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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

Commission file number 0-14463

WELLS REAL ESTATE FUND I

(Exact name of registrant as specified in its charter)

CLASS A UNITS

(Title of Class)

CLASS B UNITS

(Title of Class)

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

Yes  x No  ¨

Aggregate market value of the voting stock held by nonaffiliates:                                                             Not Applicable

PART I

ITEM 1.        BUSINESS

General

Wells Real Estate Fund I (the “Partnership”) is a Georgia public limited partnership with Leo F. Wells, III and Wells Capital, Inc. (“Wells Capital”), a Georgia corporation, serving as its General Partners. The Partnership was formed on April 26, 1984 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 may vote to, among other things, (a) amend the partnership agreement, subject to certain limitations, (b) change the business purpose or investment objectives of the Partnership, and (c) remove a general partner. A majority vote on any of the 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 September 6, 1984, the Partnership commenced a public offering of its limited partnership units pursuant to a Registration Statement filed on Form S-11 under the Securities Act of 1933. The Partnership terminated its offering on September 5, 1986 upon receiving and accepting gross proceeds of $35,321,000 for a total of 141,284 Class A and Class B limited partner units from 4,895 limited partners at $250 per unit.

Employees

The Partnership has no direct employees. The employees of Wells Capital and Wells Management Company, Inc., an affiliate of the general partners, perform a full range of real estate services including leasing and property management, accounting, asset management and investor relations for the Partnership. See Item 11 “Compensation of General Partners and Affiliates” for a summary of the fees paid to the General Partners and their affiliates during the year ended December 31, 2002.

Insurance

Wells Management Company, Inc. carries comprehensive liability and extended coverage with respect to all the properties in which the Partnership has an ownership interest. In the opinion of management of the Partnership, all such properties are adequately insured.

Competition

The Partnership will experience competition for tenants from owners and managers of competing projects which may include the General Partners and their affiliates. As a result, the Partnership may provide free rent, reduced charges for tenant improvements, and other inducements, all of which may have an adverse impact on results of operations. At the time the Partnership elects to dispose of its properties, the Partnership will also be in competition with sellers of similar properties to locate suitable purchasers for its properties.

ITEM 2.    PROPERTIES

As of December 31, 2002, the Partnership owned 100% interests in the following two properties. Accordingly, the accounts of these properties are consolidated in the financial statements of the Partnership included herein.

As of December 31, 2002, the Partnership owned interests in 2 properties through the following affiliated joint ventures:

The Partnership substantially controls the operations of Wells Baker Associates. Accordingly, the accounts of Wells Baker Associates are consolidated in the accompanying financial statements. The Partnership does not control the operations of Fund I-II Associates-Tucker; however, it does exercise significant influence. Thus, the Partnership accounts for its investment in Fund I-II Associates-Tucker

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using the equity method of accounting. Each of the foregoing properties was acquired on an all cash basis.

Wells Baker Associates sold one of its commercial office buildings, 3875 Peachtree Place, on August 31, 2000, for a gross sales price of $772,915. This sale resulted in a gain of approximately $268,000 and yielded net proceeds of the sale were $704,495, of which approximately $240,000 and $630,000, respectively, were allocated to the Partnership.

On January 11, 2001, the Partnership sold its 100% interest in the Crowe’s Crossing property, a shopping center located in DeKalb County, Georgia, to an unrelated third-party. This sale resulted in a gain of approximately $1,139,000 and yielded net proceeds of $6,486,654, all of which were attributable to the Partnership.

On October 1, 2001, Fund I-II-IIOW-VI-VII Associates, a joint venture among the Partnership, Fund II-IIOW Associates, Wells Real Estate Fund VI, L.P. and Wells Real Estate Fund VII, L.P. sold the Cherokee Commons property to an unrelated third-party. The Cherokee Commons property is a retail shopping center located in Cherokee County, Georgia. This sale resulted in a gain of approximately $1,725,000 and yielded net proceeds of $8,434,089, of which approximately $384,000 and $1,876,000, respectively, were allocated to the Partnership.

As of December 31, 2002, the lease expirations scheduled during each of the following ten years for all properties in which the Partnership owned an interest, either directly or through the joint ventures, assuming no exercise of renewal options or termination rights, are summarized below:

The properties and joint ventures in which the Partnership owned an interest as of December 31, 2002 are further described below:

Paces Pavilion

On December 27, 1985, the Partnership acquired a three-story medical office building on 1.65 acres of land located on Howell Mill Road in metropolitan Atlanta, Fulton County, Georgia, known as Paces Pavilion for a purchase price of $3,443,203. Paces Pavilion, which is held in condominium ownership, contains approximately 30,800 of net rentable square feet, all of which was originally leased to HCA Realty, Inc. and Hospital Corporation of America until December 31, 1996. As of December 31, 2002, six tenants occupied Paces Pavilion, the following three of which occupied 10% or more of the rentable space: Eye Consultants of Atlanta; King, Sanderson & Heidecker; and Peachtree Park Pediatric. All of the tenants of Paces Pavilion are in the business of providing various medical services.

