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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 10-Q


(Mark One)

  x Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

    For the quarterly period ended September 30, 2002

OR

  o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

    For the transition period from                        to                       

Commission file number 0-25606


WELLS REAL ESTATE FUND IX, L.P.
(Exact name of registrant as specified in its charter)


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

  6200 The Corners Pkwy., Norcross, Georgia
(Address of principal executive offices)
   30092
(Zip Code)		  

Registrant’s telephone number, including area code  (770) 449-7800
______________________________________________________________
(Former name, former address, and former fiscal year, if changed since last report)

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

             Yes x                                           No o


 

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FORM 10-Q

WELLS REAL ESTATE FUND IX, L.P.

(A Georgia Public Limited Partnership)

INDEX

        Page No
           
PART I.   FINANCIAL INFORMATION  
           
    Item 1.   Financial Statements  
           
        Balance Sheets--September 30, 2002 (unaudited) and December 31, 2001 3
           
        Statements of Income for the Three Months and Nine Months Ended September 30, 2002 (unaudited) and 2001 (unaudited) 4
           
        Statements of Partners’ Capital for the Year Ended December 31, 2001 and the Nine Months Ended September 30, 2002 (unaudited) 5
           
        Statements of Cash Flows for the Nine Months Ended September 30, 2002 (unaudited) and 2001 (unaudited) 6
           
        Condensed Notes to Financial Statements (unaudited) 7
           
    Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations 11
           
    Item 4.   Controls and Procedures 13
           
PART II.   OTHER INFORMATION 14

 
   
Exhibit Index 17
   
Exhibit 99.1 — Certification of Chief Executive Officer 18
   
Exhibit 99.2 — Certification of Chief Financial Officer 19
   
   

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WELLS REAL ESTATE FUND IX, L.P.

(A Georgia Public Limited Partnership)

BALANCE SHEETS

(unaudited)
September 30,
2002		 December 31,
2001
             
ASSETS:              
   Investments in joint ventures (Note 2)   $ 24,049,684   $ 24,980,158  
   Cash and cash equivalents     32,348     95,263  
   Due from affiliates     795,153     792,318  
   Deferred project costs     3,720     3,720  
         Total assets   $ 24,880,905   $ 25,871,459  
             
LIABILITIES AND PARTNERS’ CAPITAL              
   Liabilities:              
     Accounts payable   $ 11,408   $ 4,726  
     Partnership distributions payable     710,527     744,902  
         Total liabilities     721,935     749,628  
             
     Partners’ capital:              
     Limited partners:              
       Class A—3,157,883 units and 3,136,429 units outstanding as of
            September 30, 2002 and December 31, 2001, respectively		     24,158,970     25,121,831  
       Class B—342,117 units and 363,571 units outstanding as of September
            30, 2002 and December 31, 2001, respectively		     0     0  
         Total partners’ capital     24,158,970     25,121,831  
         Total liabilities and partners’ capital   $ 24,880,905   $ 25,871,459  

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

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WELLS REAL ESTATE FUND IX, L.P.

(A Georgia Public Limited Partnership)

STATEMENTS OF INCOME

(unaudited)
Three Months Ended		 (unaudited)
Nine Months Ended
September 30,
2002		 September 30,
2001		 September 30,
2002		 September 30,
2001
REVENUES:                          
   Equity in income of joint ventures (Note 2)   $ 422,050   $ 480,649   $ 1,227,510   $ 1,380,193  
   Interest income     438     993     2,027     3,079  
    422,488     481,642     1,229,537     1,383,272  
EXPENSES:                          
   Partnership administration     15,350     26,413     69,258     60,031  
   Legal and accounting fees     776     1,300     11,422     12,930  
   Computer costs     2,028     2,997     5,999     8,504  
    18,154     30,710     86,679     81,465  
NET INCOME   $ 404,334   $ 450,932   $ 1,142,858   $ 1,301,807  
NET INCOME ALLOCATED TO CLASS A
    LIMITED PARTNERS		   $ 404,334   $ 450,932   $ 1,142,858   $ 1,301,807  
                         
NET LOSS ALLOCATED TO CLASS B
    LIMITED PARTNERS		   $ 0   $ 0   $ 0   $ 0  
                         
NET INCOME PER WEIGHTED AVERAGE
    CLASS A LIMITED PARTNER UNIT		   $ 0.13   $ 0.15   $ 0.36   $ 0.42  
                         
NET LOSS PER WEIGHTED AVERAGE
    CLASS B LIMITED PARTNER UNIT		   $ 0.00   $ 0.00   $ 0.00   $ 0.00  
                         
CASH DISTRIBUTION PER WEIGHTED
    AVERAGE CLASS A LIMITED PARTNER
    UNIT		   $ 0.23   $ 0.24   $ 0.67   $ 0.70  

The accompanying notes are an integral part of these statements.

