UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________

FORM 10-K

__________________________________

(Mark One)
x	Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the fiscal year ended December 31, 2012 or
	For the fiscal year ended December 31, 2013 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)

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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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Name of each exchange on which registered
None		None

Securities registered pursuant to section 12(g) of the Act:

Shares of Investor Member Interests

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o No x

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 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

While there is no established market for the registrant’s shares of investor member interests, the registrant conducted a private placement offering of its shares of investor member interests that commenced on September 15, 2005 and terminated on September 15, 2008. Shares in its offering were sold at $1,000 per investor member interest, with discounts available for certain categories of purchasers. The number of shares of investor member interests held by non-affiliates as of June 30, ~~2012~~2013 was approximately 51,745.

As of February 28, ~~2013~~2014, there were 51,854 shares of investor member interests outstanding.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Form 10-K 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," "expect," "intend," "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-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 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 real estate properties, 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 ~~have~~may ~~the ability to~~ 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. Our current loan with NXT Capital is secured by the Nathan Lane Building and the Commerce Street Building. Should we draw on the remaining availability of our current loan and we are unable to make any payments under the loan or are found to be in default under the terms of the loan, the lender could foreclose on the properties. Any such default or foreclosure would have a material adverse effect on our financial condition and results of operations. In addition, provisions under the loan require that net proceeds from the sale of certain properties be applied against the outstanding balance of the respective loan up to a disclosed release price prior to funding any capital requirements, operating needs of the portfolio, or distributions to investors.

• The current economic conditions and their impact on office market conditions ~~may~~has ~~require~~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.

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PART I


ITEM 1.	BUSINESS.

General

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 a period of three to five years following acquisition. As a result of the current economic conditions and their impact on office market conditions, we have determined to hold individual assets longer than originally projected in order to achieve better disposition pricing for our investor members. We intend to continue to focus on positioning our remaining ~~properties~~property for sale. ~~and~~We ~~dispose of the remaining assets in our portfolio this year, which is the final year of our projected fund life; however, we~~ will evaluate offers to sell our remaining ~~properties~~property on an as-is basis. We can provide no guarantees, however, ~~that~~when our portfolio will be liquidated ~~by December 2013~~ as our manager, in its discretion, may hold our remaining ~~assets~~asset longer in order to achieve better returns for our investor members. 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 our sponsoring member 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 our manager. In addition, we have entered into an agreement with WIM (the "Advisory Agreement"), under which WIM performs certain key functions on our behalf, including, but not limited to, the investment of capital proceeds and management of day-to-day operations.

On September 15, 2005, we commenced an offering of up to 150,000 shares of investor member interests under a private placement to qualified purchasers who met the definition of "accredited investors," as provided in Regulation D of the Securities Act. We commenced active operations upon receiving and accepting subscriptions for 10,000 shares of investor member interests on June 22, 2006. Our offering terminated on September 15, 2008, at which time we 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, we received net offering proceeds of approximately $47,706,000. All equity proceeds raised from the sale of investor member interests have 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.

Our investment policy ~~includes,~~included ~~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. As of February 28, ~~2013~~2014, we owned ~~two~~one office ~~buildings~~building encompassing approximately ~~302~~184,000 square feet, and we do not anticipate acquiring any additional properties. See Item 2, "Properties" for a more detailed description of our portfolio.

Wells VAF I is not a mutual fund and does not intend to register under the Investment Company Act of 1940.

Investment Objectives and General

We ~~have~~ invested primarily in commercial office real estate properties, principally Class-A type assets in primary and secondary markets in the United States, that ~~provide~~provided opportunities for value enhancement through development, operations, re-leasing, property improvements, or other means. Class-A type assets are characterized by excellent location and access, high-quality construction materials and condition, and professional management. They are competitive with new buildings and attract high-quality tenants. We ~~have~~ invested in properties located across the United States in Plymouth, Minnesota; Pittsburgh, Pennsylvania; Nashville, Tennessee; and Austin, Texas. We have since disposed of our properties located in Pittsburgh, Pennsylvania; Nashville, Tennessee; and Austin, Texas.

Wells VAF I is designed to provide investors with an opportunity to earn attractive risk-adjusted returns from equity real estate investments in the United States through a medium-term investment product. Because of its structure and its medium-term investment objective, Wells VAF I is considered to be a "value-added investment" program. Value-added investment programs occupy a middle tier in the risk/return continuum of real estate investment funds. At one end of the spectrum are long-term core income funds, which concentrate on providing a stable income return to investors, with the goal of providing modest appreciation in property value at the end of the fund's holding period. At the other end of the spectrum are opportunistic funds that seek to

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provide substantially all of their return in the form of short-term gain realized from high-risk, highly leveraged strategies. Value-added investment funds, such as Wells VAF I, fall in the middle of that risk/return spectrum, by seeking both stable income for modest levels of current distributions and gains from property sales that are attributable to capital appreciation at the time of disposition, as part of the overall return target.

Wells VAF I seeks to operate, improve, and otherwise enhance and dispose of its properties at a profit, within three to five years after completion of each acquisition, in a manner that achieves greater appreciation in value upon such dispositions and superior total returns to investors, than programs with a primary focus on current distributions of income. ~~While~~We we believe that we can complete our leasing efforts, ~~and~~ sell the remaining ~~assets~~asset in the portfolio ~~this~~and ~~year,~~begin ~~which~~liquidating ~~is the final year of~~ our ~~projected~~portfolio. ~~fund~~The ~~life of four to eight years after commencement of our private placement offering, the~~ current economic conditions and their impact on office market conditions have resulted in a decrease in leasing activity and volume, an increase in rental concessions, and a decline in effective rental rates, which has affected our ability to lease ~~vacancies~~vacancy in our ~~properties~~property. In addition, disruptions and dislocations in the credit markets have negatively impacted transaction activity and made property dispositions within the near-term less attractive. These conditions have required that we hold individual assets longer than the three- to five-year period originally projected in order to achieve better disposition pricing for our investor members. The timing of the disposition of ~~individual~~the ~~assets~~remaining property will depend on prevailing economic conditions, including when a stabilization of the credit markets occurs, as well as the recovery of the real estate markets in the geographic ~~locations~~location ~~where~~of ~~we hold~~ our ~~properties.~~remaining ~~No assurances can be given that we will meet this projected time frame~~property. Wells VAF I's investment objectives are:

• to increase the value of our ~~portfolio~~property ~~of properties~~ through property-level value-enhancing strategies;


•	to preserve, protect, and return investors' capital contributions;


•	to return to investors excess operating income in the form of cash distributions on their shares; and


•	to realize capital appreciation for investors upon the orderly disposition of our properties and distribution of any cash gains to members.

Financing Objectives

Wells VAF I has employed leverage in a strategic manner to augment our net offering proceeds and net cash flows from operations, which ~~has~~ permitted us to acquire a larger and more diversified portfolio of properties. In the aggregate, we may borrow up to 75% of the value of any particular property purchased by us, so long as the aggregate amount of such borrowings does not exceed 50% of the aggregate asset value of properties in our portfolio on a stabilized basis.

Employees

Wells VAF I has no direct employees. The employees of Wells Management, the sole member of WIM, perform substantially all of the services related to our asset management, accounting, investor relations, and other administrative activities. See Item 13, "Certain Relationships and Related Transactions," for a summary of the fees paid to the manager and its affiliates during the years ended December 31, ~~2012~~2013 and ~~2011~~2012.

Insurance

Wells Management carries property insurance and liability insurance with respect to the ~~properties~~property we own. In the opinion of management, our ~~properties~~property ~~are~~is adequately insured.

Competition

Leasing of real estate is highly competitive in the current market, and we may experience competition for high-quality tenants from owners and managers of competing projects. As a result, we may have to provide rent concessions, incur charges for tenant improvements, or offer other inducements to enable us to timely lease vacant space, all of which may have an adverse impact on our results of operations. At the time we elect to dispose of our ~~properties~~remaining property, we may be in competition with sellers of similar properties to locate suitable purchasers.

Operational Dependency

We have engaged WIM and Wells Management to provide certain services essential to us, including asset management services, supervision of the management of properties, asset acquisition and disposition services, as well as other administrative

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responsibilities, including accounting services, investor member communications, and investor relations. As a result of these relationships, we are dependent upon WIM and Wells Management.

WIM and Wells Management are owned and controlled by Wells Real Estate Funds, Inc. ("WREF"). The operations of Wells Capital, WIM, Wells ~~Investment Securities, Inc. ("WIS"), Wells~~ Management, ~~Wells Core Office Income REIT Advisory Services,~~ and their affiliates represent substantially all of the business of WREF. Accordingly, we focus 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, we might be required to find alternative service providers. WREF is winding down its operations and, as a result, its workforce and available capital have been significantly reduced. Accordingly, we may not be able to rely on our General Partners to allocate sufficient time and resources to our operations, which may adversely affect our ability to operate our business and continue our operations in the same manner as in the past. As of December 31, 2013, 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.

Future net income generated by WREF is largely dependent upon the amount of fees earned by affiliates of WIM and Wells Management based on, among other things, the level of investor proceeds raised from the sale of common stock for certain WREF-sponsored programs and the volume of future acquisitions and dispositions of real estate assets by WREF-sponsored programs, as well as distribution income earned from equity interests in a real estate investment trust previously sponsored by Wells Capital. As of December 31, 2012, we have no reason to believe that WREF does not have access to adequate liquidity and capital resources, including cash flow generated from operations, cash on hand, other investments, and borrowing capacity, necessary to meet its current and future obligations as they become due. Modifying service agreements between WREF, or its affiliates, and Wells VAF I, or other WREF-sponsored programs, could impact WREF's future net income and future access to liquidity and capital resources. For example, a large portion of WREF's income is derived under agreements with Columbia Property Trust, Inc. ("Columbia"), formerly known as Wells Real Estate Investment Trust II, Inc. Effective February 28, 2013, Columbia transitioned to self-management and indicated that it does not expect to rely on WREF for the same level of services beyond December 31, 2013. As such, WREF does not expect to receive significant compensation from Columbia beyond December 31, 2013.

Economic Dependency

We are also dependent upon the ability of our 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 our results of operations. We are not aware of any reason why our current tenants will not be able to pay their contractual rental amounts as they become due in all material respects. Situations preventing our tenants from paying contractual rents could result in a material adverse impact on our results of operations.

Environmental

As an owner of real estate, we are subject to various environmental laws of federal, state, and local governments. Compliance with existing laws has not had a material adverse effect on our financial condition or results of operations, and management does not believe it will have such an impact in the future. However, we cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on properties we currently own.

Assertion of Legal Action Against Related Parties

On March 12, 2007, a stockholder of Piedmont REIT filed a putative class action and derivative complaint, presently styled In re Wells Real Estate Investment Trust, Inc. Securities Litigation, in the United States District Court for the District of Maryland against, among others, Piedmont REIT; Leo F. Wells, III; Wells Capital; Wells Management, our sponsoring member; certain affiliates of WREF; the directors of Piedmont REIT; and certain individuals who formerly served as officers or directors of Piedmont REIT prior to the closing of the internalization transaction on April 16, 2007.

The complaint alleged, among other things, violations of the federal proxy rules and breaches of fiduciary duty arising from the Piedmont REIT internalization transaction and the related proxy statement filed with the SEC on February 26, 2007, as amended. The complaint sought, among other things, unspecified monetary damages and nullification of the Piedmont REIT internalization transaction.

On June 27, 2007, the plaintiff filed an amended complaint, which attempted to assert class action claims on behalf of those persons who received and were entitled to vote on the Piedmont REIT proxy statement filed with the SEC on February 26, 2007, and derivative claims on behalf of Piedmont REIT.

On March 31, 2008, the Court granted in part the defendants' motion to dismiss the amended complaint. The Court dismissed five of the seven counts of the amended complaint in their entirety. The Court dismissed the remaining two counts with the exception of allegations regarding the failure to disclose in the Piedmont REIT proxy statement details of certain expressions of interest in acquiring Piedmont REIT. On April 21, 2008, the plaintiff filed a second amended complaint, which alleged violations of the federal proxy rules based upon allegations that the proxy statement to obtain approval for the Piedmont REIT internalization transaction omitted details of certain expressions of interest in acquiring Piedmont REIT. The second amended complaint sought,

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among other things, unspecified monetary damages, to nullify and rescind the internalization transaction, and to cancel and rescind any stock issued to the defendants as consideration for the internalization transaction. On May 12, 2008, the defendants answered and raised certain defenses to the second amended complaint. Subsequent to the filing of the second amended complaint, the plaintiff said it intended to seek monetary damages of approximately $159 million plus prejudgment interest.

On June 23, 2008, the plaintiff filed a motion for class certification. On September 16, 2009, the Court granted the plaintiff's motion for class certification. On September 20, 2009, the defendants filed a petition for permission to appeal immediately the Court's order granting the motion for class certification with the Eleventh Circuit Court of Appeals. The petition for permission to appeal was denied on October 30, 2009.

On April 13, 2009, the plaintiff moved for leave to amend the second amended complaint to add additional defendants. The Court denied the plaintiff's motion for leave to amend on June 23, 2009.

On December 4, 2009, the parties filed motions for summary judgment. On August 2, 2010, the Court entered an order denying the defendants' motion for summary judgment and granting, in part, the plaintiff's motion for partial summary judgment. The Court ruled that the question of whether certain expressions of interest in acquiring Piedmont REIT constituted "material" information required to be disclosed in the proxy statement to obtain approval for the Piedmont REIT internalization transaction raises questions of fact that must be determined at trial.

On November 17, 2011, the Court issued rulings granting several of the plaintiff's motions in limine to prohibit the defendants from introducing certain evidence, including evidence of the defendants' reliance on advice from their outside legal and financial advisors, and limiting the defendants' ability to relate their subjective views, considerations, and observations during the trial of the case. On February 23, 2012, the Court granted several of the defendants' motions, including a motion for reconsideration regarding a motion the plaintiff had filed seeking exclusion of certain evidence impacting damages, and motions seeking exclusion of certain evidence proposed to be submitted by the plaintiff.

On March 20, 2012, the Court granted the defendants leave to file a motion for summary judgment. On April 5, 2012, the defendants filed a motion for summary judgment. On September 26, 2012, the Court granted the defendants' motion for summary judgment and entered judgment in favor of the defendants. On October 12, 2012, the plaintiff filed a notice of appeal with the Eleventh Circuit Court of Appeals.

On October 22, 2012, Piedmont REIT announced the parties reached an agreement in principle to settle the lawsuit on October 12, 2012. Under the terms of the proposed settlement, the plaintiff will dismiss the appeal and release all defendants from liability in exchange for total payment of $4.9 million in cash by Piedmont REIT and its insurer. On December 31, 2012, the plaintiff filed a motion for preliminary approval of the settlement with the Court. On January 2, 2013, the Court preliminarily approved the settlement and scheduled a hearing for April 18, 2013 to determine whether to grant final approval of the settlement. The settlement, which is subject to Court approval following notice to the class, is expected to resolve the appeal and result in the final disposition of the case.

Mr. Wells, Wells Capital, and Wells Management believe that the allegations contained in the complaint are without merit and intend to continue to vigorously defend this action if for any reason the settlement is not approved. Although WREF believes that it has meritorious defenses to the claims of liability and damages in these actions, WREF is unable at this time to predict the outcome of the appeal of this action or, if the action is reinstated, reasonably estimate a range of damages, or how any liability and responsibility for damages might be allocated among the 17 defendants in the action, which includes 11 defendants not affiliated with Mr. Wells, Wells Capital, or Wells Management. The ultimate resolution of this matter could have a material adverse impact on WREF's financial results, financial condition, or liquidity.