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Eye Consultants of Atlanta occupies two suites representing 11,757 square feet. The annual base rent is $223,383, and the lease expires December 31, 2006.

King, Sanderson & Heidecker occupy 3,752 rentable square feet. The annual base rent is $85,231 and the lease expires December 31, 2007.

Peachtree Park Pediatric occupies 5,892 rentable square feet. The annual base rent is $112,214 and the lease expires March 31, 2014.

The average effective annual rental rate per square foot was $17.88 for 2002, $7.78 for 2001, $3.84 for 2000, $3.31 for 1999, and $2.44 for 1998.

Black Oak Plaza

On December 31, 1986, the Partnership acquired a retail shopping center located in Metropolitan Knoxville, Knox County, Tennessee known as Black Oak Plaza which was initially developed in 1981. Black Oak Plaza contains a total of approximately 175,000 square feet of space, including a K-Mart department store and a Kroger Food/Drug. The Partnership does not own the portion of the shopping center occupied by K-Mart and Kroger. The portion of the shopping center owned and operated by the Partnership contains approximately 68,414 net rentable square feet. As of December 31, 2002, the Partnership had expended a total of $4,581,743 for the acquisition of Black Oak Plaza.

As of December 31, 2002, Black Oak Plaza was leased to 15 tenants with no one tenant occupying a significant portion of the rentable space.

The average annual rental rate per square foot was $5.91 for 2002, $6.37 for 2001, $6.01 for 2000, $5.53 for 1999 and $6.41 for 1998.

Peachtree Place

In 1985, the Partnership acquired an interest in two commercial office buildings located at Holcomb Bridge Road, Norcross, Gwinnett County, Georgia known as Peachtree Place. Peachtree Place which is owned by the Wells Baker Associates. The land upon which Peachtree Place was developed was originally purchased by Wells & Associates, Inc. for a purchase price of $187,087. Upon the formation of the Wells Baker Associates, Wells & Associates, Inc. contributed the land to the joint venture as its capital contribution. As of December 31, 2002, the Partnership had made total capital contributions of $1,526,798 to the Wells Baker Associates. The Partnership holds an approximate equity interest of 90%, and Wells & Associates, Inc. holds an approximate equity interest of 10%.

Wells Baker Associates sold one of its commercial office buildings, 3875 Peachtree Place, on August 31, 2000, for $772,915. Net proceeds were approximately $704,495, of which the Partnership received $633,694. The Partnership was allocated taxable gain of approximately $205,019 from this sale.

The remaining office building at Peachtree Place contains approximately 11,006 net rentable square feet and is leased to five tenants, of which the following three occupy 10% or more of the rentable square footage: Law Offices of Jules & Associates, attorneys; Adevco Corporation, a commercial real estate development company; and Flying Fotos, Inc., an aerial photo company.

Law Offices of Jules & Associates lease represents 2,065 rentable square feet. The annual base rent was $34,073 for 2002. The lease expires on July 31, 2005.

Adevco Corporation’s lease represents 1,512 rentable square feet. The annual base rent was $26,838 for 2002. The lease expires on September 30, 2005.

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Flying Fotos, Inc.’s lease represents 1,449 rentable square feet. The base rent was $26,082 for 2002. The lease expires January 31, 2004.

The average annual rental rate per square foot was $18.79 for 2002, $14.06 for 2001, $18.05 for 2000, $13.86 for 1999 and $15.51 for 1998.

Fund I-II Associates-Tucker

The Partnership entered into a joint venture agreement with Fund II-IIOW Associates, known as Fund I-II Associates-Tucker, for the purpose of developing, constructing, owning and operating Heritage Place, which is further described below. Both the Partnership and the Fund II-IIOW Associates have funded the cost of developing Heritage Place through capital contributions made as progressive stages of construction were completed. As of December 31, 2002, the Partnership and Fund II-IIOW Associates held equity interests of approximately 52% and 48%, respectively.

Heritage Place

Heritage Place consists of a retail shopping center and a commercial office building complex located in Tucker, DeKalb County, Georgia. The retail shopping center contains approximately 29,858 net rentable square feet. The commercial office space, which is divided into seven separate buildings, contains approximately 67,465 net rentable square feet.

