March 30, 2000



United States
Securities and Exchange Commission
Washington, D.C.  20549


RE:   Angeles Income Properties, Ltd. II
      Form 10-KSB
      File No. 0-11767


To Whom it May Concern:

The  accompanying  Form 10-KSB for the year ended  December 31, 1999 describes a
change in the method of  accounting to  capitalize  exterior  painting and major
landscaping,   which  would  have  been  expensed  under  the  old  policy.  The
Partnership believes that this accounting principle change is preferable because
it  provides a better  matching  of  expenses  with the  related  benefit of the
expenditures and it is consistent with industry practice and the policies of the
Managing General Partner.

Please do not hesitate to contact the undersigned with any questions or comments
that you might have.

Very truly yours,



Stephen Waters
Real Estate Controller


<PAGE>



                  FORM 10-KSB--Annual or Transitional Report Under

                               Section 13 or 15(d)

                                   Form 10-KSB

[X] ANNUAL  REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
    1934 [No Fee Required]

                    For the fiscal year ended December 31, 1999

[ ] TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
    OF 1934 [No Fee Required]

                  For the transition period _________to _________

                         Commission file number 0-11767

                         ANGELES INCOME PROPERTIES, LTD. II
                   (Name of small business issuer in its charter)

         California                                              95-3793526
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                          55 Beattie Place, PO Box 1089
                        Greenville, South Carolina 29602

                      (Address of principal executive offices)

                                 (864) 239-1000
                            Issuer's telephone number

           Securities registered under Section 12(b) of the Exchange Act:

                                      None

           Securities registered under Section 12(g) of the Exchange Act:

                      Units of Limited Partnership Interest

                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act of 1934 during the past 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___

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of the  registrant's  knowledge  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year.   $6,767,000

State the aggregate  market value of the voting  partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  partnership
interests  were sold,  or the average bid and asked  prices of such  partnership
interests as of December 31, 1999. No market exists for the limited  partnership
interests of the Registrant,  and,  therefore,  no aggregate market value can be
determined.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None


<PAGE>

                                     PART I

Item 1.     Description of Business

Angeles Income  Properties,  Ltd. II (the  "Partnership"  or  "Registrant") is a
publicly held limited partnership organized under the California Uniform Limited
Partnership Act on October 12, 1982. The Partnership's  managing general partner
is Angeles  Realty  Corporation  II, a  California  corporation  (the  "Managing
General  Partner" or "ARC II").  ARC II was  wholly-owned  by MAE GP Corporation
("MAE  GP").  Effective  February  25,  1998,  MAE GP was merged  into  Insignia
Properties  Trust  ("IPT").  Effective  February 26,  1999,  IPT was merged into
Apartment  Investment  and  Management  Company  ("AIMCO").  Thus,  the Managing
General  Partner is now  wholly-owned  by IPT (see  "Transfer of Control").  The
Elliott Accommodation Trust and the Elliott Family Partnership, Ltd., California
limited partnerships, were the non-managing general partners. Effective December
31, 1997 the Elliott Family Partnership, Ltd. acquired the Elliott Accommodation
Trust's general partner interest in the Registrant. The Managing General Partner
and the non-managing general partner are herein collectively  referred to as the
"General Partners".  The Partnership  Agreement provides that the Partnership is
to terminate on December 31, 2037 unless terminated prior to such date.

The Partnership,  through its public offering of Limited Partnership Units, sold
100,000 units aggregating $50,000,000.  The General Partners contributed capital
in the amount of $1,000 for a 1% interest in the  Partnership.  The  Partnership
was formed for the purpose of acquiring fee and other forms of equity  interests
in various types of real estate  property.  The  Partnership  presently owns and
operates three apartment properties and one commercial property,  which was sold
subsequent to December 31, 1999. (See "Item 2.  Properties").  Since its initial
offering,  the Registrant has not received, nor are limited partners required to
make, additional capital contributions.

The  Partnership  has no full  time  employees.  Management  and  administrative
services are provided by the Managing  General Partner and by agents retained by
the Managing  General  Partner.  An affiliate  of the Managing  General  Partner
provided such property  management  services for the residential  properties for
the years ended December 31, 1999 and 1998.  Effective October 1, 1998, property
management  services for the  commercial  property were provided by an unrelated
party.

The  real  estate  business  in which  the  Partnership  is  engaged  is  highly
competitive.  There are other  residential  properties within the market area of
the Partnership's properties.  The number and quality of competitive properties,
including  those which may be managed by an affiliate  of the  Managing  General
Partner in such market area,  could have a material  effect on the rental market
for  apartment  properties  owned by the  Partnership  and the rents that may be
charged  for  such  apartments.  While  the  Managing  General  Partner  and its
affiliates  own and/or  control a significant  number of apartment  units in the
United  States,  such  units  represent  an  insignificant  percentage  of total
apartment  units in the United  States and  competition  for the  apartments  is
local.

There have been, and it is possible there may be other, Federal, state and local
legislation  and  regulations   enacted   relating  to  the  protection  of  the
environment.  The Partnership is unable to predict the extent,  if any, to which
such new  legislation  or  regulations  might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.

The Partnership  monitors its properties for evidence of pollutants,  toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental   testing  has  been   performed.   See   discussion   of  ongoing
environmental  clean-up  project  at  Princeton  Meadows  in  "Note  G"  of  the
consolidated  financial statements included in "Item 7. Financial Statements" of
this Form 10-KSB.

Both  the  income  and  expenses  of  operating  the  properties  owned  by  the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand for similar  properties  resulting from various
market  conditions,  increases/decreases  in unemployment or population  shifts,
changes in the availability of permanent mortgage  financing,  changes in zoning
laws,  or changes in patterns or needs of users.  In  addition,  there are risks
inherent in owning and operating residential  properties because such properties
are  susceptible to the impact of economic and other  conditions  outside of the
control of the Partnership.

A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operations" included in "Item 6" of this Form
10-KSB.

Transfer of Control

Pursuant  to a series  of  transactions  which  closed  on  October  1, 1998 and
February 26, 1999,  Insignia  Financial Group, Inc.  ("Insignia") and IPT merged
into AIMCO, a publicly traded real estate investment trust, with AIMCO being the
surviving  corporation (the "Insignia Merger"). As a result, AIMCO acquired 100%
ownership interest in the Managing General Partner. The Managing General Partner
does not believe that this transaction has had or will have a material effect on
the affairs and operations of the Partnership.

Item 2.     Description of Properties:

The following table sets forth the Partnership's investment in properties:
<TABLE>
<CAPTION>

                                Date of
Property                        Purchase       Type of Ownership            Use

Continuing Operations
<S>                             <C>   <C>
Deer Creek Apartments           09/28/83   Fee ownership subject to   Apartments
  Plainsboro, NJ                             a first mortgage         288 units

Georgetown Apartments           11/21/83   Fee ownership subject to   Apartments
  South Bend, IN                             a first and second       200 units
                                             mortgage (1)

Landmark Apartments             12/16/83   Fee ownership subject to   Apartments
  Raleigh, NC                                a first mortgage         292 units

Discontinued Operation

Atlanta Crossing (2)            09/27/83   100% Leasehold Interest    Retail Center
  Shopping Center                                                     169,168 s.f.
  Montgomery, AL
</TABLE>

(1) Property is held by a limited partnership in which the Registrant owns a 99%
    interest.

(2) Property was sold subsequent to December 31, 1999.

The  Partnership  had a 14.4%  interest  in the  Princeton  Meadows  Golf Course
("Joint  Venture")  Joint Venture.  On February 26, 1999, the Joint Venture sold
its only investment property,  Princeton Meadows Golf Course, to an unaffiliated
third party (see "Note G" of the consolidated  financial  statements included in
"Item 7. Financial Statements").

Schedule of Properties:

Set forth below for each of the  Registrant's  properties is the gross  carrying
value,  accumulated  depreciation,  depreciable life, method of depreciation and
Federal tax basis.
<TABLE>
<CAPTION>

                            Gross
                           Carrying   Accumulated                          Federal
Property                     Value    Depreciation    Rate     Method     Tax Basis
                                (in thousands)                         (in thousands)
Continuing Operations

<S>                         <C>          <C>        <C>         <C>        <C>
Deer Creek Apartments       $12,305      $7,453     5-20 yrs    (1)        $ 4,505

Georgetown Apartments         7,555       5,674     5-20 yrs    (1)          1,052

Landmark Apartments          12,527       9,471     5-20 yrs    (1)          2,421
                             32,387      22,598                              7,978
Discontinued Operation
Atlanta Crossing

  Shopping Center             5,318       4,905     5-20 yrs    (1)          1,269
                            $37,705     $27,503                            $ 9,247
</TABLE>

(1)   Straight line and accelerated.

See  "Note A" of the  consolidated  financial  statements  included  in "Item 7.
Financial Statements" for a description of the Partnership's depreciation policy
and "Note M - Change in Accounting Principle".


<PAGE>


Schedule of Property Indebtedness:

The  following  table  sets  forth  certain  information  relating  to the loans
encumbering the Registrant's properties.
<TABLE>
<CAPTION>

                       Principal                                          Principal
                       Balance At                                          Balance
                      December 31,   Interest     Period     Maturity      Due At
     Property             1999         Rate      Amortized     Date     Maturity (2)
                     (in thousands)                                    (in thousands)

Deer Creek
<S>                     <C>            <C>        <C>         <C>          <C>
  1st mortgage          $ 6,100        7.33%      30 yrs      11/2003      $ 5,779

Georgetown
  1st mortgage            5,175        7.83%     28.67 yrs    10/2003        4,806
  2nd mortgage              173        7.83%        (1)       10/2003          173

Landmark
  1st mortgage            6,391        7.33%      30 yrs      11/2003        6,054
                         17,839                                            $16,812

Less unamortized
  discount                  (55)
                        $17,784
</TABLE>

(1)   Interest only payments.

(2)   See "Item 7. Financial  Statements - Note C" for information  with respect
      to the  Partnership's  ability to prepay  these  loans and other  specific
      details about the loans.

Rental Rates and Occupancy:

Average annual rental rate and occupancy for 1999 and 1998 for each property:
<TABLE>
<CAPTION>

                                     Average Annual               Average Annual
                                       Rental Rate                   Occupancy
 Property                         1999            1998          1999         1998
 Continuing Operations
<S>                            <C>             <C>               <C>          <C>
 Deer Creek Apartments         9,397/unit      8,920/unit        98%          97%
 Georgetown Apartments         7,775/unit      7,624/unit        96%          96%
 Landmark Apartments           8,518/unit      8,308/unit        92%          92%

 Discontinued Operation
 Atlanta Crossing

   Shopping Center (1)         $4.17/s.f.      $4.51/s.f.        57%          59%
</TABLE>

(1)  Bruno's,  an anchor  tenant,  declared  bankruptcy and vacated its space in
     Atlanta  Crossing  during  February of 1998. This tenant was subleasing the
     space and the previous  tenant is liable for, and the  Partnership  expects
     that it will  continue to pay, its rental  payments  through the year 2007.
     Atlanta  Crossing's  average  occupancy  for  1999  and  1998  shown  above
     represents the center's physical occupancy. Because the original tenant has
     continued  making  the  rental  payments,  the  center's  economic  average
     occupancy  for the years ended  December  31, 1999 and 1998 is 88% and 90%,
     respectively.

As noted under "Item 1.  Description of Business",  the real estate  industry is
highly  competitive.  All of the  properties of the  Partnership  are subject to
competition from other residential  apartment complexes and commercial buildings
in the area. The Managing  General  Partner  believes that all of the properties
are adequately insured.  Each residential property is an apartment complex which
leases  its units for lease  terms of one year or less.  No  residential  tenant
leases 10% or more of the available  rental space.  All of the properties are in
good physical condition,  subject to normal depreciation and deterioration as is
typical for assets of this type and age.

Schedule of Lease Expirations:

The following is a schedule of the commercial  lease  expirations  for the years
2000-2009:
<TABLE>
<CAPTION>

                            Number of                      Annual       % of Gross
    Atlanta Crossing       Expirations   Square Feet        Rent        Annual Rent
                                                       (in thousands)

<S>   <C>                       <C>          <C>              <C>          <C>
      2000                      2            3,200            25           3.81%
      2001                     --               --            --              --
      2002                      3            9,282            89          13.48%
      2003                      3            8,812(1)        118          17.93%
      2004                      2           11,971(1)         77          11.66%
      2005                      1               --(1)         28           4.28%
      2006                      2           55,009           214          32.50%
      2007                      1           53,820            65           9.85%
      2008-2009                --               --            --              --
</TABLE>

(1)   Includes a tenant  that holds a ground  lease and is not  included  in the
      total  square   footage  for  the  property  (See  "Note  I"  for  further
      information).

The following schedule reflects  information on tenants occupying 10% or more of
the leasable square feet for the commercial property:

             Nature of                            Annual Rent        Lease
              Business                Leased    Per Square Foot   Expiration

Atlanta Crossing Shopping Center
Grocery Store                         53,820         $1.21         03/05/07
Discount Store                        50,000          3.30         02/28/06



<PAGE>


Schedule of Real Estate Taxes and Rates:

Real estate taxes and rates in 1999 for each property were:

                                    1999             1999
                                  Billing            Rate
                               (in thousands)
Continued Operations

Deer Creek Apartments              $ 285             2.67%
Georgetown Apartments                133*            9.40%
Landmark Apartments                  122             1.26%

Discontinued Operation
Atlanta Crossing
  Shopping Center                   $ 53             3.45%

*Amount per 1998 billings; tax bills for 1999 not yet received.

Capital Improvements:

Continuing Operations:

Deer Creek

During the year ended December 31, 1999,  the  Partnership  spent  approximately
$521,000 on capital improvements  consisting primarily of building improvements,
parking lot improvements,  air conditioning unit replacement, major landscaping,
and  interior  improvements.  These  improvements  were  funded  primarily  from
Partnership  reserves.  The  Partnership  is  currently  evaluating  the capital
improvement  needs of the property for the upcoming  year. The minimum amount to
be budgeted is expected to be $300 per unit or $86,400.  Additional improvements
may be considered  and will depend on the physical  condition of the property as
well  as  replacement  reserves  and  anticipated  cash  flow  generated  by the
property.

Georgetown

During the year ended December 31, 1999,  the  Partnership  spent  approximately
$168,000  on  capital  improvements  consisting  primarily  of carpet  and vinyl
replacement,  window  replacements,  major  landscaping,  and appliances.  These
improvements were funded primarily from Partnership  reserves and operating cash
flow. The Partnership is currently  evaluating the capital  improvement needs of
the  property  for the  upcoming  year.  The  minimum  amount to be  budgeted is
expected  to be  $300  per  unit  or  $60,000.  Additional  improvements  may be
considered and will depend on the physical  condition of the property as well as
replacement reserves and anticipated cash flow generated by the property.

Landmark

During the year ended December 31, 1999,  the  Partnership  spent  approximately
$371,000  on  capital  improvements  consisting  primarily  of carpet  and vinyl
replacement,  exterior painting, and structural improvements. These improvements
were funded  primarily  from  Partnership  reserves and operating cash flow. The
Partnership  is  currently  evaluating  the  capital  improvement  needs  of the
property for the upcoming year. The minimum amount to be budgeted is expected to
be $300 per unit or $87,600.  Additional improvements may be considered and will
depend on the physical condition of the property as well as replacement reserves
and anticipated cash flow generated by the property.

Discontinued Operation:

Atlanta Crossing

During the year ended December 31, 1999,  the  Partnership  spent  approximately
$5,000 on capital improvements consisting primarily of tenant improvements.  The
property was sold subsequent to December 31, 1999.

Item 3.     Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial  Group,  Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs  named as defendants,  among others,
the  Partnership,  the Managing  General Partner and several of their affiliated
partnerships  and corporate  entities.  The action  purports to assert claims on
behalf of a class of limited  partners and derivatively on behalf of a number of
limited  partnerships  (including  the  Partnership)  which are named as nominal
defendants,  challenging  the  acquisition  by Insignia  Financial  Group,  Inc.
("Insignia")  and  entities  which  were,  at one time,  affiliates  of Insignia
("Insignia  Affiliates") of interests in certain general partner entities,  past
tender offers by Insignia  Affiliates to acquire limited  partnership units, the
management of partnerships  by Insignia  Affiliates and the Insignia Merger (see
"Item 7. Financial  Statements,  Note B - Transfer of Control").  The plaintiffs
seek monetary damages and equitable relief,  including  judicial  dissolution of
the  Partnership.  On June 25, 1998, the Managing General Partner filed a motion
seeking  dismissal  of the action.  In lieu of  responding  to the  motion,  the
plaintiffs have filed an amended  complaint.  The Managing General Partner filed
demurrers to the amended  complaint which were heard February 1999.  Pending the
ruling on such  demurrers,  settlement  negotiations  commenced.  On November 2,
1999,  the parties  executed and filed a  Stipulation  of  Settlement,  settling
claims,  subject to final court  approval,  on behalf of the Partnership and all
limited partners who own units as of November 3, 1999.  Preliminary  approval of
the  settlement  was obtained on November 3, 1999 from the Superior Court of the
State of  California,  County of San Mateo,  at which time the Court set a final
approval  hearing for December 10, 1999.  Prior to the December 10, 1999 hearing
the Court received various  objections to the settlement,  including a challenge
to the Court's preliminary  approval based upon the alleged lack of authority of
class  plaintiffs'  counsel to enter the  settlement.  On December 14, 1999, the
Managing General Partner and its affiliates  terminated the proposed settlement.
Certain  plaintiffs  have filed a motion to disqualify  some of the  plaintiffs'
counsel in the action.  The Managing  General  Partner does not anticipate  that
costs  associated with this case will be material to the  Partnership's  overall
operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.

Item 4.     Submission of Matters to a Vote of Security Holders

The unit  holders  of the  Partnership  did not vote on any  matter  during  the
quarter ended December 31, 1999.

<PAGE>

                                     PART II

Item 5. Market for the  Partnership's  Common Equity and Related Security Holder
        Matters

The Partnership,  a publicly-held limited partnership,  offered and sold 100,000
Limited Partnership Units aggregating $50,000,000. The Partnership currently has
2,043 holders of record  owning an aggregate of 99,784 units.  Affiliates of the
Managing  General Partner owned 48,624 units or 48.729% at December 31, 1999. No
public  trading  market has developed for the Units,  and it is not  anticipated
that such a market will develop in the future.

The following table sets forth the distributions made by the Partnership for the
years ended December 31, 1998 and 1999:

                                                Distributions
                                                           Per Limited
                                        Aggregate        Partnership Unit
                                      (in thousands)
       01/01/98 - 12/31/98             $ 1,487 (1)            $14.75

       01/01/99 - 12/31/99             $ 2,200 (2)            $21.83

(1)  Distribution was made from cash from operations.  (See "Item 6" for further
     details).

(2)  Consists of $700,000 of cash from  operations  paid in 1999 and consists of
     $1,074,000  of cash  from  operations  and  $426,000  of cash from the sale
     proceeds  from the sale of  Princeton  Meadows  Golf Course  Joint  Venture
     payable at December 31, 1999 (see "Item 6" for further details).

Future  cash  distributions  will  depend on the levels of cash  generated  from
operations, the availability of cash reserves and the timing of debt maturities,
refinancings  and/or property sales. The  Partnership's  distribution  policy is
reviewed on a semi-annual  basis. There can be no assurance,  however,  that the
Partnership  will  generate  sufficient  funds from  operations  after  required
capital  expenditures to permit additional  distributions to its partners in the
year 2000 or subsequent periods.

Several tender offers were made by various parties,  including affiliates of the
Managing General Partner,  during the years ended December 31, 1999 and 1998. As
a result of these tender offers,  AIMCO and its affiliates  currently own 48,624
limited  partnership  units  in  the  Partnership  representing  48.729%  of the
outstanding  units. It is possible that AIMCO or its affiliates will make one or
more additional offers to acquire  additional limited  partnership  interests in
the Partnership  for cash or in exchange for units in the operating  partnership
of AIMCO.  Consequently,  AIMCO is in a position to significantly  influence all
voting  decisions  with  respect  to  the  Registrant.   Under  the  Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with respect to a variety of matters. When voting on matters, AIMCO would
in all  likelihood  vote the  Units it  acquired  in a manner  favorable  to the
interest of the Managing  General Partner because of their  affiliation with the
Managing General Partner.


<PAGE>


Item 6.     Management's Discussion and Analysis or Plan of Operation

The  matters  discussed  in this Form  10-KSB  contain  certain  forward-looking
statements  and  involve  risks and  uncertainties  (including  changing  market
conditions, competitive and regulatory matters, etc.) detailed in the disclosure
contained  in this Form 10-KSB and the other  filings  with the  Securities  and
Exchange Commission made by the Registrant from time to time. The discussions of
the Registrant's business and results of operations,  including  forward-looking
statements pertaining to such matters, does not take into account the effects of
any changes to the Registrant's business and results of operations. Accordingly,
actual   results   could  differ   materially   from  those   projected  in  the
forward-looking  statements as a result of a number of factors,  including those
identified herein.

This item should be read in conjunction with "Item 7. Financial  Statements" and
other items contained elsewhere in this report.

Results of Operations

The  Partnership's  net  income  for the  year  ended  December  31,  1999,  was
approximately  $1,098,000  compared to approximately  $60,000 for the year ended
December  31,  1998.   (See  "Note  D"  of  the  financial   statements   for  a
reconciliation of these amounts to the Registrant's federal taxable income.) The
increase  in net  income  for the  year  ended  December  31,  1999 is due to an
increase in total  revenues,  a decrease in total  expenses  and the increase in
equity in income of the joint venture due to the sale of Princeton  Meadows Golf
Course as discussed  below,  which was partially  offset by a decrease in income
from  discontinued  operation.   The  Partnership  had  income  from  continuing
operations  of  approximately  $988,000 for the year ended  December 31, 1999 as
compared to a loss of  approximately  $111,000  for the year ended  December 31,
1998.  This  increase in income is due to an increase  in total  revenues  and a
decrease in total expenses.

The increase in total  revenues is due to an increase in rental income which was
partially offset by a decrease in other income. The increase in rental income is
the  result  of  increased  average  rental  rates  at all of the  Partnership's
residential  properties and increased  occupancy at Deer Creek  Apartments.  The
decrease in other income is primarily due to a decrease in interest  income as a
result of lower average cash balances in interest-bearing accounts.

Total  expenses  decreased for the year ended December 31, 1999 due to decreases
in operating  expense which was  partially  offset by an increase in general and
administrative expenses. The decrease in operating expenses was primarily due to
decreased spending on repairs and maintenance. These repairs were mostly related
to a renovation project at Landmark  Apartments which was completed during 1998.
This renovation project included the correction of drainage problems and related
foundation  repairs along with exterior building repairs in order to improve the
appearance of the property. In addition,  insurance expense decreased due to the
change of insurance  carriers late in 1998. The  Partnership  recorded losses on
disposal of property of  approximately  $35,000 and $157,000 for the years ended
December 31, 1999 and 1998, respectively. These losses are included in operating
expenses. Both the 1999 and 1998 losses resulted from the write-off of siding at
Deer Creek  Apartments.  Both of these  write-offs were the result of assets not
being fully depreciated at the time of replacement.  General and  administrative
expenses  increased due to increased  legal  expenses due to the settlement of a
lawsuit as disclosed in the  Partnership's  Annual Report on Form 10-KSB for the
year ended  December 31, 1998 and an increase in a management fee accrued to the
Managing  General Partner based on a percentage of positive cash flow as allowed
in the Partnership  Agreement.  These increases were partially offset by reduced
expense reimbursements to the Managing General Partner.  Included in general and
administrative  expenses at both December 31, 1999 and 1998, are  reimbursements
to  the  Managing  General  Partner  allowed  under  the  Partnership  Agreement
associated  with its management of the  partnership.  Costs  associated with the
quarterly and annual  communications  with investors and regulatory agencies and
the annual audit required by the Partnership Agreement are also included.

In March 2000, Atlanta Crossing Shopping Center, located in Montgomery, Alabama,
was sold to an  unaffiliated  party for  $2,875,000.  After  payment  of closing
expenses,  the net sales proceeds received by the Partnership were approximately
$2,746,000.  For financial  statement  purposes,  the sale resulted in a gain of
approximately $2,060,000, which was recognized in the first quarter of 2000.

Atlanta Crossing  Shopping Center was the only commercial  property owned by the
Partnership and represented one segment of the Partnership's operations.  Due to
the sale of this property,  the net assets of this property have been classified
as  "Investment  in  discontinued  operation"  as of December 31,  1999,  on the
balance sheet. The investment in discontinued  operation on the balance sheet as
of  December  31,  1999  includes  the  investment  property  and the  remaining
receivables and payables of Atlanta Crossing Shopping Center. The results of the
commercial  segment  have been  shown as  income  from  discontinued  operation.
Revenues of this property were approximately  $563,000 and $803,000 for 1999 and
1998,  respectively.  Income from  operations  was  approximately  $111,000  and
$171,000 for 1999 and 1998, respectively.

The  Partnership had a 14.4%  investment in Princeton  Meadows Golf Course Joint
Venture. On February 26, 1999, the Joint Venture sold the Princeton Meadows Golf
Course to an unaffiliated third party for gross sale proceeds of $5,100,000. The
Joint  Venture  received net  proceeds of  $3,411,000  after  payment of closing
costs, and repayment of the mortgage  principal and accrued interest.  The Joint
Venture recorded a gain on sale of approximately  $3,090,000 after the write-off
of  undepreciated  fixed  assets.  For the  year  ended  December  31,  1999 the
Partnership  realized  equity in income of the Joint  Venture  of  approximately
$419,000, which included its equity in the gain on disposal of Princeton Meadows
Golf  Course of $445,000  and the equity in loss on  operations  of $26,000,  as
compared to equity in loss of the Joint Venture of approximately  $2,000 for the
year ended December 31, 1998.

Effective  January 1, 1999, the Partnership  changed its method of accounting to
capitalize the cost of exterior  painting and major landscaping on a prospective
basis.  The  Partnership  believes  that  this  accounting  principle  change is
preferable  because it provides a better  matching of expenses  with the related
benefit of the expenditures and it is consistent with industry  practice and the
policies of the Managing General  Partner.  The effect of the change in 1999 was
to increase net income by approximately  $182,000 ($1.80 per limited partnership
unit). The cumulative effect, had this change been applied to prior periods,  is
not material.  The accounting  principle  change will not have an effect on cash
flow,  funds available for  distribution or fees payable to the Managing General
Partner and affiliates.

As part of the ongoing  business plan of the  Partnership,  the Managing General
Partner  monitors  the  rental  market  environment  of each  of its  investment
properties  to assess  the  feasibility  of  increasing  rents,  maintaining  or
increasing  occupancy  levels and protecting the  Partnership  from increases in
expense.  As part of this plan, the Managing General Partner attempts to protect
the Partnership  from the burden of  inflation-related  increases in expenses by
increasing rents and maintaining a high overall occupancy level. However, due to
changing market  conditions,  which can result in the use of rental  concessions
and  rental  reductions  to  offset  softening  market  conditions,  there is no
guarantee that the Managing General Partner will be able to sustain such a plan.

Liquidity and Capital Resources

The Partnership  had cash and cash  equivalents of  approximately  $4,229,000 at
December 31, 1999,  compared to  approximately  $2,063,000 at December 31, 1998.
The increase in cash and cash  equivalents  of  approximately  $2,166,000  since
December  31,  1998,  is due to  approximately  $2,988,000  of cash  provided by
operating  activities and  approximately  $103,000 of cash provided by investing
activities, which was partially offset by approximately $925,000 of cash used in
financing  activities.  Cash provided by investing  activities  consisted of net
withdrawals  from  escrow  accounts   maintained  by  the  mortgage  lenders,  a
distribution  from the Joint  Venture and  repayment  of an advance to the Joint
Venture,  which was partially offset by property  improvements and replacements.
Cash used in financing  activities  consisted of a distribution  to the partners
and, to a lesser extent, payments of principal made on the mortgages encumbering
the  Partnership's  properties.  The  Partnership  invests its  working  capital
reserves in money market accounts.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the various  properties  to  adequately  maintain  the
physical  assets and other operating needs of the Partnership and to comply with
Federal, state, and local legal and regulatory requirements.  The Partnership is
currently  evaluating  the capital  improvement  needs of the properties for the
upcoming year. The minimum amount to be budgeted is expected to be $300 per unit
or $234,000.  Additional  improvements  may be considered and will depend on the
physical  condition of the properties as well as anticipated cash flow generated
by the  properties.  The capital  expenditures  will be incurred only if cash is
available from operations or from Partnership  reserves. To the extent that such
budgeted capital improvements are completed, the Registrant's distributable cash
flow, if any, may be adversely affected at least in the short term.

