WELLS MID-HORIZON VALUE-ADDED FUND I LLC - FORM 10-Q - May 15, 2014

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________ 
FORM 10-Q
__________________________________ 
(Mark One)
 
x
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the quarterly period ended March 31, 2014 or
 
 
o
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the transition period from _____________ to _____________

Commission file number 000-53626
__________________________________ 
WELLS MID-HORIZON VALUE-ADDED FUND I, LLC
(Exact name of registrant as specified in its charter)
__________________________________ 

Georgia
 
20-3192853
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification Number)
 
 
6200 The Corners Pkwy.
Norcross, Georgia
 
30092-3365
(Address of principal executive offices)
 
(Zip Code)
 
 
Registrant's telephone number, including area code
 
(770) 449-7800
N/A
(Former name, former address, and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated file," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
o (Do not check if a smaller reporting company)
Smaller reporting company
x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o    No  x
As of April 30, 2014, there were 51,854 shares of investor member interests outstanding.


 
 
 
 
 


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Form 10-Q of Wells Mid-Horizon Value-Added Fund I, LLC ("Wells VAF I," "we," "our," or "us") other than historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). 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," "would," "could," "expect," "intend," "plan," "anticipate," "estimate," "believe," "continue," or other similar words. Specifically, we consider, among others, statements concerning future operating results and cash flows, our ability to meet future obligations, and the amount and timing of any future distributions to investor members to be forward-looking statements. 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 ("SEC"). We make no representations or warranties (express or implied) about the accuracy of any such forward-looking statements contained in this Form 10-Q, 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 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 members, and maintain the value of our remaining real estate property, may be significantly hindered.
The following are some of the risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements:
•
Although we currently have no outstanding loan obligations, we may utilize debt financing from third parties to fund re-leasing costs, capital expenditures, and operating costs of the portfolio. If we do incur additional debt, our cash from operations would be needed to make debt service payments and, as a result, cash available for engaging in value-enhancing strategies would be reduced.
•
The current economic conditions and their impact on office market conditions has required that we extend our fund life longer than originally projected in order to achieve better disposition pricing for our investor members and we can provide no guarantee as to when investor members may be able to obtain liquidity.
•
Real estate investments are subject to general downturns in the economy as well as downturns in specific geographic areas. We cannot predict what the occupancy level will be in a particular building or that any tenant will remain solvent. We depend on tenants for our revenue and, accordingly, our revenue is dependent upon the success and economic viability of our current and future tenants.
•
The management and other key personnel of our manager, whose services are essential to Wells VAF I, will face a conflict in allocating their time and other resources between Wells VAF I and the other Wells real estate programs and activities in which they are involved. Failure of our manager to devote sufficient time or resources to our operations could result in reduced returns to our members.
•
We will pay certain prescribed fees to our manager and its affiliates regardless of the quality of services provided.



2

WELLS MID-HORIZON VALUE-ADDED FUND I, LLC
TABLE OF CONTENTS
 
 
  
 
 
Page No.
 
 
 
 
 
 
PART I.
  
 
 
 
 
 
 
 
 
 
  
Item 1.
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
  
Item 2.
 
 
 
 
 
 
 
 
  
Item 3.
 
 
 
 
 
 
 
 
  
Item 4.
 
 
 
 
 
 
 
PART II.
  
 
 
 
 
 
 
 
 
 
  
Item 1.
 
 
 
 
 
 
 
 
  
Item 1A.
 
 
 
 
 
 
 
 
  
Item 2.
 
 
 
 
 
 
 
 
  
Item 3.
 
 
 
 
 
 
 
 
  
Item 4.
 
 
 
 
 
 
 
 
  
Item 5.
 
 
 
 
 
 
 
 
  
Item 6.
 


3

PART I.
FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
The information presented in Wells VAF I's accompanying balance sheets and statements of operations, members' capital, and cash flows reflects all adjustments that are, in management's opinion, necessary for a fair and consistent presentation of the aforementioned financial statements. The accompanying financial statements should be read in conjunction with the notes to Wells VAF I's financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations included in this Quarterly Report on Form 10-Q and in Wells VAF I's Annual Report on Form 10-K for the year ended December 31, 2013. Wells VAF I's results of operations for the three months ended March 31, 2014 are not necessarily indicative of the operating results expected for the full year.

4

WELLS MID-HORIZON VALUE-ADDED FUND I, LLC
BALANCE SHEETS
 
(Unaudited)
 
 
 
March 31,
2014
 
December 31,
2013
Assets:
 
 
 
Real estate, at cost:
 
 
 
Land
$
3,780,435

 
$
3,780,435

Building and improvements, less accumulated depreciation of $2,917,197 and
    $2,797,176 as of March 31, 2014 and December 31, 2013, respectively
11,122,750

 
11,242,771

Intangible lease assets, less accumulated amortization of $1,380,265 and
    $1,331,490 as of March 31, 2014 and December 31, 2013, respectively
454,108

 
502,883

Total real estate assets
15,357,293

 
15,526,089

 
 
 
 
Cash and cash equivalents
12,128,907

 
12,048,872

Tenant receivables
348,523

 
346,732

Other assets
57,792

 
58,747

Intangible lease origination costs, less accumulated amortization of $852,788 and
    $824,362 as of March 31, 2014 and December 31, 2013, respectively
246,361

 
274,787

Deferred leasing costs, less accumulated amortization of $511,752 and
    $481,457 as of March 31, 2014 and December 31, 2013, respectively
403,940

 
434,235

Total assets
$
28,542,816

 
$
28,689,462

 
 
 
 
Liabilities:
 
 
 
Accounts payable, accrued expenses and accrued capital expenditures
$
265,055

 
$
127,467

Due to affiliates
31,701

 
22,022

Deferred income
197,976

 
185,881

Intangible lease liabilities, less accumulated amortization of $174,136 and
    $168,331 as of March 31, 2014 and December 31, 2013, respectively
50,306

 
56,111

Total liabilities
545,038

 
391,481

 
 
 
 
Commitments and Contingencies

 

 
 
 
 
Members' Capital:
 
 
 
Member Shares, $1,000 par value; 150,000 shares authorized;
51,854 shares issued and outstanding
27,997,778

 
28,297,981

Total liabilities and members' capital
$
28,542,816

 
$
28,689,462

See accompanying notes.