No tenants occupied ten percent or more of the total rentable square footage. The principal businesses, occupations, and professions of the tenants at Heritage Place include shopping/commercial office services.

The average effective annual rental rate per square foot was $12.66 for 2002, $13.66 for 2001, $14.29 for 2000, $14.11 for 1999 and $12.76 for 1998.

On January 23, 2003, Fund I-II Associates-Tucker entered into an agreement (the “Agreement”) to sell the retail shopping center portion of Heritage Place to an unrelated third-party for a gross selling price of $3,400,000. Pursuant to the terms of the Agreement, this transaction was subject to a due diligence period, which ended on February 22, 2003 without significant modifications to the Agreement. Accordingly, Fund I-II Associates-Tucker currently anticipates closing on this sale during the second quarter of 2003.

Crowe’s Crossing

On December 31, 1986, the Partnership acquired a retail shopping center located in metropolitan Atlanta, DeKalb County, Georgia known as Crowe’s Crossing containing approximately 93,728 net rentable square feet. Crowe’s Crossing is anchored by a 45,528 square foot lease with Kroger Food/Drug. The remaining 48,200 square feet of the center was composed of 31 separate spaces whose tenants operate retail businesses typical of multi-tenant shopping centers.

On January 11, 2001, the Partnership sold its 100% interest in the Crowe’s Crossing property, a shopping center located in DeKalb County, Georgia, to an unrelated third-party. This sale resulted in a gain of approximately $1,139,000 and yielded net proceeds of $6,486,654, all of which were attributable to the Partnership.

Cherokee Commons

The Fund I-II-IIOW-VI-VII Associates was formed for the purpose of owning and operating Cherokee Commons, which consists of a retail shopping center located in metropolitan Atlanta, Cherokee County, Georgia and was expanded to consist of approximately 103,755 net rentable square feet. Cherokee Commons was initially developed through a joint venture between the Partnership and the Fund II-IIOW

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Associates, which contributed Cherokee Commons to the Fund I-II-IIOW-VI-VII Joint Venture on August 1, 1995 to complete the required funding for the expansion.

As of December 31 2002, Fund II-IIOW Associates had contributed property with a book value of $4,860,100, Wells Fund I had contributed property with a book value of $2,139,900, and Wells Fund VI and Wells Fund VII had each contributed cash in the amount of $953,798 to Fund I-II-IIOW-VI-VII Associates. As of December 31, 2002, the equity interests of the joint venture partners in Fund I-II-IIOW-VI-VII Associates were approximately as follows: Fund II-IIOW Associates—54%, Wells Fund I—24%, Wells Fund VI—11%, and Wells Fund VII—11%.

On October 1, 2001, Fund I-II-IIOW-VI-VII Associates, a joint venture among the Partnership, Fund II-IIOW Associates, Wells Real Estate Fund VI, L.P. and Wells Real Estate Fund VII, L.P. sold the Cherokee Commons property to an unrelated third-party. The Cherokee Commons property is a retail shopping center located in Cherokee County, Georgia. This sale resulted in a gain of approximately $1,725,000 and yielded net proceeds of $8,434,089, of which approximately $384,000 and $1,876,000, respectively, were allocated to the Partnership.

ITEM 3.    LEGAL PROCEEDINGS

There were no material pending legal proceedings or proceedings known to be contemplated by governmental authorities involving the Partnership during the fourth quarter of 2002.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the Limited Partners during the fourth quarter of 2002.

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PART II

ITEM 5.    MARKET FOR PARTNERSHIP’S UNITS AND RELATED SECURITY HOLDER MATTERS

As of February 28, 2003, the Partnership had 98,716 outstanding Class A Units held by a total of 3,513 Limited Partners and 42,568 outstanding Class B Units held by a total of 889 Limited Partners. The capital contribution per unit was $250. There is no established public trading market for the Partnership’s limited partnership units, and it is not anticipated that a public trading market for the units will develop. Under the Partnership Agreement, the General Partners have the right to prohibit transfers of units.

Class A Unit holders are entitled to an annual 9% distribution preference over Class B Unit holders as to distributions from Cash Available for Distribution but are initially allocated none of the depreciation, amortization, cost recovery, and interest expense. These items are allocated to Class B Unit holders until their capital account balances have been reduced to zero.

Cash Available for Distribution to the Limited Partners is distributed on a quarterly basis. To date, no cash distributions have been made to Limited Partners holding Class B Units. The cash distributions made to the Limited Partners holding Class A Units during the two most recent years were as follows:

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ITEM 6.    SELECTED FINANCIAL DATA

The following sets forth a summary of selected financial data as of and for the years ended December 31, 2002, 2001, 2000, 1999, and 1998.

