UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549

                                    FORM 10-K

              Annual Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

   For the fiscal year ended December 31, 1998. Commission file number 0-11200

               GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP

                              Minnesota 41-1398390
                         510 Marquette Avenue, Suite 300
                          Minneapolis, Minnesota 55402

                  Registrant's telephone number (612) 338-2828


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

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

Securities registered pursuant to Section 12(g) of the act:  $11,000,000


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 ___


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.405 of this chapter) is not contained herein, and will
not be contained to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this form 10-K.  [ ]

Forms 8-K dated September 9, 1998 and January 27, 1999 is incorporated by
reference in this report.


<PAGE>


               GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP


                                TABLE OF CONTENTS

                                                                            PAGE
PART I
    Item 1   Business........................................................1-2

    Item 2   Properties........................................................3

    Item 3   Legal Proceedings.................................................3

    Item 4   Submission of Matters to a Vote
             of Limited Partners...............................................3


PART II
    Item 5   Market for the Partnership's Limited Partnership
             Interests and Related Limited Partner Matters.....................3

    Item 6   Selected Financial Data...........................................4

    Item 7   Management's Discussion and Analysis of
             Financial Condition and Results of Operations...................5-7

    Item 8   Financial Statements and Supplementary Data.......................8

    Item 9   Changes in and Disagreements with Accountants on
             Accounting and Financial Disclosure...............................8


PART III
    Item 10  The General Partner of the Partnership..........................8-9

    Item 11  Management Remuneration and Transactions.........................10

    Item 12  Limited Partnership Ownership of Certain
             Beneficial Owners and Management.................................11

    Item 13  Certain Relationships and Related
             Transactions.....................................................11


PART IV
    Item 14  Exhibits, Financial Statement Schedules
             and Reports on Form 8-K..........................................12


SIGNATURES   .................................................................13


<PAGE>


               GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP

                                     PART I

Item 1.  Business

      The registrant, Griffin Real Estate Fund-II, A Limited Partnership (the
"Partnership"), was organized on September 19, 1980 under the laws of the State
of Minnesota. The Partnership was formed by the general partner, Investment
Associates, a Minnesota general partnership, to acquire existing,
income-producing real properties for rental purposes. On February 2, 1981 the
Partnership commenced an offering of $10,000,000 pursuant to a Registration
Statement on Form S-11 under the Securities Act of 1933. The offering terminated
December 15, 1982 upon the acceptance of 2200 units ($11,000,000), the maximum
allowed under the registration.

      The Partnership is engaged solely in the business of real estate
investment, and is limiting its investment to the real property acquired at its
inception plus reasonable repairs and capital improvements. The goal of these
investments is to generate both capital gain income and current income from cash
flow. The Partnership does not invest in real estate mortgages, securities of or
interests in persons primarily engaged in real estate activities, or in other
securities. A presentation of information about industry segments is not
applicable and would not be material to an understanding of the Partnership's
business taken as a whole.

      The General Partner manages and controls all of the affairs of the
Partnership, including deciding when and on what terms properties should be sold
or refinanced.

      As of December 31, 1998 the Partnership has made the real property
investment set forth in the following table:

      Name, type of property                          Date of       Type of
            and location     (a)         Size        Purchase      Ownership (b)
      ----------------------           ---------     --------      ---------

      1. Olde English Village Apts.    264 units      8/31/82      Mortgage Note
         West Des Moines, Iowa

      (a)   Reference is made to Schedule III of this annual report.

      (b)   Reference is made to Note 3 of Notes to Financial Statements filed
            with this annual report for the current outstanding principal
            balances and a description of the long-term indebtedness secured by
            the Partnership's real property investment;

      The Terms of Transactions between the Partnership and affiliates of the
General Partner are described in Item 11 to which reference is hereby made.

      It is the Partnership's policy to conduct its business activities in
accordance with the Partnership Agreement which may not be changed without a
vote of a majority of the Limited Partnership units outstanding. Pursuant to the
Partnership Agreement, the Partnership may not issue senior securities, make
loans to other persons, invest in the securities of other entities for the
purposes of exercising control, underwrite the securities of others or offer
securities in exchange for property.