Website Address

Access to copies of each of our filings with the SEC is available, free of charge, from our website at http://www.wellsref.com or through a link to the SEC website, http://www.sec.gov. These filings are available promptly after we file with, or furnish them to, the SEC.


ITEM 1A.	RISK FACTORS

We have omitted a discussion of risk factors because, as a smaller reporting company, we are not required to provide such information.

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ITEM 1B.	UNRESOLVED STAFF COMMENTS.

Not applicable.


ITEM 2.	PROPERTIES.

Overview

During the periods presented, we owned direct interests in the following properties:

	Leased % as of December 31,
Properties	~~2012~~2013	~~2011~~2012
1. Nathan Lane Building A five-story office building located in Plymouth, Minnesota	45%	45%
3. Commerce Street Building A four-story office building and two floors of a parking deck located in Nashville, Tennessee	85%	85%
3. Commerce Street Building (Sold August 1, 2013)A four-story office building and two floors of a parking deck located in Nashville, Tennessee	—	85%
4. Parkway at Oak Hill Buildings (Sold May 9, 2012)Two separate two-story office buildings located in Austin, Texas	—	~~94%~~—

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Lease Expirations

As of December 31, ~~2012~~2013, the lease expirations scheduled during the following 10 years and thereafter for our ~~properties~~remaining property, assuming no exercise of renewal options or termination rights, are summarized below:

Year ofLeaseExpiration	NumberofLeasesExpiring	SquareFeetExpiring	AnnualizedGross BaseRent in Yearof Expiration		Percentageof TotalSquareFeetExpiring		Percentageof TotalAnnualizedGross BaseRent in Yearof Expiration
2016(1)	21	4837,~~536~~427	$	~~728~~523,~~384~~978	2745.15	%	2240.72	%
2017(2)	1	44,846	778,956		2554.05	%	2459.38	%
2020(3)	1	86,017	1,695,716		47.9	%	53.0	%
	2	82,273	$	1,302,934	100.0	%	100.0	%
	4	179,399	$	3,203,056	100.0	%	100.0	%

(1) Nathan Lane Building: Stanley Convergent Security Solutions, Inc. lease ~~(approximately 37,400 square feet) and Commerce Street: Tennessee Information Consortium (approximately 11,100 square feet).~~

(2) Nathan Lane Building: Brocade Communications Systems, Inc. lease ~~(approximately 44,800 square feet)~~

(3) Commerce Street Building: Country Music Television, Inc. lease (approximately 86,000 square feet).

Property Descriptions

The properties that we owned during the periods presented are further described below:

Nathan Lane Building

The Nathan Lane Building is a five-story office building containing approximately 184,000 rentable square feet located in Plymouth, Minnesota. The Nathan Lane Building was acquired on September 20, 2006. As of December 31, ~~2012~~2013, the Nathan Lane Building was 45% leased under lease agreements with Brocade Communications Systems, Inc. ("Brocade") (approximately 24%) and Stanley Convergent Security Solutions, Inc. ("Stanley") (approximately 21%). The original Brocade net lease for approximately 148,000 rentable square feet commenced on October 8, 1999, and expired on April 30, 2010. On October 20, 2009, we entered into a new lease agreement with Brocade, effective as of May 1, 2010, which (i) reduced Brocade's square footage from approximately 81% of the building to approximately 24% of the building; (ii) extended the lease term from April 30, 2010 to July 31, 2017; and (iii) provided for a three-month rental abatement period. Pursuant to the new lease agreement, Brocade no longer manages the Nathan Lane Building, and its annual base rent has increased from an average of approximately $10.12 per square foot to an average of approximately $14.20 per square foot. In addition to annual base rent, Brocade is also required to reimburse us for its pro rata share of all operating expenses and real estate taxes effective May 1, 2010. Brocade's annual base rent increases by approximately 3% annually effective May 1, 2011. Brocade has the right to extend the lease term for two additional five-year periods at the then fair market rental rate. As of December 31, 2013, the annual base rent payable under the current Brocade lease was approximately $692,000. The annualized rent payable in 2017 under the current Brocade lease will be approximately $779,000.

7Stanley occupies approximately 37,400 rentable square feet of the Nathan Lane Building. The Stanley lease commenced on May 12, 2006, and expires on May 31, 2016. Effective May 1, 2010, Stanley began to reimburse for its pro rata share of the operating expenses and real estate taxes. Stanley has the right, at its option, to extend the initial term of its lease for two additional five-year periods. As of December 31, 2013, the annual base rent payable under the Stanley lease was approximately $524,000 and will remain the same through the expiration of the lease. The annualized base rent amounts for Brocade and Stanley are exclusive of rental abatement periods.

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by approximately 3% annually effective May 1, 2011. Brocade has the right to extend the lease term for two additional five-year periods at the then fair market rental rate. As of December 31, 2012, the annual base rent payable under the current Brocade lease was approximately $672,000. The annualized rent payable in 2017 under the current Brocade lease will be approximately $779,000.

Stanley occupies approximately 37,400 rentable square feet of the Nathan Lane Building. The Stanley lease commenced on May 12, 2006, and expires on May 31, 2016. Effective May 1, 2010, Stanley began to reimburse for its pro rata share of the operating expenses and real estate taxes. Stanley has the right, at its option, to extend the initial term of its lease for two additional five-year periods. As of December 31, 2012, the annual base rent payable under the Stanley lease was approximately $487,000. The annualized base rent payable in 2016 under the Stanley lease will be approximately $524,000. The annualized base rent amounts for Brocade and Stanley are exclusive of rental abatement periods.

Commerce Street Building

The Commerce Street Building is a four-story office building containing a total of approximately 118,000 square feet, of which we ~~own~~owned approximately 115,000 rentable square feet, and two floors of a parking deck located in Nashville, Tennessee. The Commerce Street Building was acquired on December 14, 2007~~. As of December 31~~, ~~2012,~~and ~~the Commerce Street Building~~ was approximately 85% leased ~~under~~to ~~lease~~two ~~agreements~~tenants ~~with~~at ~~Country Music Television, Inc. ("CMT") for approximately 76% and Tennessee Information Consortium for approximately 9%. We are currently marketing~~ the ~~property~~time ~~for~~of disposition. ~~The original lease agreement with CMT, which includes approximately 57,000 square feet, commenced on October 1, 2002, and expires on May 31, 2013.~~ On August 1, ~~2005~~2013, ~~CMT~~we ~~executed~~sold anthe ~~amendment~~Commerce toStreet ~~its~~Building ~~original~~to ~~lease~~an ~~agreement,~~unrelated ~~increasing~~third ~~the~~party ~~square~~for ~~footage~~a ~~leased~~gross bysales anprice ~~additional~~of 29$11,200,000 ~~square feet~~, ~~which~~exclusive ~~commenced~~of onclosing ~~June~~costs ~~1, 2006,~~ and ~~also~~a ~~expires~~credit onof ~~May~~approximately 31$602,000 ~~2013. On~~for ~~December~~an 7,outstanding ~~2012,~~tenant ~~CMT~~improvement ~~exercised its option to extend the lease term on its leased space through May 31, 2020~~obligation. InAs ~~addition~~a toresult ~~annual base rent, CMT is required to reimburse its pro rata share~~ of the ~~operating expenses and real estate taxes that exceed base year expenses. In connection with the extension~~sale, ~~CMT~~we ~~received~~recognized a ~~rent~~gain ~~credit in the amount~~ of approximately $~~296~~268,~~800.~~000 Inand ~~addition,~~received ~~CMT~~net issale ~~entitled~~proceeds ~~to a landlord-funded tenant allowance~~ of approximately $~~602~~10,~~200. The landlord is also required to complete certain building improvements~~844, ~~as defined in the amendment~~000. ~~The~~In ~~amendment allows CMT to reduce its square footage leased by up to approximately 28,700 square feet,~~ the ~~second~~third ~~floor~~quarter of ~~the building~~2012, ~~effective~~we ~~May~~recorded ~~31,~~an ~~2018,~~impairment byloss ~~providing~~on ~~at least 12 months written notice and funding a payment to~~ the ~~landlord~~Commerce upStreet toBuilding of approximately $~~150~~1,~~000~~588,000 ~~dependent~~to ~~upon~~reduce the ~~total~~carrying ~~reduction~~value inof ~~square footage leased. CMT has~~ the ~~right,~~property ~~at its option,~~ to ~~extend the term of~~ its ~~lease~~estimated ~~for~~fair ~~two~~value ~~additional~~based ~~five-year~~on ~~periods at 95% of~~ the ~~then-current~~present ~~market~~value ~~rental rate. As~~ of ~~December 31,~~future ~~2012,~~cash ~~the annual base rent payable under the current CMT lease was approximately $1,609,000~~flows. ~~The annualized base rent payable in 2020 under the CMT lease will be approximately $1,696,000.~~

Tennessee Information Consortium occupies approximately 11,100 rentable square feet of the Commerce Building. The Tennessee Information Consortium lease, which commenced on September 1, 2011, and expires on August 31, 2016, provided for a three-month rental abatement period. In addition to annual base rent, Tennessee Information Consortium is required to reimburse its pro rata share of the operating expenses and real estate taxes that exceed base year expenses. As of December 31, 2012, the annual base rent payable under the Tennessee Information Consortium lease was approximately $193,000. The annualized base rent payable in 2016 under the Tennessee Information Consortium lease will be approximately $204,000. The annualized base rent amounts for CMT and Tennessee Information Consortium are exclusive of rental abatement periods.6

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Parkway at Oak Hill Buildings

The Parkway at Oak Hill Buildings consist of two separate two-story office buildings containing a combined total of approximately 146,000 rentable square feet and a three-story parking garage located in Austin, Texas. The Parkway at Oak Hill Buildings were acquired vacant on October 15, 2008, and were approximately 94% leased to seven tenants at the time of disposition. On May 9, 2012, we sold the Parkway at Oak Hill Buildings to Rorasa, Inc., an unaffiliated third party, for a gross sale price of $31.3 million. The disposition resulted in net sale proceeds of approximately $30.5 million and a gain on sale of approximately $5.6 million. In accordance with the terms of our loan agreement with NXT Capital, LLC (the "NXT Loan"), approximately $19.2 million of the net proceeds from the sale of the Parkway at Oak Hill Buildings was applied against the outstanding balance of the NXT Loan.


ITEM 3.	LEGAL PROCEEDINGS

We are from time to time a party to legal proceedings that arise in the ordinary course of our business. We are not currently involved in any litigation for which the outcome would, in management's judgment based on information currently available, have a material adverse effect on our results of operations or financial condition, nor is management aware of any such litigation threatened against us during the year ended December 31, ~~2012~~2013.


ITEM 4.	MINE SAFETY DISCLOSURES

Not applicable.

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PART II


ITEM 5.	MARKET FOR WELLS VAF I'S INVESTOR MEMBER INTERESTS, RELATED SECURITY HOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES.

Summary

As of February 28, ~~2013~~2014, 51,854 shares of investor member interests, held by a total of ~~602~~607 investor members, were outstanding. Capital contributions are equal to $1,000 per share of investor member interest. A public trading market has not been established for our shares of investor member interests, nor is such a market anticipated to develop in the future. The operating agreement provides WIM with the right to prohibit transfers of shares under certain circumstances.

Share Valuation

We are required to report the estimated value of the investor member interests annually to our members following the property valuation process set forth in the Advisory Agreement. In accordance with our Advisory Agreement, each year one-third of the properties are appraised by an independent appraiser, and the remaining two-thirds are appraised by personnel of WIM or its affiliates and reviewed by an independent appraiser. For purposes of the ~~2012~~2013 valuation, an independent appraisal was completed by Integra Realty Resources, Inc. on the Nathan Lane Building~~, while an internal appraisal by personnel of WIM or its affiliates was completed on the Commerce Street Building and subsequently reviewed by Altus Group U~~.~~S. Inc.~~ ~~as required by our Advisory Agreement.~~ The final ~~appraisals~~appraisal ~~were~~was utilized to determine the ~~aggregate asset~~ value of the assets under management for purposes of computing the appropriate amount of the annual asset management fee. The aggregate value of the assets under management discussed above, along with other assets and liabilities, were used to calculate the estimated value of the investor member interests. The estimated share valuations are intended to be an estimate of the distributions that would be made to investor members, assuming an orderly liquidation of our assets.

Utilizing the methodology described above and based upon market conditions existing in early December ~~2012~~2013, WIM's board of directors estimated the share valuation as of December 31, ~~2012~~2013, to be approximately $~~658~~555 per share, dependent upon each investor member's time of purchase in relation to our offering period. Individual member share values may vary from the average share value disclosed as a result of the complexities of the net cash flow distribution calculation described in detail below. These estimates should not be viewed as an accurate reflection of the price at which investor members might be able to sell their shares, or the fair market value of Wells VAF I's ~~properties~~remaining property, nor do they necessarily represent the amount of net proceeds the members would receive if Wells VAF I's ~~properties~~remaining ~~were~~property was sold and the proceeds were distributed in a liquidation. There is no established public trading market for our investor member shares, and it is not anticipated that a public trading market for the shares will ever develop. The valuations performed by us are estimates only and ~~are~~is based on a number of assumptions that may not be accurate or complete and may or may not be applicable to any specific investor member shares. In addition, the property ~~values~~value ~~are~~is subject to change and could decline in the future.

In addition, as we sell certain properties and distribute the net sale proceeds, if available, the remaining value of our portfolio of properties and resulting value of our investor member shares will naturally decline.

Distribution of Net Cash Flow

We may not make significant regular distributions from cash flow from operations, and we have the discretion to not distribute cash flow generated as net proceeds of nonliquidating sales of our properties, if WIM determines that it is in the best interest of Wells VAF I and its members to use such net proceeds to enhance the value of our portfolio. Our principal investment strategy is to operate and/or develop, improve, and dispose of properties in a manner that enhances their appreciation in value for realization upon property sales over the mid-term. Accordingly, a significant portion of any cash flow from operations may be deployed by us in value-enhancing strategies for our portfolio of properties, and some portion of nonliquidating net sale proceeds may also be deployed for such purposes.

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:


•	First, to the investor members up to a 10% per annum compounded return on their capital contributions during the offering period;

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•	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;

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•	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 contributions;


•	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.

During the years ended December 31, ~~2012~~2013 and ~~2011~~2012, we paid distributions of $75.0 million and $7.0 million, respectively, to investor members. No cash distributions were paid to Wells Management during the years ended December 31, ~~2012~~2013 and ~~2011~~2012.

Redemption of Shares of Investor Member Interests

We did not redeem any securities during the quarter ended December 31, ~~2012~~2013.

Unregistered Issuance of Securities

During ~~2012~~2013, we did not sell any equity securities that were not registered under the Securities Act.


ITEM 6.	SELECTED FINANCIAL DATA.

We have omitted presentation of selected financial data because, as a smaller reporting company, we are not required to provide such information.


ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our accompanying financial statements and notes thereto. See also "Cautionary Note Regarding Forward-Looking Statements" preceding Part I of this report.

