<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-Q



(Mark One)

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

For the quarterly period ended   September 30, 2001     or
                               ------------------------

[_]   Transition report pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934

For the transition period from ______________ to ____________________

Commission file number                   0-16518
                       -----------------------------------------------

                           WELLS REAL ESTATE FUND II
--------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)


              Georgia                                       58-1678709
---------------------------------------        ---------------------------------
   (State or other jurisdiction of                       (I.R.S. Employer
   incorporation or organization)                      Identification Number)

6200 The Corners Parkway, Suite 250, Norcross, Georgia          30092
------------------------------------------------------      ---------------
  (Address of principal executive offices)                    (Zip Code)


Registrant's telephone number, including area code      (770) 449-7800
                                                   -------------------------

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


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

          Yes   X         No   ________
              -----
<PAGE>

                                   FORM 10-Q

                           WELLS REAL ESTATE FUND II

                    (A Georgia Public Limited Partnership)


                                     INDEX


<TABLE>
<CAPTION>
                                                                                                    Page No.
                                                                                                    --------
<S>                                                                                               <C>
PART I.    FINANCIAL INFORMATION

  Item 1.  Financial Statements

           Balance Sheets-September 30, 2001 and December 31, 2000                                        3

           Statements of (Loss) Income for the Three Months and Nine Months Ended September
              30, 2001 and 2000                                                                           4

           Statements of Partners' Capital for the Nine Months Ended September 30, 2001 and
              the Year Ended December 31, 2000                                                            5

           Statements of Cash Flows for the Nine Months Ended September 30, 2001
              and 2000                                                                                    6

           Condensed Notes to Financial Statements                                                        7

  Item 2.  Management's Discussion and Analysis of Financial Condition and Results
              of Operations                                                                              10

PART II.   OTHER INFORMATION                                                                             13
</TABLE>

                                       2
<PAGE>

                           WELLS REAL ESTATE FUND II

                     (A Georgia Public Limited Partnership)


                                 BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                           September 30,      December 31,
                                                                               2001               2000
                                                                           ------------       ------------
<S>                                                                       <C>                <C>
ASSETS:
 Investment in joint venture (Note 2)                                      $18,419,950        $19,280,727
 Cash and cash equivalents                                                      35,948             47,334
 Due from affiliate                                                            253,212            468,016
 Prepaid expenses and other assets                                                 552                187
                                                                           -----------        -----------
       Total assets                                                        $18,709,662        $19,796,264
                                                                           ===========        ===========
LIABILITIES AND PARTNERS' CAPITAL:
 Liabilities:
   Accounts payable                                                        $         0        $     5,584
   Partnership distributions payable                                           194,818            483,158
                                                                           -----------        -----------
       Total liabilities                                                       194,818            488,742
                                                                           -----------        -----------
 Partners' capital:
   Limited partners:
     Class A-108,572 units                                                  18,514,845         19,307,522
     Class B-30,221 units                                                            0                  0
                                                                           -----------        -----------
       Total partners' capital                                              18,514,845         19,307,522
                                                                           -----------        -----------
       Total liabilities and partners' capital                             $18,709,662        $19,796,264
                                                                           ===========        ===========
</TABLE>

           See accompanying condensed notes to financial statements.

                                       3
<PAGE>

                           WELLS REAL ESTATE FUND II

                     (A Georgia Public Limited Partnership)


                          STATEMENTS OF (LOSS) INCOME


<TABLE>
<CAPTION>
                                                   Three Months Ended                    Nine Months Ended
                                           -----------------------------------  ----------------------------------
                                            September 30,      September 30,     September 30,      September 30,
                                                2001               2000              2001               2000
                                           --------------     ----------------  ---------------    ---------------
<S>                                        <C>                <C>               <C>                <C>
 REVENUES:
 Equity in (loss) income of joint
  venture (Note 2)                           $(100,857)          $102,293          $105,164           $386,400
 Interest income                                   467              2,061             1,398              2,292
                                             ---------           --------          --------           --------
                                              (100,390)           104,354           106,562            388,692
                                             ---------           --------          --------           --------
EXPENSES:
 Partnership administration                          0                 10                19                 10
                                             ---------           --------          --------           --------
NET (LOSS) INCOME                            $(100,390)          $104,344          $106,543           $388,682
                                             =========           ========          ========           ========
NET (LOSS) INCOME ALLOCATED TO
 CLASS A LIMITED PARTNERS                    $(100,390)          $104,344          $106,543           $388,682
                                             =========           ========          ========           ========
NET LOSS ALLOCATED TO CLASS B
 LIMITED PARTNERS                            $       0           $      0          $      0           $      0
                                             =========           ========          ========           ========
NET (LOSS) INCOME PER CLASS A
 LIMITED PARTNER UNIT                        $   (0.92)          $   0.96          $   0.98           $   3.58
                                             =========           ========          ========           ========
CASH DISTRIBUTION PER CLASS A
 LIMITED PARTNER UNIT                        $    1.72           $   4.37          $   8.28           $  13.28
                                             =========           ========          ========           ========
</TABLE>