The following discussion and analysis should be read in conjunction with the selected financial data and the accompanying financial statements of the Partnership and notes thereto. This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, including discussion and analysis of the financial condition of the Partnership, anticipated capital expenditures required to complete certain projects, amounts of cash distributions anticipated to be distributed to limited partners in the future and certain other matters. Readers of this report should be aware that there are various factors that could cause actual results to differ materially from any forward-looking 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, leasing commissions or other capital expenditures or lease-up costs out of operating cash flows.

Gross Revenues

Gross revenues of the Partnership were $1,504,446, $3,219,730 and $2,519,779 for the years ended December 31, 2002, 2001 and 2000, respectively. The 2002 decrease from 2001 resulted primarily from the gain recognized in 2001 from the sale of Crowe’s Crossing, in addition to the loss of related rental and reimbursement revenues on a going forward basis, and a corresponding decrease in equity in income of joint ventures described below. The majority of the increase for 2001 from 2000 resulted from the recognition of the aforementioned gain, in addition to an increase in interest income earned on additional sales proceeds, and the corresponding increase in equity in income of joint ventures described below.

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Equity In Income of Joint Ventures—Operations

Gross Revenues of Joint Ventures

Gross revenues of the joint ventures in which the Partnership holds an interest decreased in 2002, as compared to 2001, primarily due to the recognition of the gain in 2001 on the sale of Cherokee Commons, in addition to the related loss of rental and reimbursement income on a going forward basis. Such gross revenues increased in 2001, as compared to 2000, primarily due to the 2001 sale of Cherokee Commons, in addition to the reduction of related current year rental and reimbursement billings, as compared to 2000.

Expenses of Joint Ventures

The expenses of the joint ventures in which the Partnership holds an interest decreased in 2002, as compared to 2001, and decreased in 2001, as compared to 2000, primarily due to the sale of Cherokee Commons in 2001.

Expenses

Expenses of the Partnership were $1,904,750, $1,477,461 and $2,289,245 for the years ended December 31, 2002, 2001 and 2000, respectively. The 2002 increase from 2001 resulted primarily from increased legal costs related to litigation mentioned in Note 6 to the Partnership’s financial statements included with this report and an increase in administrative salaries, partially offset by a reduction in operating costs due to the sale of Crowe’s Crossing. The 2001 decrease from 2000 resulted primarily from the sale of Crowe’s Crossing in January 2001, which resulted in proportional reductions of depreciation, operating expenses and management and leasing fees.

As a result, net (loss) income of the Partnership was $(410,907), $1,734,777 and $208,078 for the years ended December 31, 2002, 2001 and 2000, respectively.

Cash Flows From Operating Activities

Net cash flows provided by operating activities was $455,348, $562,623 and $922,523 for 2002, 2001 and 2000, respectively. The 2002 decrease from 2001, and the 2001 decrease from 2000, resulted primarily from the sale of Crowe’s Crossing in January 2001.

Cash Flows From Investing Activities

Net cash flows provided by investing activities was $2,199,048, $6,895,309, and $1,101,144 for 2002, 2001, and 2000, respectively. The 2002 decrease from 2001, and the 2001 increase from 2000, resulted primarily from the transfer of sales proceeds, related to the 2001 sale of Cherokee Commons from Fund I-II-IIOW-VI-VII Associates to the Partnership in 2002, compared to the receipt of sales proceeds in 2001 for the sale of Crowe’s Crossing, a wholly owned property, and the receipt of sales proceeds related to the sale of a portion of Peachtree Place, a smaller, majority owned subsidiary in 2000.

Cash Flows Used in Financing Activities

Net cash flows used in financing activities was $837,166, $1,139,120 and $1,425,236 for 2002, 2001, and 2000, respectively. The 2002 decrease from 2001, and the 2001 decrease from 2000, resulted from the decreases in cash flows provided by operating and investing activities during the corresponding accounting periods, as described above. Distributions payable to Class A limited partners declined accordingly.

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Distributions

The Partnership made distributions to the limited partners holding Class A units of $10.00, $10.16 and $14.15 per unit for the years ended December 31, 2002, 2001 and 2000, respectively. No distributions have been made to the limited partners holding Class B units.

The General Partners anticipate that distributions per unit to limited partners holding Class A Units will continue in 2003. Distributions accrued for the fourth quarter of 2002 to the Limited Partners holding Class A Units were paid in February 2003. No cash distributions were made to Limited Partners holding Class B Units.

