UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________ 

FORM 10-Q

__________________________________ 

(Mark One)

x Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended March 31, 2012

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 000-51262

WELLS REAL ESTATE INVESTMENT TRUST II, INC.

(Exact name of registrant as specified in its charter)

__________________________________

Maryland	20-0068852
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

6200 The Corners Parkway

Norcross, Georgia 30092

(Address of principal executive offices)

(Zip Code)

(770) 449-7800

(Registrant’s telephone number, including area code)

N/A

(Former name, former address, and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x    No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

  Yes  x  No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer", "accelerated filer", and "smaller reporting company" in Rule 12b-2 of the Exchange Act (check one).

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x (Do not check if a smaller reporting company)	Smaller reporting company	o

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

Number of shares outstanding of the registrant's

only class of common stock, as of April 30, 2012: 545,581,297 shares

FORM 10-Q

WELLS REAL ESTATE INVESTMENT TRUST II, INC.

TABLE OF CONTENTS

		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements	Page 4
	Consolidated Balance Sheets as of March 31, 2012 (unaudited) and December 31, 2011	Page 5
	Consolidated Statements of Operations for the Three Months Ended March 31, 2012 (unaudited) and 2011 (unaudited)	Page 6
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2012 (unaudited) and 2011 (unaudited)	Page 7
	Consolidated Statements of Equity for the Three Months Ended March 31, 2012 (unaudited) and 2011 (unaudited)	Page 8
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2012 (unaudited) and 2011 (unaudited)	Page 10
	Condensed Notes to Consolidated Financial Statements (unaudited)	Page 11
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	Page 30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	Page 40
Item 4.	Controls and Procedures	Page 41
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	Page 41
Item 1A.	Risk Factors	Page 41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	Page 42
Item 3.	Defaults Upon Senior Securities	Page 42
Item 4.	Mine Safety Disclosures	Page 42
Item 5.	Other Information	Page 42
Item 6.	Exhibits	Page 42

Page 2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Form 10-Q of Wells Real Estate Investment Trust II, Inc. ("Wells REIT II," "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 and Section 21E of the Securities Exchange Act of 1934. We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those acts. Such statements include, in particular, statements about our plans, strategies, and prospects and are subject to certain risks and uncertainties, including known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the U.S. Securities and Exchange Commission ("SEC"). We make no representations or warranties (express or implied) about the accuracy of any such forward-looking statements contained in this Form 10-Q, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Any such forward-looking statements are subject to 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 conditions, our ability to accurately anticipate results expressed in such forward-looking statements, including our ability to generate positive cash flow from operations, make distributions to stockholders, and maintain the value of our real estate properties, may be significantly hindered. See Item 1A in Wells REIT II's Annual Report on Form 10-K for the year ended December 31, 2011 for a discussion of some of the risks and uncertainties that could cause actual results to differ materially from those presented in our forward-looking statements. The risk factors described in our Annual Report are not the only ones we face, but do represent those risks and uncertainties that we believe are material to us. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also harm our business.

Page 3

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The information furnished in the accompanying consolidated balance sheets and related consolidated statements of operations, comprehensive income, equity and cash flows reflects all normal and recurring adjustments that are, in management’s opinion, necessary for a fair and consistent presentation of the aforementioned financial statements.

The accompanying consolidated financial statements should be read in conjunction with the condensed notes to Wells REIT II's financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations included in this quarterly report on Form 10-Q, and with Wells REIT II’s Annual Report on Form 10-K and Form 10-K/A filed for the year ended December 31, 2011. Wells REIT II’s results of operations for the three months endedMarch 31, 2012 are not necessarily indicative of the operating results expected for the full year.

Page 4

WELLS REAL ESTATE INVESTMENT TRUST II, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per-share amounts)

	(Unaudited)
	March 31, 2012			December 31, 2011
Assets:
Real estate assets, at cost:
Land	$	704,336		$	704,336
Buildings and improvements, less accumulated depreciation of $545,086 and $514,961 as of March 31, 2012 and December 31, 2011, respectively	3,448,122			3,472,971
Intangible lease assets, less accumulated amortization of $337,197 and $343,463 as of March 31, 2012 and December 31, 2011, respectively	374,802			391,989
Construction in progress	8,941			8,414
Real estate assets held for sale, less accumulated depreciation and amortization of $9,551 as of December 31, 2011	—			37,508
Total real estate assets	4,536,201			4,615,218
Cash and cash equivalents	49,156			39,468
Tenant receivables, net of allowance for doubtful accounts of $3,429 and $3,728 as of March 31, 2012 and December 31, 2011, respectively	126,518			130,549
Prepaid expenses and other assets	30,413			32,831
Deferred financing costs, less accumulated amortization of $6,215 and $5,590 as of March 31, 2012 and December 31, 2011, respectively	11,391			9,442
Intangible lease origination costs, less accumulated amortization of $235,671 and $236,679 as of March 31, 2012 and December 31, 2011, respectively	220,006			231,338
Deferred lease costs, less accumulated amortization of $23,818 and $22,390 as of March 31, 2012 and December 31, 2011, respectively	76,642			68,289
Investment in development authority bonds	646,000			646,000
Other assets held for sale, less accumulated amortization of $2,260 as of December 31, 2011	—			3,432
Total assets	$	5,696,327		$	5,776,567
Liabilities:
Line of credit and notes payable	$	1,177,754		$	1,221,060
Bonds payable, net of discount of $1,511 and $1,574 as of March 31, 2012 and December 31, 2011 respectively	248,489			248,426
Accounts payable, accrued expenses, and accrued capital expenditures	71,091			72,349
Due to affiliates	1,618			3,329
Deferred income	36,153			35,079
Intangible lease liabilities, less accumulated amortization of $77,260 and $74,326 as of March 31, 2012 and December 31, 2011, respectively	85,286			89,581
Obligations under capital leases	646,000			646,000
Liabilities held for sale	—			624
Total liabilities	2,266,391			2,316,448
Commitments and Contingencies (Note 6)	—			—
Redeemable Common Stock	177,450			113,147
Equity:
Common stock, $0.01 par value; 900,000,000 shares authorized; 546,731,156 and 546,197,750 shares issued and outstanding as of March 31, 2012 and December 31, 2011, respectively	5,467			5,462
Additional paid-in capital	4,886,844			4,880,806
Cumulative distributions in excess of earnings	(1,463,373		)	(1,426,550		)
Redeemable common stock	(177,450		)	(113,147		)
Other comprehensive income	692			84
Total Wells Real Estate Investment Trust II, Inc. stockholders' equity	3,252,180			3,346,655
Nonredeemable noncontrolling interests	306			317
Total equity	3,252,486			3,346,972
Total liabilities, redeemable common stock, and equity	$	5,696,327		$	5,776,567

See accompanying notes.

Page 5

WELLS REAL ESTATE INVESTMENT TRUST II, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per-share amounts)

	(Unaudited)
	Three months ended March 31,
	2012			2011
Revenues:
Rental income	$	120,486		$	113,619
Tenant reimbursements	25,791			25,907
Hotel income	4,375			4,150
Other property income	1,699			283
	152,351			143,959
Expenses:
Property operating costs	44,534			41,688
Hotel operating costs	4,097			4,012
Asset and property management fees:
Related-party	9,351			8,760
Other	831			904
Depreciation	30,125			27,442
Amortization	27,050			30,166
General and administrative	5,343			6,614
Acquisition fees and expenses	—			10,026
	121,331			129,612
Real estate operating income	31,020			14,347
Other income (expense):
Interest expense	(26,856		)	(22,165		)
Interest and other income	10,016			12,055
(Loss) gain on interest rate swaps	(76		)	89
	(16,916		)	(10,021		)
Income before income tax benefit	14,104			4,326
Income tax benefit	97			231
Income from continuing operations	14,201			4,557
Discontinued operations:
Operating income (loss) from discontinued operations	49			(2,142		)
Gain on disposition of discontinued operations	16,885			—
Income (loss) from discontinued operations	16,934			(2,142		)
Net income	31,135			2,415
Less: net income attributable to nonredeemable noncontrolling interests	(4		)	(4		)
Net income attributable to the common stockholders of Wells Real Estate Investment Trust II,Inc.	$	31,131		$	2,411
Per-share information – basic and diluted:
Income from continuing operations	$	0.03		$	0.00
Income (loss) from discontinued operations	$	0.03		$	0.00
Net income attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	$	0.06		$	0.00
Weighted-average common shares outstanding – basic and diluted	545,600			541,012

See accompanying notes.

Page 6

WELLS REAL ESTATE INVESTMENT TRUST II, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	(Unaudited) Three months ended March 31,
	2012		2011
Net income attributable to the common stockholders of Wells Real Estate Investment Trust II,Inc.	$	31,131	$	2,411
Market value adjustment to interest rate swap	608		752
Comprehensive income attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	31,739		3,163
Comprehensive income attributable to noncontrolling interests	4		4
Comprehensive income	$	31,743	$	3,167

See accompanying notes.

Page 7

WELLS REAL ESTATE INVESTMENT TRUST II, INC.

CONSOLIDATED STATEMENTS OF EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2012 (UNAUDITED)

(in thousands, except per-share amounts)

	Stockholders’ Equity
	Common Stock					Additional Paid-In Capital			Cumulative Distributions in Excess of Earnings			Redeemable Common Stock			Other Comprehensive Income		Total Wells Real Estate Investment Trust II, Inc. Stockholders’ Equity			Nonredeemable Noncontrolling Interests			Total Equity
	Shares		Amount
Balance, December 31, 2011	546,198		$	5,462		$	4,880,806		$	(1,426,550	)	$	(113,147	)	$	84	$	3,346,655		$	317		$	3,346,972
Issuance of common stock	4,356		44			31,017			—			—			—		31,061			—			31,061
Redemptions of common stock	(3,823	)	(39		)	(24,979		)	—			—			—		(25,018		)	—			(25,018		)
Increase in redeemable common stock	—		—			—			—			(64,303		)	—		(64,303		)	—			(64,303		)
Distributions to common stockholders ($0.125 per share)	—		—			—			(67,954		)	—			—		(67,954		)	—			(67,954		)
Distributions to noncontrolling interests	—		—						—			—			—		—			(15		)	(15		)
Components of comprehensive income:
Net income attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	—		—			—			31,131			—			—		31,131			—			31,131
Net income attributable to noncontrolling interests	—		—			—						—			—		—			4			4
Market value adjustment to interest rate swap	—		—			—			—			—			608		608			—			608
Balance, March 31, 2012	546,731		$	5,467		$	4,886,844		$	(1,463,373	)	$	(177,450	)	$	692	$	3,252,180		$	306		$	3,252,486

Page 8

WELLS REAL ESTATE INVESTMENT TRUST II, INC.

CONSOLIDATED STATEMENTS OF EQUITY

FOR THE THREE MONTHS ENDED March 31, 2011 (UNAUDITED)

(in thousands, except per-share amounts)

	Stockholders’ Equity
	Common Stock					Additional Paid-In Capital			Cumulative Distributions in Excess of Earnings			Redeemable Common Stock			Other Comprehensive Loss			Total Wells Real Estate Investment Trust II, Inc. Stockholders’ Equity			Nonredeemable Noncontrolling Interests			Total Equity
	Shares		Amount
Balance, December 31, 2010	540,907		$	5,409		$	4,835,088		$	(1,212,472	)	$	(161,189	)	$	(11,139	)	$	3,455,697		$	347		$	3,456,044
Issuance of common stock	3,392		34			32,360			—			—			—			32,394			—			32,394
Redemptions of common stock	(1,901	)	(19		)	(17,086		)	—			—			—			(17,105		)	—			(17,105		)
Increase in redeemable common stock	—		—			—			—			(84,952		)	—			(84,952		)	—			(84,952		)
Distributions to common stockholders ($0.125 per share)	—		—			—			(67,485		)	—			—			(67,485		)	—			(67,485		)
Distributions to noncontrolling interests	—		—			—			—			—			—			—			(13		)	(13		)
Components of comprehensive income:
Net income attributable to common stockholders of Wells Real Estate Investment Trust II, Inc.	—		—			—			2,411			—			—			2,411			—			2,411
Net income attributable to noncontrolling interests	—		—			—			—			—			—			—			4			4
Market value adjustment to interest rate swap	—		—			—			—						752			752			—			752
Balance, March 31, 2011	542,398		$	5,424		$	4,850,362		$	(1,277,546	)	$	(246,141	)	$	(10,387	)	$	3,321,712		$	338		$	3,322,050

See accompanying notes.

Page 9

WELLS REAL ESTATE INVESTMENT TRUST II, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	(unaudited)
	Three months ended March 31,
	2012			2011
Cash Flows from Operating Activities:
Net income	$	31,135		$	2,415
Adjustments to reconcile net income to net cash provided by operating activities:
Straight-line rental income	(809		)	(1,092		)
Depreciation	30,125			28,118
Amortization	26,792			32,183
Gain on interest rate swaps	(231		)	(2,554		)
Gain on sale of discontinued operations	(16,885		)	—
Noncash interest expense	909			5,356
Changes in assets and liabilities, net of acquisitions:
Decrease in tenant receivables, net	4,061			146
Decrease (increase) in prepaid expenses and other assets	2,271			(1,613		)
Decrease in accounts payable and accrued expenses	(2,689		)	(2,086		)
Decrease in due to affiliates	(1,713		)	(2,729		)
Increase (decrease) in deferred income	628			(384		)
Net cash provided by operating activities	73,594			57,760
Cash Flows from Investing Activities:
Net proceeds from the sale of real estate	57,685			—
Investment in real estate and earnest money paid	(6,327		)	(604,143		)
Deferred lease costs paid	(6,671		)	(8,187		)
Net cash provided by (used in) investing activities	44,687			(612,330		)
Cash Flows from Financing Activities:
Financing costs paid	(2,721		)	(3,847		)
Proceeds from lines of credit and notes payable	409,000			624,000
Repayments of lines of credit and notes payable	(452,415		)	(20,485		)
Distributions paid to nonredeemable noncontrolling interests	(15		)	(13		)
Issuance of common stock	31,061			32,394
Redemptions of common stock	(25,261		)	(16,292		)
Distributions paid to stockholders	(36,893		)	(35,048		)
Distributions paid to stockholders and reinvested in shares of our common stock	(31,061		)	(32,437		)
Net cash (used in) provided by financing activities	(108,305		)	548,272
Net increase (decrease) in cash and cash equivalents	9,976			(6,298		)
Effect of foreign exchange rate on cash and cash equivalents	(288		)	36
Cash and cash equivalents, beginning of period	39,468			38,882
Cash and cash equivalents, end of period	$	49,156		$	32,620

See accompanying notes.

