**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

**[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

For the quarterly period ended March 31, 2009         

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: 0-11909                  

REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - II

(Exact name of registrant as specified in its charter)

                                   Delaware                                                                                                                                     16-1212761                

                        (State of        organization)                                                                                                       (IRS Employer Identification No.)

2350 North Forest Road, Getzville, New York 14068

          (Address of principal executive offices)         

(716) 636-9090

(Registrant’s telephone number) 

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 [  ]

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| PART I - FINANCIAL INFORMATION                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                         |         |                                                          |  |
|----------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|--------------|---------------------------------------------------------------|--|
| Item 1. Financial Statements                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                         |         |                                                          |  |
| Condensed Balance Sheets                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                               |                      
                                       (Unaudited)                                                          March 31, |                         | December 31, |
|                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 2009                         |         | 2008                                                          |  |  |  |
| Assets                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                         |         |                                                          |  |  |  |
| Property and equipment, all held for sale                                                          |  $                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 4,863,356                    |         | 4,863,356                                                     |  |  |  |
| Less accumulated depreciation                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | (2,531,480)                  |         | (2,531,480)                                                   |  |  |  |
|                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 2,331,876                    |         | 2,331,876                                                     |  |  |  |
| Equity interest (loss) in unconsolidated                    joint ventures in excess of investment |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 1,101,693                    |         | 1,091,255                                                     |  |  |  |
| Cash and equivalents                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 280,870                      |         | 347,423                                                       |  |  |  |
| Accounts receivable                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 14,010                       |         | 10,402                                                        |  |  |  |
| Receivable from affiliates                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 604,589                      |         | 604,589                                                       |  |  |  |
| Other assets                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 60,921                       |         | 37,373                                                        |  |  |  |
| Total assets                                                                                       | $                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 4,393,959                    |         | 4,422,918                                                     |  |  |  |
|                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                         |         |                                                          |  |  |  |
| Liabilities and Partners’ Equity                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                         |         |                                                          |  |  |  |
| Accounts payable and accrued expenses                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 11,885                       |         | 11,632                                                        |  |  |  |
| Other liabilities                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 62,011                       |         | 77,428                                                        |  |  |  |
| Partners’ equity                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 4,320,063                    |         | 4,333,858                                                     |  |  |  |
| Total liabilities and partners’ equity                                                       | $                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 4,393,959                    |         | 4,422,918                                                     |  |  |  |
|                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                         |         |                                                          |  |  |  |
| Condensed Statements of Operations                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                              |              |
| (Unaudited)                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                              |              |
|                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Three months ended March 31, |              |                                                               |  |
|                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 2009                         |         | 2008                                                          |  |  |
| Rental income                                                                                      | $                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 164,895                      |         | 212,519                                                       |  |  |
| Other income                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 2,706                        |         | 482                                                           |  |  |
| Total income                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 167,601                      |         | 213,001                                                       |  |  |
| Property operating costs                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 142,163                      |         | 143,725                                                       |  |  |
| Administrative expense - affiliates                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 26,495                       |         | 32,653                                                        |  |  |
| Other administrative expense                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 23,176                       |         | 29,694                                                        |  |  |
| Total expenses                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 191,834                      |         | 206,072                                                       |  |  |
| Income (loss) before equity in earnings of joint venture                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | (24,233)                     |         | 6,929                                                         |  |  |
| Equity in earnings (loss) of joint venture                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 10,438                       |         |         (9,067)            |  |  |
| Net loss                                                                                           | $                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | (13,795)                     |         |         (2,138)            |  |  |
| Net loss per limited partnership unit                                                              | $                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | (1.34)                       |         |           (0.21) |  |  |
| Weighted average limited partnership units outstanding                                             | 10,000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                         | 10,000       |                                                               |  |