Sales Proceeds

Rather than distributing to the limited partners, the Partnership’s share of the net proceeds generated from the sales of the Cherokee Commons property, the Crowe’s Crossing property and a portion of Peachtree Place is being held in reserve as the General Partners continue to negotiate with the owners of the other interests in Paces Pavilion, evaluate the capital needs of the existing properties in which the Partnership holds an interest, directly and through investments in joint ventures, in consideration of the best interests of the limited partners, and await the outcome of the litigation described in the “Subsequent Events” section below.

Capital Resources

The Partnership is an investment vehicle formed for the purpose of acquiring, owning and operating income-producing real properties and has invested all of its funds available for investment. Accordingly, it is unlikely that the Partnership will acquire interests in any additional properties, except potentially for the acquisition of other interests in Paces Pavilion. Other than those mentioned above, the General Partners are unaware of any specific need requiring capital resources.

Management and Leasing Fees

Wells Management Company, Inc., an affiliate of the General Partners, is entitled to compensation for the management and leasing of the Partnership’s properties owned through joint ventures equal to (a) 3% of the gross revenues for management and 3% of the gross revenues for leasing (aggregate maximum of 6%) plus a separate fee for the one-time lease-up of newly constructed properties in an amount not to exceed the fee customarily charged in arm’s-length transactions by others rendering similar services in the same geographic area for similar properties or (b) in the case of commercial properties which are leased on a long-term net basis (ten or more years), 1% of the gross revenues except for initial leasing fees equal to 3% of the gross revenues over the first five years of the lease term.

Since the third quarter of 1998, the management and leasing of Black Oak Plaza has been performed by an independent third-party property management company. The management company receives a 3% fee and the balance due to Wells Management Company, Inc. is accrued. Since Wells Management has elected to defer current receipt of its fees due from the Partnership, management and leasing fees as well as initial lease-up fees due from the Partnership and with respect to the Partnership’s interest in joint ventures owning properties are currently being expensed but not paid to Wells Management. As set forth above, as of December 31, 2002, deferred property management and leasing fees totaling $2,731,594 were due to Wells Management, of which $102,745 was accrued for fiscal year 2002.

Administration Reimbursements

Wells Capital, Inc. and its affiliates perform certain administrative services for the Partnership, such as accounting and other partnership administration, and incurs the related expenses. Such expenses are

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allocated among the various Wells Real Estate Funds based on time spent on each fund by individual administrative personnel. During 2002, 2001 and 2000, the Partnership reimbursed $71,264, $71,005 and $47,374, respectively, to Wells Capital, Inc. and its affiliates for these services.

Conflicts of Interests

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

(e)    Inflation

The real estate market has not been affected significantly by inflation in the past three years due to the relatively low inflation rate. However, there are provisions in the majority of tenant leases, which would protect the Partnership from the impact of inflation. These provisions include reimbursement billings for operating expense pass-through charges, real estate tax and insurance reimbursements on a per square foot basis, or in some cases, annual reimbursement of operating expenses above a certain per square foot allowance. However, due to the long-term nature of the leases, the leases may not re-set frequently enough to cover inflation.

(f)    Application of Critical Accounting Policies

The Partnership’s accounting policies have been established to conform with GAAP. The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If management’s judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied; thus, resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact comparability of the Partnership’s results of operations to those of companies in similar businesses.

Below is a discussion of the accounting policies that management considers to be critical in that they may require complex judgment in their application or require estimates about matters that are inherently uncertain. Additional discussion of accounting policies that management considers to be significant, including further discussion of the critical accounting policies described below, is presented in Note 1 to the Partnership’s financial statements included in this report.

Investment in Real Estate Assets

The Partnership’s management is required to make subjective assessments as to the useful lives of its depreciable assets. The Partnership considers the period of future benefit of the asset to determine the appropriate useful lives. These assessments have a direct impact on net income. The estimated useful lives of the Partnership’s assets by class are as follows:

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In the event that management uses inappropriate useful lives or methods for depreciation, the Partnership’s net income would be misstated.

Valuation of Real Estate Assets

Management continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate assets in which the Partnership has an ownership interest, either directly or through investments in joint ventures, may not be recoverable. When indicators of potential impairment are present which indicate that the carrying amounts of real estate assets may not be recoverable, management assesses the recoverability of the real estate assets by determining whether the carrying value of the real estate assets will be recovered through the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying value, management adjusts the real estate assets to the fair value and recognizes an impairment loss. Management has determined that there has been no impairment in the carrying value of real estate assets held by the Partnership at December 31, 2002 and 2001.

Projections of expected future cash flows requires management to estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, discount rates, the number of months it takes to re-lease the property, and the number of years the property is held for investment. The use of inappropriate assumptions in the future cash flow analysis would result in an incorrect assessment of the property’s future cash flows and fair value, and could result in the overstatement of the carrying value of real estate assets held by the joint ventures and net income of the Partnership.

