<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 June 30, 1997                   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 JUNE 30, 1997

                                     PART I

                             FINANCIAL INFORMATION
                             ----------------------
<PAGE>
 
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
 
 
                                        June 30, 1997  December 31, 1996
                                        -------------  -----------------
<S>                                     <C>            <C>
 
ASSETS
 
Real estate investments:
   Ground leases and mortgage loans,
       net                                $12,894,558        $12,896,144
   Property, net                           16,451,267         16,795,323
   Deferred leasing costs and
       other assets, net                      850,934            809,629
                                          -----------        -----------
                                           30,196,759         30,501,096
 
 
Cash and cash equivalents                   3,942,917          7,877,668
Short-term investments                      1,579,430          1,912,918
Interest and rent receivable                   36,051             46,982
                                          -----------        -----------
 
                                          $35,755,157        $40,338,664
                                          ===========        ===========

LIABILITIES AND PARTNERS' CAPITAL
 
Accounts payable                          $   878,407        $ 1,014,398
Accrued management fee                         53,475             62,089
Deferred disposition fees                     472,312            472,312
                                          -----------        -----------
Total liabilities                           1,404,194          1,548,799
                                          -----------        -----------
 
Partners' capital:
   Limited partners ($766.04 and $889.89
   per unit, respectively; 110,000
   units authorized, 39,917 units
   issued and outstanding)                 34,275,052         38,719,002
   General partner                             75,911             70,863
                                          -----------        -----------
Total partners' capital                    34,350,963         38,789,865
                                          -----------        -----------
 
                                          $35,755,157        $40,338,664
                                          ===========        ===========
</TABLE>


               (See accompanying notes to financial statements)
<PAGE>
 
STATEMENTS OF OPERATIONS
        (Unaudited)
<TABLE> 
<CAPTION> 
 
                                         Quarter Ended     Six Months Ended    Quarter Ended    Six Months Ended
                                         June 30, 1997      June 30, 1997      June 30, 1996     June 30, 1996
                                        --------------     ----------------    -------------    ----------------
<S>                                     <C>                <C>                 <C>              <C>
INVESTMENT ACTIVITY

Property rentals                          $  823,238          $1,544,865         $ 553,371         $1,127,444
Property operating expenses                 (197,235)           (415,235)         (230,037)          (488,048)
Depreciation and amortization               (189,847)           (379,693)         (174,610)          (331,754)
                                          ----------          ----------         ---------         ----------
                                             436,156             749,937           148,724            307,642
Provision for impaired mortgage loans              -                   -          (310,000)          (310,000)
Ground rentals and interest on
   mortgage loans                            525,266           1,007,766           630,948          1,263,431
                                          ----------          ----------         ---------         ----------
   Total real estate activity                961,422           1,757,703           469,672          1,261,073
 
 
Interest on cash equivalents
   and short term investments                 57,672             131,934            69,026            132,996
                                          ----------          ----------         ---------         ----------
   Total investment activity               1,019,094           1,889,637           538,698          1,394,069
                                          ----------          ----------         ---------         ----------
 
PORTFOLIO EXPENSES
 
Management fee                                53,475             109,702            62,088            124,177
General and administrative                    39,205              78,816            38,869             89,077
                                          ----------          ----------         ---------         ----------
                                              92,680             188,518           100,957            213,254
                                          ----------          ----------         ---------         ----------
 
Net Income                                $  926,414          $1,701,119         $ 437,741         $1,180,815
                                          ==========          ==========         =========         ==========
Net income per limited partnership
   unit                                   $    22.98          $    42.19         $   10.86         $    29.29
                                          ==========          ==========         =========         ==========
</TABLE>
<PAGE>
 
<TABLE>
<CAPTION>
                                         Quarter Ended     Six Months Ended    Quarter Ended    Six Months Ended
                                         June 30, 1997      June 30, 1997      June 30, 1996     June 30, 1996
                                        --------------     ----------------    -------------    ----------------
<S>                                     <C>                <C>                 <C>              <C>
Cash distributions per
 limited partnership unit                 $    14.10          $   153.52         $   15.57         $    31.14
                                          ==========          ==========         =========         ==========
 
