SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    ----------

                                    FORM 10-K
(Mark One)
_X_ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCGANGE ACT
    OF 1934 [FEE REQUIRED]



For the fiscal year ended           December 31, 1997
                         -------------------------------------------------------

                                       OR

___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 [NO FEE REQUIRED]

For the transition period from ____________________ to _________________________

                         Commission file number  0-14360
                                               -----------

                        NOONEY INCOME FUND LTD. II, L.P.
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

           Missouri                                    43-1357693
---------------------------------                      -------------------------
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                         Identification No.)

500 N. Broadway, St. Louis, Missouri                      63102
-------------------------------------------            -------------------------
(Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code     (314) 206-4600
                                                  ------------------------------

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

Securities registered pursuant to Section 12(b) of the Act:

         Title of each class           Name of each exchange on which registered
         -------------------           -----------------------------------------

                 None                          Not Applicable
-----------------------------------    -----------------------------------------

Securities registered pursuant to Section 12(g) of the Act:

                          Limited Partnership Interests
                          -----------------------------
                                (Title of Class)

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>



_X_      Indicate by check mark if disclosure of delinquent  filers  pursuant to
         Item 405 of  Regulation  S-K is not contained  herein,  and will not be
         contained,  to the best of registrant's  knowledge, in definitive proxy
         or information statements incorporated by reference in Part III of this
         Form 10-K or any amendment to this Form 10-K.

As of February 1, 1998, the aggregate market value of the Registrant's  units of
limited  partnership  interest (which constitute voting securities under certain
circumstances)  held by non-affiliates  of the Registrant was $19,221,000.  (The
aggregate market value was computed on the basis of the initial selling price of
$1,000 per unit of limited partnership  interest,  using the number of units not
beneficially  owned on February 1, 1998,  by the General  Partners or holders of
10% or more of the  Registrant's  limited  partnership  interests.  The  initial
selling  price of $1,000  per unit is not the  current  market  value.  Accurate
pricing  information is not available  because the value of the units of limited
partnership  interests  is not  determinable  since no active  secondary  market
exists.  The  characterization  of the  General  Partners  and  10%  holders  as
affiliates  is for the  purpose  of this  computation  only  and  should  not be
construed  as an  admission  for any purpose that any such persons are, or other
persons not so characterized are not, in fact, affiliates of the Registrant).

Documents incorporated by reference:

Portions of the  Prospectus  of the  Registrant  dated  February  15,  1985,  as
supplemented  and filed  pursuant to Rule 424(c) of the  Securities Act of 1933,
are incorporated by reference in Part III of this Annual Report on Form 10-K.


                                       -2-

<PAGE>



                                     PART I
                                     ------
ITEM 1:       BUSINESS

It should  be noted  that this 10-K  contains  forward-looking  information  (as
defined in the Private  Securities  Litigation Reform Act of 1995) that involves
risk and  uncertainty,  including trends in the real estate  investment  market,
projected leasing and sales, and the future prospects for the Registrant. Actual
results could differ materially from those contemplated by such statements.

Nooney Income Fund Ltd. II, L.P.  (the  "Registrant")  is a limited  partnership
formed under the Missouri Uniform Limited  Partnership Law on February 12, 1985,
to invest,  on an all-cash  basis, in  income-producing  real properties such as
shopping  centers,  office  buildings,  office/warehouse  properties  and  other
commercial   properties.   The  Registrant  originally  invested  in  five  real
properties  described  in Item 2  below.  The  Registrant  continues  to own and
operate its five original properties.

The Registrant's  primary investment  objectives are to preserve and protect the
Limited Partners'  capital,  provide the maximum possible cash  distributions to
the Partners,  and provide for capital growth through  appreciation in the value
of the Registrant's properties. The term of the Registrant is until December 31,
2085. It was originally  anticipated  that the Registrant  would sell or finance
its properties within  approximately  five to ten years after their acquisition.
The depression of real estate values  experienced  nationwide  from 1988 to 1993
lengthened this time frame in order to achieve the goal of capital appreciation.

