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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

[Fee Required]

For the fiscal year ended December 31, 2002 or

[No Fee Required]

For the transition period from                                                   to                                                  

Commission file number 0-20103

WELLS REAL ESTATE FUND IV, L. P.

(Exact name of registrant as specified in its charter)

CLASS A UNIT

(Title of Class)

CLASS B UNIT

(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 non-affiliates: Not Applicable

PART I

ITEM 1.    BUSINESS

General

Wells Real Estate Fund IV, L.P. (the “Partnership”) is a Georgia public limited partnership with Leo F. Wells, III and Wells Partners, L.P. (“Wells Partners”), a Georgia non-public limited partnership, serving as the General Partners. The Partnership was formed on October 25, 1990, 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) 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 partner unit has equal voting rights, regardless of class.

On March 4, 1991, the Partnership commenced an offering of up to $25,000,000 of Class A or Class B limited partnership units ($10.00 per unit) pursuant to a Registration Statement filed on Form S-11 under the Securities Act of 1933. The Partnership did not commence active operations until it received and accepted subscriptions for 125,000 units on May 13, 1991. The offering was terminated on February 29, 1992 at which time the Partnership had sold approximately 1,322,909 Class A units and 38,551 Class B units representing capital contributions of $13,614,652 from investors who were admitted to the Partnership as limited partners. From the original funds raised, the Partnership has invested a total of $11,188,611 in properties, paid $748,805 in acquisition and advisory fees, and paid $1,767,236 in selling commission and organization and offering expenses.

Employees

The Partnership has no direct employees. The employees of Wells Capital Inc., the general partner of Wells Partners, 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 fiscal year ended December 31, 2002.

Insurance

Wells Management Company, Inc. carries comprehensive liability and extended coverage with respect to all 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.

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ITEM 2.    PROPERTIES

The Partnership owns interests in all of its real estate assets through joint ventures with other Wells Real Estate Funds. As of December 31, 2002, the Partnership owned interests in the following four properties through the affiliated joint ventures listed below:

The Partnership does not have control over the operations of the joint ventures; however, it does exercise significant influence. Accordingly, the Partnership accounts for its investments in joint ventures using the equity method of accounting.

As of December 31, 2001 the lease expirations scheduled during each of the following ten years for all properties in which the Partnership owned an interest through the joint ventures described above assuming no exercise of renewal options or termination rights, are summarized below:

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

Fund III—IV Associates

On March 27, 1991, the Partnership and Wells Fund III, a public limited partnership affiliated with the Partnership through common general partners formed Fund III-IV Associates. The investment objectives of Wells Fund III are substantially identical to those of the Partnership. As of December 31, 2002, the Partnership had contributed $6,415,731 and Wells Fund III had contributed $8,375,551 to Fund III-IV Associates for equity interests of 43% and 57%, respectively. The Partnership owns interests in the following two properties through Fund III-IV Associates.

Stockbridge Village Shopping Center

On April 4, 1991, Fund III-IV Associates purchased 13.62 acres of real property located in Clayton County, Georgia for the purchase price of $3,057,729, including acquisition costs, for the purpose of developing, constructing and operating a shopping center known as the Stockbridge Village Shopping Center. The multi-tenant shopping center contains approximately 112,891 square feet, of which approximately 63,986 square feet are occupied by the Kroger Company, a retail grocery chain. Kroger is the only tenant in occupancy of more than ten percent of the rentable square feet of this property. The Kroger lease is for an initial term of 20 years, commencing November 14, 1991, with an option to extend for four consecutive five year periods at the same rental rate as the original lease. The annual base rent payable under the Kroger lease $492,692. The remaining 48,794 square feet are comprised of 16 separate retail spaces and 3 free-standing retail buildings. As of December 31, 2002, the Partnership had contributed a total of $4,574,247 and Wells Fund IV had contributed a total of $5,114,502 to fund the total costs of $9,688,749 related to the acquisition and development of the Stockbridge Village Shopping Center.

The average effective annual rental rate per square foot was $11.32 for 2002, $11.82 for 2001, $11.29 for 2000, $11.23 for 1999, and $10.82 for 1998.

Reciprocal Group Building

The Reciprocal Group Building is a two-story office building containing approximately 43,000 square feet located in Richmond, Virginia, which was acquired by Fund III-IV Associates on July 1, 1992, for $4,689,106 including acquisition and closing costs. As of December 31, 2002, the Partnership had contributed $1,301,229 and Wells Fund III had contributed $3,783,304 to Fund III-IV Associates for the acquisition of the Reciprocal Group Building.

General Electric, the previous tenant, elected not to renew its lease at the Reciprocal Group Building, which expired March 31, 2000. Management leased 100% of this building to the Reciprocal Group on October 4, 2000 for a term of eight years, with rent commencing in February 2001. The total cost of refurbishments, tenant improvements and building maintenance was $1,407,002. These costs were funded out of cash from operations of the Partnership and Wells Fund IV, which caused a substantial reduction in distributions paid to the Partnership from Fund III-IV Associates and, consequently, distributions payable from the Partnership to the Limited Partners in 2000. The Partnership funded $570,914 of these improvements, which were fully funded as of December 31, 2001.

The average effective annual rental rate per square foot was $13.45 for 2002, $12.33 for 2001, $3.07 for 2000 and $12.27 for 1999 and 1998.

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Fund IV—V Associates

On April 14, 1992, the Partnership and Wells Real Estate Fund V, L.P. (“Wells Fund V”), a Georgia public limited partnership affiliated with the Partnership through common general partners, formed Fund IV-V Associates. The investment objectives of Wells Fund V are substantially identical to those of the Partnership. As of December 31, 2002, the Partnership and Wells Fund V had contributed approximately $4,837,041 and $8,032,509 to Fund IV-V Associates for equity interests of approximately 38% and 62%, respectively.