Page 10

WELLS REAL ESTATE INVESTMENT TRUST II, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2012

(unaudited)

1. Organization

Wells Real Estate Investment Trust II, Inc. ("Wells REIT II") is a Maryland corporation that has elected to be taxed as a real estate investment trust ("REIT") for federal income tax purposes. Wells REIT II engages in the acquisition and ownership of commercial real estate properties, including properties that are under construction, are newly constructed, or have operating histories. Wells REIT II was incorporated on July 3, 2003 and commenced operations on January 22, 2004. Wells REIT II conducts business primarily through Wells Operating Partnership II, L.P. ("Wells OP II"), a Delaware limited partnership. Wells REIT II is the sole general partner of Wells OP II, and Wells OP II LP, LLC, a wholly owned subsidiary of Wells REIT II, is the sole limited partner of Wells OP II. Therefore, Wells REIT II owns 100% of the equity interests in, and possesses full legal control and authority over, the operations of Wells OP II. Wells OP II acquires, develops, owns, leases, and operates real properties directly, through wholly owned subsidiaries, or through joint ventures. References to Wells REIT II herein shall include Wells REIT II and all subsidiaries of Wells REIT II, direct and indirect, and consolidated joint ventures. Wells Real Estate Advisory Services II, LLC ("WREAS II") serves as the external advisor to Wells REIT II. See Note 8 for a discussion of the advisory services provided by WREAS II.

As of March 31, 2012, Wells REIT II owned controlling interests in 69 office properties and one hotel, which include 91operational buildings. These properties are comprised of approximately 22.3 million square feet of commercial space and are located in 22 states, the District of Columbia, and Moscow, Russia. As of March 31, 2012, 66 of the office properties were wholly owned and the remaining three were owned through consolidated joint ventures; the office properties were approximately 92.9% leased.

On December 1, 2003, Wells REIT II commenced its initial public offering of up to 785.0 million shares of common stock, of which 185.0 million shares were reserved for issuance through Wells REIT II's dividend reinvestment plan ("DRP"), pursuant to a Registration Statement filed on Form S-11 with the SEC (the "Initial Public Offering"). Except for continuing to offer shares for sale through its DRP, Wells REIT II stopped offering shares for sale under the Initial Public Offering on November 26, 2005. Wells REIT II raised gross offering proceeds of approximately $2.0 billion from the sale of approximately 197.1 million shares under the Initial Public Offering, including shares sold under the DRP through March 2006. On November 10, 2005, Wells REIT II commenced a follow-on offering of up to 300.6 million shares of common stock, of which 0.6 million shares were reserved for issuance under Wells REIT II's DRP, pursuant to a Registration Statement filed on Form S-11 with the SEC (the "Follow-On Offering"). On April 14, 2006, Wells REIT II amended the aforementioned registration statements to offer in a combined prospectus 300.6 million shares registered under the Follow-On Offering and 174.4 million unsold shares related to the DRP originally registered under the Initial Public Offering. Wells REIT II raised gross offering proceeds of approximately $2.6 billion from the sale of approximately 257.6 million shares under the Follow-On Offering, including shares sold under the DRP, through November 2008. Wells REIT II stopped offering shares for sale under the Follow-On Offering on November 10, 2008.

On November 11, 2008, Wells REIT II commenced a third offering of up to 375.0 million shares of common stock pursuant to a Registration Statement filed on Form S-11 with the SEC (the "Third Offering"). Under the Third Offering registration statement, as amended, Wells REIT II offered up to 300.0 million shares of common stock in a primary offering for $10 per share, with discounts available to certain categories of purchasers, and up to 75.0 million shares pursuant to its DRP at a purchase price equal to $9.55. Effective June 30, 2010, Wells REIT II ceased offering shares under the Third Offering. On August 27, 2010, the Third Offering was deregistered under the Form S-11 filing and the shares issuable pursuant to the DRP were registered on Form S-3. As of March 31, 2012, Wells REIT II had raised gross offering proceeds of approximately $1.5 billion from the sale of approximately 146.0 million shares under the Third Offering, including shares sold under the DRP.

As of March 31, 2012, Wells REIT II had raised gross offering proceeds from the sale of common stock under its public offerings of approximately $5.9 billion. After deductions from such gross offering proceeds for selling commissions and dealer-manager fees of approximately $509.5 million, acquisition fees of approximately $116.8 million, other organization and offering expenses of approximately $75.9 million, and common stock redemptions pursuant to our share redemption program of approximately $540.5 million, Wells REIT II had received aggregate net offering proceeds of approximately $4.7 billion. Substantially all of Wells REIT II's net offering proceeds have been invested in real estate.

Wells REIT II's stock is not listed on a public securities exchange. However, Wells REIT II's charter requires that in the event Wells REIT II's stock is not listed on a national securities exchange by October 2015, Wells REIT II must either seek stockholder

Page 11

approval to extend or amend this listing deadline or seek stockholder approval to begin liquidating investments and distributing the resulting proceeds to the stockholders. If Wells REIT II seeks stockholder approval to extend or amend this listing date and does not obtain it, Wells REIT II will then be required to seek stockholder approval to liquidate. In this circumstance, if Wells REIT II seeks and does not obtain approval to liquidate, Wells REIT II will not be required to list or liquidate and could continue to operate indefinitely as an unlisted company.

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements of Wells REIT II have been prepared in accordance with the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by U.S. generally accepted accounting principles ("GAAP") for complete financial statements. In the opinion of management, the statements for these unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Results for these interim periods are not necessarily indicative of a full year's results. Wells REIT II's consolidated financial statements include the accounts of Wells REIT II, Wells OP II, and any variable interest entity in which Wells REIT II or Wells OP II was deemed the primary beneficiary. With respect to entities that are not variable interest entities, Wells REIT II's consolidated financial statements shall also include the accounts of any entity in which Wells REIT II, Wells OP II, or their subsidiaries own a controlling financial interest and any limited partnership in which Wells REIT II, Wells OP II, or its subsidiaries own a controlling general partnership interest. All intercompany balances and transactions eliminate in consolidation. For further information, refer to the financial statements and footnotes included in Wells REIT II's Annual Report on Form 10-K for the year ended December 31, 2011.

Fair Value Measurements

Wells REIT II 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 consider.

Real Estate Assets

Wells REIT II is required to make subjective assessments as to the useful lives of its depreciable assets. Wells REIT II considers the period of future benefit of the asset to determine the appropriate useful lives. These assessments have a direct impact on net income. The estimated useful lives of its assets by class are as follows:

Buildings	40 years
Building improvements	5-25 years
Site improvements	15 years
Tenant improvements	Shorter of economic life or lease term
Intangible lease assets	Lease term

Evaluating the Recoverability of Real Estate Assets

Wells REIT II continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate and related intangible assets of both operating properties and properties under construction, in which Wells REIT II has an ownership interest, either directly or through investments in joint ventures, may not be recoverable. When indicators of potential impairment are present that suggest that the carrying amounts of real estate assets and related intangible assets (liabilities) may

Page 12

not be recoverable, Wells REIT II assesses the recoverability of these 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. In the event that such expected undiscounted future cash flows do not exceed the carrying values, Wells REIT II adjusts the carrying value of the real estate assets and related intangible assets to the estimated fair values, pursuant to the property, plant, and equipment accounting standard for the impairment or disposal of long-lived assets, and recognizes an impairment loss. Estimated fair values are calculated based on the following information, in order of preference, depending upon availability: (i) recently quoted market prices, (ii) market prices for comparable properties, or (iii) the present value of future cash flows, including estimated salvage value. Certain of our assets may be carried at more than an amount that could be realized in a current disposition transaction.

Assets Held for Sale

Wells REIT II classifies assets as held for sale according to ASC 360, Accounting for the Impairment or Disposal of Long-Lived Assets ("ASC 360"). According to ASC 360, assets are considered held for sale when the following criteria are met:

• Management, having the authority to approve the action, commits to a plan to sell the property.

• The property is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such property.

• An active program to locate a buyer and other actions required to complete the plan to sell the property have been initiated.

• The sale of the property is probable, and transfer of the property is expected to qualify for recognition as a completed sale, within one year.

• The property is being actively marketed for sale at a price that is reasonable in relation to its current fair value.

• Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

At such time that a property is determined to be held for sale, its carrying amount is reduced to the lower of its depreciated book value or its estimated fair value, less costs to sell, and depreciation is no longer recognized. As of December 31, 2011, Emerald Point and 5995 Opus Parkway were classified as held for sale at their respective depreciated book values (see Note 9. Assets Held for Sale and Discontinued Operations for additional information). Both 5995 Opus Parkway and Emerald Point were sold during the first three months of 2012.

Intangible Assets and Liabilities Arising from In-Place Leases where Wells REIT II is the Lessor

As of March 31, 2012 and December 31, 2011, Wells REIT II had the following gross intangible in-place lease assets and liabilities (in thousands):

		Intangible Lease Assets						Intangible Lease Origination Costs			Intangible Below-Market In-Place Lease Liabilities
		Above-Market In-Place Lease Assets			Absorption Period Costs
March 31, 2012	Gross	$	102,143		$	499,184		$	455,677		$	162,546
	Accumulated Amortization	$	(64,210	)	$	(263,557	)	$	(235,671	)	$	(77,260	)
	Net	$	37,933		$	235,627		$	220,006		$	85,286
December 31, 2011	Gross	$	109,457		$	515,322		$	468,017		$	163,907
	Accumulated Amortization	$	(68,706	)	$	(265,844	)	$	(236,679	)	$	(74,326	)
	Net	$	40,751		$	249,478		$	231,338		$	89,581

For the three months ended March 31, 2012 and the year ended December 31, 2011, Wells REIT II recognized the following amortization of intangible lease assets and liabilities (in thousands):

	Intangible Lease Assets				Intangible Lease Origination Costs		Intangible Below-Market In-Place Lease Liabilities
	Above-Market In-Place Lease Assets		Absorption Period Costs
For the three months ended March 31, 2012	$	2,532	$	13,838	$	11,344	$	4,296
For the year ended December 31, 2011	$	14,244	$	62,902	$	50,006	$	17,203
For the three months ended March 31, 2011	$	3,810	$	15,273	$	12,601	$	3,828

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The remaining net intangible assets and liabilities as of March 31, 2012 will be amortized as follows (in thousands):

	Intangible Lease Assets				Intangible Lease Origination Costs		Intangible Below-Market In-Place Lease Liabilities
	Above-Market In-Place Lease Assets		Absorption Period Costs
For the nine months ended December 31, 2012	$	6,694	$	37,690	$	31,809	$	12,408
For the years ending December 31:
2013	7,620		45,321		40,109		16,061
2014	6,578		40,283		37,151		15,629
2015	5,993		34,965		33,425		13,217
2016	5,718		24,688		25,654		8,209
2017	2,418		16,227		17,167		5,715
Thereafter	2,912		36,453		34,691		14,047
	$	37,933	$	235,627	$	220,006	$	85,286

Intangible Assets and Liabilities Arising from In-Place Leases where Wells REIT II is the Lessee

In-place ground leases where Wells REIT II is the lessee may have value associated with effective contractual rental rates that are above or below market rates. Such values are 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 paid pursuant to the in-place lease and (ii) management's estimate of fair market lease rates for the corresponding in-place lease, measured over a period equal to the remaining terms of the leases. The capitalized above-market and below-market in-place lease values are recorded as intangible lease liabilities or assets and amortized as an adjustment to property operating cost over the remaining term of the respective leases. Wells REIT II had gross below-market lease assets of approximately $110.7 million as of March 31, 2012 and December 31, 2011, and recognized amortization of these assets of approximately $0.5 million for the three months ended March 31, 2012 and 2011, and approximately $2.1 million for the year ended December 31, 2011.

As of March 31, 2012, the remaining net below-market lease asset will be amortized as follows (in thousands):

For the year ending December 31:
2012	$	1,552
2013	2,069
2014	2,069
2015	2,069
2016	2,069
2017	2,069
Thereafter	89,345
	$	101,242

Bonds Payable

In 2011, Wells REIT II issued $250.0 million of its 7-year, unsecured 5.875% senior notes at 99.295 percent of their face value. The discount on bonds payable is amortized to interest expense over the term of the bonds using the effective-interest method.

Interest Rate Swap Agreements

Wells REIT II enters into interest rate swap contracts to mitigate its interest rate risk on the related financial instruments. Wells REIT II does not enter into derivative or interest rate transactions for speculative purposes; however, certain of its derivatives may not qualify for hedge accounting treatment. Wells REIT II records the fair value of its interest rate swaps either as prepaid expenses and other assets or as accounts payable, accrued expenses, and accrued capital expenditures. Changes in the fair value of the effective portion of interest rate swaps that are designated as hedges are recorded as other comprehensive income (loss), while changes in the fair value of the ineffective portion of a hedge, if any, is recognized currently in earnings. Changes in the fair value of interest rate swaps that do not qualify for hedge accounting treatment are recorded as gain (loss) on interest rate swaps. Amounts

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received or paid under interest rate swap agreements are recorded as interest expense for contracts that qualify for hedge accounting treatment and as gain (loss) on interest rate swaps for contracts that do not qualify for hedge accounting treatment.