The Partnership's  current assets are thought to be sufficient for any near-term
needs  (exclusive  of capital  improvements)  of the  Partnership.  The mortgage
indebtedness of approximately  $17,784,000,  net of discount,  is amortized over
periods  ranging  from 29 to 30 years with  balloon  payments  due in 2003.  The
Managing General Partner will attempt to refinance such indebtedness and/or sell
the  properties  prior  to such  maturity  date.  If the  properties  cannot  be
refinanced or sold for a sufficient amount, the Partnership may risk losing such
properties through foreclosure.

During the year ended December 31, 1999, the Partnership  made a distribution in
the amount of $700,000  (approximately $693,000 to the limited partners or $6.95
per limited  partnership  unit) from  operations.  As of December 31, 1999,  the
Partnership  declared  a  distribution  of  approximately  $1,500,000  of  which
approximately  $1,074,000  (approximately  $1,063,000 to the limited partners or
$10.65  per  limited  partnership  unit) is from  operations  and  approximately
$426,000  (approximately  $422,000 to the limited  partners or $4.23 per limited
partnership  unit) is from  proceeds  from the sale of  Princeton  Meadows  Golf
Course Joint Venture.  This  distribution  was paid in January 2000.  During the
year ended December 31, 1998, the Partnership  made a distribution in the amount
of $1,487,000  (approximately  $1,472,000 to the limited  partners or $14.75 per
limited partnership unit) from operations. Future cash distributions will depend
on the  levels of cash  generated  from  operations,  the  availability  of cash
reserves and the timing of debt maturities,  refinancings and/or property sales.
The Partnership's  distribution policy is reviewed on a semi-annual basis. There
can be no assurance,  however,  that the  Partnership  will generate  sufficient
funds from operations after required capital  expenditures to permit  additional
distributions to its partners during the year 2000 or subsequent periods.

Tender Offer

Several tender offers were made by various parties,  including affiliates of the
Managing General Partner,  during the years ended December 31, 1999 and 1998. As
a result of these tender offers,  AIMCO and its affiliates  currently own 48,624
limited  partnership  units  in  the  Partnership  representing  48.729%  of the
outstanding  units. It is possible that AIMCO or its affiliates will make one or
more additional offers to acquire  additional limited  partnership  interests in
the Partnership  for cash or in exchange for units in the operating  partnership
of AIMCO.  Consequently,  AIMCO is in a position to significantly  influence all
voting  decisions  with  respect  to  the  Registrant.   Under  the  Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with respect to a variety of matters. When voting on matters, AIMCO would
in all  likelihood  vote the  Units it  acquired  in a manner  favorable  to the
interest of the Managing  General Partner because of their  affiliation with the
Managing General Partner.

Year 2000 Compliance

General Description

The Year 2000 issue is the result of computer  programs  being written using two
digits rather than four digits to define the applicable year. The Partnership is
dependent  upon the Managing  General  Partner and its affiliates for management
and  administrative  services  ("Managing  Agent").  Any of the Managing Agent's
computer programs or hardware that had date-sensitive software or embedded chips
might have  recognized  a date using "00" as the year 1900  rather than the year
2000.  This could have resulted in a system failure or  miscalculations  causing
disruptions of operations,  including, among other things, a temporary inability
to process  transactions,  send invoices,  or engage in similar normal  business
activities.

Computer Hardware, Software and Operating Equipment

In 1999,  the Managing  Agent  completed  all phases of its Year 2000 program by
completing  the  replacement  and repair of any  hardware or software  system or
operating  equipment that was not yet Year 2000 compliant.  The Managing Agent's
hardware  and software  systems and its  operating  equipment  are now Year 2000
compliant.  No  material  failure or  erroneous  results  have  occurred  in the
Managing Agent's computer  applications  related to the failure to reference the
Year 2000 to date.

Third Parties

To  date,  the  Managing  Agent  is not  aware of any  significant  supplier  or
subcontractor  (external agent) or financial institution of the Partnership that
has a Year 2000 issue that  would  have a material  impact on the  Partnership's
results of operations,  liquidity or capital  resources.  However,  the Managing
Agent  has no means of  ensuring  or  determining  the Year 2000  compliance  of
external  agents.  At this time, the Managing Agent does not believe that a Year
2000 issue of any  non-compliant  external agent will have a material  impact on
the Partnership's financial position or results of operations.

Costs

The total cost of the Managing Agent's Year 2000 project was approximately  $3.2
million and was funded from operating cash flows.

Risks Associated with the Year 2000

The Managing  Agent  completed all necessary  phases of its Year 2000 program in
1999,  and did not  experience  system or  equipment  malfunctions  related to a
failure to reference the Year 2000. The Managing  Agent or Partnership  have not
been  materially  adversely  effected by  disruptions  in the economy  generally
resulting from the Year 2000 issue.

At this  time,  the  Managing  Agent  does not  believe  that the  Partnership's
businesses,  results of  operations  or financial  condition  will be materially
adversely effected by the Year 2000 issue.

Contingency Plans Associated with the Year 2000

The  Managing  Agent has not had to implement  contingency  plans such as manual
workarounds or selecting new relationships for its banking or elevator operation
activities in order to avoid the Year 2000 issue.


<PAGE>


Item 7.     Financial Statements

ANGELES INCOME PROPERTIES, LTD. II

LIST OF FINANCIAL STATEMENTS

Report of Ernst & Young LLP, Independent Auditors

Consolidated Balance Sheet - December 31, 1999

Consolidated Statements of Operations - Years ended December 31, 1999 and 1998

Consolidated  Statements of Changes in Partners'  Deficit - Years ended December
31, 1999 and 1998

Consolidated Statements of Cash Flows - Years ended December 31, 1999 and 1998

Notes to Consolidated Financial Statements


<PAGE>


                 Report of Ernst & Young LLP, Independent Auditors

The Partners
Angeles Income Properties, Ltd. II


We have audited the  accompanying  consolidated  balance sheet of Angeles Income
Properties,  Ltd.  II as of December  31,  1999,  and the  related  consolidated
statements of operations,  changes in partners'  deficit and cash flows for each
of the two  years  in the  period  ended  December  31,  1999.  These  financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made  by the  Partnership's  management,  as  well  as  evaluating  the  overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial  position of Angeles Income
Properties,  Ltd. II at December 31, 1999, and the  consolidated  results of its
operations  and its cash  flows  for each of the two years in the  period  ended
December 31, 1999, in conformity with accounting  principles  generally accepted
in the United States.

As discussed in Note M to the consolidated financial statements, the Partnership
changed its method of accounting to capitalize the cost of exterior painting and
major landscaping effective January 1, 1999.

                                                            /s/ERNST & YOUNG LLP

Greenville, South Carolina
March 21, 2000


<PAGE>



                         ANGELES INCOME PROPERTIES, LTD. II

                           CONSOLIDATED BALANCE SHEET

                          (in thousands, except unit data)

                                December 31, 1999
<TABLE>
<CAPTION>

Assets
<S>                                                                         <C>
   Cash and cash equivalents                                                $  4,229
   Receivables and deposits                                                      342
   Restricted escrows                                                            315
   Other assets                                                                  350
   Investment in joint venture                                                     2
   Investment properties (Notes C and F):
      Land                                                    $ 1,984
      Buildings and related personal property                   30,403
                                                                32,387

      Less accumulated depreciation                            (22,598)        9,789
   Investment in discontinued operation (Note N)                                 833

                                                                            $ 15,860

Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                          $   243
   Tenant security deposit liabilities                                           281
   Accrued property taxes                                                        140
   Other liabilities                                                             442
   Due to affiliates (Note E)                                                    228
   Distribution payable                                                        1,500
   Mortgage notes payable (Notes C and F)                                     17,784

Partners' Deficit
   General partners                                            $ (487)
   Limited partners (99,784 units issued and
      outstanding)                                              (4,271)       (4,758)

                                                                            $ 15,860
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements


<PAGE>


                         ANGELES INCOME PROPERTIES, LTD. II

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                          (in thousands, except unit data)

<TABLE>
<CAPTION>

                                                                     Years Ended
                                                                    December 31,

                                                               1999          1998
Revenues:                                                                 (restated)
<S>                                                           <C>          <C>
  Rental income                                               $ 6,370      $ 6,170
  Other income                                                    397          472
      Total revenues                                            6,767        6,642

Expenses:
  Operating                                                     2,072        2,837
  General and administrative                                      532          344
  Depreciation                                                  1,616        1,601
  Interest                                                      1,439        1,439
  Property taxes                                                  539          530
      Total expenses                                            6,198        6,751

Income (loss) before equity in income (loss) of joint
  venture, extraordinary item, and discontinued operation         569         (109)

Equity in income (loss) of joint venture (Note G)                 419           (2)

Income (loss) form continuing operations                          988         (111)

Equity in extraordinary loss on early extinguishment of
  debt of joint venture (Note G)                                   (1)          --

Net income                                                    $ 1,098        $  60

Net income allocated to general partners (1%)                  $   11          $ 1

Net income allocated to limited partners (99%)                  1,087           59

                                                              $ 1,098        $  60
Per limited partnership unit:
  Income (loss) from continuing operations                    $  9.80       $ (1.10)
  Extraordinary item                                            (0.01)           --
  Income from discontinued operation                             1.10          1.69

Net income                                                    $ 10.89       $  0.59

Distributions per limited partnership unit                    $ 21.83      $  14.75
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements


<PAGE>


                         ANGELES INCOME PROPERTIES, LTD. II

              CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
                          (in thousands, except unit data)


<TABLE>
<CAPTION>

                                        Limited
                                       Partnership    General    Limited
                                          Units       Partners   Partners     Total

<S>                                      <C>            <C>       <C>        <C>
Original capital contributions           100,000        $  1      $50,000    $50,001

Partners' deficit
   at December 31, 1997                   99,784      $ (462)     $(1,767)   $(2,229)

Distribution to partners                                  (15)     (1,472)    (1,487)

Net income for the year ended
   December 31, 1998                          --            1          59          60

Partners' deficit at
   December 31, 1998                      99,784         (476)     (3,180)     (3,656)

Distribution to partners                                  (22)     (2,178)     (2,200)

Net income for the year
   ended December 31, 1999                    --           11       1,087       1,098

Partners' deficit
   at December 31, 1999                   99,784       $ (487)    $(4,271)    $(4,758)
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements


<PAGE>


                         ANGELES INCOME PROPERTIES, LTD. II

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (in thousands)
<TABLE>
<CAPTION>
                                                              Years Ended December 31,
                                                                  1999        1998
Cash flows from operating activities:
<S>                                                             <C>           <C>
  Net income                                                    $ 1,098       $   60
  Adjustments to reconcile net income to net
   cash provided by operating activities:
   Depreciation                                                   1,759        1,867
   Amortization of discounts, loan costs and lease
      commissions                                                    95           96
   Bad debt expense, net                                            119          117
   Equity in (income) loss of joint venture                        (419)           2
   Equity in extraordinary loss on early extinguishment of
     Debt of joint venture                                            1           --
   Loss on disposal of property                                      35          157
   Change in accounts:
      Receivables and deposits                                      185         (207)
      Other assets                                                 (197)         (45)
      Accounts payable                                              (31)         (46)
      Tenant security deposit liabilities                            20            8
      Accrued property taxes                                       (115)           1
      Due to affiliates                                             183           --
      Other liabilities                                             255           66
          Net cash provided by operating activities               2,988        2,076

Cash flows from investing activities:
  Property improvements and replacements                           (908)      (1,672)
  Net withdrawals from restricted escrows                           537          255
  Repayment of advances to joint venture                             46           --
  Distributions from joint venture                                  428           --
          Net cash provided by (used in) investing
            activities                                              103       (1,417)

Cash flows from financing activities:
  Payments on mortgage notes payable                               (225)        (208)
  Distributions to partners                                        (700)      (1,487)
          Net cash used in financing activities                    (925)      (1,695)

Net increase (decrease) in cash and cash equivalents              2,166       (1,036)

Cash and cash equivalents at beginning of the year                2,063        3,099

Cash and cash equivalents at end of year                        $ 4,229      $ 2,063

Supplemental disclosure of cash flow information:
  Cash paid for interest                                        $ 1,344      $ 1,360

Supplemental disclosure of non-cash activity:
  Distribution payable                                          $ 1,500       $   --
  Property improvements and replcements included in
   accounts payable                                              $  157        $  --
</TABLE>


          See Accompanying Notes to Consolidated Financial Statements


<PAGE>



                         ANGELES INCOME PROPERTIES, LTD. II

                     Notes to Consolidated Financial Statements

                                December 31, 1999

Note A - Organization and Significant Accounting Policies

Organization:   Angeles  Income  Properties,   Ltd.  II  (the  "Partnership"  or
"Registrant") is a California limited partnership  organized on October 12, 1982
to acquire and operate  residential and commercial real estate  properties.  The
Partnership's  managing  general  partner  responsible  for  management  of  the
Partnership's  business, is Angeles Realty Corporation II ("ARC II"). ARC II was
wholly-owned by MAE GP Corporation ("MAE GP").  Effective February 25, 1998, MAE
GP was merged into Insignia  Properties  Trust ("IPT").  Effective  February 26,
1999, IPT was merged into Apartment  Investment and Management Company ("AIMCO")
(see "Note B - Transfer of Control").  Thus, the Managing General Partner is now
wholly-owned by AIMCO.  The Elliott  Accommodation  Trust and the Elliott Family
Partnership,  Ltd.,  California  limited  partnerships,  were  the  non-managing
general partners.  Effective  December 31, 1997 the Elliott Family  Partnership,
Ltd. acquired the Elliott  Accommodation Trust's general partner interest in the
Registrant.  The Managing General Partner and the  non-managing  general partner
are herein collectively referred to as the "General Partners". The directors and
officers of the Managing  General  Partner  also serve as executive  officers of
AIMCO. The Partnership  Agreement  provides that the Partnership is to terminate
on December  31,  2037 unless  terminated  prior to such date.  The  Partnership
commenced  operations  on  October  12,  1982.  As of  December  31,  1999,  the
Partnership  operates three residential  properties and one commercial property,
which was sold  subsequent to December 31, 1999,  located in or near major urban
areas in the United States.

Principles  of  Consolidation:  The  consolidated  financial  statements  of the
Partnership  include  all  accounts  of the  Partnership  and  its  99%  limited
partnership  interest  in  Georgetown  AIP II,  LP and its  100%  owned  limited
liability  corporation  interest in AIPL II GP, LLC. Although legal ownership of
the respective  asset remains with these entities,  the Partnership  retains all
economic benefits from the properties. As a result, the Partnership consolidates
its  interests in these two  entities,  whereby all accounts are included in the
consolidated  financial  statements  of the  Partnership  with all  inter-entity
accounts being eliminated.

Joint Venture:  The Partnership  accounted for its 14.4% investment in Princeton
Meadows Joint Venture  ("Joint  Venture")  using the equity method of accounting
(see "Note G").

Allocations and  Distributions  to Partners:  In accordance with the Partnership
Agreement,  any gain from the sale or other  disposition of  Partnership  assets
will be  allocated  first to the Managing  General  Partner to the extent of the
amount  of any  brokerage  compensation  and  incentive  interest  to which  the
Managing  General Partner is entitled.  Any gain remaining after said allocation
will be allocated to the General  Partners and limited partners in proportion to
their interests in the Partnership.

The  Partnership  will  allocate  other  profits  and  losses 1% to the  General
Partners and 99% to the limited partners.

Except as discussed below, the Partnership will allocate distributions 1% to the
General Partners and 99% to the limited partners.

<PAGE>

Upon  the  sale or  other  disposition,  or  refinancing,  of any  asset  of the
Partnership,  the  distributable  net proceeds  shall be distributed as follows:
First,  to the  partners  in  proportion  to their  interests  until the limited
partners have  received  proceeds  equal to their  original  capital  investment
applicable to the property.  Second,  to the partners until the limited partners
have  received  distributions  from all  sources  equal  to their 6%  cumulative
distribution;  Third, to the Managing General Partners until it has received its
brokerage compensation; Fourth, to the partners in proportion to their interests
until the limited partners have received distributions from all sources equal to
their additional 2% cumulative distribution;  and thereafter, 85% to the limited
partners and non-managing  general partners in proportion to their interests and
15% ("Incentive Interest") to the Managing General Partner.

Depreciation:  Depreciation  is  provided by the  straight-line  method over the
estimated lives of the apartment and commercial  properties and related personal
property.  For Federal income tax purposes, the accelerated cost recovery method
is used (1) for real  property  over 15 years for  additions  prior to March 16,
1984, 18 years for additions after March 15, 1984 and before May 9, 1985, and 19
years for additions  after May 8, 1985,  and before January 1, 1987, and (2) for
personal  property  over 5 years for  additions  prior to January 1, 1987.  As a
result of the Tax Reform Act of 1986, for additions after December 31, 1986, the
modified  accelerated  cost recovery method is used for depreciation of (1) real
property over 27 1/2 years and (2) personal property additions over 5 years.

Effective  January 1, 1999 the  Partnership  changed its method of accounting to
capitalize the costs of exterior painting and major landscaping (Note M).

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand and in
banks and money market accounts.  At certain times, the amount of cash deposited
at a bank may exceed the limit on insured deposits.

Tenant Security  Deposits:  The Partnership  requires security deposits from all
apartment  lessees for the duration of the lease and such  deposits are included
in receivables and deposits.  The security deposits are refunded when the tenant
vacates  the  apartment  provided  the tenant has not  damaged  the space and is
current on rental payments.

Investment   Properties:   Investment  properties  consist  of  three  apartment
complexes and one commercial shopping center and are stated at cost. Acquisition
fees are  capitalized as a cost of real estate.  In accordance with Statement of
Financial  Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment
of  Long-Lived  Assets  and  for  Long-Lived  Assets  to Be  Disposed  Of",  the
Partnership  records  impairment  losses on long-lived assets used in operations
when events and  circumstances  indicate  the assets  might be impaired  and the
undiscounted  cash flows estimated to be generated by those assets are less than
the carrying amounts of those assets.  Costs of investment  properties that have
been  permanently  impaired  have  been  written  down to  appraised  value.  No
adjustments for impairment of value were necessary for the years ending December
31, 1999 or 1998.

Loan Costs:  Loan costs,  included in other assets on the  consolidated  balance
sheet, of  approximately  $557,000 are being amortized on a straight-line  basis
over  the  lives of the  related  loans.  Current  accumulated  amortization  is
approximately  $293,000 and is also included in other assets on the consolidated
balance sheet. Amortization of loan costs is included in interest expense in the
accompanying consolidated statements of operations.

Lease Commissions: Lease commissions are being amortized using the straight line
method over the term of the respective leases.

Leases: The Partnership  generally leases apartment units for twelve-month terms
or less. The Partnership  recognizes income as earned on its residential leases.
Commercial  building lease terms are generally from twelve months to twenty-five
years. For leases containing fixed rental increases during their term, rents are
recognized on a straight-line  basis over the terms of the lease.  For all other
commercial leases,  rents are recognized over the terms of the leases as earned.
In  addition,   the  Managing  General  Partner's  policy  is  to  offer  rental
concessions  during  periods of  declining  occupancy  or in  response  to heavy
competition  from other similar  complexes in the area.  Concessions are charged
against rental income as incurred.

Use of Estimates:  The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Fair  Value:  SFAS  No.  107,   "Disclosures   about  Fair  Value  of  Financial
Instruments",  as  amended  by  SFAS  No.  119,  "Disclosures  about  Derivative
Financial  Instruments  and  Fair  Value  of  Financial  Instruments",  requires
disclosure of fair value information about financial instruments, whether or not
recognized in the balance  sheet,  for which it is  practicable to estimate fair
value.  Fair value is defined in the SFAS as the amount at which the instruments
could be exchanged in a current transaction between willing parties,  other than
in a forced or  liquidation  sale.  The  Partnership  believes that the carrying
amount of its  financial  instruments  (except for long term debt)  approximates
their fair value due to the short term maturity of these  instruments.  The fair
value of the Partnership's  long term debt, after discounting the scheduled loan
payments to maturity, approximates its carrying balance.

Restricted Escrows:

      Capital  Improvement  Reserves  - At the time of the  refinancing  of Deer
      Creek and Landmark  Apartments,  $1,313,000 of the proceeds for Deer Creek
      Apartments  and  $150,000 of the proceeds  for  Landmark  Apartments  were
      designated  for  "Capital   Improvement   Escrows"  for  certain   capital
      improvements. During 1999 all the required improvements were completed and
      the remaining funds were returned to the properties.

      Reserve Account - In addition to the Capital Improvement Reserves, general
      Reserve Accounts of $80,000 were established with the refinancing proceeds
      for the  Georgetown  Apartments.  These  funds were  established  to cover
      necessary repairs and replacements of existing improvements, debt service,
      out-of-pocket expenses incurred for ordinary and necessary  administrative
      tasks,  and payment of real  property  taxes and insurance  premiums.  The
      Partnership is required to deposit net operating income (as defined in the
      mortgage note) from the refinanced  property to the reserve  account until
      the  reserve  account  equals a minimum  of $200 and a maximum of $400 per
      apartment  unit,  for a total of  approximately  $40,000  to  $80,000.  At
      December 31, 1999, the balance was $47,000, which includes interest earned
      on these funds.

      Replacement Reserve - A replacement reserve account is maintained for Deer
      Creek  Apartments  and Landmark  Apartments.  Each property has a required
      monthly   payment   into  its  account  to  cover  the  costs  of  capital
      improvements and  replacements.  The balance of these accounts at December
      31, 1999, is approximately $268,000 which includes interest.

Segment Reporting: SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related  Information"  established  standards  for the way that public  business
enterprises  report  information  about operating  segments in annual  financial
statements and requires that those enterprises report selected information about
operating  segments in interim financial  report. It also establishes  standards
for related disclosures about products and services, geographic areas, and major
customers.   (See  "Note  K"  for  detailed  disclosures  of  the  Partnership's
segments).

Advertising:  The  Partnership  expenses  the cost of  advertising  as incurred.
Advertising  costs of  approximately  $59,000  and  $58,000  for the years ended
December 31, 1999 and 1998,  respectively,  were charged to operating expense as
incurred.

Reclassifications: Certain reclassifications have been made to the 1998 balances
to conform to the 1999 presentation.

Note B - Transfer of Control

Pursuant  to a series  of  transactions  which  closed  on  October  1, 1998 and
February 26, 1999,  Insignia  Financial Group, Inc.  ("Insignia") and IPT merged
into AIMCO, a publicly traded real estate investment trust, with AIMCO being the
surviving  corporation (the "Insignia Merger"). As a result, AIMCO acquired 100%
ownership interest in the Managing General Partner. The Managing General Partner
does not believe that this transaction has had or will have a material effect on
the affairs and operations of the Partnership.

Note C - Mortgage Notes Payable

The principle terms of mortgage notes payable are as follows:
<TABLE>
<CAPTION>

                           Principal     Monthly                            Principal
                          Balance At     Payment     Stated                  Balance
                         December 31,   Including   Interest   Maturity      Due At
Property                     1999       Interest      Rate       Date       Maturity
                              (in thousands)                             (in thousands)

Deer Creek Apartments
<S>                         <C>           <C>        <C>       <C>           <C>
  1st mortgage              $ 6,100       $  43      7.33%     11/2003       $ 5,779

Georgetown Apartments
  1st mortgage                5,175          41      7.83%     10/2003         4,806
  2nd mortgage                  173           1      7.83%     10/2003           173

Landmark Apartments
  1st mortgage                6,391          45      7.33%     11/2003         6,054
                             17,839       $ 130                              $16,812
Less unamortized
  discounts                     (55)
                            $17,784
</TABLE>

The  Partnership  exercised  an interest  rate  buy-down  option for  Georgetown
Apartments when the debt was refinanced,  reducing the stated rate from 8.13% to
7.83%. The fee for the interest rate reduction amounted to $113,000 and is being
amortized as a mortgage discount on the effective  interest method over the life
of the loan.  The  unamortized  discount  fee is reflected as a reduction of the
mortgage notes payable and increases the effective rate of the debt to 8.13%.

The mortgage notes payable are  nonrecourse and are secured by pledge of certain
of the  Partnership's  rental  properties  and by  pledge of  revenues  from the
respective rental properties.  Certain of the notes require prepayment penalties
if repaid prior to maturity.

Scheduled  principal  payments of mortgage notes payable  subsequent to December
31, 1999, are as follows (in thousands):

                                     2000      $   242
                                     2001          261
                                     2002          281
                                     2003       17,055
                                               $17,839

Note D - Income Taxes

The Partnership has received a ruling from the Internal  Revenue Service that it
will  be  classified  as  a  partnership   for  Federal   income  tax  purposes.
Accordingly, no provision for income taxes is made in the consolidated financial
statements of the  Partnership.  Taxable  income or loss of the  Partnership  is
reported in the income tax returns of its partners.

The  following is a  reconciliation  of reported net income and Federal  taxable
income (in thousands, except per unit data):

                                          1999          1998
Net income as reported                   $ 1,098        $  60
Add (deduct):
     Depreciation differences              1,161          999
     Unearned income                          58          (45)
     Accrued audit                            25           23
     Other                                  (168)         271

Federal taxable income                   $ 2,174      $ 1,308

Federal taxable income per limited
     partnership unit                    $ 21.47      $ 12.98


The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):

Net deficit as reported                  $(4,758)
Land and buildings                         4,074
Accumulated depreciation                  (5,029)
Syndication and distribution costs         6,148
Investment in Joint Venture                  197
Unearned income                              209
Distributions payable                      1,500
Other                                       (252)
Net assets - Federal tax basis           $ 2,089


<PAGE>

Note E - Transactions with Affiliated Parties

The  Partnership  has no employees  and is  dependent  on the  Managing  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership activities.  The Partnership Agreement provides for certain payments
to affiliates for services and  reimbursement  of certain  expenses  incurred by
affiliates on behalf of the  Partnership.  The  following  payments were paid or
accrued to the Managing  General  Partner and affiliates  during the years ended
December 31, 1999 and 1998:

                                                              1999       1998
                                                              (in thousands)

   Property management fees (included in
     operating expenses)                                     $ 339      $ 350
   Partnership management fees (included in general and
     administrative expense) (1)                               228         45
   Reimbursement for services of affiliates (included in
     operating expense, general and administrative
     expense, and investment properties)                       262        264

(1)   The  Partnership  Agreement  provides  for a fee equal to 10% of "net cash
      flow from operations",  as defined in the Partnership Agreement to be paid
      to  the  Managing   General  Partner  for  executive  and   administrative
      management services.

During the years ended  December 31, 1999 and 1998,  affiliates  of the Managing
General  Partner were  entitled to receive 5% of gross  receipts from all of the
Registrant's  residential properties for providing property management services.
The Registrant paid to such affiliates  approximately  $339,000 and $327,000 for
the years ended December 31, 1999 and 1998, respectively. During the nine months
ending  September  30, 1998,  affiliates  of the Managing  General  Partner were
entitled  to  varying  percentages  of  gross  receipts  from  the  Registrant's
commercial property for providing property management  services.  These services
were  performed by affiliates of the Managing  General  Partner  during the nine
months  ending  September  30, 1998 and were  approximately  $23,000.  Effective
October 1, 1998 (the effective date of the Insignia Merger),  these services for
the commercial property were provided by an unrelated party.

An  affiliate  of  the  Managing  General  Partner  received   reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $262,000 and
$264,000 for the years ended December 31, 1999 and 1998, respectively, including
approximately  $132,000 and $90,000,  respectively,  in  construction  oversight
costs.

Additionally,  the Partnership paid approximately  $57,000 during the year ended
December  31, 1998 to an affiliate  of the  Managing  General  Partner for lease
commissions at the Partnership's  commercial  property.  These lease commissions
are included in investment in discontinued  operation and are amortized over the
terms of the respective leases.

Angeles Mortgage  Investment  Trust,  ("AMIT"),  a real estate investment trust,
provided  financing  (the  "AMIT  Loan") to the Joint  Venture  (see  "Note G").
Pursuant to a series of transactions, affiliates of the Managing General Partner
acquired  ownership  interests in AMIT. On September  17, 1998,  AMIT was merged
with and into IPT, the entity which  controlled  the Managing  General  Partner.
Effective  February  26,  1999,  IPT was merged into AIMCO.  As a result,  AIMCO
became the holder of the AMIT loan. On February 26, 1999, Princeton Meadows Golf
Course was sold to an unaffiliated third party. Upon closing, the AMIT principal
balance of $1,567,000 plus accrued  interest of  approximately  $17,000 was paid
off.