                                       -1-


<PAGE>


               GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP

      As circumstances dictate, the Partnership has the right under the
Partnership Agreement to borrow money, and to use its investments in real
property as collateral for that debt. The amount of debt for acquisitions was
subject to a maximum of 75% loan to value. Although not required, the General
Partner intends to maintain this limit with any subsequent refinancings. No
refinancings occurred in 1998, 1997, or 1996. There is no limit on the number of
mortgages that may be taken out on any one piece of the Partnership's real
properties.

      The Partnership Agreement provides for the redemption of limited
partnership units under certain circumstances. In 1998, 1997, and 1996 the
Partnership redeemed no units.

      It is the policy of the General Partner to report on a quarterly basis to
the limited partners. Each interim report contains limited financial reporting
with a management discussion of operations and goals for the Partnership. The
annual report contains financial statements that are audited by independent
public accountants, and is accompanied by a management discussion of operations
and goals.

                            AVERAGE EFFECTIVE ANNUAL
                                 RENTAL PER UNIT

                             Lunnonhaus     Olde English          Villas of
           Candleridge       Village        Village               Patricia Park
           Apartments        Apartments     Apartments            Apartments
           Urbandale, IA     Golden, CO     W. Des Moines, IA     Urbandale, IA
--------------------------------------------------------------------------------
1998               *           $7,786          $6,371                    *
--------------------------------------------------------------------------------
1997           6,397            7,453           5,996                5,650
--------------------------------------------------------------------------------
1996           6,494            7,114           6,094                6,095
--------------------------------------------------------------------------------
1995           6,605            6,699           6,329                6,435
--------------------------------------------------------------------------------
1994           6,345            6,311           6,094                6,214
--------------------------------------------------------------------------------
*     Indicates the partnership did not own the property at any time during the
      year.


                                SCHEDULE OF REAL
                                  ESTATE TAXES

                                Lunnonhaus    Olde English         Villas of
               Candleridge      Village       Village              Patricia Park
               Apartments       Apartments    Apartments           Apartments
               Urbandale, IA    Golden, CO    W. Des Moines, IA    Urbandale, IA
--------------------------------------------------------------------------------
1998 Tax Rate      *                (a)             (a)                 *
   Assessment      *                (a)             (a)                 *
--------------------------------------------------------------------------------
1997 Tax Rate      *               89.573        34.36266               *
   Assessment      *              $74,071        $272,482               *
--------------------------------------------------------------------------------
1996 Tax Rate    34.07312          89.059        34.07312            34.07312
   Assessment    $151,068         $65,983        $268,332            $127,987
--------------------------------------------------------------------------------
1995 Tax Rate    33.32970          89.412        33.32970            33.32970
   Assessment    $143,756         $66,244        $261,864            $121,792
--------------------------------------------------------------------------------
1994 Tax Rate    34.39191          90.98         34.66721            34.39191
   Assessment    $128,614         $59,799        $242,212            $119,900
--------------------------------------------------------------------------------
*     Indicates the Partnership did not own the property at the time of the
      assessment.
(a)   Data not yet available.

It is the opinion of the General Partner that the Partnership's property is
adequately covered by insurance. 

                                      -2-


<PAGE>


               GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP

Item 2.  Properties

      The Partnership owns the real property referred to in Item 1 to which
reference is hereby made.

Item 3.  Legal Proceedings

      On September 20, 1995 Everest Investors, LLC ("Everest") filed a lawsuit
in Hennepin County Minnesota's Fourth Judicial District Court against Investment
Associates ("General Partner"), the general partner of Griffin Real Estate
Fund-II, A Limited Partnership ("Partnership"). The lawsuit alleged that the
General Partner had wrongfully denied Everest access to the books and records of
the Partnership. The court granted, in part, Everest's request for access to the
books and records and ordered the General Partner to provide Everest access to
these records. The General Partner complied with this court order. Everest
continued to seek access to additional books and records of the Partnership
beyond the scope of the court order. The General Partner vigorously defended the
Partnership's right to keep its proprietary records from being reviewed by
Everest, who has not been admitted as a limited partner of the Partnership
despite having been assigned a financial interest in 126 units by some original
limited partners. The General Partner filed for a dismissal of the matter. The
court heard arguments on September 29, 1995, October 26, 1995 and November 17,
1995. On November 27, 1995 the court dismissed Everest's lawsuit. Everest
appealed the dismissal in the Minnesota Court of Appeals on March 12, 1996.
Briefs were filed and oral arguments were heard by the court on July 1, 1996. On
September 10, 1996 the court affirmed the dismissal.

