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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, 2003

[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)

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

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Form 10-K of Wells Real Estate Fund XII, L.P. (the “Partnership”) other than historical facts may be considered 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. Such statements include, in particular, statements about our plans, strategies and prospects and are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the Securities and Exchange Commission. Neither the Partnership nor the general partners make any representations or warranties (expressed or implied) about the accuracy of any such forward-looking statements. Actual results could differ materially from any forward-looking statements contained in this Form 10-K, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Any such forward-looking statements are subject to known and unknown risks, uncertainties and other factors and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive and market conditions, all of which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual results, our ability to meet such forward-looking statements, including our ability to generate positive cash flow from operations; provide distributions to limited partners; and maintain the value of our real estate properties, may be significantly hindered. Following are some of the risks and uncertainties, although not all risks and uncertainties, which could cause actual results to differ materially from those presented in certain forward-looking statements:

General economic risks

Real estate risks

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Other operational risks

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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 its general partners (the “General Partners”). The Partnership was formed on September 15, 1998 for the purpose of acquiring, developing, constructing, owning, operating, improving, leasing and managing income-producing commercial properties for investment purposes. Upon subscription, limited partners elect to have their units treated 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 Status Units or Tax Preferred Status 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) add or 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 an offering of up to $70,000,000 of Cash Preferred or Tax Preferred 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 commenced active operations upon receiving and accepting subscriptions for 125,000 Units on June 1, 1999. The offering was terminated on March 21, 2001 at which time the Partnership had sold approximately 2,688,861 Cash Preferred Status Units and 872,258 Tax Preferred Status Units representing capital contributions of $35,611,192 from investors who were admitted to the Partnership as limited partners.

Management believes that the Partnership would ideally operate through the course of the following five key life cycle phases. The time spent in each phase is dependent upon various economic, industry, market, and other internal/external factors. Some overlap naturally exists in the transition from one phase to the next.

The period during which the Partnership is raising capital through the sale and issuance of limited partner units to the public

The period during which the Partnership invests the capital raised during the fund-raising phase, less upfront fees, into the acquisition of real estate assets

The period during which real estate assets are owned and operated by the Partnership during the initial lease terms of the tenants

The period during which the leases in place at the time of acquisition expire and, thus, the Partnership expends time, effort, and funds to re-lease such space to existing and/or new tenants. Following the

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holding phase, the Partnership continues to own and operate the real estate assets, evaluate various options for disposition, and market the real estate assets for sale

The period during which the Partnership sells its real estate investments and distributes net sales proceeds to the partners

Management believes that the Partnership is currently in the holding phase. Accordingly, we will focus resources on managing the Partnership’s existing portfolio and locating suitable replacement tenants for vacant space as necessary.

Cash management is a chief area of focus for the Partnership. Historically, the Partnership has not taken out borrowings from third-party lenders and, while operating cash flows and net property sales proceeds are withheld to provide for known events from time to time, the Partnership does not maintain as a general rule cash reserves for unknown events. Instead, during the holding phase, management prefers to maximize operating cash flows distributed to investors commensurate with the period earned; however, it is likely that, during the positioning-for-sale phase, the Partnership will be required to use cash flow from operations and/or net sale proceeds from the sale of the Partnership’s properties, which would otherwise be available for distribution to limited partners, to fund tenant improvements, leasing commissions and other leasing costs associated with the re-leasing of the Partnership’s properties. The Partnership’s cash needs evolve during the course of its life cycle and, accordingly, volatility in operating returns is a natural and expected part of the process.

Employees

The Partnership has no direct employees. The employees of Wells Capital, Inc. (“Wells Capital”), the general partner of Wells Partners, and Wells Management Company, Inc. (“Wells Management”), an affiliate of the General Partners, 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, 2003.

Insurance

Wells Management carries comprehensive liability and extended coverage with respect to 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 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.