5

WELLS MID-HORIZON VALUE-ADDED FUND I, LLC
STATEMENTS OF OPERATIONS
 
 
(Unaudited)
 
Three Months Ended
 
March 31,
 
2014
 
2013
Revenues:
 
 
 
Rental income
$
295,513

 
$
301,449

Tenant reimbursements
277,759

 
242,852

Total revenues
573,272

 
544,301

Expenses:
 
 
 
Property operating costs
445,167

 
431,843

Asset and property management fees:
 
 
 
Related-party
32,813

 
32,813

Other
14,811

 
13,307

Depreciation
120,021

 
119,943

Amortization
79,677

 
79,677

General and administrative expenses
180,986

 
161,925

Total expenses
873,475

 
839,508

Real Estate Operating Loss
(300,203
)
 
(295,207
)
 
 
 
 
Other Expense:
 
 
 
Interest expense
—

 
(103,508
)
Loss from Continuing Operations
(300,203
)

(398,715
)
 
 
 
 
Operating Loss from Discontinued Operations
—

 
(5,099
)
Net Loss
$
(300,203
)
 
$
(403,814
)
 
 
 
 
Net Loss per Weighted-Average Share of Investor Members' Interests
 
 
 
Loss from continuing operations
$
(5.79
)
 
$
(7.69
)
Loss from discontinued operations
—

 
(0.10
)
Net loss per weighted-average share of investor members' interests
$
(5.79
)
 
$
(7.79
)
 
 
 
 
Weighted-Average Shares of Investor Members' Interests Outstanding
51,854

 
51,854

See accompanying notes.

6

WELLS MID-HORIZON VALUE-ADDED FUND I, LLC
STATEMENTS OF MEMBERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2013
AND THE THREE MONTHS ENDED MARCH 31, 2014 (UNAUDITED)
 
 
Sponsoring
Member
 
Investor  Members'
Interests
 
Total
Members'
Capital
 
Shares    
 
Amount    
 
Members' Capital as of December 31, 2012
$
959,727

 
51,854

 
$
33,372,316

 
$
34,332,043

 
 
 
 
 
 
 
 
Net loss
—

 
—

 
(1,034,062
)
 
(1,034,062
)
Distributions
—

 
—

 
(5,000,000
)
 
(5,000,000
)
Members' Capital as of December 31, 2013
959,727

 
51,854

 
27,338,254

 
28,297,981

 
 
 
 
 
 
 
 
Net loss
—

 
—

 
(300,203
)
 
(300,203
)
Members' Capital as of March 31, 2014
$
959,727

 
51,854

 
$
27,038,051

 
$
27,997,778

See accompanying notes.

7

WELLS MID-HORIZON VALUE-ADDED FUND I, LLC
STATEMENTS OF CASH FLOWS
 
 
(Unaudited)
 
Three Months Ended
 
March 31,
 
2014
 
2013
Cash Flows from Operating Activities:
 
 
 
Net loss
$
(300,203
)
 
$
(403,814
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
Depreciation
120,021

 
208,635

Amortization of deferred financing costs
—

 
103,508

Other amortization
101,691

 
237,966

Changes in assets and liabilities:
 
 
 
(Increase) decrease in tenant receivables
(1,791
)
 
31,857

Decrease (increase) in other assets
955

 
(21,163
)
Increase in accounts payable and accrued expenses
137,588

 
25,352

Increase in due to affiliates
9,679

 
6,274

Increase in deferred income
12,095

 
21,576

Net cash provided by operating activities
80,035

 
210,191

 
 
 
 
Cash Flows from Investing Activities:
 
 
 
Investment in real estate
—

 
(169,332
)
Net Increase in Cash and Cash Equivalents
80,035

 
40,859

 
 
 
 
Cash and Cash Equivalents, beginning of period
12,048,872

 
6,586,461

Cash and Cash Equivalents, end of period
$
12,128,907

 
$
6,627,320

 
 
 
 
Supplemental Disclosure of Noncash Investing and Financing Activities:
 
 
 
Accrued capital expenditures
$
—

 
$
213,588

See accompanying notes.

