.

(b)  Plan submittals as well as construction in connection with any
Improvements, once commenced, and all required reviews by Landlord, shall be
diligently pursued to substantial completion. Attached hereto, as Exhibit C is a
listing of documents constituting Tenant's "Preliminary Plan Package." All
further plan or driveway submittals required by the Restrictions will be
approved by Landlord so long as they are substantially consistent with the
Preliminary Plan Package. Tenant, at its expense and subject to compliance with
the Restrictions and all applicable building regulations, may from time to time
remodel or demolish any Improvements, or construct other Improvements on the
Demised Premises and remodel or demolish such other Improvements. Tenant may
construct, remodel, or demolish the interior of the Improvements as it may
desire from time to time and nothing in the Restrictions shall be construed to
require any approval of Landlord with respect thereto.

9.   INFRASTRUCTURE ASSESSMENT
-------------------------

Tenant shall pay to Landlord upon execution of this Lease an infrastructure
assessment of $325,127.04 as Tenant's share of Landlord's cost of constructing
and installing on and off-site infrastructure facilities which serve or will
serve the Demised Premises in common with other premises.

10.  MAINTENANCE AND REPAIRS
-----------------------

Tenant shall at all times during the Term keep and maintain in good order
and repair the Land as well as the exterior of all Improvements, howsoever the
necessity or desirability of maintenance or repairs may occur. Tenant waives any
right created by any law now or hereafter in force to maintain or make repairs
to any portion of the Demised Premises at Landlord's expense, it being
understood that neither Ground Lessor nor Landlord shall in any event be
required to maintain or make any alterations, rebuildings, restorations,
replacements, changes, additions, improvements or repairs to the Demised
Premises. Nothing in the Lease shall be construed to require the Tenant to
maintain the interior of the Improvements beyond the extent necessary to comply
with applicable laws.

11.  REGULATORY REQUIREMENTS
-----------------------

(a)  Tenant shall promptly observe and comply with all present and
future laws, ordinances, requirements, orders, directions, rules and regulations
of all governmental authorities having or claiming jurisdiction over the Demised
Premises or any part thereof and of all insurance companies writing policies
covering the Demised Premises or any

9

part thereof. Without limiting the generality of the foregoing, Tenant shall
also procure each and every permit, license, certificate or other authorization
required in connection with the lawful and proper use of the Demised Premises or
required in connection with any building or improvement now or hereafter erected
thereon.

(b)  Tenant covenants and agrees to pay all costs and expenses
associated with enforcement, removal, remedial or other governmental or
regulatory actions, agreements or orders threatened, instituted or completed
pursuant to any Hazardous Materials Laws, and all audits, tests, investigations,
cleanup, reports and other such items incurred in connection with any efforts to
complete, satisfy or resolve any matters, issues or concerns, whether
governmental or otherwise, arising out of or in any way related to the use,
generation, release, management, treatment, manufacture, storage or disposal of,
on, under or about, or transport to or from (any of the foregoing hereinafter a
"Use") the Demised Premises of any Hazardous Materials in any amount by Tenant,
its employees, agents, invitees, subtenants, licensees, assignees or
contractors. For purposes of this Lease (1) the term "Hazardous Materials"
shall include but not be limited to asbestos, urea formaldehyde, polychlorinated
biphenyls, oil, petroleum products, pesticides, radioactive materials, hazardous
wastes, toxic substances and any other related or dangerous, toxic or hazardous
chemical, material or substance defined as hazardous or regulated or as a
pollutant or contaminant in, or the Use of or exposure to which is prohibited,
limited, governed or regulated by, any Hazardous Materials Laws; and (2) the
term "Hazardous Materials Laws" shall mean any federal, state, county,
municipal, local or other statute, law, ordinance or regulation now or hereafter
enacted which may relate to or deal with the protection of human health or the
environment, including but not limited to the Comprehensive Environment
Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601, et
--
seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et
--
seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et
--
seq.; the Federal Water Pollution Control Act, 33 U.S.C. Section 1251, et seq.;
--
the Toxic Substances Control Act of 1976, 15 U.S.C. Section 2601, et seq.; Ariz.
--
Rev. Stat. Ann., Title 49 (the "Arizona Environmental Quality Act of 1986"); and
any rules, regulations or guidelines adopted or promulgated pursuant to any of
the foregoing as they may be amended or replaced from time to time.

(c)  Upon reasonable advance notice to Tenant, Landlord shall
have the right, from time to time during Tenant's regular business hours, to
enter upon and, as accompanied by a representative of Tenant, inspect the
Demised Premises for purposes of satisfying itself as to whether Tenant is in
compliance with the requirements of Section I1.1 (a) above.

(d)  Tenant acknowledges that Landlord has provided to Tenant an
environmental assessment report on the Research Park (excluding Lots 3, 4, 8, 9,
10, 11, 12, 19, 32, 39, 42 and 44) prepared by Foree & Vann, Inc., dated October
13, 1993 ("Report"). Except as otherwise disclosed in said Report, Landlord, to
the extent of its current actual knowledge, knows of no Hazardous Materials
contamination of the Research Park or the Demised Premises.

10

(e)  Landlord covenants and agrees to pay all costs and expenses
associated with enforcement, removal, remedial or other governmental or
regulatory actions, agreements or orders threatened, instituted or completed
pursuant to any Hazardous Materials Laws, and all audits, tests, investigations,
cleanup, reports and other such items incurred in connection with any efforts to
complete, satisfy or resolve any matters, issues or concerns, whether
governmental or otherwise, arising out of or in any way related to the Use of
Hazardous Materials in any amount by Landlord, its employees, agents, invitees,
predecessors in interest, licensees, assignees or contractors.

(f)  Landlord covenants and agrees diligently to enforce against
other tenants of the Research Park those provisions of applicable tenant leases
which pertain to Hazardous Materials and Hazardous Materials Laws.

12.  INDEMNIFICATION
---------------

(a)  Except to the extent caused by the gross negligence of
Ground Lessor or Landlord, or their agents, contractors, servants or employees,
Tenant shall save, hold harmless and indemnify Ground Lessor, Landlord and their
agents, employees and contractors performing management functions for the
Research Park from and against all liabilities, obligations, claims, causes of
action, suits, damages, penalties, assessments, taxes, fees, costs and expenses
(including without limitation, reasonable attorneys' fees and expenses) imposed
upon or asserted against Ground Lessor or Landlord by reason of (i) any use,
nonuse or condition of the Demised Premises or any part thereof, (ii) any
accident, injury to or death of persons (including workmen) or loss of or damage
to property occurring on the Demised Premises or any part thereof, (iii) any
failure on the part of Tenant to perform or comply with any of the terms of this
Lease, (iv) performance of any labor or services or the furnishing of any
materials or other property in respect of the Demised Premises or any part
thereof by, on behalf of or at the request of Tenant, (v) any accident, injury
to or death of persons (including workmen) or loss of or damage to property
arising from or in any way related to construction of the Improvements, (vi) any
failure on the part of Tenant to comply with any of the matters set forth in
Section 7 and Section I1; and (vii) any violation or breach by Tenant of the
Restrictions or the Declaration of Height Limitations referred to in Section 48
below.

(b)  Landlord shall save, hold harmless and indemnify Tenant and
its agents, employees and contractors from and against all liabilities,
obligations, claims, suits, damages, penalties, costs and expenses (including
without limitation, reasonable attorneys' fees and expenses) imposed upon or
asserted against Tenant by reason of (i) the gross negligence of Landlord or its
agents, contractors, servants or employees, or (ii) any failure on the part of
Landlord to perform or comply with any of the terms of this Lease including any
failure on the part of Landlord to comply with any of the matters set forth in
Section 11.

(c)  In the event any indemnified party should be made a
defendant in any action, suit or proceeding brought by reason of any act or
omission of the indemnifying party, the indemnifying party shall at its own
expense resist and defend such action, suit or 

11

proceeding by counsel reasonably approved by the indemnified party. If any such
action, suit or proceeding should result in a final judgment against the
indemnified party, the indemnifying party shall promptly satisfy and discharge
such judgment or shall cause such judgment to be promptly satisfied and
discharged. The obligations of the indemnifying party under this Section arising
by reason of any such occurrence-taking place while this Lease is in effect
shall survive any termination of this Lease.

13.  INSURANCE
---------

(a)  Without limiting Tenant's indemnify obligations set forth in
this Lease (but subject to the waiver of subrogation provided in Section 13(c)
below), Tenant shall, at its sole cost and expense, procure and maintain
throughout the Term commercial general liability insurance in the amount of
$10,000,000 combined single limit (CSL).

(b)  All policies of insurance required under Section 13 (a)
above will name the Ground Lessor and Landlord and its managing agent(s) as
additional insureds, and certificates thereof will be delivered to Landlord
within ten (10) days after delivery of possession of the Demised Premises to
Tenant and within 30 days prior to the expiration of the term of each policy.
All policies of insurance required hereunder must contain a provision that the
insurance carrier will notify in writing the insured and Landlord thirty (30)
days in advance of any cancellation or lapse or the effective date of a
reduction in the amount of insurance. All policies of insurance required
hereunder shall be written as primary policies. The Tenant further covenants and
agrees to increase liability insurance in additional amounts as Landlord may
reasonably require. All policies of insurance required hereunder shall be issued
by responsible insurance companies qualified to do business in the State of
Arizona with a Best's Rating Guide rating of at least A-Class VIII.

(c)  In the event any liability indemnified against under Section
12 or elsewhere in this Lease is also insured against under Section 13 or
otherwise, the indemnification obligation shall only extend to the portion of
the liability exceeding the amount of insurance proceeds, if any, received by
the party being indemnified, the parties hereby waiving all rights of
subrogation to the extent permitted by any applicable insurance policies.

(d)  Tenant may procure, but shall not be required to procure,
property damage and/or casualty insurance. In the event Tenant does so, Tenant
shall be the sole owner thereof and Landlord shall have no interest or rights
therein.