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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| Condensed Statements of Cash Flows                         |                                                    |                              |                                              |                                              |        |  |  |
|------------------------------------------------------------|----------------------------------------------------|------------------------------|----------------------------------------------|----------------------------------------------|--------|--|--|
| (Unaudited)                                                |                                                    |                              |                                              |                                              |        |  |  |
|                                                       |                                               | Three months ended March 31, |                                         |
|                                                       |                                               | 2009                         |                                         | 2008                                         |   |  |
| Cash used by:                                              |                                               |                         |                                         |                                              |        |  |
| Operating activities:                                      |                                               |                         |                                         |                                         |   |  |
| Net loss                                                   |          $ | (13,795)                     |                                         |        (2,138) |   |  |
| Adjustments:                                               |                                               |                         |                                         |                                         |   |  |
| Equity in earnings of joint ventures                       |                                               | (10,438)                     |                                         | 9,067                                        |   |  |
| Other, principally changes in other assets and liabilities | (42,320)                                           |                         |       (24,415) |                                         |        |  |
| Net cash used by operating activities                      | (66,553)                                           |                         |       (17,486)      |                                         |        |  |
| Cash and equivalents at beginning of period                |                                               | 347,423                      |                                         |  752,241                                |   |  |
| Cash and equivalents at end of period                      | $                                                  | 280,870                      |                                         |  734,755                                |   |  |

         

 

 

 

 

 

 

 

 

 

 

 

 

 

        Notes to Financial StatementsThree months ended March 31, 2009 and 2008(Unaudited)

Organization

Realmark Property Investors Limited Partnership - II (the Partnership), a Delaware Limited Partnership was formed on March 25, 1982, to invest in a diversified portfolio of income producing real estate investments. The general partners are Realmark Properties, Inc. (the corporate general partner) and Joseph M. Jayson (the individual general partner). Joseph M. Jayson is        the sole stockholder of J.M. Jayson & Company Inc. Realmark Properties, Inc. is a wholly-owned subsidiary of J.M. Jayson & Company, Inc. Under the partnership agreement, the general partners and their affiliates receive compensation for services rendered and reimbursement for expenses incurred on behalf of the Partnership.

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial        statements. The balance sheet at December 31, 2008 has been derived from the audited financial statements at that date. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation, have been included. The Partnership’s significant accounting policies are set forth in its December 31, 2008 Form 10-K. The interim financial statements should be read in conjunction with the financial statements included        therein. The interim results should not be considered indicative of the annual results.

 

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Property and Equipment

At March 31, 2009, the Partnership owned and operated an office complex in Michigan (Northwind Office Park), and was a partner in a joint ventures. It had a 50% interest in Research Triangle Industrial Park Joint Venture with the other 50% owned by Realmark Property Investors Limited Partnership - VI A (RPILP - VI A), an entity affiliated through common general        partners.        All of the Partnership and venture properties are being actively marketed for sale and therefore, are not being depreciated. Depreciation expense not recorded during the three month periods ended March 31, 2009 and 2008 was approximately $42,000.

Investment in Joint Venture

The Partnership has a 50% interest in Research Triangle Industrial Park Joint Venture (the Venture) with Realmark Property Investors Limited Partnership - VIA (RPILP - VIA), an entity affiliated through common general partners. The joint venture owned and operated the Research Triangle Industrial Park West, an office/warehouse facility in Durham, North Carolina, which was        sold in December 2006. The joint venture agreement provides that any income, loss, gain, cash flow, or sale proceeds be allocated 50% to the Partnership and 50% to RPILP - VIA. Summary financial information of the Venture follows:         

| Balance Sheet Information |                                              |
|---------------------------|----------------------------------------------|
|                      |                                         | March 31, |   | December 31, |
|                      |                                         | 2009 |   | 2008 |   |
|                      | Assets:                                      |   |   |   |   |
|                      | Cash and equivalents                         |   | $ 1,394,645 |   | 1,471,582 |   |
|                      | Receivable from affiliates                   | 962,490 |   | 912,490 |   |
|                      | Accrued interest receivable                  | 190,134 |   | 169,008 |   |
|                      | Total assets                                 |   | $ 2,547,269 |   | 2,553,080 |   |
|                      |                                         |   |   |   |   |
|                      | Liabilities:                                 |   |   |   |   |
|                      | Accounts payable and accrued expenses        | - |   | 25,030 |   |
|                      | Payable to affiliates                        | 555,991 |   | 557,648 |   |
|                      | Total liabilities                            | 555,991 |   | 582,678 |   |
|                      |                                         |   |   |   |   |
|                      | Partners’ equity:                      |   |   |   |   |
|                      | The Partnership                              | 995,639 |   | 985,201 |   |
|                      | RPILP - VIA                                  | 995,639 |   | 985,201 |   |
|                      | Total partners’ equity                 | 1,991,278 |   | 1,970,402 |   |
|                      | Total liabilities and partners’ equity | $ 2,547,269 |   | 2,553,080 |   |