Number of limited partnership
 units outstanding during the period          39,917              39,917            39,917             39,917
                                          ==========          ==========         =========         ==========
 
</TABLE>
               (See accompanying notes to financial statements)
<PAGE>
 
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
<TABLE>
<CAPTION>
 
 
                   Quarter Ended             Six Months Ended             Quarter Ended               Six Months Ended
                   June 30, 1997              June 30, 1997               June 30, 1996                June 30, 1996
                --------------------       --------------------       ---------------------         --------------------
                                                                                                               
                General      Limited       General        Limited      General        Limited       General        Limited
                Partner     Partners       Partner       Partners      Partner       Partners       Partner       Partners
                -------    ---------       -------       --------      --------      --------       -------       --------  
<S>             <C>        <C>             <C>          <C>            <C>          <C>             <C>          <C> 
Balance at
beginning of
period          $ 72,332   $ 33,920,732    $ 70,863     $ 38,719,002   $ 66,041     $ 38,241,581    $ 64,888     $ 38,127,446

Cash                                                                                                             
distributions     (5,685)      (562,830)    (11,963)      (6,128,058)    (6,278)        (621,508)    (12,556)      (1,243,016)

Net income         9,264        917,150      17,011        1,684,108      4,377          433,364      11,808        1,169,007
                --------   ------------    --------     ------------   --------     ------------    --------     ------------ 

Balance at                                                                                                       
end of period   $ 75,911   $ 34,275,052    $ 75,911     $ 34,275,052   $ 64,140     $ 38,053,437    $ 64,140     $ 38,053,437
                ========   ============    ========     ============   ========     ============    ========     ============ 
</TABLE> 

               (See accompanying notes to financial statements)
<PAGE>
 
SUMMARIZED STATEMENTS OF CASH FLOWS
(Unaudited)

<TABLE> 
<CAPTION> 
                                              Six Months Ended June 30,
                                              -------------------------
                                                   1997          1996
                                              -----------   -----------
<S>                                           <C>           <C>
Net cash provided by operating activities     $ 1,885,210   $ 1,718,763
                                              -----------   -----------
 
Cash flows from investing activities:
   Net proceeds from sale of investment                 -       836,852
   Capital expenditures on owned property         (13,428)     (246,538)
   Decrease in short-term investments, net        333,488       645,668
   Deferred disposition fee                             -        27,450
                                              -----------   -----------
          Net cash provided by
          investing activities                    320,060     1,263,432
                                              -----------   -----------
 
Cash flows from financing activity:
   Distributions to partners                   (6,140,021)   (1,255,572)
                                              -----------   -----------
 
          Net (decrease)increase in
          cash and cash equivalents            (3,934,751)    1,726,623
 
Cash and cash equivalents:
   Beginning of period                          7,877,668     2,731,930
                                              -----------   -----------
 
   End of period                              $ 3,942,917   $ 4,458,553
                                              ===========   ===========
</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 June 30, 1997 and December 31, 1996 and the results of
its operations, its cash flows and partners' capital for the interim periods
ended June 30, 1997 and 1996. These adjustments are of a normal recurring
nature.

      See notes to financial statements included in the Partnership's 1996
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, three of which have been sold
as of June 30, 1997. It intends to dispose of its investments within twelve
years of their acquisition, and then liquidate; however, the general partner
could extend the investment period if it is in the best interest of the limited
partners.

NOTE 2 - INVESTMENTS IN GROUND LEASES AND MORTGAGE LOANS
--------------------------------------------------------

      One of the two Elkridge buildings was sold in May 1996, and the other was
sold in December 1996. The Susana Corporate Center was sold in October 1996.
Each of these investments was sold for a price which approximated the
Partnership's carrying value, as previously adjusted for valuation allowances.
On January 30, 1997, the Partnership made a capital distribution of $4,943,720
($123.85 per limited partnership unit) from the proceeds of these sales.