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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. During the periods presented, the Partnership owned interests in the following seven properties through the affiliated joint ventures listed below (the “Joint Ventures”):

Each of the aforementioned properties was acquired on an all-cash basis. The investment objectives of each of the joint venture partners listed in the above table are substantially identical to those of the Partnership. The Partnership does not have control over the operations of the Joint Ventures; however, it does exercise significant influence. Accordingly, investments in Joint Ventures are recorded using the equity method of accounting.

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As of December 31, 2003, the lease expirations scheduled during each of the following ten years for all properties in which the Partnership held an interest through the Joint Ventures, assuming no exercise of renewal options or termination rights, are summarized below:

Additional information about the Joint Ventures and properties in which the Partnership owns interests during the periods presented is provided below:

Fund XI-XII-REIT Associates

On June 21, 1999, the Wells Fund XI-REIT Joint Venture (“Fund XI-REIT Associates”), a joint venture between Wells Real Estate Fund XI, L.P. and Wells Operating Partnership, L.P., was amended and restated to admit the Partnership and became known as Fund XI-XII-REIT Associates. As of December 31, 2003, the Partnership, Wells Real Estate Fund XI, L.P., and Wells Operating Partnership, L.P. owned equity interests of approximately 17%, 26%, and 57%, respectively, in the following four properties based on their respective cumulative capital contributions to Fund XI-XII-REIT Associates:

111 Southchase Boulevard

On May 18, 1999, Fund XI-XII-REIT Associates purchased 111 Southchase Boulevard, a manufacturing and office building located in Fountain Inn, unincorporated Greenville County, South Carolina.

111 Southchase Boulevard is a manufacturing building including approximately 169,000 rentable square feet, comprised of approximately 141,000 square feet of manufacturing space, 25,000 square feet of two-story office space, and 3,000 square feet of cafeteria/training space. The entire 169,000 rentable square feet of 111 Southchase Boulevard was under lease with EYBL CarTex, Inc. (“EYBL CarTex”), a South Carolina corporation, for ten years commencing on March 1, 1998. EYBL CarTex had the right to extend the lease for two additional five-year periods. The annual rent payable was $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 of 111 Southchase Boulevard vacated 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

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Associates is currently pursuing legal actions to collect the delinquent rent due under this lease, while actively seeking prospective tenants and marketing the property for re-leasing. Rental revenue reductions associated with the vacant space approximate $650,000 annually.

The average effective annual rental rate per square foot at 111 Southchase Boulevard was $0.00 for 2003, $3.29 for 2002, and $3.31 for 2001, 2000, and 1999.

Sprint Building

On July 2, 1999, the Fund XI-XII-REIT Associates acquired the Sprint Building, a three-story office building including approximately 68,900 rentable square feet on a 7.12-acre tract of land located in Leawood, Johnson County, Kansas.

The entire rentable area of the Sprint Building is currently under a net lease with Sprint Communications, Inc. (“Sprint”) for an initial term of ten years, which commenced on May 19, 1997 and expires on May 18, 2007. 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.

On August 19, 2003, Sprint notified Fund XI-XII-REIT Associates of its intention to exercise an early termination option under its lease; accordingly, Sprint is expected to vacate the building on or before May 18, 2004. Under the terms of the lease, Sprint is required to pay Fund XI-XII-REIT Associates a termination payment equal to $6.53 per square foot, or $450,199, upon vacating the premises.

The average effective annual rental rate per square foot at the Sprint Building was $15.45 for 2003, $15.45 for 2002 and 2001, and $15.44 for 2000 and 1999.

Johnson Matthey Building

On August 17, 1999, Fund XI-XII-REIT Associates acquired the Johnson Matthey Building, an office and warehouse building located in Chester County, Pennsylvania.

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, which commenced on July 1, 1998 and will expire on June 30, 2007. The annual base rent payable under the Johnson Matthey lease for the remainder of the lease term is as follows: year seven—$874,250, year eight—$897,000, year nine—$916,500, and year ten—$939,250. 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 desire 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.

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The average effective annual rental rate per square foot at the Johnson Matthey Building was $6.65 for 2003, $6.77 for 2002, and $6.67 for 2001, 2000, and 1999.