The following tables provide additional information related to Wells REIT II's interest rate swaps as of March 31, 2012 and December 31, 2011 (in thousands):

		Estimated Fair Value as of
Instrument Type	Balance Sheet Classification	March 31, 2012			December 31, 2011
Derivatives designated as hedging instruments:
Interest rate contracts	Prepaid expenses and other assets	$	608		$	—
Interest rate contracts	Accounts payable	$	—		$	—
Derivatives not designated as hedging instruments:
Interest rate contracts	Accounts payable	$	(1,491	)	$	(1,722	)

Wells REIT II applied the provisions of the accounting standard for fair value measurements and disclosures in recording its interest rate swaps at fair value. The fair values of the interest rate swap, classified under Level 2, were determined using a third-party proprietary model that is based on prevailing market data for contracts with matching durations, current and anticipated London Interbank Offered Rate ("LIBOR") information, and reasonable estimates about relevant future market conditions. The fair value of Wells REIT II's interest rate swaps were ($0.9 million) and ($1.7 million) at March 31, 2012 and December 31, 2011, respectively.

	Three months ended March 31,
	2012			2011
Market value adjustment to interest rate swap designated as a hedge instrument and included in   other comprehensive income	$	608		$	752
Loss on interest rate swaps recognized through earnings	$	(76	)	$	89

During the periods presented, there was no hedge ineffectiveness required to be recognized into earnings on the interest rate swaps that qualified for hedge accounting treatment.

Income Taxes

Wells REIT II has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"), and has operated as such beginning with its taxable year ended December 31, 2003. To qualify as a REIT, Wells REIT II must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its REIT taxable income, as defined by the Code, to its stockholders. As a REIT, Wells REIT II generally is not subject to income tax on income it distributes to stockholders. Wells REIT II is subject to certain state and local taxes related to the operations of properties in certain locations, which have been provided for in the accompanying consolidated financial statements.

Wells TRS II, LLC ("Wells TRS"); Wells KCP TRS, LLC ("Wells KCP TRS"); and Wells Energy TRS, LLC ("Wells Energy TRS") are wholly owned subsidiaries of Wells REIT II, are organized as Delaware limited liability companies, and operate, among other things, a full-service hotel. Wells REIT II has elected to treat Wells TRS, Wells KCP TRS, and Wells Energy TRS as taxable REIT subsidiaries. Wells REIT II may perform certain additional, noncustomary services for tenants of its buildings through Wells TRS, Wells KCP TRS, or Wells Energy TRS; however, any earnings related to such services are subject to federal and state income taxes. In addition, for Wells REIT II to continue to qualify as a REIT, Wells REIT II must limit its investments in taxable REIT subsidiaries to 25% of the value of the total assets. Deferred tax assets and liabilities represent temporary differences between the financial reporting basis and the tax basis of assets and liabilities based on the enacted rates expected to be in effect when the temporary differences reverse. Wells REIT II records interest and penalties related to uncertain tax positions as general and administrative expense in the accompanying consolidated statements of operations.

Recent Accounting Pronouncements

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 U.S. GAAP and IFRSs definition of "fair value," the requirements for

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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 REIT II on December 15, 2011. Wells REIT II's adoption of ASU 2011-04 has not had a material impact on Wells REIT II's consolidated 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. The adoption of ASU 2011-05 was effective for Wells REIT II after December 15, 2011, except for the specific requirement to present items that are reclassified from other comprehensive income to net income alongside their respective components of net income and other comprehensive income that has been deferred. Wells REIT II's adoption of ASU 2011-05 has not had a material impact on Wells REIT II's consolidated financial statements or disclosures.

3. Real Estate Acquisitions

Wells REIT II did not acquire real properties during the three months ended March 31, 2012. Wells REIT II acquired the Market Square Buildings on March 7, 2011. The following unaudited pro forma statement of operations presented for the three months ended March 31, 2011 has been prepared for Wells REIT II to give effect to the acquisition of the Market Square Buildings as if the acquisition occurred on January 1, 2011. The unaudited pro forma financial information has been prepared for informational purposes only and is not necessarily indicative of future results or of actual results that would have been achieved had the acquisition of the Market Square Buildings acquisition been consummated as of January 1, 2011 (in thousands).

	Three months ended March 31, 2011
Revenues	$	154,248
Net loss attributable to common stockholders	$	(664	)

4. Line of Credit and Notes Payable

As of March 31, 2012 and December 31, 2011, Wells REIT II had the following line of credit and notes payable indebtedness outstanding (excluding bonds payable, see Note 5. Bonds Payable) in thousands:

Facility	March 31, 2012		December 31, 2011
$450 Million Term Loan	$	375,000	$	—
Market Square Buildings mortgage note	325,000		325,000
100 East Pratt Street Building mortgage note	105,000		105,000
JPMorgan Chase Credit Facility	100,000		484,000
Wildwood Buildings mortgage note	90,000		90,000
263 Shuman Boulevard Building mortgage note	49,000		49,000
SanTan Corporate Center mortgage notes	39,000		39,000
One West Fourth Street Building mortgage note	38,980		39,555
Three Glenlake Building mortgage note	26,033		25,958
215 Diehl Road Building mortgage note	21,000		21,000
544 Lakeview Building mortgage note	8,741		8,707
Highland Landmark Building mortgage note	—		33,840
Total indebtedness	$	1,177,754	$	1,221,060

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On January 10, 2012, Wells REIT II used cash on hand and proceeds from the JPMorgan Chase credit facility to fully repay the Highland Landmark Building mortgage note of $33.8 million at its maturity.

On February 3, 2012, Wells REIT II closed on a four-year, unsecured term loan with a syndicate of banks led by JPMorgan Chase Bank N.A. (the “$450.0 Million Term Loan”). The $450.0 Million Term Loan bears interest at LIBOR, plus an applicable base margin; however, Wells REIT II effectively fixed the interest rate (assuming no change in our corporate credit rating) at 2.64% per annum with an interest rate swap executed contemporaneously with the loan. At closing, the $450.0 Million Term Loan yielded initial gross proceeds of $375.0 million. Wells REIT II has the ability to increase the amount of borrowings under the $450.0 Million Term Loan up to a maximum amount of $450.0 million on two occasions during the borrowing period in minimum increments of $25.0 million; however, none of the current banks are obligated to participate in such increases. The $450.0 Million Term Loan matures on February 3, 2016 provided that certain conditions are met prior to that date. Furthermore, provided that certain additional conditions are met prior to, and at, maturity, the $450.0 Million Term Loan shall become eligible for a one-year extension upon paying an extension fee equal to 0.15% of the outstanding balance.

The initial gross proceeds of $375.0 million were used to repay temporary borrowings on the JPMorgan Chase Credit Facility, which were drawn to repay mortgages in the third and fourth quarters of 2011. In April 2012, Wells REIT II exercised one of the options to increase borrowings under the $450.0 Million Term Loan from $375.0 million to $410.0 million, which additional proceeds were used to further reduce temporary borrowings, and thereby create additional short-term borrowing capacity, under the JPMorgan Chase Credit Facility. The $450.0 Million Term Loan contains the same restrictions and financial covenants as those included in the JPMorgan Chase Credit Facility, which are further described in the "Debt Covenants" section of Item 2. Management's Discussion and Analysis.

The estimated fair value of Wells REIT II's line of credit and notes payable as of March 31, 2012 and December 31, 2011 was approximately $1,216.4 million and $1,282.6 million, respectively. Wells REIT II estimated the fair value of its line of credit by obtaining estimates for similar facilities from multiple market participants as of the respective reporting dates. Therefore, the fair values determined are considered to be based on observable market data for similar instruments (Level 2). The fair values of all other debt instruments were estimated based on discounted cash flow analyses using the current incremental borrowing rates for similar types of borrowing arrangements as of the respective reporting dates. The discounted cash flow method of assessing fair value results in a general approximation of value, and such value may never actually be realized. During the three months ended March 31, 2012 and 2011, Wells REIT II also made interest payments of approximately $10.1 million and $8.2 million, respectively. There was no interest capitalized in either period. As of March 31, 2012, Wells REIT II believes it was in compliance with the restrictive covenants on its $450 Million Term Loan, outstanding line of credit, and notes payable obligations.

5. Bonds Payable

In 2011, Wells REIT II issued $250.0 million of its 7-year, unsecured 5.875% senior notes at 99.295 percent of their face value (the "2018 Bonds Payable").Wells REIT II received proceeds from the 2018 Bonds Payable, net of fees, of $246.7 million. The 2018 Bonds Payable require semi-annual interest payments in April and October based on a contractual annual interest rate of 5.875%, which is subject to adjustment in certain circumstances. In the accompanying consolidated balance sheets, the 2018 Bonds Payable are shown net of the initial issuance discount of approximately $1.8 million, which is amortized to interest expense over the term of the 2018 Bonds Payable using the effective interest method. The principal amount of the 2018 Bonds Payable is due and payable on the maturity date. No interest payments were made on the 2018 Bonds Payable during the three months ended March 31, 2012. As of March 31, 2012, Wells REIT II believes it was in compliance with the restrictive covenants on its 2018 Bonds Payable.

The estimated fair value of Wells REIT II's 2018 Bonds Payable as of March 31, 2012 and December 31, 2011 was approximately $251.1 million. The fair value of the 2018 Bonds Payable was estimated based on discounted cash flow analyses using the current incremental borrowing rates for similar types of borrowing as the 2018 Bonds Payable arrangements as of the respective reporting dates (Level 2). The discounted cash flow method of assessing fair value results in a general approximation of value, and such value may never actually be realized.

6. Commitments and Contingencies

Commitments Under Existing Lease Agreements

Certain lease agreements include provisions that, at the option of the tenant, may obligate Wells REIT II to expend capital to expand an existing property or provide other expenditures for the benefit of the tenant. As of March 31, 2012, no tenants have exercised such options that had not been materially satisfied.

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Litigation

Wells REIT II is subject to various legal proceedings, claims and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. Wells REIT II records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, Wells REIT II accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, Wells REIT II accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, Wells REIT II discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, Wells REIT II discloses the nature and estimate of the possible loss of the litigation. Wells REIT II does not disclose information with respect to litigation where an unfavorable outcome is considered to be remote. Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business or financial condition of Wells REIT II. Wells REIT II is not currently involved in any legal proceedings of which management would consider the outcome to be reasonably likely to have a material adverse effect on the results of operations or financial condition of Wells REIT II.

7. Supplemental Disclosures of Noncash Investing and Financing Activities

Outlined below are significant noncash investing and financing activities for the three months ended March 31, 2012 and 2011 (in thousands):

	Three months ended March 31,
	2012		2011
Other assets assumed upon acquisition of properties	$	50	$	—
Other liabilities assumed upon acquisition of property	$	—	$	6,430
Noncash interest accruing to notes payable	$	75	$	3,840
Market value adjustment to interest rate swap that qualifies for hedge accounting treatment	$	608	$	752
Accrued capital expenditures and deferred lease costs	$	8,660	$	8,481
Accrued deferred financing costs	$	10	$	342
Accrued redemptions of common stock	$	1,397	$	827
Increase in redeemable common stock	$	64,303	$	84,952

8. Related-Party Transactions and Agreements

Advisory Agreement

Wells REIT II is party to an agreement with WREAS II, under which WREAS II is required to perform certain key functions on behalf of Wells REIT II, including, among others, the investment of capital proceeds and management of day-to-day operations (the "Advisory Agreement"). WREAS II has executed master services agreements with Wells Capital, Inc. ("Wells Capital") and Wells Management Company, Inc. ("Wells Management") whereby WREAS II may retain the use of Wells Capital's and Wells Management's employees as necessary to perform the services required under the Advisory Agreement, and in return, shall reimburse Wells Capital and Wells Management for the associated personnel costs. Further, under the terms of the Advisory Agreement, Wells Real Estate Funds, Inc. ("WREF") guarantees WREAS II's performance of services and any amounts payable to Wells REIT II in connection therewith. The agreement may be terminated, without cause or penalty, by either party upon providing 60 days' prior written notice to the other party.

Under the terms of the Advisory Agreement, Wells REIT II incurs fees and reimbursements payable to WREAS II and its affiliates for services as described below:

• Reimbursement of organization and offering costs paid by WREAS II and its affiliates on behalf of Wells REIT II, not to exceed 2.0% of gross offering proceeds.

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• Through July 31, 2011, acquisition fees were incurred at 2.0% of gross offering proceeds, subject to certain limitations. Effective August 1, 2011, acquisition fees have been incurred at 1% of the property purchase price (excluding acquisition expenses); however, in no event may total acquisition fees for the calendar year exceed 2% of total gross offering proceeds. Wells REIT II also reimburses WREAS II and its affiliates for expenses it pays to third parties in connection with acquisitions or potential acquisitions.

• Asset management fees are incurred monthly at one-twelfth of 0.625% of the lesser of (i) gross cost, as defined, of all properties of Wells REIT II (other than those that fail to meet specified occupancy thresholds) and investments in joint ventures, or (ii) the aggregate value of Wells REIT II's interest in the properties and joint ventures as established with the most recent asset-based valuation, until the monthly payment equals $2.7 million (or $32.5 million annualized), as of the last day of each preceding month. For the first three months of 2011, Wells REIT II generally paid monthly asset management fees equal to one-twelfth of 0.625% of the cost of all of Wells REIT II's properties (other than those that fail to meet specified occupancy thresholds) and its investments in joint ventures; from April 2011 through March 2012, asset management fees were capped at $2.7 million per month (or $32.5 million annualized) following the March 2011 acquisition of the Market Square Buildings. With respect to (ii) above, Wells REIT II published its first net asset-based valuation (per share) on November 8, 2011, which has not impacted asset management fees incurred to date due to continued applicability of the $2.7 million per month ($32.5 million per annum) cap described above.