      In October 1996, the Partnership reached an agreement in principle with
the borrowers on the Oakland and Case Communications mortgage loans which
matured in 1994 and 1995 respectively, whereby the maturity dates will be
extended to December 1997. In addition, effective January 1, 1997, the fixed
interest and ground rental payments will be reduced, but the Partnership's rate
of participation in revenue from the underlying properties will be increased.
The agreement will also allow the Partnership to cause a sale of the respective
properties.


<PAGE>
 
      The mortgage loans on Case Communications are impaired, as were the
mortgage loans on Elkridge and Susana Corporate Center. Accordingly, a valuation
allowance has been established to adjust the carrying value of each loan to its
estimated fair market value less anticipated costs of sale. The activity in the
valuation allowance during 1996 and 1997, together with the related recorded and
carrying values of the impaired mortgage loans at the beginning and end of the
respective periods, are as follows:

<TABLE>
<CAPTION>
 
                                      Recorded      Valuation      Carrying
                                       Value        Allowance       Value
                                    ------------  -------------  ------------
<S>                                 <C>           <C>            <C>
 
Balance at January 1, 1996           $15,619,235   $(3,898,000)   $11,721,235
                                     ===========  ============   ============
 
Decrease in estimated fair
  market value of collateral                          (310,000)
 
Sale of Collateral                                     155,915
                                                  ------------
 
Balance at June 30, 1996             $14,889,944   $(4,052,085)   $10,837,859
                                     ===========  ============   ============
 
Increase in estimated fair
 market value of collateral, net                       327,291
 
Sale of collateral                                   2,924,794
                                                  ------------
 
Balance at January 1, 1997           $ 9,907,088   $  (800,000)   $ 9,107,088
                                     ===========  ============   ============
 
Balance at June 30, 1997             $ 9,907,088   $  (800,000)   $ 9,107,088
                                     ===========  ============   ============
</TABLE>

      The average recorded value of the impaired mortgage loans did not differ
materially from the balances at the end of the quarterly periods.

NOTE 3 - SUBSEQUENT EVENTS
--------------------------

      Distributions of cash from operations relating to the quarter ended June
30, 1997 were made on July 24, 1997 in the aggregate amount of $540,694 ($13.41
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; three investments have been sold,
one in 1993 and two in 1996. Capital of $9,338,981 ($233.96 per limited
partnership unit) has been returned to the limited partners as a result of sales
and similar transactions.

      At June 30, 1997, the Partnership had $5,522,347 in cash, cash equivalents
and short-term investments, of which $540,694 was used for cash distributions to
partners on July 24, 1997; the remainder is primarily being retained as working
capital reserves. The Partnership also has a commitment to fund the balance of
its share of the renovation of the Willows Shopping Center, which approximates
$948,000. The source of future liquidity and cash distributions to partners is
expected to be cash generated by the Partnership's real estate investments, and
proceeds from the sale of such investments. The adjusted capital contribution
was reduced from $889.89 to $766.04 per limited partnership unit during the
first quarter of 1997, with a distribution of sales proceeds. Distributions of
cash from operations for the first and second quarters of 1997 and 1996 were
made at the annualized rate of 7% on the weighted average adjusted capital
contribution.

      The carrying value of real estate investments in the financial statements,
other than impaired mortgage loans (Case Communications), is at depreciated cost
or, if the investment's carrying value is determined not to be recoverable
through expected undiscounted future cash flows, the carrying value is reduced
to estimated fair market value. The fair market value of such investments is
further reduced by the estimated cost of sale for properties held for sale.
Carrying value may be greater or less than current appraised value. At June 30,
1997, the appraised value of each of the Partnership's investments exceeded its
related carrying value by an aggregate of approximately $2,400,000. The current
appraised value of real estate investments has been estimated by the general
partner and is generally based on a correlation of traditional appraisal
approaches performed by the Partnership's advisor and independent appraisers.
Because of the subjectivity inherent in the valuation process, the estimated
current appraised value may differ significantly from that which could be
realized if the real estate were actually offered for sale in the marketplace.