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 ~~enhancing the value of our current portfolio and~~ positioning our remaining ~~properties~~property for sale. As a result of the current economic conditions and their impact on office market conditions, we have determined to hold individual assets longer than originally projected in order to achieve better disposition pricing for our investor members. We intend to continue to focus on positioning our remaining ~~properties~~property for sale ~~and dispose of the remaining assets in our portfolio this year, which is the final year of our projected fund life~~; however, we will evaluate offers to sell our remaining ~~properties~~property on an as-is basis. WeThe ~~can~~current ~~provide~~economic noconditions ~~guarantees,~~and ~~however,~~their ~~that~~impact ~~our~~on ~~portfolio~~office ~~will~~market beconditions ~~liquidated~~have byrequired ~~December~~that ~~2013~~we asextend our ~~manager,~~projected infund ~~its~~life ~~discretion,~~into ~~may~~2014 ~~hold our remaining assets longer~~ in order to potentially achieve better ~~returns~~disposition pricing for our investor members. As of February 28, ~~2013~~2014, we owned interests in ~~two~~one ~~properties~~remaining property.

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Portfolio Overview

Summary information relating to our properties 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 and Stanley. 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 issold ~~approximately~~on ~~85%~~August ~~leased~~1, to2013 ~~two~~for ~~tenants,~~a ~~CMT~~gross ~~and~~sales ~~Tennessee~~price ~~Information~~of ~~Consortium.~~$11,200,000, ~~The~~exclusive ~~major~~of ~~lease~~closing tocosts ~~CMT~~and ~~for~~a credit of approximately ~~76%~~$602,000 ~~extends~~for ~~through~~an ~~May~~outstanding ~~2020~~tenant improvement obligation. ~~Our~~The ~~fee-simple~~disposition ~~interest~~resulted in ~~the~~net ~~Commerce~~sale ~~Street~~proceeds ~~Building~~of isapproximately ~~subject~~$10,844,000 toand a ~~reciprocal~~gain ~~easement~~of ~~lease~~approximately ~~through~~$268,000. ~~December~~In 31the third quarter of 2012, ~~2083.~~we Werecorded ~~are~~an ~~currently~~impairment ~~marketing~~loss on the ~~property~~Commerce ~~for~~Street ~~disposition.~~Building of approximately $1,588,000 to reduce

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the carrying value of the property to its estimated fair value based on the present value of future cash flows. The Commerce Street Building was approximately 85% leased to two tenants at the time of its disposition.

•

The Parkway at Oak Hill Buildings are two separate two-story office buildings located in Austin, Texas, that were acquired vacant in October 2008 and sold to an unrelated third-party on May 9, 2012 for a gross sales price of $31.3 million, exclusive of adjustments and closing costs. The disposition resulted in net sale proceeds of approximately $30.5 million, of which $19.2 million was used to repay the outstanding balance on the NXT loan, and a gain of approximately $5.6 million. These buildings were 94% leased to seven tenants at the time of their disposition.

During the year ended December 31, 2013 and 2012, we distributed $5.0 million and $7.0 million to investor members in connection with the ~~disposition~~dispositions of the Commerce Street Building and the Parkway at Oak Hill ~~Buildings~~Building, respectively.

General Economic Conditions and Real Estate Market Commentary

Management reviews a number of economic forecasts and market commentaries in order to evaluate general economic conditions and to formulate a view of the current environment's effect on the real estate markets in which we operate.

As measured by the U.S real gross domestic product (“real GDP”), the U.S. economy increased by 21.29% in ~~2012~~2013, according to estimates, compared ~~with~~to an increase of 12.8% in ~~2011~~2012. The ~~increase~~growth inof ~~real~~the ~~GDP~~U.S. economy in ~~2012~~2013 primarily reflected positive contributions from personal consumption expenditures, ~~nonresidential~~exports, residential fixed investment, ~~exports,~~nonresidential ~~residential~~ fixed investment, and private inventory investment that were partly offset by a negative ~~contributions~~contribution from federal, ~~state, and local~~ government spending. While there are still challenges, management believes the U.S. ~~economy~~economic isindicators ~~likely~~across tothe ~~continue~~board, ~~its~~including ~~recovery~~employment, weoutput ~~believe~~and ~~the recovery will maintain a moderate pace with fiscal policy presenting the biggest variable in this outlook. Given the ongoing uncertainty surrounding the debt ceiling~~housing, ~~the~~point ~~U.S.~~to ~~economy~~sustained isgrowth ~~expected~~and tocontinued ~~start~~recovery ~~2013~~ at a ~~slow~~moderate pace. ~~Real~~ ~~GDP~~Given ~~is projected to remain below 2% in~~ the ~~first~~improving ~~half~~economic ofdata ~~the~~observed ~~year, and business growth is expected to remain below potential. But assuming U.S. lawmakers can agree to a deal, or~~ at ~~least provide a framework by~~ the ~~middle~~end of 2013, ~~the~~we ~~U.S.~~are ~~economy~~cautiously isoptimistic ~~expected~~that to2014 ~~accelerate~~will indeliver ~~the~~a ~~second half, with~~ real GDP ~~averaging~~growth ~~closer~~number toabove ~~a 3~~2% and that job growth ~~rate~~will accelerate.

Real estate market fundamentals underlying the U.S. office markets ~~improved~~mirrored ~~modestly~~the overall U.S. economy, displaying signs of broader, more consistent growth and modest improvements in the major indicators in ~~2012~~2013. ~~The~~ UNet absorption was 15.S.6 ~~office~~million ~~market~~square ~~ended~~feet in the fourth quarter ofand ~~2012~~51.6 ~~with~~million asquare ~~vacancy~~feet ~~rate~~for ofthe ~~12.5%~~year, anwhich ~~improvement~~is ~~from~~ a ~~13.0%~~slight ~~vacancy~~increase ~~rate~~as atcompared to the ~~end of 2011~~50. ~~During~~1 ~~the~~million ~~fourth~~square ~~quarter~~feet of ~~2012,~~net ~~demand~~absorption ~~for~~in ~~office~~2012. ~~space~~More ~~strengthened~~than ~~despite~~80% ~~the~~of ~~uncertainty~~metropolitan ~~surrounding~~areas ~~the~~experienced ~~fiscal~~occupancy ~~cliff. Net~~gains ~~absorption~~in ~~was~~both 202012 ~~million~~and ~~square~~2013. ~~feet~~As ina result of the ~~fourth~~additional ~~quarter~~space absorbed, ~~which~~vacancy islevels ~~the~~declined ~~highest~~to ~~level~~12.1% ~~since~~in the ~~third~~fourth quarter of ~~2007. However~~2013, ~~annual~~an ~~absorption~~improvement isfrom 20a 12.7% ~~below~~vacancy rate at the ~~long-term~~end ~~trend. Of~~of 802012, ~~metropolitan~~with ~~statistical~~48 ~~areas~~out ~~monitored,~~of 6682 metropolitan areas (8259%) ~~reported~~showing ~~positive~~declines ~~absorption~~ in ~~2012~~vacancy rates. Of ~~the~~Although ~~total~~vacancy ~~net~~is ~~absorption~~currently inlower ~~2012~~than its recessionary peak, ~~two-thirds~~it ~~was~~remains inslightly ~~Class~~higher Athan ~~space,~~its ~~which~~historical isaverage. ~~well~~With ~~above~~vacancy ~~its~~declining ~~35%~~in ~~share~~the majority of areas of the ~~office~~country, ~~stock~~rental ~~indicating~~rates aare ~~"flight~~beginning to ~~quality"~~trend byupward ~~tenants. Most~~and, ~~major~~despite ~~markets~~a ~~had~~recent ~~year-over-year~~trend ~~gains~~towards inoffice ~~both~~space ~~net~~efficiency, ~~absorption~~demand ~~and~~for office ~~jobs~~space ~~indicating~~exceeded anew ~~broad~~supply ~~level~~for ofthe ~~recovery~~second straight year. ~~Net~~ ~~absorption~~Approximately is82% ~~expected~~of tomarkets ~~average~~displayed 10higher ~~million~~rent ~~square~~in ~~feet~~the tofourth 25quarter ~~million~~of ~~square~~2013 ~~feet~~compared ~~per~~to the fourth quarter ~~through~~of ~~2017. The~~2012 with average quoted rental rates of the total office market ~~experienced~~seeing aan ~~slight~~ increase from $2223.9512 per square foot into $23.69 per square foot over this period. Similar to 2012, of the ~~fourth~~total ~~quarter~~net absorption in 2013, almost two-thirds occurred in Class A office space, which is above its 35% share of ~~2011~~the office market, indicating a continued trend to ~~$23~~quality assets by tenants.12 ~~per~~Economic ~~square~~prospects ~~foot~~throughout the country have improved with more industries and more markets participating in the ~~fourth~~recovery, ~~quarter~~something ofnot seen from 2010 through 2012. Early ~~2013~~2014 economic indicators are suggesting another year of at least modest growth.

~~Transaction~~The ~~activity~~upward ~~for~~trend ~~the~~in ~~fourth~~transaction ~~quarter~~volume ofcontinued ~~2012~~for ~~was~~office ~~the~~properties ~~highest~~in ~~seen~~2013. inThe ~~any~~fourth quarter ~~since~~of ~~the~~2013 ~~end~~marked ofthe ~~2007~~best ~~with~~fourth aquarter ~~volume~~performance offor ~~$29.1~~the ~~billion. Sellers~~office ~~motivated~~sector tosince ~~close~~the ~~deals~~2007 ~~prior~~peak toyear ~~the~~with ~~rise~~sales involume ~~applicable~~for ~~tax~~office ~~rates~~transactions ~~contributed~~of toapproximately ~~the~~$44.0 ~~increase,~~billion. ~~but~~U.S. office ~~prices~~transaction volumes increased ~~over~~45% in the fourth quarter of 2013 and ~~capitalization~~36% ~~rates~~for ~~declined~~the ~~slightly~~full ~~indicating~~year ~~that~~in ~~buyers~~2013 ~~were~~as ~~perhaps~~compared ~~even~~to ~~more~~the ~~motivated. The~~same ~~year-end~~respective ~~increase~~periods in ~~closings~~2012. ~~contributed~~As tothe aeconomic ~~2012~~recovery ~~total~~extends ~~volume~~across ofassets ~~$77.6~~and ~~billion~~markets, acompetition ~~19%~~remained ~~increase~~strong ~~from~~in ~~2011. In~~secondary ~~addition~~markets, awhile ~~shift~~high-end indeals ~~momentum~~continued ~~from~~to ~~trophy,~~contribute significantly ~~central~~to ~~business~~stronger ~~district~~primary ~~towers~~market toactivity ~~suburban~~during ~~properties~~the ~~and~~fourth ~~secondary~~quarter ~~markets~~of ~~began in 2012~~2013. ~~Non-major~~ ~~metropolitan~~Office ~~areas~~transaction ~~saw~~volumes acontinued ~~volume~~to ~~increase~~grow ofin ~~over~~secondary ~~40%~~markets, which iscontributed ~~more~~approximately ~~than~~40% ~~double~~of the ~~national~~investment ~~average. Additionally,~~sales ~~cap~~activity ~~rates~~for inthe ~~secondary~~year. ~~markets~~As ~~have~~we ~~started~~enter to2014, ~~decline~~we ~~with~~expect athe ~~sharp~~investment ~~decrease~~sales ~~observed~~momentum seen in ~~the~~2013 ~~fourth~~to ~~quarter of 2012. Overall~~continue, ~~average~~with ~~cap~~estimated ~~rates~~growth ~~decreased from 7.6%~~ in ~~October~~office ofinvestment ~~2012~~sales volume to ~~7.4~~exceed 20% infor ~~November~~the ~~of 2012~~year.

~~Despite~~Job ~~elevated~~growth was positive in 2013, with the unemployment ~~and~~rate ~~below-average~~declining ~~consumer~~from ~~confidence~~7.9% inat the ~~overall~~beginning ~~economy,~~of ~~annual~~the ~~office~~year ~~job~~to ~~growth~~6.7% isat ~~projected~~the end of the year. Essential to ~~range~~the ~~between~~commercial 1%real estate sector, office-using employment continues to 3%improve ~~through~~with ~~2017~~the U. ~~With~~S. ~~this~~creating 721,000 office-using jobs in 2013, up from 696,000 in 2012 and 570,000 in 2011. We expect these trends will continue in 2014; however, diversified and non-niche markets will likely be responsible for an increasing share of job growth as they recover from the economic downturn. This projected job growth, ~~future~~combined ~~years~~with a lack of new supply coming into the market in 2014-2015 should ~~see~~continue ~~solid~~to produce strong office net absorption and declining office vacancy rates and push leverage in landlords’ favor until additional supply, in the form of new construction, is delivered across markets in the mid-2015 to early-2016 time frame. This will likely result in continued increases in rental rents and declines in landlord concessions offered to tenants. Although tech-heavy and energy-rich markets such as Seattle-Bellevue, San Francisco, Silicon Valley, Houston and Dallas, continue to lead the

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~~absorption~~overall ~~rates. With~~markets with the ~~expected~~most ~~decline~~aggressive inupward ~~office vacancy rates nationally,~~ rent ~~growth~~trends isdue ~~projected~~ to ~~expand~~high todemand ~~more markets in 2013~~ and ~~more~~decreasing ~~significantly~~availability, inlandlord ~~2014. Office~~confidence ~~market~~has ~~rents~~begun ~~are expected~~ to ~~have~~spread ~~more~~across ~~upside than any~~ other ~~property~~markets ~~type~~as ~~with a cumulative increase of 30% expected by 2017~~well. ~~Due~~ toThrough ~~low vacancy levels and little to no new product~~2014, ~~many of the more supply~~once-~~constrained~~lagging ~~metropolitan~~markets ~~areas~~like ~~should~~Atlanta, ~~see~~Philadelphia, ~~the~~Los ~~strongest~~Angeles, ~~growth~~Chicago byand ~~2017. These~~other ~~metropolitan~~heavily ~~areas~~diversified ~~include~~tenant ~~New~~markets ~~York,~~are ~~Boston,~~likely ~~Denver,~~to ~~and~~see ~~Orange~~rents ~~County,~~grow ~~California. Technology-exposed~~at ~~markets~~a ~~should~~faster ~~also~~pace ~~have strong rent growth~~ due to ~~above-average~~an ~~demand~~economic ~~prospects. Examples~~recovery ofthat ~~these~~finally ~~markets~~appears ~~include San Jose and San Francisco~~firm.

Impact of Economic Conditions on our Portfolio

While some of the market conditions noted above may indicate expected changes in rental rates, the extent to which our portfolio may be affected is dependent upon the market conditions in the geographic ~~areas~~area inof ~~which we own~~ our ~~two~~remaining ~~properties~~property.

Less diversified real estate funds that own few properties, similar to Wells VAF I, and those funds with current vacancies or near- term tenant rollover, similar to Wells VAF I, may face a challenging leasing environment. As of December 31, ~~2012~~2013, the Nathan Lane Building ~~and~~is ~~the Commerce Street Building are~~ currently approximately 55% ~~and 15%~~ vacant~~, respectively~~. ~~These~~The ~~properties,~~property ~~in particular,~~ may be required to offer lower rental rates and higher concession packages to potential tenants~~, the degree to which will depend heavily upon the specific property and market~~. Our investment strategy, which includes either renewing an existing tenant's lease or re-leasing the property prior to marketing it for sale, remains intact. However, our leasing efforts will be impacted by the economic conditions noted above. As a result of the current economic conditions and their impact on office market conditions, we have determined to hold individual assets longer than originally projected in order to achieve better disposition pricing for our investor members. We intend to continue to focus on positioning our remaining ~~properties~~property for sale and dispose of the remaining assets in our portfolio this year~~, which is the final year of our projected fund life; however, we will evaluate offers to sell our remaining properties on an as-is basis~~. We can provide no guarantees, however, that our portfolio will be liquidated by December ~~2013~~2014 as our manager, in its discretion, may hold our remaining ~~assets~~asset longer in order to achieve better returns for our investor members.