• Reimbursement for all costs and expenses WREAS II and its affiliates incur in fulfilling its duties as the asset portfolio manager, including (i) wages and salaries (but excluding bonuses other than the signing bonus paid to E. Nelson Mills upon his appointment as President of Wells REIT II) and other employee-related expenses of WREAS II and its affiliates' employees, who perform a full range of real estate services for Wells REIT II, including management, administration, operations, and marketing, and are billed to Wells REIT II based on the amount of time spent on Wells REIT II by such personnel, provided that such expenses are not reimbursed if incurred in connection with services for which WREAS II and its affiliates receive a disposition fee (described below) or an acquisition fee, and (ii) amounts paid for IRA custodial service costs allocated to Wells REIT II accounts. The Advisory Agreement limits the amount of reimbursements to the Advisor of "portfolio general and administrative expenses" and "personnel expenses," as defined, to the extent they would exceed $18.7 million and $10.5 million, respectively, for the period from January 1, 2011 through December 31, 2011 and $4.5 million and $2.5 million, respectively, for the period from January 1, 2012 through March 31, 2012.

• For any property sold by Wells REIT II, other than part of a "bulk sale" of assets, as defined, a disposition fee equal to 1.0% of the sales price, with the limitation that the total real estate commissions (including such disposition fee) for any Wells REIT II property sold may not exceed the lesser of (i) 6.0% of the sales price of each property or (ii) the level of real estate commissions customarily charged in light of the size, type, and location of the property.

• Incentive fee of 10% of net sales proceeds remaining after stockholders have received distributions equal to the sum of the stockholders' invested capital, plus an 8% per annum cumulative return of invested capital, which fee is payable only if the shares of common stock of Wells REIT II are not listed on an exchange.

• Listing fee of 10% of the amount by which the market value of the stock plus distributions paid prior to listing exceeds the sum of 100% of the invested capital, plus an 8% per annum cumulative return on invested capital, which fee will be reduced by the amount of any incentive fees paid as described in the preceding bullet.

Advisory Agreement Renewal

On April 1, 2012, Wells REIT II renewed the advisory agreement with WREAS II for an additional three months (the "April Renewed Advisory Agreement"). The April Renewed Advisory Agreement is effective from April 1, 2012 through June 30, 2012 and has materially the same terms as the agreement that was in effect through March 31, 2012, with limits on reimbursements to WREAS II of "portfolio general and administrative expenses" and "personnel expenses," as defined, to the extent they would exceed approximately $4.5 million and $2.5 million, respectively, for the period from April 1, 2012 through June 30, 2012. In addition, the April Renewed Advisory Agreement includes a limit of $1.5 million on acquisition fees during the term of the agreement.

Proposed Agreements with Wells Real Estate Funds and its Affiliates

Although Wells REIT II can give no assurance that the parties will be able to come to agreement, Wells REIT II is working to document and agree to the following proposed arrangements with Wells Real Estate Funds and its affiliates:

Advisory Agreements. Wells REIT II is in negotiations to enter into an advisory agreement for the period from July 1 through December 31, 2012. The parties expect that the total fees and reimbursements under this agreement (the "Initial Term Advisory Agreement"), would reflect savings of approximately $375,000 to the company. Following the expiration of the Initial Term

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Advisory Agreement, the parties expect to enter into a subsequent advisory agreement for another year with fees and reimbursements being approximately $1,750,000 less than Wells REIT II pays for such services under the current payment terms. This one-year advisory agreement, which is referred to as the "Renewal Advisory Agreement," and the Initial Term Advisory Agreement would each be terminable on 60 days' notice without penalty by either party. The Renewal Advisory Agreement would also automatically terminate upon the exercise of the WREAS II Assignment Option, which is described below.

Wells REIT II expects that stockholder and communications services (currently provided under Well REIT II's advisory agreement) would be covered under a separate agreement with Wells Real Estate Funds or an affiliate of WREF (the "Investor Services Agreement"). The savings referenced in the prior paragraph are inclusive of the amounts expected to be paid under the Investor Services Agreement. Accordingly, if WREF enters into the Initial Term Advisory Agreement, the Renewal Advisory Agreement and the Investor Services Agreement, from July 1, 2012 through December 31, 2013, Wells REIT II would expect to receive all of the services Wells REIT II currently receive from the Advisor and its affiliates under Wells REIT II's current advisory agreement for a total cost that is approximately $2,125,000 less than Wells REIT II would pay for such services under current payment terms. The Investor Services Agreement would commence on July 1, 2012 for a six-month term. Wells REIT II expects the Investor Services Agreement would be renewed on the same terms for a one-year term commencing January 1, 2013. The Investor Services Agreement would be terminable on 60 days' notice without penalty. Also, upon the exercise of the WREAS II Assignment Option, certain caps designed to ensure the savings described above would expire.

Transitional Services Agreement. Subject to coming to terms on final documentation, WREF has indicated a willingness to enter into a Transitional Services Agreement pursuant to which WREF would be obligated to assign WREAS II to Wells REIT II at a time of Wells REIT II's choosing during the term of the Renewal Advisory Agreement (the "WREAS II Assignment Option"). No payment would be associated with this assignment. However, Wells REIT II would agree to pay WREF for the work required to transfer sufficient employees, proprietary systems and processes and assets to WREAS II to prepare for a successful transition to self-management. The Transitional Services Agreement would commence on July 1, 2012 and run through December 31, 2013. Wells REIT II would pay WREF $500,000 per month for the first 12 months for these services, with no additional payments required during the last six months of the agreement's term. The Transitional Services Agreement would not be terminable by either party except for cause. Should Wells REIT II exercise the proposed WREAS II Assignment Option prior to December 31, 2013, Wells REIT II must also agree to enter into a consulting agreement with WREF pursuant to which WREF would consult with Wells REIT II regarding certain of the matters covered by the Renewal Advisory Agreement at a price equal to the amounts remaining to be paid under that agreement less the costs assumed by Wells REIT II in connection with the assignment.

Agreements with WREF After Wells REIT II's Self-management. Upon becoming self-managed through the exercise of the WREAS II Assignment Option, Wells REIT II would expect to have the following agreements in place with WREF or its affiliates:

• Investor Services Agreement (described above), with payment terms to be negotiated.

• Operations and Administrative Support Agreement, with respect to the provision of human resources services, certain information technology services (such as desktop support services) and accounts payable administration. Whether Wells REIT II enters into this agreement would be solely at its discretion depending upon Wells REIT II's needs at that time. Assuming Wells REIT II had 50 employees during the first year that it was self-managed, Wells REIT II estimates the maximum annual costs under such an agreement would be less than $900,000.

• Lease and Occupancy Agreement, with respect to the leasing of office space at a cost of approximately $250,000 per year. Whether Wells REIT II enters into this agreement would be solely at Wells REIT II's discretion as Wells REIT II might choose to lease space elsewhere.

• Master Property Management, Leasing and Construction Management Agreement (the "Master Property Management Agreement"). Wells REIT II is already party to this agreement with Wells Management. The current agreement is terminable without penalty on 60 days' notice. Whether Wells REIT II terminates this agreement or renew or modify it following Wells REIT II's becoming self-managed would be solely at Wells REIT II's discretion. Wells REIT II expects this agreement would be at market rates.

Property Management, Leasing, and Construction Agreement

Wells REIT II and Wells Management, an affiliate of WREAS II, were party to a master property management, leasing, and construction agreement (the "Management Agreement") during 2011 and 2012, under which Wells Management received the following fees and reimbursements in consideration for supervising the management, leasing, and construction of certain Wells REIT II properties:

Page 20

• Property management fees in an amount equal to a percentage negotiated for each property managed by Wells Management of the gross monthly income collected for that property for the preceding month;

• Leasing commissions for new, renewal, or expansion leases entered into with respect to any property for which Wells Management serves as leasing agent equal to a percentage as negotiated for that property of the total base rental and operating expenses to be paid to Wells REIT II during the applicable term of the lease, provided, however, that no commission shall be payable as to any portion of such term beyond 10 years;

• Initial lease-up fees for newly constructed properties under the agreement, generally equal to one month's rent;

• Fees equal to a specified percentage of up to 5% of all construction build-out funded by Wells REIT II, given as a leasing concession, and overseen by Wells Management; and

• Other fees as negotiated with the addition of each specific property covered under the agreement.

Related-Party Costs

Pursuant to the terms of the agreements described above, Wells REIT II incurred the following related-party costs for the three months endedMarch 31, 2012 and 2011, respectively (in thousands):

	Three months ended March 31,
	2012		2011
Asset management fees	$	8,125	7,719
Administrative reimbursements, net(1)	2,752		2,840
Property management fees	1,226		1,049
Acquisition fees	—		648
Construction fees(2)	41		39
Total	$	12,144	$	12,295

⁽¹⁾  Administrative reimbursements are presented net of reimbursements from tenants of approximately $1.1 million and $0.8 million for the three months ended March 31, 2012 and 2011, respectively.

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

Wells REIT II incurred no related-party commissions, dealer-manager fees, other offering costs, incentive fees, listing fees, disposition fees or leasing commissions during the three months endedMarch 31, 2012 and 2011, respectively.

Due to Affiliates

The detail of amounts due to WREAS II and its affiliates is provided below as of March 31, 2012 and December 31, 2011 (in thousands):

	March 31, 2012		December 31, 2011
Administrative reimbursements	$	1,259	$	217
Asset and property management fees	359		3,112
	$	1,618	$	3,329

Operational Dependency

Wells REIT II has engaged WREAS II and Wells Management to provide certain services that are essential to Wells REIT II, including asset management services, supervision of the property management and leasing of some properties owned by Wells REIT II, asset acquisition and disposition services, as well as other administrative responsibilities for Wells REIT II, including accounting services, stockholder communications, and investor relations. Further, WREAS II has engaged Wells Capital to retain the use of its employees to carry out certain of the services listed above. As a result of these relationships, Wells REIT II's operations are dependent upon WREAS II, Wells Capital, and Wells Management.

WREAS II, Wells Capital, and Wells Management are owned and controlled by WREF. Historically, the operations of WREAS II, Wells Capital, and Wells Management have represented substantially all of the business of WREF. Accordingly, Wells REIT II

Page 21

focuses on the financial condition of WREF when assessing the financial condition of WREAS II, Wells Capital, and Wells Management. In the event that WREF were to become unable to meet its obligations as they become due, Wells REIT II might be required to find alternative service providers. Future net income generated by WREF will be largely dependent upon the amount of fees earned by WREF's subsidiaries based on, among other things, the level of investor proceeds raised and the volume of future acquisitions and dispositions of real estate assets by other WREF-sponsored real estate programs, as well as distribution income earned from equity interests in another REIT previously sponsored by Wells Capital. As of March 31, 2012, Wells REIT II 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, and other investments and borrowing capacity necessary to meet its obligations as they become due. Modifying Wells REIT II's service agreements, as described in the preceding section Proposed Agreements with Wells Real Estate Funds and its Affiliates, could impact WREF's future net income and future access to liquidity and capital resources.

9. Assets Held for Sale and Discontinued Operations

Assets Held for Sale

In accordance with GAAP, assets that meet certain criteria for disposal are required to be classified as "held for sale" in the accompanying balance sheets. As of December 31, 2011, Emerald Point, a four-story office building in Dublin, California, and 5995 Opus Parkway, a five-story office building in Minnetonka, Minnesota, were subject to firm sales contracts and, thus, classified as "held for sale" in the accompanying consolidated balance sheet as of December 31, 2011. The Emerald Point sale closed on January 9, 2012 for $37.3 million, exclusive of transaction costs, and the 5995 Opus Parkway sale closed on January 12, 2012 for $22.8 million, exclusive of transaction costs.

The major classes of assets and liabilities classified as held for sale as of December 31, 2011 is provided below (in thousands):

	December 31, 2011
Real estate assets held for sale:
Real estate assets, at cost:
Land	$	11,536
Buildings and improvements, less accumulated depreciation of $6,509	25,972
Intangible lease assets, less accumulated amortization of $3,042	—
Total real estate assets held for sale, net	$	37,508
Other assets held for sale:
Tenant receivables	$	1,747
Prepaid expenses and other assets	39
Intangible lease origination costs, less accumulated amortization of $2,018	—
Deferred lease costs, less accumulated amortization of $242	1,646
Total other assets held for sale, net	$	3,432
Liabilities held for sale:
Accounts payable, accrued expenses, and accrued capital expenditures	$	176
Due to affiliates	2
Deferred income	446
Total liabilities held for sale	$	624

Discontinued Operations

The historical operating results and gains (losses) from the disposition of certain assets, including assets "held for sale" and operating properties sold, are required to be reflected in a separate section ("discontinued operations") in the consolidated statements of operations for all periods presented. As a result, the revenues and expenses of Emerald Point, 5995 Opus Parkway and the Manhattan Towers property are included in income (loss) from discontinued operations in the accompanying consolidated statements of operations for all periods presented. On September 6, 2011, Wells REIT II transferred the Manhattan Towers property, an office building located in Manhattan Beach, California, to an affiliate of its lender in connection with settling a $75.0 million mortgage note through a deed in lieu of foreclosure transaction, resulting in a $13.5 million gain on extinguishment of debt.