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WELLS REAL ESTATE FUND IX, L.P.

(A Georgia Public Limited Partnership)

STATEMENTS OF PARTNERS’ CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2001 AND

NINE MONTHS ENDED SEPTEMBER 30, 2002 (UNAUDITED)

Limited Partners Total
Class A Class B Partners’
Units Amount Units Amount Capital
                               
BALANCE, December 31, 2000     3,110,159   $ 26,276,464     389,841   $ 0   $ 26,276,464  
                               
   Net income     0     1,768,474     0     0     1,768,474  
   Partnership distributions     0     (2,923,107 )   0     0     (2,923,107 )
   Class A conversion elections     (1,635 )   0     1,635           0  
   Class B conversion elections     27,905     0     (27,905 )   0     0  
BALANCE, December 31, 2001     3,136,429     25,121,831     363,571           25,121,831  
                               
   Net income     0     1,142,858     0     0     1,142,858  
   Partnership distributions     0     (2,105,719 )   0     0     (2,105,719 )
   Class B conversion elections     21,454     0     (21,454 )   0     0  
BALANCE, September 30, 2002
    (unaudited)		     3,157,883   $ 24,158,970     342,117   $ 0   $ 24,158,970  

The accompanying notes are an integral part of these statements.

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WELLS REAL ESTATE FUND IX, L.P.

(A Georgia Public Limited Partnership)

STATEMENTS OF CASH FLOWS

(unaudited)
Nine Months Ended
Sept. 30, 2002 Sept. 30, 2001
CASH FLOW FROM OPERATING ACTIVITIES:              
   Net income   $ 1,142,858   $ 1,301,807  
   Adjustments to reconcile net income to net cash used in operating activities:              
     Equity in income of joint ventures     (1,227,510 )   (1,380,193 )
     Changes in assets and liabilities:              
       Prepaid expenses and other assets     0     (858 )
       Accounts receivable     0     1,458  
       Accounts payable     6,682     (5,853 )
         Net cash used in operating activities     (77,970 )   (83,639 )
CASH FLOW FROM INVESTING ACTIVITIES:              
   Distributions received from joint ventures     2,155,149     2,203,023  
CASH FLOW FROM FINANCING ACTIVITIES:              
   Distributions to partners from accumulated earnings     (1,205,218 )   (2,041,740 )
   Distributions to partners in excess of accumulated earnings     (934,876 )   (116,647 )
         Net cash used in financing activities     (2,140,094 )   (2,158,387 )
NET DECREASE IN CASH AND CASH EQUIVALENTS     (62,915 )   (39,003 )
             
CASH AND CASH EQUIVALENTS, beginning of year     95,263     115,337  
CASH AND CASH EQUIVALENTS, end of period   $ 32,348   $ 76,334  

The accompanying notes are an integral part of these statements.

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WELLS REAL ESTATE FUND IX, L.P.

(A GEORGIA PUBLIC LIMITED PARTNERSHIP)

CONDENSED NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2002 (UNAUDITED)

1.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (a)      Organization and Business

  Wells Real Estate Fund IX, L.P. (the “Partnership”) is a Georgia public limited partnership with Leo F. Wells, III and Wells Partners, L.P. (“Wells Partners”), a Georgia nonpublic limited partnership, serving as the General Partners. The Partnership was formed on August 15, 1994 for the purpose of acquiring, developing, constructing, owning, operating, improving, leasing, and otherwise managing income-producing commercial properties for investment purposes. The Partnership has two classes of limited partnership interests, Class A and Class B units. Limited partners shall have the right to change their prior elections to have some or all of their units treated as Class A or Class B units one time during each quarterly accounting period. Limited partners may vote to, among other things, (a) amend the partnership agreement, subject to certain limitations, (b) change the business purpose or investment objectives of the Partnership, and (c) add or remove a general partner. A majority vote on any of the above described matters will bind the Partnership without the concurrence of the General Partners. Each limited partnership unit has equal voting rights regardless of class.