Several tender offers were made by various parties,  including affiliates of the
Managing General Partner,  during the years ended December 31, 1999 and 1998. As
a result of these tender offers,  AIMCO and its affiliates  currently own 48,624
limited  partnership  units  in  the  Partnership  representing  48.729%  of the
outstanding  units. It is possible that AIMCO or its affiliates will make one or
more additional offers to acquire  additional limited  partnership  interests in
the Partnership  for cash or in exchange for units in the operating  partnership
of AIMCO.  Consequently,  AIMCO is in a position to significantly  influence all
voting  decisions  with  respect  to  the  Registrant.   Under  the  Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with respect to a variety of matters. When voting on matters, AIMCO would
in all  likelihood  vote the  Units it  acquired  in a manner  favorable  to the
interest of the Managing  General Partner because of their  affiliation with the
Managing General Partner.

Note F - Real Estate and Accumulated Depreciation
<TABLE>
<CAPTION>

                                                   Initial Cost
                                                  To Partnership
                                                  (in thousands)
                                                          Buildings         Cost
                                                         and Related     Capitalized
                                                           Personal     Subsequent to
Description                 Encumbrances       Land        Property      Acquisition
                           (in thousands)                              (in thousands)
Continuing Operations

<S>                            <C>             <C>         <C>             <C>
Deer Creek Apartments          $ 6,100         $ 953       $ 8,863         $ 2,489
Georgetown Apartments            5,348           294         6,545             716
Landmark Apartments              6,391           738         9,885           1,904

                                17,839         1,985        25,293           5,109
Discontinued Operation
Atlanta Crossing
  Shopping Center                   --           213         6,071            (966)

Totals                         $17,839        $ 2,198      $31,364         $ 4,143
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                          Gross Amount At Which Carried
                              At December 31, 1999
                                 (in thousands)
                                  Buildings
                                 And Related
                                   Personal               Accumulated     Date    Depreciable
      Description         Land     Property     Total     Depreciation  Acquired  Life-Years
                                                         (in thousands)
Continuing Operations

<S>                      <C>       <C>         <C>          <C>         <C>   <C>  <C>
Deer Creek               $  953    $11,352     $12,305      $ 7,453     09/28/83   5-20 yrs
Georgetown                  293      7,262       7,555        5,674     11/21/83   5-20 yrs
Landmark                    738     11,789      12,527        9,471     12/16/83   5-20 yrs

                          1,984     30,403      32,387       22,598
Discontinued Operation
Atlanta Crossing
  Shopping Center           213      5,105       5,318        4,905     09/27/83   5-20 yrs

Totals                   $2,197    $35,508     $37,705      $27,503
</TABLE>


Reconciliation of "Investment Properties and Accumulated Depreciation":

                                                Years Ended December 31,
                                                  1999            1998
                                                     (in thousands)
Investment Properties
Balance at beginning of year                    $36,790          $35,800
    Property improvements                         1,065            1,617
    Write-offs due to replacements                 (150)            (627)
Balance at end of year                          $37,705          $36,790

Accumulated Depreciation
Balance at beginning of year                    $25,859          $24,462
    Additions charged to expense                  1,759            1,867
    Write-offs due to replacements                 (115)            (470)
Balance at end of year                          $27,503          $25,859

The  aggregate  cost of the real  estate  for  Federal  income tax  purposes  at
December  31,  1999 and 1998,  is  approximately  $41,779,000  and  $40,829,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December 31, 1999 and 1998, is approximately $32,532,000 and $32,053,000.

<PAGE>

Note G - Investment in Joint Venture

The  Partnership had a 14.4%  investment in Princeton  Meadows Golf Course Joint
Venture ("Joint Venture"). On February 26, 1999, the Joint Venture sold its only
investment  property,  Princeton Meadows Golf Course,  to an unaffiliated  third
party.  The sale  resulted in net  proceeds of  approximately  $3,411,000  after
payment of closing  costs,  and  repayment  of  mortgage  principal  and accrued
interest. The Joint Venture recorded a gain on sale of approximately  $3,090,000
after the write-off of undepreciated  fixed assets. In connection with the sale,
a commission of approximately  $153,000 was paid to the Joint Venture's managing
general   partner  in  accordance   with  the  Joint  Venture   Agreement.   The
Partnership's 1999 pro-rata share of this gain is approximately $445,000 and its
equity in loss on  operations  of the Joint  Venture  amounted to  approximately
$26,000.  The Joint  Venture  also  recognized  an  extraordinary  loss on early
extinguishment  of debt of approximately  $7,000 as a result of unamortized loan
costs being written off. The Partnership's  pro-rata share of this extraordinary
loss is approximately $1,000.

Condensed  balance sheet  information of the Joint Venture at December 31, 1999,
is as follows (in thousands):

Assets
Cash                                             $ 17
  Total                                          $ 17
Liabilities and Partners' Capital
Other liabilities                                $  7
Partners' capital                                  10
  Total                                          $ 17

The  condensed  statement of operations of the Joint Venture for the years ended
December 31, 1999 and 1998, are summarized as follows (in thousands):

                                                    Years Ended
                                                   December 31,
                                                 1999        1998

Revenues                                         $  104     $ 1,667
Costs and expenses                                 (283)     (1,681)
Loss before gain on sale of
  investment property and extraordinary
  loss on extinguishment of debt                   (179)        (14)
Gain on sale of investment property               3,090          --
Extraordinary loss on extinguishment
  of debt                                            (7)         --
Net income (loss)                               $ 2,904      $ (14)


<PAGE>

The Partnership recognized its 14.4% equity income of approximately $419,000 and
equity  loss of  approximately  $2,000 in the Joint  Venture for the years ended
December 31, 1999 and 1998,  respectively.  The  Partnership  also recognized an
extraordinary  loss on  extinguishment  of debt of  $1,000  for the  year  ended
December 31, 1999.

The Princeton  Meadows Golf Course property had an underground fuel storage tank
that was removed in 1992.  This fuel  storage tank caused  contamination  to the
area.  Management  installed  monitoring  wells in the area  where  the tank was
formerly  buried.  Some samples from these wells  indicated lead and phosphorous
readings that were higher than the range prescribed by the New Jersey Department
of Environmental  Protection ("DEP").  The Joint Venture notified the DEP of the
findings  when they were  first  discovered.  However,  the DEP did not give any
directives as to corrective action until late 1995.

In November  1995,  representatives  of the Joint Venture and the New Jersey DEP
met and  developed  a plan of  action  to  clean-up  the  contamination  site at
Princeton Meadows Golf Course.  The Joint Venture engaged an engineering firm to
conduct  consulting and  compliance  work and a second firm to perform the field
work necessary for the clean-up.  Field work commenced,  with skimmers installed
at three  test  wells on the site.  These  skimmers  were in place to detect any
residual fuel that may still be in the ground. Upon the sale of the Golf Course,
as noted above,  the Joint Venture was released from any further  responsibility
or liability with respect to the clean-up.

Note H - Operating Leases

Tenants of the commercial properties are responsible for their own utilities and
maintenance of their space, and payment of their  proportionate  share of common
area  maintenance,  utilities,  insurance  and real  estate  taxes.  Tenants are
generally  not  required to pay a security  deposit.  Bad debt  expense has been
within the Managing General Partner's expectations.

As of December  31, 1999,  the  Partnership  had minimum  future  rentals  under
non-cancelable leases with terms ranging from twelve months to twenty years.

                                            (in thousands)
                              2000              $  667
                              2001                 653
                              2002                 601
                              2003                 467
                              2004                 430
                           Thereafter            1,072

                                                $3,890

Note I - Ground Lease

The  Partnership   assumed  three  operating   leases  in  connection  with  the
acquisition of a leasehold interest in the Atlanta Crossing Shopping Center. The
aggregate annual lease expense for both of the years ended December 31, 1999 and
1998, was approximately  $61,000. Such amounts are included in the statements of
operations  as income from  discontinued  operation.  The terms of these  leases
provide for  increases  in rent every five years,  based on the  Consumer  Price
Index.

As of December 31, 1999, the aggregate  minimum  rental  payments under the land
leases were as follows:

                                            (in thousands)
                              2000                  61
                              2001                  61
                              2002                  61
                              2003                  61
                              2004                  61
                           Thereafter            1,098

                                                $1,403

Note J - Distributions

During the year ended December 31, 1999, the Partnership  made a distribution in
the amount of $700,000  (approximately $693,000 to the limited partners or $6.95
per limited  partnership  unit) from  operations.  As of December 31, 1999,  the
Partnership  declared  a  distribution  of  approximately  $1,500,000  of  which
approximately  $1,074,000  (approximately  $1,063,000 to the limited partners or
$10.65  per  limited  partnership  unit) is from  operations  and  approximately
$426,000  (approximately  $422,000 to the limited  partners or $4.23 per limited
partnership  unit) is from  proceeds  from the sale of  Princeton  Meadows  Golf
Course Joint Venture. The distribution was paid in January 2000. During the year
ended December 31, 1998, the  Partnership  made a distribution  in the amount of
$1,487,000  (approximately  $1,472,000  to the  limited  partners  or $14.75 per
limited partnership unit) from operations.

Note K - Segment Reporting

The  Partnership  had  two  reportable  segments:   residential  properties  and
commercial properties.  The Partnership's  residential property segment consists
of three apartment  complexes in New Jersey,  Indiana,  and North Carolina.  The
Partnership rents apartment units to tenants for terms that are typically twelve
months or less. The commercial  property segment  consisted of a retail shopping
center located in Montgomery,  Alabama. This property leases space to a discount
store,  various  specialty  retail  outlets,  and several  restaurants  at terms
ranging  from 12  months to  twenty  years.  The  commercial  property  was sold
subsequent to December 31, 1999 (see "Note N").

The  Partnership  evaluates  performance  based on segment  profit (loss) before
depreciation.  The accounting policies of the reportable segment are the same as
those described in the summary of significant policies.

The  Partnership's  reportable  segments are  investment  properties  that offer
different  products  and  services.  The  reportable  segments  are each managed
separately  because they  provide  distinct  services  with  different  types of
products and customers.


<PAGE>


Segment information for the years 1999 and 1998 is shown in the tables below (in
thousands). The "Other" column includes Partnership administration related items
and income and expense not allocated to the reportable segments.
<TABLE>
<CAPTION>

   1999                               Residential     Commercial      Other     Totals
                                                    (discontinued)
<S>                                     <C>              <C>          <C>       <C>
   Rental income                        $ 6,370          $  --        $   --    $ 6,370
   Other income                             344             --            53        397
   Interest expense                       1,439             --            --      1,439
   Depreciation                           1,616             --            --      1,616
   General and administrative
     expense                                 --             --           532        532
   Equity in income of joint
     venture                                 --             --           419        419
   Equity in extraordinary loss on
     the early extinguishment of
     debt of joint venture                   --             --            (1)        (1)
   Income from discontinued

     operation                               --            111            --        111
   Segment profit (loss)                  1,048            111           (61)     1,098
   Total assets                          12,921            833         2,106     15,860
   Capital expenditures for
     investment properties                1,060              5            --      1,065
</TABLE>


<TABLE>
<CAPTION>

   1998                             Residential      Commercial      Other      Totals
                                                   (Discontinued)
<S>                                   <C>               <C>            <C>      <C>
   Rental income                      $ 6,170           $  --          $ --     $ 6,170
   Other income                           375              --            97         472
   Interest expense                     1,439              --            --       1,439
   Depreciation                         1,601              --            --       1,601
   General and administrative
     expense                               --              --           344         344
   Equity in loss of joint
     venture                               --              --            (2)         (2)
   Income from discontinued
     operation                             --             171            --         171
   Segment profit (loss)                  138             171          (249)         60
   Total assets                        13,091           1,111         1,015      15,217
   Capital expenditures for
     investment properties              1,537              80            --       1,617
</TABLE>

Note L - Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial  Group,  Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs  named as defendants,  among others,
the  Partnership,  the Managing  General Partner and several of their affiliated
partnerships  and corporate  entities.  The action  purports to assert claims on
behalf of a class of limited  partners and derivatively on behalf of a number of
limited  partnerships  (including  the  Partnership)  which are named as nominal
defendants,  challenging  the  acquisition  by Insignia  Financial  Group,  Inc.
("Insignia")  and  entities  which  were,  at one time,  affiliates  of Insignia
("Insignia  Affiliates") of interests in certain general partner entities,  past
tender offers by Insignia  Affiliates to acquire limited  partnership units, the
management of partnerships  by Insignia  Affiliates and the Insignia Merger (see
"Note B - Transfer  of  Control").  The  plaintiffs  seek  monetary  damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998,  the Managing  General  Partner  filed a motion  seeking  dismissal of the
action.  In lieu of  responding  to the  motion,  the  plaintiffs  have filed an
amended  complaint.  The Managing General Partner filed demurrers to the amended
complaint which were heard February 1999.  Pending the ruling on such demurrers,
settlement negotiations commenced. On November 2, 1999, the parties executed and
filed a  Stipulation  of  Settlement,  settling  claims,  subject to final court
approval, on behalf of the Partnership and all limited partners who own units as
of November 3, 1999.  Preliminary  approval of the  settlement  was  obtained on
November 3, 1999 from the Superior Court of the State of  California,  County of
San Mateo, at which time the Court set a final approval hearing for December 10,
1999.  Prior to the  December  10,  1999  hearing  the  Court  received  various
objections to the settlement,  including a challenge to the Court's  preliminary
approval based upon the alleged lack of authority of class  plaintiffs'  counsel
to enter the settlement.  On December 14, 1999, the Managing General Partner and
its affiliates terminated the proposed settlement. Certain plaintiffs have filed
a motion to  disqualify  some of the  plaintiffs'  counsel  in the  action.  The
Managing  General  Partner does not anticipate  that costs  associated with this
case will be material to the Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.

Note M - Change in Accounting Principle

Effective  January 1, 1999, the Partnership  changed its method of accounting to
capitalize the cost of exterior  painting and major landscaping on a prospective
basis.  The  Partnership  believes  that  this  accounting  principle  change is
preferable  because it provides a better  matching of expenses  with the related
benefit of the expenditures and it is consistent with industry  practice and the
policies of the Managing General  Partner.  The effect of the change in 1999 was
to increase net income by approximately  $182,000 ($1.80 per limited partnership
unit). The cumulative effect, had this change been applied to prior periods,  is
not material.  The accounting  principle  change will not have an effect on cash
flow,  funds available for  distribution or fees payable to the Managing General
Partner and affiliates.

<PAGE>

Note N - Discontinued Operation

In March 2000, Atlanta Crossing Shopping center, located in Montgomery, Alabama,
was sold to an  unaffiliated  party for  $2,875,000.  After  payment  of closing
expenses,  the net sales proceeds received by the Partnership were approximately
$2,746,000.  For financial  statement  purposes,  the sale resulted in a gain of
approximately $2,060,000, which was recognized in the first quarter of 2000. The
sale transaction is summarized as follows (amounts in thousands):

           Net sales price, net of selling costs         $ 2,746
           Net real estate (1)                              (419)
           Net other assets                                 (267)
           Gain on sale of real estate                   $ 2,060

(1)  Real  estate at cost,  net of  accumulated  depreciation  of  approximately
     $4,905,000.

Atlanta Crossing  Shopping Center was the only commercial  property owned by the
Partnership and represented one segment of the Partnership's operations.  Due to
the sale of this property,  the net assets of this property have been classified
as  "Investment  in  discontinued  operation"  as of December 31,  1999,  on the
balance sheet. The investment in discontinued  operation on the balance sheet as
of  December  31,  1999  includes  the  investment  property  and the  remaining
receivables and payables of Atlanta Crossing Shopping Center. The results of the
commercial segment have been shown as income from discontinued  operation on the
statement of operations.  Revenues of this property were approximately  $563,000
and  $803,000  for 1999 and  1998,  respectively.  Income  from  operations  was
approximately $111,000 and $171,000 for 1999 and 1998, respectively.

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

        None.

<PAGE>

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        with Section 16(a) of the Exchange Act

The names of the directors and executive  officers of Angeles Realty Corporation
II ("ARC II" or Managing  General  Partner),  the  Managing  General  Partner of
Angeles Income  Properties,  Ltd. II (the  "Partnership"  or "Registrant") as of
December  31,  1999,  their  ages and the  nature of all  positions  with ARC II
presently held by them are as follows:

       Name                  Age    Position

       Patrick J. Foye        42    Executive Vice President and Director

       Martha L. Long         40    Senior Vice President and Controller

Patrick J. Foye has been  Executive  Vice President and Director of the Managing
General  Partner  since October 1, 1998.  Mr. Foye has served as Executive  Vice
President  of AIMCO  since May 1998.  Prior to  joining  AIMCO,  Mr.  Foye was a
partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to
1998 and was  Managing  Partner  of the  firm's  Brussels,  Budapest  and Moscow
offices from 1992  through  1994.  Mr. Foye is also Deputy  Chairman of the Long
Island  Power   Authority  and  serves  as  a  member  of  the  New  York  State
Privatization  Council.  He received a B.A. from Fordham College and a J.D. from
Fordham University Law School.

Martha L. Long has been Senior Vice  President  and  Controller  of the Managing
General  Partner and AIMCO since October 1998, as a result of the acquisition of
Insignia  Financial  Group,  Inc. From June 1994 until January 1997, she was the
Controller for Insignia, and was promoted to Senior Vice President - Finance and
Controller in January 1997,  retaining that title until October 1998.  From 1988
to June 1994,  Ms. Long was Senior Vice  President and  Controller for The First
Savings Bank, FSB in Greenville, South Carolina.

Based solely upon a review of Forms 3 and 4 and amendments  thereto furnished to
the Registrant  under Rule 16a-3(e) during the  Registrant's  most recent fiscal
year and Form 5 and amendments  thereto furnished to the Registrant with respect
to its most recent  fiscal year,  the  Registrant  is not aware of any director,
officer,  beneficial  owner of more than ten  percent  of the  units of  limited
partnership interest in the Registrant that failed to file on a timely basis, as
disclosed in the above Forms,  reports required by Section 16(a) of the Exchange
Act during the most recent fiscal year or prior fiscal years.

Item 10.    Executive Compensation

No  remuneration  was paid by the  Partnership to any officer or director of the
Managing General Partner during the year ended December 31, 1999.


<PAGE>


Item 11.    Security Ownership of Certain Beneficial Owners and Management

Except as noted below, no person or entity was known by the Registrant to be the
beneficial  owner  of  more  than 5% of the  Limited  Partnership  Units  of the
Registrant as of December 31, 1999.

         Entity                             Number of Units    Percentage

         Cooper River Properties, LLC
          (an affiliate of AIMCO)                5,864           5.877%
         Insignia Properties LP
          (an affiliate of AIMCO)                3,990           3.998%
         Broad River Properties, LLC
          (an affiliate of AIMCO)                8,908           8.927%
         AIMCO Properties, LP
          (an affiliate of AIMCO)               29,862          29.927%

Cooper  River  Properties,   LLC,  Insignia   Properties  LP,  and  Broad  River
Properties, LLC are indirectly ultimately owned by AIMCO. Their business address
is 55 Beattie Place, Greenville, South Carolina 29602.

AIMCO Properties,  LP is indirectly ultimately controlled by AIMCO. Its business
address is 2000 South Colorado Boulevard, Denver, Colorado 80222.

The Partnership knows of no contractual arrangements, the operation of the terms
of,  which  may at a  subsequent  date  result  in a change  in  control  of the
Partnership,  except for: Article 12.1 of the Agreement, which provide that upon
a vote of the limited  partners  holding  more than 50% of the then  outstanding
limited  partnership  units  the  general  partners  may be  expelled  from  the
Partnership  upon 90 days written  notice.  In the event that successor  general
partners have been elected by limited partners holding more than 50% of the then
outstanding  limited  partnership  Units and if said limited  partners  elect to
continue the business of the Partnership,  the Partnership is required to pay in
cash to the expelled  general partners an amount equal to the accrued and unpaid
management  fee  described  in Article 10 of the  Agreement  and to purchase the
general  partners'  interest in the  Partnership  on the  effective  date of the
expulsion,  which shall be an amount equal to the difference between the balance
of the general  partners' capital account and the fair market value of the share
of  distributable  net proceeds to which the general partners would be entitled.
Such  determination of the fair market value of the share of  distributable  net
proceeds is defined in Article 12.2(b) of the Agreement.

<PAGE>

Item 12.    Certain Relationships and Related Transactions

The  Partnership  has no employees  and is  dependent  on the  Managing  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership activities.  The Partnership Agreement provides for certain payments
to affiliates for services and  reimbursement  of certain  expenses  incurred by
affiliates on behalf of the  Partnership.  The  following  payments were paid or
accrued to the Managing  General  Partner and affiliates  during the years ended
December 31, 1999 and 1998:

                                                              1999       1998
                                                              (in thousands)

   Property management fees                                  $ 339      $ 350
   Partnership management fees (1)                             228         45
   Reimbursement for services of affiliates                    262        264

(1)   The  Partnership  Agreement  provides  for a fee equal to 10% of "net cash
      flow from operations",  as defined in the Partnership Agreement to be paid
      to  the  Managing   General  Partner  for  executive  and   administrative
      management services.

During the years ended  December 31, 1999 and 1998,  affiliates  of the Managing
General  Partner were  entitled to receive 5% of gross  receipts from all of the
Registrant's  residential properties for providing property management services.
The Registrant paid to such affiliates  approximately  $339,000 and $327,000 for
the years ended December 31, 1999 and 1998, respectively. During the nine months
ending  September  30, 1998,  affiliates  of the Managing  General  Partner were
entitled  to  varying  percentages  of  gross  receipts  from  the  Registrant's
commercial property for providing property management  services.  These services
were  performed by affiliates of the Managing  General  Partner  during the nine
months  ending  September  30, 1998 and were  approximately  $23,000.  Effective
October 1, 1998 (the effective date of the Insignia Merger),  these services for
the commercial property were provided by an unrelated party.

An  affiliate  of  the  Managing  General  Partner  received   reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $262,000 and
$264,000 for the years ended December 31, 1999 and 1998, respectively, including
approximately  $132,000 and $90,000,  respectively,  in  construction  oversight
costs

Additionally,  the Partnership paid approximately  $57,000 during the year ended
December  31, 1998 to an affiliate  of the  Managing  General  Partner for lease
commissions at the Partnership's  commercial  property.  These lease commissions
are included in investment in discontinued operations and are amortized over the
terms of the respective leases.

Angeles Mortgage  Investment  Trust,  ("AMIT"),  a real estate investment trust,
provided  financing to the Princeton  Meadows Golf Course Joint Venture  ("Joint
Venture")  (see "Part II. Item 7. Financial  Statements,  Note G - Investment in
Joint  Venture").  Pursuant  to a  series  of  transactions,  affiliates  of the
Managing General Partner acquired ownership  interests in AMIT. On September 17,
1998,  AMIT was  merged  with and into IPT,  the  entity  which  controlled  the
Managing General Partner.

<PAGE>

Effective  February  26,  1999,  IPT was merged into AIMCO.  As a result,  AIMCO
became the holder of the AMIT loan. On February 26, 1999, Princeton Meadows Golf
Course was sold to an unaffiliated third party. Upon closing, the AMIT principal
balance of $1,567,000 plus accrued  interest of  approximately  $17,000 was paid
off.

Several tender offers were made by various parties,  including affiliates of the
Managing General Partner,  during the years ended December 31, 1999 and 1998. As
a result of these tender offers,  AIMCO and its affiliates  currently own 48,624
limited  partnership  units  in  the  Partnership  representing  48.729%  of the
outstanding  units. It is possible that AIMCO or its affiliates will make one or
more additional offers to acquire  additional limited  partnership  interests in
the Partnership  for cash or in exchange for units in the operating  partnership
of AIMCO.  Consequently,  AIMCO is in a position to significantly  influence all
voting  decisions  with  respect  to  the  Registrant.   Under  the  Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with respect to a variety of matters. When voting on matters, AIMCO would
in all  likelihood  vote the  Units it  acquired  in a manner  favorable  to the
interest of the Managing  General Partner because of their  affiliation with the
Managing General Partner.
<PAGE>

                                     PART IV

Item 13.  Exhibits and Reports on Form 8-K

      (a) Exhibits:

          Exhibit 18, Independent  Accountants'  Preferability Letter for Change
          in Accounting Principle, is filed as an exhibit to this report.

          Exhibit 27,  Financial Data  Schedule,  is filed as an exhibit to this
          report.

     (b)  Reports on Form 8-K filed in the fourth quarter of calendar year 1999:

          None.



<PAGE>


                                   SIGNATURES

In accordance  with Section 13 or 15(d) of the Exchange Act, the  Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                    ANGELES INCOME PROPERTIES, LTD. II

                                    By:   Angeles Realty Corporation II
                                          Managing General Partner

                                    By:   /s/Patrick J. Foye
                                          Patrick J. Foye
                                          Executive Vice President

                                    By:   /s/Martha L. Long
                                          Martha L. Long
                                          Senior Vice President
                                          and Controller

                                    Date:


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the Registrant and in the capacities on the date
indicated.

/s/Patrick J. Foye      Executive Vice President      Date:
Patrick J. Foye         and Director

/s/Martha L. Long       Senior Vice President         Date:
Martha L. Long          and Controller

<PAGE>


                       ANGELES INCOME PROPERTIES, LTD. II

                                  EXHIBIT INDEX

Exhibit Number    Description of Exhibit

2.1  Agreement  and Plan of Merger,  dated as of October 1, 1998, by and between
     AIMCO  and  IPT  incorporated  by  reference  to  Exhibit  2.1  filed  with
     Registrant's Current Report on Form 8-K dated October 1, 1998.

3.1  Amendment Agreement of Limited Partnership of the Partnership dated October
     12, 1982 filed in Form 10K dated November 30, 1983,  incorporated herein by
     reference

3.2  Amended Agreement of Limited Partnership of the Partnership dated March 31,
     1983 filed in the Prospectus, of the Partnership, as Exhibit A, dated March
     31, 1983 incorporated herein by reference

10.1 Agreement of Purchase and of Real Property with Exhibits - Executive  Plaza
     filed in Form 8K dated September 27, 1983, incorporated herein by reference

10.2 Agreement of Purchase  and Sale of Real  Property  with  Exhibits - Atlanta
     Crossing  Shopping  Center  filed  in Form 8K  dated  September  27,  1983,
     incorporated herein by reference

10.3 Agreement of Purchase and Sale of Real  Property with Exhibits - Deer Creek
     Apartments filed in Form 8K dated September 28, 1983,  incorporated  herein
     by reference

10.4 Agreement of Purchase and Sale of Real  Property with Exhibits - Georgetown
     Apartments filed in Form 8K dated November 21, 1983, incorporated herein by
     reference

10.5 Agreement of Purchase and Sale of Real  Property  with  Exhibits - Landmark
     Apartments filed in Form 8K dated December 16, 1983, incorporated herein by
     reference

10.6 Multifamily Note - Deer Creek Apartments, dated June 11, 1986 filed in Form
     10K dated February 25, 1987, incorporated herein by reference.

10.7 Multifamily Note - Georgetown Apartments, dated June 16, 1985, incorporated
     herein by reference

10.8 Additional  Financing - Deer Creek  Apartments,  dated  September 22, 1987.
     Funded  November 1988 filed in Form 10K dated March 29, 1989,  incorporated
     herein by reference

10.9 Additional  Financing - Georgetown  Apartments,  dated  September 22, 1989,
     incorporated herein by reference

10.10Purchase  and Sale  Agreement  with  Exhibits - dated July 26, 1991 between
     Princeton  Golf Course Joint Venture and Lincoln  Property  Company No. 199
     filed in Form 10-K dated March 27, 1992, incorporated herein by reference

10.11Princeton Golf Course Joint Venture  Agreement with Exhibits - dated August
     21, 1991 between the Partnership,  Angeles Partners XI and Angeles Partners
     XII  filed in Form  10-K  dated  March  27,  1992,  incorporated  herein by
     reference

10.12Stock  Purchase  Agreement  dated November 24, 1992 showing the purchase of
     100%  of  the  outstanding  stock  of  Angeles  Realty  Corporation  II,  a
     subsidiary  of MAE GP  Corporation,  filed in Form 8-K dated  December  31,
     1993, which is incorporated herein by reference

10.13Deed in Lieu of  Foreclosure  between  Executive  Plaza,  L.P.  and Capshaw
     Investment  Company,  L.L.C. dated March 20, 1995,  incorporated  herein by
     reference

10.14Multifamily Note - Deercreek  Apartments between Angeles Income Properties,
     Ltd. II and Lehman Brothers Holdings, Inc. d/b/a Lehman Capital, a division
     of Lehman Brothers Holdings, Inc. dated November 1, 1996

10.15Multifamily Note - Landmark  Apartments  between Angeles Income Properties,
     Ltd. II and Lehman Brothers Holdings, Inc. d/b/a Lehman Capital, a division
     of Lehman Brothers Holdings, Inc. dated November 1, 1996

10.16Purchase  and  Sale  Contract  between  Registrant  and  Atlanta  Crossing,
     L.L.C.,  an Alabama limited liability  company,  dated October 25, 1999, is
     incorporated  by reference to the Annual Report on Form 10-KSB for the year
     ended December 31, 1999.