(g)    Subsequent Events

On January 17, 2003, the Partnership was served with a putative class action by a limited partner holding Class B units, on behalf of all limited partners holding Class B units as of January 15, 2003, that seeks equitable relief with regard to the rights and obligations of all the Partnership’s limited partners and general partners under the Partnership Agreement. This litigation was filed in the Superior Court of Gwinnett County, Georgia (Rev Johnston v. Wells Real Estate Fund I, Civil Action No. 03-A00525-6) (the “Johnston Action”). The plaintiff in the Johnston Action generally alleges that the terms of the Partnership Agreement, as it relates to the allocation and distribution of net sale proceeds, are inconsistent with the original intent of the parties. The plaintiff alleges that the original intent was that limited partners holding Class B units would have a priority in payment of cash distributions of net sale proceeds to bring them even with the amount of cash distributions previously made to limited partners holding Class A units. The Johnston Action seeks, among other things, to have the Partnership’s Partnership Agreement equitably reformed consistent with the alleged original intent or, in the alternative, to have the investments made by limited partners holding Class B units equitably rescinded, and requests an injunction prohibiting the general partners of the Partnership from distributing net sales proceeds until the resolution of the action. The Partnership filed a motion requesting the court to compel arbitration of all claims alleged in the Johnston Action and to dismiss the Johnston Action or, in the alternative, to stay the Johnston Action pending the arbitration. In response, the plaintiff filed a motion to stay arbitration and deny the Partnership’s motion to compel arbitration.

See Item 2—“Heritage Place” for a description of the contract to sell the retail shopping center portion of Heritage Place entered into on January 23, 2003.

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ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Since the Partnership does not borrow any money or make any foreign investments, it is not subject to risks relating to interest rate or foreign currency exchange rate fluctuations.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Financial Statements of the Registrant and supplementary data are detailed under Item 15(a) and filed as part of the report on the pages indicated.

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

There were no disagreements with the Partnership’s independent public accountants during the two years ended December 31, 2002.

On May 16, 2002, the general partners dismissed Arthur Andersen LLP (Andersen) as the Partnership’s independent public accountants effective immediately.

Andersen’s reports on the financial statements of the Partnership for the year ended December 31, 2001 and 2000 did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.

During the years ended December 31, 2001 and 2000 and through the date of Andersen’s dismissal, there were no disagreements with Andersen on any matter of accounting principle or practice, financial statement disclosure, or auditing scope or procedure which, if not resolved to Andersen’s satisfaction, would have caused Andersen to make reference to the subject matter in connection with its report on the financial statements of the Partnership for such year and there were no reportable events as set forth in Item 304(a)(1)(v) of Regulation S-K.

On July 3, 2002, the Partnership engaged Ernst & Young, LLP (Ernst & Young) to audit the financial statements of the Partnership, effective immediately. During the fiscal year ended December 31, 2001, and through the date of appointment of Ernst & Young as the Partnership’s independent public accountants, the Partnership did not consult Ernst & Young with respect to the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the financial statements of the Partnership, or any other matters or reportable events as set forth in Items 304(a)(2)(i) and (ii) of Regulation S-K.

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PART III

ITEM 10.    GENERAL PARTNERS OF THE PARTNERSHIP

Wells Capital, Inc.

Wells Capital, Inc. (“Wells Capital”) was formed in April 1984. The executive offices of Wells Capital are located at 6200 The Corners Parkway, Norcross, Georgia 30092. Leo F. Wells, III is the sole Director and the President of Wells Capital.

Leo F. Wells, III.

Mr. Wells is a resident of Atlanta, Georgia, 59 years of age and holds a Bachelor of Business Administration Degree in Economics from the University of Georgia. Mr. Wells is the President, sole Director and sole shareholder of Wells Real Estate Funds, Inc., which is the parent company of Wells Capital, Wells & Associates, Inc., Wells Management Company, Inc. and Wells Investment Securities, Inc. Mr. Wells is the President and sole Director of Wells Capital. Mr. Wells is the President of Wells & Associates, Inc., a real estate brokerage and investment company formed in 1976 and incorporated in 1978, for which he serves as principal broker. Mr. Wells is also the President, sole Director and sole shareholder of Wells Real Estate Funds, Inc., the parent company of Wells Capital, and the sole Director and President of Wells Management Company, Inc., a property management company he founded in 1983. In addition, Mr. Wells is the President and Chairman of the Board of Wells Investment Securities, Inc., Wells & Associates, Inc., and Wells Management Company, Inc., which are all affiliates of the General Partners. From 1980 to February 1985, Mr. Wells served as Vice-President of Hill-Johnson, Inc., a Georgia corporation engaged in the construction business. From 1973 to 1976, he was associated with Sax Gaskin Real Estate Company, and from 1970 to 1973, he was a real estate salesman and property manager for Roy D. Warren & Company, an Atlanta real estate company.