14.  LIENS
-----

(a)  Tenant shall have no power to do any act or make any
contract which may create or be the basis for any lien, mortgage or other
encumbrance upon the interest of Landlord in the Demised Premises. Under no
circumstances shall the interest of Ground Lessor in and to the Demised Premises
be subject to any such lien, mortgage or other encumbrance.

12

(b)  If, because of any act or omission or alleged act or
omission of Tenant, any mechanics', materialmen's or other lien, charge or order
for the payment of money shall be filed or recorded against Ground Lessor,
Landlord or the Demised Premises (whether or not such lien, charge or order is
valid or enforceable as such), Tenant shall, at its own expense, cause the same
to be released and discharged of record within thirty (30) days after Tenant
shall have received notice of the filing or recording thereof, or Tenant may,
within said period, record a surety bond pursuant to Section 33-1004, Arizona
Revised Statutes, in the case of a mechanics' or materialmen's lien, or furnish
to Landlord a bond satisfactory to Landlord against any other lien, charge or
order, in which case Tenant shall have the right in good faith to contest the
validity or amount thereof

15.  DAMAGE OR DESTRUCTION
---------------------

In the event any portion of the Demised Premises is damaged by fire or
any other peril, Tenant, at its election, either (a) shall promptly commence and
proceed diligently with the work of restoring the same, or (b) shall raze all
damaged Improvements and return the Demised Premises to their condition
preceding execution of this Lease. If Tenant elects to do the latter, Tenant may
terminate this Lease upon completion by Tenant of such work.

16.  EMINENT DOMAIN
--------------

(a)  If the whole of the Demised Premises shall be taken or
condemned under the right of eminent domain or if such a substantial part of the
Demised Premises shall be taken as shall result in the portion remaining being
unsuitable for the use being made thereof at the time of such taking, then this
Lease shall terminate as of the date upon which title shall vest in such
condemning authority. The net awards or payments on account of any taking shall
be apportioned as follows:

(i)  Ground Lessor shall receive that portion of the
award attributable to the value of the Land.

(ii) Tenant shall receive that portion of the award
attributable to the value of the Improvements.

(b)  If only a part of the Demised Premises shall be so taken or
condemned and the part not so taken can, in Tenant's reasonable judgment, be
adapted for the use then being made thereof, this Lease shall remain in full
force and effect without any abatement or reduction in rent except as provided
in Section 16(c), and Tenant, whether or not its portion of the awards or
payments, if any, on account of such taking shall be sufficient for the purpose,
at its own expense shall promptly commence and complete the restoration of the
Improvements on the Demised Premises as nearly as possible to their value,
condition and character immediately prior to such taking or condemnation. Tenant
shall have no entitlement to any rent reduction for any taking or condemnation
of Land which does not result in a reduction in the net square footage of the
Demised Premises.

13

(c)  In the event that a taking or condemnation results in a
reduction of the net square footage of the Land, the Annual Rent and Additional
Charges payable by Tenant hereunder shall be reduced, effective as of the date
of Tenant's loss of use thereof, by a fraction the numerator of which shall be
the total reduction in the net square footage of the Land and the denominator of
which shall be the total net square footage of the Land as originally set forth
in the Fundamental Lease Provisions.

(d)  If the award or payments on account of any taking shall not
be divided or apportioned by the court or the condemning authority into the
portions set forth in Section 16(a), and if Landlord and Tenant shall be unable
to agree on such apportionment, then such apportionment shall be determined by
appraisers. Landlord and Tenant shall each appoint an appraiser, and the two
appraisers so appointed shall promptly appoint a third appraiser. Within thirty
(30) days after the appointment of the third appraiser, the two appraisers
appointed by Landlord and Tenant shall each determine and report to the third
appraiser the appropriate apportionment. Within ten (10) days thereafter, the
third appraiser shall determine which of the two apportionments determined by
the appraisers appointed by Landlord and Tenant is the more appropriate
apportionment and the apportionment chosen by the third appraiser shall be
binding upon the parties. All appraisers shall be members of the American
Institute of Real Estate Appraisers (M.A.I.) or, if such Institute shall not
then exist, members of its successor organization or an organization of
substantially equivalent stature. The fees of the appraisers shall be borne
equally by Landlord and Tenant.

17.  DEFAULTS AND REMEDIES
---------------------

(a)  The occurrence of any one or more of the following events
shall constitute a "Default" hereunder by Tenant:

(1)    The failure by Tenant to make any payment of Annual
Rent or any Additional Charges required to be paid by Tenant hereunder on
the date such payment was due (and expiration if any applicable grace
period), where such failure shall continue for a period of thirty (30) days
after written notice thereof from Landlord to Tenant.

(2)    The failure by Tenant or any sublessee of Tenant to
observe or perform the covenant set forth in Section 7 where such failure
shall continue for a period of sixty (60) days after written notice thereof
from Landlord to Tenant.

(3)    The failure by Tenant to observe or perform any
express or implied covenant or provision of this Lease to be observed or
performed by Tenant, other than as specified in (1) and (3) above, where
such failure shall continue for a period of sixty (60) days after written
notice thereof from Landlord to Tenant; provided, however, that if the
nature of Tenant's default is such that it is capable of being cured but
more than sixty (60) days are reasonably required for its cure, then Tenant
shall not be deemed to be in Default if Tenant shall commence such cure
within said sixty (60) day period and thereafter diligently prosecute such
cure to completion.

14

(b)  In the event of a Default by Tenant, in addition to any
other remedies available to Landlord at law or in equity, Landlord may, without
notice or demand of any kind to Tenant, have any one or more of the following
described remedies:

(1)    Landlord shall have the right, at its election, to
reenter the Demised Premises, or any part thereof, either with or without
process of law, and to expel, remove and put out Tenant and persons
occupying the Demised Premises under Tenant, using such force as may be
necessary in so doing, to take full possession of and control over the
Demised Premises and to have, hold and enjoy the same and to receive all
rental income of and from the same. No reentry by Landlord shall be deemed
an acceptance of a surrender of this Lease, nor shall it absolve or
discharge Tenant from any liability under this Lease. No reentry by
Landlord shall be deemed to effect a termination of this Lease unless so
stated by Landlord in a written notice delivered to Tenant.

(2)    Landlord shall have the right, at its election, with
or without reentry as provided in subparagraph (1) immediately above, to
give written notice to Tenant stating that this Lease and the Term hereby
demised shall terminate on the date specified by such notice, and upon the
date specified in such notice this Lease and the Term hereby demised and
all rights of Tenant hereunder shall terminate. Upon such termination,
Tenant shall quit and peacefully surrender to Landlord the Demised Premises
and the Improvements then situated hereon.

(3)    At any time and from time to time after such reentry,
Landlord may rent the Demised Premises, or any part thereof, in the name of
Landlord or otherwise, for such term or terms (which may be greater or less
than the period which would otherwise have constituted the balance of the
Term of this Lease), and on such conditions (which may include concessions
or free rental) as Landlord, in its reasonable discretion, may determine
and may collect and receive the rental therefor. However, in no event shall
Landlord be under any obligation to relet the Demised Premises or any part
thereof, and Landlord shall in no way be responsible or liable for any
failure to relet or for any failure to collect any rental due upon any such
reletting. Even though it may relet the Demised Premises, Landlord shall
have the right thereafter to terminate this Lease and all of the rights of
Tenant in or to the Demised Premises.

(4)    Unless Landlord shall have notified Tenant in writing
that it has elected to terminate this Lease, no such reentry or action in
lawful detainer or otherwise to obtain possession of the Demised Premises
shall relieve Tenant of its liability and obligations under this Lease; and
all such liability and obligations shall survive any such reentry. In the
event of any such reentry, whether or not the Demised Premises, or any part
thereof, shall have been relet, Tenant shall pay to Landlord the entire
rental and all other charges required to be paid by Tenant up to the time
of such reentry of this Lease, and thereafter Tenant, until the end of what
would have been the Term of this Lease in the absence of such reentry,
shall be liable to Landlord, and shall pay to Landlord, as and for
liquidated and agreed damages for Tenant's Default:

15

(i)     The amount of Annual Rental and Additional
Charges which would be payable under this Lease by Tenant if this
Lease were still in effect, less

(ii)    The net proceeds of any reletting, after
deducting all of Landlord's reasonable expenses in connection with
such reletting, including without limitation all reasonable
repossession costs, brokerage commissions, legal expenses, attorneys'
fees, alteration and repair costs and expenses of preparation for such
reletting.

Tenant shall pay such damages to Landlord monthly as and when payments of Annual
Rent are due, and Landlord shall be entitled to recover from Tenant monthly as
the same shall arise. Tenant shall be liable for such damages on a monthly
basis, where or not in any prior year or years the net proceeds described in
subparagraph (ii) above shall have exceeded the Annual Rent and Additional
Charges described in subparagraph (i) above.

(5)    In the event of any breach or threatened breach by
Tenant of any of the terms, covenants or agreements contained in this
Lease, Landlord shall have, in addition to any specific remedies provided
in this Lease, the right to invoke any right or remedy allowed by law or in
equity or by statute or otherwise, including the right to enjoin such
breach or threatened breach.

(6)    Each right and remedy of Landlord provided for in
this Lease shall be cumulative and in addition to every other right or
remedy provided for in this Lease or now or hereafter existing at law or in
equity or by statute or otherwise; and the exercise or beginning of the
exercise by Landlord of any one or more of such rights or remedies shall
not preclude the simultaneous or later exercise by Landlord of any or all
other rights or remedies provided for in this Lease or now or hereafter
existing at law or in equity or by statute or otherwise.

(c)  No waiver or breach of any term of this Lease shall be
construed as a waiver of any succeeding breach of the same or any other term.

18.  ASSIGNMENT AND SUBLETTING
-------------------------

(a)  Tenant shall not, either voluntarily or by operation of law,
sell, hypothecate or transfer this Lease, or sublet the Demised Premises or any
part thereof, or permit the Demised Premises or any part thereof to be occupied
by anyone other than Tenant or Tenant's employees or invitees (all of the
foregoing collectively referred to in this Section 18 as an "Transfer"), without
providing Landlord at least 30 days advance notice of such Transfer and without
the prior written consent of Landlord, such consent not to be unreasonably
withheld.