Item 4.  Submission of Matters to a Vote of Limited Partners

      There were no matters submitted to a vote of the Limited Partners.

                                     PART II

Item 5.  Market for the Partnership's Limited Partnership Interests and
         Related Limited Partner Matters

      There are approximately 707 holders of record of units of the Partnership.
There is no public market for units and it is not anticipated that a public
market for units will develop. The General Partner will not redeem or repurchase
units except upon death of the original limited partner.

      Reference is made to Item 6 in this annual report for a discussion of cash
distributions made to the Limited Partners.

                                       -3-


<PAGE>


               GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP

Item 6.  Selected Financial Data

               Griffin Real Estate Fund-II, A Limited Partnership
       For the Years Ended December 31, 1998, 1997, 1996, 1995, and 1994

<TABLE>
<CAPTION>
                                1998             1997              1996             1995             1994
                            -----------      -----------       -----------      -----------      -----------
<S>                         <C>              <C>               <C>              <C>              <C>        

Total Revenues              $13,107,038      $ 9,542,670       $ 5,589,366      $ 5,472,890      $ 5,148,672

Net Income before            10,088,953        5,303,794           539,331          324,981          151,515
 extraordinary item

Net Income before              4,565.70         2,359.35            234.49           141.24            65.81
 extraordinary item
 per limited
 partnership unit (c)

Extraordinary item -                 --         (142,121)               --               --               --
 Loss on extingishment
 of debt

Extraordinary item -                 --           (63.23)               --               --               --
 Loss on extingishment
 of debt per limited
 unit (c)

Net Income                   10,088,953        5,161,673           539,331          324,981          151,515

Net Income per limited         4,565.70         2,296.12            234.49           141.24            65.81
 partner unit (c)

Total Assets                  4,441,242        9,902,298        14,308,137       14,837,677       15,184,304

Mortgages and                 5,143,606        9,031,201        14,510,958       14,801,452       15,067,907
 Contracts for deed

Cash distributions          $  5,293.00      $  1,660.00       $    357.54      $    187.53               --
 per limited
 partner unit (b)

</TABLE>

(a)   The above selected financial data should be read in conjunction with the
      financial statements and the related notes appearing in Exhibit 13 in this
      annual report.

(b)   Cash distributions of $8,811 per Limited Partnership unit have been made
      to the Limited Partners since the inception of the Partnership. These
      distributions have not resulted in taxable income to such Limited Partners
      and have therefore represented a return of capital. Each Partner's taxable
      income (or loss) from the Partnership in each year is equal to his
      allocable share of the taxable income (loss) of the Partnership, without
      regard to cash generated or distributed by the Partnership.

(c)   Net income before extraordinary item, extraordinary item and Net income
      per limited partnership unit is based upon the weighted average number of
      limited partnership units outstanding during the period, which is 2,185
      for the current year.

                                       -4-


<PAGE>


               GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP

Item 7.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations.

RESULTS OF OPERATIONS

      Summary of Operations - 1998 Compared to 1997

      The year 1998 was marked by the continued disposition of the Partnership
properties that began in 1997. One of the remaining two properties was sold
during 1998 and the other was sold in January 1999. As a result of the sale of
the remaining property, the Partnership was terminated on February 28, 1999.
Quarterly distributions continued through the third quarter of 1998 at $400 per
unit for an annual rate of return of 8% of the limited partners' original
investment.

      On August 26, 1998 the Partnership sold Lunnonhaus Village Apartments.
This sale and the two property sales in 1997 mean that comparison of results
from one year to the next is not possible for the Partnership taken as a whole.
The following discussion is therefore limited to the one remaining property that
was held for the entire year.

