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						Proposed Maximum			Proposed Maximum			Amount of
Title of			Amount			Offering			Aggregate			Registration
Shares to be Registered			to be Registered			Price per Share			Offering Price(1)			Fee(2)
Primary Offering, Common Stock, $.01 par value per share			75,000,000			$10.00			$750,000,000			$88,275
Dividend Reinvestment Plan, Common Stock, $.01 par value per share			10,000,000			9.55			95,500,000			11,241
Total, Common Stock, $0.01 par value per share			85,000,000			—			845,500,000			99,516

(1)	The registrant reserves the right to reallocate shares of common stock being offered between the primary offering and the dividend reinvestment plan. Estimated solely for purposes of determining the registration fee pursuant to Rule 457.
(2)	Pursuant to Rule 457(p), $81,304.50 of the registration fee has been offset by the registration fee previously paid by Wells Real Estate Investment Trust III, Inc. (“Wells REIT III”) in connection with filing of a registration statement on Form S-11 (File No. 333-107632) on August 4, 2003. The registrant has paid the remaining balance of $18,211.50 in connection with this filing. Wells Capital, Inc., the registrant’s parent company and sole stockholder, is the successor by merger to Wells REIT III.

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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the SEC and various states is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

	•	There is no public trading market for our common stock. If you are able to sell your shares, you would likely have to sell them at a substantial discount from their public offering price.
	•	We have no operating history, do not currently own any properties and have not identified any properties to acquire with the proceeds from this offering, which make our future performance and the performance of your investment difficult to predict.
	•	If we raise substantially less than the maximum offering proceeds, we may not be able to invest in a diverse portfolio of properties, and the value of your investment may vary more widely with the performance of specific properties.
	•	Our charter limits a person from owning more than 9.8% of our common stock without prior approval of our board of directors.
	•	We are dependent upon our advisor and its affiliates to conduct our operations and this offering. Adverse changes in the financial health of our advisor or its affiliates or our relationship with them could cause our operations to suffer.
	•	We will pay substantial fees and expenses to our advisor, its affiliates and participating broker/ dealers, which payments increase the risk that you will not earn a profit on your investment.
	•	Our advisor and its affiliates will face conflicts of interest, including significant conflicts in allocating time among us and similar programs sponsored by our advisor.
	•	Our failure to qualify as a REIT for federal income tax purposes would limit our ability to make distributions to our stockholders.

			Price to				Selling				Dealer-				Net Proceeds
			Public*				Commissions*				Manager Fee*				(Before Expenses)
Primary Offering
	Per Share		$	10.00			$	0.70			$	0.18			$	9.12
	Total Minimum			2,000,000				140,000				36,000				1,824,0000
	Total Maximum		$	750,000,000			$	52,500,000			$	13,500,000			$	684,000,000
Dividend Reinvestment Plan
	Per Share			9.55				—				—				9.55
	Total Maximum		$	95,500,000			$	—			$	—			$	95,500,000

*	The selling commissions and all or a portion of the dealer-manager fee will not be charged with regard to shares sold in our primary offering to or for the account of certain categories of purchasers. The reduction in these fees will be accompanied by a corresponding reduction in the per share purchase price. See “Plan of Distribution.”

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	•	a net worth of at least $150,000; or
	•	gross annual income of at least $45,000 and a net worth of at least $45,000.

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SUITABILITY STANDARDS
PROSPECTUS SUMMARY					1
	Wells Timber Real Estate Investment Trust, Inc.				1
	Investment Objectives				1
	Summary Risk Factors				1
	Our Advisor				2
	Conflicts of Interest				2
	Compensation of the Advisor and its Affiliates				3
	Description of Investments				7
	Sources of Income				8
	Our Corporate Structure				8
	Board of Directors and Executive Officers				8
QUESTIONS AND ANSWERS ABOUT THE OFFERING					9
		What is a REIT?			9
		What will you do with the money raised in this offering?			9
		What kind of offering is this?			9
		How does a “best efforts” offering work?			9
		How long will this offering last?			10
		Who can buy shares?			10
		Are there any special restrictions on the ownership or transfer of shares?			10
		Are there any special considerations that apply to employee benefit plans subject to ERISA or other retirement plans that are investing in shares?			10
		Is there any minimum investment required?			10
		How do I subscribe for shares?			10
		What happens if you do not raise a minimum of $2,000,000 in this offering?			10
		What are your exit strategies?			11
		If I buy shares in this offering, how may I later sell them?			12
		If I buy shares, will I receive dividends and how often?			12
		How will you calculate the payment of dividends to stockholders?			13
		May I reinvest my dividends in shares of Wells Timber REIT?			13
		Will the dividends I receive be taxable as ordinary income?			13
		Will I be notified of how the company and my investment are performing?			14
		When will I get my detailed tax information?			14
		Who can help answer my questions?			14
RISK FACTORS					15
	Risks Related to Investing in this Offering				15
		There is no public trading market for your shares; therefore, it will be difficult for you to sell your shares			15
		If we are unable to find suitable investments, we may not be able to achieve our investment objectives or pay dividends			15
		We have not yet identified any of the properties that we will purchase with the proceeds of this offering, which makes your investment more speculative			16
		If we are unable to raise substantial funds, we will be limited in the number and type of investments we may make, and the value of your investment in us will fluctuate with the performance of the specific properties we acquire			16

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	We have no operating history, which makes our future performance and the performance of your investment difficult to predict			16
	Our advisor does not have any substantial experience acquiring, owning and managing timberland			16
	We expect our real estate investments to be concentrated in timberland properties, making us more vulnerable economically than if our investments were diversified			17
	Our cash dividends are not guaranteed and may fluctuate			17
	Our loss of or inability to obtain key personnel could delay or hinder implementation of our investment strategies, which could limit our ability to make distributions and decrease the value of your investment			17
	Our operating performance could suffer if Wells Capital incurs significant losses, including those losses that may result from being the general partner of other entities			18
	Our rights and the rights of our stockholders to recover claims against our independent directors are limited, which could reduce your and our recovery against them if they negligently cause us to incur losses			18
Risks Related to Conflicts of Interest				18
	Wells Capital, its affiliates and our officers will face competing demands on their time, and this may cause our operations and your investment to suffer			18
	Our officers and some of our directors face conflicts of interest related to the positions they hold with Wells Capital and its affiliates, which could hinder our ability to successfully implement our business strategy and to generate returns to you			18
	Wells Capital and its affiliates, including our officers and some of our directors, will face conflicts of interest caused by compensation arrangements with us and other Wells-sponsored programs, which could result in actions that are not in the long-term best interests of our stockholders			19
Risks Related to This Offering and Our Corporate Structure				19
	Our charter limits the number of shares a person may own, which may discourage a takeover that could otherwise result in a premium price to our stockholders			19
	Our charter permits our board of directors to issue stock with terms that may subordinate the rights of our common stockholders or discourage a third party from acquiring our company in a manner that could result in a premium price to our stockholders			20
	Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act; if we become an unregistered investment company, we could not continue our business			20
	You will have limited control over changes in our policies and operations, which increases the uncertainty and risks you face as a stockholder			20
	You may not be able to sell your shares under the proposed share redemption plan and, if you are able to sell your shares under the plan, you may not be able to recover the amount of your investment in our shares			21
	The offering price was not established on an independent basis; the actual value of your investment may be substantially less than what you pay			21
	Because the dealer-manager is one of our affiliates, you will not have the benefit of an independent review of our company or the prospectus customarily undertaken in underwritten offerings; the absence of an independent due diligence review increases the risks and uncertainty you face as a stockholder			21
	Your interest in us will be diluted if we issue additional shares, which could reduce the overall value of your investment			22
	Payment of fees to Wells Capital and its affiliates will reduce cash available for investment and distribution and increases the risk that you will not be able to recover the amount of your investment in our shares			22

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	You may be more likely to sustain a loss on your investment because our sponsor does not have as strong an economic incentive to avoid losses as do sponsors who have made more significant equity investments in their company			22
Risks Related to Investments in Timberland				23
	Following the acquisition of timberland properties, a substantial amount of our revenues will depend on our supply agreements with loggers, sawmills and forest products companies, and these contracts may preclude us from taking advantage of market opportunities			23
	We will be subject to the credit risk of our anticipated customers. The failure of any of our anticipated customers to make payments due to us under our supply agreements could materially adversely affect our financial condition, operating results and ability to make distributions to our stockholders			23
	Our business will depend in part on the health and strength of the milling and manufacturing markets that our timberlands serve, and any downturns in those markets could materially adversely affect our financial condition, operating results and ability to make distributions to our stockholders			23
	Changes in demand for “higher and better use” property may affect our anticipated land sale revenues			23
	The cyclical nature of the forest products industry could materially adversely affect our financial condition, operating results and ability to make distributions to our stockholders			24
	Our due diligence may not reveal all of the liabilities or weaknesses of a targeted timberland property acquisition, which could result in a material adverse effect on our financial condition, operating results and ability to make distributions to our stockholders			24
	We do not intend to obtain insurance on the timberland properties we acquire			25
	The forest products industry and the market for timberland properties are highly competitive, which could force us to pay higher prices for our properties or limit the amount of suitable timberland investments we are able to acquire and thereby materially adversely affect our financial condition, operating results and ability to make distributions to our stockholders			25
	Harvesting our timber may be subject to limitations which could materially adversely affect our financial condition, operating results and ability to make distributions to our stockholders			25
	The timberland properties we acquire are subject to federal and state environmental regulations			25
	Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties and materially adversely affect our financial condition, operating results and ability to make distributions to our stockholders			26
	If we sell properties and provide financing to purchasers, defaults by the purchasers would decrease our cash flows and limit our ability to make distributions to you			27
	Our international investments will be subject to changes in global market trends that could adversely impact our ability to make distributions to our stockholders			27
Risks Associated with Debt Financing				28
	We are likely to incur mortgage and other indebtedness, which may increase our business risks			28
	High mortgage rates may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, our net income and the amount of cash distributions we can make			28
	Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions to our stockholders			28
	Increases in interest rates could increase the amount of our debt payments and limit our ability to pay dividends to our stockholders			28
	We have broad authority to incur debt, and high debt levels could hinder our ability to make distributions and could decrease the value of your investment			29
	Actions of our joint venture partners could reduce the returns on our joint venture investments and decrease your overall return			29

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Federal Income Tax Risks					29
		Failure to qualify as a REIT would reduce our net income and cash available for distributions			29
		You may have current tax liability on distributions you elect to reinvest in our common stock			30
		Even if we qualify as a REIT for federal income tax purposes, we may be subject to other tax liabilities that reduce our cash flow and our ability to make distributions to you			30
		To maintain our REIT status, we may be forced to borrow funds during unfavorable market conditions to make distributions to our stockholders, which could increase our operating costs and decrease the value of your investment			30
		To maintain our REIT status, we may be forced to forego otherwise attractive opportunities, which could delay or hinder our ability to meet our investment objectives and lower the return on your investment			30
		The extent of our use of taxable REIT subsidiaries may affect the value of our common stock relative to the share price of other REITs			31
		Certain of our business activities are potentially subject to the prohibited transaction tax			31
	Retirement Plan Risks				31
		If you fail to meet the fiduciary and other standards under ERISA or the Internal Revenue Code as a result of an investment in our stock, you could be subject to criminal and civil penalties			31
		The annual statement of value that we will send to stockholders subject to ERISA and to certain other plan stockholders is only an estimate and may not reflect the actual value of our shares			32
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS					32
ESTIMATED USE OF PROCEEDS					33
MANAGEMENT					34
	Board of Directors				34
	Committees of the Board of Directors				34
	Audit Committee				34
	Nominating and Corporate Governance Committee				35
	Executive Officers and Directors				35
	Compensation of Directors				37
	2005 Long-Term Incentive Plan				37
	Limited Liability and Indemnification of Directors, Officers, Employees and Other Agents				39
	The Advisor				40
	The Advisory Agreement				41
	Initial Investment by Our Advisor				42
	Dealer-Manager				42
	Management Decisions				43
MANAGEMENT COMPENSATION					43
STOCK OWNERSHIP					48
CONFLICTS OF INTEREST					49
	Our Advisor’s Interests in Other Wells Real Estate Programs				49
	Receipt of Fees and Other Compensation by Wells Capital and its Affiliates				50
	Fiduciary Duties Owed by Some of Our Affiliates to Our Advisor and Our Advisor’s Affiliates				50
	Affiliated Dealer-Manager				50
	Certain Conflict Resolution Procedures				51

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INDUSTRY OVERVIEW				54
	General			54
	Supply and Demand Dynamics			54
	Stages of Biological Growth			55
	Biological Growth Compared to Value Growth			56
	Market Opportunity			56
BUSINESS AND POLICIES				58
	Our Business			58
	Investment Objectives			58
	Investment Strategy			58
	Other Possible Investments			59
	Investment Decisions			59
	Our Higher and Better Use Land Sales			60
	Joint Venture Investments			60
	Borrowing Policies			61
	Disposition Policies			61
	Investment Limitations			62
	Liquidity Event			63
PLAN OF OPERATION				63
	General			63
	Liquidity and Capital Resources			64
	Results of Operations			65
	Inflation			65
	Critical Accounting Policies			65
PRIOR PERFORMANCE SUMMARY				67
	Overview			67
	Publicly Offered Unspecified Real Estate Programs			68
FEDERAL INCOME TAX CONSIDERATIONS				82
	Federal Income Taxation of the Company			82
	Requirements for Qualification			84
	Annual Distribution Requirements			90
	Earnings and Profits			91
	Statutory Relief			91
	Failure to Qualify			91
	Taxable REIT Subsidiaries			92
	Taxation of U.S. Stockholders			92
	Special Tax Considerations for Non-U.S. Stockholders			94
	Information Reporting Requirements and Backup Withholding Tax			96
	Tax Aspects of Wells Timber OP			97
	State and Local Taxes			98
ERISA CONSIDERATIONS				98
	Prohibited Transactions			99
	Plan Asset Considerations			99
	Other Prohibited Transactions			100
	Annual Valuation			101

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DESCRIPTION OF SHARES				102
	Common Stock			102
	Preferred Stock			102
	Meetings and Special Voting Requirements			102
	Restriction on Ownership of Shares			103
	Dividends			105
	Dividend Reinvestment Plan			106
	Proposed Share Redemption Plan			108
	Registrar and Transfer Agent			110
	Restrictions on Roll-Up Transactions			110
CERTAIN PROVISIONS OF MARYLAND LAW AND OF OUR CHARTER AND BYLAWS				111
	Business Combinations			111
	Control Share Acquisitions			112
	Subtitle 8			113
	Advance Notice of Director Nominations and New Business			113
	Anti-takeover Effect of Certain Provisions of Maryland Law and of the Charter and Bylaws			113
THE OPERATING PARTNERSHIP AGREEMENT				114
	General			114
	Capital Contributions			114
	Operations			114
	Distributions and Allocations of Profits and Losses			114
	Rights, Obligations and Powers of the General Partner			115
	Redemption Rights			116
	Change in General Partner			117
	Transferability of Interests			117
	Amendment of Limited Partnership Agreement			117
PLAN OF DISTRIBUTION				118
	General			118
	Compensation of Dealer-Manager and Participating Broker/ Dealers			118
	Subscription Procedures			121
	Stockholder Suitability			122
	Minimum Purchase Requirements			123
	Special Notice to Pennsylvania Investors			123
LEGAL MATTERS				124
EXPERTS				124
WHERE YOU CAN FIND MORE INFORMATION				124
INDEX TO CONSOLIDATED BALANCE SHEET AND PRIOR PERFORMANCE TABLES				F-1
Appendix A — Subscription Agreement (Sample) with Instructions				A-1
Appendix B — Dividend Reinvestment Plan				B-1
EX-1.1 DEALER MANAGER AGREEMENT
EX-3.1 ARTICLES OF AMENDMENT AND RESTATEMENT
EX-3.2 BYLAWS
EX-4.4 ESCROW AGREEMENT
EX-4.5 ESCROW AGREEMENT FOR PENNSYLVANIA INVESTORS
EX-5 OPINION OF VENABLE LLP
EX-10.1 ADVISORY AGREEMENT
EX-10.2 AGREEMENT OF LIMITED PARTNERSHIP
EX-10.3 2005 LONG-TERM STOCK INCENTIVE PLAN
EX-21.1 SUBSIDIARIES OF THE COMPANY
EX-23.3 CONSENT OF DELOITTE & TOUCHE LLP

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	•	combines the capital of many investors to acquire or provide financing for real estate properties;
	•	allows individual investors to invest in a large-scale diversified real estate portfolio through the purchase of interests, typically shares, in the REIT;
	•	is required to pay dividends to investors of at least 90% of its annual REIT taxable income (computed without regard to the dividends paid deduction and excluding net capital gain); and
	•	avoids the “double taxation” treatment of income that would normally result from investments in a corporation because a REIT does not generally pay federal corporate income taxes on the net income it distributes, provided certain income tax requirements are satisfied.

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	•	listing our common stock on a national securities exchange or including such shares for quotation on a national market system; or
	•	sale or merger in a transaction that provides our stockholders with cash and/or securities of a publicly traded company.

	•	seek stockholder approval of an extension or amendment of this listing deadline; or
	•	commence an orderly liquidation.

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	•	our actual results of operations;
	•	the timing of the investment of the net proceeds of this offering; and
	•	whether the income from our harvesting activities is ordinary income or capital gains.

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		Timber REIT				Traditional REIT				C Corporation
Pre-Tax Cash Flow		$	100			$	100			$	100
Corporate Taxes*			—				—				35
Cash Available for Dividends			100				100				65
Taxes Paid by Stockholders*			15				35				10
Net Cash to Stockholders		$	85			$	65			$	55

*

Illustrates distributions of income from timber-cutting contracts for timberland properties held more than one year and assumes (1) a 35% corporate tax rate, a 35% ordinary income tax rate for individuals and a 15% capital gains and qualified dividend income tax rate for individuals; (2) that our cash flow will equal our taxable income; (3) that our distributions qualify as dividends for federal income tax purposes and not as a return of capital; and (4) that no foreign, state or local taxes apply. The 15% rates for capital gains and qualified dividend income will apply only through 2008 unless legislation extending the favorable rates is enacted.

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	•	Four quarterly investor statements, which will generally include a summary of the amount you have invested, the quarterly dividends declared, and the amount of dividends reinvested under our dividend reinvestment plan, if applicable;
	•	An annual report; and
	•	An annual IRS Form 1099-DIV, if required.

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	There is no public trading market for your shares; therefore, it will be difficult for you to sell your shares.

	If we are unable to find suitable investments, we may not be able to achieve our investment objectives or pay dividends.

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	We have not yet identified any of the properties that we will purchase with the proceeds of this offering, which makes your investment more speculative.

	If we are unable to raise substantial funds, we will be limited in the number and type of investments we may make, and the value of your investment in us will fluctuate with the performance of the specific properties we acquire.

	We have no operating history, which makes our future performance and the performance of your investment difficult to predict.

	Our advisor does not have any substantial experience acquiring, owning and managing timberland.