           See accompanying condensed notes to financial statements.

                                       4
<PAGE>

                           WELLS REAL ESTATE FUND II

                     (A Georgia Public Limited Partnership)


                        STATEMENTS OF PARTNERS' CAPITAL

                      FOR THE YEAR ENDED DECEMBER 31, 2000

                  AND THE NINE MONTHS ENDED SEPTEMBER 30, 2001

<TABLE>
<CAPTION>
                                                            Limited Partners                              Total
                                          -------------------------------------------------------
                                                   Class A                        Class B               Partners'
                                          ------------------------------------------------------
                                            Units         Amounts           Units       Amounts          Capital
                                          --------      -----------      ----------  -----------     -------------
<S>                                    <C>           <C>                 <C>          <C>           <C>
BALANCE, December 31, 1999                  108,572        $20,722,383        30,221     $     0          $20,722,383

 Net income                                       0            502,126             0           0              502,126
 Partnership distributions                        0         (1,916,987)            0           0           (1,916,987)
                                          ---------        -----------      --------     -------          -----------
BALANCE, December 31, 2000                  108,572         19,307,522        30,221           0           19,307,522

 Net income                                       0            106,543             0           0              106,543
 Partnership distributions                        0           (899,220)            0           0             (899,220)
                                          ---------        -----------      --------     -------          -----------
BALANCE, September 30, 2001                 108,572        $18,514,845        30,221     $     0          $18,514,845
                                          =========        ===========      ========     =======          ===========
</TABLE>

           See accompanying condensed notes to financial statements.

                                       5
<PAGE>

                           WELLS REAL ESTATE FUND II

                     (A Georgia Public Limited Partnership)


                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                               Nine Months Ended
                                                                       --------------------------------------
                                                                        September 30,           September 30,
                                                                           2001                     2000
                                                                       ---------------         --------------
<S>                                                                   <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                                                $   106,543          $   388,682
 Adjustments to reconcile net income to net cash (used in)
  provided by operating activities:
     Equity in income of joint venture                                        (105,164)            (386,400)
     Changes in assets and liabilities:
       Accounts payable                                                         (6,137)                (675)
       Prepaid expenses and other assets                                           187                    0
                                                                           -----------          -----------
         Net cash (used in) provided by operating activities                    (4,571)               1,607
                                                                           -----------          -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Distributions received from joint ventures                                  1,180,745            1,396,756
                                                                           -----------          -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Distributions to partners                                                  (1,187,560)          (1,442,022)
                                                                           -----------          -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                      (11,386)             (43,659)

CASH AND CASH EQUIVALENTS, beginning of year                                    47,334               90,558
                                                                           -----------          -----------
CASH AND CASH EQUIVALENTS, end of period                                   $    35,948          $    46,899
                                                                           ===========          ===========
</TABLE>

           See accompanying condensed notes to financial statements.

                                       6
<PAGE>

                           WELLS REAL ESTATE FUND II

                     (A Georgia Public Limited Partnership)

                    CONDENSED NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2001

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   (a) General

   Wells Real Estate Fund II (the "Partnership") is a Georgia public limited
   partnership with Leo F. Wells, III and Wells Capital, Inc., a Georgia
   Corporation, serving as General Partners. The Partnership was formed on June
   23, 1986, for the purpose of acquiring, developing, constructing, owning,
   operating, improving, leasing, and otherwise managing income-producing
   commercial or industrial properties for investment purposes. The Partnership
   has two classes of limited partnership interests, Class A and Class B units.
   Limited partners may vote to, among other things, (a) amend the partnership
   agreement, subject to certain limitations, (b) change the business purpose or
   investment objectives of the Partnership, and (c) add or remove a general
   partner. A majority vote on any of the above described matters will bind the
   Partnership, without the concurrence of the general partners. Each limited
   partnership unit has equal voting rights, regardless of class.