Olde English Village Apartments:

      Physical occupancy recovered to 96% from the 87% level reached in the
first quarter of 1998. This is a welcome reversal of the trend that began in
late 1996 and continued through 1997 when the Des Moines market was unusually
soft. Gross potential rents rose 2.2% from 1997 to 1998. Rent loss decreased by
$68,922 from $221,152 in 1997 to $152,230 in 1998. These two factors overcame a
small decrease in other income to bring total income up 6% from $1,666,370 in
1997 to $1,766,765 in 1998.

      Continued vacancies earlier in 1998 caused a continued increase in the
areas of repairs and maintenance expense and in painting and decorating as the
apartments were made rent ready. Repairs and maintenance increased from $60,660
in 1997 to $84,076 in 1998. Advertising also increased 31% in an attempt to
lease the vacant units. Total advertising rose from $26,907 in 1997 to $35,207
in 1998.

      Capital expenditures of $247,881 were used mostly for landscaping and
garage roof repairs, along with the normal carpet and appliance replacements and
numerous other small projects.

      Summary of Operations - 1997 Compared to 1996

      The year 1997 was a year of transition for the Partnership. The General
Partner began the marketing of the properties for sale, resulting in the sale of
two of the four apartment communities. The remaining two continue to be marketed
for sale. Quarterly distributions from operations for 1997 were increased to
$400 per unit (including distributions paid in January 1998) or an annual return
of 8% of the limited partners' original investment.

      On May 27, 1997 the Partnership sold the Candleridge Apartments and the
Villas of Patricia Park Apartments, therefore comparison of results from one
year to the next is not possible for the Partnership taken as a whole. The
following discussion is therefore limited to the two remaining properties that
were held for the entire year.

                                       -5-


<PAGE>


               GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP

Lunnonhaus Village Apartments:

      Physical occupancy remained at or near 100% during 1997 which compares
closely to 1996. Rental rates increased 4.4% and with a slight increase in other
income, total revenues increased 5.0% over 1996.

      Operating expenses in total were up only slightly from 1996. Utilities
increased 10% from $196,662 in 1996 to $216,333 in 1997. However, there were
other expenses that decreased enough to largely offset this. Most notably,
repairs and maintenance dropped 8.2% from $247,579 in 1996 to $228,727 in 1997.
The decrease is mainly a result of fewer carpet and appliance replacements
during 1997. Real estate tax expense increased by $10,423 from $65,871 in 1996
to $76,294 in 1997. Capital expenditures of $167,768 were used to repair
sidewalks, steps, siding, roofs to remodel the clubhouse and to purchase laundry
equipment.

Olde English Village Apartments:

      Physical occupancy rebounded a bit during 1997 from the 87% level as of
December 31, 1996. However, after reaching the low 90's it had slipped back to
88% by December 31, 1997 due to the soft Des Moines market. Rental rates
increased almost 3%, but with the increases in vacancy and a decrease in other
income, total income dropped 3.6% in 1997.

      Increased tenant turnover caused a commensurate increase in expenses in
the areas of repairs and maintenance and in painting and decorating as the
apartments were made rent ready. Repairs and maintenance increased from $223,822
in 1996 to $317,835 in 1997. Advertising also increased 68% in an attempt to
lease the vacant units. The amount spent rose 68% from $16,011 in 1996 to
$26,907 in 1997.

      Capital expenditures of $203,984 were used to patch and seal the parking
lot, replace concrete, for wood, roof and window replacement, for fence repairs
and restroom remodeling. The lease on the property's truck was also bought out.

YEAR 2000

      The year 2000 compliance issue concerns the inability of computerized
information systems to accurately calculate, store or use a date after 1999.
This could have resulted in a system failure or miscalculations causing
disruptions of operations. The General Partner had been evaluating the
accounting software to find out if a Year 2000 problem existed. However, given
that the Partnership terminated on February 28, 1999 this is no longer an issue.