Liquidity and Capital Resources

Overview

During the period from September 2005 through September 2008, we raised funds through the sale of shares of investor member interests under our private placement offering, and we used substantially all offering proceeds, net of offering costs, and other expenses, to acquire real properties and to fund certain re-leasing costs and capital improvements. We expect that our primary source of future cash flows will be cash generated from the operations of our ~~properties, the~~ remaining ~~availability~~property ~~on the NXT Loan,~~ and net proceeds from the sale of our remaining ~~properties~~property.

Our operating strategy entails funding expenditures related to the recurring operations of the ~~properties~~remaining property with operating cash flows, assessing the amount of operating cash flows and ~~proceeds~~cash ~~from~~on ~~the~~hand ~~NXT Loan~~ 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.

WeDuring ~~are~~2013 and 2012, we were party to an agreement with NXT Capital for a loan ~~in the amount of up to $30 million~~, referred to as the NXT Loan. ~~Following~~The ~~the repayment of the outstanding balance in May 2012 in connection with the disposition of the Parkway at Oak Hill Buildings, the remaining availability on the~~ NXT Loan was ~~$10~~scheduled ~~million, subject~~ to ~~certain~~mature ~~funding~~in ~~requirements~~December 2013. ~~The~~On ~~NXT~~October ~~Loan~~10, ~~which matures on December 16,~~ 2013, ~~with~~we anterminated ~~option to extend~~ the ~~maturity date for two additional 12-month terms provided that certain conditions are met, bears interest at the greater of (i) one-month LIBOR plus a margin of 3.75% or (ii) 7.25%. The~~ NXT Loan ~~is secured by the Nathan Lane Building and the Commerce Street Building~~. The NXT Loan requires monthly interest-only payments from our net cash flow. To the extent there is an outstanding balance on the NXT Loan, we may prepay the balance in full, but not in part, except as permitted with respect to a partial release, provided an exit fee equal to 1% of the outstanding loan amount and a minimum interest recovery amount are paid. 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 ~~properties~~remaining property in order to achieve better disposition pricing for our investor members and (ii) ~~extending~~funding ~~the~~our ~~maturity~~portfolio ~~date~~level ofgeneral ~~the~~and ~~NXT~~administrative ~~Loan,~~expenses ~~which~~from ~~currently~~the ~~matures~~operating incash ~~December~~flow ~~2013,~~of ~~or obtaining replacement third-party financing, if necessary, to fund future re-leasing costs and other capital improvements to further position~~ our ~~properties~~remaining ~~for disposition~~property.

Short-Term Liquidity and Capital Resources

During the year ended December 31, ~~2012~~2013, we generated net operating cash flows of approximately $1.0.7 million. Operating cash inflows reflect receipts of rental payments, and tenant reimbursements, less payments for property operating costs, asset and ~~fundings~~property ~~from~~management ~~certain~~fees, ~~escrow~~and ~~accounts~~general ~~included~~and ~~within~~administrative expenses.

12During the year ended December 31, 2013, we invested approximately $1.1 million in real estate by utilizing cash on hand primarily to fund tenant improvements and capital expenditures at the 330 Commerce Building, prior to its disposition. During the year ended December 31, 2013, we received net sale proceeds of approximately $10.8 million from the disposition of the Commerce Street Building. We utilized these proceeds to distribute $5.0 million to our investor members.

~~Table~~We expect to utilize the residual cash balance on hand as of ~~Contents~~December 31, 2013 of approximately $12.0 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 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.

other assets, less payments for property operating costs, interest expense, asset and property management fees, and general and administrative expenses.

During the year ended December 31, 2012, we invested approximately $0.6 million of cash on hand in real estate. During the year ended December 31, 2012, we received net sale proceeds of approximately $30.5 million from the disposition of the Parkway at Oak Hill Buildings. We utilized these proceeds to repay the outstanding balance on the NXT Loan of approximately $19.2 million, distribute $7.0 million to our investor members, fund deferred lease costs of $0.7 million, and fund deferred financing costs of approximately $0.2 million related to the exit fee on the NXT Loan. We reserved the remainder of the proceeds in order to fund future capital improvements and re-leasing costs for our remaining properties.

We expect to utilize the residual cash balance on hand as of December 31, 2012 of approximately $6.6 million and remaining availability on the NXT Loan to satisfy current liabilities and to fund anticipated re-leasing costs and capital expenditures at our remaining properties. Future distributions paid to our investor members will be largely dependent on the amount of cash generated from our operating activities, our expectations of future cash flows, net proceeds from the sale of our remaining properties, 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 ~~properties,~~our ~~and~~remaining ~~future third-party borrowings, if necessary~~property. We expect that our primary uses of capital will be for capital improvements, re-leasing costs, ~~operating expenses, including interest expense on any future outstanding indebtedness,~~ and ~~repayment~~operating ~~of such borrowings~~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 and repayment of any third-party borrowings. To the extent our properties continue to remain partially vacant, increased property operating expenses and asset and property management fees may reduce our cash flow from operating activities. We expect that substantially all future third-party borrowings, if necessary, would be used to fund certain re-leasing costs and capital expenditures for our existing properties. 11

Contractual Obligations and Commitments

We are contractually obligated to pay certain lobby and reciprocal easement rental expenses at the Commerce Street Building through December 31, 2083. As of December 31, 2012, the annualized lobby and reciprocal easement lease obligations were approximately $153,000. The tenants at the Commerce Street Building currently reimburse us for a portion of these rental expense obligations.

Certain lease agreements include provisions that, at the option of the tenant, may obligate us to expend capital to expand an existing property or provide other expenditures for the benefit of the tenant. In December 2012, we executed a lease amendment with CMT and as a result, CMT has the right to request the reimbursement of tenant improvements up to approximately $602,200, which would be required to be funded by Wells VAF I. In addition, we also required to complete certain building improvements, as defined in the CMT lease amendment, which are estimated at approximately $495,000.

Results of Operations

Comparison of the year ended December 31, 2011 versus the year ended December 31, 2012

Rental income increased from $2,956,423 for the year ended December 31, 2011 to $3,098,989 for the year ended December 31, 2012, primarily due to an increase in occupancy at the Commerce Street Building. Absent future leasing or disposition activity, we expect future rental income to remain at a relatively similar level as compared to the year ended December 31, 2012.

Tenant reimbursements increased from $1,211,852 for the year ended December 31, 2011 to $1,324,380 for the year ended December 31, 2012, primarily as a result of an increase in property operating costs at the Nathan Lane Building, as further discussed below. Absent future leasing or disposition activity, we expect future tenant reimbursements to remain at a relatively similar level, as compared to the year ended December 31, 2012.

Property operating costs increased from $2,560,397 for the year ended December 31, 2011 to $2,712,801 for the year ended December 31, 2012, primarily due to an increase in real estate taxes and utility expenses at the Nathan Lane Building, partially offset by a decrease in utility expenses at the Commerce Street Building. Absent future leasing or disposition activity, we expect future property operating costs to remain at a relatively similar level, as compared to the year ended December 31, 2012.

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~~Asset~~In ~~and~~determining ~~property~~how ~~management~~and ~~fees~~when ~~increased~~to ~~slightly~~allocate ~~from~~cash ~~$342~~resources,~~081~~ ~~for~~we ~~the~~initially ~~year~~consider ~~ended~~the ~~December 31,~~source ~~2011~~of ~~to $358,936 for~~ the ~~year~~cash. ~~ended~~We ~~December 31,~~expect ~~2012,~~that ~~primarily~~substantially ~~due~~all tofuture anet ~~slight~~operating ~~increase~~cash inflows ~~the~~will ~~gross~~be ~~value~~used offor ~~our~~reserves ~~remaining~~for ~~real~~certain ~~estate~~capital ~~assets~~expenditures insuch ~~connection~~as ~~with~~re-leasing ~~the~~costs ~~2011~~and ~~year-end~~capital ~~valuation~~improvements. ~~Asset~~To ~~management~~the ~~fees~~extent ~~are~~the ~~incurred~~Nathan asLane aBuilding ~~percentage~~continues ofto ~~our~~remain ~~gross~~partially ~~asset~~vacant, ~~value.~~property ~~Absent~~operating ~~future~~expenses ~~disposition~~and ~~activity, we anticipate~~ asset and property management fees tomay ~~remain~~continue atto areduce ~~relatively~~our ~~similar~~cash ~~level,~~flow asfrom ~~compared~~operating ~~to the year ended December 31, 2012~~activities.

~~Depreciation~~Results ~~expense increased from $798,444 for the year ended December 31, 2011 to $837,191 for the year ended December 31, 2012, primarily as a result~~ of tenant improvements completed in connection with the Tennessee Information Consortium lease at the Commerce Street Building. Absent future leasing or disposition activity, we expect future depreciation expense to increase slightly, as compared to the year ended December 31, 2012, as a result of the anticipated tenant improvement project at the Commerce Street Building incurred in connection with CMT's lease extension.Operations

~~Impairment~~Comparison ~~loss~~of ~~increased from $0 for~~ the year ended December 31, ~~2011~~2012 toversus ~~$1,588,316 for~~ the year ended December 31, ~~2012~~2013 as a result of recognizing a nonrecurring impairment loss at the Commerce Street Building due to management's strategy in shortening the estimated holding period of this asset in the third quarter of 2012.

~~General~~Rental income and ~~administrative~~tenant ~~expenses~~reimbursements ~~increased~~remained ~~from~~relatively stable at $~~600~~1,~~289~~181,188 and $1,055,365, respectively, for the year ended December 31, ~~2011~~2012 toand $~~677~~1,~~974~~185,575 and $1,048,766, respectively, for the year ended December 31, ~~2012,~~2013. ~~primarily~~Absent ~~due~~any toleasing ~~(i)~~activity, anwe ~~increase in the overhead administrative costs allocated to our portfolio and (ii) the increase in administrative costs related to reporting and regulatory requirements during 2012. We~~ expect future ~~general~~rental income and ~~administrative~~tenant ~~expenses~~reimbursements to remain at a relatively similar level, as compared to the year ended December 31, ~~2012~~2013.

~~Interest~~Property ~~expense~~operating ~~decreased~~costs increased from $1,~~824~~626,~~526~~689 for the year ended December 31, ~~2011~~2012 to $~~921~~1,~~562~~684,481 for the year ended December 31, ~~2012~~2013, primarily due to ~~the~~an ~~full~~increase ~~repayment~~in ofreal ~~the~~estate ~~NXT~~taxes ~~Loan~~assessed ~~balance~~on in the ~~second~~Nathan ~~quarter~~Lane ~~of 2012~~Building. Absent Weany ~~continue~~leasing toactivity, ~~incur non-cash interest expense related to the amortization of deferred financing costs associated with NXT Loan since~~ we ~~still have the ability to draw on the remaining availability. We~~ expect future ~~interest~~property ~~expense~~operating tocosts ~~continue~~ to ~~decrease~~remain asat a ~~result~~similar oflevel, ~~the~~as ~~full~~compared ~~repayment~~to of the ~~NXT~~year ~~Loan~~ended ~~balance~~December 31, ~~in the second quarter of 2012~~2013.

~~Our~~Asset ~~loss~~and ~~from~~property ~~discontinued~~management ~~operations~~fees ofdecreased from $~~(318~~229,~~420)~~288 for the year ended December 31, ~~2011~~2012 ~~improved~~ to ~~income from discontinued operations of~~ $5190,~~760,746~~759 for the year ended December 31, ~~2012~~2013, primarily asdue ato ~~result of recognizing~~ a ~~gain~~slight ofdecrease ~~approximately~~in ~~$5,634,100 on~~ the ~~sale~~gross value of the ~~Parkway~~Nathan atLane ~~Oak~~Building ~~Hill~~in ~~Buildings~~connection inwith ~~May~~the 2012 ~~and~~year-end anvaluation. ~~increase~~Asset inmanagement ~~occupancy~~fees atare ~~the~~incurred ~~Parkway~~as ata ~~Oak~~percentage ~~Hill~~of ~~Buildings~~our ~~prior~~gross toasset ~~its disposition in May 2012~~value. ~~Absent~~We expect future ~~disposition~~asset ~~activity,~~and weproperty ~~expect~~management ~~future~~fees ~~income~~to ~~from~~remain ~~discontinued~~at ~~operations~~a tosimilar ~~decrease~~level, as compared to the year ended December 31, ~~2012, as a result of recognizing a non-recurring gain on the sale of the Parkway at Oak Hill Buildings in the second quarter of 2012~~2013.

~~Our~~Depreciation ~~net~~expense ~~loss~~increased offrom $(3455,~~145,867)~~631 for the year ended December 31, ~~2011~~2012 ~~improved~~ to ~~net income of~~ $2480,~~210,134~~083 for the year ended December 31, ~~2012~~2013, primarily due to ~~(i)~~tenant ~~recognizing~~improvements acompleted ~~gain of approximately $5,634,100 on the sale of the Parkway at Oak Hill Buildings~~ in ~~May~~2013 2012, (ii) a decrease in interest expense from the full repayment of the NXT Loan balance in the second quarter of 2012, partially offset by (iii) recognizing a nonrecurring impairment loss of approximately $1,588,300 at the ~~Commerce~~Nathan ~~Street~~Lane Building ~~in the third quarter of 2012~~. Absent ~~future~~ leasing ~~or disposition~~ activity, we expect future ~~net~~depreciation ~~income~~expense to ~~decrease~~remain at a similar level, as compared to the year ended December 31, ~~2012, as a result of recognizing a non-recurring gain on the sale of the Parkway at Oak Hill Buildings in the second quarter of 2012~~2013.

Amortization expense remained the same at $318,708 for the years ended December 31, 2012 and 2013. Absent leasing activity, we expect future amortization expense to remain at a similar level.

General and administrative expenses decreased from $594,275 for the year ended December 31, 2012 to $493,432 for the year ended December 31, 2013, primarily due to a decrease in administrative reimbursements and administrative costs related to reporting and regulatory requirements. 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 $921,562 for the year ended December 31, 2012 to $414,031 for the year ended December 31, 2013, primarily due to the full repayment of the NXT Loan balance in the second quarter of 2012. We continued to incur non-cash interest expense in 2013 related to the amortization of deferred financing costs associated with NXT Loan. We expect interest expense to decrease, as compared to the year ended December 31, 2013, in connection with the termination of the NXT Loan in the fourth quarter of 2013.

Our income from discontinued operations decreased from $4,119,734 for the year ended December 31, 2012 to $313,091 for the year ended December 31, 2013, as a result of (i) recognizing a gain of approximately $5,634,000 on the sale of the Parkway at Oak Hill Buildings in the second quarter of 2012, partially offset by (ii) recognizing an impairment loss of approximately $1,588,000 on the Commerce Street Building in the third quarter of 2012, and (iii) recognizing a gain of approximately $268,000 on the sale of the Commerce Street Building in the third quarter of 2013.