The real  estate  investment  market  began to improve in 1994,  continued  this
improvement  through 1997, and is expected to further  continue its  improvement
over the next several years.  Management believes this trend should increase the
value of the Registrant's  properties in the future.  The Registrant is intended
to  be  self-liquidating  and  proceeds  from  the  sale  or  financing  of  the
Registrant's  real property  investments  will not be invested in new properties
but will be  distributed  to the Partners or, at the  discretion  of the General
Partners,  applied to capital  improvements  to, or the payment of  indebtedness
with  respect to,  existing  properties,  the  payment of other  expenses or the
establishment of reserves.  (See Item 7: Management's Discussion and Analysis of
Financial  Condition and Results of Operations - Liquidity and Capital Resources
- for a  discussion  of  possible  future  acquisitions  and  possible  sales of
properties.)

The  business  in which the  Registrant  is engaged is highly  competitive.  The
Registrant's  investment properties are located in or near major urban areas and
are subject to competition from other similar types of properties in such areas.
The Registrant  competes for tenants for its properties with numerous other real
estate limited  partnerships,  as well as with individuals,  corporations,  real
estate  investment  trusts and other entities engaged in real estate  investment
activities.  Such  competition  is  based  on such  factors  as  location,  rent
schedules and services and amenities provided.

The  Registrant  has  no  employees.   Property   management  services  for  the
Registrant's investment properties are provided by Nooney, Inc., an affiliate of
the General Partners.


                                       -3-

<PAGE>



Throughout the 10-K,  references are made to the following  companies  listed in
Column A below. Please note that on January 28,1998, the names of said companies
were changed to the names listed in Column B below.

         Column A                           Column B
         --------                           --------

         Nooney Company                     Brooklyn Street Properties, Inc.
         Nooney Krombach Company            Hanley Brokers, Inc.

ITEM 2:      PROPERTIES

On February  20,  1985,  the  Registrant  acquired a 24% interest as a tenant in
common in Leawood  Fountain  Plaza, a three building  office complex in Leawood,
Kansas.  Constructed  in two  phases in 1982 and  1983,  the  buildings  contain
approximately  29,000,  28,000 and 25,000 net rentable square feet respectively,
or an  aggregate  of  approximately  82,000 net  rentable  square feet of office
space. The buildings are located on a 7.9 acre site which provides paved parking
for 403  cars.  The  purchase  price of the  complex  was  $9,626,576,  of which
$2,310,379 was paid by the  Registrant  for its 24% interest.  The remaining 76%
interest was  purchased by Nooney  Income Fund Ltd.,  L.P.,  an affiliate of the
Registrant,  as the other tenant in common. All costs and revenues  attributable
to the operation of the complex are shared by the  Registrant  and Nooney Income
Fund Ltd.,  L.P. in proportion to their  respective  percentage  interests.  The
complex  was 89%  leased  by 38  tenants  at  December  31,  1997.  (See Item 7:
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations - Liquidity and Capital Resources.)

On March 20, 1986, the Registrant  acquired the Tower  Industrial  Building,  an
office warehouse located at 750-760 Tower Road in Mundelein,  Illinois, a suburb
of Chicago.  The purchase  price of the building was  $1,235,820.  The one-story
concrete block building contains  approximately  42,000 net rentable square feet
and is  situated  on a 3 acre site  which  provides  parking  for 140 cars.  The
building is  currently  100% leased by Baxter  International  Inc.  (See Item 7:
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations Liquidity and Capital Resources.)

