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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 0-30287

WELLS REAL ESTATE FUND XII, L. P.

(Exact name of registrant as specified in its charter)

CASH PREFERRED UNITS

(Title of Class)

TAX PREFERRED 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 non-affiliates: Not Applicable

PART I

ITEM 1.    BUSINESS

General

Wells Real Estate Fund XII, L.P. (the “Partnership”) is a Georgia public limited partnership having Leo F. Wells, III and Wells Partners, L.P. (“Wells Partners”), a Georgia non-public limited partnership, as the General Partners. The Partnership was formed on September 15, 1998 for the purpose of acquiring, developing, constructing, owning, operating, improving, leasing and otherwise managing income-producing commercial properties for investment purposes. Upon subscription, limited partners elect to have their unites treat their units as Cash Preferred status units or Tax Preferred status units Thereafter, the limited partners have the right to change their prior elections to have some or all of their units treated as Cash Preferred units or Tax Preferred units one time during each quarterly accounting period. The 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, (c) remove a General Partner, (d) elect a new General Partner, (e) dissolve the Partnership, and (f) approve a sale involving all or substantially all of the Partnership’s assets, subject to certain limitations. The majority vote on any of the matters described above will bind the Partnership without the concurrence of the General Partners. Each limited partnership unit has equal voting rights regardless of class.

On March 22, 1999, the Partnership commenced a public offering of up to $70,000,000 of limited partnership units pursuant to a Registration Statement on filed Form S-11 under the Securities Act of 1933. The Partnership commenced active operations on June 1, 1999 upon receiving and accepting subscriptions for 125,000 units. The offering was terminated on March 21, 2001 at which time the Partnership had sold 2,688,861 Cash Preferred units and 872,258 Tax Preferred units for $10 per unit held by a total of 1,227 and 106 Cash Preferred and Tax Preferred limited partners, respectively. As of December 31, 2002, the Partnership had paid a total of $1,246,391 in acquisition and advisory fees and acquisition expenses, $4,451,400 in selling commissions and organization and offering expenses, and had invested $5,300,000 in Fund XI-XII-REIT Associates and $24,613,401 in Fund XII-REIT Associates.

Employees

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

Insurance

Wells Management Company, Inc., an affiliate of the General Partners, carries comprehensive liability and extended coverage with respect to all the properties owned by the Partnership through investments in the joint ventures described in Item 2. In the opinion of management, 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

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impact on the 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

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

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

As of December 31, 2002, the lease expirations schedule during each of the following ten years for all properties owned by the joint ventures described above, assuming no exercise of renewal options or termination rights, are summarized below:

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Additional information about the properties and joint ventures in which the Partnership owns interests as of December 31, 2002 is provided below:

Fund XI—XII—REIT Associates

On June 21, 1999, Fund XI-REIT Associates, a joint venture between Wells Real Estate Fund XI, L.P. (“Wells Fund XI) and Wells OP, was amended and restated to admit the Partnership as a joint venture partner. Wells Fund XI and Wells OP are affiliates of the Partnership through common general partners and have investment objectives substantially identical to those of the Partnership. Accordingly, Fund XI-REIT Associates subsequently changed its name to the Fund XI-XII-REIT Associates. Fund XI-REIT Associates had previously acquired and owned the EYBL CarTex Building located in Greenville, South Carolina (further described below). As of December 31, 2002, the Partnership, Wells Fund XI, and Well OP had contributed $5,300,000, $8,131,351, and $17,585,310 for equity interests in Fund XI-XII-REIT Associates of approximately 17%, 26%, and 57%, respectively.

Sprint Building

On July 2, 1999, the Fund XI-XII-REIT Associates acquired the Sprint Building, a three-story office building with approximately 68,900 rentable square feet on a 7.12 acre tract of land located in Leawood, Johnson County, Kansas, for a purchase price of $9,500,000, plus acquisition and closing costs of approximately $46,200. As of December 31, 2002, the Partnership had contributed $1,000,000, Wells Fund XI had contributed $3,000,000 and Wells OP had contributed $5,546,210 to the purchase of this property.

The entire rentable area of the Sprint Building is currently under a net lease agreement with Sprint Communications, Inc. (“Sprint”) dated February 14, 1997. The seller’s interest in the lease was assigned to Fund XI-XII-REIT Associates at the closing. The initial term of the lease is ten years, which commenced on May 19, 1997 and expires on May 18, 2007. Sprint has the option to extend the lease for two additional five-year periods of time. The monthly base rent payable under the lease is $83,254 through May 18, 2002 and $91,867 for the remainder of the lease term. The monthly base rent payable for each extended term of the lease will be equal to 95% of the then current market rate which is calculated as a full-service rental rate less anticipated annual operating expenses on a rentable square foot basis charged for space of comparable location, size, and conditions in comparable office buildings in the suburban south Kansas City, Missouri, and south Johnson County, Kansas areas.