(b)  No Transfer, even with the consent of Landlord, shall
relieve Tenant of its obligation to pay the Annual Rent and the Additional
Charges and to perform all the other obligations to be performed by Tenant
hereunder. The acceptance by Landlord of any 

16

payment of Annual Rent or Additional Charges from any other person shall not be
deemed to be a waiver by Landlord of any provision of this Lease or to be a
consent to any Assignment.

(c)  Each Transfer shall be by a written instrument executed by
the assignor, successor or transferor, and by which the assignee, sublessee or
transferee shall agree in writing for the benefit of Landlord: (i) if a
sublessee, to abide by and in its use and occupancy of the Demised Premises to
comply with the terms and conditions of this Lease, or (ii) if an assignee of
Tenant's interest, to assume, to be bound by, and to perform the terms,
covenants and conditions of this Lease to be done, kept and performed by Tenant.
One executed copy of such written instrument shall be delivered to Landlord.

(d)  Tenant has informed Landlord that Tenant is negotiating to
sublet all or a portion of the Demised Premises to Motorola, Inc. Tenant
represents and warrants to Landlord that Motorola, Inc. intends to use the
Demised Premises for the following purposes: Regional headquarters for Motorola,
Inc.'s semi-conductor components group and related research and development
activities. Based upon the foregoing representation, Landlord confirms that the
foregoing described use is a "Permitted Use" under this Lease as well as a
"Statutory Use" (as that term is defined in Article 38 below). Landlord hereby
consents to the sublease to Motorola, Inc. and, subject to the provisions of
subparagraph (b) above, to any assignment by Tenant to Motorola, Inc. of
Tenant's right, title and interest under the Lease, provided that Tenant
provides prior written notice to Landlord of such assignment and provided Tenant
and Motorola, Inc. shall comply with subparagraph (c) above.

19.  HYPOTHECATION OF LEASEHOLD ESTATE
---------------------------------

(a)  Tenant is hereby given the right, at any time and from time
to time, to mortgage its leasehold estate in the Demised Premises (but in no
event the fee or Landlord's leasehold estate), provided that any such leasehold
mortgage shall be subject and subordinate to the rights of Landlord hereunder.
As used in this Section and throughout this Lease, the noun 4.4 mortgage" shall
include a deed of trust, the verb "mortgage" shall include the creation of a
deed of trust, the word "mortgagee" shall include the beneficiary under a deed
of trust, and the terms "foreclose" or "foreclosure" shall include a trustee's
sale under a deed of trust as well as a foreclosure by judicial process.

(b)  If a mortgagee shall have given Landlord, before any Default
shall have occurred hereunder, a written notice specifying the name and mailing
address of the mortgagee, then Landlord shall not terminate this Lease by reason
of the occurrence of any Default hereunder unless Landlord shall have given the
mortgagee a copy of its notice to Tenant of such Default addressed to the
mailing address last furnished by the mortgagee, and such Default shall not have
been cured by said mortgagee as provided in Sections 19 (c) or 19 (d) below.

(c)  Tenant irrevocably directs that Landlord accept, and
Landlord agrees to accept, performance by any such mortgagee of any term,
covenant, agreement, provision, condition or limitation on Tenant's part to be
performed or observed as though 

17

performed or observed by Tenant, provided such performance by said mortgagee
shall occur within the time prescribed therefor in this Lease, plus an
additional grace period of thirty (30) days thereafter or, if said Default is
curable but not within said thirty (30) day period, then within such additional
time as may be necessary to cure the same provided the mortgagee commences the
curing thereof within such thirty (30) day period and thereafter prosecutes the
curing of such Default to completion with all due diligence; provided, however,
with respect to any Default hereunder which cannot be cured by said mortgagee
until it obtains possession of the Demised Premises, the provisions of Section
19 (d) shall apply.

(d)  In the event of a Default by Tenant under this Lease which
cannot be cured by a mortgagee without first obtaining possession of the Demised
Premises, then, and notwithstanding any other provision contained in this Lease,
Landlord shall not terminate this Lease by reason of such Default if (i) said
mortgagee, within the thirty (30) day grace period set forth in Section 19(c)
shall have commenced, and thereafter diligently proceeds with, an appropriate
proceeding to foreclose such mortgage or otherwise obtains possession of the
Demised Premises, and (ii) said mortgagee shall have cured such Default within
30 days following its obtaining possession of the Demised Premises (or, if said
Default is curable but not within said thirty [30] day period, then within such
additional time as may be necessary to cure the same provided the mortgagee
commences the curing thereof within such thirty [30] day period and thereafter
prosecutes the curing of such Default to completion with all due diligence).

(e)  During the pendency of any foreclosure proceedings,
mortgagee shall fully perform all the obligations of Tenant under this Lease
that can be performed by such mortgagee without possession of the Demised
Premises (including, but not limited to, payment of all Rent, all Additional
Charges, and any and all other monies due and payable by Tenant hereunder);
provided, however, that if such mortgagee obtains possession of the Demised
Premises during the time that it is enforcing its foreclosure remedy or as a
result thereof, then such mortgagee shall perform fully all of Tenant's
obligations under this Lease. In the event such mortgagee or any purchaser at a
judicial or non-judicial foreclosure sale ("purchaser") acquires title to the
leasehold estate through such a foreclosure proceeding, or otherwise, it shall
thereupon become subrogated to all the rights of the Tenant under this Lease
whereupon:

(i)   Tenant shall have no further right hereunder; and

(ii)  Such mortgagee or purchaser shall forthwith be
obligated to assume and perform each and all of Tenant's obligations
and covenants hereunder.

(f)  In the event such mortgagee or purchaser acquires title to
the leasehold estate of Tenant, then, at any time thereafter when said mortgagee
or purchaser is not then in default under this Lease, Landlord shall, upon
written request of mortgagee or purchaser deliver a new lease of the Demised
Premises to mortgagee or purchaser. The new lease (whether it be granted to the
mortgagee or purchaser) shall have a term equal to the remainder of the Term of
this Lease and shall be upon the terms and conditions herein contained, except
for requirements which are no longer applicable or have already been performed.
Mortgagee or 

18

purchaser shall have the right to a new lease as set forth above provided that
mortgagee or purchaser shall reimburse Landlord for all of Landlord's expenses,
including reasonable attorneys' fees, incident to such efforts.

(g)  Upon the written request of any mortgagee or prospective
mortgagee, and for the benefit of said mortgagee or its nominee, Landlord will
promptly deliver to said mortgagee a certificate setting forth the matters set
forth in Section 21.

(h)  Notwithstanding anything to the contrary contained in this
Section 19, the mortgagee, on or after acquiring ownership of Tenant's leasehold
estate, may assign this Lease without the necessity of obtaining Landlord's
consent and, upon any such assignment, provided such assignee shall assume and
agree to perform and be bound by all of the terms hereof, be released from all
liability hereunder except for obligations occurring during its ownership of
said leasehold estate.

20.  SUBORDINATION
-------------

(a)  This Lease shall be subject and subordinate at all times to
the Ground Lease, and to the lien of any mortgages or deeds of trust in any
amount or amounts whatsoever now or hereafter placed on or against the Demised
Premises, the Ground Lease, or Landlord's leasehold estate in this Lease without
the necessity of the execution and delivery of any further instruments on the
part of Tenant to effectuate such subordination; provided, however, that so long
as no Default exists, the terms of this Lease shall not be affected by
termination proceedings in respect to the Ground Lease or by foreclosure or
other proceedings under such mortgages or deeds of trust, Tenant hereby
agreeing, at the written request of the Ground Lessor, or the purchaser in such
foreclosure or other proceedings, to attorn to the Ground Lessor, or to such
purchaser, as applicable (provided the Ground Lessor or such purchaser agrees to
recognize Tenant's leasehold estate and not disturb Tenant's tenancy so long as
Tenant is not in Default under any of the terms, covenants or conditions of this
Lease), or, at Ground Lessor's or such purchaser's option, as the case may be,
to enter into a new lease for the balance of the term hereof upon the same terms
and provisions as are contained in this Lease. Notwithstanding the foregoing,
Tenant shall execute and deliver such further instrument or instruments
evidencing such subordination of this Lease to the Ground Lease, or the lien of
any such mortgage or mortgages or deeds of trust as may be requested by Landlord
within twenty (20) days from Tenant's receipt of such request provided such
instrument also evidences Tenant's rights of recognition and non-disturbance.

(b)  Any transfer by Landlord of its leasehold estate under this
Lease shall be subject to the rights and obligations of Tenant hereunder; and
Tenant shall attorn to Landlord's transferee. Upon any such transfer and the
assumption of liability therefor by Landlord's transferee, and written notice of
such transfer to Tenant, Landlord shall be and is hereby entirely freed and
released of all liability under any and all of its covenants and obligations
contained in or derived from this Lease arising out of any act or omission
related to the Project or this Lease occurring after the consummation of such
transfer.

19

(c)  To evidence the agreements set forth in paragraphs (a) and
(b) above, simultaneously with the execution of this Lease, Ground Lessor,
Landlord and Tenant shall execute and record a Recognition, Non-Disturbance and
Attornment Agreement in the form of Exhibit D attached hereto.

21.  ESTOPPEL CERTIFICATE
--------------------

(a)  Upon receipt of a written request from the other, Landlord
and Tenant shall each, from time to time, and within twenty (20) days from
receipt of such request, execute, acknowledge and deliver a statement in writing
(i) certifying that this Lease is unmodified and in full force and effect (or,
if modified, stating the nature of such modification and certifying that this
Lease as so modified, is in full force and effect) and the dates to which the
rental and other charges are paid in advance, if any, and (ii) acknowledging
that there are not, to its knowledge, any uncured defaults on the part of the
other hereunder, or specifying such defaults if any are claimed. Any such
statement may be relied upon by a prospective purchaser or encumbrancer of all
or any portion of an estate in the Demised Premises.