Page 22

The following table shows the revenues and expenses of the above-described discontinued operations (in thousands):

	Three months ended March 31,
	2012		2011
Revenues:
Rental income	$	89	$	1,247
Tenant reimbursements	203		302
	292		1,549
Expenses:
Property operating costs	186		1,597
Asset and property management fees	38		31
Depreciation	—		676
Amortization	6		226
General and administrative	13		87
Total expenses	243		2,617
Real estate operating loss	49		(1,068		)
Other income (expense):
Interest expense	—		(1,074		)
Operating income (loss) from discontinued operations	49		(2,142		)
Gain on sale of real estate assets	16,885		—
Income (loss) from discontinued operations	$	16,934	$	(2,142	)

10.     Financial Information for Parent Guarantor, Other Guarantor Subsidiaries and Non-Guarantor Subsidiaries

The 2018 Bonds Payable (see Note 5. Bonds Payable) are guaranteed by Wells REIT II and certain direct and indirect subsidiaries of each of Wells REIT II and Wells OP II. On February 3, 2012, in connection with the execution of the $450 Million Term Loan, Wells REIT II added two subsidiaries as guarantors to the $450 Million Term Loan, the JPMorgan Chase Credit Facility, and the 2018 Bonds Payable, which resulted in the reclassification of prior-period amounts between the guarantor and non-guarantor groupings within the condensed consolidating financial statements to conform with the current period presentation. In accordance with SEC Rule 3-10(d), Wells REIT II includes herein condensed consolidating financial information in lieu of separate financial statements of the subsidiary issuer (Wells OP II) and Subsidiary Guarantors, as defined in the bond indenture, because all of the following criteria are met:

(1) The subsidiary issuer (Wells OP II) and all Subsidiary Guarantors are 100% owned by the parent company guarantor (Wells REIT II);

(2) The guarantees are full and unconditional; and

(3) The guarantees are joint and several.

Wells REIT II uses the equity method with respect to its investment in subsidiaries included in its condensed consolidating financial statements. Set forth below are Wells REIT II's condensed consolidating balance sheets as of March 31, 2012 and December 31, 2011 (in thousands) as well as its condensed consolidating statements of operations (in thousands) for the three month periods ended March 31, 2012 and 2011; its condensed consolidating statements of comprehensive income; and its condensed consolidating statements of cash flows (in thousands), for the three months ended March 31, 2012 and 2011.

Page 23

Condensed Consolidating Balance Sheets (in thousands)

	As of March 31, 2012
	Wells REIT II (Parent)		Wells OP II  (the Issuer)		Guarantors		Non- Guarantors		Consolidating adjustments			Wells REIT II (Consolidated)
Assets:
Real estate assets, at cost
Land	$	—	$	12,175	$	223,522	$	468,639	$	—		$	704,336
Buildings and improvements	—		62,296		1,625,531		1,760,295		—			3,448,122
Intangible lease assets	—		1,838		145,689		227,275		—			374,802
Construction in progress	—		447		3,206		5,288		—			8,941
Total real estate assets	—		76,756		1,997,948		2,461,497		—			4,536,201
Cash and cash equivalents	22,579		8,124		6,616		11,837		—			49,156
Investment in subsidiaries	3,233,016		2,748,670		—		—		(5,981,686		)	—
Tenant receivables, net of allowance	—		3,435		60,328		68,356		(5,601		)	126,518
Prepaid expenses and other assets	178,078		204,297		4,070		24,917		(380,949		)	30,413
Deferred financing costs	—		10,280		—		1,111		—			11,391
Intangible lease origination costs	—		1,240		127,278		91,488		—			220,006
Deferred lease costs	—		1,919		34,386		40,337		—			76,642
Investments in development authority bonds	—		60,000		466,000		120,000		—			646,000
Total assets	$	3,433,673	$	3,114,721	$	2,696,626	$	2,819,543	$	(6,368,236	)	$	5,696,327
Liabilities:
Line of credit and notes payable	$	—	$	475,000	$	147,304	$	934,757	$	(379,307	)	$	1,177,754
Bonds payable	—		248,489		—		—		—			248,489
Accounts payable, accrued expenses, and accrued capital expenditures	1,391		10,477		22,999		41,825		(5,601		)	71,091
Due to affiliates	—		891		1,221		1,148		(1,642		)	1,618
Deferred income	—		1,160		20,898		14,095		—			36,153
Intangible lease liabilities	—		—		37,747		47,539		—			85,286
Obligations under capital leases	—		60,000		466,000		120,000		—			646,000
Total liabilities	1,391		796,017		696,169		1,159,364		(386,550		)	2,266,391
Redeemable common stock	177,450		—		—		—		—			177,450
Equity:
Total Wells Real Estate Investment Trust II, Inc. stockholders’ equity	3,254,832		2,318,704		2,000,457		1,659,873		(5,981,686		)	3,252,180
Nonredeemable noncontrolling interests	—		—		—		306		—			306
Total equity	3,254,832		2,318,704		2,000,457		1,660,179		(5,981,686		)	3,252,486
Total liabilities, redeemable common stock, and equity	$	3,433,673	$	3,114,721	$	2,696,626	$	2,819,543	$	(6,368,236	)	$	5,696,327

Page 24

Condensed Consolidating Balance Sheets (in thousands)

	As of December 31, 2011
	Wells REIT II (Parent)		Wells OP II  (the Issuer)		Guarantors		Non- Guarantors		Consolidating adjustments			Wells REIT II (Consolidated)
Assets:
Real estate assets, at cost
Land	$	—	$	—	$	223,522	$	480,814	$	—		$	704,336
Building and improvements	—		—		1,635,910		1,837,061		—			3,472,971
Intangible lease assets	—		—		153,070		238,919		—			391,989
Construction in progress	—		—		4,224		4,190		—			8,414
Real estate assets held for sale	—		—		—		37,508		—			37,508
Total real estate assets	—		—		2,016,726		2,598,492		—			4,615,218
Cash and cash equivalents	11,291		10,597		9,133		8,447		—			39,468
Investment in subsidiaries	3,275,979		2,786,248		—		—		(6,062,227		)	—
Tenant receivables, net of allowance	—		—		58,435		77,471		(5,357		)	130,549
Prepaid expenses and other assets	177,444		202,126		2,056		29,009		(377,804		)	32,831
Deferred financing costs	—		8,287		—		1,155		—			9,442
Intangible lease origination costs	—		—		133,052		98,286		—			231,338
Deferred lease costs	—		—		28,650		39,639		—			68,289
Investments in development authority bonds	—		—		466,000		180,000		—			646,000
Other assets held for sale	—		—		—		3,432		—			3,432
Total assets	$	3,464,714	$	3,007,258	$	2,714,052	$	3,035,931	$	(6,445,388	)	$	5,776,567
Liabilities:
Lines of credit and notes payable	$	—	$	484,000	$	147,730	$	966,123	$	(376,793	)	$	1,221,060
Bonds payable	—		248,426		—		—		—			248,426
Accounts payable, accrued expenses, and accrued capital expenditures	1,652		5,696		24,871		45,487		(5,357		)	72,349
Due to affiliates	—		2,779		1,178		383		(1,011		)	3,329
Deferred income	—		—		22,280		12,799		—			35,079
Intangible lease liabilities	—		—		39,224		50,357		—			89,581
Obligations under capital leases	—		—		466,000		180,000		—			646,000
Liabilities held for sale	—		—		—		624		—			624
Total liabilities	1,652		740,901		701,283		1,255,773		(383,161		)	2,316,448
Redeemable common stock	113,147		—		—		—		—			113,147
Equity:
Total Wells Real Estate Investment Trust II, Inc. stockholders’ equity	3,349,915		2,266,357		2,012,769		1,779,841		(6,062,227		)	3,346,655
Nonredeemable noncontrolling interests	—		—		—		317		—			317
Total equity	3,349,915		2,266,357		2,012,769		1,780,158		(6,062,227		)	3,346,972
Total liabilities, redeemable common stock, and equity	$	3,464,714	$	3,007,258	$	2,714,052	$	3,035,931	$	(6,445,388	)	$	5,776,567

Page 25

Consolidating Statements of Operations (in thousands)

	For the three months ended March 31, 2012
	Wells REIT II (Parent)			Wells OP II (the Issuer)			Guarantors			Non- Guarantors			Consolidating adjustments			Wells REIT II (Consolidated)
Revenues:
Rental income	$	—		$	3,523		$	58,188		$	59,525		$	(750	)	$	120,486
Tenant reimbursements	—			153			9,901			15,737			—			25,791
Hotel income	—			—			—			4,375			—			4,375
Other property income	—			36			201			1,604			(142		)	1,699
	—			3,712			68,290			81,241			(892		)	152,351
Expenses:
Property operating costs	—			1,219			16,568			26,853			(106		)	44,534
Hotel operating costs	—			—			—			4,847			(750		)	4,097
Asset and property management fees:
Related-party	8,008			86			452			841			(36		)	9,351
Other	—			—			452			379			—			831
Depreciation	—			603			13,699			15,823			—			30,125
Amortization	—			629			12,630			13,791			—			27,050
General and administrative	—			4,364			191			788			—			5,343
	8,008			6,901			43,992			63,322			(892		)	121,331
Real estate operating (loss) income	(8,008		)	(3,189		)	24,298			17,919			—			31,020
Other income (expense):
Interest expense	—			(8,704		)	(10,072		)	(14,540		)	6,460			(26,856		)
Interest and other income	1,997			5,366			7,307			1,806			(6,460		)	10,016
Loss on interest rate swap	—			—			—			(76		)	—			(76		)
Income (loss) from equity investment	37,142			43,282			—			—			(80,424		)	—
	39,139			39,944			(2,765		)	(12,810		)	(80,424		)	(16,916		)
Income (loss) before income tax (expense) benefit	31,131			36,755			21,533			5,109			(80,424		)	14,104
Income tax (expense) benefit	—			(11		)	(49		)	157			—			97
Income (loss) from continuing operations	31,131			36,744			21,484			5,266			(80,424		)	14,201
Discontinued operations:
Operating income from discontinued operations	—			—			—			49			—			49
Gains on dispositions of discontinued operations	—			—			—			16,885			—			16,885
Income from discontinued operations	—			—			—			16,934			—			16,934
Net income (loss)	31,131			36,744			21,484			22,200			(80,424		)	31,135
Less: net income attributable to noncontrolling interests	—			—			—			(4		)	—			(4		)
Net income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	$	31,131		$	36,744		$	21,484		$	22,196		$	(80,424	)	$	31,131

Page 26

Consolidating Statements of Operations (in thousands)

	For the three months ended March 31, 2011
	Wells REIT II (Parent)			Wells OP II (the Issuer)			Guarantors			Non- Guarantors			Consolidating adjustments			Wells REIT II (Consolidated)
Revenues:
Rental income	$	—		$	—		$	58,825		$	56,035		$	(1,241	)	$	113,619
Tenant reimbursements	—			—			10,546			15,361			—			25,907
Hotel income	—			—			—			4,150			—			4,150
Other property income	—			35			118			297			(167		)	283
	—			35			69,489			75,843			(1,408		)	143,959
Expenses:
Property operating costs	—			—			17,241			24,579			(132		)	41,688
Hotel operating costs	—			—			—			5,253			(1,241		)	4,012
Asset and property management fees:
Related-party	7,546			—			352			897			(35		)	8,760
Other	—			—			577			327			—			904
Depreciation	—			—			13,751			13,691			—			27,442
Amortization	—			—			15,331			14,835			—			30,166
General and administrative	25			4,786			1,095			708			—			6,614
Acquisition fees and expenses	651			—			—			9,375			—			10,026
	8,222			4,786			48,347			69,665			(1,408		)	129,612
Real estate operating (loss) income	(8,222		)	(4,751		)	21,142			6,178			—			14,347
Other income (expense):
Interest expense	—			(3,909		)	(11,020		)	(11,528		)	4,292			(22,165		)
Interest and other income	2,042			4,292			7,309			2,704			(4,292		)	12,055
Gain on interest rate swap	—			—			—			89			—			89
Income (loss) from equity investment	8,593			19,712			—			—			(28,305		)	—
	10,635			20,095			(3,711		)	(8,735		)	(28,305		)	(10,021		)
Income (loss) before income tax (expense) benefit	2,413			15,344			17,431			(2,557		)	(28,305		)	4,326
Income tax (expense) benefit	—			—			(59		)	290			—			231
Income (loss) from continuing operations	2,413			15,344			17,372			(2,267		)	(28,305		)	4,557
Discontinued operations:
Operating loss from discontinued operations	—			—			—			(2,142		)	—			(2,142		)
Loss from discontinued operations	—			—			—			(2,142		)	—			(2,142		)
Net income (loss)	2,413			15,344			17,372			(4,409		)	(28,305		)	2,415
Less: net income attributable to noncontrolling interests	—			—			—			(4		)	—			(4		)
Net income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	$	2,413		$	15,344		$	17,372		$	(4,413	)	$	(28,305	)	$	2,411

Page 27

Consolidating Statements of Comprehensive Income (in thousands)

	For the three months ended March 31, 2012
	Wells REIT II (Parent)		Wells OP II (the Issuer)		Guarantors		Non- Guarantors		Consolidating adjustments			Wells REIT II (Consolidated)
Net income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II,Inc.	$	31,131	$	36,744	$	21,484	$	22,196	$	(80,424	)	$	31,131
Market value adjustment to interest rate swap	—		608		—		—		—			608
Comprehensive income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	31,131		37,352		21,484		22,196		(80,424		)	31,739
Comprehensive income attributable to noncontrolling interests	—		—		—		4		—			4
Comprehensive income (loss)	$	31,131	$	37,352	$	21,484	$	22,200	$	(80,424	)	$	31,743

	For the three months ended March 31, 2011
	Wells REIT II (Parent)		Wells OP II (the Issuer)		Guarantors		Non- Guarantors			Consolidating adjustments			Wells REIT II (Consolidated)
Net income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II,Inc.	$	2,413	$	15,344	$	17,372	$	(4,413	)	$	(28,305	)	$	2,411
Market value adjustment to interest rate swap	—		—		—		752			—			752
Comprehensive income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	2,413		15,344		17,372		(3,661		)	(28,305		)	3,163
Comprehensive income attributable to noncontrolling interests	—		—		—		4			—			4
Comprehensive income (loss)	$	2,413	$	15,344	$	17,372	$	(3,657	)	$	(28,305	)	$	3,167