Gartner Building

On September 20, 1999, 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 Myers, Lee County, Florida.

The entire rentable area of the Gartner Building is currently under a net lease agreement with Gartner. 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 under the Gartner Lease is $830,668 through January 2003, increased by 2.5% annually through the remainder of the lease term.

The average effective annual rental rate per square foot at the Gartner Building was $13.68 for 2003, $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, Fund XII-REIT Associates was created for the purpose of acquiring owning, leasing, operating and managing real properties. As of December 31, 2003, the Partnership and Wells Operating Partnership, L.P. owned equity interests of approximately 45% and 55%, respectively, in the following three properties based on their respective cumulative capital contributions to Fund XII-REIT Associates:

Siemens Building

On May 10, 2000, Fund XII-REIT Associates purchased the Siemens Building, a three-story office building containing approximately 77,000 rentable square feet on an approximate 5.3-acre tract of land located in Troy, Oakland County, Michigan.

The entire Siemens Building is currently under a net lease agreement with Siemens Automotive Corporation (“Siemens”), which expires on 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 90th month of the term (June 2007) upon (a) providing written notice of such cancellation on or before the last day of the 78th month (June 2006) and (b) paying a cancellation fee to Fund XII-REIT Associates equal to the amount of unamortized cost of brokerage commissions paid by the landlord, plus the amount of unamortized landlord-funded tenant improvements constructed as of the cancellation date.

The average effective annual rental rate per square foot at the Siemens Building was $19.05 for 2003, $18.68 for 2002, and $19.01 for 2001 and 2000, the first year of ownership.

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AT&T Oklahoma Building

On December 28, 2000, Fund XII-REIT Associates purchased the AT&T Oklahoma Building, a one-story office building and a two-story office building containing an aggregate of approximately 128,500 rentable square feet on an approximate 11.34-acre tract of land located in Oklahoma City, Oklahoma County.

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 in equal monthly installments during 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. AT&T has a right of first offer to lease the space currently occupied by Jordan Associates, Inc. (“Jordan”) should Jordan decide to vacate the premises.

Jordan currently occupies the 25,000 rentable square feet within the one-story office building under a net lease agreement. The initial term of the Jordan lease commenced on April 1, 1998 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 in equal monthly installments during the initial lease term of the Jordan lease as follows: Months 1 to 60–$294,500 and months 61 to 120–$332,000.

The average effective annual rental rate per square foot at the AT&T Oklahoma Building was $12.61 for 2003, $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 201,000 rentable square feet on an approximate 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 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 for 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 $12.46 for 2003, $12.44 for 2002, and $12.47 for 2001, the first year of ownership.

There were no material pending legal proceedings or proceedings known to be contemplated by governmental authorities involving the Partnership during the fourth quarter of 2003.

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No matters were submitted to a vote of the limited partners during the fourth quarter of 2003.

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 Status Units and 872,258 Tax Preferred Status Units held by a total of 1,227 and 106 limited partners, respectively. As of February 15, 2004, the Partnership had 2,924,050 outstanding Cash Preferred Status Units held by a total of 1,240 limited partners and 637,069 outstanding Tax Preferred Status Units held by a total of 115 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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Limited partners holding Cash Preferred Status Units 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 Status 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 Status Units. Holders of Cash Preferred Status 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 limited partners holding Tax Preferred Status Units, until their capital account balances have been reduced to zero. No distributions have been made to limited partners holding Tax Preferred Status Units or the General Partners as of December 31, 2003.

Cash available for distribution to the limited partners is distributed on a quarterly basis. Cash distributions made to limited partners holding Cash Preferred Status Units during 2002 and 2003 are summarized below:

The fourth quarter 2003 distribution was accrued for accounting purposes in 2003 and paid to limited partners holding Cash Preferred Status Units in February 2004. No cash distributions were paid to holders of Tax Preferred Status Units in 2003 or 2002.

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The following sets forth a summary of the selected financial data as of and for the years ended December 31, 2003, 2002, 2001, 2000, and the seven months ended December 31, 1999, the first year of operations.