Our net income of $2,210,134 for the year ended December 31, 2012 decreased to a net loss of $(1,034,062) for the year ended December 31, 2013, as a result of (i) recognizing a gain of approximately $5,634,000 on the sale of the Parkway at Oak Hill Buildings in the second quarter of 2012, partially offset by (ii) recognizing an impairment loss of approximately $1,588,000 on the Commerce Street Building in the third quarter of 2012, (iii) a reduction in interest expense of approximately $508,000 due to the full repayment of the NXT Loan balance in the second quarter of 2012, and (iv) recognizing a gain of approximately $268,000 on the sale of the Commerce Street Building in the third 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.

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Application of Critical Accounting Policies

Our accounting policies have been established to conform with U.S. generally accepted accounting principles ("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.

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Below is a discussion of our accounting policies, 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

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. 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 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

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 ~~operating~~ 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 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.

In the third quarter of 2012, we recorded an impairment loss on the Commerce Street Building of approximately $1,588,000 to reduce the carrying value of the property to its estimated fair value based on the present value of future cash flows ~~based~~due onto management's strategy in shortening the estimated holding period of this asset in the third quarter of 2012.

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).

Allocation of Purchase Price of Acquired Assets

Upon the acquisition of real properties, we allocated the purchase price of properties to the acquired tangible assets, consisting of land and buildings, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and the value of in-place leases, based in each case on our estimate of their fair values. As further described below, in-place leases with Wells VAF I as the lessor may have values related to:

• Direct costs associated with obtaining a new tenant, including commissions, tenant improvements, and other direct costs, are estimated based on our consideration of current market costs to execute a similar lease. Such direct costs are included in intangible lease origination costs in the accompanying balance sheets and are amortized to expense over the remaining terms of the respective leases.

• The value of opportunity costs associated with lost rentals avoided by acquiring an in-place lease is calculated based on the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease. Such opportunity costs are included in intangible lease assets in the accompanying balance sheets and are amortized to expense over the remaining terms of the respective leases.

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• The value of tenant relationships is calculated based on expected renewal of a lease or the likelihood of obtaining a particular tenant for other locations. Values associated with tenant relationships are included in intangible lease assets in the accompanying balance sheets and are amortized to expense over the remaining terms of the respective leases.

• The value of effective rental rates of in-place leases that are above or below the market rates of comparable leases is calculated based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be received pursuant to the in-place leases and (ii) our estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining terms of the leases. The capitalized above-market and below-market lease values are recorded as intangible lease assets or liabilities and amortized as an adjustment to rental income over the remaining terms of the respective leases.

As of December 31, 2012 and 2011, Wells VAF I had the following gross intangible in-place lease assets and liabilities:

	As of December 31, 2012
	Intangible Lease Assets						IntangibleLeaseOriginationCosts			IntangibleBelow-MarketIn-PlaceLease Liabilities
	Above-MarketIn-PlaceLease Assets			AbsorptionPeriodCosts
Gross	$	357,971		$	2,934,382		$	2,619,309		$	386,472
Accumulated Amortization	(231,449		)	(2,251,761		)	(2,114,913		)	(294,789		)
Net	$	126,522		$	682,621		$	504,396		$	91,683

	As of December 31, 2011
	Intangible Lease Assets						IntangibleLeaseOriginationCosts			IntangibleBelow-MarketIn-PlaceLease Liabilities
	Above-MarketIn-PlaceLease Assets			AbsorptionPeriodCosts
Gross	$	357,971		$	2,934,382		$	2,619,309		$	386,472
Accumulated Amortization	(194,417		)	(1,826,911		)	(1,723,048		)	(241,923		)
Net	$	163,554		$	1,107,471		$	896,261		$	144,549

During the years ended December 31, 2012 and 2011, Wells VAF I recognized the following amortization of acquired intangible lease assets and liabilities:

	Intangible Lease Assets				IntangibleLeaseOriginationCosts		IntangibleBelow-MarketIn-PlaceLease Liabilities
For the year ended December 31:	Above-MarketIn-PlaceLease Assets		AbsorptionPeriod Costs
2012	$	37,032	$	424,850	$	391,865	$	52,866
2011	$	37,031	$	424,849	$	391,865	$	52,867

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The remaining net intangible assets and liabilities balances as of December 31, 2012 will be amortized as follows:

	Intangible Lease Assets				IntangibleLeaseOriginationCosts		IntangibleBelow-MarketIn-PlaceLease Liabilities
For the year ending December 31,	Above-MarketIn-PlaceLease Assets		AbsorptionPeriodCosts
2013	$	37,032	$	269,233	$	229,612	$	35,573
2014	37,032		158,067		113,705		23,218
2015	37,032		158,067		113,705		23,218
2016	15,426		81,558		47,374		9,674
2017	—		15,696		—		—
	$	126,522	$	682,621	$	504,396	$	91,683
Weighted-Average Amortization Period	3 years		2 years		2 years		2 years

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 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.

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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 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

WeDuring ~~have~~the ~~entered~~periods ~~into~~presented, we were party to agreements with WIM, ~~and~~ Wells Management, and WRES whereby we ~~pay~~paid certain fees and expense reimbursements to WIM, ~~and~~ 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 ~~incur~~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 5 to our financial statements included in this report for a description of these fees and reimbursements and amounts incurred.

See Item 1 Assertion of Legal Action Against Related-Parties for information regarding pending litigation against, among others, Piedmont REIT; Leo F. Wells, III; Wells Capital; Wells Management, our sponsoring member; certain affiliates of WREF; the directors of Piedmont REIT; and certain individuals who formerly served as officers or directors of Piedmont REIT prior to the closing of the internalization transaction of Piedmont REIT on April 16, 2007.

Commitments and Contingencies

We are subject to certain commitments and contingencies with regard to certain transactions. Refer to Note 5 and Note 9 ofto our ~~accompanying~~ financial statements included in this report for further explanation. Examples of such commitments and contingencies include:

• lobby and reciprocal easement agreements;

• commitments under existing lease agreements;


•	the Advisory Agreement; and


•	property management agreements.


ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We have omitted a discussion of quantitative and qualitative disclosures about market risk because, as a smaller reporting company, itwe isare not required to provide such information.

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ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Our financial statements and supplementary data are detailed under Item 15(a) and filed as part of ~~the~~this report on the pages indicated.


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

There were no disagreements with our independent registered public ~~accountants~~accounting firm, Frazier & Deeter, LLC, during the years ended December 31, ~~2012~~2013 and ~~2011~~2012.


ITEM 9A.	CONTROLS AND PROCEDURES

Evaluation 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 December 31, ~~2012~~2013. Based upon that evaluation, which was completed as of the end of the period covered by this Form 10-K, the Principal Executive Officer and the Principal Financial Officer of WIM concluded that our disclosure controls and procedures were effective as of December 31, ~~2012~~2013, 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.

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Management Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, as a process designed by, or under the supervision of, the Principal Executive Officer and Principal Financial Officer and effected by our management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:


•	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of our assets;


•	provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of management and/or members of the Financial Oversight Committee; and


•	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of human error and the circumvention or overriding of controls, material misstatements may not be prevented or detected on a timely basis. In addition, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes ~~and~~in conditions or that the degree of compliance with policies or procedures may deteriorate. Accordingly, even internal controls determined to be effective can provide only reasonable assurance that the information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized, and represented within the time periods required.

Our management has assessed the effectiveness of our internal control over financial reporting at December 31, ~~2012~~2013. To make this assessment, we used the criteria for effective internal control over financial reporting described in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, our management believes that our system of internal control over financial reporting met those criteria, and therefore our management has concluded that we maintained effective internal control over financial reporting as of December 31, ~~2012~~2013.

This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in this report.

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Changes in Internal Control Over Financial Reporting

There have been no significant changes in our internal control over financial reporting during the quarter ended December 31, ~~2012~~2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


ITEM 9B.	OTHER INFORMATION.

During the quarter ended December 31, ~~2012~~2013, 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.

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PART III


ITEM 10.	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

WIM

We have no officers or directors and operate under the direction of the board of directors of WIM, our manager (the "Board of Directors"). WIM was formed in August 2005 to bring together the comprehensive real estate services experience and expertise of key personnel within WREF whose services are important to the successful management and conduct of our operations to achieve our objectives as a value-added investment program. The executive offices of WIM are located at 6200 The Corners Parkway, Norcross, Georgia 30092. Pursuant to its appointment by Wells Management to serve as the manager, WIM organizes and deploys personnel to perform all of the property selection, acquisition, asset management, disposition, and other functions required by Wells VAF I. WIM is a wholly owned subsidiary of Wells Management, our sponsoring member.

Directors and Executive Officers of Manager

The Board of Directors is responsible for the management and control of our affairs. Individuals on the Board of Directors have been designated to serve as the Principal Executive Officer and Principal Financial Officer of WIM and consequently serve that role for us through their position with WIM. The Board of Directors functions as the investment committee (the "Investment Committee") for us, and makes all final decisions about property acquisitions and dispositions. The Investment Committee provides financial, investment, business, and other advice and assistance with respect to existing and prospective investments, including the evaluation of the proposed terms of any investment opportunity in light of our purpose and investment objectives. In addition, the Board of Directors provides ongoing supervision and direction for portfolio management and asset management. Investor members may not directly affect the composition of the Board of Directors; however, pursuant to the operating agreement, investor members may elect to remove WIM as the manager upon the affirmative vote of investor members holding greater than two-thirds of the outstanding shares of investor member interests.

Effective February 27, 2013, Randall D. Fretz, Kevin A. Hoover, and M. Scott Meadows resigned from WIM's board of directors. Messrs. Fretz, Hoover, and Meadows did not have any disagreements with management on any matters related to our operations, polices or practices.

Section 16(a) Beneficial Ownership Reporting Compliance

Under U.S. securities laws, directors, executive officers, and any persons beneficially owning more than 10% of our investor member shares are required to report their initial ownership of the investor member shares and most changes in that ownership to the SEC. The SEC has designated specific due dates for these reports, and we are required to identify in our annual report on Form 10-K those persons who did not file these reports when due. Based solely on our review of copies of the reports filed with the SEC and written representations of our directors and executive officers, we believe all persons subject to these reporting requirements filed the reports on a timely basis in ~~2012 except as follows: The initial report on Form 3 of Patricia T~~2013. ~~Morris, president of WIM, was inadvertently filed late.~~

Financial Oversight Committee

Wells VAF I does not have an audit committee. Accordingly, Wells Management, our sponsoring member, has established a Financial Oversight Committee consisting of Randy ~~Douglas P~~A. ~~Williams~~Simmons, as the Principal Financial Officer; ~~Brian~~Parker ~~M. Davis~~Hudson, as the Senior Vice President ~~of an affiliate of our sponsoring member~~; and ~~Glen~~Kerianne F.Maloney ~~Smith,~~ as ~~Chief~~Senior ~~Accounting~~Vice ~~Officer~~President. The Financial Oversight Committee serves the equivalent function of an audit committee for, among others, the following purposes: appointment, compensation, review and oversight of the work of our independent registered public ~~accountants~~accounting firm, and establishing and enforcing the code of ethics. However, since neither Wells VAF I nor WIM has an audit committee and the Financial Oversight Committee is not independent of Wells VAF I or WIM, we do not have an "audit committee financial expert."

Code of Ethics

We do not have any officers; however, Wells Management, our sponsoring member, has adopted a code of ethics applicable to its principal executive officer and principal financial officer with respect to Wells VAF I. The code of ethics is contained in the Business Standards/Code of Conduct/General Policies established by WREF. You may obtain a copy of this code of ethics, without charge, upon request by calling our Client Services Department at 800-557-4830, option 2.

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ITEM 11.	EXECUTIVE COMPENSATION.

We do not directly employ officers or directors and, accordingly, no compensation has been awarded to, earned by, or paid directly by us to any individuals. We do, however, reimburse the salaries of certain employees of entities affiliated with WIM based on an allocation of their time spent managing our affairs. The reimbursements were not for the salary of our principal executive officer, Leo Wells, III, and the remaining amounts allocated to us for WIM's remaining officers and directors were less than the required reporting threshold of $100,000. Due to our current management structure and our lack of any direct employees, officers, or directors, no discussion and analysis of our compensation nor tabular information concerning salaries, bonuses, and other types of compensation to our executive officers or directors has been included in this Annual Report on Form 10-K.

See Item 13, "Certain Relationships and Related Transactions," for a description of the fees we incurred payable to WIM and its affiliates during the year ended December 31, ~~2012~~2013.


ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.


(a)	No investor member beneficially owns more than 5% of our outstanding investor member shares.

(b) We have no officers or directors. The directors and officers of WIM are responsible for our day-to-day operations and overall management functions. As of February 28, ~~2013~~2014, WIM's management did not own any of our outstanding investor member shares.


(c)	No arrangements exist which would, upon operation, result in a change in control of Wells VAF I.


ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Our Relationship with Wells Management, WIM, and Wells Investment Securities, Inc.

WIM is wholly owned by our sponsor, Wells Management, as its sole member. Wells Management is a wholly owned subsidiary of WREF, which is owned 100% by Leo F. Wells, III. Under our operating agreement, Wells Management has the exclusive authority to conduct the day-to-day and overall direction and supervision of our business and affairs. Pursuant to its authority, Wells Management appointed WIM to serve as our manager. During our private placement offering, WIS, which is indirectly owned 100% by Mr. Wells, served as our dealer-manager. We have entered into agreements with WIM and Wells Management, as discussed below, pursuant to which we pay our affiliates certain fees for services relating to the investment and management of our assets.

Sponsoring Member Interest

On September 27, 2005, we received a $1,000,000 contribution from Wells Management for a subordinated interest therein. 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's interest is subordinated to investor members in earnings allocations and distributions from Wells VAF I. See "Distribution of Net Cash Flow" under Item 5, "Market for Wells VAF I's Investor Member Interests and Related Security Holder Matters" for a discussion of the distributions Wells Management receives in connection with its subordinated interest.

Advisory Agreement

On September 15, 2005, Wells VAF I ~~has~~ 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, ~~2012~~2013, the Advisory Agreement was renewed for a one-year term through September 14, ~~2013,~~2014 upon terms identical to those in effect through September 14, ~~2012~~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.

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Under the terms of the Advisory Agreement, we incur 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.

Property Management ~~Agreements~~Agreement

On February 20, 2010, we executed an initial management agreement with Wells Real Estate Services, LLC ("WRES") to manage the operations of the Parkway at Oak Hill Buildings. On May 14, 2010, the initial management agreement was terminated and replaced with a revised management agreement (the "Parkway Management Agreement"), which was effective retroactive to February 20, 2010. Upon the disposition of the Parkway at Oak Hill Buildings in May 2012, this agreement was terminated. Pursuant to the Parkway Management Agreement, WRES was entitled to a monthly management fee equal to the greater of (i) $1,500 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 could have included wages and 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 5% for construction costs up to $150,000 and 3% for any construction costs over $150,000 on a per construction project basis.

OnFrom November 1, 2010 to February 28, 2013, we ~~entered~~were ~~into~~party to a management agreement with WRES tounder ~~manage~~which WRES managed the operations of the Commerce Street Building, ~~which was previously managed by a third-party vendor~~ (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 ~~could~~may have included ~~include~~ 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. ~~The~~On ~~Commerce~~February ~~Management Agreement had a one-year term~~28, ~~unless terminated pursuant to the terms of the agreement~~2013, ~~and~~we ~~was automatically extended for successive one-year terms. We could have~~ terminated the Commerce Management Agreement ~~upon 30 days' written notice prior to the expiration of the initial or subsequent extended term. The Commerce Management Agreement~~ with WRES ~~was terminated on February 28, 2013~~. Effective March 1, 2013, we 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, we terminated the Revised Commerce Management Agreement with Wells Management and entered into an agreement with a third-party provider.