8

WELLS MID-HORIZON VALUE-ADDED FUND I, LLC
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2014 (unaudited)
1.
ORGANIZATION AND BUSINESS
Wells Mid-Horizon Value-Added Fund I, LLC ("Wells VAF I") was organized as a Georgia limited liability company on July 15, 2005 for the purpose of acquiring, developing, owning, operating, and improving or otherwise enhancing income-producing commercial properties, and liquidating such investments over an estimated fund life of four to eight years. The term of Wells VAF I shall continue until the earlier of December 31, 2020, or the filing of a Certificate of Termination upon the dissolution and completion of the liquidation of Wells VAF I.
Wells Management Company, Inc. ("Wells Management") is the sponsoring member of Wells VAF I and has the exclusive authority to conduct the day-to-day and overall direction and supervision of the business and affairs of Wells VAF I pursuant to an operating agreement. Wells Management has contributed $1,000,000 to Wells VAF I for a subordinated interest therein. Wells Investment Management Company, LLC ("WIM"), a wholly owned subsidiary of Wells Management, has been appointed by Wells Management to serve as the manager of Wells VAF I. In addition, Wells VAF I and WIM have entered into an agreement (the "Advisory Agreement"), under which WIM will perform certain key functions on behalf of Wells VAF I, including, but not limited to, the investment of capital proceeds and management of day-to-day operations.
On September 15, 2005, Wells VAF I commenced an offering of up to 150,000 shares of investor member interests under a private placement to qualified purchasers who meet the definition of "accredited investors," as provided in Regulation D of the Securities Act. Wells VAF I commenced active operations upon receiving and accepting subscriptions for 10,000 shares of investor member interests on June 22, 2006. Its offering terminated on September 15, 2008, at which time Wells VAF I had sold approximately 51,854 shares of investor member interests resulting in gross offering proceeds of approximately $51,854,000. After deductions for payments of acquisition fees of approximately $1,037,000; selling commissions, discounts, and dealer-manager fees of approximately $2,852,000; and other offering expenses of approximately $259,000; Wells VAF I received net offering proceeds of approximately $47,706,000. As of October 31, 2008, all equity proceeds raised from the sale of investor member interests had been utilized to fund property acquisitions and capital expenditures. No public market exists for the shares of investor member interests and none is expected to develop.
Wells VAF I's investment policy included acquiring properties with opportunities for value enhancement related to leasing or re-leasing available space, renovating or redeveloping properties, entering into leases with sub-investment-grade tenants at above market rates, and/or benefiting from favorable market conditions. Wells VAF I does not expect to make any additional investments in the future and its current focus is on enhancing the value of its remaining portfolio and positioning the remaining property for sale.
During the periods presented, Wells VAF I owned direct interests in the following properties:
 
% Leased as of
% Leased as of
  
March 31, 2014
March 31, 2013
1. Nathan Lane Building
A five-story office building located in Plymouth, Minnesota
 
45%
45%
2. Commerce Street Building(1)
A four-story office building and two floors of a parking deck located in Nashville,
Tennessee
 
—
85%
(1) This building was sold in August 2013.

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of Wells VAF I have been prepared in accordance with the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X, and in accordance with such rules and regulations, do not include all of the information and footnotes required by U.S. generally accepted accounting principles ("GAAP") for complete financial statements. In the opinion of WIM, Wells VAF I's manager, the statements for the unaudited interim periods presented include all adjustments that are of a normal and recurring nature and necessary to fairly and consistently present the results for these periods. Results for interim periods are not necessarily indicative of full-year results. For further information, refer to the financial statements and footnotes included in Wells VAF I's Annual Report on Form 10-K for the year ended December 31, 2013.

9

Investment in Real Estate Assets
Real estate assets are stated at cost, less accumulated depreciation and amortization. Amounts capitalized to real estate assets consist of the cost of acquisition or construction, application of acquisition fees incurred, and any tenant improvements or major improvements and betterments, which extend the useful life of the related asset. Upon receiving notification of a tenant's intention to terminate a lease, undepreciated tenant improvements and intangible lease assets are written off to lease termination expense. All repairs and maintenance are expensed as incurred. Wells VAF I is required to make subjective assessments as to the useful lives of its depreciable assets. Wells VAF I considers the period of future benefit of the asset to determine the appropriate useful lives. These assessments have a direct impact on net income (loss). The estimated useful lives of Wells VAF I's assets by class are as follows:
Buildings
40 years
Building improvements
5-25 years
Site improvements
15 years
Tenant improvements
Shorter of lease term or economic life
Intangible lease assets
Lease term
Evaluating the Recoverability of Real Estate Assets
Management continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate assets and related intangible assets that Wells VAF I owns may not be recoverable. When indicators of potential impairment are present which suggest that the carrying amounts of real estate assets and related intangible assets may not be recoverable, management assesses the recoverability of the real estate assets and related intangible assets by determining whether the respective carrying values will be recovered through the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition for assets held for use, or with the estimated fair values, less costs to sell, for assets held for sale. In the event that such expected undiscounted future cash flows for assets held for use or the estimated fair values, less costs to sell, for assets held for sale do not exceed the carrying values, management adjusts the carrying value of real estate assets and related intangible assets to the estimated fair values, pursuant to the provisions of the property, plant, and equipment accounting standard for the impairment or disposal of long-lived assets, and recognize an impairment loss. Estimated fair values are determined based on the following information, dependent upon availability: (i) recently quoted market price(s) for the subject property, or highly comparable properties, under sufficiently active and normal market conditions, or (ii) the present value of future cash flows, including estimated residual value.

Real Estate Held for Sale

Wells VAF I classifies its properties as held for sale when it has entered into a contract to sell the property, all material due diligence requirements have been satisfied and Wells VAF I believes it is probable that the disposition will occur within one year. As of March 31, 2014, Wells VAF I did not have any properties classified as held for sale.