Page 28

Consolidating Statements of Cash Flows (in thousands)

	For the three months ended March 31, 2012
	Wells REIT II (Parent)			Wells OP II (the Issuer)			Guarantors			Non- Guarantors			Wells REIT II (Consolidated)
Cash flows from operating activities:	$	—		$	(18,568	)	$	51,862		$	40,300		$	73,594
Cash flows from investing activities:
Net proceeds from sale of real estate	—			57,685			—			—			57,685
Investment in real estate and related assets	—			(1,730		)	(7,230		)	(4,038		)	(12,998		)
Net cash provided by (used in) investing activities	—			55,955			(7,230		)	(4,038		)	44,687
Cash flows from financing activities:
Borrowings, net of fees	—			406,279			—			—			406,279
Repayments	—			(418,000		)	—			(34,415		)	(452,415		)
Distributions	(67,954		)	—			—			(15		)	(67,969		)
Intercompany transfers, net	73,442			(28,139		)	(47,149		)	1,846			—
Issuance of common stock, net of redemptions and fees	5,800			—			—			—			5,800
Net cash provided by (used in) financing activities	11,288			(39,860		)	(47,149		)	(32,584		)	(108,305		)
Net increase (decrease) in cash and cash equivalents	11,288			(2,473		)	(2,517		)	3,678			9,976
Effect of foreign exchange rate on cash and cash equivalents	—			—			—			(288		)	(288		)
Cash and cash equivalents, beginning of period	11,291			10,597			9,133			8,447			39,468
Cash and cash equivalents, end of period	$	22,579		$	8,124		$	6,616		$	11,837		$	49,156

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Consolidating Statements of Cash Flows (in thousands)

	For the three months ended March 31, 2011
	Wells REIT II (Parent)			Wells OP II (the Issuer)			Guarantors			Non- Guarantors			Wells REIT II (Consolidated)
Cash flows from operating activities:	$	1,365		$	(17,684	)	$	48,315		$	25,764		$	57,760
Cash flows from investing activities:
Investment in real estate and related assets	(598,425		)	—			(2,741		)	(11,164		)	(612,330		)
Net cash used in investing activities	(598,425		)	—			(2,741		)	(11,164		)	(612,330		)
Cash flows from financing activities:
Borrowings, net of fees	—			620,153			—			—			620,153
Repayments	—			(20,000		)	—			(485		)	(20,485		)
Distributions	(67,485		)	—			—			(13		)	(67,498		)
Intercompany transfers	651,971			(591,030		)	(46,111		)	(14,830		)	—
Issuance of common stock, net of redemptions and fees	16,102			—			—			—			16,102
Net cash provided by (used in) financing activities	600,588			9,123			(46,111		)	(15,328		)	548,272
Net increase (decrease) in cash and cash equivalents	3,528			(8,561		)	(537		)	(728		)	(6,298		)
Effect of foreign exchange rate on cash and cash equivalents	—			—			—			36			36
Cash and cash equivalents, beginning of period	8,281			11,074			8,250			11,277			38,882
Cash and cash equivalents, end of period	$	11,809		$	2,513		$	7,713		$	10,585		$	32,620

11. Subsequent Event

In connection with the preparation of its consolidated financial statements and notes thereto included in this report on Form 10-Q, Wells REIT II has evaluated its subsequent events and provided disclosures for such material subsequent events in, among others, Note 4. Lines of Credit and Notes Payable within this filing.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our accompanying consolidated financial statements and notes thereto. See also "Cautionary Note Regarding Forward-Looking Statements" preceding Part I, as well as our consolidated financial statements and the notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2011.

Overview

From 2004 through 2010, we raised approximately $5.9 billion in gross equity proceeds and, along with borrowings, invested those proceeds, net of fees, into commercial real estate consisting primarily of high-quality, income-producing office and industrial properties leased to creditworthy entities located in major metropolitan areas throughout the United States. Following our initial growth period, during 2011 and 2012, we have concentrated our efforts on actively managing our assets and exploring a variety of strategic opportunities focused on enhancing the composition of our portfolio and the total return potential for the REIT. In doing so, we have made strategic acquisitions and dispositions, and entered into a number of favorable debt transactions. These activities have given rise to fluctuations in property operating results and interest expense over the periods presented.

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Liquidity and Capital Resources

Overview

In 2011 and 2012, we actively managed our real estate portfolio with an emphasis on leasing and re-leasing space, and pursuing and closing on strategic acquisitions and selective dispositions to better align our portfolio with our current investment objectives. During this period, we also promoted our capital structure by continuing to raise net equity proceeds through our dividend reinvestment program (“DRP”), improving the composition, maturities and capacity of our debt portfolio, while lowering our overall borrowing costs, accessing new sources of capital, and identifying additional sources of future capital.

In determining how and when to allocate cash resources, we initially consider the source of the cash. We use substantially all net operating cash flows to fund distributions to stockholders. The amount of distributions that we pay to our common stockholders is determined by our board of directors and is dependent upon a number of factors, including the funds available for distribution to common stockholders, our financial condition, our capital expenditure requirements, our expectations of future sources of liquidity, and the annual distribution requirements necessary to maintain our status as a REIT under the Code. When evaluating funds available for stockholder distributions, we consider net cash provided by operating activities, as presented in the accompanying GAAP-basis consolidated statements of cash flows, adjusted to exclude certain costs that were incurred for the purpose of generating future earnings and appreciation in value over the long term, including acquisition fees and expenses. We use DRP proceeds to fund share redemptions (subject to the limitations of our share redemption program), and make residual DRP proceeds available to fund capital improvements for our existing portfolio, additional real estate investments, and other cash needs.

Short-term Liquidity and Capital Resources

During the three months ended March 31, 2012, we generated net cash flows from operating activities of $73.6 million, which consists primarily of receipts from tenants for rent and reimbursements, reduced by payments for operating costs, administrative expenses, and interest expense. During the same period, we paid total distributions to stockholders, including $31.1 million reinvested in our common stock pursuant to our DRP, of $68.0 million. We expect to use the majority of our future net cash flow from operating activities to fund distributions to stockholders.

During the three months ended March 31, 2012, we sold the 5995 Opus Parkway building and the Emerald Point building for net proceeds of $57.7 million and made net debt repayments of $43.4 million. During this period, we also generated net proceeds from the sale of common stock under our DRP of $31.1 million and used those proceeds, along with cash on hand, to fund share redemptions of $25.3 million and capital expenditures of $13.0 million.

We believe that we have adequate liquidity and capital resources to meet our current obligations as they come due. As of April 30, 2012, we had access to the borrowing capacity under the JPMorgan Chase Credit Facility of $435.0 million.

Long-term Liquidity and Capital Resources

Over the long term, we expect that our primary sources of capital will include operating cash flows, proceeds from our DRP, proceeds from secured or unsecured borrowings from third-party lenders, and, if and when deemed appropriate, proceeds from strategic property sales. We expect that our primary uses of capital will continue to include stockholder distributions; redemptions of shares of our common stock under our share redemption program; capital expenditures, such as building improvements, tenant improvements, and leasing costs; repaying or refinancing debt; and selective property acquisitions, either directly or through investments in joint ventures.

On February 3, 2012, we closed on a four-year, unsecured term loan with a syndicate of banks led by JPMorgan Chase Bank N.A. (the "$450.0 Million Term Loan"). The $450.0 Million Term Loan bears interest at LIBOR, plus an applicable base margin; however, we effectively fixed the interest rate (assuming no change in our corporate credit rating) at 2.64% per annum with an interest rate swap executed contemporaneously with the loan. At closing, the $450.0 Million Term Loan yielded initial gross proceeds of $375.0 million. We have the ability to increase the amount of borrowings under the $450.0 Million Term Loan up to a maximum amount of $450.0 million on two occasions during the borrowing period in minimum increments of $25.0 million; however, none of the current banks are obligated to participate in such increases. The $450.0 Million Term Loan matures on February 3, 2016 provided that certain conditions are met prior to that date. Furthermore, provided that certain additional conditions are met prior to, and at, maturity, the $450.0 Million Term Loan shall become eligible for a one-year extension upon paying an extension fee equal to 0.15% of the outstanding balance. The $450.0 Million Term Loan contains the same restrictions and financial covenants as those included in our JPMorgan Chase Credit Facility, which are further described in the "Debt Covenants" section, which follows.

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The initial gross proceeds of $375.0 million were used to repay temporary borrowings on the JPMorgan Chase Credit Facility, which were drawn to repay mortgages in the third and fourth quarters of 2011. In April 2012, we exercised one of the options to increase borrowings under the $450.0 Million Term Loan from $375.0 million to $410.0 million, which additional proceeds were used to further reduce temporary borrowings outstanding, and thereby create additional short-term borrowing capacity, under the JPMorgan Chase Credit Facility.

We have a policy of maintaining our debt level at no more than 50% of the cost of our assets (before depreciation) and, ideally, at significantly less than this 50% debt-to-real-estate-asset ratio. This conservative leverage goal could reduce the amount of current income we can generate for our stockholders, but it also reduces their risk of loss. We believe that preserving investor capital while generating stable current income is in the best interest of our stockholders. Our debt-to-real-estate-asset ratio is calculated using the outstanding debt balance and real estate at cost. As of March 31, 2012, our debt-to-real-estate-asset ratio was approximately 25.0%.

Our board of directors elected to maintain the quarterly stockholder distribution rate at $0.125 per share for the first quarter of 2012. While our operational cash flows from properties remain strong, economic downturns in our markets, or in the particular industries in which our tenants operate, and capital funding requirements for our real estate portfolio, or for future strategic acquisitions, could exert negative pressure on funds available for future stockholder distributions. We are continuing to carefully monitor our cash flows and market conditions and to assess their impact on our future earnings and future distribution projections.

Debt Covenants

Our portfolio debt instruments, the $450 Million Term Loan, the JPMorgan Chase Credit Facility, and the unsecured senior notes, contain certain covenants and restrictions that require us to meet certain financial ratios, including the following key financial covenants and respective covenant levels as of March 31, 2012:

		Actual Performance
	Covenant Level	March 31, 2012
JP Morgan Chase Credit Facility and $450 Million Term Loan
Total debt to total asset value ratio	Less than 50%	29%
Secured debt to total asset value ratio	Less than 40%	14%
Fixed charge coverage ratio	Greater than 1.75x	4.70x
Unencumbered interest coverage ratio	Greater than 2.0x	6.78x
Unencumbered asset coverage ratio	Greater than 2.0x	3.25x
Unsecured Senior Notes due 2018:
Aggregate debt test	Less than 60%	24%
Debt service test	Greater than 1.5x	4.41x
Secured debt test	Less than 40%	12%
Maintenance of total unencumbered assets	Greater than 150%	6.24x

We were in compliance with all of our debt covenants as of March 31, 2012. Currently, we expect to continue to meet the requirements of our debt covenants over the short and long term.

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Contractual Commitments and Contingencies

As of March 31, 2012, our contractual obligations will become payable in the following periods (in thousands):

Contractual Obligations	Total		2012		2013-2014		2015-2016		Thereafter
Debt obligations	$	1,428,113	$	1,775	$	130,263	$	519,759	$	776,316
Interest obligations on debt(1)	404,818		49,284		121,579		99,994		133,961
Capital lease obligations(2)	646,000		60,000		466,000		—		120,000
Operating lease obligations	227,506		2,609		5,272		5,272		214,353
Total	$	2,706,437	$	113,668	$	723,114	$	625,025	$	1,244,630

⁽¹⁾  Interest obligations on variable-rate debt are measured at the rate at which they are effectively fixed with interest rate swaps agreements (where applicable), a portion of which is reflected as Loss on interest rate swaps in our consolidated statements of operations. Interest obligations on all other debt are measured at the contractual rate. See Item 3. Quantitative and Qualitative Disclosure About Market Risk for more information regarding our interest rate swaps.

⁽²⁾  Amounts include principal obligations only. We made interest payments on these obligations of $10.0 million during the three months ended March 31, 2012, all of which was funded with interest income earned on the corresponding investments in development authority bonds.

Results of Operations

Overview

As of March 31, 2012, we owned controlling interests in 69 office properties, which were approximately 92.9% leased, and one hotel. Our real estate operating results have increased for the three months ended March 31, 2012, as compared to the same period of 2011, primarily due to the Market Square Buildings acquisition in the first quarter of 2011. In the near term, we expect future real estate operating income to fluctuate based on future strategic acquisitions and dispositions.

Comparison of the three months ended March 31, 2011 versus the three months ended March 31, 2012

Rental income increased from $113.6 million for the three months ended March 31, 2011 to $120.5 million for the three months ended March 31, 2012, primarily due to acquiring the Market Square Buildings on March 7, 2011. Absent changes to the leases currently in place at our properties, rental income is expected to remain at similar levels in future periods.

Tenant reimbursements remained stable at $25.9 million for the three months ended March 31, 2011 and $25.8 million for the three months ended March 31, 2012, as additional reimbursements from the Market Square property are offset by fewer reimbursements for the remainder of the portfolio primarily due to concessions offered in connection with new and modified leases executed in 2011 and 2012. Property operating costs increased from $41.7 million for the three months ended March 31, 2011 to $44.5 million for the three months ended March 31, 2012, primarily due to the acquisition of the Market Square Buildings on March 7, 2012. Absent changes to the leases currently in place at our properties, future tenant reimbursement fluctuations are generally expected to correspond with future property operating cost reimbursements.