  On January 5, 1996, the Partnership commenced a public offering of up to $35,000,000 of limited partnership units pursuant to a Registration Statement filed on Form S-11 filed under the Securities Act of 1933. The Partnership commenced active operations on February 12, 1996 upon receiving and accepting subscriptions for 125,000 units and collecting aggregate gross offering proceeds of $2,500,000, thus allowing for the admission of New York and Pennsylvania investors in the Partnership. The offering was terminated on December 30, 1996 at which time the Partnership had sold approximately 2,935,931 Class A units and 564,069 Class B units held by a total of 1,841 and 257 Class A and Class B Limited Partners, respectively, for total limited partner capital contributions of $35,000,000. After payments of $1,400,000 in acquisition and advisory fees and acquisition expenses and $5,254,700 in selling commissions and organization and offering expenses, an investment of $13,289,359 in Fund VIII and Fund IX Associates and an investment of $14,982,434 in the Fund IX-X-XI-REIT Associates, the Partnership held net offering proceeds of $73,507 as of September 30, 2002, which is available for investment in properties.

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  The Partnership owns interests in all of its real estate assets through joint ventures with other Wells Real Estate Funds. As of September 30, 2002, the Partnership owned interests in the following 9 properties through the affiliated joint ventures listed below:

Joint Venture     Joint Venture Partners     Properties  
Fund VIII-Fund IX Associates   - Wells Real Estate Fund VIII, L.P.   1. US Cellular Building  
    - Wells Real Estate Fund IX, L.P.     A four-story office building located in Madison, Wisconsin  
               
          2. AT&T-Texas Building  
            A one-story office building in Farmer’s Branch, Texas  
               
          3. Cirrus Logic Building  
            A two-story office building in Boulder County, Colorado  
Fund VIII-IX-REIT Associates   - Fund VIII – Fund IX Associates   4. Quest Building  
    - Wells Operating Partnership, L.P.*     A two-story office building located in Irvine, California  
Fund IX-X-XI-REIT Associates   - Wells Real Estate Fund IX, L.P.   5. Alstom Power-Knoxville Building  
    - Wells Real Estate Fund X, L.P.     A three-story office building in Knoxville, Tennessee  
    - Wells Real Estate Fund XI, L.P.        
    - Wells Operating Partnership, L.P.*        
               
          6. 360 Interlocken Building  
            A three-story office building located in Boulder County, Colorado  
               
          7. Avaya Building  
            A one-story office building located in Oklahoma City ,Oklahoma  
               
          8. Iomega Building  
            A single-story warehouse and office building located in Ogden, Weber County, Utah  
               
          9. Ohmeda Building  
            A two-story office building located in Louisville, Boulder County, Colorado  


    *   Wells Operating Partnership, L.P. is a Delaware limited partnership with Wells Real Estate Investment Trust, Inc. (“Wells REIT”) serving as its general partner; Wells REIT is a Maryland corporation that qualifies as a real estate investment trust.

  Each of the aforementioned properties was acquired on an all cash basis. For further information regarding the foregoing joint ventures and properties, refer to the report filed for the Partnership Form 10-K for the year ended December 31, 2001.

         (b)      Basis of Presentation

  The financial statements of the Partnership have been prepared in accordance with the instructions for Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles (“GAAP”) for complete financial statements. The quarterly statements included herein have not been examined by independent accountants. However, in the opinion of the General Partners, the statements for the unaudited interim periods presented include all adjustments that are of a normal and recurring nature and necessary to fairly present the results for these periods. Interim results for 2002 are not necessarily indicative of results for the year. For further information, refer to the financial statements and footnotes included in the report filed for the Partnership on Form 10-K for the year ended December 31, 2001.

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          (c)         Distributions of Net Cash From Operations
  As defined by the partnership agreement, cash available for distributions is distributed quarterly on a cumulative non-compounded basis to the limited partners as follows:

  •  
First, to all Class A limited partners until such limited partners have received distributions equal to a 10% per annum return on their respective adjusted capital contributions, as defined.