LIQUIDITY

      The Partnership had approximately $149,401 of cash reserves on hand at
December 31, 1998. This provided the Partnership with ample liquidity with which
to operate the Partnership up to its termination on February 28, 1999. The
Partnership sold Olde English Village Apartments on January 14, 1999 and
distributed sales proceeds of $1,573 to unitholders of record on February 18,
1999.

      Candleridge and Villas of Patricia Park Apartments were both sold on May
27, 1997. Sales proceeds of $1,285 per unit were distributed on June 17, 1997 to
unitholders of record on May 27, 1997. Lunnonhaus Village Apartments was sold on
August 26, 1998. Sales proceeds of $4,741 per unit were distributed on September
2, 1998 to unitholders of record on August 26, 1998. 

                                      -6-


<PAGE>


               GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP


                                 OCCUPANCY TABLE

                              Lunnonhaus    Olde English         Villas
             Candleridge      Village       Village              of Patricia
             Apartments       Apartments    Apartments           Park Apartments
             Urbandale, IA    Golden, CO    W. Des Moines, IA    Urbandale, IA
             -------------    ----------    -----------------    ---------------

3/31/98           *              99%              87%                 *
6/30/98           *              99%              92%                 *
9/30/98           *              *                95%                 *
12/31/98          *              *                96%                 *
                                                  
3/31/97           96%            99%              89%                 84%
6/30/97           *              100%             91%                 *
9/30/97           *              100%             93%                 *
12/31/97          *              100%             88%                 *
                                                  
3/31/96           96%            100%             94%                 96%
6/30/96           95%            98%              92%                 91%
9/30/96           96%            100%             94%                 95%
12/31/96          94%            100%             87%                 89%
                                                  
3/31/95           95%            100%             97%                 93%
6/30/95           99%            99%              99%                 96%
9/30/95           97%            99%              100%                98%
12/31/95          99%            100%             97%                 95%
                                                  
3/31/94           92%            100%             93%                 97%
6/30/94           98%            99%              92%                 95%
9/30/94           96%            100%             99%                 98%
12/31/94          94%            99%              98%                 98%

* Indicates the Partnership did not own the property at the end of the quarter.

                                       -7-


<PAGE>


               GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP

Item 8.  Financial Statements and Supplementary Data

      The Table of Contents to Financial Statements, Financial Statements and
Supplementary Data listed in Item 14 are referenced herein as included in the
exhibits attached to this report and are incorporated herein by reference.

Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure

      There have been no changes in independent auditors and as of the date of
the filing, there were no material disagreements with the current independent
auditors (Larson, Allen, Weishair & Co.,LLP) regarding any of the following:

      1)    Accounting principles or practices
      2)    Extent and quality of financial statement disclosure
      3)    Auditing scope or procedures


                                    PART III

Item 10.  The General Partner of the Partnership

      The General Partner of the Partnership is Investment Associates, a
Minnesota general partnership formed in September of 1980 by certain directors
and officers of Griffin Companies for the sole purpose of acting as General
Partner of the Partnership. As General Partner, Investment Associates manages
and controls the affairs of the Partnership and has general responsibility and
authority in all matters affecting its business.

      Griffin Companies, a Minnesota corporation organized in 1969, is engaged
in real estate brokerage, real estate investment counseling, and management of
commercial and multi-family real estate. Griffin Companies and its Affiliates
have organized and served as general partners in thirty-two privately placed
partnerships and six publicly offered partnerships, which were formed for the
purpose of real estate investment.

      The General Partner and its Affiliates provide executive, supervisory and
certain administrative services for the Partnership's operations and the General
Partner is responsible for determining whether, when and on what terms
properties should be sold or refinanced. In addition, the books and records of
the Partnership are maintained by Griffin Companies, and are subject to audit by
independent certified public accountants. The partners of the General Partner
intend to devote only as much of their time to the business of the Partnership
as they determine to be reasonably required. Limited Partners have no right to
participate in the management of the Partnership.

      Effective February 29, 1998 Thomas A. Robeson, one of the partners of the
General Partner, withdrew as a partner. Effective December 31, 1994 James R.
Wadsworth, one of the partners of the General Partner, withdrew as a partner.
Also effective July 22, 1997 Frederick R. Lamb, one of the partners of the
General Partners, withdrew as a partner. Their shares of ownership and their
shares of future profits and losses were assigned to and split equally between
Larry D. Fransen and Robert S. Dunbar. Mr. Fransen and Mr. Dunbar were already
partners of the General Partner.