Hotel income, net of hotel operating costs, remained relatively stable at $0.1 million for the three months ended March 31, 2011 and $0.3 million for the three months ended March 31, 2012. Hotel income and hotel operating costs are primarily driven by the local economic conditions and, as a result, are expected to fluctuate in the future primarily based on changes in the supply of, and demand for, hotel and banquet space in Cleveland, Ohio, similar to that offered by the Key Center Marriott hotel.

Other property income increased from $0.3 million for the three months ended March 31, 2011 to $1.7 million for the three months ended March 31, 2012, primarily due to fees earned in connection with a lease restructuring at 4100-4300 Wildwood Parkway. Future other property income fluctuations are expected to primarily relate to future lease restructuring activities.

Asset and property management fees increased from $9.7 million for the three months ended March 31, 2011 to $10.2 million for the three months ended March 31, 2012, primarily due to the acquisition of the Market Square Buildings on March 7, 2011. Future asset and property management fees may fluctuate in response to property dispositions or leasing activities. Pursuant to the limitations outlined in the Advisory Agreement, monthly asset management fees have remained capped at $2.7 million (or $32.5 million annualized) since April 2011 following the March 2011 acquisition of the Market Square Buildings for $603.4 million (see Note 8. Related Party Transactions and Agreements).

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Depreciation increased from $27.4 million for the three months ended March 31, 2011 to $30.1 million for the three months ended March 31, 2012, primarily due to the Market Square Buildings acquisition on March 7, 2011. Excluding the impact of changes to the leases currently in place at our properties, depreciation is expected to continue to increase in future periods, as compared to historical periods, due to ongoing capital improvements to our properties.

Amortization decreased from $30.2 million for the three months ended March 31, 2011 to $27.1 million for the three months ended March 31, 2012 due to the impact of a lease termination at 1950 University Circle in the first quarter of 2011, and discontinuing future amortization of in-place lease assets that were written-down or written-off in connection with other lease modification and termination activities in 2011. In addition to the impact of changes to the leases currently in place at our properties, amortization is expected to fluctuate in future periods due strategic acquisition and disposition activity.

General and administrative expenses decreased from $6.6 million for the three months ended March 31, 2011 to $5.3 million for the three months ended March 31, 2012 due to bad debt expense incurred in the first quarter of 2011, and the limit imposed on "portfolio general and administrative expenses" under the Advisory Agreement in the first quarter of 2012 (see Note 8. Related-Party Transactions and Agreements).

Acquisition fees and expenses were $10.0 million for the three months ended March 31, 2011, primarily due to the acquisition of the Market Square Buildings. No acquisition fees were incurred during the three months ended March 31, 2012 as we did not acquire any properties during this period. Until July 31, 2011, acquisition fees were incurred at 2.0% of gross offering proceeds, subject to certain limitations; effective August 1, 2011, acquisition fees are incurred at 1% of the property purchase price (excluding acquisition expenses); however, in no event may total acquisition fees for the 2012 calendar year exceed 2% of total gross offering proceeds. As a result of the change, we expect future acquisition fees and expenses to fluctuate based on future acquisition activity.

Interest expense increasedfrom $22.2 million for the three months ended March 31, 2011 to $26.9 million for the three months ended March 31, 2012, primarily due to changes in the composition of borrowings within our capital structure. Future interest expense will depend largely upon changes in market interest rates and our ability to secure financings or refinancings.

Interest and other income decreased from $12.1 million for the three months ended March 31, 2011 to $10.0 million for the three months ended March 31, 2012, primarily due to the settlement of litigation in 2011 related to a prospective acquisition that did not close. Interest income is expected to remain relatively consistent in future periods given that the majority of this activity consists of interest income earned on investments in development authority bonds, which had a weighted-average remaining term of approximately 5.4 years as of March 31, 2012. Interest income earned on investments in development authority bonds is entirely offset by interest expense incurred on the corresponding capital leases.

Income (loss) from discontinued operations was ($2.1 million) for the three months ended March 31, 2011 as compared with $16.9 million for the three months ended March 31, 2012. As further explained in Note 9. Assets Held for Sale and Discontinued Operations to the accompanying consolidated financial statements, properties meeting certain criterion for disposal are classified as "Discontinued Operations" in the accompanying consolidated statements of operations for all periods presented. For 2011 and 2012, discontinued operations includes the Manhattan Towers property (transferred to an affiliate of its lender in connection with settling a $75.0 million mortgage note through a deed in lieu of foreclosure transaction in September 2011) and 5995 Opus Parkway and Emerald Point, which sold for total gains of $16.9 million in January 2012.

Net income attributable to Wells REIT II increased from $2.4 million ($0.00 per share) for the three months ended March 31, 2011 to $31.1 million ($0.06 per share) for the three months ended March 31, 2012. The increase is primarily attributable to gains recognized on the sales of 5995 Opus Parkway and Emerald Point in the first quarter of 2012 and non-recurring acquisition expenses incurred in connection with the acquisition of the Market Square Buildings in the first quarter of 2011. Growth in our portfolio in 2011 generated additional real estate operating income, which is offset by additional interest expense due to increasing the percentage of borrowings used in our capital structure during that year. Absent the impact of future acquisitions and dispositions, we expect future net income to fluctuate based primarily on leasing activities. Should the U.S. economic recovery remain sluggish, or the U.S. real estate markets remain depressed for a prolonged period of time, the creditworthiness of our tenants and our ability to achieve market rents comparable to the leases currently in place at our properties may suffer and could lead to a further decline in net income over the long term.

Funds From Operations and Adjusted Funds From Operations

Funds from Operations ("FFO"), as defined by NAREIT, is a non-GAAP financial measure considered by some equity REITs in evaluating operating performance. FFO is computed as GAAP net income (loss), adjusted to exclude: extraordinary items, gains (or losses) from property sales (including deemed sales and settlements of pre-existing relationships), depreciation and amortization of real estate assets, impairment losses related to sales of real estate assets, and adjustments for earnings allocated to noncontrolling interests in consolidated partnerships.  Effective December 31, 2011, we adjusted our calculation of FFO to be consistent with

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NAREIT's recent Accounting and Financial Standards Hot Topics, which clarifies that impairment losses on real estate assets should be excluded from FFO. We believe it is useful to consider GAAP net income, adjusted to exclude the above-mentioned items, when assessing our performance because excluding the above-described adjustments highlights the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be readily apparent from GAAP net income alone. We do not, however, believe that FFO is the best measure of the sustainability of our operating performance. Changes in the GAAP accounting and reporting rules that were put into effect after the establishment of NAREIT's definition of FFO in 1999 are resulting in the inclusion of a number of items in FFO that do not correlate with the sustainability of our operating performance (e.g., acquisition expenses, market value adjustments to interest rate swaps, and amortization of certain in-place lease intangible assets and liabilities, among others). Therefore, in addition to FFO, we present Adjusted Funds from Operations ("AFFO"), a non-GAAP financial measure. AFFO is calculated by adjusting FFO to exclude the income and expenses that we believe are not reflective of the sustainability of our ongoing operating performance, as further explained below:

• Additional amortization of lease assets (liabilities). GAAP implicitly assumes that the value of intangible lease assets (liabilities) diminishes predictably over time and, thus, requires these charges to be recognized ratably over the respective lease terms. Such intangible lease assets (liabilities) arise from the allocation of acquisition price related to direct costs associated with obtaining a new tenant, the value of opportunity costs associated with lost rentals, the value of tenant relationships, and the value of effective rental rates of in-place leases that are above or below market rates of comparable leases at the time of acquisition. Like real estate values, market lease rates in aggregate have historically risen or fallen with local market conditions. As a result, management believes that, by excluding these charges, AFFO provides useful supplemental information that is reflective of the performance of our real estate investments, which is useful in assessing the sustainability of our operations.

• Straight-line rental income. In accordance with GAAP, rental payments are recognized as income on a straight-line basis over the terms of the respective leases. Thus, for any given period, straight-line rental income represents the difference between the contractual rental billings for that period and the average rental billings over the lease term for the same length of time. This application results in income recognition that can differ significantly from the current contract terms. By adjusting for this item, we believe AFFO provides useful supplemental information reflective of the realized economic impact of our leases, which is useful in assessing the sustainability of our operating performance.

• Loss on interest rate swaps and remeasurement of loss on foreign currency. These items relate to fair value adjustments, which are based on the impact of current market fluctuations, underlying market conditions and the performance of the specific holding, which is not attributable to our current operating performance. By adjusting for this item, we believe that AFFO provides useful supplemental information by focusing on the changes in our core operating fundamentals (rather than anticipated gains or losses that may never be realized), which is useful in assessing the sustainability of our operations.

• Noncash interest expense. This item represents amortization of financing costs paid in connection with executing our debt instruments, and the accretion of premiums (and amortization of discounts) on certain of our debt instruments.  GAAP requires these items to be recognized over the remaining term of the respective debt instrument, which may not correlate with the ongoing operations of our real estate portfolio. By excluding these items, management believes that AFFO provides supplemental information that allows for better comparability of reporting periods, which is useful in assessing the sustainability of our operations.

• Real estate acquisition-related costs. Acquisition expenses are incurred for investment purposes (i.e. to promote portfolio appreciation and generation of future earnings over the long term) and, therefore, do not correlate with the ongoing operations of our portfolio. By excluding these items, management believes that AFFO provides supplemental information that allows for better comparability of reporting periods, which is useful in assessing the sustainability of our operations.

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Reconciliations of net income to FFO and to AFFO (in thousands):

	Three months ended
	March 31,
	2012			2011
Reconciliation of Net Income to Funds From Operations and Adjusted Funds From Operations:
Net income attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	$	31,131		$	2,411
Adjustments:
Depreciation of real estate assets	30,125			28,118
Amortization of lease-related costs	27,056			30,392
Gain on sale of discontinued operations	(16,885		)	—
Total Funds From Operations adjustments	40,296			58,510
Funds From Operations	71,427			60,921
Other income (expenses) included in net income, which do not correlate with our operations:
Additional amortization of lease assets (liabilities)	(264		)	1,791
Straight-line rental income	(809		)	(1,092		)
Gain on interest rate swaps	(231		)	(2,554		)
Noncash interest expense	909			5,356
Subtotal	(395		)	3,501
Real estate acquisition-related costs	—			10,026
Adjusted Funds From Operations	$	71,032		$	74,448

Election as a REIT

We have elected to be taxed as a REIT under the Code, and have operated as such beginning with our taxable year ended December 31, 2003. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our adjusted taxable income, as defined in the Code, to our stockholders, computed without regard to the dividends-paid deduction and by excluding our net capital gain. As a REIT, we generally will not be subject to federal income tax on income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to federal income taxes on our taxable income for that year and for the four years following the year during which qualification is lost, unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially affect our net income and net cash available for distribution to our stockholders. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT for federal income tax purposes.

Wells TRS II, LLC ("Wells TRS"), Wells KCP TRS, LLC ("Wells KCP TRS"), and Wells Energy TRS, LLC ("Wells Energy TRS") are wholly owned subsidiaries of Wells REIT II and are organized as Delaware limited liability companies and include the operations of, among other things, a full-service hotel. We have elected to treat Wells TRS, Wells KCP TRS, and Wells Energy TRS as taxable REIT subsidiaries. We may perform certain additional, noncustomary services for tenants of our buildings through Wells TRS, Wells KCP TRS, or Wells Energy TRS; however, any earnings related to such services are subject to federal and state income taxes. In addition, for us to continue to qualify as a REIT, we must limit our investments in taxable REIT subsidiaries to 25% of the value of our total assets. Deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of assets and liabilities at the enacted rates expected to be in effect when the temporary differences reverse.

No provision for federal income taxes has been made in our accompanying consolidated financial statements, other than the provision relating to Wells TRS, as we made distributions in excess of taxable income for the periods presented. We are subject to certain state and local taxes related to property operations in certain locations, which have been provided for in our accompanying consolidated financial statements.

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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 are intended to protect us from, and mitigate the risk of, 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 the leases, the leases may not reset frequently enough to fully cover inflation.

Application of Critical Accounting Policies

Our accounting policies have been established to conform with GAAP. The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses.

Investment in Real Estate Assets

We are required to make subjective assessments as to the useful lives of our depreciable assets. We consider the period of future benefit of the asset to determine the appropriate useful lives. These assessments have a direct impact on net income. 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 economic life or lease term
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 and related intangible assets of both operating properties and properties under construction, in which we have an ownership interest, either directly or through investments in joint ventures, may not be recoverable. When indicators of potential impairment are present that suggest that the carrying amounts of real estate assets and related intangible assets (liabilities) may not be recoverable, we assess the recoverability of these 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. In the event that such expected undiscounted future cash flows do not exceed the carrying values, we adjust the carrying value of the real estate assets and related intangible assets to the estimated fair values, pursuant to 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 calculated based on the following information, in order of preference, depending upon availability: (i) recently quoted market prices, (ii) market prices for comparable properties, or (iii) the present value of future cash flows, including estimated salvage value. Certain of our assets may be carried at more than an amount that could be realized in a current disposition transaction.

Projections of expected future operating cash flows require that we estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, the number of months it takes to re-lease the property, and the number of years the property is held for investment, among other factors. The subjectivity of assumptions used in the future cash flow analysis, including discount rates, could result in an incorrect assessment of the property's fair value and could result in the misstatement of the carrying value of our real estate assets and related intangible assets and net income (loss).

Allocation of Purchase Price of Acquired Assets

Upon the acquisition of real properties, we allocate the purchase price of properties to tangible assets, consisting of land and building, site improvements, and identified intangible assets and liabilities, including the value of in-place leases, based in each case on our estimate of their fair values.

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The fair values of the tangible assets of an acquired property (which includes land and building) are determined by valuing the property as if it were vacant, and the "as-if-vacant" value is then allocated to land and building based on our determination of the relative fair value of these assets. We determine the as-if-vacant fair value of a property using methods similar to those used by independent appraisers. Factors we consider in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases, including leasing commissions and other related costs. In estimating carrying costs, we include real estate taxes, insurance, and other operating expenses during the expected lease-up periods based on current market demand.