  •  
Second, to the General Partners until each general partner has received distributions equal to 10% of the total distributions declared by the Partnership per annum.

  •  
Third, to the Class A limited partners and the General Partners allocated on a basis of 90% and 10%, respectively.

  No distributions will be made to the limited partners holding Class B units.

         (d)      Impairment of Real Estate Assets

  On January 1, 2002, the Partnership adopted SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Under this accounting standard, management reviews each of the properties in which the partnership holds an interest for impairment as events or changes in circumstances arise, which indicate that the carrying amounts of such assets may not be recoverable and the future undiscounted cash flows expected to be generated by such assets are less than the respective carrying amounts. If such assets are considered to be impaired, the Partnership records impairment losses and reduces the carrying amounts of the impaired assets to amounts that reflect the fair value of the assets at the time impairment is evident.

  Management also reviews estimated selling prices of assets held for sale and records impairment losses to reduce the carrying amount of assets held for sale when the carrying amounts exceed the estimated selling prices less costs to sell. Material long-lived assets held for sale are separately identified in the balance sheets, and the related net operating income is segregated as income from discontinued operations in the statements of income. Depreciation is not recorded for long-lived assets held for sale. If an asset held for sale reverts to an asset used in operations, the asset will be measured at the lower of the original carrying cost, adjusted for the forgone depreciation, or the fair value at the date of the decision to hold the assets for use in operations. Neither the Partnership nor its joint ventures have recognized impairment losses to date.

2.      INVESTMENTS IN JOINT VENTURES

         (a)      Basis of Presentation

  The Partnership owned interests in nine properties as of September 30, 2002 through its ownership in the joint ventures described in Note 1. The Partnership does not have control over the operations of these joint ventures; however, it does exercise significant influence. Accordingly, investments in joint ventures are recorded using the equity method of accounting. For further information regarding investments in joint ventures, see the report filed for the Partnership on Form 10-K for the year ended December 31, 2001.

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          (b)         Summary of Operations
  The following information summarizes the operations of the unconsolidated joint ventures in which the Partnership held ownership interests for the three and nine months ended September 30, 2002 and 2001:

Total Revenues Net Income Partnership’s
Share of Net Income
Three Months Ended Three Months Ended Three Months Ended
September 30,
2002		 September 30,
2001		 September 30,
2002		 September 30,
2001		 September 30,
2002		 September 30,
2001
Fund IX-X-XI-REIT
    Associates		   $ 1,086,942   $ 1,082,768   $ 573,657   $ 669,906   $ 224,216   $ 262,029  
Fund VIII-Fund IX
    Associates		     753,038 *   756,614 *   437,654     483,637     197,834     218,620  
    $ 1,839,980   $ 1,839,382   $ 1,011,311   $ 1,153,543   $ 422,050   $ 480,649  

Total Revenues Net Income Partnership’s
Share of Net Income
Nine Months Ended Nine Months Ended Nine Months Ended
September 30,
2002		 September 30,
2001		 September 30,
2002		 September 30,
2001		 September 30,
2002		 September 30,
2001
Fund IX-X-XI-REIT
    Associates		   $ 3,322,091   $ 3,263,864   $ 1,747,098   $ 2,042,759   $ 683,199   $ 799,012  
Fund VIII-Fund IX
    Associates		     2,251,913 *   2,222,563 *   1,204,141     1,285,706     544,311     581,181  
    $ 5,574,004   $ 5,486,427   $ 2,951,239   $ 3,328,465   $ 1,227,510   $ 1,380,193  

    *   The Partnership’s share of income earned from its investment in Fund VIII-IX-REIT Associates is recorded by Fund VIII-IX Associates as equity in income of joint ventures, which is classified as revenue

  The following information summarizes the operations of the Fund VIII-IX-REIT Associates in which the Partnership held an interest through its interest in Fund VIII-Fund IX Associates for the three and nine months ended September 30, 2002 and 2001:

Total Revenues Net Income Partnership’s
Share of Net Income
Three Months Ended Three Months Ended Three Months Ended
September 30,
2002		 September 30,
2001		 September 30,
2002		 September 30,
2001		 September 30,
2002		 September 30,
2001
Fund VIII-IX-REIT
    Associates		   $ 302,000   $ 313,536   $ 152,672   $ 155,976   $ 58,122 * $ 59,380 *