On December  16,  1986,  the  Registrant  acquired a 50% interest as a tenant in
common in Countryside  Executive  Center, a single story office building located
at 1210-1270 W. Northwest  Highway in Palatine,  Illinois,  a suburb of Chicago.
The  building  contains  approximately  91,000 net  rentable  square feet and is
situated on an 8.6 acre site which provides parking spaces for 467 cars, some of
which spaces are shared with adjoining  properties pursuant to a mutual easement
agreement  which also  provides for the sharing of certain  expenses.  The total
purchase price of the building was $9,853,660,  of which  $4,926,830 was paid by
the Registrant for its 50% interest. The remaining 50% interest was purchased by
Nooney Income Fund Ltd. III,  L.P., an affiliate of the  Registrant,  and during
1993 was transferred to a subsidiary of the mortgage lender.  As of December 29,
1995,  the  Registrant  acquired the mortgage  lender's  interest in Countryside
Executive  Center for  $1,250,000.  Prior to December  29,  1995,  all costs and
revenues  attributable  to the  operation  of the  building  were  shared by the
Registrant  and a  subsidiary  of the  mortgage  lender in  proportion  to their
respective  percentage  interests.  The building was 72% leased by 33 tenants at
December  31,  1997.  (See  Item 7:  Management's  Discussion  and  Analysis  of
Financial   Condition   and  Results  of  Operations  -  Liquidity  and  Capital
Resources.)

                                       -4-

<PAGE>



On December  29,  1986,  the  Registrant  acquired a 45% interest as a tenant in
common   in   Wards   Corner   Business   Center   A  &  B,   a   two   building
office/warehouse/showroom  facility  located  at 420- 422 Wards  Corner  Road in
Loveland, Ohio, a suburb of Cincinnati.  Effective January 1, 1996, the property
known  as  Wards  Corner  was  renamed  Northeast   Commerce  Center.   The  two
single-story  buildings  contain  50,000 net  rentable  square feet each,  or an
aggregate of  approximately  100,000 net rentable square feet. The buildings are
situated  on a 7.5 acre site  which  provides  parking  for 278 cars.  The total
purchase price of the buildings was $6,630,395,  of which $2,983,678 was paid by
the Registrant for its 45% interest. The remaining 55% interest was purchased by
Nooney Income Fund Ltd. III,  L.P., an affiliate of the  Registrant,  and during
1993 was transferred to a subsidiary of the mortgage lender.  As of December 29,
1995,  the  Registrant  acquired  the  mortgage  lender's  interest in Northeast
Commerce  Center for  $1,980,000.  Prior to  December  29,  1995,  all costs and
revenues  attributable  to the  operation  of the  buildings  were shared by the
Registrant  and a  subsidiary  of the  mortgage  lender in  proportion  to their
respective percentage  interests.  The buildings were 94% leased by 4 tenants at
December  31,  1997.  (See  Item 7:  Management's  Discussion  and  Analysis  of
Financial   Condition   and  Results  of  Operations  -  Liquidity  and  Capital
Resources.)

On December  29,  1986,  the  Registrant  acquired a 45% interest as a tenant in
common in NorthCreek  Office Park, a three building  office  complex  located at
8220, 8240 and 8260 NorthCreek Drive in Cincinnati,  Ohio. Constructed in phases
in 1984 and 1986, the three-story  buildings  contain 19,500,  24,000 and 48,000
net rentable square feet respectively,  or an aggregate of approximately  91,500
net rentable  square feet.  The  buildings  are located on a 8.4 acre site which
provides  paved  parking  for 366 cars.  The  purchase  price of the complex was
$11,063,260,  of which  approximately  $4,978,467 was paid by the Registrant for
its 45% interest. The remaining 55% interest was purchased by Nooney Income Fund
Ltd. III, L.P., an affiliate of the Registrant,  and during 1993 was transferred
to a subsidiary of the mortgage lender.  As of December 29, 1995, the Registrant
acquired  the  mortgage   lender's   interest  in  NorthCreek  Office  Park  for
$3,960,000.  Prior to December 29, 1995, all costs and revenues  attributable to
the operation of the complex were shared by the  Registrant  and a subsidiary of
the mortgage lender in proportion to their respective percentage interests.  The
complex  was 89%  leased  by 32  tenants  at  December  31,  1997.  (See Item 7:
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations - Liquidity and Capital Resources.)