10.17Amendment  to Purchase and Sale  Contract  between  Registrant  and Atlanta
     Crossing,  L.L.C.,  dated February 7, 2000, is incorporated by reference to
     the Annual Report on Form 10-KSB for the year ended December 31, 1999.

10.18Second  Amendment  to Purchase and Sale  Contract  between  Registrant  and
     Atlanta Crossing, L.L.C., dated March 8, 2000, is incorporated by reference
     to the Annual Report on Form 10-KSB for the year ended December 31, 1999.

16   Letter from the Registrant's  former  accountant  regarding its concurrence
     with the statements  made by the registrant is incorporated by reference to
     the Exhibit filed with Form 8-K dated September 1, 1993

18   Independent  Accountants'  Preferability  Letter for  Change in  Accounting
     Principle.

27   Financial Data Schedule.

<PAGE>
                                                                      Exhibit 18


February 7, 2000


Mr. Patrick J. Foye
Executive Vice President
Angeles Realty Corporation II
Managing General Partner of Angeles Income Properties, Ltd. II
55 Beattie Place
P.O. Box 1089
Greenville, South Carolina 29602

Dear Mr. Foye:

Note M of Notes to the  Consolidated  Financial  Statements  of  Angeles  Income
Properties,  Ltd. II included in its Form 10-KSB for the year ended December 31,
1999  describes  a change in the method of  accounting  to  capitalize  exterior
painting and major  landscaping,  which would have been  expensed  under the old
policy.  You have advised us that you believe that the change is to a preferable
method in your  circumstances  because it provides a better matching of expenses
with the related  benefit of the  expenditures  and is consistent  with policies
currently  being used by your  industry  and  conforms  to the  policies  of the
Managing General Partner.

There are no authoritative criteria for determining a preferable method based on
the particular circumstances; however, we conclude that the change in the method
of accounting  for exterior  painting and major  landscaping is to an acceptable
alternative  method which,  based on your business  judgment to make this change
for the reasons cited above, is preferable in your circumstances.

                                                               Very truly yours,
                                                            /s/Ernst & Young LLP

<PAGE>
                                                                   Exhibit 10.16

                           PURCHASE AND SALE CONTRACT

                                 BY AND BETWEEN

                       Angeles Income Properties, Ltd. II

                                    AS SELLER

                                       AND

                             Atlanta Crossing L.L.C.

                                  AS PURCHASER

                        Atlanta Crossing Shopping Center

                               Montgomery, Alabama


<PAGE>


                           PURCHASE AND SALE CONTRACT

      THIS PURCHASE AND SALE CONTRACT  ("Purchase  Contract") is entered into as
of  October  25,  1999 (the  "Effective  Date") by and  between  ANGELES  INCOME
PROPERTIES,  LTD.  II, a  California  limited  partnership,  having a  principal
address at c/o AIMCO, 1873 Bellaire Street,  Suite 1700, Denver,  Colorado 80222
("Seller") and ATLANTA CROSSING L.L.C.,  an Alabama limited  liability  company,
having a principal  address at 2828 W.  Edgemont  Avenue,  Montgomery,  AL 36101
("Purchaser").

     NOW,  THEREFORE  WITNESSETH:  that  for  and  in  consideration  of  mutual
covenants and  agreements  herein after set forth,  Seller and Purchaser  hereby
agree as follows:

                                    RECITALS

R-1...Seller holds fee title to a portion,  and leasehold title to the remaining
portion of the real estate  more  particularly  described  in Exhibit A attached
hereto  and made a part  hereof  located  in the  Montgomery,  Alabama  on which
improvements have been constructed.

R-2...The  aforementioned  leasehold  interests  were  created  pursuant  to the
following documents:

      (A) that  Agreement  of Lease  dated as of August 29,  1997 by and between
Wylie P. Johnson,  Landlord,  and Angeles  Income  Properties,  Ltd. II, Tenant,
recorded in the Office of the Judge of Probate of Montgomery County,  Alabama in
Real Property Book 1853, Page 394; and

      (B) that  Assignment of Lease dated  September 26, 1983,  executed by East
Commerce  Development,  Inc. and East Commerce Development Company,  recorded in
the Office of Judge of Probate of  Montgomery  County,  Alabama in Real Property
Book 630,  Page  870,  and  corrected  in Real  Property  Book,  643,  Page 515,
assigning  interests  created under that Agreement of Lease dated  September 24,
1974, by and between Frances E. Raoul,  Landlord, and East Commerce Development,
Inc.,  Tenant,  recorded  in the Office of the Judge of  Probate  of  Montgomery
County, Alabama in Real Property Book 247, Page 157, as amended,  including, but
not limited to, the  amendments  created by the  following  documents:  (i) that
Agreement  of  Sublease  dated  March 1,  1976,  by and  between  East  Commerce
Development,  Inc., Tenant, and East Commerce  Development  Company,  Subtenant,
recorded in the Office of the Judge of Probate of Montgomery County,  Alabama in
Real  Property  Book 304,  Page 962;  (ii) that  Amendment to Agreement of Lease
dated  November 21, 1979, by and between  Frances E. Raoul,  Landlord,  and East
Commerce  Development,  Inc.,  Tenant,  recorded  in the  Office of the Judge of
Probate of Montgomery County, Alabama in Real Property Book 468, Page 852; (iii)
that Second  Amendment  to Agreement  of Lease dated  January 10,  1980,  by and
between Frances E. Raoul, Landlord, and East Commerce Development, Inc., Tenant,
recorded in the Office of the Judge of Probate of Montgomery County,  Alabama in
Real  Property  Book 471,  Page 969;  (iv) that  Amendment to Agreement of Lease
dated January 10, 1980, by and between Frances E. Raoul, Landlord, East Commerce
Development,  Inc., Tenant, and East Commerce  Development  Company,  Subtenant,
recorded in Real Property Book 471, Page 975; (v) that Amendment to Agreement of
Lease dated May 20, 1981, by and between  Frances E. Raoul,  Landlord,  and East
Commerce  Development,  Inc.,  Tenant,  recorded  in the  Office of the Judge of
Probate of Montgomery County, Alabama in Real Property Book 546, page 410; and

      (C) that  Assignment of Lease dated  September 26, 1983,  executed by East
Commerce  Development,  Inc. and East Commerce Development Company,  recorded in
the Office of Judge of Probate of  Montgomery  County,  Alabama in Real Property
Book 630,  Page  870,  and  corrected  in Real  Property  Book,  643,  Page 515,
assigning  interests  created under that Agreement of Lease dated  September 24,
1974,  by and  between  Robert L. Gunn and  Stella E. Gunn,  Landlord,  and East
Commerce  Development,  Inc.,  Tenant,  recorded  in the  Office of the Judge of
Probate of  Montgomery  County,  Alabama in Real Property Book 247, Page 147, as
amended,  including, but not limited to, the amendments created by the following
documents:  (i) that  Agreement of Sublease  dated March 1, 1976, by and between
East Commerce Development,  Inc., Tenant, and East Commerce Development Company,
Subtenant,  recorded in the Office of the Judge of Probate of Montgomery County,
Alabama in Real Property Book 304, Page 948; (ii) that Amendment to Agreement of
Lease dated January 10, 1980 by and between  Robert L. Gunn and wife,  Stella E.
Gunn, Landlord,  and East Commerce  Development,  Inc., Tenant,  recorded in the
Office of the Judge of Probate of  Montgomery  County,  Alabama in Real Property
Book 471, Page 961

Collectively, the above documents are referred to as the "Ground Leases."

R-3...Purchaser  desires  to  purchase  and Seller has agreed to sell such land,
improvements and certain associated  property,  defined below as the "Property",
on the terms and conditions  set forth below (which terms and  conditions  shall
control  in the event of any  conflict  with these  Recitals),  such that on the
Closing  Date,  as defined  in this  Purchase  Contract,  the  Property  will be
conveyed by limited warranty deed to Purchaser;

R-4...Purchaser has agreed to pay to Seller the Purchase Price for the Property,
and  Seller  has  agreed  to sell the  Property  to  Purchaser  on the terms and
conditions set forth below.

                                    ARTICLE 1

                                  DEFINED TERMS

1.1   Terms with initial  capital  letters in this Purchase  Contract shall have
      the meanings set forth in this Article 1 below.

      1.1.1 "Business  Day"  means any day other  than a  Saturday  or Sunday or
            federal holiday or legal holiday in the State of Alabama.

      1.1.2 "Closing"  means  the  consummation  of the  purchase  and  sale and
            related  transactions  contemplated  by this  Purchase  Contract  in
            accordance with the terms and conditions of this Purchase Contract.

      1.1.3 "Closing  Date" means  November  30, 1999 (or such  earlier  date as
            Purchaser  may  designate  in  writing to Seller by at least 5 days'
            advance  Notice),  subject,  however,  to Seller's express rights of
            extension  stated  in this  Purchase  Contract,  on  which  date the
            Closing of the  conveyance  of the Property  shall be held under the
            terms and  conditions  of this  Purchase  Contract and on which date
            full payment of the Purchase  Price for the Property shall have been
            paid to and received by Seller in immediately available U.S. funds.

      1.1.4 "Commercial  Lease(s)"  means the  interest  of Seller in and to all
            leases, subleases and other occupancy agreements (including any land
            leases or ground  leases not otherwise  included  within the defined
            term "Ground Leases"),  whether or not of record,  which provide for
            the use or  occupancy of space or  facilities  on or relating to the
            Property  scheduled  on Exhibit  1.1.4  attached  hereto;  provided,
            however,  that the term  "Commercial  Leases" (i) shall also include
            any  modifications  to such leases after the Effective  Date and any
            new leases  entered into after the  Effective  Date  (subject to the
            approval of Purchaser as provided in Section 6.1.5.1, which approval
            shall not be  unreasonably  withheld  or  delayed),  and (ii)  shall
            exclude any leases expiring or terminating pursuant to the terms and
            conditions thereof or terminated by Seller prior to the Closing Date
            upon default thereunder.

      1.1.5 "Purchase  Contract" means this Purchase and Sale Purchase  Contract
            by and between Seller and Purchaser.

      1.1.6 "Effective  Date"  means the date first set forth  above,  being the
            date in which Seller accepts this Purchase Contract by executing the
            same.

      1.1.7 "Fixtures  and  Tangible  Personal  Property"  means  all  fixtures,
            furniture,  furnishings,  fittings, equipment, machinery, apparatus,
            appliances  and other  articles of personal  property now located on
            the  Land or in the  Improvements  as of the  date of this  Purchase
            Contract and used or usable in connection with any present or future
            occupation or operation of all or any part of the Property. The term
            "Fixtures  and  Tangible  Personal  Property"  does not  include (i)
            equipment  leased  by  Seller  and the  interest  of  Seller  in any
            equipment  provided to the Property for use, but not owned or leased
            by Seller,  or (ii) property  owned or leased by Tenants and guests,
            employees  or other  persons  furnishing  goods or  services  to the
            Property or (iii) property and equipment  owned by Seller,  which in
            the  ordinary  course  of  business  of the  Property  is  not  used
            exclusively  for  the  business,  operation  or  management  of  the
            Property  or (iv) the  property  and  equipment,  if any,  expressly
            identified in Exhibit 1.1.7.

      1.1.8 "Land" means all of that certain tract of land located in the County
            of  Montgomery,  State of  Alabama,  commonly  known as the  Atlanta
            Crossing Shopping Center,  more particularly  described in Exhibit A
            attached  hereto and made a part hereof and all  rights,  privileges
            and appurtenances pertaining thereto.

      1.1.9 "Property"  means the Land and Improvements and all rights of Seller
            relating  to  the  Land  and  the  Improvements,  including  without
            limitation, any rights, title and interest of Seller, if any, in and
            to (i) any strips and gores  adjacent to the Land and any land lying
            in the bed of any street,  road,  or avenue  opened or proposed,  in
            front of or adjoining the Land, to the center line thereof; (ii) any
            unpaid  award for any  taking by  condemnation  or any damage to the
            Property  by reason of a change of grade of any  street or  highway;
            (iii) any easements, rights, privileges, and appurtenances belonging
            or in any  way  appertaining  to the  Property;  together  with  all
            Fixtures and Tangible Personal Property,  the right, if any and only
            to the extent  transferable  (without  consent being required or, if
            consent shall be required,  if the required  consent shall have been
            obtained),  of  Seller  in and  to  Property  Contracts,  Commercial
            Leases,   Permits  (other  than  Excluded  Permits),   Miscellaneous
            Property Assets and Ground Leases.

      1.1.10"Property   Contracts"  means  all  purchase  orders,   maintenance,
            service, or utility contracts and similar contracts, which relate to
            the ownership, maintenance,  construction or repair and/or operation
            of the Property  scheduled on Exhibit 1.1.10 attached hereto, in any
            event  excluding  Commercial  Leases and  excluding  the  Management
            Contract.

      1.1.11      "Improvements" means all buildings and improvements located on
            the Land taken "as is".

      1.1.12"Management    Contract"    means   the   management   and   leasing
            arrangements,   contractual   or  otherwise,   between   Seller  and
            Insignia/ESG  relating  to  the  management  and  operation  of  the
            Property.

      1.1.13"Miscellaneous  Property Assets" means all contract rights,  leases,
            concessions,   warranties,   plans,  drawings  and  other  items  of
            intangible  personal property relating to the ownership or operation
            of the  Property  and  owned by  Seller  which  are  located  on the
            Property  and  used  in  its  operation,   excluding,  however,  (i)
            receivables,  (ii) Property Contracts, (iii) Commercial Leases, (iv)
            Permits,  (v) cash or other  funds,  whether  in petty cash or house
            "banks," or on deposit in bank  accounts or in transit for  deposit,
            (vi) refunds,  rebates or other claims, or any interest thereon, for
            periods or events occurring prior to the Closing Date, (vii) utility
            and similar deposits,  (viii) insurance or other prepaid items, (ix)
            books and  records,  except to the  extent  that  Seller  receives a
            credit on the Closing  Statement  for any such item,  and (x) Ground
            Leases.

      1.1.14"Permits"  means all  licenses and permits  granted by  governmental
            authorities having  jurisdiction over the Property in respect of the
            matter to which the  applicable  license or permit applies and owned
            by Seller or used in or  relating  to the  ownership,  occupancy  or
            operation  of the  Property  or any part  thereof  not  subject to a
            Commercial  Lease other than those Permits which,  under  applicable
            law, are nontransferable and such other Permits as may be designated
            as Excluded Permits on Exhibit 1.1.14, if any, attached hereto.

      1.1.15"Permitted   Exceptions"   means  those   exceptions  or  conditions
            permitted to encumber the title to the Property in  accordance  with
            the provisions of Section 4.1.

      1.1.16      "Purchase Price" means the total consideration to be paid by
            Purchaser to Seller for the purchase of the Property.

      1.1.17   "Survey" shall have the meaning ascribed thereto in Section 4.10.

      1.1.18      "Tenant" means any person or entity entitled to occupy any
            portion of the Property under a Commercial Lease.

      1.1.19   "Title Commitment" or "Title Commitments" shall have the meaning
            ascribed thereto in Section 4.1.1.

      1.1.20  "Title Insurer" shall have the meaning set forth in Section 4.1.1.


                                    ARTICLE 2

                          PURCHASE AND SALE OF PROPERTY

2.1   Seller  agrees to sell and convey the Property to Purchaser  and Purchaser
      agrees to purchase the Property from Seller,  in accordance with the terms
      and conditions set forth in this Purchase Contract.

                                    ARTICLE 3

                            PURCHASE PRICE & DEPOSIT

3.1   The total  purchase  price  ("Purchase  Price") for the Property  shall be
      Three Million  Three Hundred  Thousand  Dollars  ($3,300,000.00)  in cash,
      which shall be paid by Purchaser, as follows:

      3.1.1 On the Effective Date,  Purchaser shall deliver to Fidelity National
            Title Insurance Company, 700 Louisiana,  Suite 2600, Houston,  Texas
            77002  ("Escrow  Agent")  a  deposit  in the  sum of  Fifty-Thousand
            Dollars  ($50,000.00) in cash, (such sum, together with any interest
            or earnings thereon, being hereinafter  collectively referred to and
            held as the  "Deposit").  Purchaser and Seller each approve the form
            of Escrow  Agreement  attached as Exhibit B and Purchaser  agrees to
            sign the Escrow  Agreement in such form and deliver a counterpart of
            the  same  to  the  Escrow  Agent  along  with  the  Deposit  and  a
            counterpart of the same to Seller.

      3.1.2 The Escrow  Agent shall hold the  Deposit  and make  delivery of the
            Deposit to the party entitled thereto under the terms hereof. Escrow
            Agent  shall  invest  the  Deposit  in  such  interest-bearing  bank
            accounts,  money  market  funds or accounts,  bank  certificates  of
            deposit  or bank  repurchase  agreements  as  Escrow  Agent,  in its
            discretion,  deems suitable (provided that Escrow Agent shall invest
            the  Deposit as jointly  directed  by Seller  and  Purchaser  should
            Seller  and  Purchaser  each in  their  respective  sole  discretion
            determine to issue such joint investment  instructions to the Escrow
            Agent) and all interest and income  thereon shall become part of the
            Deposit and shall be remitted to the party  entitled to the Deposit,
            as set forth below.

      3.1.3 If the sale of the Property is closed by the date fixed therefor (or
            any extension date provided for by the mutual written consent of the
            parties  hereto,   given  or  withheld  in  their   respective  sole
            discretion),  monies held as the Deposit  shall be applied (and paid
            over to the Seller) on the Date of Closing and the Deposit  shall be
            credited to the Purchase  Price.  If the sale of the Property is not
            closed by the date fixed therefor (or any such extension date) owing
            to failure of satisfaction  of a condition  precedent to Purchaser's
            obligations,   the  Deposit   shall  be  returned  and  refunded  to
            Purchaser,  and  neither  party  shall  have any  further  liability
            hereunder.

      3.1.4.If the  sale  of  the  Property  is not  closed  by the  date  fixed
            therefor  (or  any  such   extension   date)  owing  to  failure  of
            performance by Seller,  Purchaser  shall be entitled to the remedies
            set forth in ARTICLE 10 hereof.  If the sale of the  Property is not
            closed by the date fixed therefor (or any such extension date) owing
            to  failure  of  performance  by  Purchaser,  the  Deposit  shall be
            forfeited  by  Purchaser  and the sum  thereof  shall  go to  Seller
            forthwith as liquidated  damages for the lost opportunity  costs and
            transaction  expenses incurred by Seller, as more fully set forth in
            ARTICLE 10 below.

3.2   On the  Closing  Date,  Purchaser  shall pay  Seller  the  amount of Three
      Million Three Hundred Thousand Dollars ($3,300,000.00),  subject to credit
      and adjustment as provided herein,  in cash or by wire-transfer of current
      funds through escrow pursuant to wire instructions provided by Seller.

                                    ARTICLE 4

                                      TITLE

4.1   Purchaser agrees to accept title to the Land and Improvements,  so long as
      the same is insurable at ordinary  rates,  and any  conveyance  by limited
      warranty deed pursuant to this Purchase  Contract shall be subject only to
      the  following  exceptions,  all  of  which  shall  be  deemed  "Permitted
      Exceptions",  and  Purchaser  agrees to accept the deed and title  subject
      thereto:

      4.1.1 All  exceptions  shown in the Title  Commitment  issued by  Fidelity
            National Title Insurance  Company ("Title Insurer") on June 4, 1999,
            as revised on August 24, 1999, File No. 191492 ("Title Committment")
            (other than mechanics'  liens arising out of work performed by or on
            behalf of Seller prior to Closing,  taxes due and payable in respect
            of the period preceding Closing, and rights of parties in possession
            other  than  those  claiming  under the  Commercial  Leases  and the
            Property  Contracts as provided in Sections 4.1.2 and 4.1.3 hereof),
            including without  limitation,  the leasehold right of first refusal
            referenced  in the Short Form  Ground  Sublease,  between  Seller as
            Landlord and IHOP Properties,  Inc. as Tenant,  dated July 23, 1998,
            recorded in the Office of the Judge of Probate of Montgomery County,
            Alabama in Real  Property  Book  1889,  Page 180,  and the  purchase
            option and refusal option set forth in the Lease  Agreement  between
            East Commerce  Development  Company as Lessor and Union Bank & Trust
            Company as Lessee,  dated January 4, 1977, recorded in the Office of
            the Judge of Probate of Montgomery County,  Alabama in Real Property
            Book 356, Page 865, and any other  exceptions  noted on Exhibit B to
            the form of  Limited  Warranty  Deed set  forth as  Exhibit  5.2.1.1
            attached hereto; and

      4.1.2 The Ground Leases; and

      4.1.3 All Commercial Leases; and

      4.1.4 All Property  Contracts (other than those  contracts,  if any, which
            are  identified  for  termination  by  Purchaser  on  Exhibit  4.1.4
            attached hereto); and

      4.1.5 Real estate taxes and other property taxes,  special assessments and
            installments thereof, to the extent not due and payable prior to the
            Closing Date; and

      4.1.6 Such exceptions and matters as the Title Insurer shall be willing to
            omit as exceptions to coverage; and

      4.1.7 The existence of an error in the legal  description in Warranty Deed
            dated  September  26,  1983,  recorded in the Office of the Judge of
            Probate of  Montgomery  County,  Alabama in Real  Property Book 630,
            Page 866,  as  re-recorded  in the Office of the Judge of Probate of
            Montgomery  County,  Alabama in Real Property Book 631, Page 838, as
            corrected  and again  recorded in the Office of the Judge of Probate
            of Montgomery County,  Alabama in Real Property Book 643, Page 510 ,
            whereby each of said deeds included the following: "thence North 820
            43' 45" East along  Dalphon  Road a  distance  of 33.22 feet . . .",
            wherein the correct  distance  indicated should have been 332.2 feet
            rather than 33.22 feet.

      4.1.8 Other  defects  and  exceptions,   if  any,  in  addition  to  those
            referenced in Sections 4.1.1,  4.1.2, 4.1.3, 4.1.4, 4.1.5, 4.1.6 and
            4.1.7  which in the  opinion  of  Purchaser  do not  materially  and
            adversely  affect the condition of title to the Property and its use
            as of the Effective Date.

4.2   The existence of other  mortgages,  liens,  or  encumbrances  shall not be
      objections  to title,  provided  that  properly  executed  instruments  in
      recordable  form  necessary  to satisfy  and remove the same of record are
      delivered to the Purchaser at Closing or, in the alternative, with respect
      to any  mortgage  or deed of trust  liens,  that payoff  letters  from the
      holder of the mortgage or deed of trust liens shall have been delivered to
      and accepted by the Title Insurer  (sufficient to remove the same from, or
      insure  over the same in, any policy to be issued at Closing  pursuant  to
      the Title  Commitment),  together in either case,  with  recording  and/or
      filing fees.

4.3   Unpaid liens for taxes,  charges,  and assessments shall not be objections
      to title,  but the amount  thereof past due and payable plus  interest and
      penalties thereon shall be deducted from the Purchase Price to be paid for
      the applicable Property hereunder and allowed to Purchaser, subject to the
      provisions for apportionment of taxes and charges contained herein.

4.4   Unpaid franchise or business  corporation taxes of any corporations in the
      chain of title shall not be an objection to title, provided that the Title
      Insurer  agrees  to  insure  against  collection  out of the  Property  or
      otherwise against  Purchaser or its affiliates,  and provided further that
      the Title  Insurer  agrees to either  omit  from,  or insure  over in, the
      policy  available to be issued at Closing pursuant to the Title Commitment
      if Purchaser  requests,  such taxes as exceptions to coverage with respect
      to any lender's mortgagee insurance policy.

4.5   If on the Closing Date there shall be conditional bills of sale or Uniform
      Commercial  Code financing  statements  that were filed on a day more than
      Five (5) years prior to such Closing,  and such financing  statements have
      not been extended by the filing of UCC-3  continuation  statements  within
      the past Five (5) years prior to such Closing,  such financing  statements
      shall not be deemed to be an objection to title.

4.6   If, on the Closing  Date,  the state of title is other than in  accordance
      with the Title  Commitment and the requirements set forth in this Purchase
      Contract  or if any  condition  to be  fulfilled  by  Seller  shall not be
      satisfied,  Purchaser  shall provide Seller with written Notice thereof at
      such time,  or such title  objection  or  unfulfilled  condition  shall be
      deemed waived by Purchaser (in which event,  to the extent relating to the
      state of title, the waived objection shall become an additional "Permitted
      Exception" hereunder) and Purchaser and Seller shall proceed to consummate
      the Closing on the Closing  Date.  If  Purchaser  timely gives Seller such
      Notice,  Seller,  at its sole option and within  Seven (7)  calendar  days
      following  receipt of such  Notice,  may elect to cure such  objection  or
      unfulfilled condition no later than December 7, 1999. If Seller is able to
      cure such title objection or condition,  or if Seller is able to cause the
      Title Insurer or other title insurance  company to insure over the same by
      the Closing Date or any postponed  Closing  Date,  or if Purchaser  waives
      such  objection or condition  within such period for cure (in which event,
      to the extent relating to the state of title,  the waived  objection shall
      become an additional  "Permitted Exception"  hereunder),  then the Closing
      shall take place on or before December 7, 1999.

4.7   If Seller is unable or unwilling,  in its sole  discretion or opinion,  to
      eliminate  such title  objection or cause the Title Insurer or other title
      insurance  company to insure over such matter or satisfy such  unfulfilled
      condition,  Seller shall give  Purchaser  written Notice  thereof,  and if
      Purchaser  does not waive such  objection by written  Notice  delivered to
      Seller  and the  Title  Insurer  on or  before  Seven  (7)  calendar  days
      following the date Seller gives such Notice,  then this Purchase  Contract
      shall automatically  terminate, in which event Purchaser shall release and
      quitclaim  all of  Purchaser's  right and  interest  in such  Property  to
      Seller,  and the parties hereto shall have no further  obligations to each
      other.

4.8   Seller covenants that it will not voluntarily  create or cause any lien or
      encumbrance  (other than Commercial  Leases and Property  Contracts in the
      ordinary  course  of  business)  to  attach to the  Property  between  the
      Effective Date and the Closing Date; any such monetary lien or encumbrance
      so attaching by voluntary  act of Seller shall be discharged by the Seller
      at or prior to Closing on the Closing Date or any postponed  Closing Date.
      Except as  expressly  provided  above,  Seller  shall not be  required  to
      undertake  efforts  to  remove  any  other  lien,  encumbrance,   security
      interest, exception, objection or other matter, to make any expenditure of
      money or  institute  litigation  or any other  judicial or  administrative
      proceeding,  and Seller may elect not to discharge  the same. If Purchaser
      gives Seller Notice of objection to Seller's election not to discharge any
      matter  identified  in this Section 4.8 not later than ten (10) days after
      Seller shall so notify  Purchaser  that Seller does not elect to discharge
      such matter,  this Purchase  Contract shall terminate and be of no further
      force and effect,  and Escrow Agent shall  promptly  return the Deposit to
      Purchaser,  but otherwise  and in all other  respects  Purchaser  shall be
      deemed  to  have  waived  objections  to  the  discharge  of  any  matters
      identified  in this  Section  4.8 and any  such  matters  shall  become  a
      Permitted Exception.

4.9   Anything to the  contrary  notwithstanding,  Purchaser  shall not have any
      right  to  terminate  this  Purchase  Contract  or  object  to  any  lien,
      encumbrance,  exception or other  matter that is a Permitted  Exception or
      that has been waived or deemed to have been waived by Purchaser.