      The identity and business experience of each of the partners of the
General Partner is as follows: 

                                      -8-


<PAGE>


               GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP

Larry D. Fransen (age 58) founded Griffin Companies in 1969. He is a Director
and senior officer of each of its operating entities, in addition to serving as
Chairman.

      Since 1969, he has acted as general partner in many partnerships investing
in apartments, office buildings, warehouses, land and motels.

      Acting on behalf of Griffin Companies' clients, Mr. Fransen has negotiated
the acquisition and disposition of more than one billion dollars in investment
real estate properties nationwide.

      He is a member of numerous professional organizations, including the
Greater Minneapolis Area Board of Realtors, the Minnesota Association of
Realtors, the National Association of Realtors (NAR), Minnesota Multi Housing
Association (MHA), National Multi-Housing Council (NMHC), the National Apartment
Association (NAA), Commercial and Investment Institute, National Association of
Real Estate Investment Trusts (NAREIT), and the Pension Real Estate Association
(PREA).

      Mr. Fransen holds the CCIM (Certified Commercial Investment Member)
designation of the Commercial Investment Institute, as well as the SRS
(Specialist in Real Estate Securities) designation. For 13 years, he was an
instructor for the Commercial Investment Institute and served as the group's
national president in 1983. He has been awarded the Omega Tau Rho Medal of
Service for his years of service to the National Association of Realtors.

Robert S. Dunbar (age 59) is Chief Executive Officer of Griffin Companies.

      Following several years with Control Data Corporation where he held
various administrative and management positions, he was named Executive Vice
President of the U.S. Jaycees in 1970, with responsibility for planning,
budgeting and administration of the national organization. In 1972, he joined
Ed. Phillips & Sons Company in Minneapolis, Minnesota as a sales manager. In
1975 he was elected President of Westland Capital Corporation, a Minneapolis
venture capital firm, where he was responsible for analyzing various companies
for potential investment opportunities. He joined Griffin Companies in 1977.

      Mr. Dunbar is a member of the Institute of Real Estate Management (IREM)
and the Minnesota Multi Housing Association (MHA). He holds the Certified
Apartment Manager (CAM) designation of the National Apartment Association and is
a Certified Property Manager (CPM) as designated by the National Association of
Realtors. Mr. Dunbar also holds a Minnesota Real Estate Broker's License and has
completed the necessary course work for their prestigious Certified Commercial
Investment Member (CCIM) designation conferred by the Commercial Investment
Institute. He is a member of the national Multi-Housing Council and The
Executive Committee (T.E.C.). He also serves on the Board of Trustees of
Northwestern College.

      Messrs. Fransen and Dunbar together own 100% of the issued and outstanding
shares of common stock of Griffin Companies. The partners of the General Partner
represent and warrant that they have a collective personal net worth on an
unaudited cost basis and on an unaudited estimated current value basis (measured
as total assets at estimated current value less all liabilities) in excess of
$1,500,000. The assets of the partners of the General Partner are largely
invested in interests in real property and in Griffin Companies, therefore it
may be difficult to precisely value such assets or to liquidate such assets
expeditiously or on terms favorable to the seller.

                                       -9-


<PAGE>


               GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP

Item 11.  Management Remuneration and Transactions

      Partners of the General Partner receive no current or proposed direct
remuneration in such capacity. The Partnership is required to pay a management
fee to Griffin Companies and the General Partner is entitled to receive a share
of cash distributions, when and as cash distributions are made to the Limited
Partners, and a share of profits or losses as described below:

      .     Profits, losses, and cash flow distributions, other than from
            refinancing or from the sale of Partnership properties, are
            allocated 95% to the limited partners and 5% to the general partner.