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

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

The average effective annual rental per square foot at the Sprint Building was $15.45 for 2002 and 2001, and $15.44 for 2000 and 1999, the first year of ownership.

EYBL CarTex Building

On May 18, 1999, Fund XI-XII-REIT Associates purchased the EYBL CarTex Building, a manufacturing and office building located in Fountain Inn, unincorporated Greenville County, South Carolina for a purchase price of $5,085,000, plus acquisition and closing costs of approximately $37,000. The purchase cost was funded by capital contributions of $1,530,000 from the partnership and $3,591,827 from Wells OP.

The EYBL CarTex Building is a manufacturing building containing approximately 169,510 rentable square feet, comprised of approximately 140,580 square feet of manufacturing space, 25,300 square feet of two-story office space and 3,360 square feet of cafeteria/training space. An addition was constructed to the EYBL CarTex Building in 1989, which contained approximately 64,000 square feet of warehouse space.

The entire 169,510 rentable square feet of the EYBL CarTex Building has a ten year lease with EYBL CarTex, Inc., a South Carolina corporation, beginning on March 1, 1998. EYBL CarTex has the right to extend the Lease for two additional five-year periods. Each extension option must be exercised by giving notice to the landlord at least twelve months prior to the expiration date of the then current lease term. The annual rent payable is $508,530 for the first four years, $550,907 for years five and six, $593,285 for years seven and eight, and $610,236 for years nine and ten.

The sole tenant vacated the Eybl CarTex building in November 2002 and is currently in default under the terms of the lease agreement as a result of failing to pay rent beginning in December 2002. Fund XI-XII-REIT Associates is currently pursuing legal actions to collect the delinquent rent due under this lease and, concurrently, actively seeking prospective tenants and marketing the property for releasing. Rental revenue reductions associated with the vacant space approximate $650,000 annually.

The average effective annual rental per square foot at the EBYL CarTex Building was $3.29 for 2002 and $3.31 for 2001, 2000, and 1999, the first year of ownership.

Johnson Matthey Building

On August 17, 1999, the Fund XI-XII-REIT Associates acquired the Johnson Matthey Building, an office and warehouse building located in Chester County, Pennsylvania, for a purchase price of $8,000,000, plus acquisition and closing costs of approximately $60,000. The purchase of the

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building was funded by capital contributions of $1,500,000 from the Partnership, $3,494,727 from Wells Fund XI and $3,061,594 from Wells OP.

The Johnson Matthey Building, an office and warehouse building containing approximately 130,000 square-feet, was first constructed in 1973 as a multi-tenant facility and was subsequently converted into a single-tenant facility in 1998. The site consists of a ten-acre tract of land located at 434-436 Devon Park Drive in the Tredyffrin Township, Chester County, Pennsylvania.

The entire rentable area of the Johnson Matthey Building is currently leased to Johnson Matthey. The annual base rent payable under the Johnson Matthey lease for the remainder of the lease term is as follows: year three—$789,750, year four—$809,250, year five—$828,750, year six—$854,750, year seven—$874,250, year eight—$897,000, year nine—$916,500, and year ten—$939,250. The current lease term expires in June 2007. Johnson Matthey has the right to extend the lease at the same terms and conditions for one additional three-year period.

Johnson Matthey has a right of first refusal to purchase the Johnson Matthey Building in the event that the Fund XI-XII-REIT Associates desires to sell the building to an unrelated third party. Fund XI-XII-REIT Associates must give Johnson Matthey written notice of its intent to sell the Johnson Matthey Building, and Johnson Matthey will have ten days from the date of such notice to provide written notice of its intent to purchase the building. If Johnson Matthey exercises its right of first refusal, it must purchase the Johnson Matthey Building on the same terms contained in the third-party offer.

The average effective annual rental per square foot at the Johnson Matthey Building was $6.77 for 2002, and $6.67 for 2001, 2000, and 1999, the first year of ownership.

Gartner Building

On September 20, 1999, the Fund XI-XII-REIT Associates acquired the Gartner Building, a two-story office building with approximately 62,400 rentable square feet on a 4.9-acre tract of land located in Fort Meyers, Lee County, Florida for a purchase price of $8,320,000 plus acquisition and closing costs of approximately $27,600. The purchase was funded by capital contributions of $2,800,000 by the Partnership, $106,554 by Wells Fund XI and $5,441,064 by Wells OP.

The entire rentable area of the Gartner Building is currently under a net lease agreement with Gartner dated July 30, 1997 (the “Gartner Lease”). The initial term of the Gartner Lease is ten years, commencing on February 1, 1998 and expiring on January 31, 2008. Gartner has the right to extend the Gartner Lease for two additional five-year periods. The annual base rent payable for the remainder of the Gartner Lease term is $830,668 through January 2003, and will increase by 2.5% through the remainder of the lease term.