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	We expect our real estate investments to be concentrated in timberland properties, making us more vulnerable economically than if our investments were diversified.

	Our cash dividends are not guaranteed and may fluctuate.

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

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

	Our rights and the rights of our stockholders to recover claims against our independent directors are limited, which could reduce your and our recovery against them if they negligently cause us to incur losses.

	Wells Capital, its affiliates and our officers will face competing demands on their time, and this may cause our operations and your investment to suffer.

	Our officers and some of our directors face conflicts of interest related to the positions they hold with Wells Capital and its affiliates, which could hinder our ability to successfully implement our business strategy and to generate returns to you.

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	Wells Capital and its affiliates, including our officers and some of our directors, will face conflicts of interest caused by compensation arrangements with us and other Wells-sponsored programs, which could result in actions that are not in the long-term best interests of our stockholders.

	•	the continuation, renewal or enforcement of our agreements with Wells Capital and its affiliates, including the advisory agreement and the dealer-manager agreement;
	•	public offerings of equity by us, which entitle Wells Investment Securities to dealer-manager fees and entitle Wells Capital to increased asset management fees;
	•	property sales, which entitle Wells Capital to real estate commissions and possible success-based sale fees;
	•	property acquisitions from third parties, which utilize proceeds from our public offerings, thereby increasing the likelihood of continued equity offerings and related fee income for Wells Investment Securities and Wells Capital;
	•	whether and when we seek to list our common stock on a national securities exchange or a national market system, which listing could entitle Wells Capital to a success-based listing fee but could also hinder its sales efforts for other programs if the price at which our shares trade is lower than the price at which we offered shares to the public; and
	•	whether and when we seek to sell the company or our assets, which sale could entitle Wells Capital to a success-based payment from Wells Timber OP but could also hinder its sales efforts for other programs if the sales price for the company or its assets results in proceeds less than the amount needed to preserve our stockholders’ capital.

	Our charter limits the number of shares a person may own, which may discourage a takeover that could otherwise result in a premium price to our stockholders.

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	Our charter permits our board of directors to issue stock with terms that may subordinate the rights of our common stockholders or discourage a third party from acquiring our company in a manner that could result in a premium price to our stockholders.

	Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act; if we become an unregistered investment company, we could not continue our business.

	•	limitations on capital structure;
	•	restrictions on specified investments;
	•	prohibitions on transactions with affiliates; and
	•	compliance with reporting, record-keeping, voting, proxy disclosure and other rules and regulations that would significantly increase our operating expenses.

	You will have limited control over changes in our policies and operations, which increases the uncertainty and risks you face as a stockholder.

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	You may not be able to sell your shares under the proposed share redemption plan and, if you are able to sell your shares under the plan, you may not be able to recover the amount of your investment in our shares.

	The offering price was not established on an independent basis; the actual value of your investment may be substantially less than what you pay.

	•	the range of offering prices of comparable unlisted REITs; and
	•	the recommendation of our dealer-manager.

	Because the dealer-manager is one of our affiliates, you will not have the benefit of an independent review of our company or the prospectus customarily undertaken in underwritten offerings; the absence of an independent due diligence review increases the risks and uncertainty you face as a stockholder.

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	Your interest in us will be diluted if we issue additional shares, which could reduce the overall value of your investment.

	Payment of fees to Wells Capital and its affiliates will reduce cash available for investment and distribution and increases the risk that you will not be able to recover the amount of your investment in our shares.

	You may be more likely to sustain a loss on your investment because our sponsor does not have as strong an economic incentive to avoid losses as do sponsors who have made more significant equity investments in their company.

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	Following the acquisition of timberland properties, a substantial amount of our revenues will depend on our supply agreements with loggers, sawmills and forest products companies, and these contracts may preclude us from taking advantage of market opportunities.

	We will be subject to the credit risk of our anticipated customers. The failure of any of our anticipated customers to make payments due to us under our supply agreements could materially adversely affect our financial condition, operating results and ability to make distributions to our stockholders.

	Our business will depend in part on the health and strength of the milling and manufacturing markets that our timberlands serve, and any downturns in those markets could materially adversely affect our financial condition, operating results and ability to make distributions to our stockholders.

	Changes in demand for “higher and better use” property may affect our anticipated land sale revenues.

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	The cyclical nature of the forest products industry could materially adversely affect our financial condition, operating results and ability to make distributions to our stockholders.

	•	changes in domestic and international economic conditions;
	•	interest and currency rates;
	•	population growth and changing demographics; and
	•	seasonal weather cycles (e.g., dry summers, wet winters).

	Our due diligence may not reveal all of the liabilities or weaknesses of a targeted timberland property acquisition, which could result in a material adverse effect on our financial condition, operating results and ability to make distributions to our stockholders.

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	We do not intend to obtain insurance on the timberland properties we acquire.

	The forest products industry and the market for timberland properties are highly competitive, which could force us to pay higher prices for our properties or limit the amount of suitable timberland investments we are able to acquire and thereby materially adversely affect our financial condition, operating results and ability to make distributions to our stockholders.

	Harvesting our timber may be subject to limitations which could materially adversely affect our financial condition, operating results and ability to make distributions to our stockholders.

	The timberland properties we acquire are subject to federal and state environmental regulations.

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	•	forestry activities, including harvesting, planting and road building, use and maintenance;
	•	the generation of air emissions;
	•	the discharge of industrial wastewater and storm water; and
	•	the generation and disposal of both hazardous and nonhazardous wastes.

	Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties and materially adversely affect our financial condition, operating results and ability to make distributions to our stockholders.

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	•	changes in international, national, regional and local economic and market conditions;
	•	changes in interest rates and in the availability, cost and terms of debt financing;
	•	changes in governmental laws and regulations, fiscal policies and zoning ordinances, and the related costs of compliance with laws and regulations, fiscal policies and ordinances;
	•	forestry costs associated with maintaining and managing timberland properties;
	•	changes in operating expenses; and
	•	fires, hurricanes, earthquakes, floods and other natural disasters as well as civil unrest, acts of war and terrorism, each of which may result in uninsured losses.

	If we sell properties and provide financing to purchasers, defaults by the purchasers would decrease our cash flows and limit our ability to make distributions to you.

	Our international investments will be subject to changes in global market trends that could adversely impact our ability to make distributions to our stockholders.

	•	effects of exposure to currency other than United States dollars, due to having non-U.S. customers and foreign operations;
	•	regulatory, social, political, labor or economic conditions in a specific country or region; and
	•	trade protection laws, policies and measures, and other regulatory requirements affecting trade and investment, including loss or modification of exemptions for taxes and tariffs, and import and export licensing requirements.

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	We are likely to incur mortgage and other indebtedness, which may increase our business risks.

	High mortgage rates may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, our net income and the amount of cash distributions we can make.

	Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions to our stockholders.

	Increases in interest rates could increase the amount of our debt payments and limit our ability to pay dividends to our stockholders.

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	We have broad authority to incur debt, and high debt levels could hinder our ability to make distributions and could decrease the value of your investment.

	Actions of our joint venture partners could reduce the returns on our joint venture investments and decrease your overall return.

	•	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 that are or that 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.

	Failure to qualify as a REIT would reduce our net income and cash available for distributions.

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	You may have current tax liability on distributions you elect to reinvest in our common stock.

	Even if we qualify as a REIT for federal income tax purposes, we may be subject to other tax liabilities that reduce our cash flow and our ability to make distributions to you.

	•	In order to qualify as a REIT, we must distribute annually at least 90% of our REIT taxable income to our stockholders (which is determined without regard to the dividends paid deduction or net capital gain). To the extent that we satisfy the distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to federal corporate income tax on the undistributed income.
	•	We will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions we pay in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years.
	•	If we have net income from the sale of foreclosure property that we hold primarily for sale to customers in the ordinary course of business or other nonqualifying income from foreclosure property, we must pay a tax on that income at the highest corporate income tax rate.
	•	If we sell a property, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business, our gain would be subject to the 100% “prohibited transaction” tax.
	•	Our taxable REIT subsidiaries will be subject to tax on their taxable income.

	To maintain our REIT status, we may be forced to borrow funds during unfavorable market conditions to make distributions to our stockholders, which could increase our operating costs and decrease the value of your investment.

	To maintain our REIT status, we may be forced to forego otherwise attractive opportunities, which could delay or hinder our ability to meet our investment objectives and lower the return on your investment.

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	The extent of our use of taxable REIT subsidiaries may affect the value of our common stock relative to the share price of other REITs.

	Certain of our business activities are potentially subject to the prohibited transaction tax.

	If you fail to meet the fiduciary and other standards under ERISA or the Internal Revenue Code as a result of an investment in our stock, you could be subject to criminal and civil penalties.

	•	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 and other applicable provisions of ERISA and the Internal Revenue Code;
	•	your investment will not impair the liquidity of the plan or IRA;
	•	your investment will not produce “unrelated business taxable income” for the plan or IRA;
	•	you will be able to value the assets of the plan annually in accordance with ERISA requirements and applicable provisions of the plan or IRA; and
	•	your investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code.

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	The annual statement of value that we will send to stockholders subject to ERISA and to certain other plan stockholders is only an estimate and may not reflect the actual value of our shares.

	•	a value included in the annual statement may not actually be realized by us or by our stockholders upon liquidation;
	•	stockholders may not realize that value if they attempted to sell their shares; and
	•	using the estimated statement of value, or the method used to establish the value, may not comply with any reporting and disclosure or annual valuation requirements under ERISA or other applicable law.

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											Maximum Offering
											(75 Million Shares at
			Minimum Offering								$10.00 per Share
			(200,000 Shares at								10 Million Shares at
			$10.00 per Share)								$9.55 per Share)
			Amount				Percent				Amount				Percent
Gross Offering Proceeds			$	2,000,000				100.0	%		$	845,500,000				100.0	%
	Selling Commissions			140,000				7.0				52,500,000				6.2
	Dealer-Manager Fee			36,000				1.8				13,500,000				1.6
	Other Organization and Offering Expenses(1)			24,000				1.2				9,000,000				1.1
Estimated Amount to be Invested(2)(3)			$	1,800,000				90.0	%		$	770,500,000				91.1	%

(1)	Includes all expenses (other than selling commissions and the dealer-manager fee) to be paid by us in connection with the offering, including our legal, accounting, printing, mailing and filing fees, reimbursing the due diligence expenses of broker/ dealers, and amounts to reimburse Wells Capital for the salaries of its employees and other costs in connection with preparing supplemental sales materials, holding educational conferences and attending retail seminars conducted by broker/ dealers. Wells Capital has agreed to reimburse us to the extent organizational and offering expenses incurred by us, other than selling commissions and the dealer-manager fee, exceed 1.2% of the aggregate gross offering proceeds from our primary offering. We will not reimburse Wells Capital for any organization and offering expenses from proceeds of sales pursuant to our dividend reinvestment plan.
(2)	Amount available for investment will include customary third-party acquisition expenses, such as legal fees and expenses, costs of appraisals, accounting fees and expenses, title insurance premiums, and other closing costs and miscellaneous expenses relating to the acquisition of real estate. We estimate that these third-party costs would average 0.5% of the contract purchase prices of property acquisitions.
(3)	Although it is possible that the net proceeds from the sale of shares under our dividend reinvestment plan will be available for investment, we expect that all of these proceeds will instead be used to repurchase shares of our common stock under the proposed share redemption program. See “Description of Shares — Proposed Share Redemption Program.” Until required in connection with the acquisition and development of properties, substantially all of the net proceeds of the offering and, thereafter, our working capital reserves, may be invested in short-term, highly liquid investments including government obligations, bank certificates of deposit, short-term debt obligations and interest-bearing accounts or other authorized investments as determined by our board of directors.

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Name		Age				Positions
Leo F. Wells, III			61			President and Director
Douglas P. Williams			54			Executive Vice President, Secretary, Treasurer and Director
Randall D. Fretz			53			Senior Vice President

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In 2001 and 2002, Wells Investment Securities sponsored conferences attended by registered representatives who sold its real estate investment products. Wells Investment Securities also paid for certain expenses of guests of the registered representatives who attended the conferences. In 2001, Wells Investment Securities paid the costs of travel to the conference and meals for many of the guests and paid the costs of playing golf for some of the registered representatives and their guests. Wells Investment Securities later invoiced registered representatives for the cost of golf and for travel expenses of guests, but was not fully reimbursed for such. In 2002, Wells Investment Securities paid for meals for the guests. Wells Investment Securities also conditioned most of the 2001 conference invitations on attainment by the registered representatives of a predetermined sales goal for Wells Investment Securities products. This conduct violated the prohibitions against payment and receipt of noncash compensation in connection with the sales of these products contained in NASD’s Conduct Rules 2710, 2810 and 3060. In addition, Wells Investment Securities and Mr. Wells failed to adhere to all of the terms of their written undertaking made in March 2001 not to engage in the conduct described above, and thereby failing to observe high standards of commercial honor and just and equitable principles of trade in violation of NASD Conduct Rule 2110.

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	•	$2,000 per in-person board meeting;
	•	$1,500 per in-person committee meeting;
	•	$250 per telephonic board or committee meeting; and
	•	an additional $500 to a committee chair for each in-person committee meeting.

	2005 Long-Term Incentive Plan

	•	options to purchase shares of our common stock, which may be nonstatutory stock options or incentive stock options under the Internal Revenue Code;
	•	stock appreciation rights, which give the holder the right to receive the difference between the fair market value per share on the date of exercise over the grant price;

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	•	performance awards, which are payable in cash or stock upon the attainment of specified performance goals;
	•	restricted stock, which is subject to restrictions on transferability and other restrictions set by the board of directors, or a committee of its independent directors;
	•	restricted stock units, which give the holder the right to receive shares of stock, or the equivalent value in cash or other property, in the future;
	•	deferred stock units, which give the holder the right to receive shares of stock, or the equivalent value in cash or other property, at a future time;
	•	dividend equivalents, which entitle the participant to payments equal to any dividends paid on the shares of stock underlying an award; and
	•	other stock-based awards at the discretion of the board of directors or a committee of its independent directors, including unrestricted stock grants.

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	•	the party seeking exculpation or indemnification has determined, in good faith, that the course of conduct that caused the loss or liability was in our best interest;
	•	the party seeking exculpation or indemnification was acting on our behalf or performing services for us;
	•	in the case of an independent director, the liability or loss was not the result of gross negligence or willful misconduct by the independent director;
	•	in the case of a nonindependent director, Wells Capital or one of its affiliates, the liability or loss was not the result of negligence or misconduct by the party seeking indemnification or exculpation; and
	•	the indemnification is recoverable only out of our net assets and not from the stockholders.

	•	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 SEC and of the published position of any state securities regulatory authority in which the securities were offered or sold as to indemnification for violations of securities laws.

	•	the proceeding relates to acts or omissions with respect to the performance of duties or services on our behalf;

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	•	such person provides us with written affirmation of his good faith belief that he has met the standard of conduct necessary for indemnification;
	•	the legal proceeding was initiated by a third party who is not a stockholder or, if by a stockholder acting in his or her capacity as such, a court of competent jurisdiction approves the advancement; and
	•	the person seeking the advancement undertakes to repay the amount paid or reimbursed by us, together with the applicable legal rate of interest thereon, if it is ultimately determined that such person is not entitled to indemnification.

Name		Age				Positions
Leo F. Wells, III			61			President, Treasurer and sole director
Douglas P. Williams			54			Senior Vice President and Assistant Secretary
Stephen G. Franklin			56			Senior Vice President
Randall D. Fretz			53			Senior Vice President
Donald A. Miller			43			Senior Vice President
Robert E. Bowers			49			Senior Vice President

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	•	find, present and recommend to our board of directors real estate investment opportunities consistent with our investment policies and objectives;
	•	structure the terms and conditions of our real estate acquisitions, sales or joint ventures;
	•	at the direction of our management, prepare all reports and regulatory filings, including those required by federal and state securities laws;
	•	arrange for financing and refinancing of properties;
	•	enter into supply agreements, service contracts and leases for our properties;

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	•	oversee the performance of any property managers or asset managers, including our timber manager;
	•	review and analyze the properties’ operating and capital budgets;
	•	generate an annual budget for us;
	•	review and analyze financial information for each property and the overall portfolio;
	•	if a transaction requires approval by the board of directors, deliver to the board of directors all documents requested by the board in its evaluation of the proposed transaction;
	•	actively oversee the management of our properties for purposes of meeting our investment objectives;
	•	perform cash management services;
	•	perform transfer agent functions; and
	•	engage our agents.

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Name		Age				Positions
Philip M. Taylor			62			President and director
Douglas P. Williams			54			Vice President, CFO, Treasurer and director
Randall D. Fretz			53			Director

Form of Compensation				Estimated Amount for
and Entity Receiving		Determination of Amount		Maximum Offering(1)
Organization and Offering Stage
Selling Commissions — Wells Investment Securities(2)		7.0% of gross offering proceeds before reallowance of commissions earned by participating broker/ dealers, except that no selling commissions are payable on shares sold under our dividend reinvestment plan. Wells Investment Securities, our dealer-manager, will reallow 100% of commissions earned to participating broker/ dealers.		$52,500,000

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Form of Compensation				Estimated Amount for
and Entity Receiving		Determination of Amount		Maximum Offering(1)
Dealer-Manager Fee — Wells Investment Securities(2)		1.8% of gross offering proceeds before reallowance to participating broker/ dealers, except that no dealer-manager fee is payable on shares sold under our dividend reinvestment plan. Wells Investment Securities will reallow a portion of its dealer-manager fee to participating broker/ dealers. See “Plan of Distribution.”		$13,500,000
Reimbursement of Organization and Offering Expenses — Wells Capital(3)		Up to 1.2% of gross offering proceeds for shares sold under our primary offering, except that no reimbursement will be made from proceeds of shares sold under our dividend reinvestment plan. Wells Capital will incur or pay our organization and offering expenses (excluding selling commissions and the dealer-manager fee). We will then reimburse Wells Capital for these amounts up to 1.2% of aggregate gross offering proceeds.		$9,000,000
Acquisition and Development Stage
Asset Management Fee — Wells Capital(4)		Monthly fee equal to one-twelfth of 1.25% of the cost of investments.		Actual amounts are dependent upon total equity and debt capital we raise and results of operations and therefore cannot be determined at this time.
Other Operating Expenses(5)		We will reimburse the expenses incurred by Wells Capital in connection with its provision of services, including related personnel, rent, utilities and information technology costs. We will not reimburse for personnel costs in connection with services for which Wells Capital receives real estate disposition fees.		Actual amounts are dependent upon results of operations and therefore cannot be determined at this time.
Liquidity Stage
Real Estate Disposition Fees — Wells Capital or its Affiliates(6)		For substantial assistance in connection with the sale of properties, we will pay Wells Capital or its affiliates an amount as determined by our board of directors to be appropriate based on market norms and not to exceed (1) for any property sold for $20.0 million or less, 2.0% of the contract price of the property sold and (2) for any property sold for more than $20.0 million, 1.0% of the contract price of the property sold; provided, however, in no event may the real estate commissions paid to Wells Capital, its affiliates and unaffiliated third parties exceed 6.0% of the contract sales price.		Actual amounts are dependent upon results of operations and therefore cannot be determined at this time.