      .     Net proceeds from refinancing or from the sale of property other
            than upon liquidation, less any necessary liability reserves or debt
            payments, will be distributed in the following order subject to the
            general partner receiving at least 1% of the distributions:

            ..    First, to the limited partners to the extent that prior
                  distributions are less than the original capital contribution
                  plus 6% per annum (as defined in the Partnership Agreement);

            ..    Second, any unpaid real estate commissions due to the general
                  partner on the resale of the Partnership properties;

            ..    Third, any remaining balance, 80% to the limited partners and
                  20% to the general partner.

      The Partnership is entitled to engage in various transactions involving
affiliates of the General Partner of the Partnership.

      Griffin Companies ("Griffin"), an affiliate of the General Partner, may be
reimbursed for direct expenses relating to the administration of the Partnership
and operation of the Partnership real property investments. Griffin received
approximately $43,944, $23,857 and $24,064 in 1998, 1997, and 1996 respectively,
for these expenses.

      Reference is made to Note 4 of Notes to Financial Statements appearing
elsewhere in this annual report for a description of related party transactions.

                                      -10-


<PAGE>


               GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP

Item 12.  Limited Partnership Ownership of Certain Beneficial Owners 
          and Management

      Everest Investors, LLC, located at 11755 Wilshire Boulevard, Suite 2360
Los Angeles, California 90025, is the only person or "group" known by the
Partnership to own beneficially more than 5% of the outstanding units of the
Partnership. Everest Investors, LLC has only a financial interest in their units
which were assigned by the original owners of 126 units. Everest has not been
admitted as a limited partner of the partnership.

                                   Amount and Nature           Percent of Class
                                   of Beneficial               Outstanding at
            Title of Class         Ownership                   December 31, 1998
            --------------         ---------                   -----------------
      Limited Partnership Units    126 units, purchased at          5.8%
                                   $2,387.50 per unit


          The individual general partners of the General Partner as a group have
the following interest in the Partnership:

                                   Amount and Nature           Percent of Class
                                   of Beneficial               Outstanding at
            Title of Class         Ownership                   December 31,1998
            --------------         ---------                   -----------------
      Limited Partnership Units    26 units purchased at            1.2%
                                   $4,462 per unit

      No partner of the General Partner possesses a right to acquire beneficial
ownership of interest of the Partnership.

      There exists no arrangement, known to the Partnership, the operation of
which may at subsequent date result in a change in control of the Partnership.

Item 13.  Certain Relationships and Related Transactions

      The partners of Investment Associates, the general partner of the
Partnership, are also owners and employees of Griffin Companies, a Minnesota
corporation. Accounts payable - affiliates consists of unpaid management fees to
and advances from Griffin Companies. The following is a summary of approximate
fees incurred for the years ended December 31:

                                          1998            1997            1996
                                        --------        --------        --------

      Property management fees          $219,394        $259,996        $302,319
      Major improvement     
          supervisory fees                24,198          68,502          73,408

                                      -11-


<PAGE>


               GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP


                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

      The following documents are filed as part of this report:

            Exhibit 13: Financial Statements and Schedules.

      An 8-K was filed on June 12, 1997 in regards to the sale of the
Candleridge Apartments and Villas of Patricia Park Apartments on May 27, 1997.
Another 8-K was filed on September 9, 1998 in regards to the sale of Lunnonhaus
Village Apartments on August 26, 1998. An 8-K was filed on January 27, 1999 in
regards to the sale of Olde English Village on January 14, 1999. Proforma
Financial Information was included with these filings.

      No annual report or proxy material for the fiscal year 1998 has been sent
to the Partners of the Partnership. An annual report will be sent to the
Partners subsequent to this filing substantially similar to this form 10K.

                                      -12-


<PAGE>


               GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP


                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.


Dated:  March 29, 1999                      Griffin Real Estate Fund-II,
                                            A Limited Partnership



                                            By:  Larry D. Fransen\s\
                                                 ----------------------------
                                                 Larry D. Fransen
                                                 for the General Partner
                                                 Investment Associates


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



Dated:  March 29, 1999                      By:  Larry D. Fransen\s\
                                                 ----------------------------
                                                 Larry D. Fransen
                                                 Managing General Partner
                                                 of the General Partner
                                                 Investment Associates

                                      -13-