(b)  Failure to deliver such statement within such time shall be
conclusive (i) that this lease is in full force and effect, without modification
except as may be represented by the party requesting the certificate, (ii) that
there are no uncured defaults in performance by the party requesting the
certificate, and (iii) that all Annual Rent and Additional Charges have been
paid as of the date set forth in such certificate.

22.  CONFLICT OF LAWS
----------------

The Lease shall be governed by and construed pursuant to the laws of
the State of Arizona and it is agreed that the venue of any legal suit or action
for enforcement of any obligation contained herein shall be Maricopa County,
Arizona. This Lease shall not be construed either for or against Landlord or
Tenant, but rather shall be interpreted in accordance with the general terms of
the language in an effort to reach an equitable result.

23.  STATUS OF TENANT
----------------

Tenant covenants that it is a valid and existing corporation under the
laws of the State of Minnesota, that it is duly authorized to transact business
in the State of Arizona, and that it has full right and authority to enter into
this Lease.

24.  SUCCESSORS AND ASSIGNS
----------------------

Except as otherwise provided in this Lease, all of the covenants,
conditions and provision of this Lease shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.

20

25.  ATTORNEYS' FEES
---------------

In the event that either Landlord or Tenant bring suit against the
other because of the breach of any provision of this Lease, then all costs and
expenses, including reasonable attorneys' fees, incurred by the prevailing party
therein shall be paid by the other party, which obligation on the part of the
other party shall be deemed to have accrued on the date of the commencement of
such action and shall be enforceable whether or not the action is prosecuted to
judgment.

26.  PERFORMANCE BY TENANT
---------------------

All covenants to be performed by Tenant shall be performed at Tenant's
sole cost and expense and without any abatement of Annual Rent or Additional
Charges. If Tenant shall fail to pay any sum of money, other than Annual Rent,
required to be paid by it hereunder or shall fail to perform any other act on
its part to be performed hereunder, and such failure shall continue for ten (10)
days after notice thereof by Landlord, Landlord may, without releasing Tenant
from any obligations, but shall not be obligated to, make any such payment or
perform any such other act on Tenant's part to be made or performed. All sums so
paid by Landlord, and all necessary incidental costs shall bear interest thereon
at an annual rate of two (2) percentage points above the annual interest rate
published from time to time by The Wall Street Journal under the masthead "Money
Rates" as the Prime Rate in effect at the due date (and thereafter adjusted
quarterly, but not more than the maximum contractual rate permissible by law),
from the date of such payment by Landlord and shall be payable to Landlord on
demand. In the event that The Wall Street Journal ceases to publish a Prime
Rate, then interest shall be calculated with reference to an equivalent index
selected by Landlord.

27.  MORTGAGEE PROTECTION
--------------------

In the event of any default on the part of Landlord, Tenant will give
notice by registered or certified mail to any beneficiary of a deed of trust or
mortgagee of a mortgage covering Landlord's leasehold estate under this Lease
whose address shall have been furnished it, and shall offer such beneficiary or
mortgagee a reasonable opportunity to cure the default, including time to obtain
possession of the Demised Premises by power of sale or a judicial foreclosure,
if such should prove necessary to effect a cure.

28.  WAIVER
------

The waiver by either Landlord or Tenant of any breach of any term
herein contained shall not be deemed to be a waiver of any subsequent breach of
the same or any other term herein contained, nor shall any custom or practice
which may grow up between the parties in the administration of the terms hereof
be deemed a waiver of, or in any way affect, the rights of either Landlord or
Tenant to insist upon the performance by the other in strict accordance with
said terms. The subsequent acceptance of Annual Rent or any Additional Charges
by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant
of any term of this Lease, other than the failure of Tenant to pay the Annual
Rent or Additional Charges so accepted, 

21

regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such Annual Rent or Additional Charges.

29.  EXAMINATION OF LEASE
--------------------

Submission of this instrument for examination or signature by Tenant
does not constitute a reservation of or option for Lease, and it is not
effective as a Lease or otherwise until execution by and delivery to both
Landlord and Tenant.

30.  TIME
----

Time is of the essence with respect to the performance of every
provision of this Lease in which time or performance is a factor.

31.  PRIOR AGREEMENTS, AMENDMENTS
----------------------------

This Lease contains all of the agreements of the parties hereto with
respect to any matter covered or mentioned in this Lease, and no prior agreement
or understanding pertaining to any such matter shall be effective for any
purpose. No provision of this Lease may be amended or added to except by an
agreement in writing signed by the parties hereto or their respective successors
in interest.

32.  SEVERABILITY
------------

Any provision of this Lease which shall prove to be invalid, void or
illegal in no way affects, impairs or invalidates any other provision hereof,
and such other provision shall remain in full force and effect.

33.  RECORDING
---------

A Memorandum of Lease in the form attached hereto as Exhibit E shall
be executed and recorded promptly after the full execution of this Lease.

34.  LIMITATION ON LIABILITY
-----------------------

In consideration of the benefits accruing hereunder, Tenant and all
successors and assigns covenant and agree that, in the event of any actual or
alleged failure, breach or default hereunder by Landlord, Tenant shall not have
recourse against any of the assets of Landlord except Landlord's leasehold
estate under this Lease and Landlord's leasehold estate under the Ground Lease.

35.  NONSUBORDINATED SUBLEASE
------------------------

This is a nonsubordinated sublease. Neither Ground Lessor nor Landlord
is obligated to subordinate its rights in the Demised Premises to any loan or
money encumbrance that Tenant shall place against Tenant's subleasehold
interest.

22

36.  CONSENT OF LANDLORD AND TENANT
------------------------------

In the event of the failure of Landlord or Tenant to give any consent
or approval required herein, if it is either provided herein or held to be that
any such consent or approval shall not be unreasonably withheld or delayed, the
requesting party shall be entitled to seek specific performance at law and shall
have such other remedies as are reserved to it under this Lease, but in no event
shall Landlord or Tenant be responsible for damages to anyone for such failure
to give consent or approval.

37.  DARK PERIOD
-----------

In the event the Demised Premises are not occupied with at least 25%
of the Floor Area of the Demised Premises being actively used for a period of
730 consecutive days ("Dark Period"), then Landlord after notice to Tenant as
provided below and to any trust deed beneficiary or mortgagee as provided in
Section 27 above (a "Lender"), shall have the right, but not the obligation, to
terminate this Lease and retake possession of the Demised Premises unless within
(sixty) 60 days after the giving of Landlord's notice of intent to terminate:

a.   The Demised Premises are occupied with at least 25% of the
Floor Area of the Demised Premises being actively used, or

b.   Tenant provides to Landlord reasonable evidence that Tenant
is actively and diligently exercising such rights or remedies available to
Tenant to cause a sublessee or sublessees approved by Landlord pursuant to
Section 18 above (an "Approved Sublessee") to end the Park Period, or

c.   Tenant or any Approved Sublessee provides to Landlord
reasonable evidence that the Approved Sublessee is actively and diligently
exercising commercially reasonable efforts to assign or sublease its interest in
the Demised Premises and such efforts thereafter are diligently continued to end
the Dark Period, or

d.   Tenant or any Lender provides Landlord with reasonable
evidence that the Lender is actively and diligently exercising its rights and
remedies under its deed of trust or mortgage to cause Tenant pursuant to Section
18 above to end the Dark Period (the foregoing notice and cure rights provided
to a Lender are not in limitation of the rights provided to a Lender under
Section 27 above); and

e.   At all times Tenant shall continue to maintain or cause the
Demised Premises to be maintained in accordance with the standards prescribed in
this Lease and in the Restrictions.

Upon such termination, Tenant shall have no further rights or obligations under
this Lease.

23

38.  TITLE TO BUILDINGS AND IMPROVEMENTS
-----------------------------------

It being the intent of the parties that, at all times, Tenant shall
have only a leasehold interest in the Demised Premises, including the
Improvements, ownership of all Improvements shall automatically be vested in
Ground Lessor. Notwithstanding the foregoing, neither Landlord nor Ground Lessor
shall be entitled to claim depreciation on the Improvements for income taxation
purposes. Landlord and Tenant agree that title to the Improvements shall remain
vested in Ground Lessor only for so long as the Demised Premises are used for
uses enumerated in A.R.S. (S) 15-1636 ("Statutory Uses") as now existing or as
hereafter amended, or any successor provision. In the event Tenant or any
sublessee of Tenant engages in a use of the Demised Premises which is not a
Statutory Use, then, at Landlord's sole election, title to the Improvements
shall be deemed vested in Tenant effective as of the date Tenant (or a sublessee
of Tenant) engaged in a use which is not a Statutory Use and shall remain vested
in Tenant for the remainder of the Term.

39.  SURRENDER
---------

Upon the expiration or other termination of the Term, Tenant shall
quit and surrender to Landlord the Demised Premises, including all Improvements,
buildings, replacements, changes, additions and other improvements thereon, with
all non-trade fixtures and equipment in or appurtenant thereto in their then
existing condition (but excluding any personal property of Tenant) or, if
requested by Landlord, shall clear the land, putting the same into the same
condition as existed prior to the execution of this Lease.

40.  RESTRICTIONS - AMENDMENTS
-------------------------

Tenant agrees that its construction, use, maintenance, ownership and
operation of the Demised Premises are subject to the Restrictions. Subject to
the limitations set forth in Section 6(i), Tenant specifically acknowledges and
agrees that Landlord may effect amendments to the Restrictions without the prior
written consent of Tenant so long as any such amendments (i) shall apply equally
and without discrimination to all persons entitled to the use and occupancy of
land within the Research Park, (ii) shall not prohibit or adversely affect the
use then being made of the Demised Premises or any use of the Demised Premises
permitted at the time of execution of this Lease, (iii) shall not permit uses
within the Research Park which are not then common to first class research parks
located within the southwestern United States, and (iv) do not, in Tenant's
reasonable judgment, impose an excessive financial burden on Tenant. Tenant
further agrees upon reasonable advance written notice to allow Landlord to enter
upon and inspect the Demised Premises during Tenant's normal working hours for
purposes of monitoring Tenant's compliance with said Restrictions.

