<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549
                                 ------------
                                   FORM 10-Q

                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

--------------------------------------------------------------------------------

For Quarter Ended March 31, 1999                  Commission File Number 0-13323


                    NEW ENGLAND LIFE PENSION PROPERTIES II;
                       A REAL ESTATE LIMITED PARTNERSHIP
            (Exact name of registrant as specified in its charter)



        Massachusetts                                     04-2803902
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

     225 Franklin Street, 25th Fl.
        Boston, Massachusetts                               02110
(Address of principal executive offices)                 (Zip Code)

              Registrant's telephone number, including area code:
                                 (617) 261-9000



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

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve (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 [_]
<PAGE>
 
                    NEW ENGLAND LIFE PENSION PROPERTIES II;
                       A REAL ESTATE LIMITED PARTNERSHIP

                                   FORM 10-Q

                       FOR QUARTER ENDED MARCH 31, 1999

                                    PART I

                             FINANCIAL INFORMATION
                             ---------------------
<PAGE>
 
BALANCE SHEETS

<TABLE>
<CAPTION>
                                        March 31, 1999   December 31, 1998
                                          (unaudited)        (audited)
                                        --------------   -----------------
<S>                                     <C>              <C>
ASSETS                         
                               
Cash and cash equivalents                    1,142,582           3,504,992
Interest and rent receivable                    10,095              10,095
                                        --------------   -----------------
                                        $    1,152,677   $       3,515,087
                                        ==============   =================
                               
LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                        $       68,156   $          42,397
Deferred disposition fees                            -             691,124
                                        --------------   -----------------
Total liabilities                               68,156             733,521
                                        --------------   -----------------

Partners' capital (deficit):   
   Limited partners ($0        
   per unit; 110,000           
   units authorized, 39,917 units
      issued and outstanding)                1,769,279           2,619,607
   General partner                            (684,758)            161,959  
                                        --------------   -----------------
Total partners' capital (deficit)            1,084,521           2,781,566
                                        --------------   -----------------
                                        $    1,152,677   $       3,515,087
                                        ==============   =================
</TABLE>

               (See accompanying notes to financial statements)
<PAGE>
 
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
                                      Quarter Ended March 31,
                                         1999        1998
                                       ---------  ---------
<S>                                    <C>        <C> 
INVESTMENT ACTIVITY
 
Property rentals                        $     -   $ 701,114
Property operating expenses                   -    (190,487)
Depreciation and amortization                 -     (86,909)
                                        -------   ---------
  Total real estate activity                  -     423,718
 
 
Interest on cash equivalents
 and short term investments              33,114      50,657
                                        -------   ---------
  Total investment activity              33,114     474,375
                                        -------   ---------
 
PORTFOLIO EXPENSES
 
Management fee                                -      41,273
General and administrative               36,799      38,124
                                        -------   ---------
                                         36,799      79,397
                                        -------   ---------
 
 
Net Income (Loss)                       $(3,685)  $ 394,978
                                        =======   =========
 
Net income (loss) per limited
  partnership unit                        $(.09)  $    9.80
                                        =======   =========
 
Cash distributions per
 limited partnership unit               $     -   $    9.07
                                        =======   =========
 
Number of limited partnership
 units outstanding during the period     39,917      39,917
                                        =======   =========
</TABLE>
               (See accompanying notes to financial statements)
<PAGE>
 
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)

<TABLE>
<CAPTION>
                                       Quarter Ended March 31,
                                   1999                       1998
                        -------------------------     -----------------------
                         General        Limited        General     Limited
                         Partner        Partners       Partner     Partners
                        ---------      ----------     ----------  -----------
<S>                     <C>            <C>            <C>          <C>
Balance at beginning
 of period               $ 161,959      $2,619,607    $  113,035   $14,261,105
                                                      
Cash distributions       (846,680)       (846,680)        (3,657)    (362,047)
                                                      
Net income (loss)             (37)         (3,648)         3,950      391,028
                        ---------      ----------     ----------  -----------
Balance at end
 of period              $(684,758)     $1,769,279      $ 113,328  $14,290,086
                        =========      ==========     ==========  ===========
</TABLE> 
               (See accompanying notes to financial statements)
<PAGE>
 