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| Operating Information |
|-----------------------|
|                  |   | Three months ended March 31, |  |  |
|                  |   | 2009 |   | 2008 |  |  |
|                  | Income: |   |   |   |  |  |
|                  | Interest income | 21,126 |   | 21,126 |  |  |
|                  | Expenses: |   |   |   |  |  |
|                  | Interest | 216 |   | 252 |  |  |
|                  | Administrative | 34 |   | 39,008 |  |  |
|                  | Total expenses | 250 |   | 39,260 |  |  |
|                  | Net income (loss) | 20,876 |   | (18,134) |   |  |
|                  |   |   |   |   |  |  |
|                  | Allocation of net income (loss): |   |   |   |  |  |
|                  | The Partnership | 10,438 |   | (9,067) |   |  |
|                  | RPILP - VIA | 10,438 |   | (9,067) |   |  |
|                  | $ | 20,876 |   | (18,134) |   |  |

Liquidity and Capital Resources

Effective January 1, 2001, management began formally marketing all remaining properties in the Partnership for sale. The Partnership continues to maintain a cash position adequate to fund capital improvements. Cash decreased approximately $67,000 and $17,000 during the first three month period ended March 31, 2009 and 2008, respectively. The Partnership made no        distributions to limited partners in the first quarter of 2009 and 2008. In accordance with the settlement of the lawsuit (Part II, Item 1), it is anticipated that with the sale of the remaining property and joint ventures, the Partnership may be in a position to make distributions to the limited partners.

Results of Operations

As compared to the first three months of 2008, the Partnership's income, excluding equity in earnings from joint ventures, decreased approximately $31,000 from a net gain of $7,000 in 2008 to a net loss of $24,000 in 2009. 

Total income decreased approximately $45,000. Increased vacancies resulted in an a decrease in rental income of approximately $47,000 while other income increased approximately $2,000. Total expenses decreased approximately $14,000. Property operations decreased approximately $2,000        primarily due carpeting replacement, painting, and repairs made during the three months ended March 31, 2008. Other administrative expense decreased approximately $6,000 due to a decrease in payroll expense and contracted services. Administrative expense to affiliates decrease approximately $6,000 due to a decrease in management fees and portfolio reimbursed expenses.

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PART I - Item 3.     Quantitative and Qualitative Disclosures About Market Risk

The Partnership’s cash equivalents are short-term, non-interest bearing bank accounts. 

PART I - Item 4.     Controls and Procedures

Disclosure Controls and Procedures: The Partnership’s management, with the participation of the Partnership’s Individual General Partner and Principal Financial Officer, has evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities        Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based upon such evaluation, the Partnership’s Individual General Partner and Principal Financial Officer have concluded that, as of the end of such period, the Partnership’s disclosure controls and procedures are effective.

Internal Control Over Financial Reporting: There have been no significant changes in the Partnership’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934, as amended) during the fiscal quarter to which this report relates that have materially affected, or are reasonably        likely to materially affect, the Partnership’s internal control over financial reporting.

 

 

 

 

 

 

 

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PART II - OTHER INFORMATION

Item 1.          Legal Proceedings

As previously reported, the Partnership, as a nominal defendant, the General Partners of the Partnership and of affiliated public partnerships (the “Realmark Partnerships”) and the officers and directors of the Corporate General Partner, as defendants, had been involved in a class action litigation in New York State court. The        Partnership’s settlement of this litigation is described in its Annual Report on Form 10-K for the year ended December 31, 2008.

Item 5.          Other Information

|  | (a)      | Reports on Form 8-K |
|--|-----------------------------------|---------------------|

             None.

Item 6.          Exhibits

|  | 31.      | Certification Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|--|-----------------------------------|-----------------------------------------------------------------------------------------------------------------|

|  | 32.      | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

 

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|--|-----------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

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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.                          REALMARK PROPERTY INVESTORS LIMITED PARTNERHIP - II         

     May 15, 2009     /s/ Joseph M. Jayson                         Date              Joseph M. Jayson,     

                                Individual General Partner and                                        Principal Financial Officer 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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