41.  QUIET POSSESSION
----------------

Landlord agrees that Tenant, upon paying the rent, Additional Charges
and performing all other covenants and conditions of this Lease, may quietly
have, hold and enjoy 

24

the Demised Premises during the Term hereof or any renewal thereof. It is
further the intention of the parties hereto that the covenants of this Lease be
independent of each other.

42.  WATER RESOURCES
---------------

It is the announced policy of the State of Arizona, that groundwater
resources be conserved and therefore, with respect to any landscaped area of the
Demised Premises as required by the Restrictions, Tenant will use only those
plants and planting materials that have been approved for use in the Research
Park by the Arizona Department of Water Resources. Upon request, Landlord will
furnish Tenant with a listing of such approved plants and planting materials.
Furthermore, Tenant will not allocate more than 15% of its landscaped area to
turf. Furthermore, no more than 20% of the turfed area developed by Tenant will
be overseeded with any seed variety during the winter dormancy period for
Bermuda grass. Furthermore, no outdoor water bodies such as fountains and
reflecting ponds will be installed by Tenant. For purposes of this Section 42,
"landscaped area" shall mean all areas of the Demised Premises not improved with
Improvements, parking areas and driveways.

43.  NOTICES
-------

Any notice required or permitted to be given hereunder must be in
writing and may be given by personal delivery or by mail, and if given by mail
shall be deemed given if sent by registered or certified mail addressed to
Tenant, or to Landlord at the addresses set forth in the Fundamental Lease
Provisions. Either may, by written notice to the other, specify a different
address for notice purposes.

44.  BROKERS
-------

(a)  Except as set forth in (b) below, each party warrants to the
other party that the warranting party had no dealings with any real estate
broker or agent in connection with the negotiation of this Lease, and that it
knows of no real estate broker or agent who is or might be entitled to a
commission in connection with this Lease and agrees to hold the other party
harmless from any claims of any brokers claiming a commission on account of any
actions of the warranting party.

(b)  Landlord has informed Tenant that Landlord is represented by
P.C.I. Associates, Ltd., and by Sunbelt Holdings Management, Inc., pursuant to
an asset management agreement with Landlord. Landlord shall be solely
responsible for all fees payable to said entities as a result of the closing of
this lease transaction.

45.  NET LEASE
---------

It is the intention of the parties hereto that, except as otherwise
provided in this Lease, this Lease shall be a net lease and that Landlord shall
receive the rents herein reserved and all sums which shall or may become payable
hereunder by Tenant free from all taxes, charges and expenses of every kind or
sort whatsoever (exclusive of rentals due under either the Ground 

25

Lease or the Ground Sublease) and that Tenant shall and will and hereby
expressly agrees to pay all such sums which, except for the execution and
delivery of this Lease, would have been chargeable against the Demised Premises
and payable by Landlord.

46.  TENANT'S TITLE INSURANCE
------------------------

At Tenant's option and at Tenant's sole expense, Tenant may
obtain a policy of title insurance insuring Tenant's subleasehold interest in
the Demised Premises. Tenant's obligations under this Lease shall not be
contingent upon the form or content of any such policy of title insurance.

47.  HEIGHT RESTRICTIONS
-------------------

Tenant acknowledges that it has received a copy of that certain
Declaration of Height Limitations ("Declaration") recorded at Document No. 96-
0774295, Official Records of Maricopa County, Arizona. Tenant agrees to comply
with said Declaration.

[SIGNATURES ON FOLLOWING PAGE]

26

IN WITNESS WHEREOF, the parties have executed this Lease as of the day and
year first above written.

PRICE-ELLIOTT RESEARCH PARK,             
INC., an Arizona nonprofit corporation  

By:      /s/ A. J. Pfister
-----------------------------------
A. J. Pfister                     
Its:   President                         

LANDLORD   

RYAN COMPANIES US, INC.                  
a Minnesota corporation                  

By:      /s/ John Strittmatter           
----------------------------------- 
Name:        John Strittmatter           
----------------------------------- 
Title:            VP                     
----------------------------------- 

TENANT 

27

EXHIBIT 10.59

PROMISSORY NOTE FOR $5,000,000 TO RYAN COMPANIES US, INC.

RELATING TO THE MOTOROLA BUILDING

PROMISSORY NOTE
---------------

$5,000,000.00                                             March 29, 2000

FOR VALUE RECEIVED, the undersigned, WELLS OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership ("Borrower"), promises to pay to the order of RYAN
COMPANIES US, INC., a Minnesota corporation ("Lender"), at its offices at 700
International Centre, 900 Second Avenue South, Minneapolis, Minnesota 55402, or
at such other place as the holder hereof may from time to time designate in
writing, in lawful money of the United States of America, the principal sum of
Five Million and No/100 Dollars ($5,000,000.00), together with interest on the
unpaid principal balance thereof from and after the date hereof at the rate of
nine percent (9%) per annum.  Accrued interest shall be paid on May 1, 2000 and
on the first day of each month thereafter until April 1, 2001, on which date the
entire unpaid principal balance and all accrued but unpaid interest thereon
shall be due and payable.  If a monthly interest payment is not made within five
(5) days of the date when due, Borrower shall pay to the holder hereof a late
payment charge of four percent (4%) of the amount of the overdue payment.  All
payments made hereon shall be applied first to accrued late payment charges,
then to accrued interest and then to reduction of the principal balance.
Borrower may prepay the unpaid balance of the indebtedness evidenced hereby at
any time, without premium or penalty.

This Promissory Note is secured by a Purchase Money Deed of Trust,
Assignment of Lease and Rents, Fixture Filing and Security Agreement of even
date herewith made by Borrower in favor of Lender pertaining to property located
in Maricopa County, Arizona ("Deed of Trust").  Upon the occurrence of an Event
of Default, as defined in the Deed of Trust, the entire unpaid principal sum
evidenced by this Promissory Note, together with all accrued and unpaid interest
thereon, shall at the option of the holder hereof become immediately due and
payable.  Failure to exercise this option shall not constitute a waiver of the
right to exercise the same in the event of any subsequent default.  Borrower
further agrees to pay all costs incurred by the holder hereof to collect the
amounts due hereunder, including court costs and reasonable attorneys' fees.

Borrower waives presentment, protest and demand, notice of protest, demand
and of dishonor and nonpayment of this Promissory Note and any lack of diligence
or delays in collection or enforcement of this Promissory Note.  This Promissory
Note shall be governed by and construed in accordance with the laws of the State
of Minnesota.

IN TESTIMONY WHEREOF, Borrower has caused this Promissory Note to be duly
executed and delivered as of the date first above written.

WELLS OPERATING PARTNERSHIP, L.P.
By:  Wells Real Estate Investment Trust, Inc.,
Its General Partner

By: /s/ Douglas P. Williams
-----------------------------
Its:   Executive Vice President

EXHIBIT 10.60

PURCHASE MONEY DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,

FIXTURE FILING AND SECURITY AGREEMENT

SECURING THE MOTOROLA BUILDING

WHEN RECORDED MAIL TO:

Old Republic Title Agency
3200 North Central Avenue
Suite 100
Phoenix, Arizona 85012

PURCHASE MONEY
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
FIXTURE FILING AND SECURITY AGREEMENT

THIS PURCHASE MONEY DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE
FILING AND SECURITY AGREEMENT ("Deed of Trust") dated as of March 29, 2000, is
made among WELLS OPERATING PARTNERSHIP, L.P., a Delaware limited partnership,
whose address is 6200 The Corners Parkway, Suite 250, Norcross, Georgia 30092
("Borrower"), as Trustor, OLD REPUBLIC TITLE AGENCY, INC., an Arizona
corporation ("Trustee"), as Trustee, whose address is 3200 North Central Avenue,
Suite 100, Phoenix, Arizona 85012 and RYAN COMPANIES US, INC., a Minnesota
corporation ("Lender"), as Beneficiary, whose address is 700 International
Centre, 900 Second Avenue South, Minneapolis, Minnesota 55402.

WITNESSETH:

For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, BORROWER IRREVOCABLY GRANTS, BARGAINS, SELLS AND CONVEYS TO
TRUSTEE, ITS SUCCESSORS AND ASSIGNS, IN TRUST, WITH POWER OF SALE AND RIGHT OF
ENTRY AND POSSESSION, the leasehold estate created by that certain ASU Research
Park Lease dated November 19, 1997, by and between Price-Elliott Research Park,
Inc., as Landlord, and Lender, as Tenant, a Memorandum of Lease with respect to
which was recorded in the office of the Maricopa County Recorder on December 10,
1997, as Document No. 97-0867851 (the "Lease"), pertaining to that certain real
property (the "Real Property") located in the, County of Maricopa, State of
Arizona, which is described on the attached Exhibit "A" which is made a part of
and incorporated into this Deed of Trust by this reference as though fully set
forth herein.

TOGETHER WITH all right, title and interest of Borrower in and to all of the
following, whether now owned or hereafter acquired:

a.  all buildings and other improvements erected or hereafter erected on
the Real Property (collectively, the "Improvements"); and

b.  all fixtures, appliances, machinery and equipment of any nature
whatsoever, and other articles of personal property owned by Borrower and now or
at any time hereafter installed in, attached to or situated in or upon the Real
Property or any Improvements now or hereafter erected thereon, or used or
intended to be used in connection with the Real Property, or in the 

operation of any Improvements now or hereafter erected thereon, or in the
operation or maintenance of any such Improvement, plant or business situate
thereon, whether or not the personal property is or shall be affixed thereto,
except that the foregoing shall not apply to personal property owned by any
tenant or to any furniture, furnishings, accessories and equipment not owned but
leased by Borrower for use in a management office, or otherwise in the
management and operation of the Improvements constructed on the Real Property;
and

c.  all building materials, fixtures, building machinery and building
equipment owned by Borrower and delivered on-site to the Real Property during
the course of, or in connection with, construction of, or reconstruction of, or
remodeling of any building and improvement from time to time during the term
hereof; and

d.  all of Borrower's interest in (a) all service contracts relating to the
Real Property, (b) all trade names used in connection with the Real Property,
and solely for use in connection with operation of the Real Property, and (c)
all guaranties and warranties from manufacturers, materialmen and contractors
for work done on or to the Real Property; and

e.  all awards or payments, including interest thereon, which may be made
with respect to the Real Property, whether from the exercise of the right of
eminent domain (including any transfer made in lieu thereof) or for any other
injury to or decrease in the value of the Real Property, including, without
limitation, all awards or payments or just compensation, all damages to the Real
Property resulting from any taking, all relocation or dislocation payments and
all out-of-pocket expenses; and

f.  all insurance policies covering the Real Property and all proceeds of
any unearned premiums on any such insurance policies including, without
limitation, the right to receive and apply the proceeds of any insurance,
judgment, or settlements made in lieu thereof, for damage to the Real Property;
and

g.  any and all tenements, hereditaments and appurtenances belonging to the
Real Property or any part thereof including any water rights, mineral rights,
development rights and strips and gores, or in any way appertaining thereto, and
all streets, alleys, passages, ways, water courses, and all easements and
covenants now existing or hereafter created which relate to the Real Property
for the benefit of Borrower or any subsequent owner or tenant of the Real
Property and all rights to enforce the maintenance thereof, and all other
rights, liberties and privileges of whatsoever kind or character, and the
reversions and remainders, income, rents, issues and profits arising therefrom,
and all the estate, right, title, interest, property, possession, claim and
demand whatsoever, at law or in equity, of Borrower in and to the Real Property
or any part thereof; and

h.  all leasehold estates, rights, title and interest of Borrower as
landlord in and to all leases or subleases covering any portion  of the Real
Property or Improvements now or hereafter existing or entered into, and all
right, title and interest of Borrower thereunder, including without limitation,
all security deposits (subject to applicable legal restrictions and leases of
tenants), advance rentals, and deposits or payments of similar nature; and

2

i.  all the rents, issues and profits thereof, and also all the estate,
right, title, interest and all claims and demands whatsoever, as well in law as
in equity, of Borrower in and to the Real Property, now owned or hereafter
acquired, and every item, part and parcel thereof.

All of the above-mentioned Real Property, Improvements, fixtures, machinery,
furniture, equipment, rights, tenements, hereditaments and appurtenances and
other property interests are sometimes collectively referred to herein as the
"Secured Property."

This Deed of Trust also constitutes a "Security Agreement" as that term is
defined in the Uniform Commercial Code as enacted in the State of Arizona with
respect to all of the personal property as identified above appropriated to the
use of the Secured Property and the Improvements owned by Borrower subject to
the lien of this Deed of Trust including, but not limited to, all of the
furniture, furnishings, machinery, apparatus, equipment, fittings, fixtures and
other articles of personal property (excluding any and all personal property
leased by Borrower from any third party) whether affixed or annexed or not,
which shall for purposes of this Deed of Trust, to the extent permitted by law,
be considered as annexed to and forming a part of the Secured Property and the
Improvements; and with respect to any award in eminent domain proceedings for a
taking or loss of value with respect to the Secured Property and the
Improvements; and in all future leases and rents.  This Deed of Trust creates a
security interest in Lender, and Borrower does hereby grant to Lender a security
interest in all of the personal property of the Borrower as described above
subject to the lien of this Deed of Trust.  With respect to Borrower's interest
in the fixtures described above, this Deed of Trust shall constitute a security
agreement and financing statement between Borrower and Lender and shall be
effective as a financing statement recorded as a fixture filing under the
Uniform Commercial Code, as adopted in the State of Arizona, from the date of
its recordation in the real estate records of the county or counties in which
the real property is located.  This security agreement and financing statement
covers the above described fixtures and cumulative of all other rights of Lender
hereunder, Lender shall have all of the rights conferred on secured parties by
the Uniform Commercial Code with respect to such fixtures.

Any reproduction of this Deed of Trust or of any other security agreement or
financing statement shall be sufficient as a financing statement to the extent
permitted by law.  In addition, Borrower agrees to execute and deliver to
Lender, upon Lender's  request, any financing statements, as well as extensions,
renewals and amendments thereof, and reproductions of this Deed of Trust in such
form as Lender may require to perfect a security interest with respect to said
items.  Borrower shall pay all costs of filing such financing statements and any
extensions, renewals, amendments and releases thereof, and shall pay all
reasonable costs and expenses of any record searches for financing statements
Lender may reasonably require.  Without the prior written consent of Lender,
Borrower shall not create or suffer to be created pursuant to the Uniform
Commercial Code or otherwise any other security interest in said items,
including replacements and additions thereto.  Upon Borrower's breach of any
covenant or agreement of Borrower contained in this Deed of Trust, Lender shall
have the remedies of a secured party under the Uniform Commercial Code and, at
Lender's option, may also invoke the remedies provided in this Deed of Trust as
to such items, and it is expressly agreed that if, upon default, Lender should
proceed to dispose of the collateral in accordance with the provisions of the
Uniform Commercial Code, ten (10) days 

3

notice by Lender to Borrower shall be deemed to be reasonable notice under any
provisions of the Uniform Commercial Code requiring such notice. In exercising
any of said remedies, Lender may proceed against the items of real property and
any items of personal property specified above as part of the Secured Property
separately or together and in any order whatsoever, without in any way affecting
the availability of Lender's remedies under the Uniform Commercial Code or of
the remedies provided in this Deed of Trust.

TO HAVE AND TO HOLD all of the above granted and described Secured Property with
the appurtenances and any after-acquired title Borrower may subsequently have
obtained therein, unto Lender, its successor or successors, forever; and
Borrower warrants generally its title to the Secured Property free of all liens
and encumbrances, and agrees to execute such further assurances of title as
Lender may reasonably require.

PROVIDED, ALWAYS, and these presents are upon this express condition, that if
Borrower or its successors or assigns, shall well and truly pay unto Lender the
principal amount of that certain Note (as defined below) and the interest and
other fees and charges, if any, thereof, at the time and in the manner mentioned
in the Note as well as any other indebtedness secured hereby, and shall well and
truly abide by and comply with each and every covenant and condition set forth
herein or in the Note, then these presents and the estate hereby granted shall
cease, determine and be void; and provided, further, that until the happening of
any Event of Default as set forth in this Deed of Trust, Borrower shall have the
right to possess and enjoy the Secured Property and a license to receive and
retain the rents, issues and profits thereof; and provided further, that on full
payment of the amounts advanced pursuant to the Note secured by this Deed of
Trust and all property costs, charges, expenses, prepayment charges, and
commissions incurred at any time before the sale hereinafter provided for,
Lender shall release and  reconvey the premises unto and at the cost of Borrower
without covenant or warranty to the person or persons legally entitled thereto.

FOR THE PURPOSE OF SECURING:

A.  Payment of the indebtedness evidenced by the Promissory Note (the
"Note"), given by Borrower to Lender in the amount of $5,000,000.00, dated of
even date herewith, and together with any interest and all other charges under
the Note, and any renewals, extensions, supplements and modifications of the
Note.

B.  Payment of such additional sums and interest thereon which may now or
hereafter be loaned to Borrower, or its successors or assigns, by Lender, when
evidenced by a promissory note or notes reciting that they are secured by this
Deed of Trust.

C.  Payment of all other sums, including without limitation, any advances
made by Lender or Trustee for or on account of Borrower, becoming due or payable
under this Deed of Trust, or any other agreement or instrument securing or
pertaining to the Note or the indebtedness (the "Indebtedness") evidenced by the
Note, together with interest thereon at the rate or rates specified in such
instruments.

4

BORROWER AND LENDER AGREE AS FOLLOWS:

1.  Promise to Defend Title.  Borrower is lawfully seized of the estate
conveyed and has the right to grant and convey the Secured Property; the Secured
Property is unencumbered by Borrower; and Borrower will warrant and defend
generally the title to the Secured Property against all claims and demands,
subject to any declarations, easements or restrictions listed in a schedule of
exceptions to coverage in the mortgagee title insurance policy insuring Lender's
interest in the Secured Property.

2.  Obligation to Pay.  Borrower will pay all amounts under the Note when
due.

3.  Performance of Lease.  Borrower shall promptly pay when due all rents,
charges, expenses and other sums or amounts required to be paid by the Tenant
under the Lease and shall faithfully keep and perform each and all of the terms,
covenants, provisions and agreements to be kept and performed by the Tenant
under the Lease and shall do all things necessary to preserve and keep
unimpaired the rights and interests of Borrower, as Tenant, under the Lease.
Upon receipt by Lender from the Landlord of any written notice of default or
failure to perform any of the terms, covenants, provisions or agreements of the
Lease to be paid, observed or performed by Borrower, Lender may rely thereon and
may pay any amount and take any action necessary to cure such breach or default,
even though the existence of such breach or default may be questioned or denied
by Borrower.  Borrower shall reimburse Lender on demand for all amounts expended
by Lender in effecting such cure, together with interest thereon from the date
of demand at the rate provided in the Note.

4.  [Intentionally Omitted]

5.  Charges; Liens.

(a) Borrower will pay, prior to delinquency, all taxes, assessments
and other charges, fines and impositions attributed to the Secured Property
which create or may create a lien on any of the Secured Property, and leasehold
payments or ground rents, if any, as provided under Paragraph 3.

(b) Borrower covenants and agrees to and with Lender that if the
Secured Property or any part thereof is encumbered, mortgaged or pledged by
Borrower, whether voluntarily or involuntarily or by operation of law, in either
or any case without the prior written consent of Lender, Lender may, at Lender's
option, declare all of the sums secured by this Deed of Trust to be immediately
due and payable, and Lender may invoke any remedies permitted by this Deed of
Trust.