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Related-Party Costs

Pursuant to the terms of the agreements described above, we incurred the following related-party costs for the years ended December 31, ~~2012~~2013 and ~~2011~~2012:

	2012		2011
	2013		2012
Administrative reimbursements(1)	$	~~468~~279,~~937~~127	$	~~401~~468,~~852~~937
Asset management fees(1)	~~340~~187,~~175~~250		~~427~~340,~~125~~175
Property management fees(1)	87,579		88,383
Disposition fee(1)	28,000		78,250
Disposition fee(1)	78,250		—
Property management fees(1)	9,803		87,579
Construction management fees(2)	—		43,457
Total	$	504,180	$	974,941
Total	$	974,941	$	960,817

(1) Administrative reimbursements, asset management fees, ~~property~~disposition ~~management~~ fees, and ~~disposition~~property management fees are expensed as incurred.

~~(2) Construction management fees are capitalized to real estate assets as incurred.~~18

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ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES.

Preapproval Policies and Procedures

The Financial Oversight Committee preapproves all auditing and permissible nonauditing services provided by our independent registered public accountants. The approval may be given as part of the Financial Oversight Committee's approval of the scope of the engagement of our independent registered public accountants or on an individual basis. The preapproval of certain audit-related services and certain nonauditing services not exceeding enumerated dollar limits may be delegated to one or more of the Financial Oversight Committee's members, but the member to whom such authority is delegated shall report any preapproval decisions to the full Financial Oversight Committee. Our independent registered public accountants may not be retained to perform the nonauditing services specified in Section 10A(g) of the Exchange Act.

Fees Paid to the Independent Registered Public Accountants

Frazier & Deeter, LLC serves as our independent registered public accountants and has provided audit services since August 19, 2008. All such fees are recognized in the period to which the services relate. The aggregate fees billed to Wells VAF I for professional accounting services by Frazier & Deeter, LLC, including the audit of Wells VAF I's annual financial statements for the fiscal years ended December 31, ~~2012~~2013 and ~~2011~~2012, are set forth in the table below.

	Frazier & Deeter, LLC
	2012		2011
	2013		2012
Audit Fees	$	52,000	$	5152,~~500~~000
Audit-Related Fees	—		—
Tax Fees	—		—
Other Fees	—		—
Total	$	52,000	$	5152,~~500~~000

For purposes of the preceding table, the professional fees are classified as follows:

•

Audit Fees - These are fees for professional services performed for the audit of our annual financial statements and review of financial statements included in our Form 10-Q filings, services that are normally provided by independent registered public accountants in connection with statutory and regulatory filings or engagements, and services that generally independent registered public accountants reasonably can provide, such as statutory audits, attest services, consents, and assistance with and review of documents filed with the SEC.


•	Audit-Related Fees - These are fees for assurance and related services that traditionally are performed by independent registered public accountants, such as due diligence related to acquisitions and dispositions, internal control reviews, attestation services that are not required by statute or regulation, and consultation concerning financial accounting and reporting standards.

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•

Tax Fees - These are fees for all professional services performed by professional staff in our independent registered public accountant's tax division, except those services related to the audit of our financial statements. These include fees for tax compliance, tax planning, and tax advice. Tax compliance involves preparation of any federal, state, or local tax returns. Tax planning and tax advice encompass a diverse range of services, including assistance with tax audits and appeals, tax advice related to acquisitions and dispositions of assets, and requests for rulings or technical advice from taxing authorities.


•	Other Fees - These are fees for other permissible work performed that do not meet the above-described categories, including assistance with internal audit plans and risk assessments.

During the fiscal years ended December 31, ~~2012~~2013 and ~~2011~~2012, 100% of the services performed by Frazier & Deeter, LLC described above under the caption "Audit Fees" were approved in advance by a member of the Financial Oversight Committee. In addition, fees were incurred for tax services performed by an accounting firm separate from our independent registered public accountants in each year presented.

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PART IV


ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) 1. A list of the financial statements contained herein is set forth on page F-1 hereof.

(a) 2. Not applicable.

(a) 3. The Exhibits filed in response to Item 601 of Regulation S-K are listed on the Exhibit Index attached hereto.

(b) See (a) 3 above.

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SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) 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)
March 15, 2013		/s/ Leo F. Wells, III
March 28, 2014		/s/ Leo F. Wells, III
		Leo F. Wells, IIIPrincipal Executive Officer, Director, and Chairman of the Board of Wells Investment Management Company, LLC

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacity as and on the date indicated.

March 15, 2013	/s/ Leo F. Wells, III
March 28, 2014	/s/ Leo F. Wells, III
	Leo F. Wells, IIIPrincipal Executive Officer, Director, and Chairman of the Board of Wells Investment Management Company, LLC
March 15, 2013	/s/ Douglas P. Williams
March 28, 2014	/s/ Randy A. Simmons
	Douglas P. Williams
	Randy A. Simmons
	Principal Financial Officer, Principal Accounting Officer, Director, Senior Vice President, Secretary, and Treasurer of Wells Investment Management Company, LLC
March 15, 2013	/s/ Brian M. Davis
March 28, 2014	/s/ Parker Hudson
	Brian M. Davis
	Parker Hudson
	Director of Wells Investment Management Company, LLC

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EXHIBIT INDEX TO

~~2012~~2013 FORM 10-K OF

WELLS MID-HORIZON VALUE-ADDED FUND I, LLC

ExhibitNo.			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
10.1			Purchase and Sale Agreement by and between Wells VAF - ~~Parkway~~330 atCommerce ~~Oak Hill~~Street, LLC and ~~Rorasa,~~Commerce ~~Inc.~~Street Nashville Partnership dated as of ~~March~~May 1229, ~~2012~~2013, incorporated by reference to Exhibit 10.1 to the Form 10-Q filed August 1013, ~~2012~~2013
10.2			First Amendment to the Purchase and Sale Agreement by and between Wells VAF - ~~Parkway~~330 atCommerce ~~Oak Hill~~Street, LLC and ~~Rorasa,~~Commerce ~~Inc.~~Street Nashville Partnership dated as of ~~April~~June 221, ~~2012~~2013, incorporated by reference to Exhibit 10.2 to the Form 10-Q filed August 1013, ~~2012~~2013
10.3*			Office Lease (related to the Commerce Street Building) between Wells VAF – 330 Commerce Street, LLC and Country Music Television, Inc.
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 Financial 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.INS*			XBRL Instance Document.
101.SCH**			XBRL Taxonomy Extension Schema.
101.SCH*			XBRL Taxonomy Extension Schema.
101.CAL**			XBRL Taxonomy Extension Calculation Linkbase.
101.CAL*			XBRL Taxonomy Extension Calculation Linkbase.
101.DEF**			XBRL Taxonomy Extension Definition Linkbase.
101.DEF*			XBRL Taxonomy Extension Definition Linkbase.
101.LAB**			XBRL Taxonomy Extension Label Linkbase.
101.LAB*			XBRL Taxonomy Extension Label Linkbase.
101.PRE**			XBRL Taxonomy Extension Presentation Linkbase.
101.PRE*			XBRL Taxonomy Extension Presentation Linkbase.
	*	Filed herewith.
	**	Furnished with this Form 10-K

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WELLS MID-HORIZON VALUE-ADDED FUND I, LLC

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FINANCIAL STATEMENTS

		Page
Report of Independent Registered Public Accounting Firm - Frazier & Deeter, LLC		F-2
Balance Sheets as of December 31, 2012 and 2011		F-3
Balance Sheets as of December 31, 2013 and 2012		F-3
Statements of Operations for the Years Ended December 31, 2012 and 2011		F-4
Statements of Operations for the Years Ended December 31, 2013 and 2012		F-4
Statements of Members’ Capital for the Years Ended December 31, 2012 and 2011		F-5
Statements of Members’ Capital for the Years Ended December 31, 2013 and 2012		F-5
Statements of Cash Flows for the Years Ended December 31, 2012 and 2011		F-6
Statements of Cash Flows for the Years Ended December 31, 2013 and 2012		F-6
Notes to Financial Statements		F-7

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Members

Wells Mid-Horizon Value-Added Fund I, LLC

We have audited the accompanying balance sheets of Wells Mid-Horizon Value-Added Fund I, LLC (the "Company") as of December 31, ~~2012~~2013 and ~~2011~~2012, and the related statements of operations, members' capital, and cash flows for ~~each of~~ the ~~two~~ years inthen ~~the period~~ ended ~~December 31, 2012~~. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Wells Mid-Horizon Value-Added Fund I, LLC as of December 31, ~~2012~~2013 and ~~2011~~2012, and the results of its operations and its cash flows for ~~each of~~ the ~~two~~ years inthen ~~the period~~ ended ~~December 31, 2012,~~ in conformity with U.S. generally accepted accounting principles.

/s/ Frazier & Deeter, LLC

Atlanta, Georgia

March 1528, ~~2013~~2014

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WELLS MID-HORIZON VALUE-ADDED FUND I, LLC

BALANCE SHEETS

	December 31, 2012		December 31, 2011
	December 31, 2013		December 31, 2012
Assets:
Real estate, at cost:
Land	$	3,780,435	$	73,~~281~~780,~~349~~435
Building and improvements, less accumulated depreciation of $3,987,525 and $5,740,531 as of December 31, 2012 and December 31, 2011, respectively	20,654,102		40,543,466
Building and improvements, less accumulated depreciation of $2,797,176 and $3,987,525 as of December 31, 2013 and December 31, 2012, respectively	11,242,771		20,654,102
Intangible lease assets, less accumulated amortization of $2,483,210 and $2,021,328 as of December 31, 2012 and December 31, 2011, respectively	809,143		1,271,025
Intangible lease assets, less accumulated amortization of $1,331,490 and $2,483,210 as of December 31, 2013 and December 31, 2012, respectively	502,883		809,143
Construction in progress	~~33,280~~—		~~160~~33,~~940~~280
Total real estate assets	2515,~~276~~526,~~960~~089		4925,~~256~~276,~~780~~960
Cash and cash equivalents	612,~~586~~048,~~461~~872		26,~~963~~586,~~396~~461
Tenant receivables	~~592~~346,~~114~~732		2592,~~593,389~~114
Other assets	~~473~~58,~~575~~747		1473,~~688,101~~575
Deferred financing costs, less accumulated amortization of $827,906 and $413,874 as of December 31, 2012 and December 31, 2011, respectively	414,031		828,063
Deferred financing costs, less accumulated amortization of $0 and $827,906 as of December 31, 2013 and December 31, 2012, respectively	—		414,031
Intangible lease origination costs, less accumulated amortization of $2,114,913 and $1,723,048 as of December 31, 2012 and December 31, 2011, respectively	504,396		896,261
Intangible lease origination costs, less accumulated amortization of $824,362 and $2,114,913 as of December 31, 2013 and December 31, 2012, respectively	274,787		504,396
Deferred leasing costs, less accumulated amortization of $402,870 and $599,672 as of December 31, 2012 and December 31, 2011, respectively	1,405,874		2,349,390
Deferred leasing costs, less accumulated amortization of $481,457 and $402,870 as of December 31, 2013 and December 31, 2012, respectively	434,235		1,405,874
Total assets	$	3528,~~253~~689,~~411~~462	$	6035,~~575~~253,~~380~~411
Liabilities:
Note payable	$	—	$	19,237,786
Accounts payable, accrued expenses and accrued capital expenditures	$	127,467	$	586,673
Accounts payable, accrued expenses and accrued capital expenditures	586,673		1,540,206
Due to affiliates	22,022		34,071
Due to affiliates	34,071		39,224
Deferred income	185,881		208,941
Deferred income	208,941		491,706
Intangible lease liabilities, less accumulated amortization of $168,331 and $294,789 as of December 31, 2013 and December 31, 2012, respectively	56,111		91,683
Intangible lease liabilities, less accumulated amortization of $294,789 and $241,923 as of December 31, 2012 and December 31, 2011, respectively	91,683		144,549
Total liabilities	391,481		921,368
Total liabilities	921,368		21,453,471
Commitments and Contingencies
Members' Capital:
Member Shares, $1,000 par value; 150,000 shares authorized; 51,854 shares issued and outstanding	3428,~~332~~297,~~043~~981		3934,~~121~~332,~~909~~043
Total liabilities and members' capital	$	3528,~~253~~689,~~411~~462	$	6035,~~575~~253,~~380~~411

See accompanying notes.

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WELLS MID-HORIZON VALUE-ADDED FUND I, LLC

STATEMENTS OF OPERATIONS

	Years ended December 31,
	2012			2011
	2013			2012
Revenues:
Rental income	$	31,~~098~~185,~~989~~575		$	21,~~956~~181,~~423~~188
Tenant reimbursements	1,~~324~~048,~~380~~766			1,~~211~~055,~~852~~365
Total revenues	42,~~423~~234,~~369~~341			42,~~168~~236,~~275~~553
Expenses:
Property operating costs	21,~~712~~684,~~801~~481			21,~~560~~626,~~397~~689
Asset and property management fees:
Related-party	~~298~~131,~~947~~250			~~288~~169,~~534~~300
Other	59,~~989~~509			5359,~~547~~988
Depreciation	~~837~~480,~~191~~083			~~798~~455,~~444~~631
Amortization	~~877~~318,~~201~~708			~~870~~318,~~032~~708
Impairment loss	1,588,316			—
General and administrative expenses	493,432			594,275
General and administrative expenses	677,974			600,289
Total expenses	3,167,463			3,224,591
Total expenses	7,052,419			5,171,243
Real Estate Operating Loss	(933,122		)	(988,038		)
Real Estate Operating Loss	(2,629,050		)	(1,002,968		)
Other Expense:
Other Income (Expense):
Interest expense	(414,031		)	(921,562		)
Interest and other income	—			47
Total Other Expense	(414,031		)	(921,562		)
Interest expense	(921,562		)	(1,824,526		)
Loss from Continuing Operations	(1,347,153		)	(1,909,600		)
Total Other Income (Expense)	(921,562		)	(1,824,479		)
Loss from Continuing Operations	(3,550,612		)	(2,827,447		)
Discontinued Operations:
Operating income (loss)	126,645			(318,420		)
Operating income	45,324			73,949
Gain from disposition	5,634,101			—
Impairment loss	—			(1,588,316		)
Income (Loss) from Discontinued Operations	5,760,746			(318,420		)
Gain from disposition	267,767			5,634,101
Net Income (Loss)	$	2,210,134		$	(3,145,867	)
Income from Discontinued Operations	313,091			4,119,734
Net Income (Loss)	$	(1,034,062	)	$	2,210,134
Net Income (Loss) per Weighted-Average Share of Investor Members' Interests
Loss from continuing operations	$	(6825.4798	)	$	(5436.5382	)
Income (loss) from discontinued operations	111.10			(6.14		)
Income from discontinued operations	6.04			79.45
Net income (loss) per weighted-average share of members' interests	$	42.63		$	(60.67	)
Net income (loss) per weighted-average share of investor members' interests	$	(19.94	)	$	42.63
Weighted-Average Shares of Investor Members' Interests Outstanding	51,854			51,854

See accompanying notes.