Reference is made to Note 7 of Notes to Financial  Statements  for a description
of revenues derived from major tenants.

Reference is made to Note 4 of Notes to Financial  Statements  filed herewith as
Exhibit 99.3 in response to Item 8 for a description of the indebtedness secured
by the Registrant's real property investments.


                                       -5-

<PAGE>



The  following  table sets forth  certain  information  as of December 31, 1997,
relating to the properties owned by the Registrant.

<TABLE>


                                            AVERAGE
                                            ANNUALIZED
                               TOTAL        EFFECTIVE                 PRINCIPAL TENANTS
                     SQUARE    ANNUALIZED   BASE RENT PER  PERCENT    OVER 10% OF PROPERTY          LEASE
PROPERTY             FEET      BASE RENT*   SQUARE FOOT    LEASED     SQUARE FOOTAGE                EXPIRATION
--------             ------    ----------   -----------    -------    --------------------         -----------
<S>                 <C>        <C>             <C>        <C>         <C>                          <C>
Tower Industrial                                                      Baxter International Inc.
Building             42,000    $ 155,400        $3.69     100%        (100%)                       2000
Leawood Fountain                                                      Midwest Mechanical (11%)     1998
Plaza                82,000    $1,134,000      $15.51      89%        Family Medical Care of
                                                                      Kansas City (10%)            1999
Northeast                                                             Baldwin Piano & Organ
Commerce Center     100,000    $   602,000     $ 6.42      94%        Co. (50%)                    1998
                                                                      Hill Top Research (17%)      2002
                                                                      Aerospace International
                                                                      (19%)                        1999
Countryside
Executive Center     91,000    $ 1,054,000     $15.94      72%        Dietzgen Corporation
                                                                      (17%)                        2005
NorthCreek Office                                                     Cincinnati Group Health
Park                 91,500    $1,134,000      $13.90      89%        Associates (26%),(7%)        2003, 1998
<FN>
* Represents 100% of Base Rent.  Registrant has 24% ownership in Leawood Fountain Plaza.
</FN>

</TABLE>


ITEM 3:      LEGAL PROCEEDINGS

The Registrant is not a party to any material pending legal proceedings.

ITEM 4:      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                                      NONE





                                       -6-

<PAGE>



                                     PART II
                                     -------

ITEM 5:      MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
             MATTERS

As of  February  1, 1998 there were 1,428  record  holders of  Interests  in the
Registrant.  There  is no  public  market  for  the  Interests  and  it  is  not
anticipated that a public market will develop.

              Cash Distributions Paid Per Limited Partnership Unit
              ----------------------------------------------------

          First Quarter   Second Quarter   Third Quarter   Fourth Quarter
          -------------   --------------   -------------   --------------


1996            0               0                 0             $12.50

1997            0              $6.25             $6.25            0


                                       -7-

<PAGE>



<TABLE>

ITEM 6:  SELECTED FINANCIAL DATA

                                                                     Year Ended December 31,
                                           ---------------------------------------------------------------------------
                                                1997            1996          1995 (1)        1994            1993

                                                          (Not covered by independent auditors' report)
<S>                                        <C>            <C>            <C>             <C>             <C>

Rental and other income                    $  3,355,159   $  3,502,080   $  1,754,750    $  1,729,872    $  1,843,782

Net income (loss)                                63,587         83,571        209,517         254,046     (1,261,814)

Data per limited partnership unit:

  Net income (loss)                                2.66           3.69          10.17           12.16         (65.61)

  Cash distributions - Investment income           2.66           3.69          10.17           12.16             --

  Cash distributions - Return of capital           9.84           8.81           2.33            6.59           12.50

Weighted average limited partnership
  units outstanding                              19,221         19,221         19,221          19,221          19,221

At year-end:

  Total assets                               16,563,704     16,473,106     16,803,566       9,118,452       9,287,233

  Investment property, net                   14,744,540     14,798,098     15,166,737       7,803,472       7,980,243

  Mortgage note payable                       7,096,532      7,190,000      7,190,000             --              --

  Partners' equity                            8,280,887      8,472,267      8,643,642       8,689,086       8,817,462

<FN>
See Item 7: Management's Discussion and Analysis for discussion of comparability of items.