In addition, Gartner was afforded two expansion options to construct additional buildings under the Gartner Lease, neither of which were exercised and expired on April 15, 2002.

The average effective annual rental per square foot at the Gartner Building was $13.73 for 2002 and $13.68 for 2001, 2000, and 1999, the first year of ownership.

Fund XII—REIT Associates

On April 10, 2000, the Partnership and Wells OP formed Fund XII-REIT Associates for the purpose of acquiring owning, leasing, operating and managing real properties. As of December 31, 2002, the Partnership had contributed $24,613,401 for an equity interest of approximately 45%, and Wells OP had

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contributed $30,011,162 for an equity interest of approximately 55% equity interest in the Fund XII-REIT Associates.

Siemens Building

On May 10, 2000, Fund XII-REIT Associates purchased the Siemens Building, a three-story office building containing 77,054 rentable square feet on a 5.3 acre tract of land located in Troy, Oakland County, Michigan. The purchase price for the Siemens Building was $14,265,000, which was funded by capital contributions of $7,096,245 from the Partnership and $7,096,245 from Wells OP.

The entire Siemens Building is currently under a net lease agreement with Siemens Automotive Corporation (“Siemens”) that expires August 31, 2010. Siemens has the right to extend the lease for two additional five-year periods at 95% of the then current fair market rental rates.

The monthly rent payable under the Siemens lease is $117,251 for year one; $119,947 for year two; $122,644 for year three; $125,341 for year four; $128,038 for year five; $130,735 for year six; and $133,432 for year seven and the first eight months of year eight.

Siemens has a one-time right to cancel the lease effective after the 90^th month of the term upon (a) providing written notice of such cancellation on or before the last day of the 78^th month, and (b) paying a cancellation fee to Fund XII-REIT Associates equal to the amortized cost of landlord’s paid brokerage commissions, plus the landlord’s contribution as of the cancellation date, amortized at a rate of 10% per annum over a period of 126 months.

The average effective annual rental rate per square foot at the Siemens Building was $18.68 for 2002 and $19.01 for 2001 and 2000, the first year of ownership.

AT&T Oklahoma Buildings

On December 28, 2000, Fund XII-REIT Associates purchased the AT&T Oklahoma Buildings, a one-story office building and a two-story office building containing an aggregate of approximately 128,500 rentable square feet on a 11.34 acre tract of land located in Oklahoma City, Oklahoma County, Oklahoma for a purchase price of $15,300,000, plus acquisition and closing costs of approximately $28,000. The purchase of the building was funded by capital contributions of $8,591,000 by the Partnership and $6,736,554 by Wells OP.

The entire 78,500 rentable square feet of the two-story office building and 25,000 rentable square feet of the one-story office building are currently under a net lease agreement with AT&T Corporation. (“AT&T”). The AT&T lease commenced on April 1, 2000 and expires on November 30, 2010. AT&T has the right to extend the AT&T lease for two additional five-year periods at the then current fair market rental rate upon delivering written notice within 240 days prior to expiration of the lease.

Annual base rent is payable for the initial term of the AT&T lease as follows: months 1 to 35—$1,242,000, months 36 to 65—$1,293,750; months 66 to 95—$1,345,500 and months 96 to 125—$1,397,250, all payable in equal monthly installments.

AT&T has a right of first offer to lease the space currently occupied by Jordan Associates, Inc. should Jordan decide to vacates the premises.

Jordan Associates currently occupies the 25,000 rentable square feet contained in the one-story office building under a net lease agreement. The initial term of the Jordan lease commenced on April 1, 1998

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for a period of ten years. Jordan has the right to extend the lease for one five year period at the then current fair market rental rate upon delivering written notice within 240 days prior to expiration of the initial lease term.

Annual base rent is payable for the initial lease term of the Jordan lease as follows: Months 1 to 60—$294,500 and months 61 to 120—$332,000 payable in equal monthly installments.

The average effective annual rental rate per square foot at the AT&T Oklahoma Buildings was $12.46 for 2002, and $12.78 for 2001 and 2000, the first year of ownership.

The Comdata Building

On May 15, 2001, Fund XII-REIT Associates purchased the Comdata Building, a three-story office building containing approximately 201,237 rentable square feet on a 12.3-acre tract of land located at 5301 Maryland Way, Williamson County, Brentwood, Tennessee for a purchase price of $24,950,000, plus acquisition and closing costs of approximately $52,000. The purchase price was funded by capital contributions of $8,926,156 from the Partnership and $16,075,863 from Wells OP.