4.10  As of the  Effective  Date,  Purchaser,  at its  expense,  may cause to be
      prepared an American Land Title Association  ("ATLA") ATLA/ACSM Land Title
      Survey for the  Property  ("Survey")  to be  delivered  to  Purchaser  and
      Seller.  The Survey (i) shall be  prepared  in  accordance  with and shall
      comply with the minimum requirements of the ALTA; (ii) shall be in a form,
      and shall be  certified  as of a date  satisfactory  to Title  Insurer  to
      enable Title Insurer to delete standard  survey  exceptions from the title
      insurance  policy to be issued pursuant to the Title  Commitments,  except
      for  any  Permitted   Exceptions;   (iii)  shall   specifically  show  all
      improvements,  recorded easements to the extent locatable, set back lines,
      and such other matters shown as exceptions by the Title Commitments;  (iv)
      shall  specifically show the right of way for all adjacent public streets;
      (v) shall specifically  disclose whether (and, if so, what part of) any of
      the Property is in an area  designated as requiring  flood insurance under
      applicable federal laws regulating lenders; (vi) shall contain a perimeter
      legal  description  of the  Property  which  may be  used  in the  limited
      warranty  deed,  showing the separate  tracts held in fee and by leasehold
      title (including the separate parcels subject to the Ground Leases); (vii)
      shall be certified to  Purchaser,  Seller and Title  Insurer as being true
      and correct;  (viii) shall  certify that the legal  description  set forth
      therein  describes  the  same,  and  comprises  all of,  the  real  estate
      comprising the Property to be purchased by Purchaser pursuant to the terms
      of this Purchase Contract; and (ix) shall state that the property shown is
      the same property described in the Warranty Deed dated September 26, 1983,
      recorded  in the  Office of the Judge of  Probate  of  Montgomery  County,
      Alabama in Real Property Book 630, Page 866, as  re-recorded in the Office
      of the Judge of Probate of  Montgomery  County,  Alabama in Real  Property
      Book 631, Page 838, as corrected  and again  recorded in the Office of the
      Judge of Probate of Montgomery County,  Alabama in Real Property Book 643,
      Page 510 . To the extent the perimeter  legal  description of the Property
      contained in the Survey differs from the legal  descriptions  contained in
      (i) the deed or  deeds by which  Seller  took  title to the  Property,  as
      corrected  to remedy the error  described  in  Section  4.1.7 and which is
      correctly set forth in the Title  Commitment,  and (ii) the Ground Leases,
      the legal descriptions  contained in the deed (or deeds) and Ground Leases
      shall be used in the limited  warranty  deed  delivered  to  Purchaser  at
      Closing,  and the Survey  legal shall be used in a  quitclaim  deed to the
      Property  executed by Seller which also shall be delivered to Purchaser at
      Closing.

      4.10.1Purchaser  agrees to make  payment in full of all costs of obtaining
            the Survey  required by this Purchase  Contract on or before Closing
            or termination of this Purchase Contract.

                                    ARTICLE 5

                                     CLOSING

5.1   Dates, Places Of Closing, Prorations, and Delinquent Rent.

      5.1.1 The Closing  shall take place on the Closing Date, in the offices of
            the Title  Insurer or its  agent,  Edward J.  Azar,  260  Washington
            Avenue,  Montgomery,  Alabama  36197,  or such  other  place  as the
            parties  shall  mutually  agree,  at 11:00 a.m.  Alabama Time on the
            Closing  Date,  subject,  however,  to  Seller's  express  rights of
            extension  stated  in this  Purchase  Contract.  The  parties  shall
            conduct closing through an escrow, whereby Seller, Purchaser and its
            attorneys  need not be  physically  present at the  Closing  and may
            deliver documents by overnight air courier or other means.

      5.1.2 The Closing  Date may be extended  without  penalty at the option of
            Seller to a date not later  than  December  7,  1999,  to  satisfy a
            condition  to be  satisfied  by  Seller,  or such  later  date as is
            mutually acceptable to Seller and Buyer.

      5.1.3.All normal and  customarily  proratable  items,  including,  without
            limitation,  Rents (as defined below), operating expenses,  personal
            property taxes, other operating expenses and fees, shall be prorated
            as of the Closing  Date,  Seller being  entitled to, or  responsible
            for,  and charged or  credited  for, as the case may be, all of same
            attributable  to the period up to the Closing Date (and credited for
            any amounts  paid by Seller  attributable  to the period on or after
            the Closing Date) and Purchaser being  responsible for, and credited
            or charged,  as the case may be, for all of same attributable to the
            period on and after the Closing Date;  provided,  however,  that any
            sums owing in respect of base rent under the  Commercial  Leases and
            remaining  more  than 30 days  past  due  and  delinquent  as of the
            Closing  Date  ("Delinquent  Rent")  shall  not be  reflected  in an
            adjustment   on  the  Closing  Date  but  shall  be  collected   and
            apportioned  as set forth in  Section  5.1.5  below.  All  unapplied
            deposits under  Commercial  Leases,  if any, shall be transferred by
            Seller to Purchaser at the Closing,  and Purchaser  shall assume all
            liability  for the  same.  Purchaser  shall  assume at  Closing  the
            obligation  to  pay  any  accrued  but  unpaid  tenant   improvement
            allowances and leasing  commissions,  together with any payments due
            parties to other  agreements  affecting  the Property  which survive
            Closing,  to the extent such items are scheduled on Exhibit 1.1.4 or
            are hereafter  approved in writing by Purchaser.  Any real estate ad
            valorem or similar taxes for the  Property,  or any  installment  of
            assessments  payable in installments which installment is payable in
            the year of Closing, shall be prorated to the date of Closing, based
            upon actual days  involved.  The proration of real property taxes or
            installments  of  assessments  shall  be  based  upon  the  assessed
            valuation  and tax rate  figures  for the year in which the  Closing
            occurs to the extent the same are available;  provided,  that in the
            event that actual  figures  (whether for the  assessed  value of the
            Property  or for  the tax  rate)  for the  year of  Closing  are not
            available at the Closing  Date,  the  proration  shall be made using
            figures  from the  preceding  year.  For  purposes  of this  Section
            5.1.3.,  Section  5.1.4.  and Section  5.1.5.  the terms  "Rent" and
            "Rents" shall include,  without limitation,  base rents,  additional
            rents, tax payments, insurance payments, percentage rents, operating
            expense escalations or payments, and common area maintenance charges
            under the Commercial  Leases.  The provisions of this Section 5.1.3.
            shall  survive  the Closing  and shall  apply  during the  Proration
            Period (as defined below).

      5.1.4.If any  of the  items  subject  to  proration  hereunder  cannot  be
            prorated at the Closing because the information necessary to compute
            such  proration is  unavailable  or  incomplete,  or if a period-end
            reconciliation  is required under the relevant  Commercial  Lease or
            Ground Lease, or if any errors or omissions in computing  prorations
            at the Closing are discovered  subsequent to the Closing,  or if any
            real  estate  ad  valorem  or  similar  taxes for the  Property  are
            reevaluated  subsequent  to the  Closing,  then such  item  shall be
            reapportioned  and  such  errors,   omissions  and/or  reevaluations
            corrected  as soon as  practicable  after the  Closing  Date and the
            proper party reimbursed,  which obligation shall survive the Closing
            for a period  from the  Closing  Date  until  October  1,  2000 (the
            "Proration  Period").  Neither  party hereto shall have the right to
            require a recomputation of a Closing proration or a correction of an
            error or omission in a Closing proration unless within the Proration
            Period one of the parties  hereto (i) has  obtained  the  previously
            unavailable  information,  has completed the required reconciliation
            under the relevant  Commercial Lease, or has discovered the error or
            omission,  and (ii) has given  Notice  thereof  to the  other  party
            together  with  a  copy  of  its  good  faith  recomputation  of the
            proration and copies of all substantiating  information used in such
            recomputation.  In connection with the reconciliations subsequent to
            the Closing Date with respect to any annual, quarter-annual, monthly
            or other period during which the Closing  shall occur,  Seller shall
            provide Purchaser with tenant reconciliation information,  including
            applicable invoices, receipts and other documentation backing up the
            tenant charges with respect to the period prior to the Closing Date,
            and  Purchaser  shall share with  Seller  similar  information  with
            respect to the period on and after the Closing Date;  and Seller and
            Purchaser  agree to  cooperate  in good  faith  in the  computation,
            billing  and  collection  and/or  adjustments  associated  with such
            reconciliations.

      5.1.5.If on the Closing  Date any Tenant is more than 30 days past due and
            delinquent in any base rent payment under any Commercial  Lease (the
            "Delinquent  Rent"),  any Delinquent  Rent received by Purchaser and
            Seller  from such  Tenant  after the  Closing  shall be  applied  to
            amounts due and payable by such Tenant during the following  periods
            in the following order of priority: (i) first, to the period of time
            after the  Closing  Date,  and (ii)  second,  to the  period of time
            before the Closing Date. If Delinquent  Rent or any portion  thereof
            received  by  Seller or  Purchaser  after  the  Closing  are due and
            payable  to the  other  party  by  reason  of this  allocation,  the
            appropriate  sum,  less a  proportionate  share  of  any  reasonable
            attorneys'  fees and costs and expenses  expended in connection with
            the collection  thereof,  shall be promptly paid to the other party.
            After the Closing,  Seller shall continue to have the right, but not
            the obligation, in its own name, to demand payment of and to collect
            Delinquent  Rent owed to Seller by any  Tenant,  which  right  shall
            include, without limitation, the right to continue or commence legal
            actions or  proceedings  against any Tenant  (provided,  that Seller
            shall not  commence  any legal  actions or  proceedings  against any
            Tenant which  continues as a Tenant at the  Property  after  Closing
            without  the  prior  consent  of   Purchaser,   which  will  not  be
            unreasonably   withheld  or  delayed),   and  the  delivery  of  the
            Assignment  as defined in Section  5.2.1.3  shall not  constitute  a
            waiver by Seller of such right.  Purchaser  agrees to cooperate with
            Seller at no cost or liability to Purchaser in  connection  with all
            efforts  by  Seller  to  collect  such  Delinquent  Rent and to take
            reasonable  steps,  whether before or after the Closing Date, as may
            be necessary to carry out the intention of the foregoing, including,
            without  limitation,  the delivery to Seller,  upon  demand,  of any
            relevant  books and records  (including,  without  limitation,  rent
            statements,  receipted  bills and  copies of tenant  checks  used in
            payment of such  rent),  the  execution  of any and all  consents or
            other documents, and the undertaking of any act reasonably necessary
            for the  collection  of such  Delinquent  Rent by Seller;  provided,
            however,  that  Purchaser's  obligation  to  cooperate  with  Seller
            pursuant to this sentence shall not obligate  Purchaser to terminate
            any Commercial  Lease with an existing  Tenant or evict any existing
            Tenant from the  Property.  The  provisions  of this Section  5.1.5.
            shall  survive  the Closing  and shall  apply  during the  Proration
            Period.

      5.1.6 All Ground Rents (as defined below) under the Ground Leases shall be
            prorated as of the Closing Date,  Seller being  responsible for, and
            charged  or  credited  for,  as the  case  may be,  all of the  same
            attributable  to the period up to the Closing Date (and credited for
            any amounts  paid by Seller  attributable  to the period on or after
            the Closing Date) and Purchaser being  responsible for, and credited
            or charged,  as the case may be, for all of same attributable to the
            period on and after the  Closing  Date (and  charged for any amounts
            paid by Seller  attributable  to the period on or after the  Closing
            Date).  All of Seller's  rights and  interest in deposits  under the
            Ground  Leases,  if any, shall be transferred by Seller to Purchaser
            at the  Closing,  and  Purchaser  shall be  charged  for the same at
            Closing.  For the purposes of this Section 5.1.5,  the terms "Ground
            Rent" and "Ground Rents" shall  include,  without  limitation,  base
            rents,  additional rents, tax payments,  percentage rents, operating
            expense escalations or payments, and common area maintenance charges
            under the Ground Leases.  The provisions of this Section 5.1.5 shall
            survive the Closing and shall apply during the Proration Period.

      5.1.7 Purchaser shall pay all premiums,  charges and costs associated with
            the Title  Commitment and the Survey.  In the event Purchaser elects
            to have a Standard  Owner's  Policy  Title Policy (1992 ALTA Form B)
            issued for the  Property in an amount  equal to the  Purchase  Price
            ("Title Policy"), then Seller shall pay at Closing one-half (1/2) of
            the cost of the Title Policy and Purchaser  shall pay the balance of
            the cost of the  Title  Policy,  including  the  costs  of  extended
            coverage, endorsements or affirmative insurance.

      5.1.8 Purchaser  and Seller  shall  split the  escrow  fee  charged by the
            Escrow Agent  incidental  to the Closing,  but  otherwise  Purchaser
            shall pay all recording fees, stamp taxes,  deed taxes,  intangibles
            taxes,  documentary fees and other  assessments,  if any,  attendant
            upon the transfer of the  Property,  including  any fees  associated
            with closing services described in Section 5.1.1.

5.2   Items To Be Delivered Prior To Or At Closing.

      5.2.1 Seller.  At Closing, Seller shall deliver to Purchaser, each of the
            following items, as applicable:

            5.2.1.1  Limited  warranty  deed,  with  assignment of Ground Leases
                     (the "Limited  Warranty Deed" or "Deed" or "deed"),  in the
                     form  attached  as  Exhibit   5.2.1.1  to  Purchaser.   The
                     acceptance  of the deed at  Closing  shall be  deemed to be
                     full  performance of, and discharge of, every agreement and
                     obligation  on  Seller's  part to be  performed  under this
                     Purchase  Contract,  except  for those  that this  Purchase
                     Contract specifically provides shall survive Closing.

            5.2.1.2  A Bill of Sale in the form  attached  as  Exhibit  5.2.1.2,
                     covering  Fixtures and Tangible  Personal Property required
                     to  be  transferred  to  Purchaser  with  respect  to  such
                     Property.  Purchaser  shall  countersign  the same so as to
                     effect an assumption by Purchaser of liability therefor.

            5.2.1.3  An Assignment (to the extent  assignable  without  required
                     consents) without recourse or warranty in the form attached
                     as Exhibit 5.2.1.3,  of Seller's right, title and interest,
                     if  any,  in  and  to  the  Permits  (other  than  Excluded
                     Permits),  the  Miscellaneous  Property Assets the Property
                     Contracts  (except  those  excluded  as listed  on  Exhibit
                     5.2.4)  and the  Commercial  Leases,  Permits  (other  than
                     Excluded Permits).  Purchaser shall countersign the same so
                     as to effect an  assumption  by  Purchaser  of  obligations
                     thereunder and liability therefor.

            5.2.1.4  A closing statement executed by Seller.

            5.2.1.5  A vendor's affidavit or at Seller's option an indemnity, as
                     applicable,  in the customary form reasonably acceptable to
                     Seller to enable  Title  Insurer  to  delete  the  standard
                     exceptions for mechanic liens relating to work performed by
                     or on behalf of Seller  prior to Closing  and for rights of
                     parties in  possession,  other  than  under the  Commercial
                     Leases and the Property Contracts (except those excluded as
                     listed on Exhibit 4.1.4); provided that such affidavit does
                     not subject Seller to any greater liability,  or impose any
                     additional  obligations,  other  than as set  forth in this
                     Purchase Contract.

            5.2.1.6  A certification of Seller's  non-foreign status pursuant to
                     Section  1445 of the  Internal  Revenue  Code of  1986,  as
                     amended, in the form attached as Exhibit 5.2.1.6.

            5.2.1.7  Tenant Estoppel  Certificates,  in  substantially  the form
                     attached as Exhibit 5.2.1.7,  from (i) seventy-five percent
                     (75%) of the total number of Tenants  under the  Commercial
                     Leases,  and (ii) all Tenants under the  Commercial  Leases
                     leasing five thousand (5,000) square feet of space or more,
                     such  certificates  to be dated no earlier than thirty (30)
                     days prior to the Effective Date; provided,  however,  that
                     in the  event  that  Seller  fails  to  obtain  any  Tenant
                     Estoppel  Certificates as provided herein,  in lieu thereof
                     Seller  shall  deliver to Purchaser at Closing an affidavit
                     in substantially  the form of Exhibit  5.2.1.7,  certifying
                     the  accuracy of the  information  contained in such Tenant
                     Estoppel  Certificates  not  received  from  Tenants of the
                     Property.

            5.2.1.8  The Commercial Leases of the Property.

            5.2.1.9  The Property Contracts  (excepting those excluded as listed
                     on Exhibit 4.1.4) pertaining to the Property.

            5.2.1.10 A certificate  of Seller  certifying the accuracy of a rent
                     roll updating the  information  set forth on Exhibit 1.1.4,
                     further  certifying  that the  Commercial  Leases and those
                     Property  Contracts  delivered  to Purchaser at Closing are
                     true and complete,  and further  certifying that there have
                     been no  material  and  adverse  changes to the  Commercial
                     Leases or those Property  Contracts  delivered to Purchaser
                     at Closing since the  Effective  Date,  either  voluntarily
                     made or expressly  consented to by Seller,  unless with the
                     written consent of Purchaser (excluding,  in any event, the
                     exercise  of  any  rights  pursuant  to  the  terms  of the
                     Commercial Leases or those Property  Contracts,  including,
                     without limitation, rights of termination, extension, etc.,
                     which shall be permissible  without the written  consent of
                     Purchaser).

            5.2.1.11 Evidence of termination of the Management Contract.

            5.2.1.12 Such other instruments,  documents or certificates, if any,
                     as are  required to be  delivered by Seller to Purchaser in
                     accordance  with  any  other  provision  of  this  Purchase
                     Contract.

5.2.2    Purchaser.  At Closing, Purchaser shall deliver to Seller the following
         items:

            5.2.2.1  The full  Purchase  Price as  required  by ARTICLE 3 hereof
                     plus or minus the  adjustments  or  prorations  required by
                     this Purchase  Contract.  If at Closing there are any liens
                     or encumbrances on the Property that Seller is obligated or
                     elects to pay and discharge,  Seller may use any portion of
                     the Purchase Price for the  Property(s) to satisfy the same
                     out of the escrow at Closing,  provided  that Seller  shall
                     have   delivered  such   instruments  in  recordable   form
                     sufficient to satisfy such liens and encumbrances of record
                     (or,  as to any  mortgages  or deeds of trust,  appropriate
                     payoff  letters  as  shall be  sufficient  to  satisfy  the
                     reasonable  requirements  of the Title Insurer for deletion
                     or affirmative  insurance over the same in connection  with
                     the   issuance   of  any  policy   pursuant  to  the  Title
                     Commitment),  together with the cost of recording or filing
                     such  instruments.  The  existence  of any  such  liens  or
                     encumbrances  shall  not be deemed  objections  to title if
                     Seller shall comply with the foregoing requirements.

            5.2.2.2  A closing statement executed by Purchaser.

            5.2.2.3  A countersigned counterpart of the Bill of Sale in the form
                     attached as Exhibit 5.2.1.2.

            5.2.2.4  A countersigned counterpart of the Assignment in the form
                     attached as Exhibit 5.2.1.3.

            5.2.2.5  A countersigned  counterpart of the limited  warranty deed,
                     with  assignment of ground leases,  in the form attached as
                     Exhibit 5.2.1.1.

            5.2.2.6  Such other  instruments,  documents or  certificates as are
                     required  to  be   delivered  by  Purchaser  to  Seller  in
                     accordance  with  any  of  the  other  provisions  of  this
                     Purchase Contract.

                                    ARTICLE 6

         REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AND PURCHASER

6.1   Representations And Warranties Of Seller.

      6.1.1 For the purpose of inducing  Purchaser  to enter into this  Purchase
            Contract and to consummate  the sale and purchase of the Property in
            accordance herewith, Seller represents and warrants to Purchaser the
            following,  subject (as  appropriate) to the conditions set forth in
            Section 8.2, as of the Effective Date:

            6.1.1.1  Seller is lawfully and duly organized, and in good standing
                     under the laws of the state of its  formation  set forth in
                     the initial  paragraph of this Purchase  Contract;  and has
                     the power and authority to sell and convey the Property and
                     will be empowered  and  authorized to execute the documents
                     to be executed  by Seller at  Closing,  and has taken as of
                     the Effective  Date or will have taken by the Closing Date,
                     as   applicable,   all  corporate,   partnership,   limited
                     liability company or equivalent entity actions required for
                     the execution and delivery of this Purchase  Contract,  and
                     the consummation of the  transactions  contemplated by this
                     Purchase  Contract.  The compliance  with or fulfillment of
                     the terms and conditions  hereof will not conflict with, or
                     result in a breach of, the terms,  conditions or provisions
                     of, or constitute a default under, any Purchase Contract to
                     which  Seller is a party or by which  Seller  is  otherwise
                     bound.  Seller has not made any other Purchase Contract for
                     the sale  of,  or  given  any  other  person  the  right to
                     purchase, all or any part of any of the Property;

            6.1.1.2  Seller  owns  insurable  fee  or  leasehold  title  to  the
                     Property,  including  all real property  contained  therein
                     required  to be  sold  to  Purchaser,  subject  only to the
                     Permitted Exceptions;

            6.1.1.3  There are no adverse or other  parties in possession of the
                     Property,  except for  occupants,  guests and tenants under
                     the  Commercial  Leases  and  the  Property   Contracts  or
                     otherwise as set forth in Exhibit 6.1.1.3;

            6.1.1.4  Other than any consents,  waivers and/or releases which may
                     be  required  in  connection  with the Ground  Leases,  the
                     joinder  of no  person  or  entity  other  than  Seller  is
                     necessary to convey the Property  fully and  completely  to
                     Purchaser at Closing,  or to fulfill Seller's  obligations,
                     and Seller has all necessary  right and authority to convey
                     and assign to Purchaser all contract  rights and warranties
                     required  to  be  conveyed   and   assigned  to   Purchaser
                     hereunder;

            6.1.1.5  Purchaser  has no duty to  collect  withholding  taxes  for
                     Seller pursuant to the Foreign  Investors Real Property Tax
                     Act of 1980, as amended;

            6.1.1.6  To Seller's knowledge,  there are no actions,  proceedings,
                     litigation or governmental  investigations  or condemnation
                     actions either  pending or threatened  against the Property
                     or against  Seller which will, if  successful,  result in a
                     lien against the Property, as applicable;

            6.1.1.7  To  Seller's  knowledge,  there  are no  claims  for  labor
                     performed,  materials  furnished  or  services  rendered in
                     connection with constructing, improving or repairing any of
                     the  Property,  as  applicable,  caused by Seller and which
                     remain unpaid beyond the date for which payment was due and
                     in respect of which liens may or could be filed against any
                     of the Property, as applicable;

            6.1.1.8  To Seller's knowledge,  the copies of the Commercial Leases
                     delivered to Purchaser on or about the  Effective  Date are
                     correct  and  complete  copies   thereof,   and  except  as
                     expressly  provided in such  Commercial  Leases or noted on
                     Exhibit  1.1.4,  no such tenants are entitled to any unpaid
                     allowances  for  repairs or  improvements  and there are no
                     leasing commissions accrued or unpaid.

            6.1.1.9  Seller has not dealt with any  broker,  finder or any other
                     person,  in connection  with the sale of or the negotiation
                     of the sale of the  Property  that  might  give rise to any
                     claim for  commission  against  Purchaser  or lien or claim
                     against  the  Property,  except  Broker  (as  such  term is
                     defined in Section 8.1).

            6.1.1.10 To Seller's knowledge,  Seller has not received from any
                    governmental   body  having  authority  any  written  order,
                    citation  or  notice  with  regard to air  emissions,  water
                    discharges,  noise  emissions  or Hazardous  Substances  (as
                    hereinafter defined). For purposes of this Section 6.1.1.10,
                    "Hazardous  ----------------  Substances"  shall mean "toxic
                    substances,"    "toxic   materials,"    "hazardous   waste,"
                    "hazardous  substances,"  "pollutants," or "contaminants" as
                    those terms are defined in the  Resource,  Conservation  and
                    Recovery  Act of 1976,  as amended  (42  U.S.C.ss.  6901 et.
                    seq.),  the  Comprehensive  Environmental  Response  --  ---
                    Compensation  and  Liability  Act of 1980,  as  amended  (42
                    U.S.C.   ss.  9601  et.  seq.),   the  Hazardous   Materials
                    Transportation  Act, -- --- as amended (49 U.S.C.ss.1801 et.
                    seq.),  the Toxic  Substances -- --- Control Act of 1976, as
                    amended (15  U.S.C.ss.2601  et. seq.),  -- --- the Clean Air
                    Act, as amended (42  U.S.C.ss.1251  et. seq.) and -- --- any
                    other federal, state or local law, statute, ordinance, rule,
                    regulation  or  code  relating  to  health,  safety  or  the
                    environment; asbestos or asbestos-containing materials; lead
                    or  lead-containing   materials;   oils;   petroleum-derived
                    compounds; pesticides; or polychlorinated biphenyls.

            6.1.1.11 To  Seller's  knowledge,  Seller  has  received  no written
                     notice  of  a  violation  of  (or  outstanding   obligation
                     pertaining  to)  any  zoning,   building,   health,   fire,
                     environmental, safety or similar law or ordinance, order or
                     regulation, or of any certificate of occupancy issued or to
                     be issued for the Property,  or written notice of violation
                     of  any  rights,   ordinances,   orders,   regulations   or
                     requirements affecting any portion of the Property.

      6.1.2 Except for the  representations  and warranties  expressly set forth
            above in Section 6.1.1 or in the instruments  delivered by Seller at
            Closing  pursuant  to  Section  5.2.1,  the  Property  is  expressly
            purchased  and sold "AS IS," "WHERE IS," and "WITH ALL  FAULTS." The
            Purchase Price and the terms and conditions set forth herein are the
            result of arm's-length  bargaining  between  entities  familiar with
            transactions  of this kind,  and said  price,  terms and  conditions
            reflect  the fact that  Purchaser  shall have the benefit of, and is
            relying upon, no  information  provided by Seller and no statements,
            representations  or  warranties,  express  or  implied,  made  by or
            enforceable directly against Seller, including,  without limitation,
            any  relating  to  the  value  of  the  Property,  the  physical  or
            environmental  condition of the  Property,  the  suitability  of the
            Property,  compliance or lack of compliance of the Property with any
            federal,  state, county or local law, ordinance,  order,  permit, or
            regulation,  or any other  attribute or matter of or relating to the
            Property  (other than any covenants of title  contained in the deeds
            conveying  the Property and the  representations  set forth  above).
            Purchaser  represents  and warrants  that as of the Closing Date, it
            shall  have  reviewed  and  conducted  such  independent   analyses,
            studies,  reports,  investigations  and  inspections  as  they  deem
            appropriate in connection  with the Property.  If Seller provides or
            has provided any documents, opinions or work product of consultants,
            surveyors,  architects,  engineers,  title  companies,  governmental
            authorities  or any  other  person  or entity  with  respect  to the
            Property,  Purchaser  and Seller  agree  that  Seller has done so or
            shall  do so only for the  convenience  of both  parties,  Purchaser
            shall not rely thereon and the  reliance by Purchaser  upon any such
            documents, opinions or work product shall not create or give rise to
            any liability of or against Seller,  Seller's partners or affiliates
            or  any  of  their   respective   partners,   officers,   directors,
            participants,   employees,   contractors,   attorneys,  consultants,
            representatives,       agents,      successors,      assigns      or
            predecessors-in-interest.  Except for the specific warranty of title
            set forth in the deed  delivered  at  Closing  pursuant  to  Section
            5.2.1.1, Purchaser shall rely only upon any title insurance obtained
            by Purchaser  with respect to title to the Property.  Except for the
            specific  representations  and  warranties  expressly  set  forth in
            Section 6.1.1 or in the  instruments  delivered by Seller at Closing
            pursuant to Section 5.2.1, Purchaser acknowledges and agrees that no
            representation  has been made and no  responsibility  is  assumed by
            Seller  with  respect to current  and  future  applicable  zoning or
            building code  requirements  or the  compliance of the Property with
            any other laws,  rules,  ordinances  or  regulations,  the financial
            earning   capacity  or  expense   history  of  the   Property,   the
            continuation  of  contracts,   continued  occupancy  levels  of  the
            Property, or any part thereof, or the continued occupancy by tenants
            of any Commercial  Leases or, without limiting any of the foregoing,
            occupancy at Closing. Prior to Closing, Seller shall have the right,
            but not the  obligation,  to enforce its rights  against any and all
            Property  occupants,  guests or tenants.  Purchaser  agrees that the
            departure,  prior to Closing,  of any of such  guests,  occupants or
            tenants  shall not be the basis for,  nor shall it give rise to, any
            claim on the part of Purchaser,  nor shall it affect the obligations
            of Purchaser under this Purchase Contract in any manner  whatsoever;
            and Purchaser shall close title and accept delivery of the deed with
            or without such tenants in  possession  and without any allowance or
            reduction  in the  Purchase  Price  under  this  Purchase  Contract.
            Purchaser  hereby  releases  Seller  from  any  and all  claims  and
            liabilities relating to the foregoing matters, except as provided in
            Section 6.1.3 below.

      6.1.3 Seller and Purchaser agree that those  representations  contained in
            Section  6.1.1  shall  survive  Closing for a period of One (1) year
            (that is, any  proceeding  based on the  breach of a  representation
            contained in Section 6.1.1 that  survives  Closing must be commenced
            within One (1) year subsequent to the date of such  representation),
            except  for  the  representations  contained  in  Sections  6.1.1.2,
            6.1.1.3,  6.1.1.7 and  6.1.1.8,  which shall not survive the Closing
            but shall be merged  into the deed,  the  assignment,  the  vendor's
            affidavit or  indemnity,  and the Tenant  Estoppel  Certificates  or
            affidavit   delivered  at  Closing  pursuant  to  Sections  5.2.1.1,
            5.2.1.3, 5.2.1.5, and 5.2.1.7. In the event that Seller breaches any
            representation   contained  in  Section   6.1.1  and  Purchaser  has
            knowledge of such breach, however, Purchaser shall be deemed to have
            waived any right of recovery and Seller shall not have any liability
            in connection therewith.