ITEM 11.    COMPENSATION OF GENERAL PARTNERS AND AFFILIATES

No cash compensation or fees were paid to the General Partners or their affiliates during the year ended December 31, 2002 from the Partnership or with respect to the Partnership’s interests in joint ventures owning and operating properties. Due to the fact that Wells Management Company, Inc. has elected to defer the receipt of property management and leasing fees from the Partnership and with respect to the Partnership’s interests in properties owned through joint ventures, as of December 31, 2002, deferred cash compensation of approximately $2,731,594 in the aggregate, of which $2,000,915 was accrued at the Partnership level and the remainder at the joint venture level, was due to Wells Management Company, Inc. An aggregate of $102,745 in deferred property management and leasing fees were accrued for fiscal year 2002, of which $49,458 were accrued at the Partnership level and the remainder at the joint venture level.

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The following table summarizes the compensation and fees to the General Partners and their affiliates during the year ended December 31, 2002:

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

No Limited Partner is known by the Partnership to own beneficially more than 5% of the outstanding units of the Partnership.

Set forth below is the security ownership of management as of February 28, 2003.

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

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The following are compensation and fees paid or to be paid by the Partnership to the General Partners and their affiliates in connection with the operation of the Partnership.

Interest in Partnership Cash Flow and Net Sale Proceeds

The General Partners are entitled to receive a subordinated participation in net cash flow from operations equal to 10% of net cash flow after the Limited Partners have received preferential distributions equal to 9% of their adjusted capital accounts in each fiscal year. In addition, after the Limited Partners receive their distributions equal to 9% of their capital contributions and the General Partners receive their distributions equal to 10% of the total distributions for such year, the General Partners will receive a participation of 10% of the additional distributions from cash available for distribution, 9% of which is to be paid to the General Partners as a Partnership Management Fee. The General Partners will also receive a participation in net sale proceeds and net financing proceeds equal to 15% of the residual proceeds available for distribution after the Limited Partners have received a return of their adjusted capital contributions plus a 15% cumulative return on their adjusted capital contributions. The General Partners received no distributions of cash flow or net sale proceeds from the Partnership during 2002.

15

Property Management and Leasing Fees

Wells Management Company, Inc., an affiliate of the General Partners, is entitled to compensation for the management and leasing of the Partnership’s properties owned through joint ventures equal to 6% (3% management and 3% leasing) of rental income. In no event will such fees exceed the sum of (i) 6% of the gross receipts of each property, plus (ii) a separate one-time fee for initial rent-up or leasing-up of development properties in an amount not to exceed the fee customarily charged in arm’s-length transactions by others rendering similar services in the same geographic area for similar properties. With respect to properties leased on a net lease basis for a period of ten years or longer, property management fees will not exceed 1% of gross revenues from such leases, plus a one-time initial leasing fee of 3% of the gross revenues which are payable over the first five years of the term of such net leases. Since the third quarter of 1998, the management and leasing of Black Oak Plaza has been performed by an independent third-party property management company. The management company receives a 3% fee and the balance due to Wells Management Company, Inc. is accrued. Since Wells Management Company, Inc. has elected to defer current receipt of its fees due from the Partnership, management and leasing fees as well as initial lease-up fees due from the Partnership and with respect to the Partnership’s interest in joint ventures owning properties are currently being expensed but not paid to Wells Management Company, Inc. As set forth above, as of December 31, 2002, deferred property management and leasing fees totaling $2,731,594 were due to Wells Management Company, Inc., of which $102,745 was accrued for fiscal year 2002.

Real Estate Commissions

In connection with the sale of Partnership properties, the General Partners or their affiliates may receive commissions not exceeding the lesser of (A) 50% of the commissions customarily charged by other brokers in arm’s-length transactions involving comparable properties in the same geographic area or (B) 3% of the gross sales price of the property, and provided that payments of such commissions will be made only after Limited Partners have received prior distributions totaling 100% of their capital contributions plus a 6% cumulative return on their adjusted capital contributions. During 2002, no real estate commissions were paid to the General Partners or their affiliates.

ITEM 14.    CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report, the Partnership carried out an evaluation, under the supervision and with the participation of management of Wells Capital, Inc., the corporate General Partner of the Partnership, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of the Partnership’s disclosure controls and procedures pursuant to Rule 13a – 14 under the Securities Exchange Act of 1934. Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Partnership’s disclosure controls and procedures were effective.