Intangible Assets and Liabilities Arising from In-Place Leases where Wells VAF I is the Lessor

As of March 31, 2014 and December 31, 2013, Wells VAF I had the following gross intangible in-place lease assets and liabilities:
 
 
As of March 31, 2014
 
 
Intangible Lease Assets
 
Intangible
Lease
Origination
Costs
 
Intangible
Below-Market
In-Place
Lease Liabilities
 
 
Above-Market
In-Place
Lease Assets
 
Absorption
Period
Costs
 
Gross
 
$
357,971

 
$
1,476,402

 
$
1,099,149

 
$
224,442

Accumulated Amortization
 
(277,736
)
 
(1,102,529
)
 
(852,788
)
 
(174,136
)
Net
 
$
80,235

 
$
373,873

 
$
246,361

 
$
50,306



10

 
 
As of December 31, 2013
 
 
Intangible Lease Assets
 
Intangible
Lease
Origination
Costs
 
Intangible
Below-Market
In-Place
Lease Liabilities
 
 
Above-Market
In-Place
Lease Assets
 
Absorption
Period
Costs
 
Gross
 
$
357,971

 
$
1,476,402

 
$
1,099,149

 
$
224,442

Accumulated Amortization
 
(268,478
)
 
(1,063,012
)
 
(824,362
)
 
(168,331
)
Net
 
$
89,493

 
$
413,390

 
$
274,787

 
$
56,111

During the three months ended March 31, 2014 and 2013, Wells VAF I recognized the following amortization of acquired intangible lease assets and liabilities: 
 
 
Intangible Lease Assets
 
Intangible
Lease
Origination
Costs
 
Intangible
Below-Market
In-Place
Lease Liabilities
For the three months ended March 31:
 
Above-Market
In-Place
Lease Assets
 
Absorption
Period 
Costs
 
2014
 
$
9,258

 
$
39,517

 
$
28,426

 
$
5,805

2013
 
$
9,258

 
$
106,212

 
$
97,966

 
$
13,217


The remaining net intangible assets and liabilities balances as of March 31, 2014 will be amortized as follows: 
 
 
Intangible Lease Assets
 
Intangible
Lease
Origination
Costs
 
Intangible
Below-Market
In-Place
Lease Liabilities
For the year ending December 31,
 
Above-Market
In-Place
Lease Assets
 
Absorption
Period
Costs
 
2014
 
$
27,774

 
$
118,550

 
$
85,279

 
$
17,413

2015
 
37,032

 
158,067

 
113,705

 
23,218

2016
 
15,429

 
81,558

 
47,377

 
9,675

2017
 
—

 
15,698

 
—

 
—

 
 
$
80,235

 
$
373,873

 
$
246,361

 
$
50,306

Weighted-Average Amortization Period
 
2 years
 
2 years
 
2 years
 
2 years

Other Assets
Other assets are comprised of (i) certain escrow accounts restricted by the lender to fund future real estate taxes and (ii) prepaid taxes, prepaid insurance, and nontenant receivables. Prepaid expenses and other assets will be expensed as incurred. Management assesses the collectability of other assets on an ongoing basis and provides for allowances as such balances, or portions thereof, become uncollectible. No such allowances have been recorded as of March 31, 2014 and December 31, 2013.
Income Taxes
Wells VAF I is not subject to federal or state income taxes; therefore, none have been provided for in the accompanying financial statements. The members are required to include their respective shares of profits and losses in their individual income tax returns, regardless of whether any cash distributions were made during the respective period.
Allocation of Profits and Losses
Wells VAF I allocates profits or losses for each allocation period to the investor members in proportion to their respective percentage interests in an amount not to create a deficit capital balance.
Distribution of Net Cash Flow
Net cash flow, as defined in the operating agreement, is distributed to the members in the order and priority that follows:
•
First, to pay the following returns on capital:

11

•
First, to the investor members up to a 10% per annum compounded return on their capital contributions during the offering period;
•
Second, to the investor members in proportion to their percentage interests, as defined, until each investor member receives a 10% per annum compounded return on their capital contributions for the period following the offering period;
•
Third, to Wells Management up to a 10% per annum compounded return on its capital contribution;
•
Second, to the investor members in proportion to their percentage interests until each investor member has received $1,000 per share;
•
Third, to Wells Management until it has received its capital contribution; and
•
Fourth,
•
To Wells Management in the amount of 20% of all distributable proceeds, less any disposition fees previously paid to Wells Management, of which Wells Management has agreed to pay up to 50% of any such amount received to broker/dealers who participated in its private placement offering; and
•
The remainder to the investor members in accordance with their percentage interests.
3.        MEMBERS' EQUITY
Sponsoring Member Interest
On September 27, 2005, Wells VAF I received a $1,000,000 contribution from Wells Management. During the start-up period, proceeds from this contribution were held as working capital and used primarily to fund initial operating costs. Following the start-up period, the residual proceeds were distributed to investor members. Wells Management has a subordinated interest to that of the investor members in earnings allocations and distributions from Wells VAF I.
Investor Member Interests
Wells VAF I commenced active operations upon receiving and accepting subscriptions for 10,000 shares of investor member interests on June 22, 2006. The offering was terminated on September 15, 2008, at which time Wells VAF I had sold approximately 51,854 shares of investor member interests. Investor members have a priority interest over that of the sponsoring member in earnings allocations and distributions from Wells VAF I.
4.        RELATED-PARTY TRANSACTIONS
Advisory Agreement
On September 15, 2005, Wells VAF I entered into the Advisory Agreement with WIM. Pursuant to the Advisory Agreement, WIM is entitled to specified fees for certain services, including, but not limited to, the investment of offering proceeds in real estate projects, sales of properties, and management of day-to-day operations. The Advisory Agreement has a one-year term and is subject to an unlimited number of successive one-year renewals upon the consent of the parties. Effective September 15, 2013, the Advisory Agreement was renewed for a one-year term through September 14, 2014 upon terms identical to those in effect through September 14, 2013. Wells VAF I may terminate the Advisory Agreement upon 60 days' written notice without cause or penalty. If Wells VAF I terminates the Advisory Agreement, Wells VAF I will pay WIM all unpaid reimbursements of expenses and all earned but unpaid fees. The negotiations of the Advisory Agreement were not at arm's length, and Wells VAF I will pay certain prescribed fees to WIM and its affiliates regardless of the quality of its services.
Under the terms of the Advisory Agreement, Wells VAF I incurs the following fees and reimbursements payable to WIM:
•
Monthly asset management fees equal to one-twelfth of 0.75% of the gross value of Wells VAF I's real estate assets, as determined and approved in good faith and consistent with applicable fiduciary duties by the investment committee of Wells VAF I. Any portion of the asset management fee may be deferred upon WIM's request and paid in a subsequent month or year.
•
Reimbursement for all costs and expenses that WIM incurs in fulfilling its duties as the asset portfolio manager. These costs and expenses may include wages and salaries and other employee-related expenses of WIM's employees engaged in management, administration, operations, and marketing functions. Employee-related expenses include taxes, insurance, and benefits relating to such employees, and legal, travel, and other out-of-pocket expenses that are directly related to the services they provide. WIM allocates its reimbursable costs of providing these services among Wells VAF I and various other affiliated public real estate investment programs based on time spent on each entity by individual personnel.
•
For any property sold by Wells VAF I, a disposition fee equal to 0.25% of the sales price, if WIM provides a substantial amount of services in connection with the sale.

12

Property Management Agreement
From November 1, 2010 to February 28, 2013, Wells VAF I was party to a management agreement with Wells Real Estate Services, LLC ("WRES") under which WRES managed the operations of the Commerce Street Building (the "Commerce Management Agreement"). Pursuant to the Commerce Management Agreement, WRES was entitled to a monthly management fee equal to the greater of (i) $2,000 per month or (ii) 2.5% of gross monthly income actually collected from the property for the preceding month. In addition, WRES was entitled to reimbursement for all costs and expenses WRES incurred in fulfilling its duties as the property manager. These costs and expenses may have included wages, salaries, and other employee-related expenses of WRES employees engaged in management, administration, operations, and marketing functions. Further, WRES was entitled to reimbursement for construction management services rendered for projects on behalf of Wells VAF I equal to 4% for construction costs up to $500,000, 3% for construction costs over $500,000 but less than $1,500,000, and 2% for construction costs greater than $1,500,000 on a per construction project basis. For tenant improvement projects managed by a tenant, WRES was entitled to a construction management fee for supervision of the project equal to 1% of construction costs. On February 28, 2013, Wells VAF I terminated the Commerce Management Agreement with WRES. Effective March 1, 2013, Wells VAF I entered into a one-month management agreement with Wells Management (the "Revised Commerce Management Agreement") to manage the operations of the Commerce Street Building upon terms identical to those in the original Commerce Management Agreement with WRES. Effective March 31, 2013, Wells VAF I terminated the Revised Commerce Management Agreement with Wells Management and entered into an agreement with a third-party provider.
Related-Party Costs
Pursuant to the terms of the agreements described above, Wells VAF I incurred the following related-party costs for the three months ended March 31, 2014 and 2013, respectively, portions of which are included in income from discontinued operations in the accompanying statements of operations:
 
 
Three Months Ended
 
 
March 31,
 
 
2014
 
2013
Administrative reimbursements(1)
 
$
95,079

 
$
77,937

Asset management fees(1)
 
32,813

 
53,812

Property management fees(1)
 
—

 
9,803

Total
 
$
127,892

 
$
141,552

(1) 
Administrative reimbursements, asset management fees, and property management fees are expensed as incurred.
Due to Affiliates
As of March 31, 2014 and December 31, 2013, due to affiliates was comprised of administrative reimbursements and bill-backs due to WIM. WIM's affiliates pay for certain expenses of Wells VAF I directly and invoice Wells VAF I for reimbursement thereof on a quarterly basis. Amounts for these reimbursements are included in the aforementioned administrative reimbursements.
Operational Dependency
Wells VAF I has engaged WIM and Wells Management to provide certain services essential to Wells VAF I, including asset management services, supervision of the management of properties, asset acquisition and disposition services, as well as other administrative responsibilities for Wells VAF I, including accounting services, investor member communications, and investor relations. As a result of these relationships, Wells VAF I's operations are dependent upon WIM and Wells Management.
WIM and Wells Management are owned and controlled by Wells Real Estate Funds ("WREF"). The operations of Wells Capital, Inc. ("Wells Capital"), WIM, Wells Management and their affiliates represent substantially all of the business of WREF. Accordingly, Wells VAF I focuses on the financial condition of WREF when assessing the financial condition of WIM and Wells Management. In the event that WREF were to become unable to meet its obligations as they become due, Wells VAF I might be required to find alternative service providers. Beginning in 2013, WREF began winding down its operations and, as a result, its workforce has been reduced. As of March 31, 2014, however, we have no reason to believe that WREF does not have access to adequate liquidity and capital resources, including cash on hand, other investments, and borrowing capacity, necessary to meet its current and future obligations as they become due.


13

5.
ECONOMIC DEPENDENCY
Wells VAF I is dependent upon the ability of its current tenants to pay their contractual base rent amounts as they become due. The inability of a tenant to pay future rental amounts would have a negative impact on Wells VAF I's results of operations. Wells VAF I is not aware of any reason why its current tenants will not be able to pay their contractual rental amounts as they become due in all material respects. Situations preventing Wells VAF I's tenants from paying contractual rents could result in a material adverse impact on its results of operations.
6.
DISCONTINUED OPERATIONS
In accordance with GAAP, Wells VAF I has classified the results of operations related to the Commerce Street Building, which was sold on August 1, 2013, as discontinued operations in the accompanying statements of operations. The Commerce Street Building was sold for a gross sales price of $11.2 million, exclusive of closing costs and a credit of approximately $0.6 million for an outstanding tenant improvement obligation, and generated net sale proceeds of approximately $10.8 million. The details comprising income from discontinued operations are presented below:
 
Three Months Ended
 
March 31,
 
2014
 
2013
Revenues:
 
 
 
Rental income
$
—

 
$
475,501

Tenant reimbursements
—

 
63,818

Total revenues
—

 
539,319

 
 
 
 
Expenses:
 
 
 
Property operating costs
—

 
257,660

Asset and property management fees - Related-party
—

 
30,802

Depreciation
—

 
88,692

Amortization
—

 
139,623

General and administrative expenses
—

 
27,641

Total expenses
—

 
544,418

Operating Loss from Discontinued Operations
$
—

 
$
(5,099
)

7.
COMMITMENTS AND CONTINGENCIES
Wells VAF I is not subject to any material litigation nor to management's knowledge is any material litigation currently threatened against Wells VAF I.

14

ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the accompanying financial statements and notes thereto. See also "Cautionary Note Regarding Forward-Looking Statements" preceding Part I, as well as the notes to our financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations provided in our Annual Report on Form 10-K for the year ended December 31, 2013.
Overview
We were formed on July 15, 2005 for the purpose of acquiring, developing, owning, operating, and improving or otherwise enhancing income-producing commercial properties. Our investment strategy includes, but is not limited to, acquiring properties with opportunities for value enhancement related to leasing or re-leasing available space, renovating or redeveloping properties, entering into leases with sub-investment-grade tenants at above-market rates and/or benefiting from favorable market conditions. We are externally advised and managed by WIM. In June 2006, we commenced active operations upon receiving the minimum proceeds in our private placement offering of investor member interests, which offering raised approximately $51,854,000 in gross proceeds prior to its termination in September 2008. We do not expect to make any additional investments in the future, and our current focus is on positioning our remaining property for sale. We intend to continue to focus on positioning our remaining property for sale; however, we will evaluate offers to sell our remaining property on an as-is basis. The current economic conditions and their impact on office market conditions have required that we extend our projected fund life into 2014 in order to potentially achieve better disposition pricing for our investor members. As of April 30, 2014, we owned interests in one remaining property.
Portfolio Overview
Summary information relating to our properties owned during the periods discussed is presented below:
•
The Nathan Lane Building is a five-story office building located in Plymouth, Minnesota, that was acquired in September 2006 and is currently approximately 45% leased to two tenants, Brocade Communications Systems, Inc. and Stanley Convergent Security Solutions, Inc. We are marketing the vacant space in this building for lease.
•
The Commerce Street Building is a four-story office building and the top two floors of a parking deck located in Nashville, Tennessee, that was acquired in December 2007 and sold on August 1, 2013 for a gross sales price of $11,200,000, exclusive of closing costs and a credit of approximately $602,000 for an outstanding obligation. The disposition resulted in net sale proceeds of approximately $10,844,000 and a gain of approximately $268,000.
Liquidity and Capital Resources
Overview
We expect that our primary source of future cash flows will be cash generated from the operations and net proceeds from the sale of our remaining property.
Our operating strategy entails funding expenditures related to the recurring operations of the remaining property with operating cash flows, assessing the amount of operating cash flows and cash on hand that will be required to fund future re-leasing costs and other capital improvements, and distributing residual operating cash flows to our investor members. We continue to carefully monitor market conditions and their impact on our earnings, our cash flows, and future distributions to investor members.
During 2013, we were party to an agreement with NXT Capital for a loan, referred to as the NXT Loan. The NXT Loan was scheduled to mature in December 2013. On October 10, 2013, we terminated the NXT Loan.
Our most significant risks and challenges include (i) re-leasing vacant space and space that may become vacant upon the expiration of our current leases at our remaining property in order to achieve better disposition pricing for our investor members and (ii) funding our portfolio level general and administrative expenses from the operating cash flow of our remaining property.
Short-Term Liquidity and Capital Resources
During the three months ended March 31, 2014, we generated net operating cash flows of approximately $0.1 million. Operating cash inflows reflect receipts of rental payments and tenant reimbursements, less payments for property operating costs, asset and property management fees, and general and administrative expenses.
We expect to utilize the residual cash balance on hand as of March 31, 2014 of approximately $12.1 million to satisfy current liabilities and to fund anticipated re-leasing costs and capital expenditures at the Nathan Lane Building. Future distributions paid to our investor members will be largely dependent on the amount of cash generated from our operating activities, our expectations

15

of future cash flows, net proceeds from the sale of our remaining property, and our determination of near-term cash needs for capital improvements and tenant re-leasing costs.
Long-Term Liquidity and Capital Resources
We expect that our primary sources of capital over the long term will include proceeds from net cash flows from operations and net proceeds received from the sale of our remaining property. We expect that our primary uses of capital will be for capital improvements, re-leasing costs, and operating expenses.
In determining how and when to allocate cash resources, we initially consider the source of the cash. We expect that substantially all future net operating cash flows will be used for reserves for certain capital expenditures such as re-leasing costs and capital improvements. To the extent the Nathan Lane Building continues to remain partially vacant, property operating expenses and asset and property management fees may continue to reduce our cash flow from operating activities.
Results of Operations
Comparison of the three months ended March 31, 2013 versus the three months ended March 31, 2014
Rental income and tenant reimbursements remained relatively stable at $301,449 and $242,852, respectively, for the three months ended March 31, 2013 and $295,513 and $277,759, respectively, for the three months ended March 31, 2014. Absent any leasing activity, we expect future rental income and tenant reimbursements to remain at a relatively similar level as compared to the three months ended March 31, 2014.
Property operating costs remained relatively stable at $431,843 for the three months ended March 31, 2013 and $445,167 for the three months ended March 31, 2014. Absent any leasing activity, we expect future property operating costs to remain at a similar level, as compared to the three months ended March 31, 2014.
Asset and property management fees remained relatively stable at $46,120 for the three months ended March 31, 2013 and $47,624 for the three months ended March 31, 2014. Asset management fees are incurred as a percentage of our gross asset value. We expect future asset and property management fees to remain at a similar level, as compared to the three months ended March 31, 2014.
Depreciation expense remained relatively stable at $119,943 for the three months ended March 31, 2013 and $120,021 for the three months ended March 31, 2014. Absent leasing activity, we expect future depreciation expense to remain at a similar level, as compared to the three months ended March 31, 2014.

Amortization expense remained the same at $79,677 for the three months ended March 31, 2013 and 2014. Absent leasing activity, we expect future amortization expense to remain at a similar level.

General and administrative expenses remained relatively stable at $161,925 for the three months ended March 31, 2013 and $180,986 for the three months ended March 31, 2014. We anticipate that future general and administrative expenses will vary primarily based on future changes in our reporting and regulatory requirements.

Interest expense decreased from $103,508 for the three months ended March 31, 2013 to $0 for the three months ended March 31, 2014 due to fully amortizing the remaining financing costs associated with the NXT Loan in connection with its termination in the fourth quarter of 2013. We expect future interest expense to remain at a similar level, as compared to the first quarter of 2014.
Our loss from discontinued operations changed from a loss of $5,099 for the three months ended March 31, 2013 to $0 for the three months ended March 31, 2014, as a result of the sale of the Commerce Street Building in the third quarter of 2013.
Our net loss decreased from $(403,814) for the three months ended March 31, 2013 to $(300,203) for the three months ended March 31, 2014, as a result of a decrease in interest expense due to fully amortizing the remaining financing costs associated with the NXT Loan in the fourth quarter of 2013.
Inflation
We are exposed to inflation risk, as income from long-term leases is the primary source of our cash flows from operations. There are provisions in the majority of our tenant leases that would protect us from the impact of inflation. These provisions include rent steps, 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 our leases, the leases may not readjust their reimbursement rates frequently enough to cover inflation.

16

Application of Critical Accounting Policies
Our 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 is different, it is possible that different accounting policies would be applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact comparability of our results of operations to those of companies in similar businesses.
Below is a discussion of the accounting policies used by Wells VAF I, which are considered critical in that they may require complex judgment in their application or require estimates about matters that are inherently uncertain.
Investment in Real Estate Assets
We are required to make subjective assessments as to the useful lives of our depreciable assets. We consider the period of future benefit of the asset to determine the appropriate useful lives. These assessments have a direct impact on net income (loss). The estimated useful lives of our assets are depreciated or amortized using the straight-line method over the following useful lives:
Buildings
40 years
Building improvements
5-25 years
Site improvements
15 years
Tenant improvements
Shorter of lease term or economic life
Intangible lease assets
Lease term
Evaluating the Recoverability of Real Estate Assets
We continually monitor events and changes in circumstances that could indicate that the carrying amounts of the real estate assets and related intangible assets which Wells VAF I owns may not be recoverable. When indicators of potential impairment are present which suggest that the carrying amounts of real estate assets and related intangible assets may not be recoverable, we assess the recoverability of the real estate assets and related intangible assets by determining whether the respective carrying values will be recovered through the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition for assets held for use, or with the estimated fair values, less costs to sell, for assets held for sale. In the event that such expected undiscounted future cash flows for assets held for use or the estimated fair values, less costs to sell, for assets held for sale do not exceed the carrying values, we adjust the carrying value of real estate assets and related intangible assets to the estimated fair values, pursuant to the provisions of the property, plant, and equipment accounting standard for the impairment or disposal of long-lived assets, and recognize an impairment loss. Estimated fair values are determined based on the following information, dependent upon availability: (i) recently quoted market price(s) for the subject property, or highly comparable properties, under sufficiently active and normal market conditions, or (ii) the present value of future cash flows, including estimated residual value. We have determined that there has been no impairment in the carrying value of our remaining real estate asset and related intangible assets to date however, certain of our assets may be carried at an amount more than could be realized in a current disposition transaction.
Projections of expected future operating cash flows require that we estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, the number of months it takes to re-lease the property, and the number of years the property is held for investment, among other factors. The subjectivity of assumptions used in the future cash flow analysis, including discount rates, could result in an incorrect assessment of the property's ultimate fair value and could result in the misstatement of the carrying value of our real estate and related intangible assets and net income (loss).
Evaluating the Recoverability of Intangible Assets and Liabilities
The values of intangible lease assets and liabilities are determined based on assumptions made at the time of acquisition and have defined useful lives, which correspond with the lease terms. There may be instances in which intangible lease assets and liabilities become impaired and we are required to expense the remaining asset or liability immediately or over a shorter period of time. Lease restructurings, including but not limited to lease terminations and lease extensions, may impact the value and useful life of in-place leases. In-place leases that are terminated, partially terminated, or modified will be evaluated for impairment if the original in-place lease terms have been modified. In situations where the discounted cash flows of the modified in- place lease stream are less than the discounted cash flows of the original in-place lease stream, we reduce the carrying value of