      6.1.4 Any statement  contained in the  representations  and  warranties in
            this  Section 6.1 and made to the  "knowledge"  of Seller shall mean
            ONLY the  actual  knowledge  of Seller  based  upon the  information
            communicated to Seller by a representative of the management company
            managing the Property as of the date of this Purchase Contract, in a
            certification  addressed to Purchaser and Seller and dated as of the
            Effective  Date, a copy of which has been  furnished to Purchaser on
            or prior to the Effective  Date;  and otherwise any reference to the
            "knowledge"  of  Seller  shall  not be  deemed  to imply any duty of
            investigation  or inquiry by Seller,  and shall not be  construed to
            include the  knowledge of any member,  partner,  officer,  director,
            agent,  employee or representative of the Seller or any affiliate of
            the  Seller,  imputed  to Seller  or  constructively  attributed  to
            Seller.

      6.1.5 Covenants of Seller

               6.1.5.1  Seller  shall not,  without  the  consent  of  Purchaser
                        (which consent will not be unreasonably withheld), enter
                        into any new  commercial  leases or  property  contracts
                        affecting  the  Property,   or  terminate  or  agree  to
                        terminate any  Commercial  Leases.  For purposes of this
                        Section  6.1.5.1,  Purchaser's  failure  to  respond  to
                        Seller's  written  request for  consent  within five (5)
                        business days shall be deemed consent on the part of the
                        Purchaser.  All new leases or contracts  entered into in
                        accordance  with the provisions of this Section  6.1.5.1
                        shall  be  deemed  "Commercial   Leases"  and  "Property
                        Contracts",  respectively,  as  defined  herein.  Seller
                        shall provide  Purchaser  with copies of any  Commercial
                        Leases and Property  Contracts  entered into or modified
                        after the Effective Date.

6.2   Representations And Warranties Of Purchaser

      6.2.1 For the  purpose  of  inducing  Seller to enter  into this  Purchase
            Contract and to consummate  the sale and purchase of the Property in
            accordance herewith, Purchaser represents and warrants to Seller the
            following as of the Effective Date and as of the Closing Date:

      6.2.2 With respect to Purchaser and its business, Purchaser represents and
            warrants, in particular, that:

            6.2.2.1  Atlanta Crossing L.L.C. is a limited liability company,
                     validly existing and in good standing under the laws of the
                     State of Alabama.

            6.2.2.2  Purchaser,  acting  through any of its duly  empowered  and
                     authorized officers, partners, managers or members, has all
                     necessary power and authority to own and use its properties
                     and to transact  the  business in which it is engaged,  and
                     has full power and  authority  to enter into this  Purchase
                     Contract and will be empowered and  authorized,  to execute
                     and  deliver  the  documents  and  instruments  required of
                     Purchaser herein, and to perform its obligations hereunder;
                     and no consent of any other  party or person is required to
                     so empower or authorize Purchaser.

            6.2.2.3  No pending or, to the  knowledge of  Purchaser,  threatened
                     litigation  exists  which  if  determined  adversely  would
                     restrain the consummation of the transactions  contemplated
                     by this Purchase Contract or would declare illegal, invalid
                     or non-binding any of Purchaser's  obligations or covenants
                     to Seller.

            6.2.2.4  Purchaser is duly authorized to execute and deliver, acting
                     through  its  duly  empowered  and   authorized   officers,
                     managers, partners and members,  respectively,  and perform
                     this Purchase  Contract and all  documents and  instruments
                     and transactions  contemplated hereby or incidental hereto,
                     and such  execution,  delivery and performance by Purchaser
                     do not (i) violate any of the  provisions of its respective
                     certificates   of   incorporation,    bylaws,   partnership
                     agreements  or articles of  association,  (ii)  violate any
                     provision  of any  law,  governmental  rule  or  regulation
                     currently in effect,  (iii) violate any  judgment,  decree,
                     writ, injunction,  award,  determination or order currently
                     in effect that name or is  specifically  directed at one or
                     both  Purchaser  or its  property,  and  (iv)  require  the
                     consent, approval, order or authorization of, or any filing
                     with  or  notice  to,  any  court  or  other   governmental
                     authority.

            6.2.2.5  The joinder of no person or entity other than  Purchaser is
                     necessary to consummate the transactions to be performed by
                     Purchaser  and  Purchaser  has  all  necessary   right  and
                     authority   to  perform  such  acts  as  are  required  and
                     contemplated by this Purchase Contract.

      6.2.3 Purchaser has not dealt with any broker, finder or any other person,
            in  connection  with  the  purchase  of or  the  negotiation  of the
            purchase  of the  Property  that  might  give  rise to any claim for
            commission  against  Seller or lien or claim  against the  Property,
            except Broker (as such term is defined in Section 8.1).

                                    ARTICLE 7

                         CONDITIONS PRECEDENT TO CLOSING

7.1   Purchaser's  obligation  to close under this Purchase  Contract,  shall be
      subject to and  conditioned  upon the  fulfillment  of each and all of the
      following conditions precedent:

      7.1.1 All of the documents required to be delivered by Seller to Purchaser
            at Closing  pursuant to the terms and  conditions  hereof shall have
            been  delivered  and  shall  be in  form  and  substance  reasonably
            satisfactory to Purchaser;

     7.1.2Each of the  representations and warranties of Seller contained herein
          shall be true in all material respects as of the Closing Date;

      7.1.3 Seller shall have  complied  with,  fulfilled  and  performed in all
            material respects each of the covenants,  terms and conditions to be
            complied with, fulfilled or performed by Seller hereunder;

      7.1.4 Purchaser  shall have  received,  within seven (7) days prior to the
            Closing  Date,   pursuant  to  Section   5.2.1.7,   Tenant  Estoppel
            Certificates in substantially  the form set forth in Exhibit 5.2.1.7
            (subject to  modifications  included by the Tenants or modifications
            consistent  with the  requirements  of the  Commercial  Leases) from
            Tenants of the  Property,  or in lieu  thereof  with  respect to any
            Tenant  for  which a Tenant  Estoppel  Certificate  shall  not be so
            delivered,  the affidavit of Seller described in Section 5.2.1.7, to
            be delivered on the Closing Date.

      7.1.5 Seller  shall have  obtained  any  necessary  consents or  approvals
            required under the Ground Leases to convey the Property.

      7.1.6 Notwithstanding  anything  to  the  contrary,  there  are  no  other
            conditions  on  Purchaser's  obligation to Close except as expressly
            set forth in this Purchase Contract.

7.2   Without  limiting  any of the rights of Seller  elsewhere  provided for in
      this  Purchase  Contract,  Seller's  obligation  to close with  respect to
      conveyance of the Property  under this Purchase  Contract shall be subject
      to and  conditioned  upon the fulfillment of each and all of the following
      conditions precedent:

      7.2.1 Purchaser's   representations  and  warranties  set  forth  in  this
            Purchase  Contract  shall have been true and correct in all material
            respects  when made,  and shall be true and correct in all  material
            respects as of the Closing Date as though such  representations  and
            warranties were made at and as of such date and time.

      7.2.2 Purchaser   shall  have  fully   performed  and  complied  with  all
            covenants,  conditions,  and  other  obligations  in  this  Purchase
            Contract to be  performed  or  complied  with by them at or prior to
            Closing  including,  without  limitation,  payment  in  full  of the
            Purchase Price.

      7.2.4 Purchaser shall have produced  evidence  reasonably  satisfactory to
            Seller  of  Purchaser's   compliance  with   Hart-Scott-Rodino   Act
            requirements or of the non-applicability thereof to the transactions
            contemplated by this Purchase Contract.

      7.2.4 Seller  shall have  obtained  any  necessary  consents or  approvals
            required under the Ground Leases to convey the Property.

      7.2.5 Prior to the Closing Date, Seller shall have obtained, at no cost to
            or obligation of the parties,  from the lessee (or its successors or
            assigns),   under  the  Lease   Agreement   between  East   Commerce
            Development Company, Lessor, and Union Bank & Trust Company, Lessee,
            dated  January  4,  1977,  recorded  in the  Office  of the Judge of
            Probate of  Montgomery  County,  Alabama in Real  Property Book 356,
            Page 865, a written waiver and/or release of any purchase  option or
            right of first refusal of such lessee affecting the Property.

      7.2.6 Prior to the Closing Date, Seller shall have obtained, at no cost to
            or  obligations  of the parties,  the waiver  and/or  release of any
            other option to purchase or right of first refusal granted under any
            Commercial Lease. It is expressed understood by the parties that the
            rights of Purchaser to purchase the Property and any  obligations of
            Seller to sell the Property are subject to the waiver and/or release
            of any and all prior and paramount  rights and  interests  under the
            Commercial Lease.

                                    ARTICLE 8

                                    BROKERAGE

8.1   Seller  represents  and  warrants  to  Purchaser  that it has  dealt  only
      Pinnacle  Realty  ("Broker")  in connection  with this Purchase  Contract.
      Seller and  Purchaser  each  represent and warrant to the other that other
      than Pinnacle Realty, they have not dealt with or utilized the services of
      any other real estate  broker,  sales person or finder in connection  with
      this Purchase Contract, and each party agrees to indemnify the other party
      from and against all claims for  brokerage  commissions  and finder's fees
      arising from or attributable to the acts of omissions of the  indemnifying
      party.

8.2   Seller  agrees  to pay  Broker a  commission  according  to the terms of a
      separate  agreement.  Broker  shall not be  deemed a party or third  party
      beneficiary of this Purchase Contract.

8.3   Broker  assumes no  responsibility  for the  condition  of the Property or
      representation  for the performance of this Purchase Contract by Seller or
      Purchaser.

                                   ARTICLE 9

                                   POSSESSION

9.1  Possession of the Property,  subject to the Permitted  Exceptions shall be
      delivered to Purchaser at the Closing.

                                   ARTICLE 10

                              DEFAULTS AND REMEDIES

10.1  In the event Purchaser  terminates  this Purchase  Contract for any reason
      other than failure of an express  condition to Purchaser'  obligations  to
      close  herein or Seller's  inability  to convey  title as required by this
      Purchase Contract,  or in the event Purchaser otherwise defaults hereunder
      prior to the Closing Date, and  consummation of the Closing does not occur
      by  reason  of such  termination  or  default  by  Purchaser,  Seller  and
      Purchaser  agree that it would be impractical  and extremely  difficult to
      estimate  the  damages  which  Seller may  suffer.  Therefore,  Seller and
      Purchaser  hereby  agree that,  the  reasonable  estimate of the total net
      detriment that Seller would suffer in the event that Purchaser  terminates
      this Purchase Contract or defaults  hereunder prior to the Closing Date is
      and shall be, as Seller's sole remedy  (whether at law or in equity),  the
      right to receive  from the Escrow  Agent and retain the full amount of the
      Deposit. The payment and performance of the above as liquidated damages is
      not intended as a forfeiture  or penalty  within the meaning of applicable
      law and is intended to settle all issues and questions about the amount of
      damages  suffered by Seller in the applicable  event,  irrespective of the
      time when the inquiry  about such  damages  may take place.  Upon any such
      failure  by  Purchaser   hereunder,   this  Purchase   Contract  shall  be
      terminated,  and  neither  the  Seller  nor the  Purchaser  shall have any
      further  rights or  obligations  hereunder  to each other and Seller shall
      have the right to collect the Deposit.

10.2  Provided that Purchaser has not terminated  this Purchase  Contract and is
      not  otherwise  in default  hereunder,  if the Closing does not occur as a
      result of Seller's default hereunder,  Purchaser's sole remedy shall be to
      elect to terminate this Purchase Contract and receive reimbursement of the
      Deposit (or so much  thereof as has been  received by Escrow  Agent) or to
      enforce  specific  performance  of  this  Purchase  Contract  (along  with
      recovery,  by the  prevailing  party,  of its  attorneys'  fees and  court
      costs).

                                   ARTICLE 11

                            RISK OF LOSS OR CASUALTY

11.1  The risk of loss or damage to the Property by fire or other casualty until
      the  date  of  Closing  is  assumed  by  Seller,  provided  that  Seller's
      responsibility  shall be only to the extent of any recovery from insurance
      now carried on the Property. If any of the Improvements shall be destroyed
      or  damaged  prior to the  Closing,  and the  estimated  cost of repair or
      replacement (as reasonably estimated by an independent contractor selected
      by Seller)  exceeds Three Hundred and Thirty  Thousand and No/100  Dollars
      ($330,000.00),  Purchaser  may, by Notice given to Seller  within five (5)
      days after  receipt of Notice from  Seller of such damage or  destruction,
      elect to  terminate  this  Purchase  Contract,  in which event the Deposit
      shall  immediately  be returned by Escrow Agent to Purchaser and except as
      expressly  provided  herein,   the  rights,   duties,   obligations,   and
      liabilities of the parties hereunder shall immediately terminate and be of
      no further force or effect.  If Purchaser does not elect to terminate this
      Purchase  Contract  pursuant  to this  Section  11.1,  or have no right to
      terminate this Purchase  Contract (because the estimated cost of repairing
      or replacing the damage or destruction does not exceed  $330,000.00),  and
      the sale of the Property is  consummated,  Purchaser  shall be entitled to
      receive all insurance proceeds paid or payable to Seller by reason of such
      destruction or damage under the insurance policies carried by Seller (less
      amounts  of  insurance  theretofore  received  and  applied  by  Seller to
      restoration);  provided that in the event the insurance proceeds,  if any,
      shall be  insufficient  to  defray  the  estimated  cost of  repairing  or
      replacing the damage or destruction,  then the amount of the insufficiency
      may be claimed by Purchaser, by Notice of such claim given to Seller prior
      to Closing,  as an additional  adjustment  at Closing  pursuant to Section
      5.1.3 above,  unless  Seller  elects,  at its sole option,  by so advising
      Purchaser  in  writing  at or  prior to the  Closing,  to  terminate  this
      Purchase  Contract,  in which  event  the  Deposit  shall be  returned  to
      Purchaser and except as expressly  provided  herein,  the rights,  duties,
      obligations  and liabilities of the parties  hereunder  shall  immediately
      terminate  and be of no further  force and  effect.  If the amount of said
      casualty  proceeds  is not settled by the date of  Closing,  Seller  shall
      execute at Closing  all proofs of loss,  assignments  of claim,  and other
      similar instruments to ensure that Purchaser shall receive all of Seller's
      right,  title, and interest in and under said insurance  proceeds.  Seller
      shall not, in any event,  be obligated to effect any repair,  replacement,
      and/or  restoration,  but may do so at its option in which case Seller may
      apply the insurance proceeds to the costs of restoration.

                                   ARTICLE 12

                                  RATIFICATION

12.1  This Purchase  Contract  shall be null and void unless signed by Purchaser
      on or before  October 19, 1999 and accepted by Seller on or before October
      26, 1999.

                                   ARTICLE 13

                                 EMINENT DOMAIN

13.1  In the event that at the time of Closing  all or any part of the  Property
      is (or has previously  been)  acquired,  by authority of any  governmental
      agency in  purchase  in lieu  thereof  (or in the event  that at such time
      there  are any  pending  proceedings  for  such  acquisition  by any  such
      governmental  agency),  Purchaser  shall  have the right,  at  Purchaser's
      option,  to terminate  this  Purchase  Contract by giving  written  Notice
      within Five (5) days after the  Purchaser  are  notified in writing of the
      occurrence of such event and recover the Deposit  hereunder,  or to settle
      in  accordance  with the  terms  of this  Purchase  Contract  for the full
      Purchase Price and receive the full benefit or any condemnation  award. It
      is expressly  agreed between the parties hereto that this paragraph  shall
      in no way apply to customary  dedications for public purposes which may be
      necessary for the development of the Property.

                                   ARTICLE 14

                                  MISCELLANEOUS

14.1  Exhibits And Schedules

            All  Exhibits  and  Schedules  annexed  hereto  are a part  of  this
            Purchase Contract for all purposes.

14.2  Assignability

            This Purchase  Contract and the interests of Purchaser  herein shall
            not be assignable without first obtaining the prior written approval
            of  Seller,  except  that  Purchaser  shall  be  permitted,  without
            Seller's consent but upon prior written notice to Seller,  to assign
            its  interests  hereunder  to an  entity  owned  and  controlled  by
            Purchaser,  or under common  ownership  and control with  Purchaser,
            provided  that  Purchaser  delivers  to  Seller a copy of a  written
            assumption  in favor of Seller,  under  which  named  Purchaser  and
            assignee shall both agree to be jointly and severally liable for all
            duties and obligations of "Purchaser" under this Purchase Contract.

14.3  Binding Effect

            This  Purchase  Contract  shall be  binding  upon  and  inure to the
            benefit  of Seller and  Purchaser,  and its  respective  successors,
            heirs and permitted assigns.

14.4  Captions

            The  captions,  headings,  and  arrangements  used in this  Purchase
            Contract  are for  convenience  only  and do not in any way  affect,
            limit, amplify, or modify the terms and provisions hereof.

14.5  Number And Gender Of Words

            Whenever  herein the singular number is used, the same shall include
            the plural where appropriate,  and words of any gender shall include
            each other gender where appropriate.

14.6  Notices

            All notices,  demands,  requests and other  communications  required
            pursuant to the  provisions  of this  Purchase  Contract  ("Notice")
            shall be in writing and shall be deemed to have been properly  given
            or served for all purposes  (i) if sent by Federal  Express or other
            nationally  recognized  overnight  carrier  for  next  business  day
            delivery, on the first business day following deposit of such Notice
            with such carrier,  or (ii) if personally  delivered,  on the actual
            date of delivery, or (iii) if sent by certified mail, return receipt
            requested postage prepaid, on the fifth (5th) business day following
            the date of mailing addressed as follows:

       If to Seller:                        If to Purchaser:

      Angeles Income Properties, Ltd. II    Atlanta Crossing L.L.C.
      c/o AIMCO                             2828 W. Edgemont Avenue (36108)
      1873 South Bellaire Street            P.O. Box 1148
      Suite 1700                            Montgomery, Alabama  36101-1148
      Denver, Colorado  80222               Attention: Duncan Liles
      Attention: Harry Alcock

      and                                   with a copy to:

      David Marquette                       Jesse Williams, Esq.
      Argent Real Estate                    Rushton, Stakely, Johnston &
      1401 Brickell Avenue, Suite 520       Garrett, P.A.
      Miami, Florida  33131                 184 Commerce Street
                                            Montgomery, Alabama  36104
      with copies to:

      Richard A. Cohn, Esq.
      Bryan Cave LLP
      700 Thirteenth Street, N.W.
      Washington, D.C.  20005-3960

            and

      David M. Unseth, Esq.
      Bryan Cave LLP
      One Metropolitan Sq.
      Suite 3600
      St. Louis, Missouri  63102-2750

      Any of the parties may  designate a change of address by Notice in writing
      to the other  parties.  Whenever in this  Purchase  Contract the giving of
      Notice by mail or otherwise is required,  the giving of such Notice may be
      waived in  writing  by the person or  persons  entitled  to  receive  such
      Notice.

14.7  Governing Law And Venue

            The  laws  of the  State  of  Alabama  shall  govern  the  validity,
            construction,  enforcement,  and  interpretation  of  this  Purchase
            Contract,  unless otherwise specified herein except for the conflict
            of laws provisions thereof.  All claims,  disputes and other matters
            in question arising out of or relating to this Purchase Contract, or
            the breach thereof,  shall be decided by proceedings  instituted and
            litigated in the United  States  District  Court for the district in
            which the Property is  situated,  and the parties  hereto  expressly
            consent to the venue and jurisdiction of such court.

14.8  Entirety And Amendments

            This Purchase  Contract  embodies the entire  agreement  between the
            parties  relating to the subject  matter hereof and  supersedes  all
            prior purchase contracts and understandings, if any, relating to the
            Property,  and may be amended or supplemented  only by an instrument
            in writing executed by all parties.

14.9  Severability

            If any of the  provisions  of this  Purchase  Contract is held to be
            illegal,  invalid,  or  unenforceable  under present or future laws,
            such provision shall be fully severable. The Purchase Contract shall
            be  construed  and  enforced  as  if  such  illegal,   invalid,   or
            unenforceable  provision had never comprised a part of this Purchase
            Contract;  and the remaining  provisions  of this Purchase  Contract
            shall  remain in full force and effect and shall not be  affected by
            the illegal, invalid, or unenforceable provision or by its severance
            from this Purchase Contract.

14.10 Multiple Counterparts

            This  Purchase  Contract  may  be  fully  executed  in a  number  of
            identical   counterparts.   If  so  fully  executed,  each  of  such
            counterparts  shall be deemed an original  for all  purposes and all
            such  counterparts  shall,  collectively,  constitute  one  Purchase
            Contract. In making proof of this Purchase Contract, it shall not be
            necessary to produce or account for more than one such counterparts.

14.11 Further Acts

            In addition to the acts and deeds  recited  herein and  contemplated
            and performed,  executed  and/or  delivered by Seller and Purchaser,
            Seller and Purchaser  agree to perform,  execute  and/or  deliver or
            cause to be performed,  executed  and/or  delivered any and all such
            further  acts,   deeds,  and  assurances  as  may  be  necessary  to
            consummate the transactions contemplated hereby.

14.12 Construction

            No provision of this Purchase  Contract  shall be construed in favor
            of, or against,  any particular  party by reason of any  presumption
            with  respect  to the  drafting  of  this  Purchase  Contract;  both
            parties, being represented by counsel,  having fully participated in
            the negotiation of this instrument.

14.13 Confidentiality

            Purchaser  shall not disclose the terms and conditions  contained in
            this Purchase Contract,  shall keep the same confidential,  provided
            that  Purchaser  may  disclose  the  terms  and  conditions  of this
            Purchase  Contract (i) as required by law,  (ii) to  consummate  the
            terms of this Purchase Contract,  or any financing relating thereto,
            or  (iii)  to  Purchaser's  or  Seller's   lenders,   attorneys  and
            accountants.  Any information  provided by Seller to Purchaser under
            the terms of this Purchase  Contract is for  informational  purposes
            only. In providing such  information  to Purchaser,  Seller makes no
            representation or warranty,  express,  written, oral, statutory,  or
            implied,  and all such  representations  and  warranties  are hereby
            expressly  excluded.  Purchaser  shall not in any way be entitled to
            rely upon the accuracy of such information. Such information is also
            confidential  and  Purchaser  shall be  prohibited  from making such
            information  public to any other  person  or entity  other  than its
            agents and legal  representatives,  without  Seller's  prior written
            authorization,  which may be  granted  or denied  in  Seller's  sole
            discretion.  If  this  Purchase  Contract  is  terminated  prior  to
            Closing,  Purchaser agrees to return to Seller within seven (7) days
            all  documents  produced to  Purchaser by Seller  pertaining  to the
            ownership  or  operation   of  the   Property   including,   without
            limitation,  the following:  (1) Property Contracts;  (2) Commercial
            Leases;  (3)  architectural  and engineering  plans; (4) reports and
            studies  relating to the  condition of the  Property;  (5) a list of
            Fixtures and Tangible Personal Property;  (6) tenant  correspondence
            files with respect to the Commercial  Leases; (7) service and repair
            requests  and work orders  relating to the  Property;  (8) a list of
            accounts receivable;  and (9) copies of governmental permits,  alarm
            registrations  and other  permits  and  licenses  necessary  for the
            operation of the Property.

14.14 Time Of The Essence

            It is  expressly  agreed by the  parties  hereto that time is of the
            essence with respect to this Purchase Contract.

14.15 Cumulative Remedies And Waiver

            Except as otherwise  provided herein,  no remedy herein conferred or
            reserved is intended to be exclusive of any other  available  remedy
            or remedies,  but each and every such remedy shall be cumulative and
            shall be in addition to every other remedy given under this Purchase
            Contract or now or hereafter  existing at law or in equity. No delay
            or  omission  to  exercise  any  right  or power  accruing  upon any
            default,  omission, or failure of performance hereunder shall impair
            any right or power or shall be construed to be a waiver thereof, but
            any such right and power may be  exercised  from time to time and as
            often as may be deemed expedient. No waiver, amendment,  release, or
            modification  of this  Purchase  Contract  shall be  established  by
            conduct, custom, or course of dealing.

14.16 Litigation Expenses

            In the event either party hereto  commences  litigation  against the
            other to enforce its rights hereunder,  the prevailing party in such
            litigation  shall be  entitled  to recover  from the other party its
            reasonable   attorneys'   fees  and  expenses   incidental  to  such
            litigation.

14.17 Time Periods

            Should  the last day of a time  period  fall on a  weekend  or legal
            holiday,  the next Business Day  thereafter  shall be considered the
            end of the time period.

14.18 Closing Costs

            Purchaser and Seller agree to each pay their own attorneys  fees and
            closing costs.

14.19 Exchange

            At Seller's sole cost and expense,  Seller may structure the sale of
            the  Property to Purchaser as a Like Kind  Exchange  under  Internal
            Revenue  Code  Section  1031  whereby  Seller will  acquire  certain
            property (the "Like Kind Exchange Property") in conjunction with the
            sale of the Property  (the "Like Kind  Exchange").  Purchaser  shall
            cooperate fully and promptly with Seller's  conduct of the Like Kind
            Exchange,  provided that all costs and expenses  associated with the
            Like Kind  Exchange  shall be borne solely by Seller,  and Purchaser
            shall not be required to take title to or contract  for the purchase
            of any other  property.  If Seller uses a qualified  intermediary to
            effectuate the exchange, any assignment of the rights or obligations
            of Seller hereunder shall not relieve,  release or absolve Seller of
            its obligations to Purchaser.  In no event shall the Closing Date be
            delayed by the Like Kind Exchange.  Seller shall  indemnify and hold
            harmless  Purchaser  from and against any and all cost or  liability
            arising from and out of the Like Kind Exchange.

14.20       Access to Property

            Purchaser  shall  have the right from time to time to enter onto the
            Property solely for the purpose of viewing the improvements  located
            on the Property incidental to planning for Purchaser's  occupancy of
            the  Property.  Purchaser  shall  give  Notice  to  Seller  five (5)
            business  days prior to entry onto the Property and shall permit the
            Seller  to  have a  representative  present  during  any  inspection
            conducted with the Property. In no event shall Purchaser conduct any
            environmental  assessment,  testing or other invasive  inspection of
            the Property.

          [The remainder of this page has been intentionally left blank.]


<PAGE>




            NOW  WHEREFORE,  the parties  hereto  have  executed  this  Purchase
Contract as of the date first set forth above.

                              SELLER:

                              ANGELES INCOME PROPERTIES, LTD. II,
                              a California limited partnership

                              By:   ANGELES REALTY CORPORATION II,
                                    a California corporation,
                                    its Managing General Partner

                              By: Name: Title:

                                  PURCHASER:

                                  ATLANTA  CROSSING  L.L.C.,   an  Alabama
                                  limited  liability company

                              By:
                              Name:
                              Title:


<PAGE>


                                    EXHIBIT A

                                LEGAL DESCRIPTION

                  (Insert legal description from Title Commitment)

<PAGE>


                                    EXHIBIT B

                            FORM OF ESCROW AGREEMENT

THIS ESCROW AGREEMENT ("Escrow Agreement") made this 25th day of October,1999 by
and among ANGELES INCOME PROPERTIES, LTD., II, a California limited partnership
("Seller"); ATLANTA CROSSING L.L.C., an Alabama limited liability company
("Purchaser"); and FIDELITY NATIONAL TITLE INSURANCE CO. ("Escrow Agent");

                                   WITNESSETH:

      Whereas  Purchaser  and Seller are parties to a certain  Purchase and Sale
Contract (the "Purchase Contract") made and dated as of the 25th day of October,
1999; and

      Whereas,  the Purchase  Contract requires that Purchaser provide a Deposit
in the amount of Fifty Thousand Dollars ($50,000.00) in cash to be held pursuant
to an escrow agreement approved by Purchaser and Seller.

      Now, therefore, the parties agree to the following:

1.  Establishment  of Escrow.  Escrow Agent hereby  acknowledges  receipt  Fifty
Thousand  Dollars  ($50,000.00)  in cash (the "Escrow Fund") pursuant to Section
3.1.1 of the Purchase Contract, to be deposited,  held, invested,  and disbursed
for the benefit of Seller and  Purchaser  and their  respective  successors  and
assigns, as provided herein and as provided in the Purchase Contract.