SUMMARIZED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
                                                      Quarter Ended March 31,
                                                     ------------------------
                                                         1999         1998
                                                     -----------   ----------
<S>                                                  <C>           <C>
Net cash provided by operating activities            $    22,074   $  394,996
                                                     -----------   ----------
Cash flows from investing activities:
        Decrease in short-term
                investments, net                               -    1,844,431
        Decrease in deferred disposition fees           (691,124)           -
                                                     -----------   ----------
                   Net cash provided by (used in)
                   investing activities                 (691,124)   1,844,431
                                                     -----------   ----------
 
Cash flows from financing activity:
        Distributions to partners                     (1,693,360)    (365,704)
                                                     -----------   ----------
 
                   Net increase (decrease) in
                   cash and cash equivalents          (2,362,410)   1,873,723
 
Cash and cash equivalents:
        Beginning of period                            3,504,992    2,111,776
                                                     -----------   ----------
 
        End of period                                $ 1,142,582   $3,985,499
                                                     ===========   ==========
</TABLE>
                (See accompanying notes to financial statements)
<PAGE>
 
NOTES TO FINANCIAL STATEMENTS (Unaudited)

     In the opinion of management, the accompanying unaudited financial
statements contain all adjustments necessary to present fairly the Partnership's
financial position as of March 31, 1999 and December 31, 1998 and the results of
its operations, its cash flows and partners' capital for the interim periods
ended March 31, 1999 and 1998.  These adjustments are of a normal recurring
nature.

     See notes to financial statements included in the Partnership's 1998 Annual
Report on Form 10-K for additional information relating to the Partnership's
financial statements.

NOTE 1 - ORGANIZATION AND BUSINESS
----------------------------------

     New England Life Pension Properties II; A Real Estate Limited Partnership
(the "Partnership") is a Massachusetts limited partnership organized for the
purpose of investing primarily in newly constructed and existing income
producing real properties.  It primarily serves as an investment for qualified
pension and profit sharing plans and other entities intended to be exempt from
Federal income tax.  The Partnership commenced operations in June, 1984 and
acquired six real estate investments through 1986. The Partnership sold its last
remaining real estate asset in October 1998 and therefore intends to liquidate
and dissolve in 2000.

NOTE 2 - INVESTMENT IN PROPERTY
--------------------------------
 
     On October 13, 1998, the Partnership sold Case Communications property to
an unaffiliated third party (the Case Buyer) for total gross proceeds of
$20,008,520.  The terms of the sale were determined by arms-length negotiation
between the Case Buyer and AEW Real Estate Advisors, Inc. ("AEW"), on behalf of
the Partnership.  The Partnership received its share of the net proceeds
totaling $18,066,658, representing repayment of its ground lease and mortgage
loan investments and residual proceeds.  The Partnership recognized a gain of
$6,469,508 ($160.45 per limited partnership unit).  On October 29, 1998 the
Partnership made a capital distribution of sales proceeds in the amount of
$16,484,923 ($412.98 per limited partnership unit).
<PAGE>
 
Management's Discussion and Analysis of Financial Condition and Results of
Operations

Liquidity and Capital Resources
-------------------------------

     The Partnership completed its offering of units of limited partnership
interest in November, 1984.  A total of 39,917 units were sold.  The Partnership
received proceeds of $36,296,995, net of selling commissions and other offering
costs, which have been used for investment in real estate and the payment of
related acquisition costs, or retained as working capital reserves. The
Partnership made six real estate investments; all investments have been sold,
one in 1993, two in 1996, two in 1997 and one in 1998.  Capital of $49,513,047
($1,240.40 per limited partnership unit) has been returned to the limited
partners through March 31, 1999 as a result of sales and similar transactions.

     At March 31, 1999, the Partnership had $1,142,582 in cash and cash
equivalents, which is being retained primarily as a reserve in the event of any
claim for such of a representation or warranty in the connection with the sale
of the Case Communication property on October 13, 1998, and as an  additional
reserve in the connection with the liquidation of the Partnership.  Due to the
sale of the Partnership's last investment, the General Partner has elected not
to make any further distributions until all Partnership expenses have been paid
or reconciled.  The Partnership intends to liquidate and dissolve in early 2000.
On January 28, 1999, the Partnership made an initial liquidating distribution in
the aggregate amount of $1,693,359.  Of this distribution, $846,679 was
distributed to investors who are part of the Partnership's Early Investor
Incentive Program (the "Program") in the amount of $62.32 per limited
partnership unit.  The remaining $846,679 was paid to the General Partner, as
its share of the initial liquidating distribution in accordance with the terms
of the Program.