Intangible Assets and Liabilities Arising from In-Place Leases where We are the Lessor

As further described below, in-place leases where we are the lessor may have values related to direct costs associated with obtaining a new tenant, opportunity costs associated with lost rentals that are avoided by acquiring an in-place lease, tenant relationships, and effective contractual rental rates that are above or below market rates:

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

• 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 consolidated 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) management'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.

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 write-off the remaining asset or liability immediately or over a shorter period of time. Lease restructurings, including 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 the event that the discounted cash flows of the original in-place lease stream do not exceed the discounted modified in-place lease stream, we adjust the carrying value of the intangible lease assets to the discounted cash flows 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.

Intangible Assets and Liabilities Arising from In-Place Leases where We are the Lessee

In-place ground leases where we are the lessee may have value associated with effective contractual rental rates that are above or below market rates. Such values are 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 paid pursuant to the in-place lease and (ii) management's estimate of fair market lease rates for the corresponding in-place lease, measured over a period equal to the remaining terms of the leases. The capitalized above-market and below-market in-place lease values are recorded as intangible lease liabilities or assets and amortized as an adjustment to property operating cost over the remaining term of the respective leases. Wells REIT II had gross below-market lease assets of approximately $110.7 million as of March 31, 2012 and December 31, 2011, and recognized amortization of these assets of approximately $0.5 million for the three months ended March 31, 2012 and 2011, and approximately $2.1 million for the year ended December 31, 2011.

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Related Parties

Transactions and Agreements

We have entered into agreements with our advisor, WREAS II, and its affiliates, whereby we pay certain fees and reimbursements to WREAS II or its affiliates, for acquisition fees, commissions, dealer-manager fees, asset and property management fees, construction fees, reimbursement of other offering costs, and reimbursement of operating costs. See Note 8. Related Party Transactions and Agreements to our accompanying consolidated financial statements included herein for a discussion of the various related-party transactions, agreements, and fees.

Assertion of Legal Action Against Related-Parties

On March 12, 2007, a stockholder of Piedmont Office Realty Trust, Inc. ("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, the Chairman of our Board of Directors; Wells Capital; Wells Management; 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 alleges 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 seeks, 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. Since the filing of the second amended complaint, the plaintiff has said it intends 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. The suit has been removed from the Court's trial calendar pending resolution of a request for interlocutory appellate review of certain legal rulings made by the Court.

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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 April 24, 2012, the plaintiff filed its response to the defendants' motion for summary judgment. The time for the defendants to file their reply in support of their motion for summary judgment has not yet expired.

Mr. Wells, Wells Capital, and Wells Management believe that the allegations contained in the complaint are without merit and intend to vigorously defend this action. 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 these actions or 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 these matters could have a material adverse impact on WREF's financial results, financial condition, or liquidity.

Commitments and Contingencies

We are subject to certain commitments and contingencies with regard to certain transactions. Refer to Note 6 of our accompanying consolidated financial statements for further explanation. Examples of such commitments and contingencies include:

• obligations under operating leases;

• obligations under capital leases;

• commitments under existing lease agreements; and

• litigation.

Subsequent Events

In connection with the preparation of our consolidated financial statements and notes thereto included in this report on Form 10-Q, we have evaluated our subsequent events and provided disclosures for such material subsequent event in, among others, Note 4. Lines of Credit and Notes Payable within this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a result of our debt facilities, we are exposed to interest rate changes. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flow primarily through a low to moderate level of overall borrowings. However, we currently have a substantial amount of debt outstanding. We manage our ratio of fixed- to floating-rate debt with the objective of achieving a mix that we believe is appropriate in light of anticipated changes in interest rates. We closely monitor interest rates and will continue to consider the sources and terms of our borrowing facilities to determine whether we have appropriately guarded ourselves against the risk of increasing interest rates in future periods.

Additionally, we have entered into interest rate swaps, and may enter into other interest rate swaps, caps, or other arrangements to mitigate our interest rate risk on a related financial instrument. We do not enter into derivative or interest rate transactions for speculative purposes; however, certain of our derivatives may not qualify for hedge accounting treatment. All of our debt was entered into for other-than-trading purposes.

Our financial instruments consist of both fixed-rate and variable-rate debt. Our variable-rate borrowings consist of the JPMorgan Chase Credit Facility, the $450 Million Term Loan, and the Three Glenlake Building mortgage note. However, only the JPMorgan Chase Credit Revolving Facility bears interest at an effectively variable rate, as the variable rate on the $450 Million Term Loan and the Three Glenlake Building mortgage note have been effectively fixed through the interest rate swap agreements described below. As of March 31, 2012, we had $100.0 million outstanding under the JPMorgan Chase Credit Facility; $375 million outstanding on the $450 Million Term Loan; $26.0 million outstanding on the Three Glenlake Building mortgage note; $248.5 million in 5.875% bonds outstanding; and $676.7million outstanding on fixed-rate, term mortgage loans. The weighted-average interest rate of all of our debt instruments was 4.45% as of March 31, 2012.

On February 3, 2012, we closed on a four-year, unsecured term loan with a syndicate of banks led by JPMorgan Chase Bank N.A. (the “$450.0 Million Term Loan”). The $450.0 Million Term Loan bears interest at LIBOR, plus an applicable base margin; however, we effectively fixed the interest rate (assuming no change in our corporate credit rating) at 2.64% per annum with an interest rate swap executed contemporaneously with the loan. At closing, the $450.0 Million Term Loan yielded initial gross proceeds of $375.0 million. We have the ability to increase the amount of borrowings under the $450.0 Million Term Loan up to a maximum amount of $450.0 million on two occasions during the borrowing period in minimum increments of $25.0 million; however, none of the current banks are obligated to participate in such increases. The $450.0 Million Term Loan matures on February 3, 2016 provided that certain conditions are met prior to that date. Furthermore, provided that certain additional conditions are met prior to, and at, maturity, the $450.0 Million Term Loan shall become eligible for a one-year extension upon paying an extension fee equal to 0.15% of the outstanding balance.

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The initial gross proceeds of $375.0 million were used to repay temporary borrowings on the JPMorgan Chase Credit Facility, which were drawn to repay mortgages in the third and fourth quarters of 2011. In April 2012, we exercised one of the options to increase borrowings under the $450.0 Million Term Loan from $375.0 million to $410.0 million, which additional proceeds were used to further reduce temporary borrowings outstanding, and thereby create additional short-term borrowing capacity, under the JPMorgan Chase Credit Facility.

During the three months ended March 31, 2012, we used cash on hand and proceeds from the JPMorgan Chase Credit Facility to fully repay the Highland Landmark Building mortgage note of $33.8 million at its maturity. During the three months ended March 31, 2012 and 2011, we also made interest payments of approximately $10.1 million and $8.2 million, respectively.

Approximately $1,326.2 million of our total debt outstanding as of March 31, 2012 is subject to fixed rates, either directly or when coupled with an interest rate swap agreement. As of March 31, 2012, these balances incurred interest expense at an average interest rate of 4.62% and have expirations ranging from 2012 through 2023. A change in the market interest rate impacts the net financial instrument position of our fixed-rate debt portfolio; however, it has no impact on interest incurred or cash flows. The amounts outstanding on our variable-rate debt facilities in the future will largely depend upon the level of investor proceeds raised under our DRP and the rate at which we are able to employ such proceeds in acquisitions of real properties.

We do not believe there is any exposure to increases in interest rates related to the capital lease obligations of $646.0 million at March 31, 2012, as the obligations are at fixed interest rates.

Foreign Currency Risk

We are also subject to foreign exchange risk arising from our foreign operations in Russia. Foreign operations represented 2.0% and 1.9% of total assets at March 31, 2012 and December 31, 2011, respectively, and 1.0% and 0.5% of total revenue for the three months ended March 31, 2012 and 2011, respectively. As compared to rates in effect at March 31, 2012, an increase or decrease in the U.S. dollar to Russian rouble exchange rate by 10% would not materially impact the accompanying consolidated financial statements.

ITEM 4. CONTROLS AND PROCEDURES

Management's Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of management, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) under the Securities Exchange Act of 1934 as of the end of the period covered by this report. Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report in providing a reasonable level of assurance that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods in 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 our Principal Executive Officer and our Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

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

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are party to legal proceedings, which arise in the ordinary course of our business. We are not currently involved in any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on our results of operations or financial condition, nor are we aware of any such legal proceedings contemplated by governmental authorities.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors disclosed in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2011.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) All equity securities sold by us in the quarter ended March 31, 2012 were sold in an offering registered under the Securities Act of 1933.

(b) Not applicable.

(c) During the quarter ended March 31, 2012, we redeemed shares as follows (in thousands, except per-share amounts):

Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)	Approximate Dollar Value of  Shares Available That May Yet Be Redeemed Under the Program
January 2012	1,627	$	6.51	1,627	(3)
February 2012	1,145	$	6.65	1,145	(3)
March 2012	1,075	$	6.56	1,075	(3)

During the quarter ended March 31, 2012, we redeemed all of the shares eligible and properly submitted for redemption prior to the redemption payment date in March 2012.

⁽¹⁾  All purchases of our equity securities by us in the three months ended March 31, 2012, were made pursuant to our SRP.

⁽²⁾  We announced the commencement of the program on December 10, 2003 and amendments to the program on April 22, 2004; March 28, 2006; May 11, 2006; August 10, 2006; August 8, 2007; November 13, 2008; March 31, 2009; August 13, 2009; February 18, 2010; July 21, 2010; September 23, 2010; July 19, 2011; August 12, 2011; November 8, 2011; and December 12, 2011.

⁽³⁾  We currently limit the dollar value and number of shares that may yet be redeemed under the program. First, we limit requests for redemptions other than those made within two years of a stockholder's death on a pro rata basis so that the aggregate of such redemptions during any calendar year do not exceed 5.0% of the weighted-average number of shares outstanding in the prior calendar year. Requests precluded by this test are not considered in the test below. In addition, if necessary, we limit all redemption requests, including those sought within two years of a stockholder's death, on a pro rata basis so that the aggregate of such redemptions during any calendar year do not exceed the greater of 100% of the net proceeds from our DRP during the calendar year or 5.0% of weighted average number of shares outstanding in the prior calendar year.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

(a) There have been no defaults with respect to any of our indebtedness.

(b) Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

(a) During the first quarter of 2012, there was no information that was required to be disclosed in a report of Form 8-K that was not disclosed in a report on Form 8-K.

(b) There are no material changes to the procedures by which stockholders may recommend nominees to our board of directors since the filing of our Schedule 14A.

ITEM 6. EXHIBITS

The exhibits required to be filed with this report are set forth on the Exhibit Index to this quarterly report attached hereto.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		WELLS REAL ESTATE INVESTMENT TRUST II, INC. (Registrant)
Dated:	May 4, 2012	By:	/s/ DOUGLAS P. WILLIAMS
			Douglas P. Williams Executive Vice President, Treasurer and Principal Financial Officer

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EXHIBIT INDEX TO

FIRST QUARTER 2012 FORM 10-Q OF

WELLS REAL ESTATE INVESTMENT TRUST II, INC.

The following documents are filed as exhibits to this report. Exhibits that are not required for this report are omitted.

Ex.	Description
3.1	Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Amendment No. 3 to the Registration Statement on Form S-11 (No. 333-107066) filed with the Commission on November 25, 2003).
3.2	Articles of Amendment of Wells Real Estate Investment Trust II, Inc., effective as of October 1, 2008 (incorporated by reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K/A for the year ended December 31, 2008).
3.3	Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2007).
3.4	Amendment No. 1 to Amended and Restated Bylaws (incorporated by reference to Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2007).
4.1	Form of Dividend Reinvestment Enrollment Form (incorporated by reference to Appendix A to the Prospectus included in Post-Effective Amendment No. 7 to the Registration Statement on Form S-11 on Form S-3 (No. 333-144414) and filed with the Commission on August 27, 2010 (the "DRP Registration Statement")).
4.2	Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates) (incorporated by reference to Exhibit 4.2 to Amendment No. 2 to the Registration Statement on Form S-11 (No. 333-144414) filed with the Commission on September 22, 2008).
4.3	Amended and Restated Dividend Reinvestment Plan (incorporated by reference to Appendix B to the Prospectus included in the DRP Registration Statement).
4.4	Fifth Amended and Restated Share Redemption Program (incorporated by reference to Exhibit 4.4 to the Company's Current Report on Form 8-K filed with the Commission on December 12, 2011).
10.1	Advisory Agreement between the Company and Wells Real Estate Advisory Services II, LLC effective as of January 1, 2012, incorporated by reference to the Company's Annual Report on Form 10-K filed with the Commission on February 29, 2012.
10.2*	Term Loan Agreement dated as of February 3, 2012, by and among Wells Operating Partnership II, L.P., as Borrower, J.P. Morgan Securities LLC and PNC Capital Markets LLC, as Joint Lead Arrangers and Joint Bookrunners, JPMorgan Chase Bank, N.A., as Administrative Agent and PNC Bank, National Association, as Syndication Agent and Regions Bank, U.S. Bank National Association, TD Bank, N.A. and Union Bank, N.A., as Documentation Agents and the Financial Institutions and their Assignees as Lenders.
10.3*	Supplemental Indenture dated as of February 3, 2012 among Wells Operating Partnership II, L.P., the Guarantors Party Hereto and U.S. Bank National Association, as Trustee.
31.1*	Certification of the Principal Executive Officer of the Company, 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 Company, 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 Company, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**	XBRL Instance Document.
101.SCH**	XBRL Taxonomy Extension Schema.
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF**	XBRL Taxonomy Extension Definition Linkbase.
101.LAB**	XBRL Taxonomy Extension Label Linkbase.
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase.

*	Filed herewith.
**	Furnished with this Form 10-Q

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