   On September 8, 1986, the Partnership commenced a public offering of its
   limited partnership units pursuant to a Registration Statement filed on Form
   S-11 under the Securities Act of 1933. The Partnership terminated its
   offering on September 7, 1988 and received gross proceeds of $34,948,250
   representing subscriptions from 4,440 Limited Partners, comprised of two
   classes of limited partnership interests, Class A and Class B limited
   partnership units.

   The Partnership owns interests in properties through its ownership in the
   following joint ventures with other Wells Real Estate Funds: (i) a joint
   venture between the Partnership and Wells Real Estate Fund II-OW ("Fund II-
   Fund IIOW Joint Venture"), (ii) a joint venture between Fund II-Fund IIOW
   Joint Venture and Wells Real Estate Fund III, L.P. ("Fund II-III
   Associates"), (iii) a joint venture among Fund II-III Associates, Wells Real
   Estate Fund VI, L.P. and Wells Real Estate Fund VII, L.P. ("Fund II-III-VI-
   VII Associates"), (iv) a joint venture between Fund II-Fund IIOW Joint
   Venture and Wells Real Estate Fund I ("Tucker Joint Venture"), and (v) a
   joint venture among Wells Real Estate Fund I, Fund II-Fund IIOW Joint
   Venture, Wells Real Estate Fund VI, L.P. and Wells Real Estate Fund VII, L.P.
   ("Fund I-II-IIOW-VI-VII Joint Venture").

   As of September 30, 2001, the Partnership owned interests in the following
   properties through its ownership in the foregoing joint ventures: (i) a two-
   story office building located in Charlotte, North Carolina ("First Union at
   Charlotte"), owned by Fund II-Fund IIOW Joint Venture, (ii) a four-story
   office building located in metropolitan Houston, Texas ("Boeing at the
   Atrium"), owned by Fund II-III Associates, (iii) a restaurant located in
   Fulton County, Georgia ("Brookwood Grill"), owned by Fund II-III Associates,
   (iv) an office/retail center in Fulton County, Georgia ("Holcomb Bridge Road
   Property"), owned by Fund II-III-VI-VII Associates, (v) a retail shopping and
   commercial office complex located in Tucker, Georgia ("Heritage Place"),
   owned by Tucker Joint Venture, and (vi) a shopping center located in Cherokee
   County, Georgia ("Cherokee Commons"), owned by the Fund I-II-IIOW-VI-VII
   Joint Venture. All of the foregoing properties were acquired on an all cash
   basis.

                                       7
<PAGE>

   For further information regarding these joint ventures and properties, refer
   to the Partnership's Form 10-K for the year ended December 31, 2000.

   (b) Basis of Presentation

   The financial statements of the Partnership have been prepared in accordance
   with instructions to Form 10-Q and do not include all of the information and
   footnotes required by generally accepted accounting principles for complete
   financial statements. These quarterly statements have not been examined by
   independent accountants, but in the opinion of the General Partners, the
   statements for the unaudited interim periods presented include all
   adjustments, which are of a normal and recurring nature and necessary to
   present a fair presentation of the results for such periods. For further
   information, refer to the financial statements and footnotes included in the
   Partnership's Form 10-K for the year ended December 30, 2000.

   (c) Reclassifications

   Certain prior year amounts have been reclassified to conform to the current
   year financial statement presentation.

2. INVESTMENT IN JOINT VENTURE

   As of September 30, 2001, the Partnership owned interests in each of the six
   aforementioned properties through its interest in the Fund II-Fund IIOW Joint
   Venture. The Partnership does not have control over the operations of this
   joint venture; however, it does exercise significant influence. Accordingly,
   the investment in the Fund II-Fund IIOW Joint Venture is recorded using the
   equity method.

   Fund II-Fund IIOW Joint Venture

   The Fund II-Fund IIOW Joint Venture was formed on March 1, 1988 between the
   Partnership and Wells Real Estate Fund II-OW ("Wells Fund IIOW"). Wells Fund
   IIOW is a Georgia public limited partnership affiliated with the Partnership
   through common general partners. The investment objectives of Wells Fund IIOW
   are substantially identical to those of the Partnership. As of September 30,
   2001, the Partnership's equity interest in the Fund II-Fund IIOW Joint
   Venture was approximately 95%, and the equity interest of Wells Fund IIOW was
   approximately 5%.

                                       8
<PAGE>

  SUMMARY OF OPERATIONS

  The following information summarizes the operations of the Fund II-Fund IIOW
  Joint Venture for the three and nine months ended September 30, 2001 and 2000,
  respectively.

<TABLE>
<CAPTION>
                                                                                                 Partnership's Share of Net
                                        Total Revenues               Net (Loss) Income                   (Loss) Income
                               ------------------------------ -----------------------------  ----------------------------------
                                       Three Months Ended            Three Months Ended               Three Months Ended
                               ------------------------------ ----------------------------   ----------------------------------
                                September 30,  September 30,  September 30,   September 30,   September 30,      September 30,
                                    2001           2000           2001            2000            2001               2000
                               --------------  -------------  -------------   -------------   -------------      --------------
<S>                             <C>            <C>            <C>             <C>             <C>                <C>
Fund II-Fund IIOW
  Joint Venture                      $ 88,646       $238,415      $(106,512)       $108,029         $(100,857)          $102,293
                               ==============  =============  =============   =============     =============      =============

                                       Total Revenues                  Net Income             Partnership's Share of Net Income
                               ------------------------------ -----------------------------  ----------------------------------
                                     Nine Months Ended              Nine Months Ended                 Nine Months Ended
                               ------------------------------ -----------------------------  ----------------------------------
                                September 30,  September 30,  September 30,   September 30,   September 30,      September 30,
                                   2001            2000           2001            2000            2001               2000
                               --------------  -------------  -------------   -------------   -------------      --------------
Fund II-Fund IIOW
  Joint Venture                      $631,514       $847,678      $ 111,062        $408,068       $ 105,164            $386,400
                               ==============  =============  =============   =============   =============      ==============
</TABLE>

  The following information summarizes the operations of the unconsolidated
  joint ventures in which the Fund II-Fund IIOW Joint Venture had ownership
  interests as of September 30, 2001 and 2000, respectively.

<TABLE>
<CAPTION>
                                                                                               Fund II-Fund IIOW Joint Venture's
                                       Total Revenues               Net (Loss) Income              Share of Net (Loss) Income
                               ------------------------------ -----------------------------  ----------------------------------
                                     Three Months Ended             Three Months Ended                 Three Months Ended
                               ------------------------------ -----------------------------  ----------------------------------
                                September 30,  September 30,  September 30,   September 30,     September 30,      September 30,
                                   2001            2000           2001            2000              2001               2000
                               --------------  -------------  -------------   -------------     -------------     -------------
<S>                            <C>             <C>            <C>             <C>               <C>              <C>
Fund II-III
 Joint Venture                     $  448,347     $  436,391       $(52,455)      $ (78,229)          $(31,780)          $(47,460)
Fund II-III-IV-VII
 Joint Venture                        215,407        214,052         84,664          52,629             12,706              7,898
Tucker Joint Venture                  309,535        341,286         36,301          62,864             16,303              8,232
Fund I-II-IIOW-VI-
 VII Joint Venture                    253,155        230,688        165,105          58,293             90,083             31,805
                               --------------  -------------  -------------   -------------      -------------     --------------
                                   $1,226,444     $1,222,417       $233,615       $  95,557           $ 87,312           $ 20,475
                               ==============  =============  =============   =============      =============     ==============

                                                                                               Fund II-Fund IIOW Joint Venture's
                                       Total Revenues               Net (Loss) Income             Share of Net (Loss) Income
                              ------------------------------  ----------------------------    -------------------------------------
                                     Nine Months Ended              Nine Months Ended                  Nine Months Ended
                              ------------------------------  ----------------------------    -------------------------------------
                                September 30,  September 30,  September 30,   September 30,    September 30,        September 30,
                                    2001           2000           2001            2000             2001                 2000
                              --------------  --------------  -------------   -------------   --------------     ------------------
Fund II-III
 Joint Venture                     $1,323,286     $1,315,847       $(17,827)      $(129,785)          $ (9,785)          $(78,413)
Fund II-III-IV-VII
 Joint Venture                        631,698        658,907        175,834         191,051             26,388             28,672
Tucker Joint Venture                  993,851      1,029,696        184,020         202,580             82,643             90,979
Fund I-II-IIOW-VI-
 VII Joint Venture                    764,131        713,787        452,799         304,760            247,052            166,280
                                   ----------     ----------       --------       ---------           --------           --------
                                   $3,712,966     $3,718,237       $794,826       $ 568,606           $346,298           $207,518
                                   ==========     ==========       ========       =========           ========           ========
</TABLE>

                                       9
<PAGE>

  SUMMARY OF OPERATIONS

  The following information summarizes the operations of the properties, which
  are owned by the above joint ventures and significant to the Partnership, for
  the periods ended September 30, 2001 and September 30, 2000, respectively.
  Audited financial statements of these properties are included in the
  Partnership's Annual Report on Form 10-K filed for the year ended December 31,
  2000:

<TABLE>
<CAPTION>
                                                                                                 Partnership's Share of Net (Loss)
                                         Total Revenues               Net (Loss) Income                        Income
                                 ----------------------------  ------------------------------   -----------------------------------
                                       Three Months Ended             Three Months Ended                 Three Months Ended
                                 ----------------------------  ------------------------------   -----------------------------------
                                  September 30,  September 30,  September 30,   September 30,    September 30,       September 30,
                                      2001           2000           2001            2000            2001                 2000
                                 --------------  -------------  -------------   -------------   --------------      ---------------
<S>                              <C>            <C>            <C>             <C>             <C>                 <C>
First Union at Charlotte             $      189     $  211,141      $(168,988)      $  98,920          $(160,015)         $  93,667
Boeing at the Atrium                    368,814        367,536        (88,199)       (125,292)           (51,195)           (72,726)
                                 --------------  -------------   ------------     -----------        -----------       ------------
                                     $  369,003     $  578,677      $(257,187)      $ (26,372)         $(211,210)         $  20,941
                                 ==============  =============   ============     ===========        ===========       ============

                                                                                                 Partnership's Share of Net (Loss)
                                         Total Revenues               Net (Loss) Income                       Income
                                 ----------------------------- ------------------------------  ------------------------------------
                                       Nine Months Ended              Nine Months Ended                  Nine Months Ended
                                 ----------------------------- ------------------------------  ------------------------------------
                                  September 30,  September 30,  September 30,   September 30,     September 30,       September 30,
                                      2001           2000           2001            2000              2001               2000
                                 --------------  ------------- --------------  --------------  ----------------   -----------------
First Union at Charlotte             $  281,738     $  633,361      $(137,442)      $ 294,552          $(130,144)         $ 278,911
Boeing at the Atrium                  1,109,273      1,101,248       (126,659)       (238,911)           (73,519)          (138,676)
                                   ------------     ----------     ----------      ----------         ----------        -----------
                                     $1,391,011     $1,734,609      $(264,101)      $  55,641          $(203,663)         $ 140,235
                                   ============     ==========     ==========      ==========         ==========        ===========
</TABLE>

3.  SUBSEQUENT EVENT


    On October 1, 2001, Fund I-II-IIOW-VI-VII Joint Venture sold Cherokee
    Commons for a gross sales price of $8,660,000. The Partnership received net
    proceeds of approximately $4,381,000, resulting in a gain of approximately
    $900,000.

    Rent guarantees for two tenants were provided by Fund I-II-IIOW-VI-VII Joint
    Venture to the Purchaser in the sale of Cherokee Commons. Fund I-II-IIOW-VI-
    VII Joint Venture accrued a contingent liability in October 2001 for its
    rental payments due from one tenant, as management considers the likelihood
    of nonpayment by this tenant to be probable. The Partnership's portion of
    this liability is $8,111. Management considers the likelihood of nonpayment
    by the second tenant to be low and, accordingly, has not accrued a
    contingent liability for the related rental guarantee.

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

    The following discussion and analysis should be read in conjunction with the
    accompanying financial statements of the Partnership and notes thereto. This
    Report contains forward-looking statements, within the meaning of Section
    27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
    Act of 1934, including discussion and analysis of the financial condition of
    the Partnership, anticipated

                                       10
<PAGE>

    capital expenditures required to complete certain projects, amounts of cash
    distributions anticipated to be distributed to Limited Partners in the
    future and certain other matters. Readers of this Report should be aware
    that there are various factors that could cause actual results to differ
    materially from any forward-looking statement made in this Report, which
    include construction costs which may exceed estimates, construction delays,
    lease-up risks, inability to obtain new tenants upon the expiration of
    existing leases, and the potential need to fund tenant improvements or other
    capital expenditures out of operating cash flow.

1.  RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL CONDITIONS

    General

    As of September 30, 2001, the developed properties owned by the Fund II-Fund
    IIOW Joint Venture were 69.3% occupied, as compared to 97.1% occupied as of
    September 30, 2000, primarily due to the expiration of First Union's (sole
    tenant at First Union at Charlotte) lease on April 30, 2001.

    Gross revenues of the Partnership decreased to $105,164 for the nine months
    ended September 30, 2001 from $386,400 for the nine months ended September
    30, 2000, primarily due to a decrease in equity in income from the Fund II-
    Fund IIOW Joint Venture resulting from the expiration of First Union's
    lease, bad debt expense at the Holcomb Bridge Road Property and lower rental
    income at Heritage Place. The decrease in revenue from First Union was
    partially offset by increased rental rates at other properties, adjustments
    to the common area maintenance billings to the tenant at Boeing at the
    Atrium and decreased depreciation at Cherokee Commons. In accordance with
    the provisions of SFAS No. 121, "Accounting for the Impairment of Long-Lived
    Assets and for Long-Lived Assets to be Disposed of", Fund I-II-IIOW-VI-VII
    Joint Venture reclassified the real estate assets of Cherokee Commons as
    "Held For Sale" upon finalizing negotiations with the Purchaser in August
    2001 and stopped depreciating these real estate assets. As a result, net
    income decreased to $106,543 for the nine months ended September 30, 2001,
    as compared to $388,682 for the same period in 2000.

    The Partnership's net cash used in operating activities was $4,571 for the
    nine months ended September 30, 2001, as compared to net cash provided by
    operating activities of $1,607 for the nine months ended September 30, 2000.
    The change is due to the payment of withholding taxes in 2001. Net cash
    provided by investing activities decreased to $1,180,745 for 2001 from
    $1,396,756 in 2000, primarily due to decreased distributions received from
    the Fund II-Fund IIOW Joint Venture as a result of the vacancy at First
    Union at Charlotte, offset by additional income from Cherokee Commons and
    Boeing at the Atrium as explained above. The Partnership anticipates
    receiving lower distributions from joint ventures until First Union at
    Charlotte is leased. The management team is currently working on leasing
    this space.

    The Partnership declared cash distributions to the Limited Partners holding
    Class A Units for the nine months ended September 30, 2001 in the amount of
    $8.28 per Class A Unit, as compared to distributions of $13.28 per Class A
    Unit for the nine months ended September 30, 2000, as a result of the
    vacancy at First Union at Charlotte. No cash distributions were made by the
    Partnership to the Limited Partners holding Class B Units or to the General
    Partner.

    The Partnership's distributions payable through the third quarter of 2001
    have been paid from net cash from operations and from distributions received
    from its investments in the Fund II-Fund IIOW Joint Venture. The Partnership
    expects to continue to meets its short-term liquidity requirements

                                       11
<PAGE>

    generally through net cash provided by operations which the Partnership
    believes will continue to be adequate to meet both operating requirements
    and distributions to limited partners.

    The Partnership has previously made the decision to begin the process of
    selling its properties. At this time, Heritage Place is being actively
    marketed for sale. As the properties are sold, net sales proceeds will be
    distributed to limited partners in accordance with the Partnership
    Agreement. Management estimates that the fair market value of each of the
    properties exceeds the carrying value of the corresponding real estate
    assets; consequently, no impairment losses have been recorded. In the event
    that the net sales proceeds are less than the carrying value of the
    properties sold, the Partnership would recognize losses on the sales. Upon
    finalizing negotiations with purchasers, management will reclassify the real
    estate assets of such properties as "Held for Sale" and, pursuant to SFAS
    No. 121, discontinue depreciation at that point. Management is not
    contractually or financially obligated to sell any of its properties, and it
    is management's current intent to fully realize the Partnership's investment
    in real estate. The success of the Partnership's future operations and the
    ability to realize the investment in its assets will be dependent on the
    Partnership's ability to maintain rental rates, occupancy and an appropriate
    level of operating expenses in future years. Management believes that the
    steps that it is taking will enable the Partnership to realize its
    investment in its assets.

                                       12
<PAGE>

                          PART II.  OTHER INFORMATION

ITEM 6 (b.)  No reports on Form 8-K were filed during the third quarter of 2001.

                                  SIGNATURES

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


                                          WELLS REAL ESTATE FUND II
                                          (Registrant)

Dated:  November 9, 2001             By:  /s/ Leo F. Wells, III
                                          --------------------------------------
                                          Leo F. Wells, III, as Individual
                                          General Partner, and as President and
                                          Chief Financial Officer
                                          of Wells Capital, Inc., the
                                          Corporate General Partner

                                       13