The Partnership owns interests in the following two properties through Fund IV-V Associates:

IBM Jacksonville Building

On June 8, 1992, Fund IV- V Associates acquired 5.676 acres of real property located in Jacksonville, Florida at a purchase price of $1,360,000 for the purpose of developing, constructing, and operating a four-story office building containing approximately 87,600 square feet (the “IBM Jacksonville Building”). As of December 31, 2002, the Partnership contributed $3,479,750 and Wells Fund V contributed $5,000,116 to Fund IV- V Associates to fund the acquisition and development of the IBM Jacksonville Building.

The IBM Jacksonville Building is leased primarily by International Business Machines Corporation (“IBM”), a computer sales and service corporation. The initial term of the IBM lease for 62,406 square feet is 9 years and 11 months and commenced upon completion of the building in June 1993, with an option to extend the initial lease for two consecutive five-year periods. The annual base rent payable under the IBM lease during the initial term is $1,122,478. IBM is also required to pay additional rent equal to its share of operating expenses during the lease term.

The IBM lease will expire on April 30, 2003. IBM has informed Fund IV-V Associates that it will not exercise the first option to extend the lease term at that time. Annual revenues are estimated to be reduced by approximately $1,275,000 when this space becomes vacant on April 30, 2003. Management is actively marketing the property to prospective tenants. In connection therewith, management has undertaken a renovation project for the common areas, including the lobbies and corridors, in an effort to make the building attractive to prospective tenants.

The average effective annual rental per square foot at the Jacksonville Building was $12.72 for 2002, $17.49 for 2001, $16.46 for 2000, $16.80 for 1999, and $16.69 for 1998.

Village Overlook Property

On September 14, 1992, Fund IV- V Associates acquired 2.655 acres of real property in Stockbridge, Georgia for $440,000 for the purpose of constructing two substantially identical two-story office buildings containing approximately 17,847 rentable square feet each (the “Village Overlook Property”). As of December 31, 2002, the Partnership had contributed $1,357,291 and Wells Fund V had contributed $3,032,393 to Fund IV- V Associates for the acquisition and development of the Village Overlook Property.

The average effective annual rental per square foot was $18.86 for 2002, $16.51 for 2001, $15.90 for 2000, $12.75 for 1999, and $13.46 for 1998.

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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.

(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)

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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 1,322,909 outstanding Class A Units held by a total of 1,263 Limited Partners and 38,551 outstanding Class B Units held by a total of 20 Limited Partners. The capital contribution per unit is $10.00. 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.

Because fiduciaries of retirement plans subject to ERISA are required to determine the value of the assets of such retirement plans on an annual basis, the General Partners are required under the Partnership Agreement to report estimated Unit values to the Limited Partners each year in the Partnership’s annual Form 10-K. The methodology to be utilized for determining such estimated Unit values under the Partnership Agreement requires the General Partners to estimate the amount a Unit holder would receive if the Partnership’s properties were sold at their estimated fair market values as of the end of the Partnership’s fiscal year and the proceeds therefrom (without reduction for selling expenses) were distributed to the Limited Partners in liquidation of the Partnership. Utilizing this methodology, the General Partners have estimated Unit valuations, based upon their estimates of property values as of December 31, 2002, to be approximately $9.06 per Class A Unit and $9.06 per Class B Unit, based upon market conditions existing in early December 2002. In connection with these estimated valuations, the General Partners obtained an opinion from David L. Beal Company, an independent MAI appraiser, to the effect that such estimates of value were reasonable; however, due to the inordinate expense involved in obtaining appraisals for all of the Partnership’s properties, no actual appraisals were obtained. Accordingly, these estimates should not be viewed as an accurate reflection of the values of the Limited Partners’ Units, what a Limited Partner might be able to sell his Units for, or the fair market value of the Partnership’s properties, nor do they represent the amount of net proceeds Limited Partners would receive if the Partnership’s properties were sold and the proceeds distributed in a liquidation of the Partnership. The valuations performed by the General Partners are estimates only, and are based a number of assumptions which may not be accurate or complete. In addition, property values are subject to change and could decline in the future. Further, as set forth above, no appraisals have or will be obtained. For these reasons, the estimated Unit valuations set forth above should not be used by or relied upon by investors, other than fiduciaries of retirement plans for limited ERISA reporting purposes, as any indication of the fair market value of their Units.

Cash available for distribution to the Limited Partners is distributed on a annual basis unless Limited Partners elect to have distributions paid monthly. Under the Partnership Agreement, distributions are allocated first to the Limited Partners holding Class A Units until they have received cash distributions in each fiscal year of the Partnership equal to 10% of their adjusted capital contribution. After this preference is satisfied, the General Partners will receive an amount of Net Cash from Operations equal to one-tenth of the total amount of Net Cash from Operations distributed. Afterwards, the Limited Partners holding Class A Units will receive 90% of Net Cash from Operations, and the General Partners will receive 10%. No Net Cash from Operations will be distributed to Limited Partners holding Class B Units. Cash distributions made to the Limited Partners holding Class A Units for the two most recent fiscal years were as follows:

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The fourth quarter distribution was accrued for accounting purposes in 2002 and was paid to the limited partners holding Class A units in February 2003.

ITEM 6.    SELECTED FINANCIAL DATA

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

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(a)    Forward Looking Statements

This report contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 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 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 flow.

(b)    Results of Operations

Gross Revenues

Gross revenues of