Results of Operations

Operating Factors

      One of the two Elkridge buildings was sold in May 1996; the other was sold
in December 1996. The Susana Corporate Center was sold in October 1996.

      At June 30, 1997, the Willows Shopping Center was 94% leased, compared to
90% at June 30, 1996. The ground lessee/borrower has substantially completed the
full rehabilitation of the Center. The Partnership's share of the remaining cost
is approximately $948,000 at June 30, 1997 which largely relates to the
renovation of space occupied by a significant anchor tenant which began
operating in October 1996. The Partnership and its affiliate are currently
negotiating a purchase and sale agreement for the property. Although, there can
be no assurances, a fourth quarter 1997 closing is anticipated.
<PAGE>
 
      Occupancy at Oakland was 100% at June 30, 1997, an increase from 91% at
June 30, 1996. During the second quarter of 1997, a month-to-month tenant
occupied 12% of the building, while the space is being marketed to potential
long-term tenants.

      The Case Communications property continues to be fully occupied by a
government agency, whose lease expired in November 1996. The tenant has
indicated its intention to renew, although a new lease agreement has not yet
been executed. In the meantime, the tenant has been renting the space on a 
month-to-month basis.

      The Partnership's mortgage loans on Oakland and Case Communications
reached maturity in 1994 and 1995, respectively. In October 1996, the
Partnership reached an agreement in principle with the borrowers, whereby the
maturity dates will be extended to December 1997. In addition, effective January
1, 1997, the fixed interest and ground rental payments will be reduced, but the
Partnership's rate of participation in revenue from the underlying properties
will be increased. The agreement will also allow the Partnership to cause a sale
of the properties.


Investment Results

      Exclusive of the operating results from Susana Corporate Center in 1996 of
$236,931 and Elkridge in 1996 of $61,500 and the provision for impaired mortgage
loans, total real estate activity was $1,757,703 and $1,272,642 for the six
months ended June 30, 1997 and 1996, respectively. This increase of $485,061, is
primarily due to improved operating results at the Willows Shopping Center of
approximately $442,000 caused by increased occupancy and lower operating
expenses. Revenue from Oakland and Case Communications also increased due to
higher percentage rent payments.

      Interest on cash equivalents and short-term investments was relatively
unchanged between the first six months of 1996 and 1997.

      The increase in operating cash flow of approximately $166,000 between the
first six months of 1996 and 1997 is due to the above mentioned changes in
operating results, partially offset by changes in net working capital.

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 six months of 1996 and 1997
due to a reduction in distributable cash flow. General and administrative
expenses for the first six months of 1997 decreased approximately 12% compared
to the first six months of 1996 primarily due to lower professional fees.
<PAGE>
 
                      NEW ENGLAND PENSION PROPERTIES II; 
                      A REAL ESTATE LIMITED PARTNERSHIP 

                                  FORM 10-Q 

                        FOR QUARTER ENDED JUNE 30, 1997

                                   PART II 

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



     Item 6. Exhibits and Reports on Form 8-K

                  a.    Exhibits:   None.

                  b.    Reports on Form 8-K:  No Current Reports on
                        Form 8-K were filed during the quarter ended
                        June 30, 1997.
<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)



August 14, 1997
                              /s/ James J. Finnegan
                              -------------------------------
                                James J. Finnegan
                                Managing Director and General
                                Counsel of General Partner,
                                Copley Properties Company II, Inc.



August 14, 1997
                             /s/ Karin J. Lagerlund
                             --------------------------------
                               Karin J. Lagerlund
                               Principal Financial and Accounting
                               Officer of General Partner,
                               Copley Properties Company II, Inc.