There were no significant changes in the Partnership’s internal controls or other factors that could significantly affect such controls subsequent to the date of their evaluation.

(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)

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PART IV

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)

17

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

18

CERTIFICATIONS

I, Leo F. Wells, III, certify that:

19

CERTIFICATIONS

I, Douglas P. Williams, certify that:

20

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT

TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT BEEN

REGISTERED PURSUANT TO SECTION 12 OF THE ACT.

No annual report or proxy material relating to an annual or other meeting of security holders has been sent to security holders.

21

EXHIBIT INDEX

TO

2002 FORM 10-K

OF

WELLS REAL ESTATE FUND I

The following documents are filed as exhibits to this report. Those exhibits previously filed and incorporated herein by reference are identified below by an asterisk. For each such asterisked exhibit, there is shown below the description of the previous filing. Exhibits which are not required for this report are omitted.

22

23

INDEX TO FINANCIAL STATEMENTS

F-1

REPORT OF INDEPENDENT AUDITORS

The Partners

Wells Real Estate Fund I

We have audited the accompanying consolidated balance sheet of Wells Real Estate Fund I and subsidiary as of December 31, 2002 and the related consolidated statements of income (loss), partners’ equity, and cash flows for the year then ended. Our audit also included the financial statement schedule listed in the index at Item 15(a) as of December 31, 2002. These financial statements and schedule are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audit. The consolidated financial statements and schedule of Wells Real Estate Fund I and subsidiary as of December 31, 2001, and for the years ended December 31, 2001 and 2000 were audited by other auditors who have ceased operations and whose report dated January 25, 2002 expressed an unqualified opinion on those financial statements and schedule before the restatement adjustments described in Note 1.

We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the 2002 financial statements referred to above present fairly, in all material respects, the consolidated financial position of Wells Real Estate Fund I and subsidiary at December 31, 2002 and the consolidated results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related 2002 financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

As discussed above, the consolidated financial statements of Wells Real Estate Fund I and subsidiary as of December 31, 2001 and for the years ended December 31, 2001 and 2000 were audited by other auditors who have ceased operations. As described in Note 1, these financial statements have been restated. We audited the adjustments described in Note 1 that were applied to restate the 2001 and 2000 financial statements. Our procedures included (a) agreeing the amounts in the restatement adjustments columns to the corresponding accounts maintained in the underlying records of the Partnership, and (b) testing the application of the adjustments to the previously reported amounts. In our opinion, such adjustments are appropriate and have been properly applied. However, we were not engaged to audit, review, or apply any procedures to the 2001 and 2000 financial statements of Wells Real Estate Fund I and subsidiary other than with respect to such restatement adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2001 and 2000 financial statements taken as a whole.

/s/Ernst & Young LLP

Atlanta, Georgia

January 24, 2003

F-2

(The following is a copy of the audit report previously issued by Arthur Andersen LLP in connection with the financial statements of Wells Real Estate Fund I for the fiscal year ended December 31, 2001 included in the previous year’s Form 10-K filing. This audit report has not been reissued by Arthur Andersen in connection with the filing of this form 10-K for the fiscal year ended December 31, 2002.)

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Fund I and Subsidiary:

We have audited the accompanying consolidated balance sheets of WELLS REAL ESTATE FUND I (a Georgia limited partnership) AND SUBSIDIARY as of December 31, 2001 and 2000 and the related consolidated statements of income (loss), partners’ capital, and cash flows for each of the three years in the period ended December 31, 2001. These financial statements and the schedule referred to below are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements and the schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and schedule are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Wells Real Estate Fund I and subsidiary as of December 31, 2001 and 2000 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States.

Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. Schedule III—Real Estate Investments and Accumulated Depreciation as of December 31, 2001 is presented for purposes of complying with the Securities and Exchange Commission’s rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fairly states, in all material respects, the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Atlanta, Georgia

January 25, 2002

F-3

WELLS REAL ESTATE FUND I AND SUBSIDIARY

(A Georgia Public Limited Partnership)

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2002 AND 2001

See accompanying notes.

F-4

WELLS REAL ESTATE FUND I AND SUBSIDIARY

(A Georgia Public Limited Partnership)

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31, 2002, 2001, AND 2000

See accompanying notes.

F-5

WELLS REAL ESTATE FUND I AND SUBSIDIARY

(A Georgia Public Limited Partnership)

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2002, 2001, AND 2000

See accompanying notes.

F-6

WELLS REAL ESTATE FUND I AND SUBSIDIARY

(A Georgia Public Limited Partnership)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2002, 2001, AND 2000