2.  Investment of Escrow Fund.  All funds received by Escrow Agent shall be held
in insured  accounts  and  invested  in such  money  market  funds or  accounts,
interest bearing bank accounts,  bank certificates of deposit or bank repurchase
agreements as Escrow Agent,  in its  discretion,  deems suitable  (provided that
Escrow  Agent  shall  invest the Escrow  Fund as jointly  directed by Seller and
Purchaser  should Seller and Purchaser each in their  respective sole discretion
determine to issue such joint  investment  instructions to the Escrow Agent) and
all interest and income  thereon  shall become part of the Escrow Fund and shall
be remitted to the party entitled to the Escrow Fund, as set forth below.

3.  Application  of Escrow  Fund.  Escrow  Agent  shall hold the Escrow  Fund as
provided  above and (a) if the sale of the  Property is closed by the date fixed
therefore (or any extension date provided for by mutual  written  consent of the
parties hereto,  given or withheld in their respective sole discretion),  Escrow
Agent shall deliver the Escrow Fund to Seller in immediately  available funds by
wire transfer in accordance with the  instructions of Seller on the Closing Date
as set forth in the  Purchase  Contract,  (b) if the sale of the Property is not
closed by the date fixed therefor (or any such extension  date) owing to failure
of satisfaction of a condition precedent to Purchaser's obligations,  the Escrow
Agent shall return and refund the Escrow Fund to  Purchaser,  (c) if the sale of
the  Property is not closed by the date fixed  therefor  (or any such  extension
date) owing to failure of performance by Seller,  Purchaser shall give Notice to
the Escrow  Agent and Seller and in such Notice  shall state  whether  Purchaser
elects as Purchaser's  remedy return of the Escrow Fund or specific  performance
of the Purchase Contract;  if Purchaser elects return of the Escrow Fund, Escrow
Agent shall return and refund the Escrow Fund to Purchaser,  and (d) if the sale
of the Property is not closed by the date fixed  therefor (or any such extension
date) owing to failure of performance by Purchaser, Escrow Agent shall forthwith
deliver  to  Seller  the  Escrow  Fund in  immediately  available  funds by wire
transfer in accordance with the instructions of Seller.

      If on or prior to the termination of the Escrow  Agreement,  the Seller or
the  Purchaser  claim to be  entitled  to payment  of the Escrow  Fund under the
provisions referred to, such party shall give Notice to the Escrow Agent and the
other party of the claim in writing, describing in such Notice the nature of the
claim, and the provisions of the Purchase  Contract on which the claim is based.
Unless the other party sends the Escrow Agent a written  objection to the claim,
with a copy  concurrently  to the  claiming  party,  within  Ten (10) days after
delivery  of the Notice of claim,  the claim shall be  conclusively  presumed to
have been approved.  In such case, or in the event of mutual written  consent of
the  parties  hereto,  given or withheld in their  respective  sole  discretion,
Escrow Agent shall,  within Two (2) business days  thereafter,  pay the claim as
demanded.  Notwithstanding the foregoing,  Escrow Agent shall deliver the Escrow
Fund to Seller  forthwith  upon Closing in accordance  with the terms of subpart
(a) of the immediately preceding paragraph.

      When all monies  held by Escrow  Agent have been  finally  distributed  in
accordance herewith, this Escrow Agreement shall terminate.

4. Liability. Escrow Agent will be obligated to perform only the duties that are
expressly set forth herein. In case of conflicting demands upon Escrow Agent, it
may (i) refuse to comply  therewith as long as such  disagreement  continues and
make no delivery or other  disposition  of any funds or property  then held (and
Escrow  Agent  shall not be or  become  liable  in any way for such  failure  or
refusal to comply with such conflicting or adverse claims or demands, except for
its failure to exercise due care,  willful breach and willful  misconduct);  and
(ii) continue to so refrain and so refuse to act until all differences have been
adjusted by agreement  and,  Escrow Agent has been  notified  thereof in writing
signed  jointly by Seller and  Purchaser or (iii) to  interplead  the portion of
Escrow Fund in dispute.

5. No  Obligation  to Take Legal  Action.  Escrow  Agent  shall not be under any
obligation to take any legal action in connection with this Escrow  Agreement or
for its enforcement,  or to appear in, prosecute,  or defend any action or legal
proceeding  which,  in its  opinion,  would or might  involve  it in any  costs,
expense,  loss,  or  liability,  unless  and as often as  required  by it, it is
furnished  with  satisfactory  security  and  indemnity  against all such costs,
expenses, losses, or liabilities.

6. Status of Escrow Agent.  Escrow Agent is to be  considered  and regarded as a
depository  only, and shall not be responsible or liable (except for its failure
to exercise due care, willful breach or willful  misconduct) for the sufficiency
or  correctness as to form,  manner of execution,  or validity of any instrument
deposited pursuant to this Escrow Agreement, nor as to the identity,  authority,
or rights of any person  executing the same.  Escrow  Agent's  duties  hereunder
shall be limited to the  safekeeping and investment of money,  instruments,  and
securities  received  by it as  Escrow  Agent  and  for  their  disbursement  in
accordance with the written escrow instructions given it in accordance with this
Escrow Agreement.

7. Written  Instructions  of Parties.  Notwithstanding  any  contrary  provision
contained  herein,  Escrow  Agent  shall,  at all  times,  have  full  right and
authority and the duty and  obligation  to pay over and disburse the  principal,
interest  and  quitclaim  deed of the Escrow Fund in  accordance  with the joint
written instructions signed by Seller and Purchaser.

8. Notices.  Any required or permitted Notice or other  communication under this
Escrow Agreement  ("Notice") shall be given as follows.  All Notices,  requests,
demands  and other  communications  hereunder  shall be deemed to have been duly
given if the same shall be in writing and shall be delivered  personally or sent
by Federal  Express  or other  recognized  national  overnight  courier  service
maintaining  records of  delivery,  or sent by  registered  or  certified  mail,
postage pre-paid, and addressed as set forth below:

If to Seller:                           If to Purchaser:

Angeles Income Properties, Ltd. II       Atlanta Crossing L.L.C.
c/o AIMCO                                2828 W. Edgemont Avenue (36108)
1873 South Bellaire Street               P.O. Box 1148
Suite 1700                               Montgomery, Alabama  36101-1148
Denver, Colorado  80222                  Attention: Duncan Liles
Attention: Harry Alcock

and                                      with a copy to:


David Marquette                          Jesse Williams, Esq.
Argent Real Estate                       Rushton, Stakely, Johnston & Garrett,
1401 Brickell Avenue, Suite 520          P.A.
Miami, Florida  33131                    184 Commerce Street
                                         Montgomery, Alabama  36104
with copies to:

Richard A. Cohn, Esq.
Bryan Cave LLP
700 Thirteenth Street, N.W.
Washington, D.C.  20005-3960

      and

David M. Unseth, Esq.
Bryan Cave LLP
One Metropolitan Sq.
Suite 3600
St. Louis, Missouri  63102-2750

If to Escrow Agent:

Fidelity National Title Insurance Company
700 Louisiana, Suite 2600
Houston, TX 77002
Attention: Lolly Avant

      Any party may change the address to which  Notices are to be  addressed by
giving  the other  parties  Notice in the  manner  herein  set  forth.  All such
Notices, requests, demands and other communications shall be deemed to have been
delivered  (i) as of the day of receipt,  in the case of personal  delivery,  or
(ii) as of the day of receipt or attempted delivery date in the case of delivery
by air courier,  or (iii) as of the date of receipt or first attempted delivery,
as evidenced by the return  receipt card, in the case of mailing by certified or
registered United States mail.

9. Fee. Escrow Agent shall receive a fee of Three Hundred Dollars  ($300.00) for
its  services   hereunder,   and  be  paid  or  reimbursed   for  all  expenses,
disbursements and advances,  including  reasonable  attorney's fees, incurred or
paid in  connection  with carrying out its duties  hereunder,  all amounts to be
payable by Purchaser and not out of the Escrow Fund.  Non-payment of such fee by
Purchaser shall not entitle Escrow Agent to refuse or fail to act as required by
this Escrow Agreement.

10. Titles and Section Headings. Titles of sections and subsections contained in
this Escrow  Agreement  are inserted for  convenience  of  reference  only,  and
neither  form a part  of  this  Escrow  Agreement  nor  are  to be  used  in its
construction or interpretation.

11.   Counterparts.  This Escrow Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

12. Non-Waiver. No waiver by either party of any breach of any term or condition
of this Escrow  Agreement  shall operate as a waiver of any other breach of such
term or condition or of any other term or condition.  No failure to enforce such
provision  shall operate as a waiver of such provision or of any other provision
hereof,  or  constitute  or be deemed a waiver or release of any other party for
anything arising out of, connected with, or based upon this Escrow Agreement.

13. Binding Effect. This Escrow Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective transferees,  successors, and
assigns.  The parties  recognize and  acknowledge  that the powers and authority
granted Escrow Agent herein are each  irrevocable  and coupled with an interest.
Escrow  Agent shall have no liability to any Seller for any mistakes in judgment
in the performance of any function hereunder, except for failure to exercise due
care, willful breach and willful misconduct.

14. Nonlimitation of Liability.  Nothing contained herein shall in any way limit
the  liabilities,  obligations and remedies of Seller and Purchaser as set forth
in the Purchase Contract.

15. Governing Law. This Escrow Agreement shall be governed by and construed in
accordance with the laws of the State of Alabama.

16.   Time of Essence.  Time is of the essence of this Escrow Agreement.

17. Entire Agreement;  Modification.  This Escrow Agreement supersedes all prior
agreements  and  constitutes  the entire  agreement  with respect to the subject
matter hereof.  It may not be altered or modified without the written consent of
all parties.

20. Joint and Several  Liability.  Aegis and Liles hereby agree that any and all
representations,  warranties,  covenants,  agreements, duties and obligations of
Purchaser  in this  Purchase  Agreement  shall be  binding  upon Aegis and Liles
jointly and severally in all respects.

          [The remainder of this page has been intentionally left blank.]


<PAGE>



      In witness  whereof  each of the  parties  hereto  have caused this Escrow
Agreement to be executed on its behalf by duly authorized persons, all as of the
day and year first above written.

                              SELLER:

                              ANGELES INCOME PROPERTIES, LTD. II,
                              a California limited partnership

                              By:   ANGELES REALTY CORPORATION II,
                                    a California corporation,
                                    its Managing General Partner

                                    By:
                                    Name:
                                    Title:

                              PURCHASER:

                              ATLANTA CROSSING L.L.C., an Alabama limited
                              liability company

                              By:
                              Name:
                              Title:

                              ESCROW AGENT:

                              FIDELITY NATIONAL TITLE INSURANCE CO.

                              By:
                              Name:
                              Title:


<PAGE>

                                  EXHIBIT 1.1.4

                          SCHEDULE OF COMMERCIAL LEASES

<PAGE>

                                    EXHIBIT 1.1.7

                     FIXTURES AND TANGIBLE PERSONAL PROPERTY

                                     -NONE-

<PAGE>

                                 EXHIBIT 1.1.10

                               PROPERTY CONTRACTS

<PAGE>


                                 EXHIBIT 1.1.14

                                EXCLUDED PERMITS

                                     -NONE-


<PAGE>


                                  EXHIBIT 4.1.4

                   PROPERTY CONTRACTS IDENTIFIED FOR TERMINATION


<PAGE>

                                 EXHIBIT 5.2.1.1

                              LIMITED WARRANTY DEED

                       (with Assignment of Ground Leases)

STATE OF          )
                  ) ss:
COUNTY OF         )

      THIS  INDENTURE,  Made the 25th day of October in the Year of Our Lord One
Thousand Nine Hundred and Ninety-Nine,  between ANGELES INCOME PROPERTIES,  LTD.
II, a California limited  partnership,  as party of the first part,  hereinafter
called  "Grantor," and ATLANTA  CROSSING  L.L.C.,  an Alabama limited  liability
company,  as part of the second part,  hereinafter  called  "Grantee" (the words
"Grantor" and "Grantee" to include their respective successors and assigns where
the context requires or permits).

      WITNESSETH  that  Grantor,  for  and in  consideration  of the  sum of Ten
Dollars in hand paid, at and before the sealing and delivery of these  presents,
the receipt of which is hereby acknowledged:

      (a) by these presents does assign,  transfer and set over, grant, bargain,
sell and convey unto Grantee all right,  title and interest of Grantor in and to
that certain real estate located in the County of Montgomery,  State of Alabama,
as more  particularly  described  on Exhibit A  attached  hereto and made a part
hereof ("Tract A"), which right, title and interest were acquired by Grantor and
arose  pursuant to that  Agreement of Lease dated as of August 29, 1997 ("Ground
Lease A"),  by and  between  Wylie P.  Johnson,  Landlord,  and  Angeles  Income
Properties,  Ltd. II, Tenant,  recorded in the Office of the Judge of Probate of
Montgomery County, Alabama in Real Property Book 1853, Page 394;

      (b) by these presents does assign,  transfer and set over, grant, bargain,
sell and convey unto Grantee all right,  title and interest of Grantor in and to
that certain real estate located in the County of Montgomery,  State of Alabama,
as more  particularly  described  on Exhibit B  attached  hereto and made a part
hereof  ("Tract B1"),  which right,  title and interest were acquired by Grantor
pursuant to that Assignment of Lease dated September 26, 1983,  executed by East
Commerce  Development,  Inc. and East Commerce Development Company,  recorded in
the Office of Judge of Probate of  Montgomery  County,  Alabama in Real Property
Book 630,  Page  870,  and  corrected  in Real  Property  Book,  643,  Page 515,
assigning  interests  created under that Agreement of Lease dated  September 24,
1974 ("Ground Lease B1"), by and between  Frances E. Raoul,  Landlord,  and East
Commerce  Development,  Inc.,  Tenant,  recorded  in the  Office of the Judge of
Probate of  Montgomery  County,  Alabama in Real Property Book 247, Page 157, as
amended, including, but not limited to, the amendments effected by the following
documents:  (i) that  Agreement of Sublease  dated March 1, 1976, by and between
East Commerce Development,  Inc., Tenant, and East Commerce Development Company,
Subtenant,  recorded in the Office of the Judge of Probate of Montgomery County,
Alabama in Real Property Book 304, Page 962; (ii) that Amendment to Agreement of
Lease dated November 21, 1979, by and between  Frances E. Raoul,  Landlord,  and
East Commerce Development,  Inc., Tenant, recorded in the Office of the Judge of
Probate of Montgomery County, Alabama in Real Property Book 468, Page 852; (iii)
that Second  Amendment  to Agreement  of Lease dated  January 10,  1980,  by and
between Frances E. Raoul, Landlord, and East Commerce Development, Inc., Tenant,
recorded in the Office of the Judge of Probate of Montgomery County,  Alabama in
Real  Property  Book 471,  Page 969;  (iv) that  Amendment to Agreement of Lease
dated January 10, 1980, by and between Frances E. Raoul, Landlord, East Commerce
Development,  Inc., Tenant, and East Commerce  Development  Company,  Subtenant,
recorded in Real Property Book 471, Page 975; (v) that Amendment to Agreement of
Lease dated May 20, 1981, by and between  Frances E. Raoul,  Landlord,  and East
Commerce  Development,  Inc.,  Tenant,  recorded  in the  Office of the Judge of
Probate of Montgomery County, Alabama in Real Property Book 546, page 410; and

      (c) by these presents does assign,  transfer and set over, grant, bargain,
sell and convey unto Grantee all right,  title and interest of Grantor in and to
that certain real estate located in the County of Montgomery,  State of Alabama,
as more  particularly  described  on Exhibit C  attached  hereto and made a part
hereof  ("Tract B2"),  which right,  title and interest were acquired by Grantor
pursuant to that Assignment of Lease dated September 26, 1983,  executed by East
Commerce  Development,  Inc. and East Commerce Development Company,  recorded in
the Office of Judge of Probate of  Montgomery  County,  Alabama in Real Property
Book 630,  Page  870,  and  corrected  in Real  Property  Book,  643,  Page 518,
assigning  interests  created under that Agreement of Lease dated  September 24,
1974  ("Ground  Lease  B2"),  recorded  in the Office of the Judge of Probate of
Montgomery  County,  Alabama in Real  Property  Book 247,  Page 147, as amended,
including,  but  not  limited  to,  the  amendments  effected  by the  following
documents:  (i) that  Agreement of Sublease  dated March 1, 1976, by and between
East Commerce Development,  Inc., Tenant, and East Commerce Development Company,
Subtenant,  recorded in the Office of the Judge of Probate of Montgomery County,
Alabama in Real Property Book 304, Page 948; (ii) that Amendment to Agreement of
Lease dated January 10, 1980 by and between  Robert L. Gunn and wife,  Stella E.
Gunn, Landlord,  and East Commerce  Development,  Inc., Tenant,  recorded in the
Office of the Judge of Probate of  Montgomery  County,  Alabama in Real Property
Book 471, Page 961; and

      (d) by these  presents does grant,  bargain,  sell and convey unto Grantee
certain real estate located in the County of Montgomery,  State of Alabama, more
particularly  described  on  Exhibit D attached  hereto  and made a part  hereof
("Tract C");

      SUBJECT TO the exceptions (the "Exceptions")  more particularly  described
in Exhibit E attached hereto and made a part hereof;

      TO HAVE AND TO HOLD the leaseholds in Tract A, Tract B1 and Tract B2, with
all and singular rights,  members and appurtenances  thereof, to the same being,
belonging,  or in anywise  appertaining,  to the only  proper  use,  benefit and
behoof of the said Grantee,  FOREVER;  Grantor hereby  covenanting  that it will
warrant  and  forever  defend the right,  title and  interest in and to Tract A,
Tract B1 and Tract B2 and under, respectively,  Ground Lease A, Ground Lease B1,
as amended, and Ground Lease B2, as amended (Ground Lease A, Ground Lease B1, as
amended, and Ground Lease B2, as amended,  being collectively referred to as the
"Ground Leases") unto Grantee against the claims of all persons owning,  holding
or claiming by, through or under Grantor, but NONE OTHER, and NOT, in any event,
the EXCEPTIONS;  and Grantee, by acceptance hereof, does hereby assume all terms
and  covenants in the Ground  Leases to be kept,  preserved and performed by the
lessee  therein and do hereby agree to indemnify and save Grantor  harmless from
and against any and all claims, expenses,  suits, demands or liabilities arising
under or in connection  with the Ground Leases and accruing on or after the date
hereof.

      TO HAVE AND TO HOLD Tract C, with all and  singular  rights,  members  and
appurtenances thereof, to the same being, belonging, or in anywise appertaining,
to the only  proper  use,  benefit  and  behoof of said  Grantee,  in FEE SIMPLE
FOREVER;  Grantor hereby covenanting that it will warrant and forever defend the
right and title to Tract C against the claims of all persons owning,  holding or
claiming by,  through or under Grantor,  but NONE OTHER,  and NOT, in any event,
the EXCEPTIONS.

      IN WITNESS WHEREOF,  the said Grantor has signed and sealed this deed, the
day and year above written.

Witnesses:                    GRANTOR:

                              ANGELES INCOME PROPERTIES, LTD. II,
                              a California limited partnership

                              By:   ANGELES REALTY CORPORATION II,
                                    a California corporation,
                                    its Managing General Partner

                                    By:
                                    Name:
                                    Title:

<PAGE>

STATE OF          )
                  ) ss:
COUNTY OF         )

      I,  __________________________,  a Notary public in and for said county in
said  state,  hereby  certifies  that  ________________________,  whose  name as
_____________________   of  Angeles   Realty   Corporation   II,  a   California
corporation,  as Managing General Partner of Angeles Income Properties, Ltd. II,
a California limited partnership, is signed to the foregoing conveyance, and who
is known to me,  acknowledged  before me on this day that, being informed of the
contents  of the  conveyance,  he,  as such  officer  and with  full  authority,
executed the same  voluntarily  for and as the act of said  corporation,  in its
capacity as Managing General Partner.

      Given under my hand this _______ day of ______________, A.D. 19____.

                                          Notary Public

                                          (Notarial Stamp or Seal)

<PAGE>

                       EXHIBIT A TO LIMITED WARRANTY DEED

                          Legal Description of Tract A

<PAGE>


                       EXHIBIT B TO LIMITED WARRANTY DEED

                          Legal Description of Tract B1


<PAGE>


                       EXHIBIT C TO LIMITED WARRANTY DEED

                          Legal Description of Tract B2


<PAGE>


                       EXHIBIT D TO LIMITED WARRANTY DEED

                          Legal Description of Tract C


<PAGE>



                            EXHIBIT E TO LIMITED WARRANTY DEED

                             Permitted Encumbrances

1.    General and personal property taxes not delinquent for the year 1999 and
      all subsequent years.

2.    Special taxes or assessments.

3.    Unrecorded  easements,  discrepancies  or  conflicts  in  boundary  lines,
      shortage in area and  encroachments  which an accurate and complete survey
      would disclose.

4.    Rights of eminent domain, governmental rights of police power and other
      governmental or quasi-governmental rights.

5.    Rights of tenants in possession of the Property pursuant to unrecorded
      leases, as tenants only.

6.    Visible and apparent easements and all underground easements, if any, the
      existence of which may arise by unrecorded grant or by use.

7.   Present and future laws, ordinances, restrictions,  resolutions, orders and
     regulations and all present and future  ordinances,  laws,  regulations and
     orders of all  federal,  state,  county,  municipal  or other  governments,
     agencies,  boards,  bureaus,  commissions,  authorities  and  bodies now or
     hereafter having or acquiring  jurisdiction of the Property and the use and
     improvement thereof, including any restricting or regulating or prohibiting
     the  occupancy,  use  or  enjoyment  of the  Property,  or  regulating  the
     character,  dimensions  or location  of any  improvement  now or  hereafter
     erected on the  Property,  or  prohibiting  a separation  in ownership or a
     reduction in the dimensions or area of the Property,  and the effect of any
     violation of such law, ordinance or governmental regulation.

8.    Easements  to the Water  Works  and  Sanitary  Sewer  Board of the City of
      Montgomery  recorded  in the Office of the Judge of Probate of  Montgomery
      County,  Alabama in Real Property Book 103,  Pages 989, 994 and 997, as to
      Tract B.

9.    Easements to the Alabama Power Company recorded in the Office of the Judge
      of Probate of Montgomery  County,  Alabama in Real Property Book 499, Page
      697,  Real  Property  Book 475,  Page 934 and Real Property Book 499, Page
      702, as to Tracts B and C.

10.   Easement  for  storm  drainage  sewer to the City of  Montgomery,  Alabama
      recorded  in the  Office of the Judge of  Probate  of  Montgomery  County,
      Alabama in Real Property Book 534, Page 937, as to Tracts B and C.

11.   Easement  for sewer lines and water mains to the Water Works and  Sanitary
      Sewer Board of the City of Montgomery  recorded in the Office of the Judge
      of Probate of Montgomery  County,  Alabama in Real Property Book 540, Page
      947, as to Tracts B and C.

12.   Easements which appear on the map of East Commerce Development Plat No. 8,
      recorded  in the  Office of the Judge of  Probate  of  Montgomery  County,
      Alabama in Plat Book 27, Page 316, except Lot 2, Block D.

13.   Easements  as shown on the map of East  Commerce  Development  Plat No. 7,
      recorded  in the  Office of the Judge of  Probate  of  Montgomery  County,
      Alabama in Plat Book 27, Page 297, as to Tract B,  Parcels A and C (Lot 2,
      Block D).

14.  Lease  between  East  Commerce  Development   Company,   Inc.  and  Service
     Merchandise  Company,  dated  June 29,  1979  (unrecorded)  and  subsequent
     Memorandum of Lease dated July 8, 1987 between  Angeles Income  Properties,
     Ltd.,  as  Landlord,  and Service  Merchandise  Company,  Inc.,  as Tenant,
     recorded  in the  Office  of the Judge of  Probate  of  Montgomery  County,
     Alabama in Real Property Book 899, page 295, as to Tracts A and C.

15.   Encroachment  of Service  Merchandise  Store over the  easements for storm
      drainage and the easement for sanitary sewer which  easements are shown on
      the map of East Commerce Development Plat No. 8, recorded in the Office of
      the Judge of Probate of Montgomery  County,  Alabama in Real Property Book
      27, Page 316, as to Tracts A and C.

16.   Terms,  conditions and provisions contained in Agreement of Lease dated as
      of August 29, 1997,  between  Wylie P. Johnson,  as Landlord,  and Angeles
      Income Properties,  Ltd. II, a California limited partnership,  as Tenant,
      recorded  in the  Office of the Judge of  Probate  of  Montgomery  County,
      Alabama in Real Property Book 1853, page 394, as to Tract A.

17.  Terms,  conditions and provision contained in the following documents:  (i)
     Short Form Ground Sublease between Angeles Income Properties,  Ltd., II, as
     Landlord,  and IHOP  Properties,  Inc.,  as Tenant,  dated  July 23,  1998,
     recorded  in the  Office  of the Judge of  Probate  of  Montgomery  County,
     Alabama in Real  Property  Book 1889,  Page 180,  and (ii)  Attornment  and
     Non-disturbance  Agreement  between  Wylie P. Johnson and IHOP  Properties,
     Inc.,  dated July 28, 1998,  recorded in the Office of the Judge of Probate
     of Montgomery  County,  Alabama in Real Property Book 1889, Page 185, as to
     Tract A.

18.  Terms, conditions and provisions contained in the following documents:  (i)
     Agreement  of Lease dated  September  24, 1974,  by and between  Frances E.
     Raoul, Landlord, and East Commerce Development,  Inc., Tenant,  recorded in
     the Office of the Judge of Probate of  Montgomery  County,  Alabama in Real
     Property  Book 247,  Page 157;  (ii)  Agreement of Sublease  dated March 1,
     1976,  by and between East Commerce  Development,  Inc.,  Tenant,  and East
     Commerce  Development  Company,  Sub-tenant,  recorded in the Office of the
     Judge of Probate of Montgomery  County,  Alabama in Real Property Book 304,
     Page 962; (iii)  Amendment to Agreement of Lease dated November 21, 1979 by
     and between  Frances E. Raoul,  Landlord,  and East  Commerce  Development,
     Inc., Tenant,  recorded in the Office of the Judge of Probate of Montgomery
     County,  Alabama in Real Property Book 468, Page 852; (iv) Second Amendment
     to  Agreement  of Lease dated  January  10, 1980 by and between  Frances E.
     Raoul, Landlord, and East Commerce Development,  Inc., Tenant,  recorded in
     the Office of the Judge of Probate of  Montgomery  County,  Alabama in Real
     Property  Book 471,  Page 969;  (v)  Amendment  to Agreement of Lease dated
     January 10, 1980 by and between Frances E. Raoul,  Landlord,  East Commerce
     Development,   Inc.,  Tenant,  and  East  Commerce   Development   Company,
     Subtenant,  recorded  in the Office of the Judge of  Probate of  Montgomery
     County,  Alabama in Real Property  Book 471,  Page 975;  (vi)  Amendment to
     Agreement  of Lease  dated May 20,  1981 by and  between  Frances E. Raoul,
     Landlord,  and East Commerce  Development,  Inc.,  Tenant,  recorded in the
     Office  of the Judge of  Probate  of  Montgomery  County,  Alabama  in Real
     Property Book 546, page 410; (vii)  Assignment of Lease dated September 26,
     1983,  executed  by East  Commerce  Development,  Inc.  and  East  Commerce
     Development  Company,  recorded  in the  Office of the Judge of  Probate of
     Montgomery  County,  Alabama  in Real  Property  Book 630,  Page  870,  and
     corrected in Real Property Book 643, Page 518, Tract B, Parcels A and B.

19.   Lease Agreement by and between East Commerce Development Company,  Lessor,
      and Union Bank & Trust Company, Lessee, dated January 4, 1977, recorded in
      the Office of the Judge of Probate of Montgomery  County,  Alabama in Real
      Property Book 356, Page 865, as to a portion of Tract B, Parcels A and C.

20.   Statement of  Commencement of Ground Lease Term dated November 28, 1984 by
      and between Angeles Income  Properties,  Ltd. II, Lessor,  and Burger King
      Corporation,  Lessee,  recorded  in the  Office of the Judge of Probate of
      Montgomery  County,  Alabama in Real  Property  Book 715,  Page 798, as to
      Tract B, Parcel A.