The entire Comdata Building is currently under a triple-net lease agreement with Comdata, a wholly owned subsidiary of Ceridian Corporation. Ceridian Corporation is the guarantor of the Comdata lease. The Comdata lease commenced on April 1, 1997 and expires on May 31, 2016. Comdata has the right to extend the lease for one additional five-year period at a rate equal to the greater of the base rent of the final year of the initial term or 90% of the then-current fair market rental rate.

Annual base rent is payable for the current term of the Comdata lease as follows: $2,398,672 for year 1; $2,458,638 for years 2-6; $2,528,605 for years 7-11; and $2,578,572 for years 12-15.

The average effective annual rental rate per square foot at the Comdata Building was $12.44 for 2002 and $12.47 for 2001, the first year of ownership.

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.

The offering for sale of Units in the Partnership terminated on March 21, 2001, at which time the Partnership had sold 2,688,861 Cash Preferred Units and 872,258 Tax Preferred Units held by a total of 1,227 and 106 Limited Partners, respectively. As of February 28, 2003, the Partnership had 2,856,396 outstanding Cash Preferred Units held by a total of 1,248 Limited Partners and 704,723 outstanding Tax Preferred Units held by a total of 94 Limited Partners. The capital contribution per unit is $10.00. There is no established public trading 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.

Pursuant to Section 15.2 of the Partnership Agreement and the Partnership’s Prospectus, the General Partners are required to prepare annual statements of estimated unit values to assist fiduciaries of retirement plans subject to the annual reporting requirements of ERISA in the preparation of their reports. Pursuant to Section 15.2 of the Partnership Agreement and the Partnership’s Prospectus, for the first three fiscal years following the termination of the offering of units in the Partnership, the estimated value of the units shall be deemed to be $10 per unit for these purposes. The basis for this valuation is the fact that the Partnership was recently engaged in a public offering of its units at the price of $10.00 per unit. However, please note that there is no public trading market for the units nor is one ever expected to develop and there can be no assurance that limited partners could receive $10 per unit if such a market did exist and they sold their units or that they will be able to receive such amount for their units in the future. In addition, the Partnership has not performed an evaluation of the Partnership properties and, therefore, this valuation is not based upon the value of the Partnership properties, nor does it represent the amount limited partners would receive if the Partnership properties were sold and the proceeds distributed to the limited partners in a liquidation of the Partnership, which amount would most likely be less than $10.00 per unit as a result of the fact that, at the time the Partnership purchased its properties, the amount of funds available for investment in properties was reduced by the 16% of offering proceeds raised by the Partnership, which are used to pay selling commissions and dealer manager fees, organization and offering expenses and acquisition and advisory fees, as described in more detail in this Annual Report and the Partnership’s Prospectus.

After the expiration of this three-year period, the General Partners are required under the Partnership Agreement to determine an estimated per unit valuation by estimating the amount a holder of Partnership units would receive if the Partnership properties were sold as of the close of the Partnership’s fiscal year at their estimated fair market values and the proceeds from such sales (without reductions for selling expenses and other costs), together with any other funds of the Partnership, were distributed in a liquidation of the Partnership. Such estimated property values will be based upon annual valuations performed by the General Partners, and no independent property appraisals will be obtained. Accordingly, these estimates, when prepared by the General Partners, 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 properties, nor will they represent the amount of net proceeds Limited Partners would receive if the Partnership properties were sold and the proceeds distributed in a liquidation of the Partnership. The valuations to be performed by the General Partners will be estimates only, and will be based a number of assumptions which may not be accurate or complete. In addition, property values are subject to change and could decline after the date of the valuations.

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Cash Preferred Status Limited Partners are entitled to a distribution from Net Cash From Operations, as defined in the Partnership Agreement to mean cash flow, less adequate cash reserves for other obligations of the Partnership for which there is no provision, on a per unit basis until they have received distributions in each fiscal year of the Partnership equal to 10% of their adjusted capital contributions. After this preference is satisfied, the General Partners will receive an amount of Net Cash From Operations equal to 10% of the total amount of Net Cash From Operations distributed. Thereafter, the Limited Partners holding Cash Preferred 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 Tax Preferred Units. Holders of Cash Preferred Units will, except in limited circumstances, be allocated none of the Partnership’s net loss, depreciation and amortization deductions. These deductions will be allocated to the Tax Preferred Units, until their capital account balances have been reduced to zero. No distributions have been made to the Tax Preferred Status Limited Partners or the General Partners as of December 31, 2002.

Cash available for distribution to the Limited Partners is distributed on a quarterly basis unless Limited Partners elect to have their cash distributed monthly. Cash distributions made to Cash Preferred Status Limited Partners during 2002 and 2001 were as follows:

The fourth quarter distribution was accrued for accounting purposes in 2002 and paid to Limited Partners in February 2003.

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ITEM 6.    SELECTED FINANCIAL DATA

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