Total Revenues Net Income Partnership’s
Share of Net Income
Nine Months Ended Nine Months Ended Nine Months Ended
September 30,
2002		 September 30,
2001		 September 30,
2002		 September 30,
2001		 September 30,
2002		 September 30,
2001
Fund VIII-IX-REIT
    Associates		   $ 905,999   $ 894,460   $ 461,366   $ 416,328   $ 175,642 * $ 158,496 *

    *   The Partnership’s share of income earned from its investment in Fund VIII-IX-REIT Associates is recorded by Fund VIII-IX Associates as equity in income of joint ventures, which is classified as revenue

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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATION.

  The following discussion and analysis should be read in conjunction with the accompanying financial statements and notes thereto.

         (a)      Forward-Looking Statements

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

         (b)      Results of Operations

  Gross Revenues
Gross revenues decreased to $1,229,537 for the nine months ended September 30, 2002 from $1,383,272 for the nine months ended September 30, 2001 primarily due to the corresponding decrease in equity in income of joint ventures resulting from (i) decreased operating cost reimbursement billings to tenants at the 360 Interlocken Building, Alstom Power-Knoxville Building, Iomega Building, US Cellular Building, and Cirrus Logic Building, partially offset by (ii) tenant renewals at the 360 Interlocken Building resulting in higher rental rates. Tenants are billed for operating cost reimbursements at estimated amounts, which are reconciled as tenants are billed (credited) for the net annual under (over) billings in the following year.

  Expenses
Expenses increased to $86,679 for 2002 from $81,465 for 2001 due to an increase in partnership administration expenses primarily as a result of Tennessee Partnership franchise and excise taxes, which were assessed for 2001 and 2002 during the second quarter of 2002.

  As a result, net income decreased to $1,142,858 for the nine months ended September 30, 2002 from $1,301,807 for the nine months ended September 30, 2001.

  Distributions
Distributions made to the limited partners holding Class A units decreased to $0.67 per unit, with respect to the nine months ended September 30, 2002, from $0.70 for the same period in 2001, primarily as a result of funding leasing costs and tenant improvements for the re-leasing of space at the 360 Interlocken Building in the second quarter of 2002. Such distributions have been made from net cash from operations and distributions received from investments in joint ventures. No distributions have been made to the limited partners holding Class B units or to the General Partners.

  The General Partners’ guidance with regard to future operating cash distributions to the limited partners holding Class A units is that such distributions are likely to continue at a level comparable with that provided for the three months ended September 30, 2002.

         (c)      Liquidity and Capital Resources

  Net cash used in operating activities decreased to $77,970 for the nine months ended September 30, 2002 from $83,639 for the nine months ended September 30, 2001 primarily due to a change in

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  the timing of paying accounts payable. Net cash provided by investing activities decreased to $2,155,149 for the nine months ended September 30, 2002 from $2,203,023 for the nine months ended September 30, 2001 due to a corresponding decrease in earnings generated from joint ventures during 2002. Net cash used in financing activities decreased to $2,140,094 for the nine months ended September 30, 2002 from $2,158,387 for the same period in 2001 due to the corresponding decrease in cash available for partnership distributions resulting from the decrease in cash provided from investing activities as described above.

  The Partnership expects to continue to meets its short-term liquidity requirements, generally through the use of net cash from operations and distributions received from investments in joint ventures. The General Partners believe that such sources will continue to provide adequate cash flows for the purposes of meeting the Partnership’ operating requirements.

         (d)      Inflation

  The real estate market has not been affected significantly by inflation in the past three years due to the relatively low inflation rate. There are provisions in the majority of tenant leases executed by the Partnership to protect the Partnership from the impact of inflation. Most leases contain provisions for common area maintenance, real estate tax and insurance reimbursements from tenants either on a per square foot basis, or above a certain allowance per square foot annually. These provisions should reduce the Partnership’s exposure to increases in costs and operating expenses resulting from inflation. In addition, a number of the Partnership’s leases are for remaining terms of less than five years, which may allow the Partnership to enter into new leases at higher base rental rates in the event that market renta