21.  Terms, conditions and provisions contained in the following documents:  (i)
     Agreement of Lease dated  September 24, 1974, by and between Robert L. Gunn
     and wife, Stella E. Gunn, Landlord,  and East Commerce  Development,  Inc.,
     Tenant,  recorded  in the  Office of the  Judge of  Probate  of  Montgomery
     County,  Alabama in Real Property  Book 247,  Page 147;  (ii)  Agreement of
     Sublease  dated March 1, 1976 by and  between  East  Commerce  Development,
     Inc., Tenant, and East Commerce Development Company,  Sub-tenant,  recorded
     in the Office of the Judge of Probate of Montgomery County, Alabama in Real
     Property  Book 304, Page 948;  (iii)  Amendment to Agreement of Lease dated
     January 10, 1980 by and  between  Robert L. Gunn and wife,  Stella E. Gunn,
     Landlord,  and East Commerce  Development,  Inc.,  Tenant,  recorded in the
     Office  of the Judge of  Probate  of  Montgomery  County,  Alabama  in Real
     Property Book 471, Page 961; (iv)  Assignment of Lease dated  September 26,
     1983,  executed  by East  Commerce  Development,  Inc.  and  East  Commerce
     Development  Company,  recorded  in the  Office of the Judge of  Probate of
     Montgomery  County,  Alabama  in Real  Property  Book 630,  Page  870,  and
     corrected in Real Property Book, 643, Page 518, as to Tract B, Parcel C.

22.  Terms, conditions and provisions contained in the following documents:  (i)
     Ground Lease from East Commerce Development Company, a general partnership,
     to  Albertson's  Inc.,  dated March 6, 1979,  recorded in the Office of the
     Judge of Probate of Montgomery County,  Alabama, in Real Property Book 447,
     Page 311; (ii) First Amendment, dated March 7, 1979, recorded in the Office
     of the Judge of Probate of Montgomery County, Alabama in Real Property Book
     466,  Page 181,  relating to  development  and payment for  development  of
     common areas of Union Square Shopping  Center;  (iii) an instrument,  dated
     August  2,  1979,  recorded  in the  Office  of the  Judge  of  Probate  of
     Montgomery County,  Alabama,  in Real Property Book 456, Page 868, amending
     the description  attached to aforesaid Ground Lease; (iv) Second Amendment,
     dated  October 18, 1979,  recorded in the Office of the Judge of Probate of
     Montgomery County,  Alabama in Real Property Book 466, Page 668; and (v) an
     instrument,  dated February 1, 1980, recorded in the Office of the Judge of
     Probate of Montgomery County,  Alabama in Real Property Book 476, Page 205,
     assigning   aforesaid   Ground   Lease  to  Spokmont   Associated   Limited
     Partnership,  a Connecticut limited  partnership,  as to Tract B, Parcels A
     and B.

23.  Error in legal  description  in Warranty  Deed dated  September  26,  1983,
     recorded  in the  Office  of the Judge of  Probate  of  Montgomery  County,
     Alabama in Real Property Book 630, Page 866, as  re-recorded  in the Office
     of the Judge of Probate of Montgomery County, Alabama in Real Property Book
     631, Page 838, as corrected  and again  recorded in the Office of the Judge
     of Probate of  Montgomery  County,  Alabama in Real Property Book 643, Page
     510 , whereby each of said deeds included the following:  "thence North 820
     43' 45" East along  Dalphon  Road a distance of 33.22 feet . . .",  wherein
     the  correct  distance  indicated  should  have been 332.2 feet rather than
     33.22 feet.

24.   Other   covenants,   conditions,   limitations,    restrictions,   rights,
      rights-of-way, liens, encumbrances,  encroachments, defects, reservations,
      easements, agreements and other matters of record, if any.


<PAGE>


                                 EXHIBIT 5.2.1.2

                              FORM OF BILL OF SALE

Dated:  October 25, 1999.

            For good and valuable consideration,  the receipt and sufficiency of
which are hereby acknowledged,  ANGELES INCOME PROPERTIES, LTD. II, a California
limited  partnership  ("Seller"),  in  connection  with the sale of certain real
property  ("Property")  located in the County of  Montgomery,  State of Alabama,
which is more particularly  described on Exhibit "A" attached hereto and by this
reference  incorporated  herein,  hereby quitclaim  ATLANTA CROSSING L.L.C.,  an
Alabama limited liability company ("Purchaser"), without recourse or warranty to
Seller,  all of  Seller's  right,  title  and  interest  in and to the  personal
property more particularly described on Exhibit "B" hereto ("Personal Property")
used in, held for use in connection  with, or necessary for the operation of the
Property as of the date hereof.

            WITH  RESPECT  TO  ALL  MATTERS  TRANSFERRED,  WHETHER  TANGIBLE  OR
INTANGIBLE,   PERSONAL  OR  REAL,  SELLER  EXPRESSLY  DISCLAIMS  A  WARRANTY  OF
MERCHANTABILITY  AND  WARRANTY  FOR  FITNESS FOR A  PARTICULAR  USE OR ANY OTHER
WARRANTY  EXPRESSED  OR IMPLIED  THAT MAY ARISE BY OPERATION OF LAW OR UNDER THE
UNIFORM COMMERCIAL CODE FOR THE STATE IN WHICH THE PROPERTY IS LOCATED.

           [The remainder of this page has intentionally been left blank]


<PAGE>

            Purchaser hereby accepts the Personal Property on and subject to the
conditions  and  disclaimers  above,  and  assume,  jointly and  severally,  all
responsibility and liability for the Personal Property as of the date hereof.

                           SELLER:

                           ANGELES INCOME PROPERTIES, LTD. II,
                           a California limited partnership

                           By:   ANGELES REALTY CORPORATION II,
                                 a California corporation,
                                 its Managing General Partner

                                 By:
                                 Name:
                                 Title:

                           PURCHASER:

                           ATLANTA CROSSING L.L.C., an Alabama limited liability
                           company

                           By:
                           Name:
                           Title:


<PAGE>



                            EXHIBIT A TO BILL OF SALE

                       Legal Description of Real Property


<PAGE>



                            EXHIBIT B TO BILL OF SALE

                        Description of Personal Property

                                     -None-


<PAGE>


                                 EXHIBIT 5.2.1.3

                               FORM OF ASSIGNMENT

This Assignment  ("Assignment") is executed by ANGELES INCOME  PROPERTIES,  LTD.
II, a California limited partnership]  ("Seller"),  in favor of ATLANTA CROSSING
L.L.C., an Alabama limited liability company ("Purchaser").

      Seller and  Purchaser  have entered  into that  certain  Purchase and Sale
Contract dated as of the 25th day of October,  1999  ("Purchase  Contract"),  in
which  Seller has agreed to sell and  Purchaser  has agreed to purchase the real
property  described in Exhibit "A" attached hereto and the improvements  located
thereon (collectively, the "Project").

      Pursuant to the Purchase  Contract,  Seller has agreed to assign,  without
recourse or warranty, to Purchaser all of Seller's right, title and interest, if
any, in and to the Property (as hereinafter defined).

      NOW  THEREFORE,  for good and  valuable  consideration,  the  receipt  and
sufficiency  of which are hereby  acknowledged,  Seller and  Purchaser  agree as
follows:

      1. As used herein,  the term "Property" shall mean the following  property
to the extent  said  property  is owned by Seller  and used in,  held for use in
connection with, or necessary for the operation of the Project:

a.   Books  and  Records.  All of  Seller's  rights,  IF ANY,  in and to  files,
     records, and books of account of the Project.

b.   Licenses and Permits. All of Seller's rights and interests,  IF ANY, in and
     to plans, specifications,  reports, rights, privileges,  licenses, permits,
     surveys,  entitlements,  maps, agreements, and authorizations utilized with
     respect to the Project, excluding any "Excluded Permits" identified as such
     in the Purchase Contract.

c.   Property  Contracts.  All  of  Seller's  rights  and  interests  in  and to
     maintenance,  service or utility contracts which relate to the maintenance,
     repair or  operation  of the  Project  scheduled  on Exhibit  "B"  attached
     hereto.

d.   Commercial  Leases.  All of Seller's rights and interests in and to leases,
     subleases, and other occupancy agreements,  whether or not of record, which
     provide for use or occupancy of space or  facilities  on or relating to the
     Project scheduled on Exhibit "C" attached hereto.


            The term "Property"  shall not include any of the foregoing:  (i) to
the extent the same are reserved to Seller pursuant to the Purchase  Contract to
which Seller and Purchaser are parties;  and (ii) to the extent that the sale or
transfer thereof requires consent or approval of any third party,  which consent
or approval is not obtained by Seller. Nothing herein shall create a transfer or
assignment of intellectual property or similar assets of Seller.

      2.  Assignment.  Seller  hereby  assigns,  sells  and  transfers,  without
recourse or warranty, to Purchaser all of Seller's right, title and interest, if
any, in and to the Property Contracts and the Commercial Leases,  subject to any
rights of consent as provided  therein.  Seller agrees to indemnify,  defend and
hold Purchaser  harmless from and against any and all cost, loss, or harms which
may arise with respect to the Property Contracts and the Commercial Leases which
accrued prior to the date hereof.

      3. Assumption. Purchaser expressly agrees to assume and hereby assumes all
liabilities  and  obligations of the Seller in connection  with the Property and
agree to perform  all of the  covenants  and  obligations  of Seller  thereunder
including without limitation,  all liabilities and obligations of landlord under
the Commercial  Leases and all  liabilities  and  obligations of the contracting
parties under the Property  Contracts,  including  responsibility  for refunding
security deposits. Purchaser further agrees to indemnify, defend and hold Seller
harmless from and against any and all cost, loss, harm or damage which may arise
in connection  with the Property,  including the Commercial  leases and Property
Contracts.

4.   Counterparts.  This  Assignment  may be executed in  counterparts,  each of
     which  shall be  deemed  an  original,  and both of  which  together  shall
     constitute one and the same instrument.

5.   Miscellaneous.  This Assignment shall be without recourse to or warranty by
     Seller except only as explicitly set forth to the contrary herein.

6.   Attorneys'  Fees.  If any action or proceeding is commenced by either party
     to enforce its rights under this  Assignment,  the prevailing party in such
     action or proceeding  shall be entitled to recover all reasonable costs and
     expenses  incurred  in such  action  or  proceeding,  including  reasonable
     attorneys'  fees and costs,  in addition to any other relief awarded by the
     court.

7.   Applicable  Law. This  Assignment  shall be governed by and  interpreted in
     accordance with the laws of the State of Alabama.

8.   Titles and Section Headings.  Titles of sections and subsections  contained
     in this  Assignment  are inserted for  convenience  of reference  only, and
     neither  form  a  part  of  this  Assignment  or  are  to be  used  in  its
     construction or interpretation.

9.   Binding  Effect.  This  Assignment  shall be binding  upon and inure to the
     benefit of the parties hereto and their respective transferees, successors,
     and assigns.

10.  Entire  Agreement;  Modification.  This  Assignment  supersedes  all  prior
     agreements and constitutes the entire agreement with respect to the subject
     matter  hereof.  It may not be  altered or  modified  without  the  written
     consent of all parties.

            WITH  RESPECT  TO  ALL  MATTERS  TRANSFERRED,  WHETHER  TANGIBLE  OR
INTANGIBLE,   PERSONAL  OR  REAL,  SELLER  EXPRESSLY  DISCLAIMS  A  WARRANTY  OF
MERCHANTABILITY  AND  WARRANTY  FOR  FITNESS FOR A  PARTICULAR  USE OR ANY OTHER
WARRANTY  EXPRESSED  OR IMPLIED  THAT MAY ARISE BY OPERATION OF LAW OR UNDER THE
UNIFORM COMMERCIAL CODE FOR THE STATE IN WHICH THE PROPERTY IS LOCATED.

Dated:, 1999

                              SELLER:

                              ANGELES INCOME PROPERTIES, LTD. II,
                              a California limited partnership

                              By:   ANGELES REALTY CORPORATION II,
                                    a California corporation,
                                    its Managing General Partner

                                    By:
                                    Name:
                                    Title:

Accepted to and agreed by:

                              PURCHASER:

                              ATLANTA CROSSING L.L.C., an Alabama limited
                              liability company

                              By:
                              Name:
                              Title:

<PAGE>


                             EXHIBIT A TO ASSIGNMENT

                                Legal Description


<PAGE>


                             EXHIBIT B TO ASSIGNMENT

                 Property Contracts (Assigned to Purchaser)

[Property Contracts listed on Exhibit 1.1.10,  excepting those listed on Exhibit
4.1.4]



<PAGE>


                             EXHIBIT C TO ASSIGNMENT

                                Commercial Leases


<PAGE>


                                 EXHIBIT 5.2.1.6

                    SELLER'S CERTIFICATION OF NON-FOREIGN STATUS

A.    Federal FIRPTA Certificate

      To inform ATLANTA CROSSING L.L.C.,  an Alabama limited  liability  company
("Transferee"),  that  withholding  of tax under  Section  1445 of the  Internal
Revenue Code of 1986,  as amended (the  "Code"),  will not be required  upon the
transfer of certain rights  relating to real property,  located in the County of
Montgomery, State of Alabama, to Transferees, by ANGELES INCOME PROPERTIES, LTD.
II, a California limited partnership ("Transferor"), Transferor hereby certifies
to Transferees:

1.   Transferor  is not a  foreign  corporation,  foreign  partnership,  foreign
     trust,  or foreign  estate (as those  terms are defined in the Code and the
     Income Tax Regulations promulgated thereunder);

2.   Transferor's U.S. tax identification number is 95-3793526;and

3.   Transferor's office address is c/o AIMCO, 1873 South Bellaire Street, Suite
     1700, Denver, CO 80222.

      Transferor  understands  that this  Certification  may be disclosed to the
Internal  Revenue Service by Transferees and that any false statement  contained
herein could be punished by fine, imprisonment, or both.

      Transferor  understands that Transferees are relying on this Certification
in determining whether withholding is required upon said transfer.

      Under  penalty of perjury the  undersigned  declares  that it has examined
this  Certification  and to the best of its  knowledge  and  belief  it is true,
correct and complete, and it further declares that it has authority to sign this
Certification on behalf of Transferor.

                              SELLER:

                              ANGELES INCOME PROPERTIES, LTD. II,
                              a California limited partnership

                              By:   ANGELES REALTY CORPORATION II,
                                    a California corporation,
                                    its Managing General Partner

                                    By:
                                    Name:
                                    Title:

<PAGE>

                                 EXHIBIT 5.2.1.7

                       FORM OF TENANT ESTOPPEL CERTIFICATE

TO:   Atlanta Crossing L.L.C.
      2828 W. Edgemont Avenue
      Montgomery, Alabama  36101
      Attention: Duncan Liles

            Re:   Lease Agreement (the "Lease") dated ______________, by and
                  between ____________________________ ("Landlord") and
                  _____________________("Tenant")

            The undersigned is the tenant under the Lease, whereby Tenant leases
from Landlord certain space in the Atlanta Crossing Shopping Center,  located at
1333 Eastern  By-Pass,  Montgomery,  Alabama on the real  property  described in
Exhibit A attached  hereto (the  "Property").  Tenant  understands  that Atlanta
crossing  l.l.c.  ("Prospective  Purchaser") may be purchasing the Property from
Landlord and Tenant certifies to Landlord and Prospective Purchaser as follows:

1.   The Lease is in full force and effect on the date hereof.

2.   The term of the Lease began on _____________________.  The termination date
     of the  present  term of the  Lease,  excluding  unexercised  renewals,  is
     -------------------.

3.    Tenant has paid rent for the Property for the period up to and including
      ----------------.

4.    As of the date hereof, Landlord is holding $______________ as a security
      deposit for the Lease.

5.    As of the date hereof, Tenant is occupying the Property and is open for
      business.

6.    To Tenant's  knowledge,  Landlord is not in default under the Lease beyond
      applicable  cure periods in the  performance  of any covenant,  agreement,
      term, provision or condition contained in the Lease.

7.   The  undersigned  is  authorized to execute this  Estoppel  Certificate  on
     behalf of Tenant.

<PAGE>

Dated this _____ day of _____________, 1999.

                              TENANT:

                              ------------------------------,
                              a ______________ ___________________

                              By:________________________________
                              Name:______________________________
                              Title:_______________________________

<PAGE>


                    EXHIBIT A TO TENANT ESTOPPEL CERTIFICATE

                                Legal Description

<PAGE>


                                 EXHIBIT 6.1.1.3

                        PARTIES IN POSSESSION OF PROPERTY

                                     -NONE-
<PAGE>

                                                                   Exhibit 10.17

                   REINSTATEMENT OF AND FIRST AMENDMENT TO
                          PURCHASE AND SALE CONTRACT

      This Reinstatement of and First Amendment to Purchase and Sale Contract
(this "First Amendment") is made and entered into as of this _____ day of
February, 2000, by and between ANGELES INCOME PROPERTIES, LTD. II ("Seller")
and ATLANTA CROSSING L.L.C. ("Purchaser").

                                   RECITALS

      WHEREAS,  Seller and Purchaser entered into that certain Purchase and Sale
Contract,  dated October 25, 1999 (the "Purchase  Contract"),  pursuant to which
Seller  agreed to sell,  and Purchaser  agreed to purchase,  certain real estate
located in Montgomery, Alabama (the "Property").

      WHEREAS,  the Purchase  Contract  terminated by its terms and by reason of
the failure of conditions.

      WHEREAS,  Seller and Purchaser desire to reinstate and modify the Purchase
Contract, on and subject to the terms and conditions contained herein.

                             W I T N E S S E T H

      NOW,  THEREFORE,  for and in  consideration  of the  premises,  the mutual
agreements  herein, and other good and valuable  consideration,  the receipt and
adequacy  of which  are  hereby  acknowledged,  Seller  and  Purchaser  agree as
follows:

      1.  The   Purchase   Contract  is  hereby   reinstated,   subject  to  the
modifications and agreements  expressly set forth below. Except as so amended by
the  modifications  and  agreements  herein,  the  terms and  conditions  of the
Purchase  Contract shall be effective and shall remain in full force and effect.
Any  capitalized  terms used herein but not  defined  shall have the meaning set
forth in the Purchase Contract.  In the event of a conflict between the terms of
the Purchase  Contract and the terms of this First Amendment,  the terms of this
First Amendment shall govern and control.

2.   Section  1.1.3 of the Purchase  Contract is hereby  deleted in its entirety
     and replaced with the following:

            "Closing  Date"  means  thirty (30) days after the date of the First
            Amendment  (or such  earlier  date as  Purchaser  may  designate  in
            writing  to Seller  by at least 5 days'  advance  Notice),  subject,
            however,  to Seller's  express  rights of  extension  stated in this
            Purchase  Contract,  on which date the Closing of the  conveyance of
            the Property  shall be held under the terms and  conditions  of this
            Purchase  Contract  and on which  date the  Purchase  Price  for the
            Property shall have been paid to and received by Seller  pursuant to
            Article 3 of this Purchase Contract.

3.   Article 3 of the  Purchase  Contract is hereby  deleted in its entirety and
     replaced with the following:

         3.1   The total purchase price (the "Purchase  Price") for the Property
               shall be Two Million Eight Hundred Seventy-Five  Thousand Dollars
               ($2,875,000.00), which shall be paid by Purchase as follows:

               3.1.1 As of the Effective Date,  Purchaser  delivered to Fidelity
                     National Title  Insurance  Company,  700  Louisiana,  Suite
                     2600,  Houston,  Texas 77002 ("Escrow  Agent") a deposit in
                     the sum of  Fifty-Thousand  Dollars  ($50,000.00)  in cash,
                     (such sum,  together with any interest or earnings thereon,
                     being  hereinafter  collectively  referred to as the "First
                     Deposit').  By execution of the First Amendment,  Purchaser
                     directs  the  Escrow  Agent to pay over the  amount  of the
                     First Deposit  immediately to Seller,  according to written
                     wire  instructions  received  from  Seller,  and the Escrow
                     Agent may rely  conclusively  upon the First  Amendment  in
                     making such  payment  over to Seller.  By  execution of the
                     First  Amendment,  Purchaser also waives any and all claims
                     or defenses to the release of the First  Deposit to Seller,
                     including,  but not  limited to,  those  claims or defenses
                     enumerated in  correspondence  dated  December 3, 1999, and
                     December 9, 1999,  addressed by Jesse M.  Williams,  III of
                     the Firm of Rushton,  Stakely,  Johnston & Garrett to David
                     M. Unseth of the Firm of Bryan Cave LLP.

               3.1.2 As of the  date of the  First  Amendment,  Purchaser  shall
                     deliver to the Escrow  Agent an  additional  deposit in the
                     sum of Twenty Thousand  Dollars  ($20,000.00) in cash (such
                     sum being hereinafter referred to as the "Second Deposit").
                     Purchaser  and  Seller  each  approve  the  form of  Escrow
                     Agreement  attached  as Exhibit A and  Purchaser  agrees to
                     sign  the  Escrow  Agreement  in such  form and  deliver  a
                     counterpart  of the same to the Escrow Agent along with the
                     Second Deposit and a counterpart of the same to Seller.

               3.1.3 The Escrow  Agent  shall hold the Second  Deposit  and make
                     delivery  of  the  Second  Deposit  to the  party  entitled
                     thereto under the terms  hereof.  Escrow Agent shall invest
                     the Second Deposit in such  interest-bearing bank accounts,
                     money  market  funds  or  accounts,  bank  certificates  of
                     deposit or bank  repurchase  agreements as Escrow Agent, in
                     its discretion,  deems suitable (provided that Escrow Agent
                     shall  invest the Second  Deposit  as jointly  directed  by
                     Seller and Purchaser  should  Seller and Purchaser  each in
                     their  respective sole  discretion  determine to issue such
                     joint investment  instructions to the Escrow Agent) and all
                     interest and income thereon shall become part of the Second
                     Deposit and shall be remitted to the party  entitled to the
                     Second Deposit, as set forth below.

               3.1.4 The First Deposit and the Second Deposit (collectively, the
                     "Deposit")  shall  only  be  required  to  be  refunded  to
                     Purchaser  if the sale of the  Property  under the Purchase
                     Contract  shall not be  consummated  by reason  of: (a) the
                     failure  of any  of  the  conditions  expressly  stated  in
                     Article 7 of the Purchase Contract, (b) the occurrence of a
                     casualty  resulting  in the  termination  of  the  Purchase
                     Contract  pursuant  to the  terms  of  Section  11.1 of the
                     Purchase  Contract,  (c) the  occurrence of a  condemnation
                     resulting  in  the  termination  of the  Purchase  Contract
                     pursuant  to the  terms  of  Section  13.1 of the  Purchase
                     Contract,  or (d) the election of Seller to  terminate  the
                     Purchase   Contract   by  reason  of  the  failure  of  the
                     conditions  precedent set forth in Sections 7.2.4, 7.2.5 or
                     7.2.6 of the Purchase  Contract (unless Seller's failure to
                     secure the consents,  approvals, waivers and/or releases is
                     a direct result of Purchaser's actions). If the sale of the
                     Property  is  closed  by the  Closing  Date  (or any  valid
                     extension date  thereof),  the Deposit shall be credited to
                     the Purchase Price.

         3.2   On the Closing Date,  Purchaser  shall pay the Purchase  Price to
               Seller,  net of the  Deposit  credited  at Closing and subject to
               credit  and  adjustment  as  provided  herein,   in  cash  or  by
               wire-transfer  of current funds through  escrow  pursuant to wire
               instructions provided by Seller.

4.   Section  5.1.2 of the Purchase  Contract is hereby  deleted in its entirety
     and replaced with the following:

            "The Closing Date may be extended  without  penalty at the option of
            Seller  to a date not later  than  thirty  (30) days  after the date
            determined by reference to the definition of "Closing Date."

5.   Sections  5.2.1.7,  5.2.1.8 and 5.2.1.9 of the Purchase Contract are hereby
     deleted in their entirety.

6.   Section 7.1.4 of the Purchase Contract is hereby deleted in its entirety.

7.   Seller  shall take  reasonable  efforts  to assist  Purchaser  in  securing
     documentation  from the Tenants of the Property as required by  Purchaser's
     Lender,  provided,  however,  that  securing  such  documentation  shall be
     neither a condition of Seller's performance under the Purchase Contract nor
     a  condition  precedent  to  Purchaser's  performance  under  the  Purchase
     Contract.

8.   This First  Amendment,  and the reinstated and modified  Purchase  Contract
     effected by this First  Amendment,  shall be null and void unless signed by
     Purchaser  on or before  February  4, 2000,  and  accepted  by Seller on or
     before February 11, 2000."

9.   This First  Amendment shall be binding upon, and shall inure to the benefit
     of, the parties  hereto,  and their  respective  successors  and  permitted
     assigns.

10.  This First Amendment may be executed in counterparts and by facsimile, each
     of which shall be deemed an original,  and all of which  together  shall be
     deemed one and the same document.

      IN WITNESS WHEREOF,  the undersigned have executed this First Amendment to
Purchase and Sale Contract as of the date first above written.

                              SELLER:

                              ANGELES INCOME PROPERTIES, LTD. II,
                              a California limited partnership

                              By:   ANGELES REALTY CORPORATION II,
                                    a California corporation,
                                    its Managing General Partner

                                    By:
                                    Name:
                                    Title:


                              PURCHASER:

                              ATLANTA CROSSING L.L.C., an Alabama limited
                              liability company

                              By:
                              Name:
                              Title:
<PAGE>

                                                                   Exhibit 10.18

                SECOND AMENDMENT TO PURCHASE AND SALE CONTRACT

     This  Second   Amendment  to  Purchase  and  Sale  Contract  (this  "Second
Amendment")  is made and entered into as of this 8th day of March,  2000, by and
between  ANGELES  INCOME  PROPERTIES,  LTD. II ("Seller")  and ATLANTA  CROSSING
L.L.C. ("Purchaser").

                                    RECITALS

      WHEREAS,  Seller and Purchaser entered into that certain Purchase and Sale
Contract,  dated October 25, 1999, as reinstated and amended on February 7, 2000
(the  "Purchase  Contract"),  pursuant  to which  Seller  agreed  to  sell,  and
Purchaser  agreed to  purchase,  certain  real  estate  located  in  Montgomery,
Alabama.

      WHEREAS,  the Purchase  Contract  contemplates  a Closing Date of March 8,
2000.

      WHEREAS,  Purchaser  desires to extend the  Closing  Date until  March 15,
2000.

      WHEREAS,  Seller and Purchaser desire to modify the Purchase Contract,  on
and subject to the terms and conditions contained herein.

                               W I T N E S S E T H

      NOW,  THEREFORE,  for and in  consideration  of the  premises,  the mutual
agreements  herein, and other good and valuable  consideration,  the receipt and
adequacy  of which  are  hereby  acknowledged,  Seller  and  Purchaser  agree as
follows:

      1. Except as so amended by the  modifications and agreements  herein,  the
terms and  conditions  of the Purchase  Contract  shall be  effective  and shall
remain in full force and  effect.  Any  capitalized  terms  used  herein but not
defined shall have the meaning set forth in the Purchase Contract.  In the event
of a conflict  between the terms of the Purchase  Contract and the terms of this
Second Amendment, the terms of this Second Amendment shall govern and control.

      2.    Section 1.1.3 of the Purchase Contract is hereby deleted in its
entirety and replaced with the following:

            "Closing  Date"  means  March  15,  2000  (or such  earlier  date as
            Purchaser  and Seller may  mutually  agree),  subject,  however,  to
            Seller's  express  rights  of  extension  stated  in  this  Purchase
            Contract,  on  which  date  the  Closing  of the  conveyance  of the
            Property  shall be held  under  the  terms  and  conditions  of this
            Purchase  Contract  and on which  date the  Purchase  Price  for the
            Property shall have been paid to and received by Seller  pursuant to
            Article 3 of this Purchase Contract.

      3. In  consideration  for  Seller's  agreement  to extend the Closing Date
until March 15, 2000,  Purchaser shall deliver to the Escrow Agent an additional
deposit in the sum of Twenty  Thousand  Dollars  ($20,000.00)  in cash (such sum
being hereinafter referred to as the "Closing Extension Deposit") as of the date
of this Second  Amendment.  Seller and  Purchaser  hereby agree that the Closing
Extension  Deposit  shall be held by the  Escrow  Agent on the same basis as the
Escrow Agent holds the Escrow Fund pursuant to the terms and  conditions of that
certain Escrow Agreement by and among Seller,  Purchaser and Escrow Agent, dated
February 7, 2000.

      4. This Second  Amendment  shall be binding  upon,  and shall inure to the
benefit of, the parties hereto,  and their  respective  successors and permitted
assigns.

      5. This Second Amendment may be executed in counterparts and by facsimile,
each of which shall be deemed an original,  and all of which  together  shall be
deemed one and the same document.

      IN WITNESS WHEREOF, the undersigned have executed this Second Amendment to
Purchase and Sale Contract as of the date first above written.

                              SELLER:

                              ANGELES INCOME PROPERTIES, LTD. II,
                              a California limited partnership

                              By:   ANGELES REALTY CORPORATION II,
                                    a California corporation,
                                    its Managing General Partner

                              By:
                              Name:
                              Title:

                              PURCHASER:

                              ATLANTA CROSSING L.L.C., an Alabama limited
                              liability company

                              By:
                              Name:
                              Title: