<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 March 31, 1999 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 Identification No.)
incorporation or organization)

3885 Holcomb Bridge Road, 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
                           -------------------------

                                     INDEX
                                     -----

                                                                       Page No.

PART I. FINANCIAL INFORMATION

 
        Item 1. Financial Statements
 
           Balance Sheets - March 31, 1999
             and December 31, 1998..........................................3
 
           Statements of Income for the Three Months
             Ended March 31, 1999 and 1998..................................4
 
           Statements of Partners' Capital for the Year Ended
             December 31, 1998 and the Three Months
             Ended March 31, 1999...........................................5
 
            Statements of Cash Flows for the Three Months
              Ended March 31, 1999 and 1998.................................6
 
            Condensed Notes to Financial Statements.........................7
 
         Item 2. Management's Discussion and Analysis of
                 Financial Condition and Results of
                 Operations................................................11

PART II.  OTHER INFORMATION................................................12
 

                                       2
<PAGE>
 
                           WELLS REAL ESTATE FUND II
                    (A Georgia Public Limited Partnership)

                                BALANCE SHEETS
 
 
Assets                                   March 31, 1999   December 31, 1998
------                                   --------------   -----------------
 
Investment in joint venture (Note 2)       $21,678,264         $22,019,064
Cash and cash equivalents                       36,190              27,011
Due from affiliate                             404,242             336,616
                                           -----------         -----------

     Total assets                          $22,118,695         $22,382,691
                                           ===========         ===========


          Liabilities and Partners' Capital
          ---------------------------------
 
Liabilities:

 Accounts payable                          $     1,255         $     1,255
 Partnership distributions payable             413,981             337,178
                                           -----------         -----------
 
     Total liabilities                         415,236             338,433
                                           -----------         -----------
 
Partners' capital:
 Limited Partners:
  Class A - 108,572 Units                   21,703,459          22,044,258
  Class B - 30,221 Units                             0                   0
                                           -----------         -----------
 
     Total partners' capital                21,703,459          22,044,258
                                           -----------         -----------
 Total liabilities and partners' capital   $22,118,695         $22,382,691
                                           ===========         =========== 
 
           See accompanying condensed notes to financial statements.

                                       3
<PAGE>
 
                           WELLS REAL ESTATE FUND II
                    (A Georgia Public Limited Partnership)

                             STATEMENTS OF INCOME
 
 
                                                     Three Months Ended
                                                     ------------------

                                                March 31, 1999  March 31, 1998
                                                --------------  --------------
 
Revenues:
  Equity in income of joint venture (Note 2)           $63,327         $44,766
  Interest income                                           56             161
                                                       -------         -------
                                                       $63,383         $44,927
                                                       -------         -------
 
Expenses:
  Partnership administration                           $     0         $    80
                                                       -------         -------
 
  Net income                                           $63,383         $44,847
                                                       =======         =======
 
Net income allocated to
  Class A Limited Partners                             $63,383         $44,847
 
Net loss allocated to
  Class B Limited Partners                             $  0.00         $  0.00
 
Net income per Class A
  Limited Partner Unit                                 $  0.58         $  0.41
 
Net loss per Class B
  Limited Partner Unit                                 $  0.00         $  0.00
 
Cash distribution per Class A
  Limited Partner Unit                                 $  3.72         $  3.53

 
           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, 1998 AND THREE MONTHS ENDED
                                MARCH 31, 1999
                                        

 
<TABLE>
<CAPTION>

                                                Limited Partners                 Total
                                     ----------------------------------------
                                          Class A               Class B         Partners'
                                     ------------------     -----------------
                                     Units      Amounts     Units     Amounts     Capital
                                     ------    --------     ------    -------     -------
<S>                                  <C>       <C>          <C>       <C>         <C> 

BALANCE, December 31, 1997           108,752   $23,460,451   30,221   $    0   $23,460,451
 
 Net income                                0        93,162        0        0        93,162
 Partnership distributions                 0    (1,509,355)       0        0    (1,509,355)
                                     -------   -----------   ------   ------   -----------
BALANCE, December 31, 1998           108,572    22,044,258   30,221        0    22,044,258
 
  Net income                               0        63,383        0        0        63,383
  Partnership distributions                0      (404,182)       0        0      (404,182)
                                     -------   -----------   ------   ------   -----------
 
BALANCE, March 31, 1999              108,572   $21,703,459   30,221   $    0   $21,703,459
                                     =======   ===========   ======   ======   ===========
</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>
                                                                              Three Months Ended
                                                                              ------------------
                                                                       March 31, 1999   March 31, 1998
                                                                       --------------   --------------
         
Cash flows from operating activities:
<S>                                                                    <C>              <C>
 Net income                                                                $  63,383        $  44,847
                                                                           ---------        ---------
 Adjustments to reconcile net income to net     cash provided by
  operating activities:
   Equity in (income) of joint ventures                                      (63,327)         (44,766)
   Changes in assets and liabilities:
     Withholdings and accounts payable                                             0              629
     Due from shareholders                                                         0              (70)
                                                                           ---------        ---------
     Total adjustments                                                       (63,327)         (44,207)
                                                                           ---------        ---------
      Net cash provided by
       operating activities                                                       56              640
                                                                           ---------        ---------
 
Cash flow from investing activities:
 Distributions received from joint ventures                                  336,500          322,925
                                                                           ---------        ---------
 
Cash flow from financing activities:
 Partnership distributions paid                                             (327,377)        (322,810)
                                                                           ---------        ---------
 
Net increase in cash and cash   equivalents
                                                                               9,179              755
 
Cash and cash equivalents, beginning of year                                  27,011           37,249
                                                                           ---------        ---------
 
Cash and cash equivalents, end of period                                   $  36,190        $  38,004
                                                                           =========        =========
</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

(1)  Summary of Significant Accounting Policies
     ------------------------------------------

     (a)  General
     ------------

     Wells  Real  Estate  Fund II   (the "Partnership")  is a  Georgia  public
     limited partnership having Leo F. Wells, III and Wells Capital, Inc., a
     Corporation, 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 for investment
     purposes income-producing commercial or industrial properties.

     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, composed of two
     classes of limited partnership interests, Class A and Class B limited
     partnership units.

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

     As of March 31, 1999, the Partnership owned interests in the following
     properties through its ownership of the foregoing joint ventures: (i) a
     two-story office building located in Charlotte, North Carolina ("First
     Union at Charlotte"); (ii) a four-story office building located in
     metropolitan Houston, Texas (the "Atrium"), (iii) a restaurant located in
     Fulton County, Georgia ("the Brookwood Grill"); (iv) an office/retail
     center currently being developed in Fulton County, Georgia ("Holcomb Bridge
     Road"); (v) a retail shopping and commercial office complex located in
     Tucker, Georgia ("Heritage Place at Tucker"); and (vi) a shopping center
     located in Cherokee County, Georgia ("Cherokee Commons").  All of the
     foregoing properties were acquired on an all cash basis.  For 
     

                                       7
<PAGE>
 
     further information regarding these joint ventures and properties, refer to
     the Partnership's Form 10-K for the year ended December 31, 1998.

     For further information, refer to the financial statements and footnotes
     included in the Partnership's Form 10-K for the year ended December 31,
     1998.

     (b)  Basis of Presentation
     --------------------------

     The financial statements of Wells Real Estate Fund II 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, necessary to present a fair presentation of the results for such
     periods.

(2)  Investment in Joint Venture
     ---------------------------

     The Partnership owned interests in six properties as of March 31, 1999
     through its interest in the Fund II-Fund II-OW Joint Venture.  The
     Partnership does not have control over the operations of the joint venture;
     however, it does exercise significant influence.  Accordingly, investment
     in joint venture is recorded on the equity method.

     Fund II-Fund II-OW Joint Venture
     --------------------------------

     The Partnership owns all of its properties through a joint venture (the
     "Fund II-Fund II-OW Joint Venture") formed on March 1, 1988, between the
     Partnership and Wells Real Estate Fund II-OW ("Wells Fund II-OW").  Wells
     Fund II-OW is a Georgia public limited partnership affiliated with the
     Partnership through common general partners.  The investment objectives of
     Wells Fund II-OW are substantially identical to those of the Partnership.
     As of March 31, 1999, the Partnership's equity interest in the Fund II-Fund
     II-OW Joint Venture was approximately 95%, and the equity interest of Wells
     Fund II-OW was approximately 5%.  The Partnership does not have control
     over the operations of the joint venture;  however, it does exercise
     significant influence.  Accordingly, investment in joint venture is
     recorded on the equity method.

                                       8
<PAGE>
 
Following are the financial statements for Fund II and II-OW:

                               FUND II and II-OW
                           (A Georgia Joint Venture)

                                BALANCE SHEETS
                                        
<TABLE>
<CAPTION>

             Assets                                              March 31, 1999          March 31, 1998
             -----                                               --------------          --------------
<S>                                                    <C>                          <C>
 Real estate, at cost:

 Land                                                             $ 1,367,856             $ 1,367,856
 Building and improvements, less accumulated
 depreciation of $2,715,701 in 1999 and
 $2,623,785 in 1998                                                 5,055,417               5,147,333
                                                                  -----------             -----------
 
     Total real estate assets                                       6,423,273               6,515,189
                                                                  -----------             -----------
 
Investment in joint ventures                                       16,428,159              16,676,111
Cash and cash equivalents                                              87,519                  94,367
Due from affiliates                                                   339,398                 267,581
Accounts receivable                                                     6,745                  23,184
Prepaid expenses and other assets                                      37,015                  42,828
                                                                  -----------             -----------
 
     Total assets                                                 $23,322,109             $23,619,260
                                                                  ===========             ===========
 
 
Liabilities and Partners' Capital
---------------------------------
 
Liabilities:
 Partnership distributions payable                                $   426,789             $   355,370
 Due to affiliates                                                        329                   8,988
                                                                  -----------             -----------
 
     Total liabilities                                                427,118                 364,358
                                                                  -----------             -----------
 
Partners' capital:
 Wells Real Estate Fund II                                         21,678,264              22,019,064
 Wells Real Estate Fund II-OW                                       1,216,727               1,235,838
                                                                  -----------             -----------
 
     Total partners' capital                                       22,894,991              23,254,902
                                                                  -----------             -----------
 
     Total liabilities and partners' capital                      $23,322,109             $23,619,260
                                                                  ===========             ===========
</TABLE>

           See accompanying condensed notes to financial statements.

                                       9
<PAGE>
 
                               FUND II and II-OW
                           (A Georgia Joint Venture)
                                        
                             STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                Three Months Ended
                                                                ------------------
                                                     March 31, 1999             March 31, 1998
                                                     --------------             --------------
<S>                                                   <C>                          <C>
Revenues:
 Rental income                                           $114,717                    $114,717
 Equity in income of joint ventures                        90,697                      64,339
 Interest income                                              105                         130
                                                         --------                    --------
                                                          205,519                     179,186
                                                         --------                    --------
Expenses:
 Management & leasing expenses                              6,883                       6,883
 Lease acquisition costs                                    4,589                       4,589
 Operating costs  rental property                           6,892                       3,854
 Depreciation                                              91,917                      91,917
 Legal and accounting                                       3,684                      12,021
 Computer costs                                             1,664                       2,075
 Partnership administration                                23,012                      10,570
                                                         --------                    --------
                                                          138,641                     131,909
                                                         --------                    --------
 
Net income                                               $ 66,878                    $ 47,277
                                                         ========                    ========
 
Net income  allocated to Wells
 Real Estate Fund II                                     $ 63,327                    $ 44,766
 
Net income allocated to Wells
 Real Estate Fund II-OW                                  $  3,551                    $  2,510
</TABLE>

                                       10
<PAGE>
 
     Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 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 21E of the Securities
     Exchange Act of 1934, including discussion and analysis of the financial
     condition of the Partnership, anticipated 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 the 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.

     Results of Operations and Changes in Financial Conditions
     ---------------------------------------------------------

     General
     -------

     As of March 31, 1999, the developed properties owned by the Fund II-Fund
     II-OW Joint Venture were 97.5% occupied, as compared to 95% occupied as of
     March 31, 1998.

     The increase in gross revenues of the Partnership to $63,383 for the three
     months ended March 31, 1999, as compared to $44,927 for the three months
     ended March 31, 1998 is due to the increase occupancy of The Cherokee
     Commons and Heritage Place. Total  administrative expenses of the
     Partnership which are incurred at the joint venture level, remained
     relatively stable for the three  months ended March 31, 1999, compared to
     the same period of 1998,  with increased administrative expenses offset by
     decreased legal expenses.

     The Partnership's cash flow from investing activities and cash flow from
     financing activities increased slightly in 1999, compared to 1998, due to
     the increase in distributions from joint ventures as occupancy increased.
     Since all cash received from joint ventures is distributed currently, cash
     and cash equivalents remained stable.

     Distributions accrued to the Partnership from Fund II-Fund II-OW Joint
     Venture for the three month periods ended March 31, 1999 and March 31, 1998
     were $404,242 and $336,616, respectively.

     The Partnership made cash distributions to the Limited Partners holding
     Class A Units for the first quarter of 1999 in the amount of $3.72 per Unit
     as compared to $3.53 for the first quarter of 1998.  No cash distributions
     were made by the Partnership to the Limited Partners holding Class B Units.

                                       11
<PAGE>
 
     As of March 31, 1999, the Fund II-Fund II-OW Joint Venture had used all of
     the remaining funds available for investment in properties.

     The Partnership is unaware of any known demands, commitments, events or
     capital expenditures other than that which is required from the normal
     operations of its properties that will result in the Partnership's
     liquidity increasing or decreasing in any material way. The Partnership
     expects to meet liquidity requirements and budgets demands through cash
     flow from operations.

     Year 2000
     ---------

     The Partnership is presently reviewing the potential impact of Year 2000
     compliance issues on its information systems and business operations. A
     full assessment of Year 2000 compliance issues was begun in late 1997 and
     was completed by March 31, 1999. Renovations and replacements of equipment
     have been and are being made as warranted. The costs incurred by the
     Partnership and its affiliates thus far for renovations and replacements
     have been immaterial. Some testing of systems has begun and all testing is
     expected to be complete by June 30, 1999.

     As to the status of the Partnership's information technology systems, it is
     presently believed that all major systems and software packages with the
     exception of the accounting and property management package are Year 2000
     compliant. The Partnership's affiliated entities are purchasing the upgrade
     for the accounting and property management package system; however, it is
     not slated to be available until the end of the second quarter of 1999. At
     the present time, it is believed that all non-major information technology
     systems are Year 2000 compliant. The cost to upgrade any non-compliant
     systems is believed to be immaterial.

     The Partnership is in the process of confirming with the Partnership's
     vendors, including third-party service providers such as banks, that their
     systems will be Year 2000 compliant. Based on the information received thus
     far, the primary third-party service providers with which the Partnership
     has relationships have confirmed their Year 2000 readiness.

     The Partnership relies on computers and operating systems provided by
     equipment manufacturers, and also on application software designed for use
     with its accounting, property management and investment portfolio tracking.
     The Partnership has preliminarily determined that any costs, problems or
     uncertainties associated with the potential consequences of Year 2000
     issues are not expected to have a material impact on the future operations
     or financial condition of the Partnership. The Partnership will perform due
     diligence as to the Year 2000 readiness of each property owned by the
     Partnership and each property contemplated for purchase by the Partnership.

     The Partnership's reliance on embedded computer systems (i.e.,
     microcontrollers) is limited to facilities related matters, such as office
     security systems and environmental control systems.
 
     The Partnership is currently formulating contingency plans to cover any
     areas of concern. Alternate means of operating the business are being
     developed in the unlikely circumstance that the computer and phone systems
     are rendered inoperable. An off-site facility from which the Partnership
     could operate is being sought as well as alternate means of communication
     with key third-party vendors. 
 
                                       12
<PAGE>
 
    A written plan is being developed for testing and dispensation to each staff
    member of the General Partner of the Partnership.

    Management believes that the Partnership's risk of Year 2000 problems is
    minimal. In the unlikely event there is a problem, the worst case scenarios
    would include the risks that the elevator or security systems within the
    Partnership's properties would fail or the key third-party vendors upon
    which the Partnership relies would be unable to provide accurate investor
    information. In the event that the elevator shuts down, the Partnership has
    devised a plan for each building whereby the tenants will use the stairs
    until the elevators are fixed. In the event that the security system shuts
    down, the Partnership has devised a plan for each building to hire temporary
    on-site security guards. In the event that a third-party vendor has Year
    2000 problems relating to investor information, the Partnership intends to
    perform a full system back-up of all investor information as of December 31,
    1999 so that the Partnership will have accurate hard-copy investor
    information.

                                       13
<PAGE>
 
Property Operations
-------------------

As of March 31, 1999, the Partnership owned interests in the following
properties through the Fund II-Fund II-OW Joint Venture:

First Union at Charlotte /Fund II and II-OW Joint Venture
---------------------------------------------------------

<TABLE>
<CAPTION>
                                                              Three Months Ended
                                                              ------------------
                                               March 31, 1999               March 31, 1999
                                               --------------               --------------
<S>                                                 <C>                         <C>                                             
Revenues:                                    
 Rental income                                  $114,717                      $114,717
                                             
Expenses:                                    
 Depreciation                                     91,917                        91,917
 Management & leasing expenses                    11,472                        11,472
 Other operating expenses                          6,787                         3,724
                                                --------                      --------
                                                 110,176                       107,113
                                                --------                      --------
                                             
Net income                                      $  4,541                      $  7,604
                                                ========                      ========
                                             
Occupied %                                           100%                          100%
Partnership's Ownership %                           94.7%                         94.7%
                                             
Cash generated to the                        
 Fund II-Fund II-OW Joint Venture*              $116,449                      $111,344
                                             
Net income allocated to the                  
 Fund II-Fund II-OW Joint Venture*              $  4,541                      $  7,604
</TABLE>

*The Partnership holds a 95% ownership in the Fund II-Fund II-OW Joint Venture.

Rental income remained stable for the three months ended March 31, 1999 and
1998.  The decrease in net income for the first quarter of 1999 compared to 1998
was primarily due to the increase in accounting fees and property insurance.  A
refund of 1997 insurance premiums was received in the first quarter of 1998.
Since actual rents received was higher in the first three months ended March 31,
1999 than the same period in 1998, offset by the increase in expenses, cash
generated increased in 1999 as compared to 1998.

                                       14
<PAGE>
 
Boeing at the Atrium/Fund II and Fund III Joint Venture
-------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                          Three Months Ended
                                                                          ------------------
                                                              March 31, 1999               March 31, 1998
                                                              --------------               --------------
<S>                                                           <C>                          <C>
Revenues:
 Rental income                                                  $367,536                      $367,536
                                                                --------                      --------
 
 
Expenses:
 Depreciation                                                    214,105                       216,930
 Management & leasing expenses                                    44,774                        44,488
 Other operating expenses                                        196,170                       158,431
                                                                --------                      --------
                                                                 455,049                       419,849
                                                                --------                      --------
 
Net (loss)                                                      $(87,513)                     $(52,313)
                                                                ========                      ========
 
Occupied %                                                           100%                          100%
Partnership's Ownership %                                           58.0%                         58.0%
 
Cash distributions to the
 Fund II-Fund II-OW Joint Venture*                              $ 89,632                      $112,949
 
Net (loss) allocated to the
 Fund II-Fund II-OW Joint Venture*                              $(53,646)                     $(32,067)
</TABLE>

*The Partnership holds a 95% ownership in the Fund II-Fund II-OW Joint Venture.

Rental income and occupancy remained the same for the three months ended March
31, 1999 and 1998.  Expenses increased due to additional landscaping and HVAC
repairs in 1999 and a reimbursement of tenant improvements of approximately
$12,000 received from Boeing in 1998 that reduced expenses for that year.  As a
result net loss increased and cash distributions to the Partnership decreased
for the period ended March 31, 1999.

                                       15
<PAGE>
 
The Brookwood Grill /Fund II and Fund III Joint Venture
-------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                       Three Months Ended
                                                                       ------------------

                                                              March 31, 1999               March 31, 1998
                                                              --------------               --------------
<S>                                                      <C>                         <C> 
Revenues:
 Rental income                                                   $56,188                       $56,338
 Equity in income of joint venture                                33,056                        16,131
                                                                 -------                       -------
                                                                  89,244                        72,469
                                                                 -------                       -------
Expenses:
 Depreciation                                                     13,503                        13,503
 Management & leasing expenses                                     8,728                         7,033
 Other operating expenses                                          5,525                         5,229
                                                                 -------                       -------
                                                                  27,756                        25,765
                                                                 -------                       -------
 
Net income                                                       $61,488                       $46,704
                                                                 =======                       =======
 
Occupied %                                                           100%                          100%
Partnership's Ownership %                                           59.0%                         59.0%
 
Cash distributions to the
 Fund II-Fund II-OW Joint Venture*                               $65,445                       $57,651
 
Net income allocated to the
 Fund II-Fund II-OW Joint Venture*                               $38,338                       $29,120
</TABLE>

*The Partnership holds a 95% ownership in the Fund II-Fund II-OW Joint Venture.

Rental income have increased for the three months ended March 31, 1999 as
compared to 1998, due primarily to the increase in equity in income of joint
venture, which is the result of increased occupancy at the Holcomb Bridge
Property for the full three months of 1999 compared to 1998.  Expenses remained
relatively stable with a minor increase in leasing expense.  As a result net
income and cash distributions to the partnership increased for the three months
ended March 31, 1999 as compared to the same period of 1998.

                                       16
<PAGE>
 
Holcomb Bridge Road /Fund II, III, VI, VII Joint Venture
--------------------------------------------------------

<TABLE>
<CAPTION>
                                                                  Three Months Ended
                                                                  ------------------
                                                     March 31, 1999               March 31, 1998
                                                     --------------               --------------
<S>                                                  <C>                          <C> 
Revenues:
 Rental income                                          $230,063                      $213,235
 
Expenses:
 Depreciation                                             94,129                        93,904
 Management & leasing expenses                            38,874                        29,364
 Other operating expenses                                 24,394                        23,033
                                                         --------                      --------
                                                          157,397                       146,301
                                                         --------                      --------
 
Net income                                               $ 72,666                      $ 66,934
                                                         ========                      ========
 
Occupied %                                                  94.0%                         94.1%
Partnership's Ownership %                                   14.2%                         14.2%
 
Cash distributions to the
 Fund II-Fund III Joint Venture*                         $ 35,418                      $ 41,168
 
Net income allocated to the
 Fund II-Fund III Joint Venture*                         $ 33,056                      $ 16,131
</TABLE>

*The Partnership holds a 59.0% ownership in the Fund II-Fund III Joint Venture.

While occupancy remained the same at march 31, 1999 and March 31, 1998, rental
income, management and leasing fees and net income have increased as compared to
1998 due primarily to two tenants occupying space at the property late in the
first quarter of 1998.

                                       17
<PAGE>
 
Heritage Place at Tucker Property/Fund I - Fund II Joint Venture
----------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                       Three Months Ended
                                                                       ------------------
                                                           March 31, 1999               March 31, 1998
                                                           --------------               --------------
<S>                                                        <C>                          <C> 
Revenues:
 Rental income                                                  $336,859                      $300,361
 Interest income                                                     136                           137
                                                                --------                      --------
                                                                 336,995                       300,498
                                                                --------                      --------
Expenses:
 Depreciation                                                    108,796                       107,288
 Management & leasing expenses                                    44,484                        42,588
 Other operating expenses                                         95,544                       109,595
                                                                --------                      --------
                                                                 248,824                       259,471
                                                                --------                      --------
 
Net  income                                                     $ 88,171                      $ 41,027
                                                                ========                      ========
 
Occupied %                                                            91%                           83%
 
Partnership's Ownership %                                           42.5%                         42.5%
 
Cash distributions to the
 Fund II-Fund II-OW Joint Venture*                              $ 59,448                      $ 44,564
 
Net income allocated to the
 Fund II-Fund II-OW Joint Venture*                              $ 39,598                      $ 18,425
</TABLE>

*The Partnership holds a 95% ownership in the Fund II-Fund II-OW Joint Venture.

Rental income increased in 1999 from 1998, due primarily to the increase in
occupancy from 83% to 91%.  Management and leasing expenses increased over prior
year, due to increased occupancy and revenues.  Other operating expenses
decreased, due primarily to a significant decrease in landscaping expenses.

                                       18
<PAGE>
 
Cherokee Commons/Fund I, II, II-OW, VI & VII Joint Venture
----------------------------------------------------------

<TABLE>
<CAPTION>
                                                                        Three Months Ended
                                                                       --------------------
                                                            March 31, 1999               March 31, 1998
                                                            ---------------              --------------
<S>                                                         <C>                          <C> 
Revenues:
 Rental income                                                  $227,383                      $228,977
 Interest income                                                      20                            22
                                                                --------                      --------
                                                                 227,403                       228,999
                                                                --------                      --------
Expenses:
 Depreciation                                                    110,112                       110,563
 Management & leasing expenses                                    26,135                        25,751
 Other operating expenses                                        (30,556)                        3,131
                                                                --------                      --------
                                                                 105,691                       139,445
                                                                --------                      --------
 
Net income                                                      $121,712                      $ 89,554
                                                                ========                      ========
 
Occupied %                                                            96%                           91%
Partnership's Ownership %                                           51.7%                         51.7%
 
Cash distributed to the
 Fund II-Fund II-OW Joint Venture*                              $124,124                      $102,700
 
Net income allocated to the
 Fund II-Fund II-OW Joint Venture*                              $ 66,407                      $ 48,861
</TABLE>

*The Partnership holds a 95% ownership in the Fund II-Fund II-OW Joint Venture.

Rental income remained relatively stable in 1999 as compared to 1998. The
decrease in operating expenses in 1999, as compared to 1998, are due to
increased CAM billings to tenants that were under accrued in 1998.

                                       19
<PAGE>
 
                          PART  II - OTHER INFORMATION
                          ----------------------------

Item 6(b).  No reports on Form 8-K were filed during the first quarter of 1999.

                                   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:  May 11, 1999     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
 

                                       20