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WELLS MID-HORIZON VALUE-ADDED FUND I, LLC

STATEMENTS OF MEMBERS' CAPITAL

FOR THE YEARS ENDED

DECEMBER 31, ~~2012~~2013 AND ~~2011~~2012

	SponsoringMember		Investor Members'Interests				TotalMembers'Capital
			Shares	Amount
Members' Capital as of December 31, 2010	$	959,727	51,854	$	41,308,049		$	42,267,776
Members' Capital as of December 31, 2011	$	959,727	51,854	$	38,162,182		$	39,121,909
Net loss	—		—	(3,145,867		)	(3,145,867		)
Members' Capital as of December 31, 2011	959,727		51,854	38,162,182			39,121,909
Net income	—		—	2,210,134			2,210,134
Distributions	—		—	(7,000,000		)	(7,000,000		)
Members' Capital as of December 31, 2012	$959,727	~~959,727~~	51,854	$33,372,316	~~33,372,316~~		$34,332,043	~~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

See accompanying notes.

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WELLS MID-HORIZON VALUE-ADDED FUND I, LLC

STATEMENTS OF CASH FLOWS

	Years ended December 31,
	2012			2011
	2013			2012
Cash Flows from Operating Activities:
Net income (loss)	$	2(1,~~210~~034,~~134~~062	)	$	(32,~~145~~210,~~867~~134	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Gain on disposition	(5,634,101		)	—
Gain from disposition	(267,767		)	(5,634,101		)
Depreciation	1682,~~211,855~~104			1,~~847~~211,~~081~~855
Amortization of deferred financing costs	414,~~032~~031			~~413~~414,~~874~~032
Other amortization	1656,~~033,444~~624			1,~~147~~033,~~439~~444
Impairment loss	~~1,588,316~~—			—1,588,316
Changes in assets and liabilities:
Decrease (increase) in tenant receivables	4,819			(975,999		)
Decrease in tenant receivables	187,620			4,819
Decrease in other assets	1414,~~214,526~~828			21,~~122~~214,~~913~~526
(Decrease) increase in accounts payable and accrued expenses	(768,350		)	652,135
Decrease in accounts payable and accrued expenses	(290,581		)	(768,350		)
(Decrease) increase in due to affiliates	(5,153		)	3,706
Decrease in due to affiliates	(12,049		)	(5,153		)
Decrease in deferred income	(~~282~~23,~~765~~060		)	(58282,~~938~~765		)
Net cash provided by operating activities	~~986~~727,~~757~~688			2986,~~006,344~~757
Cash Flows from Investing Activities:
Net proceeds from sale of real estate assets	30,456,527			—
Net proceeds from sale of real estate	10,843,518			30,456,527
Investment in real estate	(~~644~~1,~~155~~108,795		)	(1644,~~024,371~~155		)
Payment of deferred leasing costs	~~(745,900~~—		)	(~~259~~745,~~585~~900		)
Net cash provided by (used in) investing activities	29,066,472			(1,283,956		)
Net cash provided by investing activities	9,734,723			29,066,472
Cash Flows from Financing Activities:
Deferred financing costs paid	~~(192,378~~—		)	(~~150~~192,~~320~~378		)
Proceeds from note payable	—			237,786
Repayment of note payable	—			(19,237,786		)
Repayment of note payable	(19,237,786		)	—
Distributions paid to members	(5,000,000		)	(7,000,000		)
Distributions paid to members	(7,000,000		)	—
Net cash used in financing activities	(5,000,000		)	(26,430,164		)
Net cash (used in) provided by financing activities	(26,430,164		)	87,466
Net Increase in Cash and Cash Equivalents	5,462,411			3,623,065
Net Increase in Cash and Cash Equivalents	3,623,065			809,854
Cash and Cash Equivalents, beginning of year	6,586,461			2,963,396
Cash and Cash Equivalents, beginning of year	2,963,396			2,153,542
Cash and Cash Equivalents, end of year	$	12,048,872		$	6,586,461
Cash and Cash Equivalents, end of year	$	6,586,461		$	2,963,396
Supplemental Disclosure of Noncash Investing and Financing Activities:
Investment in real estate funded with deposit accounts included in other assets	$	—		$	438,506
Accrued capital expenditures	$	—		$	168,625
Payment of deferred leasing costs funded with deposit accounts included in other assets	$	—		$	245,602
Accrued capital expenditures	$	168,625		$	161,430
Accrued deferred financing costs	$	—		$	2,378

See accompanying notes.

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WELLS MID-HORIZON VALUE-ADDED FUND I, LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, ~~2012~~2013 AND ~~2011~~2012


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 a 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 of 1933, as amended (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 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. 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 ~~properties~~property for sale.

During the periods presented, Wells VAF I owned direct interests in the following properties:

	% Leased as of	% Leased as of
	December 31, 2012
	December 31, 2013	December 31, 2012
1. Nathan Lane BuildingA five-story office building located in Plymouth, Minnesota	45%	45%
2. Commerce Street BuildingA four-story office building and two floors of a parking deck located in Nashville,Tennessee	85%
2. Commerce Street Building(1)A four-story office building and two floors of a parking deck located in Nashville,Tennessee	—	85
3. Parkway at Oak Hill Buildings(1)Two separate two-story office buildings located in Austin, Texas	—
3. Parkway at Oak Hill Buildings(2)Two separate two-story office buildings located in Austin, Texas	—	—

(1) ~~These~~This ~~buildings~~building ~~were~~was sold in ~~May~~August ~~2012~~2013.

⁽²⁾These buildings were sold in May 2012.


2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Wells VAF I's financial statements are prepared in accordance with U.S. generally accepted accounting principles ("GAAP").

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Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. Actual results could differ from those estimates.

Fair Value Measurements

Wells VAF I estimates the fair value of its assets and liabilities (where currently required under GAAP) consistent with the provisions of the accounting standard for fair value measurements and disclosures. Under this standard, fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. While various techniques and assumptions can be used to estimate fair value depending on the nature of the asset or liability, the accounting standard for fair value measurements and disclosures provides the following fair value technique parameters and hierarchy, depending upon availability:

Level 1 - Assets or liabilities for which the identical term is traded on an active exchange, such as publicly traded instruments or futures contracts.

Level 2 - Assets and liabilities valued based on observable market data for similar instruments.

Level 3 - Assets or liabilities for which significant valuation assumptions are not readily observable in the market. Such assets or liabilities are valued based on the best available data, some of which may be internally developed. Significant assumptions may include risk premiums that a market participant would require.

Real Estate Assets

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 our 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 our 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 operating 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 (liabilities) 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 have been no additional impairments in the carrying value of our real estate assets and related intangible assets during 2013 (see below for historical impairment); however, certain of our assets may be carried at an amount more than could be realized in a current disposition transaction.

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~~During~~In the third quarter of 2012, Wells VAF I ~~evaluated~~recorded ~~the~~an ~~recoverability~~impairment ofloss ~~the~~on ~~carrying value of~~ the Commerce Street Building ~~pursuant~~of toapproximately ~~the accounting policy outlined above and determined that it is not recoverable~~$1, ~~as compared to the estimated fair value~~588,000 ~~primarily due~~ to ~~management's~~reduce ~~strategy in shortening~~ the ~~estimated holding period of this asset. Accordingly, Wells VAF I reduced the~~ carrying value of the ~~Commerce~~property ~~Street Building~~ to its estimated fair value based on the present value of future cash flows ~~and~~due ~~recognized~~to amanagement's ~~corresponding~~strategy ~~impairment~~in ~~loss~~shortening the estimated holding period of ~~approximately~~this ~~$1,588,000~~asset induring the third quarter of 2012.

The fair value ~~measurements~~measurement used in ~~these~~this ~~evaluations~~evaluation of nonfinancial assets ~~are~~is considered to be a Level 3 ~~valuations~~valuation within the fair value hierarchy outlined above, as there are significant unobservable inputs. Examples of inputs that Wells VAF I utilized in its fair value ~~calculations~~calculation ~~include~~includes estimated holding periods, discount rates, market capitalization rates, and expected lease rental rates. The table below represents the detail of the adjustment recognized during the year ended December 31, 2012, calculated using a discounted cash flow model and a discount rate of 9.0%, which is considered a significant Level 3 input.



Property	Net Book Value as of September 30, 2012		Impairment Loss Recognized		Fair Value as of September 30, 2012
Commerce Street Building	$	11,144,756	$	1,588,316	$	9,556,440

Projections of expected future operating cash flows require that management 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 Wells VAF I's real estate and related intangible assets and net income (loss).

Allocation of Purchase Price of Acquired Assets

Upon the acquisition of real properties, Wells VAF I allocated the purchase price of properties to the acquired tangible assets, consisting of land and buildings, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and the value of in-place leases, based in each case on Wells VAF I's estimate of their fair values. As further described below, in-place leases with Wells VAF I as the lessor may have values related to:

• Direct costs associated with obtaining a new tenant, including commissions, tenant improvements, and other direct costs, are estimated based on Wells VAF I's consideration of current market costs to execute a similar lease. Such direct costs are included in intangible lease origination costs in the accompanying balance sheets and are amortized to expense over the remaining terms of the respective leases.

• The value of effective rental rates of in-place leases that are above or below the market rates of comparable leases is calculated based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be received pursuant to the in-place leases and (ii) Wells VAF I's estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining terms of the leases. The capitalized above-market and below-market lease values are recorded as intangible lease assets or liabilities and amortized as an adjustment to rental income over the remaining terms of the respective leases.

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As of December 31, 2012 and 2011, Wells VAF I had the following gross intangible in-place lease assets and liabilities:

	As of December 31, 2012
	Intangible Lease Assets						IntangibleLeaseOriginationCosts			IntangibleBelow-MarketIn-PlaceLease Liabilities
	Above-MarketIn-PlaceLease Assets			AbsorptionPeriodCosts
Gross	$	357,971		$	2,934,382		$	2,619,309		$	386,472
Accumulated Amortization	(231,449		)	(2,251,761		)	(2,114,913		)	(294,789		)
Net	$	126,522		$	682,621		$	504,396		$	91,683

	As of December 31, 2011
	Intangible Lease Assets						IntangibleLeaseOriginationCosts			IntangibleBelow-MarketIn-PlaceLease Liabilities
	Above-MarketIn-PlaceLease Assets			AbsorptionPeriodCosts
Gross	$	357,971		$	2,934,382		$	2,619,309		$	386,472
Accumulated Amortization	(194,417		)	(1,826,911		)	(1,723,048		)	(241,923		)
Net	$	163,554		$	1,107,471		$	896,261		$	144,549

During the years ended December 31, 2012 and 2011, Wells VAF I recognized the following amortization of acquired intangible lease assets and liabilities:

	Intangible Lease Assets				IntangibleLeaseOriginationCosts		IntangibleBelow-MarketIn-PlaceLease Liabilities
For the year ended December 31:	Above-MarketIn-PlaceLease Assets		AbsorptionPeriod Costs
2012	$	37,032	$	424,850	$	391,865	$	52,866
2011	$	37,031	$	424,849	$	391,865	$	52,867

The remaining net intangible assets and liabilities balances as of December 31, 2012 will be amortized as follows:

	Intangible Lease Assets				IntangibleLeaseOriginationCosts		IntangibleBelow-MarketIn-PlaceLease Liabilities
For the year ending December 31,	Above-MarketIn-PlaceLease Assets		AbsorptionPeriodCosts
2013	$	37,032	$	269,233	$	229,612	$	35,573
2014	37,032		158,067		113,705		23,218
2015	37,032		158,067		113,705		23,218
2016	15,426		81,558		47,374		9,674
2017	—		15,696		—		—
	$	126,522	$	682,621	$	504,396	$	91,683
Weighted-Average Amortization Period	3 years		2 years		2 years		2 years

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 Wells VAF I is required to write off 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, Wells VAF I reduces the carrying value of 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.

FAs of December 31, 2013 and 2012, Wells VAF I had the following gross intangible in-10place lease assets and liabilities:



	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			Intangible Lease Origination Costs			Intangible Below-Market In-Place Lease Liabilities
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



	As of December 31, 2012
	Intangible Lease Assets						Intangible Lease Origination Costs			Intangible Below-Market In-Place Lease Liabilities
	Above-Market In-Place Lease Assets			Absorption Period Costs			Intangible Lease Origination Costs			Intangible Below-Market In-Place Lease Liabilities
Gross	$	357,971		$	2,934,382		$	2,619,309		$	386,472
Accumulated Amortization	(231,449		)	(2,251,761		)	(2,114,913		)	(294,789		)
Net	$	126,522		$	682,621		$	504,396		$	91,683

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~~extensions that~~During ~~are executed more than one year prior to~~ the ~~original in-place lease~~years ~~expiration~~ended ~~date, the useful life~~December ~~of the in-place lease will be extended over the new lease term with the exception of those in-place lease components~~31, ~~such~~2013 ~~as lease commissions~~ and ~~tenant allowances~~2012, ~~which~~ ~~have~~Wells ~~been~~VAF ~~renegotiated for~~I recognized the ~~extended~~following ~~term.~~amortization ~~Renegotiated~~of ~~in-place~~acquired ~~lease~~intangible ~~components, such as~~ lease ~~commissions~~assets and ~~tenant allowances, will be amortized over the shorter of the useful life of the asset or the new lease term.~~liabilities:



	Intangible Lease Assets				Intangible Lease Origination Costs		Intangible Below-Market In-Place Lease Liabilities
For the year ended December 31:	Above-Market In-Place Lease Assets		Absorption Period Costs		Intangible Lease Origination Costs		Intangible Below-Market In-Place Lease Liabilities
2013	$	37,032	$	269,228	$	229,609	$	35,572
2012	$	37,032	$	424,850	$	391,865	$	52,866

The remaining net intangible assets and liabilities balances as of December 31, 2013 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		Intangible Lease Origination Costs		Intangible Below-Market In-Place Lease Liabilities
2014	$	37,032	$	158,067	$	113,705	$	23,218
2015	37,032		158,067		113,705		23,218
2016	15,429		81,558		47,377		9,675
2017	—		15,698		—		—
	$	89,493	$	413,390	$	274,787	$	56,111
Weighted-Average Amortization Period	2 years		3 years		2 years		2 years

Cash and Cash Equivalents

Wells VAF I considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents may include cash and short-term investments. Short-term investments are stated at cost, which approximates fair value and may consist of investments in money market accounts. There were no restrictions on the use of Wells VAF I's cash balances as of December 31, ~~2012~~2013 and ~~2011~~2012.

Tenant Receivables

Tenant receivables are comprised of rental and reimbursement billings due from tenants and the cumulative amount of future adjustments necessary to present rental income using the straight-line method. Upon receiving notification of a tenant's intention to terminate a lease, unamortized straight-line rent receivables are written off to lease termination expense. Tenant receivables are recorded at the original amount earned, less an allowance for any doubtful accounts, which approximates fair value. Management assesses the collectability of tenant receivables on an ongoing basis and provides for allowances as such balances, or portions thereof, become uncollectible. No such allowances have been recorded as of December 31, ~~2012~~2013 and ~~2011, respectively~~2012.

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 December 31, ~~2012~~2013 and ~~2011~~2012.

Deferred Financing Costs

Deferred financing costs are comprised of costs incurred in connection with securing financing from third-party lenders and are capitalized and amortized over the term of the related financing arrangements. Wells VAF I recognized amortization of deferred financing costs for each of the years ended December 31, ~~2012~~2013 and ~~2011~~2012 of approximately $414,000 ~~and $414~~,~~000,~~ ~~respectively,~~ which is included in interest expense in the accompanying statements of operations.