Year 2000 Readiness Disclosure
------------------------------

     The Year 2000 Issue is a result of computer programs being written using
two digits rather than four to define the applicable year.  Computer programs
that have date-sensitive software may recognize a date using "00" as the year
1900 rather than the year 2000.  This could result in a system failure or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions or engage in normal
business operations.

     The Partnership relies on AEW Capital Management L.P. ("AEW Capital
Management"), the parent of AEW Real Estate Advisors, Inc., to generate
financial information and to provide other services, which are dependent on the
use of computers.  The Partnership has obtained assurances from AEW Capital
Management that:

     .  AEW Capital Management has developed a Year 2000 Plan (the "Plan")
        consisting of five phases: inventory, assessment, testing,
        remediation/repair and certification.

     .  As of September 30, 1998, AEW Capital Management had completed the
        inventory and assessment phases of this Plan and had commenced the
        testing and remediation/repair of internal systems.
<PAGE>
 
     .  AEW Capital Management expects to conclude the internal testing,
        remediation/repair and certifications of its Plan no later than June 30,
        1999.

     The Partnership also relies on joint venture partners and/or property
managers to supply financial and other data with respect to its real properties.
The Partnership is in the process of surveying these third party providers and
assessing their compliance with Year 2000 requirements.  To date, the
Partnership is not aware of any problems that would materially impact its
results of operations, liquidity or capital resources.  However, the Partnership
has not yet obtained written assurances that these providers would be Year 2000
compliant.

     The Partnership currently does not have a contingency plan in the event of
a particular provider or system not being Year 2000 compliant.  Such a plan will
be developed if it becomes clear that a provider (including AEW Capital
Management) is not going to achieve its scheduled compliance objectives by June
30, 1999.  The inability of one of these providers to complete its Year 2000
resolution process could materially impact the Partnership.  In addition, the
Partnership is also subject to external forces that might generally affect
industry and commerce, such as utility or transportation company Year 2000
compliance failures and related service interruptions. Given the nature of its
operations, the Partnership will not incur any costs associated with Year 2000
compliance.  All such costs are borne by AEW Capital Management and the property
managers.


Results of Operations
---------------------

 
     As discussed above, the Partnership's last real estate investment was sold
in October 1998.  Therefore, no comparative real estate investment results for
the periods ended March 31, 1998 and 1999 are presented.
 
     Interest on cash and cash equivalents decreased by approximately $17,500 or
35%, due primarily to lower investment balances in 1999 as a result of the 1998
sale mentioned above.
 
Portfolio Expenses

     The Partnership management fee is 9% of distributable cash flow from
operations after any increase or decrease in working capital reserves as
determined by the general partner.  General and administrative expenses
primarily consist of real estate appraisal, printing, legal, accounting and
investor servicing fees.

     Management fees decreased between the first quarter of 1998 and 1999
concurrent with the discontinuance of operating cash distributions, as a result
of the 1998 sale discussed above.  General and administrative expenses for the
first quarter of 1999 were relatively unchanged between the two quarters.
<PAGE>
 
                      NEW ENGLAND PENSION PROPERTIES II;
                       A REAL ESTATE LIMITED PARTNERSHIP

                                   FORM 10-Q

                       FOR QUARTER ENDED MARCH 31, 1999

                                    PART II

                               OTHER INFORMATION
                              -------------------



     Item 1-5    Not Applicable

     Item 6.     Exhibits and Reports on Form 8-K

                  a.    Exhibits:   (27) Financial Data Schedule

                  b.    Reports on Form 8-K: No Current Reports on
                        Form 8-K were filed during the quarter ended
                        March 31, 1999.
<PAGE>
 
                                   SIGNATURES
                                   ----------

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


                              NEW ENGLAND LIFE PENSION PROPERTIES II;
                              A REAL ESTATE LIMITED PARTNERSHIP
                                      (Registrant)



May 5, 1999
                              /s/ J. Christopher Meyer III
                              ------------------------------------
                                J. Christopher Meyer III
                                President, Chief Executive Officer
                                and Director of General Partner,
                                Copley Properties Company II, Inc.



May 5, 1999
                              /s/ Karin J. Lagerlund
                              ------------------------------------
                                Karin J. Lagerlund
                                Principal Financial and Accounting
                                Officer of General Partner,
                                Copley Properties Company II, Inc.