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Form of Compensation				Estimated Amount for
and Entity Receiving		Determination of Amount		Maximum Offering(1)
Special Unit Distribution of Net Sales Proceeds — Wells Capital(7)		If the net sales proceeds are sufficient to provide the common unit holders of Wells Timber OP, in the aggregate, a return of net capital contributions plus a cumulative, noncompounded return of at least 7.0%, but less than 8.0%, per year, then a distribution of 10% of the remaining net sales proceeds after return of net capital contributions plus distributions to the common unit holders, in the aggregate, of an amount equal to a 7.0% per year cumulative, noncompounded return on their invested capital, shall be paid to the holder of the special units.		Actual amounts are dependent upon results of operations and therefore cannot be determined at this time.
		If the net sales proceeds are sufficient to provide the common unit holders in Wells Timber OP, in the aggregate, a return of net capital contributions plus a cumulative, noncompounded return of at least 8.0% per year, then a distribution of 20% of the net sales proceeds after return of net capital contributions plus distributions to the common unit holders, in the aggregate, of an amount equal to an 8.0% per year cumulative, noncompounded return on their invested capital, shall be paid to the holder of the special units.
		Following the distribution to us by Wells Timber OP of net sales proceeds, we will distribute the proceeds to our stockholders. Each individual stockholder may receive more or less than the 7.0% or 8.0% cumulative noncompounded annual pre-tax return on their net capital contributions prior to the commencement of distributions to the owner of the special units.

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Form of Compensation				Estimated Amount for
and Entity Receiving		Determination of Amount		Maximum Offering(1)
Special Unit Redemption Payment Due Upon Listing — Wells Capital(7)(8)		Upon the listing of our shares on a national securities exchange or upon their quotation on a national market system, the special units will be redeemed for cash or shares of common stock, at our election. If the market value of our outstanding common stock at listing plus the total distributions paid by Wells Timber OP to the common unit holders prior to listing exceeds the aggregate capital contributed by the common unit holders to Wells Timber OP plus the amount of cash flow necessary to generate in the aggregate a cumulative, noncompounded return equal to at least 7.0%, but less than 8.0%, per year, then the redemption payment will equal 10% of the amount by which (1) the market value of our outstanding common stock exceeds (2) the sum of the total capital contributed by us to Wells Timber OP and the amount of cash flow necessary to generate in the aggregate a 7.0% per year cumulative, noncompounded return.		Actual amounts are dependent upon results of operations and therefore cannot be determined at this time.
		If the market value of our common stock at listing plus the total distributions paid by Wells Timber OP to the common unit holders prior to listing exceeds the aggregate capital contributed by the common unit holders to Wells Timber OP plus the amount of cash flow necessary to generate in the aggregate a cumulative, noncompounded return equal to at least 8.0% per year, then the redemption payment will equal 20% of the amount by which (1) the market value of our outstanding common stock exceeds (2) the sum of the total capital contributed by the common unit holders to Wells Timber OP and the amount of cash flow necessary to generate in the aggregate an 8.0% per year cumulative, noncompounded return.

(1)	The estimated maximum dollar amounts are based on the sale of the maximum of 85 million shares to the public, including 10 million shares through our dividend reinvestment plan.
(2)	Selling commissions and, in some cases, all or a portion of the dealer-manager fee will not be charged with regard to shares sold to or for the account of certain categories of purchasers. See “Plan of Distribution.”
(3)	These organization and offering expenses include all expenses (other than selling commissions and the dealer-manager fee) to be paid by us in connection with the offering, including our legal, accounting, printing, mailing and filing fees, due diligence expense reimbursements to broker/ dealers and amounts to reimburse Wells Capital for the salaries of its employees and other costs in connection with preparing supplemental sales materials, the cost of educational conferences held by us (including travel, meal and lodging costs of registered representatives of broker/ dealers) and attendance fees and cost reimbursement for employees of our affiliates to attend retail seminars conducted by broker/ dealers. The portion of these organization and offering expenses for which we (as opposed to Wells

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	Capital) would be responsible could not be increased above 1.2% of our gross offering proceeds without entering into a new or an amended advisory agreement, which under our charter would require the approval of a majority of our independent directors. We will not reimburse Wells Capital for any organization and offering expenses from proceeds of sales pursuant to our dividend reinvestment plan.
(4)	The asset management fee is based on the actual amount invested on our behalf in properties plus, with respect to joint ventures, the actual amount invested on our behalf in the joint venture plus our share of capital improvements, if applicable, made by the joint venture from cash flows generated by the joint venture, until such time as our advisor has estimated the value of all interests we hold in properties or joint ventures for ERISA reporting purposes. After such time, our asset management fee will be based on the lesser of the amount as calculated above or the aggregate value of our interest in properties and joint ventures as established in connection with the most recent estimated valuation for ERISA fiduciaries. The asset management fee is payable, at the election of our advisor, either in cash or, subject to the ownership limitations in our charter, in shares of our common stock. If the fee is paid in shares, the shares will be valued at a price equal to the average closing price of the shares over the 10 trading days immediately preceding the date of such election, if the shares are then listed on a national securities exchange or quoted on a national market system at such time. If the shares are not listed on a national securities exchange or quoted on a national market system at such time, then the shares will be valued at a price equal to the fair market value for the shares on the date of the advisor’s election to receive the fee in the form of shares as determined in good faith by our board of directors, including a majority of our independent directors.
(5)	Wells Capital must reimburse us the amount by which our aggregate annual total operating expenses exceed the greater of 2% of our average invested assets or 25% of our net income unless a majority of our independent directors has determined that such excess expenses were justified based on unusual and nonrecurring factors. “Average invested assets” means the average monthly book value of our assets for a specified period before deducting depreciation, bad debts or other noncash reserves. “Total operating expenses” means all costs and expenses paid or incurred by us, as determined under GAAP, that are in any way related to our operation, including advisory fees, but excluding (a) the expenses of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses, and taxes incurred in connection with the issuance, distribution, transfer, registration and stock exchange listing of our stock; (b) interest payments; (c) taxes; (d) noncash expenditures such as depreciation, amortization and bad debt reserves; (e) reasonable incentive fees based on the gain from the sale of our assets; and (f) acquisition fees, acquisition expenses (including expenses relating to potential acquisitions that we do not close), real estate disposition fees on the resale of property and other expenses connected with the acquisition, disposition, management and ownership of real estate interests or other property (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property).
(6)	Although we are most likely to pay real estate disposition fees to Wells Capital or an affiliate in the event of our liquidation, these fees also may be earned during our operational stage.
(7)	Upon termination of the advisory agreement, Wells Capital may be entitled to a similar redemption payment if Wells Capital would have been entitled to a special unit distribution of net sales proceeds had the portfolio been liquidated (based on an independent appraised value of the portfolio) on the date of termination. Under our charter, we could not amend Wells Timber OP’s partnership agreement to increase these success-based payments without the approval of a majority of our independent directors, and any increase in the special unit distribution of net sales proceeds or redemption payments upon listing or termination would have to be reasonable. Our charter provides that such payments are “presumptively reasonable” if the amount does not exceed 15% of the balance of such net proceeds remaining after investors have received a return of their net capital contributions and a 6.0% per year cumulative, noncompounded return.

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(8)

If at any time the shares become listed on a national securities exchange or included for quotation on a national market system, we will negotiate in good faith with Wells Capital a fee structure appropriate for an entity with a perpetual life. A majority of our independent directors must approve the new fee structure negotiated with Wells Capital. In negotiating a new fee structure, our independent directors must consider all of the factors these directors 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 its 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.

		Shares Beneficially
		Owned
Name of Beneficial Owners		Shares				Percentage
Wells Capital, Inc.(1)			20,000				100	%
Leo F. Wells, III, President and Director(1)			20,000				100	%
Douglas P. Williams, Executive Vice President, Secretary, Treasurer and Director			—					(2)
Randall D. Fretz, Senior Vice President			—					(2)
All directors and executive officers as a group (3 persons)			20,000				100	%

(1)	As the sole stockholder of Wells Real Estate Funds, Inc., which directly or indirectly owns Wells Capital, Inc., Mr. Wells may be deemed the beneficial owner of the shares held by Wells Capital, Inc. Wells Capital, Inc. also holds 200 common units in Wells Timber OP and 100 special units in Wells Timber OP.
(2)	Less than 1% of the outstanding common stock.

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	General

	1. Wells Real Estate Fund I
	2. Wells Real Estate Fund II
	3. Wells Real Estate Fund II-OW
	4. Wells Real Estate Fund III, L.P.
	5. Wells Real Estate Fund IV, L.P.
	6. Wells Real Estate Fund V, L.P.
	7. Wells Real Estate Fund VI, L.P.
	8. Wells Real Estate Fund VII, L.P.
	9. Wells Real Estate Fund VIII, L.P.
	10. Wells Real Estate Fund IX, L.P.
	11. Wells Real Estate Fund X, L.P.
	12. Wells Real Estate Fund XI, L.P.
	13. Wells Real Estate Fund XII, L.P.
	14. Wells Real Estate Fund XIII, L.P.
	15. Wells Real Estate Fund XIV, L.P.
	16. Wells Real Estate Investment Trust, Inc.
	17. Wells Real Estate Investment Trust II, Inc.

	Allocation of Advisor’s Time

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	•	the continuation, renewal or enforcement of our agreements with Wells Capital and its affiliates, including the advisory agreement and the dealer-manager agreement;
	•	public offerings of equity by us, which entitle Wells Investment Securities to dealer-manager fees and entitle Wells Capital to increased asset-management fees;
	•	property sales, which entitle Wells Capital to real estate disposition fees and possible success-based sale fees;
	•	property acquisitions from other Wells-sponsored programs, which might entitle Wells Capital to real estate disposition fees and possible success-based sale fees in connection with its services for the seller;
	•	property acquisitions from third parties, which utilize proceeds from our public offerings, thereby increasing the likelihood of continued equity offerings and related fee income for Wells Investment Securities and Wells Capital;
	•	whether and when we apply to list our common shares on a national securities exchange or to include them for quotation on a national market system, which listing or quotation could entitle Wells Capital to a success-based payment upon the redemption of the special units of Wells Timber OP that it holds, which is due upon listing, but also could adversely affect its sales efforts for other programs depending on the price at which the shares trade; and
	•	whether and when we seek to sell our company or our assets, which sale could entitle Wells Capital to a success-based distribution on the special units of Wells Timber OP that it holds, but could also adversely affect its sales efforts for other programs depending upon the sales price for our company or our assets.

	•	Wells REIT I and Wells REIT II;
	•	Wells Capital, our advisor and the general partner of the various real estate programs sponsored by Wells Capital (described above); and
	•	Wells Investment Securities, our dealer-manager.

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	Independent Directors

	•	the continuation, renewal or enforcement of our agreements with Wells Capital and its affiliates, including the advisory agreement and the dealer-manager agreement;
	•	public offerings of securities;
	•	transactions with affiliates;
	•	compensation of our officers and directors who are affiliated with our advisor;
	•	whether and when we apply to list our shares of common stock on a national securities exchange or to include them for quotation on a national market system; and
	•	whether and when we seek to sell the company or its assets.

	Other Charter Provisions Relating to Conflicts of Interest

	•	the amount of the fees paid to Wells Capital and its affiliates in relation to the size, composition and performance of our investments;
	•	the success of Wells Capital in generating appropriate investment opportunities;
	•	the rates charged to other REITs and others by advisors performing similar services;
	•	additional revenues realized by Wells Capital and its affiliates through their relationship with us, including 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 its affiliates;
	•	the performance of our investment portfolio; and
	•	the quality of our portfolio relative to the investments generated by Wells Capital for its own account and for its other clients.

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	•	the ratio of the costs of raising capital during the year to the capital raised;
	•	the aggregate amount of advisory fees and the aggregate amount of other fees paid to Wells Capital and any affiliate of Wells Capital by us or third parties doing business with us during the year;
	•	our total operating expenses for the year, stated as a percentage of our average invested assets and as a percentage of our net income;
	•	a report from our independent directors that our policies are in the best interests of our stockholders and the basis for such determination; and
	•	separately stated, full disclosure of all material terms, factors and circumstances surrounding any and all transactions involving us and our advisor, a director or any affiliate thereof during the year, including commentary by our independent directors following the independent directors’ examination of these matters regarding the fairness of the transactions.

	Allocation of Investment Opportunities

	•	the investment objectives and criteria of each program;
	•	the cash requirements of each program;
	•	the effect of the acquisition both on diversification of each program’s investments by type of property and geographic area and, if applicable, on diversification of the lessees 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 on 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.

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	Renewable Resource. Timber is a growing and renewable resource that, if properly managed, increases in value as it grows and regenerates over time. Larger-diameter trees are more valuable than smaller trees because they may be converted to higher-value end-use products such as lumber and plywood.
	Predictable and Improving Growth Rates. Predictable biological growth is an attractive feature of timberland assets because it contributes to predictable, long-term harvest planning. The development and application of intensive forest management practices continue to improve biological growth rates.
	Harvest Flexibility. Timberland owners have flexibility to increase their harvests when prices are high and decrease their harvests when prices are low, allowing timberland owners to maximize the long-term value of their growing resource base.
	Historical Real Price Appreciation. Historically, real prices for timber have exhibited positive annual growth rates. Due to growing demand combined with limitations on supply caused by environmental restrictions, urban sprawl, international demand and overcutting, prices for Douglas fir and southern yellow pine timber have exhibited a compound annual growth rate of approximately 4% and 3.1% from 1975 through 2001. Real prices for timber generally increase with increases in the Consumer Price Index, and tend to be correlated over the long term with lumber prices, the largest end-use for timber.

	•	products used in new housing construction;
	•	products used in the repair and remodeling of existing housing;

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	•	products for industrial uses;
	•	raw material for the manufacture of pulp and paper; and
	•	logs for export.

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	Restructuring of the Forest and Paper Products Industry. There is currently a significant restructuring of the forest and paper products industry propelled by the capital-intensive requirements of certain manufacturing processes and the need to more efficiently deploy capital resources. We believe that a substantial part of this trend results from forest and paper products companies seeking to sell their timberland holdings in order to strengthen deteriorating balance sheets damaged by both the weak economy and by debt-financed acquisitions. These integrated companies appear to be focusing their capital resources on their core operations in an attempt to increase operational flexibility. While these integrated companies have historically owned their own timberland and manufacturing operations, we believe they, along with other millers and manufacturers, are now embracing a strategy of purchasing timber as needed from third-party owners whom they believe will provide them with an uninterrupted supply of high-quality timber. As a result, we believe the opportunity exists for an independent company to become the supplier of choice for many forest and paper products companies seeking reliable long-term partners to supply the timber used in their manufacturing operations.
	Highly Fragmented Market. The majority of timberland in the United States is owned by private individuals, and no single timberland owner owns more than 3% of the identified timberland. We believe that owners of a small number of tracts of timberland as well as those with diverse operations cannot fully benefit from the economies of scale that are available to owners of a large number of tracts of timberland who exclusively focus on active timberland management. We believe

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	that if this offering is successful, we will be well-positioned to acquire a large number of tracts of timberland and benefit from the corresponding economies of scale.
	Advances in Forest Management Techniques. Advances in forest management and techniques for growing and tending of trees in recent years have markedly improved the ability to grow, harvest and regenerate high-quality timber. While many owners of timberland have passively grown timber with the goal of realizing a favorable return on their investment, application of advanced forest management techniques by experienced personnel is a necessary part of realizing the highest possible returns on timberland.
	Timber and Timberland Prices. Historically, timber prices have increased over the long term. However, timber prices have declined over the short term relative to long-term levels, and since the price of timberland correlates closely with prices for timber, we believe this creates a timberland buying opportunity.
	Correlation with Inflation. Timber prices tend to increase with increases in the rate of inflation, according to Do Forest Assets Hedge Inflation?, a study by Washburn & Binkley in Land Economics. If the U.S. economy continues to experience robust growth, we believe this may give rise to general inflationary pressures and could positively influence the price of timber.
	Demand for Higher and Better Use Land. Land values are related to local supply-and-demand conditions, and vary from market to market. Historically, demand for recreational land, land for commercial and residential development, and land for conservation has increased over the long term. We expect that this demand will continue to increase over the long term, creating opportunities to sell timberland having a higher and better use at attractive prices relative to its long-term value as timberland.

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	•	to provide current income for you through the payment of cash dividends;
	•	to preserve and return your capital contribution; and
	•	to realize capital appreciation upon the ultimate sale of our assets.

	•	identifying prospective timberland acquisitions that provide geography, species and age diversity to our portfolio consistent with strong and sustainable projected cash flows;
	•	applying sophisticated financial analysis to timberland investments;

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	•	educating forest and paper products companies as to our ability to become a preferred partner for dispositions and a reliable source for their future inventory needs;
	•	acquiring timberland in timber milling markets that are competitive and well developed;
	•	using targeted levels of leverage to increase our ability to acquire our timberland portfolio and enhance our return on equity (higher amounts during our initial portfolio acquisition phase and low-to-moderate levels thereafter);
	•	targeting opportunities for a seller to divest property in a tax-efficient manner by receiving units of limited partnership interest in our operating partnership in exchange for their property, giving the sellers the ability to defer some or all of the taxes otherwise payable upon sale;
	•	acquiring ancillary business as necessary to maximize the value of our portfolio; and
	•	maintaining the flexibility to invest in any other type of property that our board of directors deems appropriate and desirable in order to satisfy our investment objectives.

	•	invest in commodities or commodity futures contracts, except for futures contracts 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; or
	•	invest in equity securities unless a majority of our independent directors approves such investment as being fair, competitive and commercially reasonable.

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	•	relevant real estate property and financial factors;
	•	the creditworthiness of parties to any harvesting contracts;
	•	supply contracts and leases related to the property;
	•	the location of the property;
	•	suitability for any development contemplated or in progress;
	•	the property’s income-producing capacity and potential for future sale as a higher and better use property;
	•	prospects for long-range appreciation; and
	•	liquidity and tax considerations.

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	•	borrow in excess of our net assets limitation (described in “Borrowing Policies” above), which is generally expected to approximate 75% of the cost of our properties before noncash reserves and depreciation, unless approved by a majority of our independent directors;
	•	make investments in unimproved property or mortgage loans on unimproved property in excess of 10% of our total assets;
	•	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;
	•	make or invest in mortgage 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 an appraisal, unless substantial justification exists for exceeding such limit because of the presence of other underwriting criteria;
	•	invest in equity securities unless a majority of our independent directors approves such investment as being fair, competitive and commercially reasonable;
	•	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;
	•	invest in commodities or commodity futures contracts, except for futures contracts used solely for the purpose of hedging in connection with our ordinary business of investing in real estate assets and mortgages;
	•	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 redeemable solely at the option of the holder, which restriction has no effect on our proposed share redemption plan or the ability of our operating partnership to issue redeemable partnership interests;
	•	issue options or warrants to Wells Capital, our directors, our sponsor, or any of their affiliates except on the same terms as such options or warrants are sold to the general public; or
	•	make any investment that we believe will be inconsistent with our objectives of qualifying and remaining qualified as a REIT, unless our board of directors determines that REIT qualification is not in our best interest.

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	•	listing our common stock on a national securities exchange or including the shares for quotation on a national market system; or
	•	a sale or merger of our company in a transaction that provides our stockholders with cash and/or securities of a publicly traded company.

	•	seek stockholder approval of an extension or amendment of this listing deadline; or
	•	commence an orderly liquidation.

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	Merchantable inventory and depletion costs as determined by forestry timber harvest models

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	Impairment of Long-Lived Assets

	(1) Timber and Timberlands Used in Our Business. SFAS No. 144 provides that for assets used in a business, an impairment loss is recorded only when the carrying value of such assets is not recoverable through future operations. The recoverability test is based on undiscounted future cash flows over the expected life of the assets. We intend to use one harvest cycle for evaluating the recoverability of our timber and timberlands.
	(2) Timber and Timberlands Held for Sale. SFAS No. 144 provides that an impairment loss is recognized for long-lived assets held for sale when the carrying value of such asset exceeds an amount equal to its fair value less selling costs. An asset is generally considered to be held for sale when we have committed to plan to sell the asset, the asset is available for immediate sale in its present condition, we have initiated an active program to locate a buyer, and the sale is expected to close within one year.

	Realizability of both recorded and unrecorded tax assets and liabilities

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	Revenue recognition

	Publicly Registered Limited Partnerships

	1. Wells Real Estate Fund VII, L.P. (1995)
	2. Wells Real Estate Fund VIII, L.P. (1996)
	3. Wells Real Estate Fund IX, L.P. (1996)
	4. Wells Real Estate Fund X, L.P. (1997)
	5. Wells Real Estate Fund XI, L.P. (1998)
	6. Wells Real Estate Fund XII, L.P. (2001)
	7. Wells Real Estate Fund XIII, L.P. (2003)
	8. Wells Real Estate Fund XIV, L.P. (2005)

	Publicly Registered REITs

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	Private Limited Liability Companies

	General

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Type of Property		Existing				Construction
Office and Industrial Buildings			97.0	%			2.5	%
Shopping Centers			0.5				0.0

	Summary of the Wells Public Programs

	Wells Fund VII

Property Name		Location		Property Type
CH2M Hill		Gainesville, FL		two-story office building
BellSouth		Jacksonville, FL		four-story office building
Tanglewood Commons		Clemmons, NC		shopping center

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	Wells Fund VIII

Property Name		Location		Property Type
CH2M Hill		Gainesville, FL		two-story office building
BellSouth		Jacksonville, FL		four-story office building
Tanglewood Commons		Clemmons, NC		shopping center
U.S. Cellular		Madison, WI		four-story office building
AT&T Texas		Farmers Branch, TX		one-story office building
305 Interlocken (f/k/a Cirrus Logic)		Broomfield, CO		two-story office building

	Wells Fund IX

Property Name		Location		Property Type
U.S. Cellular		Madison, WI		four-story office building
AT&T Texas		Farmers Branch, TX		one-story office building
305 Interlocken (f/k/a Cirrus Logic)		Broomfield, CO		two-story office building
Ohmeda		Louisville, CO		two-story office building
Alstom Power Knoxville		Knoxville, TN		three-story office building
Iomega		Ogden, UT		one-story office and warehouse building
360 Interlocken		Broomfield, CO		three-story office building
Avaya		Oklahoma City, OK		one-story office building

	Wells Fund X

Property Name		Location		Property Type
Ohmeda		Louisville, CO		two-story office building
Alstom Power Knoxville		Knoxville, TN		three-story office building
Iomega		Ogden, UT		one-story office and warehouse building
360 Interlocken		Broomfield, CO		three-story office building
Avaya		Oklahoma City, OK		one-story office building
47320 Kato Road (f/k/a Fairchild)		Fremont, CA		two-story office and manufacturing building

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	Wells Fund XI

Property Name		Location		Property Type
Ohmeda		Louisville, CO		two-story office building
Alstom Power Knoxville		Knoxville, TN		three-story office building
Iomega		Ogden, UT		one-story office and warehouse building
360 Interlocken		Broomfield, CO		three-story office building
Avaya		Oklahoma City, OK		one-story office building
47320 Kato Road (f/k/a Fairchild)		Fremont, CA		two-story office and warehouse building
111 Southchase Boulevard (f/k/a EYBL CarTex)		Fountain Inn, SC		two-story manufacturing and office building
20/20 Building (f/k/a Sprint)		Leawood, KS		three-story office building
Gartner		Fort Myers, FL		two-story office building

	Wells Fund XII

Property Name		Location		Property Type
111 Southchase Boulevard (f/k/a EYBL CarTex)		Fountain Inn, SC		two-story manufacturing and office building
20/20 Building (f/k/a Sprint)		Leawood, KS		three-story office building
Gartner		Fort Myers, FL		two-story office building
Siemens		Troy, MI		three-story office building
AT&T Oklahoma		Oklahoma City, OK		one-story office building and a two-story office building
Comdata		Brentwood, TN		three-story office building

	Wells Fund XIII

Property Name		Location		Property Type
AmeriCredit		Orange Park, FL		two-story office building
ADIC		Parker, CO		two connected one-story office and assembly buildings
John Wiley Indianapolis		Fishers, IN		four-story office building
AIU — Chicago		Hoffman Estates, IL		four-story office building
Siemens — Orlando		Orlando, FL		two one-story office buildings
Randstad		Atlanta, GA		four-story office building
7500 Setzler Parkway		Brooklyn Park, MN		one-story office and warehouse building

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	Wells Fund XIV

Property Name		Location		Property Type
Siemens		Orlando, FL		two one-story office buildings
Randstad		Atlanta, GA		four-story office building
7500 Setzler Parkway		Brooklyn Park, MN		one-story office and warehouse building

	Wells REIT I

Property Name		Location		Property Type
Alstom Power Knoxville		Knoxville, TN		three-story office building
Ohmeda		Louisville, CO		two-story office building
Interlocken		Broomfield, CO		three-story office building
Iomega		Ogden, UT		one-story office and warehouse building
Avaya		Oklahoma City, OK		one-story office building
Fairchild		Fremont, CA		one-story office and warehouse building
AT&T Pennsylvania		Harrisburg, PA		four-story office building
Matsushita		Lake Forest, CA		two-story office building
EYBL CarTex		Fountain Inn, SC		two-story manufacturing and office building
Sprint		Leawood, KS		three-story office building
Alstom Power Richmond		Midlothian, VA		four-story office building
Videojet Technologies Chicago		Wood Dale, IL		two-story office, assembly and manufacturing building
Gartner		Ft. Myers, FL		two-story office building
Cinemark		Plano, TX		five-story office building
Metris Tulsa		Tulsa, OK		three-story office building

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Property Name		Location		Property Type
Dial		Scottsdale, AZ		two-story office building
ASML		Tempe, AZ		two-story office building
Motorola Tempe		Tempe, AZ		two-story office building
Siemens		Troy, MI		three-story office building
Avnet		Tempe, AZ		two-story office building
Delphi		Troy, MI		three-story office building
Motorola Plainfield		S. Plainfield, NJ		three-story office building
Stone & Webster		Houston, TX		six-story office building
Metris Minnesota		Minnetonka, MN		nine-story office building
AT&T Oklahoma		Oklahoma City, OK		one-story office building and a two-story office building
Comdata		Brentwood, TN		three-story office building
AmeriCredit		Orange Park, FL		two-story office building
State Street		Quincy, MA		seven-story office building
IKON		Houston, TX		two one-story office buildings
Nissan		Irving, TX		three-story office building
Ingram Micro		Millington, TN		one-story office and warehouse building
Lucent		Cary, NC		four-story office building
ADIC		Parker, CO		two one-story office and assembly buildings
Convergys		Tamarac, FL		two-story office building
Windy Point I		Schaumburg, IL		seven-story office building
Windy Point II		Schaumburg, IL		eleven-story office building
Vertex Sarasota		Sarasota, FL		three-story office building
Transocean Houston		Houston, TX		six-story office building
Novartis Atlanta		Duluth, GA		four-story office building
Dana Kalamazoo		Kalamazoo, MI		two-story office and industrial building
Dana Detroit		Farmington Hills, MI		three-story office and research and development building
Travelers Express Denver		Lakewood, CO		two one-story office buildings
Agilent Atlanta		Alpharetta, GA		two-story office building
BellSouth Ft. Lauderdale		Ft. Lauderdale, FL		one-story office building
Experian/ TRW		Allen, TX		two two-story office buildings
Agilent Boston		Boxborough, MA		three-story office building
TRW Denver		Aurora, CO		three-story office building
MFS Phoenix		Phoenix, AZ		three-story office building
ISS Atlanta		Atlanta, GA		two five-story office buildings
PacifiCare San Antonio		San Antonio, TX		two-story office building
Kerr-McGee		Houston, TX		four-story office building
BMG Greenville		Greenville, SC		two one-story distribution facilities
Kraft Atlanta		Suwanee, GA		one-story office building
Nokia Dallas		Irving, TX		three office buildings
Harcourt Austin		Austin, TX		seven-story office building

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Property Name		Location		Property Type
IRS Long Island		Holtsville, NY		two-story office building and one-story daycare facility
AmeriCredit Phoenix		Chandler, AZ		three-story office building
KeyBank Parsippany		Parsippany, NJ		four-story office building
Allstate Indianapolis		Indianapolis, IN		one-story office building
Federal Express Colorado Springs		Colorado Springs, CO		three-story office building
EDS Des Moines		Des Moines, IA		one-story office and distribution building
Intuit Dallas		Plano, TX		two-story office building
Daimler-Chrysler Dallas		Westlake, TX		two-story office building
NASA		Washington, D.C.		two nine-story office buildings
Capital One Richmond		Glen Allen, VA		three three-story office buildings
Caterpillar Nashville		Nashville, TN		11-story office building
John Wiley Indianapolis		Fishers, IN		four-story office building
Nestlé		Glendale, CA		20-story office building
East Point		Mayfield Heights, OH		two three-story office buildings
150 West Jefferson Detroit		Detroit, MI		25-story office building
Citicorp Englewood Cliffs New Jersey		Englewood Cliffs, NJ		three-story office building
U.S. Bancorp Minneapolis		Minneapolis, MN		32-story office building
Aon Center Chicago		Chicago, IL		83-story building
GMAC Detroit		Auburn Hills, MI		three-story office building
IBM Reston		Reston, VA		six-story office building
Tellabs		Reston, VA		two-story office building
ISS Atlanta III		Atlanta, GA		three-story office building
Lockheed Martin I		Rockville, MD		four-story office building
Lockheed Martin II		Rockville, MD		four-story office building
Cingular		Atlanta, GA		19-story office building
Aventis		Bridgewater, NJ		eight-story office building
1055 East Colorado (formerly Applera)		Pasadena, CA		five-story office building
Continental Casualty		Brea, CA		three-story office building
Copper Ridge Center (formerly Polo Ralph Lauren)		Lyndhurst, NJ		10-story office building
1901 Main Street		Irvine, CA		eight-story office building
IBM Williamette Portland		Beaverton, OR		two-story office building
IBM Deschutes Portland		Beaverton, OR		two-story office building
IBM Rhein Portland		Beaverton, OR		two-story office building
1345 Burlington Drive Portland		Beaverton, OR		three-story office building
15757 Jay Street Portland		Beaverton, OR		warehouse
IBM Portland Land Parcels		Beaverton, OR		land parcel
Leo Burnett Chicago		Chicago, IL		50-story office building
U.S. Park Service		Washington, D.C.		12-story office building
1225 Eye Street		Washington, D.C.		12-story office building

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Property Name		Location		Property Type
4250 N. Fairfax		Arlington, VA		14-story office building
400 Virginia Ave.		Washington, D.C.		eight-story office building
Boeing Seattle		Issaquah, WA		five-story office building
Bank of America Brea		Brea, CA		three-story office building
1901 Market		Philadelphia, PA		45-story office building
60 Broad Street		New York, NY		39-story office building
1414 Mass. Avenue		Cambridge, MA		five-story office building
Russell Tacoma		Tacoma, WA		12-story office building
One Brattle Square		Cambridge, MA		six-story office building
Merck New Jersey		Somerset, NJ		four-story office building
1075 West Entrance		Auburn Hills, MI		four-story office building
Citicorp Fort Mill		Fort Mill, SC		three-story office building
3100 Clarendon		Arlington, VA		14-story office building
Shady Grove		Rockville, MD		four-story office building

	Property Statistics

			2004 Annualized				Rentable				Percentage of 2004
			Gross Base				Square Feet				Annualized Gross
Year of Lease Expiration			Rent				Expiring				Base Rent
			(In thousands)				(In thousands)
Vacant			$	—				675				0	%
	2005			17,179				655				3
	2006			30,643				942				5
	2007			31,169				1,117				5
	2008			27,810				1,124				5
	2009			45,210				1,688				8
	2010			84,112				3,776				14
	2011			83,698				4,839				14
	2012			89,860				3,686				15
	2013			71,568				2,724				12
	2014			31,910				1,230				5
Thereafter				67,859				2,916				14
			$	581,018				25,372				100	%

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		2004 Annualized								Percentage of 2004
		Gross Base				Rentable				Annualized Gross
Location		Rents				Square Feet				Base Rents
		(In thousands)				(In thousands)
Chicago		$	130,610				4,640				22	%
Washington, D.C.			79,059				2,208				14
N. New Jersey			38,704				1,617				7
Minneapolis			33,083				1,230				6
Detroit			26,257				1,097				5
Dallas			25,967				1,450				4
New York			25,424				986				4
Boston			23,964				586				4
Atlanta			23,767				992				4
Los Angeles			20,822				682				4
Orange Co.			18,039				1,089				3
Other*			135,322				8,795				23
		$	581,018				25,372				100	%

*	None more than 3%

		2004 Annualized								Percentage of 2004
		Gross Base				Rentable				Annualized Gross
Industry		Rent				Square Feet				Base Rent
		(In thousands)				(In thousands)
Business Services		$	71,454				3,301				12	%
Depository Institutions			48,423				1,851				8
Nondepository Institutions			37,603				1,979				6
Insurance Carriers			35,399				1,661				6
Legal Services			34,277				1,068				6
Electronic & Other Electric Equipment			28,174				1,599				5
Communication			26,995				1,058				5
Transportation Equipment			22,205				1,011				4
Administration of Economic Programs			21,879				599				4
Insurance Agents, Brokers, & Service			21,656				610				4
Finance, Taxation, & Monetary Policy			20,410				548				4
Food and Kindred Products			19,065				631				3
Other*			193,478				9,456				33
		$	581,018				25,372				100	%

*	None more than 3%

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		2004 Annualized				Percentage of 2004
		Gross Base				Annualized Gross
Location		Rent				Base Rent
		(In thousands)
BP Amoco		$	28,890				5	%
NASA			21,685				4
Leo Burnett			19,742				3
U.S. Bancorp			19,348				3
Nestlé			15,921				3
OCC			14,547				3
Independence Blue Cross			12,904				2
Winston & Strawn			12,761				2
Kirkland & Ellis			12,304				2
Nokia			12,243				2
State of New York			11,041				2
Aventis			10,299				2
Zurich			9,693				2
Cingular			9,208				2
DDB Needham			8,909				2
State Street Bank			8,264				1
U.S. National Park Service			8,236				1
Caterpillar Financial			8,219				1
Bank of America			7,574				1
Lockheed Martin			7,422				1
Other*			321,808				56
		$	581,018				100	%

*	None more than 2%

			Year Ended December 31,
			2004				2003				2002				2001				2000
Total assets			$	5,123,689			$	4,925,292			$	2,229,727			$	752,281			$	398,550
Total stockholders’ equity				3,686,870				3,962,406				1,835,950				709,343				265,342
Total revenues*				622,092				377,555				124,441				47,743				19,368
Net income				209,722				120,685				59,854				21,724				8,553
Per share data:
	Earnings — basic and diluted			0.45				0.37				0.41				0.43				0.40
	Funds from operations			0.78				0.74				0.70				0.79				0.81
	Dividends declared			0.70				0.70				0.76				0.76				0.73

*	Prior period amounts adjusted to conform with current income statement groupings, as well as presentation of revenues from sold properties in discontinued operations, for all periods presented.

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	Wells REIT II

Property Name		Location		Major Tenant(s)		Building Type/Square Feet
Weatherford Center Houston Building		Houston, TX		Weatherford International, Ltd.		12-story office/260,000 sq. ft.
New Manchester One Building		Douglasville, GA		JVC Americas Corporation		single-story distribution facility/593,000 sq. ft.
Republic Drive Buildings		Allen Park, MI		Roush Industries, Inc.		two single-story engineering buildings/169,000 sq. ft.
Manhattan Towers Property		Manhattan Beach, CA		Northrop Grumman Space and Mission Systems Corporation		two six-story office buildings/310,000 sq. ft.
9 Technology Drive Building		Westborough, MA		EMC Corporation		two-story office building/251,000 sq. ft.
180 Park Avenue — Buildings 103 and 104		Florham Park, NJ		AT&T Corporation		two three-story office buildings/385,000 sq. ft.
One Glenlake Building		Atlanta, GA		Siebel Systems, Inc.		14-story office building/353,000 sq. ft.
80 M Street Building		Washington, D.C.		BAE Systems Applied Technologies, Inc. Technology Management and Analysis Corporation Northrop Grumman Corporation		seven-story office building/275,000 sq. ft.; three- level subsurface parking garage
One West Fourth Street Building		Winston-Salem, NC		Wachovia Bank, N.A. Womble, Carlyle, Sandridge & Rice, PLLC		13-story office building/431,000 sq. ft.
3333 Finley Road		Downers Grove, IL		Acxiom-May & Speh, Inc.		nine-story office building/207,000 sq. ft.
1501 Opus Place Buildings		Downers Grove, IL		Acxiom-May & Speh, Inc.		four-story office/data center building/115,000 sq. ft.
2500 Windy Ridge (Wildwood Buildings)		Atlanta, GA		Coca-Cola Enterprises, Inc.		15-story office building/317,000 sq. ft.
4100-4300 Wildwood (Wildwood Buildings)		Atlanta, GA		BlueLinx Corporation		two-story office building and three-story office building/250,000 sq. ft.
4200 Wildwood (Wildwood Buildings)		Atlanta, GA		General Electric Company		six-story office building/265,000 sq. ft.

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Property Name		Location		Major Tenant(s)		Building Type/Square Feet
Emerald Point Building		Dublin, CA		SBC Advanced Solutions, Inc. Franklin Templeton Corporate Services, Inc.		four-story office building/194,000 sq. ft.
800 North Frederick Building		Gaithersburg, MD		International Business Machines Corporation		two-story office building/393,000 sq. ft.
The Corridors III Building		Downers Grove, IL		MAF Bancorp, Inc. Toyota Motor Credit Corporation Credit Suisse First Boston Corporation Metropolitan Life Insurance Company		seven-story office building/222,000 sq. ft.
The Highland Landmark III Building		Downers Grove, IL		PeopleSoft USA, Inc. New York Life		nine-story office building/269,000 sq. ft.

	Property Statistics

			2004 Annualized				Rentable				Percentage of 2004
			Gross Base				Square Feet				Annualized Gross
Year of Lease Expiration			Rent				Expiring				Base Rent
			(In thousands)				(In thousands)
Vacant			$	—				136				0	%
	2005			1,484				44				1
	2006			2,171				61				2
	2007			11,421				386				10
	2008			5,535				87				5
	2009			2,861				641				2
	2010			11,011				509				10
	2011			10,691				280				9
	2012			17,097				755				15
	2013			10,969				450				10
	2014			10,945				412				9
Thereafter				31,232				1,486				27
			$	115,417				5,247				100	%

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		2004 Annualized								Percentage of 2004
		Gross Base				Rentable				Annualized Gross
Location		Rents				Square Feet				Base Rents
		(In thousands)				(In thousands)
Atlanta		$	29,887				1,778				26	%
Chicago			19,351				800				17
Washington, D.C.			11,324				275				10
Northern New Jersey			9,404				385				8
Suburban Maryland			8,842				393				7
Winston-Salem			8,472				432				7
Los Angeles			8,405				310				7
Oakland			6,549				194				6
Boston			5,937				251				5
Houston			5,385				260				5
Detroit			1,861				169				2
		$	115,417				5,247				100	%

		2004 Annualized								Percentage of 2004
		Gross Base				Rentable				Annualized Gross
Industry		Rent				Square Feet				Base Rent
		(In thousands)				(In thousands)
Business Services		$	19,168				724				17	%
Communication			15,011				542				13
Industrial Machinery And Equipment			14,780				644				13
Transportation Equipment			12,831				394				11
Electronic & Other Electric Equipment			10,689				901				9
Depository Institutions			8,562				372				7
Wholesale Trade-Durable Goods			5,841				250				5
Oil and Gas Extraction			5,319				254				5
Legal Services			5,012				200				4
Food and Kindred Products			4,803				224				4
Engineering & Management Services			3,202				200				3
Other*			10,199				542				9
		$	115,417				5,247				100	%

*	None more than 3%

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		2004 Annualized				Percentage of 2004
		Gross Base				Annualized Gross
Tenant		Rent				Base Rent
		(In thousands)
AT&T		$	9,404				8	%
IBM			8,842				8
Acxiom			8,087				7
Northrop Grumman			7,910				7
General Electric			7,322				6
EMC			5,937				5
BlueLinx Co.			5,841				5
Weatherford International			5,319				5
SBC Communications			5,077				4
Coca-Cola Enterprises			4,803				4
Siebel Systems			4,353				4
Wachovia			4,064				4
BAE			3,997				3
Womble Carlyle			3,889				3
MAF Bancorp			3,255				3
Other*			27,317				24
		$	115,417				100	%

*	None more than 3%

			2004				2003
Total assets			$	1,155,765			$	1,652
Total stockholders’ equity				677,115				1
Total revenues				50,701				—
Net loss				(4,562	)			—
Per share data:
	Net loss — basic and diluted			(0.15	)			(4.70	)
	Funds from operations			0.48				(4.70	)
	Dividends declared			0.49				—

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	•	We will be taxed at regular corporate rates on our undistributed REIT taxable income, including undistributed net capital gains.
	•	We may elect to retain and pay income tax on our net long-term capital gain. In that case, a U.S. stockholder would be taxed on its proportionate share of our undistributed long-term capital gain (to the extent that we make a timely designation of such gains to our stockholders) and would receive a credit or refund for its proportionate share of the tax we paid.
	•	We may be subject to the “alternative minimum tax” on our items of tax preference.
	•	We will be subject to tax at the highest corporate income tax rate on net income from “foreclosure property” (generally property we acquire through foreclosure or after default on a loan secured by the property or a lease of the property) held primarily for sale to customers in the ordinary course of business and other nonqualifying income from foreclosure property.
	•	We will be subject to a 100% tax on any net income from prohibited transactions (which are, in general, certain sales or other dispositions of property, other than foreclosure property, that is held primarily for sale to customers in the ordinary course of business).
	•	If we fail to satisfy either the 75% gross income test or the 95% gross income test (discussed below) but have nonetheless maintained our qualification as a REIT because we have met certain other requirements, we will be subject to a 100% tax on the net income attributable to the greater of (a) the amount by which we fail the 75% gross income test or (b) the amount by which we fail the 95% gross income test, in either case multiplied by a fraction intended to reflect our profitability.
	•	If we (1) fail to satisfy the REIT asset tests (discussed below) and continue to qualify as a REIT because we meet certain other requirements, we will have to pay a tax equal to the greater of $50,000 or the highest corporate income tax rate multiplied by the net income generated by the nonqualifying assets during the period of time we failed to satisfy the asset tests or (2) if we fail to satisfy REIT requirements other than the gross income tests and the asset tests and continue to qualify as a REIT because we meet other requirements, we will have to pay $50,000 for each other failure.
	•	If we fail to distribute each year at least the sum of:

	(1) 85% of our REIT ordinary income for such year;
	(2) 95% of our REIT capital gain net income for such year; and
	(3) 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 sum of (a) the amounts actually distributed and (b) retained amounts on which we pay income tax at the corporate level.

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	•	If we acquire assets from a corporation generally subject to full corporate-level tax in a merger or other transaction in which our initial basis in the assets is determined by reference to the transferor corporation’s basis in the assets, the fair market value of the assets acquired in any such transaction exceeds the aggregate basis of such assets, and we subsequently recognize gain on the disposition of any such asset during the 10-year period beginning on the date on which we acquired the asset, then we generally will be subject to tax at the highest regular corporate income tax rate on the lesser of the amount of gain that we recognize at the time of the sale or disposition and the amount of gain that we would have recognized if we had sold the asset at the time we acquired the asset, which is referred to as the “Built-In Gain Rules.”
	•	We will be subject to a 100% tax on transactions with our “taxable REIT subsidiaries” if such transactions are not at arm’s length.

	Organizational Requirements

	(1) is managed by one or more trustees or directors;
	(2) uses transferable shares or transferable certificates to evidence beneficial ownership;
	(3) would be taxable as a domestic corporation but for Sections 856 through 860 of the Internal Revenue Code;
	(4) is neither a financial institution nor an insurance company within the meaning of the applicable provisions of the Internal Revenue Code;
	(5) has at least 100 persons as beneficial owners;
	(6) during the last half of each taxable year, not more than 50% of the value of its outstanding stock is owned, directly or indirectly, by five or fewer “individuals,” as defined in the Internal Revenue Code to include certain entities;
	(7) files an election or continues such election to be taxed as a REIT on its return for each taxable year; and
	(8) meets other tests described below, including with respect to the nature of its assets and income and the amount of its distributions.

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	Income Tests

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	Asset Tests

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	(1) the sum of (a) 90% of our “REIT taxable income” (computed without regard to the dividends paid deduction and by excluding our net capital gain) and (b) 90% of the net income, if any, from foreclosure property in excess of the excise tax on income from foreclosure property, minus
	(2) the sum of certain items of noncash income.

	•	85% of our REIT ordinary income for such year,
	•	95% of our REIT capital gain net income for such year, and
	•	any undistributed taxable income from prior periods,

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	(1) is a citizen or resident of the United States;
	(2) is a corporation (including an entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States or any of its political subdivisions;
	(3) is an estate the income of which is subject to federal income taxation regardless of its source; or
	(4) is a trust, provided that a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust.

	Distributions Generally

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	Capital Gain Distributions

	Certain Dispositions of Shares

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	Passive Activity Loss and Investment Interest Limitations

	Treatment of Tax-Exempt Stockholders

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	•	a lower treaty rate applies and the non-U.S. Stockholder files with us an IRS Form W-8BEN evidencing eligibility for that reduced treaty rate;
	•	the non-U.S. Stockholder files with us an IRS Form W-8ECI claiming that the distribution is income effectively connected with the non-U.S. Stockholder’s trade or business so that no withholding tax is required; or
	•	the distributions are treated for FIRPTA withholding tax purposes as attributable to a sale of a U.S. real property interest, in which case tax will be withheld at a 35% rate.

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	U.S. Stockholders

	(1) the payee fails to furnish his or her taxpayer identification number (which, for an individual, would be his or her Social Security number) to the payor as required;

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	(2) the IRS notifies the payor that the taxpayer identification number furnished by the payee is incorrect;
	(3) the IRS has notified the payee that such payee has failed to properly include reportable interest and dividends in the payee’s return or has failed to file the appropriate return and the IRS has assessed a deficiency with respect to such underreporting; or
	(4) the payee has failed to certify to the payor, under penalties of perjury, that the payee is not subject to withholding.

	Non-U.S. Stockholders

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	•	whether the investment is consistent with the applicable provisions of ERISA and the Internal Revenue Code;
	•	whether, under the facts and circumstances pertaining 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” (UBTI) to the Benefit Plan (see “Federal Income Tax Considerations — Taxation of U.S. Stockholders — Treatment of Tax-Exempt Stockholders”); and
	•	the need to value the assets of the Benefit Plan annually.

	•	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.

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	•	sold as part of a public offering registered under the Securities Act of 1933, as amended, and be part of a class of securities registered under the Securities Exchange Act of 1934, as amended, within a specified time period;
	•	part of a class of securities that is owned by 100 or more persons who are independent of the issuer and one another; and
	•	“freely transferable.”

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	•	the estimated values may not be realized by us or by you upon liquidation (in part because estimated values do not necessarily indicate the price at which assets could be sold and because the estimates may not take into account the expenses of selling our assets);
	•	you may not realize these values if you were to attempt to sell your shares; and
	•	the estimated values, or the method used to establish values, may not comply with the ERISA or IRA requirements described above.

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	•	amend the charter to adversely affect the rights, preferences and privileges of the stockholders;
	•	amend charter provisions relating to director qualifications, fiduciary duties, liability and indemnification, conflicts of interest, investment policies or investment restrictions;
	•	cause our liquidation or dissolution after our initial investment in property;
	•	sell all or substantially all of our assets other than in the ordinary course of business; or
	•	cause our merger or reorganization.

	Ownership Limit

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	Suitability Standards and Minimum Purchase Requirements

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	•	our actual results of operations;
	•	the timing of the investment of the net proceeds of this offering; and
	•	whether the income from our harvesting activities is ordinary income or capital gains.

	Eligibility

	Election to Participate

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	Stock Purchases

	Excluded Distributions

	Account Statements

	•	each distribution reinvested for your account during the quarter;
	•	the date of the reinvestment; and
	•	the number and price of the shares purchased by you.

	Fees and Commissions

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	Voting

	Tax Consequences of Participation

	Termination of Participation

	Amendment or Termination of Plan

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	•	a transaction involving our securities that have been for at least 12 months listed on a national securities exchange or included for quotation on a national market system; or
	•	a transaction involving the conversion to corporate, trust, or association form of only us if, as a consequence of the transaction, there will be no significant adverse change in stockholder voting rights, the term of our existence, compensation to Wells Capital or our investment objectives.

	(1) accepting the securities of the Roll-up Entity offered in the proposed Roll-up Transaction; or
	(2) one of the following:

	(A) remaining as stockholders of us and preserving their interests therein on the same terms and conditions as existed previously; or

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	(B) receiving cash in an amount equal to the stockholder’s pro rata share of the appraised value of our net assets.

	•	that would result in the stockholders having democracy rights in a Roll-up Entity that are less than those provided in our charter 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 charter, and dissolution of us;
	•	that 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 that 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 investors’ rights of access to records of the Roll-up Entity will be less than those provided in our charter and described 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 stockholders.

	•	any person who beneficially owns 10% or more of the voting power of the corporation’s shares; or
	•	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 10% or more of the voting power of the then-outstanding voting stock of the corporation.

	•	80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and

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	•	two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.

	•	one-tenth 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.

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	•	a classified board,
	•	a two-thirds vote requirement for removing a director,
	•	a requirement that the number of directors be fixed only by vote of the directors,
	•	a requirement that a vacancy on the board be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred, and
	•	a majority requirement for the calling of a special meeting of stockholders.

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	•	If the net sales proceeds are sufficient to provide the common unit holders in the aggregate, a return of net capital contributions plus a cumulative, noncompounded return of at least 7.0%, but less than 8.0%, per year, then a distribution of 10% of the remaining net sales proceeds, after return of net capital contributions plus distributions to the common unit holders, in the aggregate, of an amount equal to a 7.0% per year cumulative, noncompounded return on their invested capital, shall be paid to the holder of the special units.
	•	If the net sales proceeds are sufficient to provide the common unit holders, in the aggregate, a return of net capital contributions plus a cumulative, noncompounded return of at least 8.0% per year, then a distribution of 20% of the net sales proceeds, after return of net capital contributions plus distributions to the common unit holders in the aggregate of an amount equal to an 8.0% per year cumulative, noncompounded return on their invested capital, shall be paid to the holder of the special units.

	•	acquire, purchase, own, operate, lease and dispose of any real property and any other property;
	•	construct buildings and make other improvements on owned or leased properties;
	•	authorize, issue, sell, redeem or otherwise purchase any debt or other securities;
	•	borrow money;
	•	make or revoke any tax election;
	•	maintain insurance coverage in amounts and types as we determine is necessary;
	•	retain employees or other service providers;

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	•	form or acquire interests in joint ventures; and
	•	merge, consolidate or combine Wells Timber OP with another entity.

	•	all expenses relating to our formation and continuity of existence;
	•	all expenses relating to the public offering and registration of our securities;
	•	all expenses associated with the preparation and filing of our periodic reports under federal, state or local laws or regulations;
	•	all expenses associated with our compliance with applicable laws, rules and regulations; and
	•	all of our other operating or administrative costs incurred in the ordinary course of business.

	•	result in any person owning shares in excess of the ownership limit in our charter (unless exempted by our board of directors);
	•	result in our shares being owned by fewer than 100 persons;
	•	result in us being “closely held” within the meaning of Section 856(h) of the Internal Revenue Code; or
	•	cause us to own 10% or more of the ownership interests in a lessee within the meaning of Section 856(d)(2)(B) of the Internal Revenue Code.

	•	If the market value of our outstanding common stock at listing plus the total distributions paid by Wells Timber OP to the common unit holders prior to listing exceeds the aggregate capital contributed by the common unit holders to Wells Timber OP plus the amount of cash flow necessary to generate in the aggregate a cumulative, noncompounded return equal to at least 7.0%, but less than 8.0%, per year, then the redemption payment will equal 10% of the amount by which (1) the market value of our outstanding common stock exceeds (2) the sum of the total capital contributed by us to

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		Wells Timber OP and the amount of cash flow necessary to generate in the aggregate a 7.0% per year cumulative, noncompounded return on our investment in Wells Timber OP.
	•	If the market value of our common stock at listing plus the total distributions paid by Wells Timber OP to the common unit holders prior to listing exceeds the aggregate capital contributed by the common unit holders to Wells Timber OP plus the amount of cash flow necessary to generate in the aggregate a cumulative, noncompounded return equal to at least 8.0% per year, then the redemption payment will equal 20% of the amount by which (1) the market value of our outstanding common stock exceeds (2) the sum of the total capital contributed by the common unit holders to Wells Timber OP and the amount of cash flow necessary to generate in the aggregate an 8.0% per year cumulative, noncompounded return on our investment in Wells Timber OP.

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	•	any amendment affecting the redemption right to the detriment of the limited partners (except for certain business combinations where we merge with another entity and leave Wells Timber OP in existence to hold all the assets of the surviving entity);
	•	any amendment that would adversely affect the limited partners’ rights to receive distributions, except for amendments we make to create and issue preferred partnership units;
	•	any amendment that would alter how we allocate profits and losses, except for amendments we make to create and issue preferred partnership units; and
	•	any amendment that would impose on the limited partners any obligation to make additional capital contributions.

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Dealer-manager fee (maximum)		$	13,525,000
Selling commissions (maximum)			52,500,000
Salary allocations of sales managers and their support personnel(1)(2)			405,000
Expense reimbursements for retail seminars(1)(3)(4)			2,630,000
Expense reimbursements for educational conferences(1)(4)(5)			1,500,000
Legal fees allocable to dealer-manager(1)(4)			125,000
Reimbursement of due diligence expenses(1)(4)(6)			25,000
Total			70,710,000

(1)	Amounts shown are estimates.
(2)	These costs are borne by Wells Capital and are not reimbursed by us.
(3)	These amounts consist primarily of reimbursements for travel, meals, lodging and attendance fees incurred by employees of Wells Investment Securities, Wells Capital or one of their affiliates to attend retail seminars sponsored by participating broker/ dealers.

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(4)	Subject to the cap on organization and offering expenses described below, we will reimburse Wells Investment Securities or its affiliates for these expenses. In some cases, these payments will serve to reimburse Wells Investment Securities for amounts it has paid to participating broker/ dealers for the items noted.
(5)	These amounts consist of expense reimbursements for actual costs incurred in connection with attending educational conferences hosted by us. The expenses consist of the travel, meals and lodging of (a) representatives of participating broker/ dealers and (b) wholesalers and other NASD-registered personnel associated with Wells Investment Securities. All conferences will be held in the vicinity of our headquarters, which is in Norcross, Georgia, unless the NASD permits a conference in another location.
(6)	We may reimburse the dealer-manager for reimbursements it may make to broker/ dealers for reasonable bona fide due diligence expenses up to a maximum of 0.5% of our gross offering proceeds. In many cases, however, a marketing fee agreement between the dealer-manager and the participating broker/ dealer will provide that neither we nor the dealer-manager will be obligated to reimburse the due diligence expenses of the participating broker/ dealer. Because of those marketing fee arrangements, we expect the total amount of our reimbursement of bona fide due diligence expenses of broker/ dealers will be far less than the 0.5% of gross offering proceeds permitted by the NASD.

		Maximum Percent
		of Gross Offering
Expense		Proceeds
Selling commissions			7.0	%
Dealer-manager fee			1.8
All other organization and offering expenses			1.2
Total			10.0	%

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		Commission				Price per
Shares Purchased		Rate				Share
1 to 50,000			7.0	%		$	10.00
50,001 to 100,000			6.0				9.90
100,001 to 200,000			5.0				9.80
200,001 to 300,000			4.0				9.70
300,001 to 400,000			3.0				9.60
400,001 to 500,000			2.0				9.50
500,001 and up			1.0				9.40

	•	50,000 shares at $10.00 per share (total: $500,000) and a 7.0% commission;
	•	50,000 shares at $9.90 per share (total: $495,000) and a 6.0% commission; and
	•	26,020 shares at $9.80 per share (total: $254,996) and a 5.0% commission.

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	Client Services Department
	Wells Investment Securities, Inc.
	6200 The Corners Parkway
	Norcross, Georgia 30092-3365
	Telephone: (800) 557-4830 or (770) 243-8282
	Fax: (770) 243-8198
	E-mail: clientservices@wellsref.com
	www.wellsref.com

	•	the amount of the investment;
	•	the date of the investment; and
	•	the number and price of the shares purchased by you.

	•	meets the minimum income and net worth standards set forth under “Suitability Standards” immediately following the cover page of this prospectus;

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	•	can reasonably benefit from an investment in our shares based on the prospective stockholder’s overall investment objectives and portfolio structure;
	•	is able to bear the economic risk of the investment based on the prospective stockholder’s overall financial situation;
	•	is in a financial position appropriate to enable the prospective stockholder to realize to a significant extent the benefits described in this prospectus of an investment in the shares; and
	•	has apparent understanding of:

	•	the fundamental risks of the investment;
	•	the risk that the stockholder may lose the entire investment;
	•	the lack of liquidity of the shares;
	•	the restrictions on transferability of the shares;
	•	the background and qualifications of Wells Capital and its affiliates; and
	•	the tax consequences of the investment.

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Report of Independent Registered Public Accounting Firm			F-2
Consolidated Balance Sheet			F-3
Notes to Consolidated Balance Sheet			F-4
Prior Performance Tables (Unaudited)			F-11

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	/s/ Deloitte & Touche LLP

F-2

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ASSETS:
Cash and cash equivalents				$	203,000
Total assets				$	203,000
LIABILITIES AND STOCKHOLDER’S EQUITY:
Liabilities
		Total liabilities			—
Commitments and Contingencies
Minority Interest of Limited Partner in Operating Partnership				$	3,000
Stockholders’ Equity:
Preferred stock, $0.01 par value; 100 million shares authorized, no shares issued and outstanding
Common stock, $0.01 par value; 900 million shares authorized, 20,000 shares issued and outstanding					200
Additional paid-in capital					199,800
	Total stockholders’ equity				200,000
	Total liabilities and stockholders’ equity			$	203,000

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1.	ORGANIZATION

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

	Principles of Consolidation and Basis of Presentation

	Use of Estimates

	Cash and Cash Equivalents

F-4

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	Offering and Related Costs

	Income Taxes

3.	STOCKHOLDER’S EQUITY

	General

	Stock Incentive Plan

F-5

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	Dividend Reinvestment Plan

	Proposed Share Redemption Plan

F-6

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4.	RELATED-PARTY TRANSACTIONS

	Advisory Agreement

F-7

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	Dealer-Manager Agreement

	Conflicts of Interest

5.	SPECIAL UNITS

F-8

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	•	If the net proceeds from the sale of timberland are sufficient to provide the common unit holders of Wells Timber OP, in the aggregate, a return of net capital contributions plus a cumulative, noncompounded return of at least 7.0%, but less than 8.0%, per year, then a distribution of 10% of the remaining net sales proceeds, after return of net capital contributions plus distributions paid to the common unit holders, in the aggregate, of an amount equal to a 7.0% per year cumulative, noncompounded return on their invested capital, shall be paid to the holder of the special units.
	•	If the net proceeds from the sale of timberland are sufficient to provide the common unit holders in Wells Timber OP, in the aggregate, a return of net capital contributions plus a cumulative, noncompounded return of at least 8.0% per year, then a distribution of 20% of the net sales proceeds, after return of net capital contributions plus payment to the common unit holders in the aggregate of an amount equal to an 8.0% per year cumulative, noncompounded return on their invested capital, shall be paid to the holder of the special units.

	(i) the listing of the Company’s common stock on a national securities exchange or a national market system (the “Listing Liquidity Event”); or
	(ii) the termination or nonrenewal of the Advisory Agreement (a “Termination Event”).

	•	If the market value of Wells Timber REIT’s outstanding common stock at listing plus the total distributions paid by Wells Timber OP to the common unit holders prior to listing exceeds the aggregate capital contributed by the common unit holders to Wells Timber OP plus the amount of cash flow necessary to generate in the aggregate a cumulative, noncompounded return equal to at least 7%, but less than 8%, per year, then the redemption payment will equal 10% of the amount by which (1) the market value of Wells Timber REIT’s outstanding common stock exceeds (2) the sum of the total capital contributed by the common unit holders to Wells Timber OP and the amount of cash flow necessary to generate in the aggregate a 7% per year cumulative, noncompounded return on Wells Timber REIT’s investment in Wells Timber OP.
	•	If the market value of Wells Timber REIT’s common stock at listing plus the total distributions paid by Wells Timber OP to the common unit holders prior to listing exceeds the aggregate capital contributed by the common unit holders to Wells Timber OP plus the amount of cash flow necessary to generate in the aggregate a cumulative, noncompounded return equal to at least 8% per year, then the redemption payment will equal 20% of the amount by which (1) the market value of Wells Timber REIT’s outstanding common stock exceeds (2) the sum of the total capital contributed by the common unit holders to Wells Timber OP and the amount of cash flow necessary to generate in the aggregate an 8% per year cumulative, noncompounded return on Wells Timber REIT’s investment in Wells Timber OP.

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6.	MINORITY INTEREST

7.	ECONOMIC DEPENDENCY

8.	COMMITMENTS AND CONTINGENCIES

F-10

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F-11

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				Wells Real				Wells Real
				Estate Fund				Estate Investment
				XIII, L.P.				Trust, Inc.
Dollar Amount Raised				$	37,751,487	(3)		$	4,508,101,925	(4)
	Percentage Amount Raised				100	%(3)			100	%(4)
	Less Offering Expenses
		Underwriting Fees			9.5				9.5
		Organizational Expenses			3.0				1.3
		Reserves(1)			0.0				0.0
	Percent Available for Investment				87.5	%			89.2	%
Acquisition and Development Costs
	Prepaid Items and Fees related to
		Purchase of Property			0.0				0.0
		Cash Down Payment			84.0				83.1
		Acquisition Fees(2)			3.5				3.5
		Development and Construction Costs			0.0				2.6
	Reserve for Payment of Indebtedness				0.0				0.0
	Total Acquisition and Development Cost				87.5				89.2
	Percent Leveraged				0.0				17.82
	Date Offering Began				03/29/01					(4)
	Length of Offering				24 mo.					(4)
Months to Invest 90% of Amount Available for Investment (Measured from Beginning of Offering)					34 mo.					(4)
	Number of Investors as of 12/31/04				1,407				117,000

(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 advisor or affiliates of the general partners.
(3)	Total dollar amount registered and available to be offered was $45 million. Wells Real Estate Fund XIII, L.P. closed its offering on March 28, 2003, and the total dollar amount raised was $37,751,487.
(4)	This amount includes only the Wells Real Estate Investment Trust, Inc.’s third and fourth offerings. The total dollar amount registered and available to be offered in the third offering was $1.35 billion. Wells Real Estate Investment Trust, Inc. began its third offering on December 20, 2000 and closed its third offering on July 26, 2002. It took Wells Real Estate Investment Trust, Inc. 21 months to invest 90% of the amount available for investment in the third offering. The total dollar amount raised in its third offering was $1,282,976,862. Wells Real Estate Investment Trust, Inc. began its fourth offering on July 26, 2002 and closed its fourth offering on July 7, 2004. It took Wells Real Estate Investment Trust, Inc. 18 months to invest 90% of the amount available for investment in the fourth offering. The total dollar amount raised in its fourth offering was approximately $3.23 billion.

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								Wells Real
				Wells Real				Estate
				Estate Fund				Investment				Other Public
				XIII, L.P.				Trust, Inc.(1)				Programs(2)
Date Offering Commenced					03/29/01				12/20/00				—
Dollar Amount Raised				$	37,751,487			$	4,508,101,925			$	320,514,000
	Amount paid to Sponsor from Proceeds of Offering:
		Underwriting Fees(3)			313,002				45,081,019				2,008,797
		Acquisition Fees
		Real Estate Commissions
		Acquisition and Advisory Fees(4)			1,293,207				157,783,567				14,469,596
Dollar Amount of Cash Generated from Operations
Before Deducting Payments to Sponsor(5)					2,354,356				571,116,384				72,899,814
Amount Paid to Sponsor from Operations:
	Property Management Fee				113,619				16,050,027				3,128,341
	Partnership Management Fee				251,416				13,545,513				2,888,294
	Reimbursements				113,619				16,050,027				3,128,341
	Leasing Commissions				—				—				—
	General Partner Distributions								—				—
	Other
Dollar Amount of Property Sales Payments to Sponsors:
		Cash			—				—				—
		Notes			—				—				—
Amount Paid to Sponsor from Property Sales and Refinancing:
		Real Estate Commissions			—				—				—
		Incentive Fees			—				—				—
		Other			—				—				—

(1)

This amount includes only the Wells Real Estate Investment Trust, Inc.’s third and fourth offerings. The total dollar amount registered and available to be offered in the third offering was $1,350,000,000. Wells Real Estate Investment Trust, Inc. began its third offering on December 20, 2000 and closed its third offering on July 26, 2002. It took Wells Real Estate Investment Trust, Inc. 21 months to invest 90% of the amount available for investment in the third offering. The total dollar amount raised in its third offering was $1,282,976,862. Wells Real Estate Investment Trust, Inc. began its fourth offering on July 26, 2002 and closed its fourth offering on July 7, 2004. It took Wells Real Estate Investment Trust, Inc. 18 months to invest 90% of the amount available for investment in the fourth offering. The total dollar amount raised in its fourth offering was $3,225,125,063.

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(2)	Includes compensation paid to the general partners from Wells Real Estate Fund I, Wells Real Estate Fund II, Wells Real Estate Fund II-OW, Wells Real Estate Fund III, L.P., Wells Real Estate Fund IV, L.P., Wells Real Estate Fund V, L.P., Wells Real Estate Fund VI, L.P., Wells Real Estate Fund VII, L.P., Wells Real Estate Fund VIII, L.P., Wells Real Estate Fund IX, L.P., Wells Real Estate Fund X, L.P., Wells Real Estate Fund XI, L.P., and Wells Real Estate Fund XII, L.P. for the last three years. In addition to the amounts shown, affiliates of the general partners of Wells Real Estate Fund I have earned certain property management and leasing fees but, as of December 31, 2004, have elected to defer the payment of such fees until a later year on properties owned by Wells Real Estate Fund I. As of December 31, 2004, the aggregate amount of such deferred fees totaled $3,032,773.
(3)	Includes net underwriting compensation and commissions paid to Wells Investment Securities, Inc. in connection with the offering that was not reallowed to participating broker/ dealers.
(4)	Fees paid to the general partners or their affiliates for acquisition and advisory services in connection with the review and evaluation of potential real property acquisitions.
(5)	Includes $4,472,555 in net cash used in operating activities and $393,160 in payments to sponsor for Wells Real Estate Fund XIII, L.P.; $525,470,816 in net cash provided by operating activities and $45,645,568 in payments to sponsor for Wells Real Estate Investment Trust, Inc.; and $63,754,839 in net cash used in operating activities and $9,144,975 in payments to sponsor for other public programs.

			2004				2003				2002				2001				2000
Gross Revenues(1)			$	1,749,468			$	1,634,528			$	1,727,330			$	1,661,194			$	929,868
Profit on Sale of Properties				413,316				—				—				—				—
Less: Operating Expenses(2)				214,621				183,756				179,436				105,776				73,640
	Depreciation and Amortization(3)			—				—				—				—				—
Net Income GAAP Basis(4)			$	1,948,163			$	1,450,772			$	1,547,894			$	1,555,418			$	856,228
Taxable Income: Operations			$	2,107,964			$	1,825,945			$	1,929,381			$	1,850,674			$	863,490
Cash Generated (Used By):
	Operations			2,425,544				(168,461	)			(176,478	)			(73,029	)			247,244
	Joint Ventures			1,603,360				2,673,330				2,824,519				2,036,837				737,266
			$	4,028,904			$	2,504,869			$	2,648,041			$	1,963,808			$	984,510

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					2004				2003				2002				2001				2000
Less Cash Distributions to Investors:
	Operating Cash Flow					2,158,737				2,520,418				2,648,041				1,963,808				779,818
	Return of Capital					—				—				—				—				—
	Undistributed Cash Flow from Prior Year Operations					—				—				2,156				164,482				—
Cash Generated (Deficiency) after Cash Distributions					$	1,870,167			$	(15,549	)		$	(2,156	)		$	(164,482	)		$	204,692
Special Items (not including sales and financing):
	Source of Funds:
		General Partner Contributions				—				—				—				—				—
		Increase in Limited Partner Contributions				—				—				—				10,625,431				15,617,575
					$	1,870,167			$	(15,549	)		$	(2,156	)		$	10,460,949			$	15,822,267
Use of Funds:
	Sales Commissions and Offering Expenses					—				—				—				1,338,556				1,952,197
	Return of Original Limited Partner’s Investment					—				—				—				—				—
	Property Acquisitions and Deferred Project Costs					—				—				—				9,298,085				16,246,485
Cash Generated (Deficiency) after Cash Distributions and Special Items					$	1,870,167			$	(15,549	)		$	(2,156	)		$	(175,692	)		$	(2,376,415	)
Net Income and Distributions Data per $1,000 Invested:
	Net Income on GAAP Basis:
		Ordinary Income (Loss)
			— Operations Cash Preferred Units			85				89				94				98				89
			— Operations Tax Preferred Units			(86	)			(163	)			(151	)			(131	)			(92	)
Capital Gain (Loss)						—				—				—				—				—
Tax and Distributions Data per $1,000 Invested:
	Federal Income Tax Results:
		Ordinary Income (Loss)
			— Operations Cash Preferred Units			66				86				91				84				58
			— Operations Tax Preferred Units			(38	)			(97	)			(95	)			(74	)			(38	)
Capital Gain (Loss)						—				—				—				—				—
Cash Distributions to Investors:
	Source (on GAAP Basis)
		— Investment Income Cash Preferred Units				66				86				93				77				41
		— Return of Capital Cash Preferred Units				—				—				—				—				—
		— Return of Capital Tax Preferred Units				—				—				—				—				—

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				2004				2003				2002				2001				2000
	Source (on Cash Basis)
		— Operations Cash Preferred Units			66				86				93				77				41
		— Return of Capital Cash Preferred Units			—				—				—				—				—
		— Operations Tax Preferred Units			—				—				—				—				—
	Source (on a Priority Distribution Basis)(5)
		— Investment Income Cash Preferred Units			52				67				70				55				13
		— Return of Capital Cash Preferred Units			14				18				23				22				28
		— Return of Capital Tax Preferred Units			—				—				—				—				—
Amount (in Percentage Terms) Remaining invested in Program Properties at the end of the last year Reported in the Table					100	%			100	%

(1)	Includes $664,401 in equity in earnings of joint ventures and $265,467 from investment of reserve funds in 2000; $1,577,523 in equity in earnings of joint ventures and $83,671 from investment of reserve funds in 2001; $1,726,553 in equity in earnings of joint ventures and $777 from investment of reserve funds in 2002; $1,634,000 in equity in earnings of joint ventures and $528 from investment of reserve funds in 2003; and $2,162,669 in equity in earnings of joint ventures and $115 from investment of reserve funds in 2004. As of December 31, 2004, the leasing status was 83% 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 $355,210 for 2000; $1,035,609 for 2001; $1,107,728 for 2002; $1,112,820 for 2003; and $541,812 for 2004.
(4)	In accordance with the partnership agreement, net income or loss, depreciation and amortization are allocated $1,209,438 to Cash Preferred Limited Partners, $(353,210) to Tax Preferred Limited Partners and $0 to General Partners for 2000; $2,591,027 to Cash Preferred Limited Partners, $(1,035,609) to Tax Preferred Limited Partners and $0 to the General Partners for 2001; $2,655,622 to Cash Preferred Limited Partners, $(1,107,728) to Tax Preferred Limited Partners, $0 to General Partners for 2002; $2,563,592 to Cash Preferred Limited Partners, $(1,112,820) to Tax Preferred Limited Partners, $0 to General Partners for 2003; and $2,489,975 to Cash Preferred Limited Partners, $(541,812) to Tax Preferred Limited Partners and $0 to the General Partners for 2004.
(5)	Pursuant to the terms of the partnership agreement, an amount equal to the cash distributions paid to Cash Preferred Limited Partners is payable as priority distributions out of the first available net proceeds from the sale of partnership properties to Tax Preferred Limited Partners. The amount of cash distributions paid per unit to Cash Preferred Limited Partners is shown as a return of capital to the extent of such priority distributions payable to Tax Preferred Limited Partners. As of December 31, 2004, the aggregate amount of such priority distributions payable to Tax Preferred Limited Partners totaled $2,063,392.

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				2004				2003				2002				2001
Gross Revenues(1)				$	1,118,781			$	1,049,108			$	621,381			$	96,685
Profit on Sale of Properties					—				—				—				—
Less: Operating Expenses(2)					164,408				160,705				142,996				61,817
	Depreciation and Amortization(3)				—				—				—				—
Net Income GAAP Basis(4)				$	954,373			$	888,403			$	478,385			$	34,868
Taxable Income: Operations				$	1,839,064			$	2,634,584			$	514,584			$	61,402
Cash Generated (Used By):
	Operations				2,538,645				(118,986	)			(7,821	)			81,705
	Joint Ventures				—				1,340,811				607,033				31,165
				$	2,538,645			$	1,221,825			$	599,212			$	112,870
Less Cash Distributions to Investors:
	Operating Cash Flow				2,354,446				1,299,992				620,711				—
	Return of Capital				—				—				—				—
	Undistributed Cash Flow From Prior Year Operations				—				—				—				—
Cash Generated (Deficiency) after Cash Distributions				$	184,199			$	(78,167	)		$	(21,499	)		$	112,870
Special Items (not including sales and financing):
	Source of Funds:
		General Partner Contributions			—				—				—				—
		Increase in Limited Partner Contributions			—				10,399,660				16,442,773				10,630,964
				$	184,199			$	10,321,493			$	16,421,274			$	10,743,834
Use of Funds:
	Sales Commissions and Offering Expenses				—				1,300,909				1,979,576				1,259,747
	Return of Original Limited Partner’s Investment				—				—				—				100
	Property Acquisitions and Deferred Project Costs				2,836,444				12,511,831				9,107,492				8,522,750
Cash Generated (Deficiency) after Cash Distributions and Special Items				$	(2,652,245	)		$	(3,491,247	)		$	5,334,206			$	(961,237	)
Net Income and Distributions Data per $1,000 Invested:
	Net Income on GAAP Basis:
	Ordinary Income (Loss)
		— Operations Cash Preferred Units			83				56				52				20
		— Operations Tax Preferred Units			(242	)			(109	)			(102	)			(55	)
	Capital Gain (Loss)				—				—				—				—

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				2004				2003				2002				2001
Tax and Distributions Data per $1,000 Invested:
	Federal Income Tax Results:
	Ordinary Income (Loss)
		— Operations Cash Preferred Units			80				61				46				20
		— Operations Tax Preferred Units			(108	)			(65	)			(61	)			(26	)
	Capital Gain (Loss)				—				—				—				—
Cash Distributions to Investors:
	Source (on GAAP Basis)
		— Investment Income Cash Preferred Units			81				50				52				—
		— Return of Capital Cash Preferred Units			—				—				—				—
		— Return of Capital Tax Preferred Units			—				—				—				—
	Source (on Cash Basis)
		— Operations Cash Preferred Units			81				50				52				—
		— Return of Capital Cash Preferred Units			—				—				—				—
		— Operations Tax Preferred Units			—				—				—				—
	Source (on a Priority Distribution Basis)(5)
		— Investment Income Cash Preferred Units			64				39				42				—
		— Return of Capital Cash Preferred Units			17				11				11				—
		— Return of Capital Tax Preferred Units			—				—				—				—
Amount (in Percentage Terms) Remaining Invested in Program Properties at the end of the Last Year Reported in the Table					100	%			100	%			100	%			100	%

(1)	Includes $58,610 in equity in earnings of joint ventures and $38,075 from investment of reserve funds in 2001; $531,457 in equity in earnings of joint ventures and $89,924 from investment of reserve funds in 2002; $931,683 in equity in earnings of joint ventures and $117,425 from investment of reserve funds in 2003; and $1,106,316 in equity in earnings of joint ventures and $12,465 from investment of reserve funds in 2004. As of December 31, 2004, 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 $48,925 for 2001; $317,466 for 2002; $739,383 for 2003; and $1,629,571 for 2004.
(4)	In accordance with the partnership agreement, net income or loss, depreciation and amortization are allocated $84,293 to Cash Preferred Limited Partners, $(48,925) to Tax Preferred Limited Partners and $0 to the General Partners for 2001; $795,851 to Cash Preferred Limited Partners, $(317,466) to Tax Preferred Limited Partners, $0 to General Partners for 2002; $1,627,786 to Cash Preferred Limited Partners, $(739,383) to Tax Preferred Limited Partners, $0 to General Partners for 2003; and $2,583,944 to Cash Preferred Limited Partners, $(1,629,571) to Tax Preferred Limited Partners, $0 to General Partners for 2004.
(5)	Pursuant to the terms of the partnership agreement, an amount equal to the cash distributions paid to Cash Preferred Limited Partners is payable as priority distributions out of the first available net proceeds from the sale of partnership properties to Tax Preferred Limited Partners. The amount of cash distributions paid per unit to Cash Preferred Limited Partners is shown as a return of capital to the extent of such priority distributions payable to Tax Preferred Limited Partners. As of December 31, 2004, the aggregate amount of such priority distributions payable to Tax Preferred Limited Partners totaled $508,186.

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					2004				2003				2002
					(In thousands, except per share amounts)
Gross Revenues(1)					$	636,644			$	390,550			$	139,480
Profit on Sale of Properties						11,787				—				—
Less: Operating Expenses						275,970				153,528				36,607
		Depreciation and Amortization(2)				162,739				116,337				43,019
Net Income GAAP Basis						209,722				120,685				59,854
Taxable Income: Operations						230,670				153,511				80,521
Cash Generated (Used By):
		Operations				328,873				247,231				111,960
		Sales				40,506				—				—
		Financing			$	194,880			$	(26,046	)		$	150,071
					$	564,259				221,185			$	262,031
Less Cash Distributions to Investors:
		Operating Cash Flow				238,252				153,385				80,847
		Return of Capital			$	88,120			$	65,736			$	24,149
Cash Generated (Deficiency) after Cash Distributions					$	237,887			$	2,064			$	157,035
Special Items (not including sales and financing):
		Issuance of common stock				194,942				2,537,192				1,340,293
		Redemptions of common stock				(96,806	)			(43,690	)			(15,362	)
		Deferred financing costs paid and other				(10,473	)			(8,346	)			(1,674	)
		Repurchase of shares upon settlement			$	(12,842	)		$	—			$	—
					$	312,708			$	2,487,220			$	1,480,292
Use of Funds:
		Sales Commissions and Offering Expenses				32,877				260,773				140,488
		Return of Investors’ Investment				—				—				—
		Property Acquisitions and Deferred Project Costs				292,778				2,183,383				1,361,016
		Contributions to joint ventures			$	395			$	24,059			$	8,910
Cash Generated (Deficiency) after Cash Distributions and Special Items					$	(13,342	)		$	19,005			$	(30,122	)
Tax and Distributions Data per $1,000 Invested:
	Federal Income Tax Results:
		Ordinary Income (Loss)
			— Operations			70	%			70	%			77	%
			— Recapture			3	%			0	%			0	%
		Capital Gain (Loss)				27	%			30	%			23	%
Amount (in Percentage Terms) Remaining Invested in Program Properties at the end of the Last Year Reported in the Table						100	%			100	%			100	%

(1)	Includes $4,700 in equity in earnings of joint ventures in 2002; $4,751 in equity in earnings of joint ventures in 2003; and $6,634 in equity in earnings of joint ventures in 2004.
(2)	Included in equity in earnings of joint ventures in gross revenues is depreciation and amortization of $2,818 for 2002; $3,730 for 2003; and $4,160 for 2004.

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										Selling Price, Net of																				Cost of Properties
										Closing Costs and GAAP Adjustments																				Including Closing and Soft Costs
																																										Excess
																		Purchase																Total								(Deficiency)
										Cash								Money				Adjustments												Acquisition								of Property
										Received				Mortgage				Mortgage				Resulting												Cost, Capital								Operating
										Net of				Balance at				Taken				from								Original				Improvement,								Cash Receipts
		Date				Date of				Closing				Time of				Back by				Application								Mortgage				Closing and								Over Cash
Property		Acquired				Sale				Costs				Sale				Program				of GAAP				Total				Financing				Soft Costs(1)				Total				Expenditures
Greenville Center, Greenville, SC			6/20/90				9/30/02			$	2,271,187				—				—				—			$	2,271,187	(2)			—			$	4,297,901			$	4,297,901				—
Tanglewood Commons Outparcel, Clemmons, NC			5/30/95				10/07/02				524,398				—				—				—				524,398	(3)			—				506,326				506,326				—
Heritage Place, DeKalb County, GA			6/30/88				04/07/03				3,207,708				—				—				—				3,207,708	(4)			—				4,549,656				4,549,656				—
Hartford Building, Southington, CT			12/29/93				08/12/03				8,146,900				—				—				—				8,146,900	(5)			—				7,687,520				7,687,520				—
Cort Building, Fountain Valley, CA			09/01/98				09/11/03				5,563,403				—				—				—				5,563,403	(6)			—				6,851,616				6,851,616				—
Village Overlook, Stockbridge, GA			09/14/92				09/29/03				4,995,305				—				—				—				4,995,305	(7)			—				4,788,885				4,788,885				—
Stockbridge Village II, Stockbridge, GA			11/12/93				04/29/04			$	2,705,451				—				—				—			$	2,705,451	(8)			—			$	3,123,252			$	3,123,252				—
Stockbridge Village III, Stockbridge, GA			04/01/94				04/29/04			$	2,909,853				—				—				—				2,909,853	(9)			—				3,034,378				3,034,378				—
Stockbridge Village I Expansion, Stockbridge, GA			06/07/95				04/29/04			$	4,108,277				—				—				—				4,108,277	(10)			—				3,222,355				3,222,355				—
Hannover Center, Clayton County, GA			04/01/96				04/29/04			$	1,703,431				—				—				—				1,703,431	(11)			—				1,682,069				1,682,069				—
Stockbridge Village Shopping Center, Stockbridge, GA			04/04/91				04/29/04			$	12,024,223				—				—				—				12,024,223	(12)			—				10,639,795				10,639,795				—
5104 Eisenhower Boulevard Building, Tampa, FL			12/31/98				06/03/04			$	30,514,310				—				—				—				30,514,310	(13)			—				24,162,456				24,162,456				—
Peachtree Place II, Norcross, GA			01/01/85				06/18/04			$	857,826				—				—				—				857,826	(14)			—				1,295,536				1,295,536				—
Brookwood Grill, Roswell, GA			01/31/90				07/01/04			$	2,346,693				—				—				—			$	2,346,693	(15)			—			$	2,018,036			$	2,018,036				—
880 Holcomb Bridge, Roswell, GA			01/31/90				07/01/04				6,889,379				—				—				—				6,889,379	(16)			—				7,171,261				7,171,261				—
Johnson Matthey Building, Wayne, PA			08/17/99				10/05/04				9,675,000				—				—				—				9,675,000	(17)			—				8,392,077				8,392,077				—
15253 Bake Parkway, Irvine, CA			01/10/97				12/02/04				11,892,035				—				—				—				11,892,035	(18)			—				9,546,234				9,546,234				—
Marathon Building, Appleton, WI			09/16/94				12/29/04				9,927,330				—				—				—				9,927,330	(19)			—				9,333,483				9,333,483				—

	(1)	Amount shown does not include pro rata share of original offering costs.
	(2)	Includes taxable loss from this sale in the amount of $910,227.
	(3)	Includes taxable gain from this sale in the amount of $13,062, of which $13,062 is allocated to capital gain and $0 is allocated to ordinary income.

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	(4)	Includes taxable loss from this sale in the amount of $147,135.
	(5)	Includes taxable gain from this sale in the amount of $1,815,315, of which $1,815,315 is allocated to capital gain and $0 is allocated to ordinary income.
	(6)	Includes taxable loss from this sale in the amount of $686,513.
	(7)	Includes taxable gain from this sale in the amount of $1,264,739, of which $1,264,739 is allocated to capital gain and $0 is allocated to ordinary gain.
	(8)	Includes taxable gain from this sale in the amount of $204,519, of which $204,519 is allocated to capital gain and $0 is allocated to ordinary gain.
	(9)	Includes taxable gain from this sale in the amount of $1,831,250, of which $1,831,250 is allocated to capital gain and $0 is allocated to ordinary gain.

(10)	Includes taxable gain from this sale in the amount of $1,465,912, of which $1,465,912 is allocated to capital gain and $0 is allocated to ordinary gain.
(11)	Includes taxable gain from this sale in the amount of $337,421, of which $337,421 is allocated to capital gain and $0 is allocated to ordinary gain.
(12)	Includes taxable gain from this sale in the amount of $4,050,688, of which $4,050,688 is allocated to capital gain and $0 is allocated to ordinary gain.
(13)	Includes taxable gain from this sale in the amount of $8,615,257, of which $8,615,257 is allocated to capital gain and $0 is allocated to ordinary gain.
(14)	Includes taxable gain from this sale in the amount of $349,361, of which $349,361 is allocated to capital gain and $0 is allocated to ordinary gain.
(15)	Includes taxable gain from this sale in the amount of $665,199, of which $665,199 is allocated to capital gain and $0 is allocated to ordinary gain.
(16)	Includes taxable gain from this sale in the amount of $1,164,002, of which $1,164,002 is allocated to capital gain and $0 is allocated to ordinary gain.
(17)	Includes taxable gain from this sale in the amount of $2,114,572, of which $2,114,572 is allocated to capital gain and $0 is allocated to ordinary gain.
(18)	Includes taxable gain from this sale in the amount of $1,930,358, of which $1,930,358 is allocated to capital gain and $0 is allocated to ordinary gain.
(19)	Includes taxable gain from this sale in the amount of $2,753,041, of which $2,753,041 is allocated to capital gain and $0 is allocated to ordinary gain.

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A-1

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B-1

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B-2

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		Page
Suitability Standards
Prospectus Summary			1
Questions and Answers About this Offering			9
Risk Factors			15
Cautionary Note Regarding Forward-Looking Statements			32
Estimated Use of Proceeds			33
Management			34
Management Compensation			43
Stock Ownership			48
Conflicts of Interest			49
Industry Overview			54
Business and Policies			58
Plan of Operation			63
Prior Performance Summary			67
Federal Income Tax Considerations			82
ERISA Considerations			98
Description of Shares			102
Certain Provisions of Maryland Law and Our Charter and Bylaws			111
The Operating Partnership Agreement			114
Plan of Distribution			118
Legal Matters			124
Experts			124
Where You Can Find More Information			124
Index to Consolidated Balance Sheet and Prior Performance Tables			F-1
Appendix A — Subscription Agreement (Sample) with Instructions			A-1
Appendix B — Dividend Reinvestment Plan			B-1

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Item 31.	Other Expenses of Issuance and Distribution

Item		Amount
SEC registration fee		$	18,212*
NASD filing fee			75,500
Legal fees and expenses			**
Blue Sky fees and expenses			**
Accounting fees and expenses			**
Sales and advertising expenses			**
Printing			**
Postage and delivery of materials			**
Escrow fees			**
Due diligence expenses (retailing)			**
Direct issuer costs regarding educational conferences and seminars			**
Expense reimbursement to wholesaling personnel and participating broker/ dealers regarding educational conferences and sales seminars			**
Legal fees — underwriter portion (retailing)			**
Miscellaneous expenses			**
Total		$	**

*	See footnote 2 to the Calculation of Registration Fee table on the cover of this Registration Statement.
*	To be filed by amendment.

Item 32.	Sales to Special Parties

Item 33.	Recent Sales of Unregistered Securities

Item 34.	Indemnification of Directors and Officers

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Item 35.	Treatment of Proceeds from Stock Being Registered

Item 36.	Financial Statements and Exhibits

	Wells Timber Real Estate Investment Trust, Inc.

	Report of Independent Auditors
	Consolidated Balance Sheet as of November 9, 2005
	Notes to Consolidated Balance Sheet as of November 9, 2005

Ex. No.				Description
	1	.1		Dealer-Manager Agreement with Selected Dealer Agreement
	3	.1		Articles of Amendment and Restatement
	3	.2		Bylaws
	4	.1		Form of Subscription Agreement with Consent to Electronic Delivery Form (included as Appendix A to prospectus)
	4	.2		Dividend Reinvestment Plan (included as Appendix B to prospectus)
	4	.3		Description of Share Redemption Plan (included in prospectus under the caption “Description of Shares — Share Redemption Plan”)
	4	.4		Escrow Agreement between registrant and the escrow agent
	4	.5		Escrow Agreement between registrant and the escrow agent (for Pennsylvania Residents)
	5			Opinion of Venable LLP regarding the legality of the shares to be issued
	8*			Opinion of Alston & Bird LLP regarding certain tax matters
	10	.1		Advisory Agreement
	10	.2		Agreement of Limited Partnership of Wells Timber Operating Partnership, L.P.
	10	.3		2005 Long-Term Stock Incentive Plan
	21	.1		Subsidiaries of the Company
	23	.1		Consent of Venable LLP (included in Exhibit 5)
	23	.2*		Consent of Alston & Bird LLP (included in Exhibit 8)
	23	.3		Consent of Deloitte & Touche LLP
	24			Power of Attorney (included on signature page)

*	To be filed by amendment.

Item 37.	Undertakings

	(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement;

	(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
	(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually

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	or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
	(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
	Provided, however, that the undertakings set forth in paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement.

	(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;
	(3) That all applicable amendments will comply with the applicable forms, rules and regulations of the Commission in effect at the time such post-effective amendments are filed; and
	(4) To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering.

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II-5

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																																Contract
																				Gross				Mortgage								Purchase
						Date of										Size of				Leasable				Financing at								Price Plus				Other Cash				Total
						Commencement of										Parcel				Square				Date of				Cash Down				Acquisition				Expenditures				Acquisition
Name of Property		Date of Purchase		Ownership		Operations(1)				Location of Property		Type of Property				(Acres)				Footage				Purchase				Payment				Fee				Capitalized(2)				Costs
Vertex Sarasota		January 11, 2002		REIT I			June 5, 1998			Sarasota, FL		three-story office building					9.8				157,700				—				—			$	21,431,212			$	801,284			$	22,232,496
Transocean Houston		March 15, 2002		REIT I			June 5, 1998			Houston, TX		six-story office building					3.9				155,991				—				—				22,038,362				3,100				22,041,462
Novartis Atlanta		March 28, 2002		REIT I			June 5, 1998			Duluth, GA		four-story office building					7.6				100,087				—				—				15,045,996				1,320				15,047,316
Dana Detroit		March 29, 2002		REIT I			June 5, 1998			Farmington Hills, MI		three-story office and research and development building					7.8				112,480				—				—				24,111,087				500				24,111,587
Dana Kalamazoo		March 29, 2002		REIT I			June 5, 1998			Kalamazoo, MI		two-story office and industrial building					27.5				147,004				—				—				18,702,082				—				18,702,082
Travelers Express Denver		April 10, 2002		REIT I			June 5, 1998			Lakewood, CO		two connected one-story office buildings					7.9				68,165				—				—				10,555,448				7,967				10,563,415
Agilent Atlanta		April 18, 2002		REIT I			June 5, 1998			Alpharetta, GA		two-story office building					9.9				101,207				—				—				15,151,643				—				15,151,643
Bellsouth Ft. Lauderdale		April 18, 2002(3)		REIT I			June 5, 1998			Ft. Lauderdale, FL		one-story office building					4.3				47,400				—				—				6,891,748				—				6,891,748
Experian/ TRW		May 1, 2002		REIT I			June 5, 1998			Allen, TX		two two-story office buildings					26.5				292,700				—				—				35,694,724				—				35,694,724
Agilent Boston		May 3, 2002		REIT I			June 5, 1998			Boxborough, MA		three-story office building					42.1				174,585				—				—				31,843,732				3,407,496				35,251,228
TRW Denver		May 29, 2002		REIT I			June 5, 1998			Aurora, CO		three-story office building					10.2				108,240				—				—				21,104,734				10,287,937				31,392,671
MFS Phoenix		June 5, 2002		REIT I			June 5, 1998			Phoenix, AZ		three-story office building					9.3				148,605				—				—				25,881,252				—				25,881,252
ISS Atlanta		July 1, 2002(4)		REIT I			June 5, 1998			Atlanta, GA		two five-story office buildings					4.8				238,600				—				—				40,765,159				—				40,765,159
PacifiCare San Antonio		July 12, 2002		REIT I			June 5, 1998			San Antonio, TX		two-story office building					21.7				142,500				—				—				14,689,827				—				14,689,827
Kerr-McGee		July 29, 2002		REIT I			June 5, 1998			Houston, TX		four-story office building					4.2				100,000				—				—				2,117,945				10,450,562				12,568,507
BMG Direct Greenville		July 31, 2002		REIT I			June 5, 1998			Duncan, SC		one-story distribution facility					54.3				473,398				8,802,760				7,254,604				16,057,364				—				16,057,364