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Deferred Leasing Costs

Deferred lease costs may include (i) costs incurred to procure leases, which are capitalized and recognized as amortization expense on a straight-line basis over the terms of the lease, and (ii) common area maintenance costs that are recoverable from tenants under the terms of the existing leases; such costs are capitalized and recognized as operating expenses over the shorter of the lease term or the recovery period provided for in the lease. The remaining unamortized balance of deferred leasing costs will be amortized over a weighted-average period of approximately four ~~six~~ years. Upon receiving notification of a tenant's intention to terminate a lease, unamortized deferred leasing costs are written off to lease termination expense.

Revenue Recognition

Wells VAF I's leases typically include renewal options, escalation provisions, and provisions requiring tenants to reimburse Wells VAF I for a pro rata share of operating costs incurred. All of the Wells VAF I's leases are classified as operating leases, and the related rental income, including scheduled rental rate increases (other than scheduled increases based on the Consumer Price Index) is generally recognized using the straight-line method over the terms of the respective leases. Tenant reimbursements are recognized as revenue in the period that the related property operating costs are incurred and are billed to the tenants pursuant to the terms of the underlying leases. Rental income and tenant reimbursements collected in advance are recorded as deferred income in the accompanying balance sheets. Lease termination income is recognized when the tenant loses the right to lease the space and Wells VAF I has satisfied all obligations under the related lease or lease termination agreement.

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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:


•	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.

During the years ended December 31, ~~2012~~2013 and ~~2011~~2012, Wells VAF I paid distributions of $75.0 million and $7.0 million, respectively, to investor members. No cash distributions were paid to Wells Management during the years ended December 31, ~~2012~~2013 and ~~2011~~2012.

Operating Segments

Wells VAF I operates in a single reporting segment, and the presentation of Wells VAF I's financial condition and performance is consistent with the way in which Wells VAF I's operations are managed.

~~Recent~~F- ~~Accounting Pronouncements~~11

In May 2011, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update 2011-04, Fair Value Measurement Topic Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS ("ASU 2011-04"). ASU 2011-04 converges the GAAP and International Financial Reporting Standards definition of "fair value," the requirements for measuring amounts at fair value, and disclosures about these measurements. The update does not require additional fair value measurements and is not intended to establish valuation standards or affect valuation practices outside of financial reporting. The adoption of ASU 2011-04 was effective for Wells VAF I for the period beginning January 1, 2012. The adoption of ASU 2011-04 has not had a material impact on Wells VAF I's financial statements or disclosures.

In June 2011, the FASB issued Accounting Standards Update 2011-05, Comprehensive Income Topic Presentation of Comprehensive Income ("ASU 2011-05"). ASU 2011-05 gives an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. ASU 2011-05 was effective for Wells VAF I for the period beginning January 1, 2012. In February 2013, the FASB issued Accounting Standards Update 2013-02, Comprehensive Income Topic Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income ("ASU 2013-02"). ASU 2013-02 requires an entity to disclose information about the amounts reclassified out of accumulated other

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~~comprehensive~~Recent ~~income~~Accounting by component. In addition, an entity is required to disclose significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income if the amount reclassified to net income in its entirety in the same reporting period is required under GAAP. For amounts that are not required under GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under GAAP that provide additional detail about those amounts. ASU 2013-02 will be effective for Wells VAF I for the period beginning January 1, 2013. The adoption of ASU 2011-05 and ASU 2013-02 have not had a material impact on Wells VAF I's financial statements or disclosures.Pronouncements

In April 2013, the FASB issued Accounting Standards Update 2013-07, Presentation of Financial Statements Topic Liquidation Basis of Accounting ("ASU 2013-07"). ASU 2013-07 requires an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is considered imminent when the likelihood is remote that the organization will return from liquidation and either: (a) a plan for liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the plan will be blocked by other parties; or (b) a plan for liquidation is being imposed by other forces. ASU 2013-07 will be effective for Wells VAF I beginning on January 1, 2014. Wells VAF I expects that the adoption of ASU 2013-07 will not have a material impact on its financial statements or disclosures.


3.	NOTE PAYABLE

On December 17, 2010, Wells VAF I entered into an agreement with NXT Capital, LLC ("NXT Capital") for a loan in the amount of up to $30 million (the "NXT Loan"). ~~Following~~The ~~the repayment of the outstanding balance in May 2012 in connection with the disposition of the Parkway at Oak Hill Buildings, the remaining availability on the~~ NXT Loan was ~~$10~~scheduled ~~million, subject~~ to ~~certain~~mature ~~funding requirements. The NXT Loan, which matures~~ on December 16, 2013~~, bears interest at the greater of (i) one-month London Interbank Offered Rate ("LIBOR") plus a margin of 3~~.~~75%~~ orOn ~~(ii)~~October ~~7.25%. As of December 31~~10, ~~2012~~2013, ~~the~~Wells ~~NXT~~VAF ~~Loan~~I ~~was~~terminated ~~secured by~~ the ~~Nathan~~NXT ~~Lane Building and the Commerce Street Building~~Loan.

Wells VAF I paid cash for interest expense on its note payable of approximately $~~508,000~~0 and $1508,~~400,~~000 during the years ended December 31, ~~2012~~2013 and ~~2011~~2012, respectively. During the periods presented, Wells VAF I did not capitalize any interest expense related to the NXT Loan.

Wells VAF I applies the provisions of the accounting standard for fair value measurements and disclosures to the estimations of fair value of its debt instruments. The fair value of Wells VAF I's debt instruments as of December 31, 2011, classified under Level 2, was estimated based on discounted cash flow analyses using the current market borrowing rates for similar types of borrowing arrangements as of the respective reporting date (see Note 2 for additional information). As of December 31, 2011, the carrying value of the NXT Loan approximated its fair value.


4.	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.


5.	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, ~~2012~~2013, the Advisory Agreement was renewed for a one-year term through September 14, ~~2013~~2014 upon terms identical to those in effect through September 14, ~~2012~~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. ~~In connection with the disposition of the Parkway at Oak Hill Buildings, the gross asset value of the assets~~

F• 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-13related 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

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~~under~~the ~~management~~services ~~was~~they ~~revised~~provide. inWIM ~~May~~allocates ~~2012~~its ~~for~~reimbursable ~~purposes~~costs of ~~calculating~~providing ~~the~~these ~~annual~~services ~~asset~~among ~~management~~Wells ~~fee~~VAF ~~effective~~I inand various ~~June~~other ~~2012~~affiliated public real estate investment programs based on time spent on each entity by individual personnel.

• 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.

Property Management ~~Agreements~~Agreement

On February 20, 2010, ~~Wells~~we ~~VAF I~~ executed an initial management agreement with Wells Real Estate Services, LLC ("WRES") to manage the operations of the Parkway at Oak Hill Buildings. On May 14, 2010, the initial management agreement was terminated and replaced with a revised management agreement (the "Parkway Management Agreement"), which was effective retroactive to February 20, 2010. Upon the disposition of the Parkway at Oak Hill Buildings in May 2012, this agreement was terminated. Pursuant to the Parkway Management Agreement, WRES was entitled to a monthly management fee equal to the greater of (i) $1,500 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 ~~incurs~~incurred in fulfilling its duties as the property manager. These costs and expenses could have included wages and 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 5% for construction costs up to $150,000 and 3% for any construction costs over $150,000 on a per construction project basis.

OnFrom November 1, 2010 to February 28, 2013, Wells VAF I ~~entered~~was ~~into~~party to a management agreement with WRES tounder ~~manage~~which WRES managed the operations of the Commerce Street Building, ~~which was previously managed by a third-party vendor~~ (the "Commerce Management Agreement"). Pursuant to the Commerce Management Agreement, WRES iswas 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 iswas entitled to reimbursement for all costs and expenses WRES incurs in fulfilling its duties as the property manager. These costs and expenses may include wages, salaries, and other employee-related expenses of WRES employees engaged in management, administration, operations, and marketing functions. Further, WRES iswas 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 iswas entitled to a construction management fee for supervision of the project equal to 1% of construction costs. ~~The~~On February 28, 2013, Wells VAF I terminated the Commerce Management Agreement ~~has~~with WRES. Effective March 1, 2013, Wells VAF I entered into a one-~~year~~month ~~term,~~management ~~unless~~agreement ~~terminated~~with ~~pursuant~~Wells Management (the "Revised Commerce Management Agreement") to manage the ~~terms~~operations of the ~~agreement,~~Commerce ~~and~~Street isBuilding ~~automatically~~upon ~~extended~~terms ~~for~~identical ~~successive~~to ~~one-year~~those ~~terms~~in the original Commerce Management Agreement with WRES. Effective March 31, 2013, Wells VAF I ~~may~~terminated ~~terminate~~ the Revised Commerce Management Agreement ~~upon~~with ~~30 days'~~Wells ~~written~~Management ~~notice~~and ~~prior~~entered tointo ~~the~~an ~~expiration~~agreement ofwith ~~the~~a ~~initial~~third-party ~~or subsequent extended term~~provider.

Related-Party Costs

Pursuant to the terms of the agreements described above, Wells VAF I incurred the following related-party costs for the years ended December 31, ~~2012~~2013 and ~~2011~~2012, portions of which are included in income ~~(loss)~~ from discontinued operations in the accompanying statements of operations:

	2012		2011
	2013		2012
Administrative reimbursements(1)	$	~~468~~279,~~937~~127	$	~~401~~468,~~852~~937
Asset management fees(1)	~~340~~187,~~175~~250		~~427~~340,~~125~~175
Property management fees(1)	87,579		88,383
Disposition fee(1)	28,000		78,250
Disposition fee(1)	78,250		—
Property management fees(1)	9,803		87,579
Construction management fees(2)	—		43,457
Total	$	504,180	$	974,941
Total	$	974,941	$	960,817

(1) Administrative reimbursements, asset management fees, ~~property~~disposition ~~management~~ fees, and ~~disposition~~property management fees are expensed as incurred.

~~(2)~~F- ~~Construction management fees are capitalized to real estate assets as incurred.~~13

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Due to Affiliates

As of December 31, ~~2012~~2013 and ~~2011~~2012, due to affiliates was comprised of the following items:

	December 31, 2012		December 31, 2011
	December 31, 2013		December 31, 2012
Administrative reimbursements and bill-backs	$	2922,~~442~~022	$	29,~~417~~442
Property management fees	~~4,629~~—		94,~~807~~629
	$	3422,~~071~~022	$	3934,~~224~~071

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.

Conflicts of Interest

As of December 31, ~~2012~~2013, WIM had no direct employees. WIM has contracted with Wells Capital and Wells Management to perform many of its obligations under the Advisory Agreement. 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.

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, WIM, Wells ~~Investment Securities, Inc. ("WIS"), Wells~~ Management, ~~Wells Core Office Income REIT Advisory Services, LLC~~ 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. As of December 31, 2013, Wells VAF I has 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.

Future net income generated by WREF is largely dependent upon the amount of fees earned by WREF's subsidiaries based on, among other things, the level of investor proceeds raised from the sale of common stock for certain WREFF-~~sponsored~~ programs and the volume of future acquisitions and dispositions of real estate assets by WREF-sponsored programs, as well as distribution income earned from equity interests in a real estate investment trust previously sponsored by Wells Capital. As of December 31, 2012, Wells VAF I has no reason to believe that WREF does not have access to adequate liquidity and capital resources, including cash flow generated from operations, cash on hand, other investments, and borrowing capacity, necessary to meet its current and future obligations as they become due. Modifying service agreements between WREF, or its affiliates, and Wells VAF I, or other WREF-sponsored programs, could impact WREF's future net income and future access to liquidity and capital resources. For example, a large portion of WREF's income is derived under agreements with Columbia Property Trust, Inc. ("Columbia"), formerly known as Wells Real Estate Investment Trust II, Inc. Effective February 28, 2013, Columbia transitioned to self-management and indicated that it does not expect to rely on WREF for the same level of services beyond December 31, 2013. As such, WREF does not expect to receive significant compensation from Columbia beyond December 31, 2013.14

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6. DISCONTINUED OPERATIONS

In accordance with GAAP, Wells VAF I has classified the results of operations related to the Parkway at Oak Hill Buildings, which were sold on May 9, 2012, and the Commerce Street Building, which was sold on August 1, 2013, as discontinued operations in the accompanying statements of operations. The Parkway at Oak Hill Buildings were sold for a gross sales price of $31.3 million, exclusive of adjustments and closing costs, and generated net sale proceeds of approximately $30.5 million. 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 ~~(loss)~~ from discontinued operations are presented below:

	Years ended December 31,
	2012		2011
	2013		2012
Revenues:
Rental income	$	~~794~~1,~~355~~106,417	$	12,~~769~~714,~~909~~391
Tenant reimbursements	~~622~~92,~~134~~689		~~755~~887,~~156~~641
Total revenues	1,~~416~~199,~~489~~106		23,~~525~~602,~~065~~032
Expenses:
Property operating costs	~~595~~587,~~457~~967		1,~~231~~680,~~950~~308
Asset and property management fees:
Related-party	~~128~~65,~~807~~803		~~226~~258,~~974~~454
Other	119,842		—
Depreciation	~~374~~202,~~664~~021		1756,~~048,637~~224
Amortization	77245,~~426~~664		~~200~~635,~~880~~919
General and administrative expenses	~~113~~42,~~479~~485		~~135~~197,~~044~~178
Total expenses	1,~~289~~153,~~844~~782		23,~~843~~528,~~485~~083
Operating Income (Loss)	126,645		(318,420		)
Operating Income	45,324		73,949
Gain on disposition	5,634,101		—
Impairment loss	—		(1,588,316		)
Income (Loss) from Discontinued Operations	$	5,760,746	$	(318,420	)
Gain from disposition	267,767		5,634,101
Income from Discontinued Operations	$	313,091	$	4,119,734


7.	RENTAL INCOME

The future contractual rental income due to Wells VAF I under noncancelable operating leases as of December 31, ~~2012~~2013, is presented below:

Year ending December 31:
2013	$	2,912,753
2014	$	1,229,794
2014	2,930,877
2015	1,251,104
2015	2,989,935
2016	967,292
2016	2,675,238
2017	446,837
2017	2,053,875
	$	3,895,027
Thereafter	4,029,914
	$	17,592,592

~~Country Music Television, Inc.,~~ Brocade Communications Systems, Inc., and Stanley Convergent Security Solutions, Inc. comprised approximately 4431%, ~~18%,~~ and 1323%, respectively, of the contractual rental income for the year ended December 31, ~~2012~~2013 and Brocade Communications Systems, Inc., and Stanley Convergent Security Solutions, Inc. will comprise approximately 67%, ~~19%,~~ and 1033%, respectively, of future contractual rental income.


8.	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.~~

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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.


9.	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.

~~Certain~~F- lease agreements include provisions that, at the option of the tenant, may obligate Wells VAF I to expend capital to expand an existing property or provide other expenditures for the benefit of the tenant. In December 2012, Wells VAF I executed a lease amendment with Country Music Television, Inc. ("CMT"). As a result, CMT has the right to request the reimbursement of tenant improvements up to approximately $602,200, which would be required to be funded by Wells VAF I. In addition, Wells VAF I is also required to complete certain building improvements, as defined in the CMT lease amendment, which are estimated at approximately $495,000.16

In addition, Wells VAF I is contractually obligated to pay certain lobby and reciprocal easement rental expenses at the Commerce Street Building through December 31, 2083. As of December 31, 2012, the annualized lobby and reciprocal easement lease obligations were approximately $153,000. The tenants at the Commerce Street Building currently reimburse Wells VAF I for a portion of these rental expense obligations.

10. SUBSEQUENT EVENT

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.

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