17

the intangible lease assets to reflect the modified lease terms and recognize an impairment loss. For in-place lease extensions  that are executed  more than one year prior to the original in-place lease expiration date, the useful life of the in-place lease will be extended over the new lease term with the exception of those in-place lease components, such as lease commissions and tenant allowances, which have been renegotiated for the extended term. Renegotiated in-place lease components, such as lease commissions and tenant allowances, will be amortized over the shorter of the useful life of the asset or the new lease term. We have determined that there has been no impairment in the carrying value of our intangible lease assets and liabilities to date.
Related-Party Transactions and Agreements
Transactions and Agreements
During the periods presented, we were party to agreements with WIM, Wells Management, and WRES whereby we paid certain fees and expense reimbursements to WIM, Wells Management, and WRES for asset management fees; property management fees; administrative services relating to accounting, portfolio management, and other general and administrative, and we incurred the related expenses.We terminated our property management agreements with WRES and Wells Management on February 28, 2013 and March 31, 2013, respectively. See Note 4 to our financial statements included in this report for a description of these fees and reimbursements and amounts incurred.
Commitments and Contingencies
We are subject to certain commitments and contingencies with regard to certain transactions. Refer to Note 4 and Note 7 to our financial statements included in this report for further explanation. Examples of such commitments and contingencies include:
•
the Advisory Agreement; and
•
property management agreements.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Wells VAF I has omitted a discussion of quantitative and qualitative disclosures about market risk because, as a smaller reporting company, it is not required to provide such information.
ITEM 4.
CONTROLS AND PROCEDURES
Management's Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of management of WIM, our manager, including the Principal Executive Officer and the Principal Financial Officer of WIM, of the effectiveness of the design and operation of Wells VAF I's disclosure controls and procedures as defined in Rule 13a-15(e) of the Exchange Act as of the end of the quarterly period covered by this report. Based upon that evaluation, the Principal Executive Officer and the Principal Financial Officer of WIM concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report in providing a reasonable level of assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in applicable SEC rules and forms, including providing a reasonable level of assurance that information required to be disclosed by us in such reports is accumulated and communicated to our management, including the Principal Executive Officer and the Principal Financial Officer of WIM, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There have been no significant changes in our internal control over financial reporting during the quarter ended March 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II.
OTHER INFORMATION
ITEM 1.
LEGAL PROCEEDINGS
From time to time, we are party to legal proceedings, which arise in the ordinary course of our business. We are not currently involved in any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on our results of operations or financial condition, nor are we aware of any such legal proceedings contemplated by governmental authorities.
ITEM 1A.
RISK FACTORS
Wells VAF I has omitted a discussion of risk factors because as a smaller reporting company, it is not required to provide such information.

18

ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a)
We did not sell any equity securities that were not registered under the Securities Act during the quarter ended March 31, 2014.
(b)
Not applicable.
(c)
We did not redeem any securities during the quarter ended March 31, 2014.
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
(a)
We were not subject to any indebtedness and, therefore, did not default with respect to any indebtedness during the quarter ended March 31, 2014.
(b)
Not applicable.
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.
OTHER INFORMATION
(a)
During the quarter ended March 31, 2014, there was no information required to be disclosed in a report on Form
8-K which was not disclosed in a report on Form 8-K.
(b)
Not applicable.
ITEM 6.
EXHIBITS
The Exhibits to this report are set forth on the Exhibit Index to First Quarter Form 10-Q attached hereto.

19

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
WELLS MID-HORIZON VALUE-ADDED FUND I, LLC
(Registrant)
 
 
 
 
By:
WELLS INVESTMENT MANAGEMENT COMPANY, LLC
(Manager)
 
 
 
May 15, 2014
 
/s/ RANDY A. SIMMONS
 
 
Randy P. Simmons
Principal Financial Officer
of Wells Investment Management Company, LLC

20

EXHIBIT INDEX
TO FIRST QUARTER FORM 10-Q
OF
WELLS MID-HORIZON VALUE-ADDED FUND I, LLC
 
Exhibit
No.
 
Description of Document
 
 
3.1

*
 
Amended and Restated Articles of Organization, dated as of September 1, 2005, incorporated by reference to Exhibit 3.1 to the Form 10 filed April 15, 2009
 
 
 
 
4.1

*
 
Operating Agreement among Wells Management Company, Inc., Wells Investment Management Company, LLC, and the Several Investor Members, dated as of September 1, 2005, and subsequently amended, incorporated by reference to Exhibit 4.1 to the Form 10 filed April 15, 2009
 
 
 
 
31.1

**
 
Certification of the Principal Executive Officer of the manager of Wells Mid-Horizon Value-Added Fund I, LLC, pursuant to Securities Exchange Act Rules 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 
31.2

**
 
Certification of the Principal Executive Officer of the manager of Wells Mid-Horizon Value-Added Fund I, LLC, pursuant to Securities Exchange Act Rules 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 
32.1

**
 
Certification of the Principal Executive Officer and Principal Financial Officer of the manager of Wells Mid-Horizon Value-Added Fund I, LLC, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 
 
 
101.INS

**
 
XBRL Instance Document.
 
 
 
 
101.SCH

**
 
XBRL Taxonomy Extension Schema.
 
 
 
 
101.CAL

**
 
XBRL Taxonomy Extension Calculation Linkbase.
 
 
 
 
101.DEF

**
 
XBRL Taxonomy Extension Definition Linkbase.
 
 
 
 
101.LAB

**
 
XBRL Taxonomy Extension Label Linkbase.
 
 
 
 
101.PRE

**
 
XBRL Taxonomy Extension Presentation Linkbase.
 
 
 
 
 
*
Previously filed and incorporated herein by reference

 
**
Filed herewith



21

WELLS MID-HORIZON VALUE-ADDED FUND I LLC Reports