6.  Fire and Other Hazard Insurance; Liability Insurance.

(a) Borrower shall keep the Secured Property and the Improvements
insured for its full replacement value against loss by fire, vandalism and
malicious mischief, perils of extended coverage and other risks as required by
Lender in its reasonable discretion.  In addition, Borrower shall provide flood
insurance, if required, in an amount satisfactory to Lender, where 

5

the Secured Property is now, or in the future is declared to be in a Special
Flood Hazard Area as described in the National Disaster Protection Act of 1973,
as amended. The insurance carrier providing the required coverage will be chosen
by Borrower subject to approval by Lender. All insurance policies and renewals
will include a standard mortgage clause in favor of and in form acceptable to
Lender, including without limitation a clause giving Lender a minimum of thirty
(30) days' notice prior to cancellation. Borrower shall furnish to Lender
originals of all policies of insurance required hereunder. If Borrower fails to
provide Lender with evidence of the required insurance during the term of the
Loan, Lender is authorized, but not obligated, to obtain insurance protecting
Lender's interest only. Borrower will be required to pay Lender the insurance
premium upon request, or the premium may be added to the principal balance of
the Note and accrue interest at the rate specified in the Note. Any sums Lender
may expend for insurance premiums will be secured by this Deed of Trust.

(b) When any hazard loss occurs, Borrower shall give prompt notice to
the insurance carrier and Lender.  Lender may submit notice of claim and/or make
proof of loss if not made promptly by Borrower.  All insurance proceeds shall be
paid to Lender.  Lender agrees that the insurance proceeds shall be applied to
restoration or repair of the Secured Property provided that (i) no Event of
Default exists hereunder, (ii) the restoration or repair will be completed prior
to April 1, 2001, (iii) Borrower first pays all costs in excess of available
insurance proceeds, and (iv) the lease to Motorola, Inc. will remain in full
force and effect.   Otherwise, the insurance proceeds shall be applied to the
sums secured by this Deed of Trust, with excess, if any, paid to Borrower.  If
the Secured Property is abandoned by Borrower, or if  Borrower fails to respond
to Lender within thirty (30) days from the date notice is mailed by Lender to
Borrower that the insurance carrier offers to settle a claim for insurance
benefits, Lender is authorized to collect and apply the insurance proceeds, at
Lender's option, either to the restoration or repair of the Secured Property or
to the sums secured by this Deed of Trust.

(c) Unless Lender and Borrower agree in writing, any application of
proceeds to principal will not extend or postpone the due date of the payments
or change the amount of the payments.  If title to the Secured Property is
acquired by Lender, all rights, title and interest of Borrower in any insurance
policies will pass to Lender.

(d) Borrower shall at all times procure and maintain at its sole
expense a policy or policies of liability insurance with respect to activities
on the Secured Property affording coverage not less than $2,000,000 combined
single limit for death or injury to one or more persons or property damage
naming Lender as additional insured.  Upon the date of this Deed of Trust and
from time to time before the expiration of any policy shown in the prior
certificate, Borrower shall deliver to Lender certificates (i) evidencing the
required coverage and (ii) obligating the insurer to provide at least 30 days
prior notice to Lender of any cancellation, non-renewal or reduction in limits
of any policy shown on the certificate.  Upon request, Borrower shall deliver to
Lender the original or a copy of each policy.  All such policies shall be issued
by a responsible insurer licensed to do business in Arizona.  Borrower shall
obtain such endorsements and coverage as Lender may reasonably request.

6

(e) Borrower shall defend, indemnify and hold Lender harmless from all
claims and liabilities, insured or uninsured, arising on the Secured Property or
resulting from any act or omission of Borrower.

7.   Preservation and Maintenance of Property.  Borrower will keep the
Secured Property in good repair and will not commit waste or permit impairment
or deterioration of the Secured Property.  No Improvements or other property
(except trade fixtures belonging to any tenant) now or hereafter covered by the
lien of this Deed of Trust shall be removed, demolished or materially altered or
enlarged, nor shall any new Improvements be constructed, without the prior
written consent of Lender, except that Borrower shall have the right, without
such consent, to remove and dispose of, free from the lien of this Deed of
Trust, such personal property as from time to time may become worn out or
obsolete, provided that simultaneously with or prior to such removal any such
personal property shall be replaced with other personal property of a value at
least equal to that of the replaced personal property and free from any title
retention or other security agreement or other encumbrance and from any
reservation of title, and by such removal and replacement the Borrower shall be
deemed to have subjected such new personal  property to the lien of this Deed of
Trust and the security interest of Lender created hereby shall be the first
priority security interest in said new personal property.

8.   Compliance with Laws.  Borrower covenants and agrees that it will
comply with or cause to be complied with all present and future laws, statutes,
ordinances, rulings, regulations, covenants, conditions and restrictions, orders
and requirements of all federal, state, municipal, county, and other
governmental agencies and authorities relating to the Secured Property, as well
as all covenants, conditions, and restrictions affecting same and shall pay all
fees or charges of any kind in connection therewith.  Borrower further covenants
that it (i) shall not join in the amendment or rescission of any covenants,
conditions and restrictions now or hereafter affecting the Secured Property or
the operation thereof, without the prior written consent of Lender; (ii) shall
give Lender written notice of any request, and, if in writing, a copy of such
request, received by Borrower and requesting Borrower to join in the amendment
of any covenants, conditions or restrictions now or hereafter affecting the
Secured Property or the operation thereof; and (iii) shall give Lender
telephonic notice within one (1) day and written notice (which shall include a
copy of any notice received by Borrower) within three (3) days of Borrower's
receipt of any notice received by or on behalf of Borrower with respect to
Borrower's noncompliance with any of the provisions of covenants, conditions or
restrictions now or hereafter affecting the Secured Property or the operation
thereof.  If Borrower fails to correct the conditions specified in the notice to
it, Lender may do so at the sole cost and expense of Borrower, and Borrower
shall reimburse Lender for such cost and expense upon demand.  Any amounts so
expended by Lender shall bear interest at the default rate (as defined in the
Note) from the date of expenditure and shall be secured by this Deed of Trust.

9.   [Intentionally Omitted]

10.  Assignment of Leases and Rents. Borrower, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
hereby conveys, transfers, assigns, sells, sets over and delivers, irrevocably
and absolutely, unto Lender, its 

7

successors and assigns, all the rights, interest and privileges, which Borrower,
as lessor, has and may have in the leases now existing or hereafter made and
affecting the Real Property, or any part thereof, as such leases may have been,
or may from time to time be hereafter, modified, extended and renewed, with all
rents, income and profits (including tenant security deposits) due and becoming
due therefrom. Borrower will, on request of Lender, execute assignments of any
specific leases affecting any part of the Real Property. Borrower will not
modify or amend the existing lease to Motorola, Inc. without the written
approval of Lender.

11.  Protection of Lender's Security.  If Borrower fails to perform the
covenants and agreements contained in this Deed of Trust, or if any action or
proceeding is commenced which materially affects Lender's interest in the
Secured Property, including, but not limited to, eminent domain, insolvency,
code enforcement, or arrangements or proceedings involving a debtor in
bankruptcy or decedent, then Lender, at Lender's option, upon notice to
Borrower, may make such appearances, disburse such sums and take such action as
is necessary to protect Lender's interest, including, but not limited to,
disbursement of reasonable attorneys' fees and entry upon the Secured Property
to make repairs.  Any amounts disbursed by Lender pursuant to this Paragraph 11,
with interest thereon, will become an additional indebtedness of Borrower
secured by this Deed of Trust.  Unless Borrower and Lender agree to other terms
of payment, such amounts will be payable upon notice from Lender to Borrower
requesting payment, and will bear interest from the dates of disbursement at the
rate payable from time to time on the outstanding principal balance under the
Note.  Nothing contained in this Paragraph 11 shall impose upon Lender an
affirmative duty to incur any expense or take any action.

12.  Inspection.  Lender may make or cause to be made reasonable entries
upon and inspections of the Secured Property.

13.  Condemnation.  The proceeds of any award or claim for damages, direct
or consequential, in connection with any condemnation or other taking of the
Secured Property, or any part of the Secured Property, or for conveyance in lieu
of condemnation are irrevocably assigned and will be paid to Lender; provided
that Lender shall receive only those amounts necessary to satisfy the
outstanding principal balance of the loan and any other additional amounts owed
by Borrower.  Any application of proceeds to principal will not affect the due
date or scheduled payments under the Note.

14.  Events of Default.  The unpaid principal balance of the indebtedness
evidenced by the Note and interest thereon, together with all other applicable
fees and charges evidenced thereby or secured hereby shall become due at the
option of Lender upon the occurrence of an Event of Default (as defined below).
The following shall constitute an "Event of Default" or "Events of Default"
hereunder.

(a) Any failure to pay, within ten (10) days after the dates when due
as provided in the Note, all amounts due and owing under the Note.

(b) Any default in the payment of any other sum due under this Deed of
Trust which is not cured ten (10) days following receipt of written notice from
Lender.

8

(c) Unless otherwise provided herein, any non-monetary default which
is not cured within thirty (30) days following receipt of written notice from
Lender.

(d) The imposition of any voluntary or involuntary lien or encumbrance
upon the Secured Property, except as permitted by this Deed of Trust or approved
by Lender.

(e) Borrower assigns, transfers or conveys any interest in all or any
part of the Secured Property.

15.  Acceleration; Remedies.  Upon the happening of an Event of Default,
Lender, at Lender's option, may declare all of the sums secured by this Deed of
Trust to be immediately due and payable without further demand and may use the
power of sale and any other remedies provided for herein or permitted by
applicable law, including without limitation, the rights and remedies afforded
by Arizona Revised Statutes (S)33-702(B), without regard to the adequacy of the
security or to the solvency of Borrower or whether Trustee or Lender has
commenced to exercise any other right or remedy provided herein or permitted by
applicable law. Lender will be entitled to collect all reasonable costs and
expenses incurred including, but not limited to, reasonable attorneys' fees in
pursuing the remedies provided in this Deed of Trust.