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																																Contract
																				Gross				Mortgage								Purchase
						Date of										Size of				Leasable				Financing at								Price Plus				Other Cash				Total
						Commencement of										Parcel				Square				Date of				Cash Down				Acquisition				Expenditures				Acquisition
Name of Property		Date of Purchase		Ownership		Operations(1)				Location of Property		Type of Property				(Acres)				Footage				Purchase				Payment				Fee				Capitalized(2)				Costs
BMG Music Greenville		July 31, 2002		REIT I			June 5, 1998			Duncan, SC		one-story distribution facility building					54.3				313,380				2,900,000				7,729,653				10,629,653				—				10,629,653
Kraft Atlanta		August 1, 2002		REIT I			June 5, 1998			Suwanee, GA		one-story office building					10.3				87,219				—				—				11,675,771				—				11,675,771
Nokia Dallas I		August 15, 2002		REIT I			June 5, 1998			Irving, TX		nine-story office building					6.5				228,678				—				—				39,977,023				418,100				40,395,123
Nokia Dallas II		August 15, 2002		REIT I			June 5, 1998			Irving, TX		seven-story office building					6.5				223,470				—				—				39,977,023				—				39,977,023
Nokia Dallas III		August 15, 2002		REIT I			June 5, 1998			Irving, TX		six-story office building					6.5				152,086				—				—				39,977,023				—				39,977,023
Harcourt Austin		August 15, 2002		REIT I			June 5, 1998			Austin, TX		seven-story office building					8.4				195,230				—				—				39,033,323				—				39,033,323
AmeriCredit Phoenix		September 12, 2002		REIT I			June 5, 1998			Chandler, AZ		three-story office building					14.7				153,494				—				—				2,671,324				22,383,452				25,054,776
IRS Long Island		September 16, 2002		REIT I			June 5, 1998			Holtsville, NY		two-story office building and one- story daycare facility					36.3				259,700				—				—				50,487,120				500,593				50,987,713
KeyBank Parsippany		September 27, 2002		REIT I			June 5, 1998			Parsippany, NJ		four-story office building					19.1				404,515				—				—				101,643,893				15,956				101,659,849
Allstate Indianapolis		September 27, 2002		REIT I			June 5, 1998			Indianapolis, IN		one-story office building					12.7				89,956				—				—				10,954,933				—				10,954,933
Federal Express Colorado Springs		September 27, 2002		REIT I			June 5, 1998			Colorado Springs, CO		three-story office building					28.0				155,808				—				—				26,087,714				—				26,087,714
EDS Des Moines		September 27, 2002		REIT I			June 5, 1998			Des Moines, IA		one-story office building					28.0				405,000				—				—				26,577,376				—				26,577,376
Intuit Dallas		September 27, 2002		REIT I			June 5, 1998			Plano, TX		two-story office building with a three-story wing					10.7				166,238				—				—				26,669,654				—				26,669,654
Daimler Chrysler Dallas		September 30, 2002		REIT I			June 5, 1998			Westlake, TX		two-story office building					13.2				130,290				—				—				25,172,753				—				25,172,753
NASA		November 22, 2002		REIT I			June 5, 1998			Washington, D.C.		two nine-story office buildings					3.6				948,800				—				—				349,165,776				—				349,165,776
Capital One Richmond I		November 26, 2002		REIT I			June 5, 1998			Glen Allen, VA		three-story office building					2.4				68,500				—				—				8,802,121				2,500				8,804,621
Capital One Richmond II		November 26, 2002		REIT I			June 5, 1998			Glen Allen, VA		three-story office building					7.0				77,045				—				—				9,925,004				—				9,925,004

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																																Contract
																				Gross				Mortgage								Purchase
						Date of										Size of				Leasable				Financing at								Price Plus				Other Cash				Total
						Commencement of										Parcel				Square				Date of				Cash Down				Acquisition				Expenditures				Acquisition
Name of Property		Date of Purchase		Ownership		Operations(1)				Location of Property		Type of Property				(Acres)				Footage				Purchase				Payment				Fee				Capitalized(2)				Costs
Capital One Richmond III		November 26, 2002		REIT I			June 5, 1998			Glen Allen, VA		three-story office building					5.8				79,675				—				—				9,925,820				—				9,925,820
Caterpillar Nashville		November 26, 2002		REIT I			June 5, 1998			Nashville, TN			11-story office building				13.2				312,297				—				—				61,779,411				4,920				61,784,331
John Wiley Indianapolis		December 12, 2002		JV Fund XIII — REIT		June 5, 1998 Fund  XIII — June 14, 2001; REIT — June  5, 1998				Fishers, IN		four-story office building					10.3				141,047				—				—				17,506,702				9,690				17,516,392
Nestlé		December 20, 2002		REIT I			June 5, 1998			Glendale, CA			20-story office building				4.0				505,115				90,000,000				67,146,442				157,146,442				500,289				157,646,731
East Point		January 9, 2003		REIT I			June 5, 1998			Mayfield Heights, OH		two three-story office buildings					9.5				187,735				—				—				22,079,138				1,743,477				23,822,615
150 West Jefferson Detroit		March 31, 2003		REIT I			June 5, 1998			Detroit, MI			25-story office building				1.5				505,417				—				—				93,893,995				3,799,888				97,693,883
Citicorp Englewood Cliffs New Jersey		April 30, 2003		REIT I			June 5, 1998			Englewood Cliffs, NJ		three-story office building					27.0				409,604				—				—				70,886,826				—				70,886,826
U.S. Bancorp Minneapolis		May 1, 2003		REIT I			June 5, 1998			Minneapolis, MN			32-story office building				1.2				929,694				—				—				173,497,104				309,573				173,806,677
Aon Center Chicago		May 9, 2003		REIT I			June 5, 1998			Chicago, IL			83-story building				3.7				2,577,000				112,346,607				354,548,316				466,894,923				32,402,585				499,297,508
GMAC Detroit		May 9, 2003		REIT I			June 5, 1998			Auburn Hills, MI		three-story office building					7.3				119,122				—				—				17,818,715				1,799,315				19,618,030
IBM Reston		June 27, 2003		REIT I			June 5, 1998			Reston, VA		six-story office building					3.1				99,794				—				—				19,794,604				6,225				19,800,829
Telllabs		June 27, 2003		REIT I			June 5, 1998			Reston, VA		two-story office building					1.5				41,200				—				—				8,893,228				3,951				8,897,179
ISS Atlanta III		July 1, 2003(5)		REIT I			June 5, 1998			Atlanta, GA		three-story office building					1.3				50,400				—				—				9,855,668				—				9,855,668
Lockheed Martin I		July 30, 2003		REIT I			June 5, 1998			Rockville, MD		four story office building					4.5				115,282				—				—				25,613,301				21,495				25,634,796
Lockheed Martin II		July 30, 2003		REIT I			June 5, 1998			Rockville, MD		four story office. building					4.5				115,315				—				—				25,613,301				—				25,613,301
Cingular		August 1, 2003		REIT I			June 5, 1998			Atlanta, GA			19-story office building				5.2				414,400				—				—				84,015,448				105,408				84,120,856
Aventis		August 14, 2003		REIT I			June 5, 1998			Bridgewater, NJ		eight-story office building					10.5				297,380				—				—				96,668,198				—				96,668,198

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																																Contract
																				Gross				Mortgage								Purchase
						Date of										Size of				Leasable				Financing at								Price Plus				Other Cash				Total
						Commencement of										Parcel				Square				Date of				Cash Down				Acquisition				Expenditures				Acquisition
Name of Property		Date of Purchase		Ownership		Operations(1)				Location of Property		Type of Property				(Acres)				Footage				Purchase				Payment				Fee				Capitalized(2)				Costs
1055 East Colorado (formerly Applera)		August 22, 2003		REIT I			June 5, 1998			Pasadena, CA		five-story office building					1.9				176,229				—				—				37,710,382				976,503				38,686,885
Continental Casualty		August 29, 2003		REIT I			June 5, 1998			Brea, CA		three-story office building					7.8				133,943				—				—				25,679,384				—				25,679,384
Copper Ridge Center (formerly Polo Ralph Lauren)		September 5, 2003		REIT I			June 5, 1998			Lyndhurst, NJ			10-story office building				6.2				268,032				—				—				46,656,226				—				46,656,226
1901 Main Street		September 17, 2003		REIT I			June 5, 1998			Irvine, CA		eight-story office building					4.8				172,260				—				—				45,587,050				—				45,587,050
AIU		September 19, 2003		JV Fund XIII  — REIT			June 5, 1998			Hoffman Estates, IL		four-story office building					2.7				193,701				—				—				26,977,172				199,566				27,176,738
IBM Williamette Portland		October 9, 2003		REIT I			June 5, 1998			Beaverton, OR		two-story office building					4.4				73,394				—				—				7,456,356				—				7,456,356
IBM Deschutes Portland		October 9, 2003		REIT I			June 5, 1998			Beaverton, OR		two-story office building					4.3				73,405				—				—				7,850,561				—				7,850,561
IBM Rhein Portland		October 9, 2003		REIT I			June 5, 1998			Beaverton, OR		two-story office building					4.1				73,446				—				—				8,118,956				—				8,118,956
1345 Burlington Drive Portland		October 9, 2003		REIT I			June 5, 1998			Beaverton, OR		three-story office building					6.2				114,000				—				—				8,815,107				2,130,172				10,945,279
15757 Jay Street Portland		October 9, 2003		REIT I			June 5, 1998			Beaverton, OR			warehouse				2.0				29,682				—				—				889,059				—				889,059
IBM Portland Land Parcels		October 9, 2003		REIT I			June 5, 1998			Beaverton, OR			land parcel				31.8				N/A				—				—				5,305,000				—				5,305,000
Siemens Orlando		October 30, 2003		JV XIII — XIV		Fund XIII — June  14, 2001; Fund  XIV — May 14, 2004				Orlando, FL		two one-story office buildings					7.5				82,175				—				—				11,709,127				—				11,709,127
Leo Burnett Chicago		November 6, 2003(6)		REIT I			June 5, 1998			Chicago, IL			50-story office building				1.2				1,117,978				139,306,695				136,470,171				275,776,866				2,087,320				277,864,186
U.S. Park Service		November 19, 2003(7)		REIT I			June 5, 1998			Washington, D.C.			12-story office building				0.6				269,299				96,669,991				8,686,255				105,356,246				564,351				105,920,597
1225 Eye Street		November 19, 2003(8)		REIT I			June 5, 1998			Washington, D.C.			12-story office building				0.5				218,000				67,826,468				4,533,634				72,360,102				712,361				72,360,102
4250 N. Fairfax		November 19, 2003		REIT I			June 5, 1998			Arlington, VA			14-story office building				1.8				304,307				—				—				90,942,655				89,338				91,031,993
400 Virginia Ave.		November 19, 2003		REIT I			June 5, 1998			Washington, D.C.		eight-story office building					1.1				213,000				—				—				71,220,504				1,115,627				72,336,131

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																																Contract
																				Gross				Mortgage								Purchase
						Date of										Size of				Leasable				Financing at								Price Plus				Other Cash				Total
						Commencement of										Parcel				Square				Date of				Cash Down				Acquisition				Expenditures				Acquisition
Name of Property		Date of Purchase		Ownership		Operations(1)				Location of Property		Type of Property				(Acres)				Footage				Purchase				Payment				Fee				Capitalized(2)				Costs
Boeing Seattle		December 11, 2003		REIT I			June 5, 1998			Issaquah, WA		five-story office building					5.8				157,546				—				—				29,977,965				—				29,977,965
Bank of America Brea		December 18, 2003		REIT I			June 5, 1998			Brea, CA		three-story office building					30.6				637,503				—				—				94,027,544				—				94,027,544
1901 Market		December 18, 2003		REIT I			June 5, 1998			Philadelphia, PA			45-story office building				0.8				760,613				—				—				176,066,169				—				176,066,169
Randstad		December 19, 2003		JV XIII — XIV		Fund XIII — June  14, 2001; Fund  XIV — May 14, 2004				Atlanta, GA		four-story office building					2.9				64,574				—				—				6,529,980				—				6,529,980
60 Broad Street		December 31, 2003		REIT I			June 5, 1998			New York, NY			39-story office building				1.1				989,000				—				—				214,930,259				2,419,852				217,350,111
1414 Mass Avenue		January 8, 2004		REIT I			June 5, 1998			Cambridge, MA		five-story office building					0.42				78,220				—				—				42,412,536				—				42,412,536
Russell Tacoma		January 9, 2004		REIT I			June 5, 1998			Tacoma, WA			12-story office building				1.28				225,248				—				—				51,995,443				—				51,995,443
Weatherford Center		February 10, 2004		REIT II			January 22, 2004			Houston, TX			12-story office building				3.12				260,178				—				—				39,728,440				—				39,728,440
One Brattle Square		February 26, 2004		REIT I			June 5, 1998			Cambridge, MA		six-story office building					1.22				98,079				27,153,282				—				69,866,728				—				69,866,728
Merck New Jersey		March 26, 2004		REIT I			June 5, 1998			Somerset, NJ		four-story office building					8.99				125,239				—				—				3,933,707				9,965,754				13,899,461
New Manchester One		March 19, 2004(9)		REIT II			January 22, 2004			Douglasville, GA		one-story office and distribution building					30.91				593,404				—				—				19,373,784				—				19,373,784
7500 Setzler Parkway		March 26, 2004		JV XIII — XIV		Fund XIII — June  14, 2001; Fund  XIV — May 14, 2004				Atlanta, GA		one-story office and warehouse building					10.32				120,000				—				—				7,022,042				—				7,022,042
333 & 777 Republic Drive		March 31, 2004		REIT II			January 22, 2004			Allen Park, MI		two one-story office buildings					20.0				169,200				—				—				18,876,272				—				18,876,272
Manhattan Towers		April 2, 2004		REIT II			January 22, 2004			Manhattan Beach, CA		two six-story office buildings					1.31				309,735				—				—				89,968,975				—				89,968,975
9 Technology Drive		May 24, 2004		REIT II			January 22, 2004			Westborough, MA		two-story office building					16.65				250,813				—				—				47,704,966				—				47,704,966
180 Park Avenue		June 23, 2004		REIT II			January 22, 2004			Floraham Park, NJ		two three-story office buildings					62.82				385,274				—				—				81,767,238				—				81,767,238
One Glenlake		June 25, 2004(10)		REIT II			January 22, 2004			Atlanta, GA			14-story office building				8.45				352,710				—				—				80,105,152				—				80,105,152

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																																Contract
																				Gross				Mortgage								Purchase
						Date of										Size of				Leasable				Financing at								Price Plus				Other Cash				Total
						Commencement of										Parcel				Square				Date of				Cash Down				Acquisition				Expenditures				Acquisition
Name of Property		Date of Purchase		Ownership		Operations(1)				Location of Property		Type of Property				(Acres)				Footage				Purchase				Payment				Fee				Capitalized(2)				Costs
80 M Street		June 29, 2004		REIT II			January 22, 2004			Washington, D.C.		seven-story office building					1.04				275,352				—				—				106,691,323				—				106,691,323
1075 West Entrance		July 7, 2004		REIT I			June 5, 1998			Auburn Hills, MI		four-story office building					14.0				210,000				14,505,563				—				29,980,503				—				29,980,503
One West Fourth Street		July 23, 2004		REIT II			January 22, 2004			Winston-Salem, NC			13-story office building				2.3				431,465				51,310,357				—				77,817,941				—				77,817,941
3333 Finley Road		August 4, 2004		REIT II			January 22, 2004			Downers Grove, IL		nine-story office building					9.28				206,500				11,718,634				—				48,033,710				—				48,033,710
1501 Opus Place		August 4, 2004		REIT II			January 22, 2004			Downers Grove, IL		four-story office/data building					4.79				115,352				6,056,366				—				24,824,544				—				24,824,544
2500 Windy Ridge		September 20, 2004		REIT II			January 22, 2004			Atlanta, GA			15-story office building				8.06				317,116				—				—				63,543,283				—				63,543,283
4100-4300 Wildwood		September 20, 2004		REIT II			January 22, 2004			Atlanta, GA		three-story office building					12.7				250,000				—				—				49,331,988				—				49,331,988
4200 Wildwood		September 20, 2004		REIT II			January 22, 2004			Atlanta, GA		Six-story office building					8.0				265,078				—				—				59,601,247				—				59,601,247
Emerald Point		October 11, 2004		REIT II			January 22, 2004			Dublin, CA		four-story office building					9.9				193,978				—				—				44,049,576				—				44,049,576
Citicorp Fort Mill		October 28, 2004		REIT I			June 5, 1998			Fort Mill, SC		three-story office building					12.4				165,000				—				—				3,518,153				114,600				3,632,753
800 N. Frederick		October 22, 2004		REIT II			January 22, 2004			Gaithersburg, MD		two-story office building					45.4				393,000				46,400,000				—				79,286,435				—				79,286,435
The Corridors III		November 1, 2004		REIT II			January 22, 2004			Downers Grove, IL		seven-story office building					7.26				221,969				—				—				40,451,753				—				40,451,753
3100 Clarendon		December 9, 2004		REIT I			June 5, 1998			Arlington, VA			14-story office building				1.36				238,014				33,500,000				—				82,742,848				—				82,742,848
Highland Landmark III		December 27, 2004(11)		REIT II			January 22, 2004			Downers Grove, IL		nine-story office building					8.77				275,000				30,840,000				—				53,484,403				—				53,484,403
Shady Grove		December 29, 2004		REIT I			June 5, 1998			Rockville, MD		four-story office building					5.70				108,518				—				—				22,610,764				—				22,610,764

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	(1)	The date minimum offering proceeds were obtained and funds became available for investment in properties.
	(2)	Includes improvements made after acquisitions through December 31, 2004.
	(3)	The BellSouth Ft. Lauderdale Building is owned subject to a long-term ground lease.
	(4)	On July 1, 2002, Wells OP acquired a ground leasehold interest in the ISS Atlanta Buildings and expects to purchase the property outright on or before December 1, 2015.
	(5)	On July 1, 2003, Wells OP acquired a ground leasehold interest in the ISS Atlanta III Building and expects to purchase the property outright on or before December 1, 2015.
	(6)	Wells REIT I acquired an approximate 98.46% interest in the Leo Burnett Chicago Building through two joint ventures. As the general partner, Wells REIT I is deemed to have control of the partnerships and, as such, consolidates the joint ventures.
	(7)	Wells REIT I purchased all of the membership interest in 1201 Equity, LLC, which owns a 49.5% membership interest in 1201 Eye Street, N.W. Associates, which owns the U.S. Park Service Building.
	(8)	Wells REIT I purchased all of the membership interest in 1225 Equity, LLC, which owns a 49.5% membership interest in 1225 Eye Street, N.W. Associates, which owns the 1225 Eye Street Building.
	(9)	On March 19, 2004, Wells OP II acquired a ground leasehold interest in the New Manchester One Building, and expects to purchase the property outright on or before January 1, 2012.

(10)	On June 25, 2004, Wells OP II acquired a ground leasehold interest in the One Glenlake Building, and expects to purchase the property outright on or before December 1, 2012.
(11)	Wells REIT II acquired an approximate 95% interest in the Highland Landmark III Building. As the majority member, Wells REIT II is deemed to have control of the joint venture and, as such, consolidates the joint venture.

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	WELLS TIMBER REAL ESTATE INVESTMENT
	TRUST, INC.

	By:	/s/ Leo F. Wells, III

	Leo F. Wells, III
	President

Name				Title		Date
/s/ Leo F. Wells, III   Leo F. Wells, III				President and Director		November 10, 2005
/s/ Douglas P. Williams   Douglas P. Williams				Executive Vice President, Secretary, Treasurer and Director (Principal Financial and Accounting Officer)		November 10, 2005

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