If Lender uses the power of sale, Trustee will give public notice of sale
to the persons and in the manner prescribed by applicable law.  After the lapse
of such time as may be required by applicable law, Trustee, without demand on
Borrower, will sell the Secured Property at public auction to the highest bidder
at the time and place and under the terms designated in the notice of sale in
one or more parcels and in such order as Trustee may determine.  Trustee may
postpone sale of all or any parcel of the Secured Property in the manner
provided by law.  Lender or Lender's designee may purchase the Secured Property
at any sale.

Trustee will deliver to the purchaser a Trustee's Deed conveying the
Secured Property sold without any covenant or warranty, expressed or implied.
The recitals in the Trustee's Deed will be prima facie evidence of the truth of
the statements made.  Trustee will apply the proceeds of the sale in the
following order: (a) to all reasonable costs and expenses of the sale,
including, but not limited to, reasonable Trustee's and attorneys' fees and
costs of title evidence; (b) to all sums secured by this Deed of Trust; and (c)
the excess, if any, to the persons legally entitled.

16.  Appointment of Receiver; Lender in Possession.  Upon the occurrence of
any Event of Default, Lender, in person, by agent, or by judicially appointed
receiver may enter upon, take possession of and manage the Secured Property and
collect the rents from the Secured Property including those past due.  All rents
collected by Lender or the receiver will be applied first to payment of the
costs of management of the Secured Property and collection of rent, including
receiver's fees, premiums on receiver's bonds and reasonable attorneys' fees,
and then to the sums secured by this Deed of Trust.  Lender and the receiver
will only be liable to account for those rents actually received.

17.  Borrower Not Released.  Extension of the time for payment or
modification or amortization of the sums secured by this Deed of Trust granted
by Lender to any successor in interest of Borrower will not operate to release,
in any manner, the liability of the original 

9

Borrower and the original Borrower's successors in interest. Lender will not be
required to commence proceedings against any successor or refuse to extend time
for payment or otherwise modify amortization of the sums secured by this Deed of
Trust by reason of any demand made by the original Borrower and the original
Borrower's successors in interest.

18.  Forbearance by Lender Not a Waiver.  Any forbearance by Lender in
exercising any right or remedy contained in this Deed of Trust, or otherwise
afforded by applicable law, will not be a waiver of, or preclude the exercise
of, any such right or remedy.  The procurement of insurance, or the payment of
taxes, or other liens or charges by Lender will not be a waiver of Lender's
right to accelerate the maturity of the Note or any additional advances.

19.  Remedies Cumulative.  All remedies provided in this Deed of Trust are
distinct and cumulative to any other right or remedy under this Deed of Trust or
under any other Loan Document or afforded by law or equity, and may be exercised
concurrently, independently or successively.

20.  Successors and Assigns Bound; Joint and Several Liability.  The
covenants and agreements contained in this Deed of Trust will bind, and the
rights under this Deed of Trust will inure to, the respective successors and
assigns of Lender and Borrower.  All covenants and agreements of Borrower will
be joint and several.

21.  Notice.  Except for any notice required under applicable law to be
given in another manner, all written notices or demands required or permitted
under this Deed of Trust, shall  be in writing, delivered in person or sent by
certified mail, return receipt requested, to the address shown on the first page
or to such other address as either party may designate from time to time by
notice to the other.  Mailed notices shall be effective upon deposit in the
mail, and personally delivered notices shall be effective upon receipt.

22.  Waiver of Rights by Borrower.  Borrower waives all the rights and
benefit of all laws now existing or that hereafter may be enacted providing for
(a) any appraisement before sale of any portion of the Secured Property, or (b)
extension of the time for the enforcement or collection of the Note or the
indebtedness evidenced thereby, or (c) creation of an extension of the period of
redemption from or a moratorium on any sale made pursuant to this Deed of Trust.
To the full extent Borrower may do so, Borrower agrees that Borrower will not at
any time insist upon, plead, claim or take the benefit or advantage of any law
now or hereafter in force providing for any appraisement, valuation, stay,
extension, redemption or moratorium, and Borrower, for Borrower, Borrower's
successors and assigns, and for any and all persons ever claiming any interest
in the Secured Property, to the extent permitted by law, hereby waives and
releases all rights of redemption, valuation, appraisement, moratorium, stay of
execution, notice of election to mature or declare due the whole of the secured
indebtedness and marshaling in the event of foreclosure of the liens hereby
created.  If any law referred to in this Paragraph and now in force, of which
Borrower, Borrower's successors and assigns or other person might take advantage
despite this Paragraph, shall hereafter be repealed or cease to be in force,
such law shall not thereafter be deemed to preclude the application of this
Paragraph.  Borrower expressly waives 

10

and relinquishes any and all rights and remedies which Borrower may have or be
able to assert by reason of the laws pertaining to the rights and remedies of
sureties, including without limitation Arizona Revised Statutes, Sections 12-
1641, et seq. and 16 Arizona Revised Statutes, Rules of Civil Procedure, Rule
17(f). Borrower waives, to the full extent permitted by law, all statutes of
limitations as a defense to this Deed of Trust and any obligation secured by
this Deed of Trust.

23.  Severability; Governing Law.  In the event that any provision or
clause of this Deed of Trust or the Note conflicts with applicable law, such
conflict will not affect other provisions of this Deed of Trust or the Note
which can be given effect without the conflicting provision, and to this end the
provisions of this Deed of Trust and the Note are declared to be severable.
This Deed of Trust shall be governed by, construed and enforced according to the
laws of the State of Arizona and construction shall be without regard to any
legal principles involving which party caused this instrument to be prepared.

24.  Reconveyance.  Upon payment of all sums secured by this Deed of Trust,
Lender will request Trustee to reconvey the Secured Property and surrender this
Deed of Trust and all notes secured by this Deed of Trust to Trustee.  Trustee
will reconvey the Secured Property without warranty to the person legally
entitled, and that person will pay all costs of the reconveyance.

25.  Substitute Trustee.  Lender may appoint a new Trustee in the manner
provided by law.  The new Trustee will succeed to all the title, power and
duties conferred upon the Trustee.

26.  No Merger.  The estate granted to Lender hereunder shall not merge
with any other estate that Lender may have in the Secured Property, present or
future.

27.  Time is of the Essence.  Time is of the essence with respect to each
and every covenant, agreement and obligation of Borrower under this Deed of
Trust, the Note and any and all other instruments now or hereafter evidencing,
securing or otherwise relating to the indebtedness.

28.  Captions.  The captions and headings of the paragraphs of this Deed of
Trust are for convenience only and are not to be used to interpret or define the
provisions of this Deed of Trust.

11

BY SIGNING BELOW, BORROWER ACKNOWLEDGES HAVING READ THIS DEED OF TRUST AND
REQUESTS THAT A COPY OF ANY NOTICE OF SALE BE MAILED TO BORROWER AT THE ADDRESS
SPECIFIED HEREIN FOR IT.

IN WITNESS WHEREOF, Borrower has executed this Purchase Money Deed of Trust,
Assignment of Leases and Rents, Fixture Filing and Security Agreement as of the
date first above written.

WELLS OPERATING PARTNERSHIP, L.P.
By:  Wells Real Estate Investment Trust, Inc.,
Its General Partner

By:  /s/ Douglas P. Williams
--------------------------------  
Its Executive Vice President

STATE OF GEORGIA    )
) ss.
COUNTY OF GWINNETT  )

The foregoing instrument was acknowledged before me, a Notary Public, this
28th day of March, 2000, by Douglas P. Williams, the Executive Vice President of
Wells Real Estate Investment Trust, Inc., the General Partner of Wells Operating
Partnership, L.P., a Delaware limited partnership.

/s/ Martha Jean Cory
------------------------------------
Notary Public

My Commission Expires:
Notary Public, Gwinnett County, Georgia

My Commission Expires June 24, 2000
---------------------------------------

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EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our reports
and to all references to our Firm included in or made a part of this
registration statement.

/s/ ARTHUR ANDERSEN LLP

Atlanta, Georgia
June 8, 2000

EXHIBIT 24.1

POWER OF ATTORNEY

POWER OF ATTORNEY
-----------------

Each person whose signature appears below hereby constitutes and
appoints Leo F. Wells, III and Douglas P. Williams, or either of them acting
singly, as his true and lawful attorney-in-fact, for him and in his name, place
and stead, to execute and sign any and all amendments, including any post-
effective amendments, to the Registration Statement on Form S-11 of Wells Real
Estate Investment Trust, Inc. or any additional Registration Statement filed
pursuant to Rule 462 and to cause the same to be filed with the Securities and
Exchange Commission hereby granting to said attorneys-in-fact and each of them
full power and authority to do and perform all and every act and thing
whatsoever requisite or desirable to be done in and about the premises as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all acts and things that said attorneys-in-fact
or either of them may do or cause to be done by virtue of these presents.

Pursuant to the requirements of the Securities Act of 1933, as
amended, this Power of Attorney has been signed below, effective as of July 30,
1999, by the following persons and in the capacities indicated below.

Signatures                               Title                                 
----------                               -----                                 

/s/ Leo F Wells, III                     President and Director                
---------------------------------                                              
Leo F. Wells, III                        (Principal Executive Officer)         

/s/ Douglas P. Williams                  Executive Vice President (Principal   
---------------------------------                                              
Douglas P. Williams                      Financial and Accounting Officer)     

/s/ John L. Bell                         Director                              
---------------------------------                                              
John L. Bell                                                                   

/s/ Richard W. Carpenter                 Director                               
---------------------------------                                              
Richard W. Carpenter                                                           

/s/ Bud Carter                           Director                               
---------------------------------
Bud Carter

/s/ William H. Keogler, Jr.              Director 
---------------------------------
William H. Keogler, Jr.

/s/ Donald S. Moss
---------------------------------
Donald S. Moss                           Director 

/s/ Walter W. Sessoms                    Director 
---------------------------------
Walter W. Sessoms

/s/ Neil H. Strickland                   Director
---------------------------------
Neil H. Strickland 

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