(1) Balance sheet information includes the effects of an acquisition which occurred on December 29, 1995. See Note 1 to financial
    statements.
</FN>

</TABLE>


                                       -8-

<PAGE>



ITEM: 7      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
             RESULTS OF OPERATIONS

Liquidity and Capital Resources

Cash on hand as of December 31, 1997, is $1,378,138, an increase of $55,112 from
the  year  ended  December  31,  1996.   The  Registrant   expects  the  capital
expenditures  during 1998 will be adequately funded by current cash reserves and
the properties' operating cash flow. The anticipated capital expenditures are as
follows:

                                     Other         Leasing
                                    Capital        Capital          Total
                                    -------------------------------------
NorthCreek Office Park             $ 11,000       $131,067       $142,067
Tower Industrial Building                 0              0              0
Northeast Commerce Center                 0         34,372         34,372
Countryside Executive Center         38,000        223,382        261,382
Leawood Fountain Plaza (24%)          8,400         34,775         43,175
                                    -------       --------       --------
                                    $57,400       $423,596       $480,996
                                    =======       ========       ========

At NorthCreek  Office Park,  other capital has been budgeted for  replacement of
wall covering and leasing  capital is anticipated  for tenant  improvements  and
lease commissions on new and renewal deals.

At Tower Industrial Building, no capital is anticipated.

At Northeast Commerce Center, leasing capital has been budgeted for a new tenant
to occupy the current vacant space.

At  Countryside   Executive   Center,   other  capital  has  been  budgeted  for
installation of an irrigation  system,  new conference  room furniture,  and new
property  identification  signage.  Leasing capital has been budgeted for tenant
improvements and lease commissions for new and renewal tenants.

At  Leawood  Fountain  Plaza,  leasing  capital  has been  budgeted  for  tenant
improvements and lease  commissions for new and renewal  tenants.  Other capital
budgeted   is  for   recarpeting   hallways  in  one   building,   sidewalk/curb
replacements,   replacing  exterior  lighting   throughout  the  property,   and
repainting of the hallways and stairwells.

As previously  disclosed,  the Registrant feels that the market conditions exist
where  Countryside  Executive  Center  should be sold.  The strategy has been to
lease up the  property  and,  once an  acceptable  level of  occupancy  has been
obtained,  to put the building on the market for sale. The Registrant is working
closely with a local  brokerage firm in the market area of the property.  During
1997  occupancy  improved  from  61% at the  beginning  of  the  year  to 72% at
year-end.

The future  liquidity  of the  Registrant  is  dependent  on its ability to fund
future  capital  expenditures  and mortgage  payments from  operations  and cash
reserves,  maintain  occupancy and sell Countryside  Executive Center at a price
sufficient to satisfy required  obligations.  Until such time as the real estate
market fully recovers,  the Registrant will continue to manage the properties to
achieve its investment objectives.

                                       -9-

<PAGE>



Results of Operations

The results of operations  for the  Registrant's  properties for the years ended
December 31, 1997, 1996 and 1995 are detailed in the schedule below. Expenses of
the Registrant are excluded.

                   NorthCreek    Tower      Northeast  Countryside  Leawood
                   Office Park  Industrial  Commerce    Executive   Fountain
                      (100%)      (100%)     (100%)   Center (100%) Plaza (24%)
                   -----------  ---------  ---------- -------------  -----------
1997
----
Revenues           $ 1,303,843  $ 196,947  $ 676,065   $  905,834   $ 283,881
Expenses             1,222,155    106,565    625,690      975,298     263,850
                   ----------------------------------------------------------
Net Income (Loss)  $    81,688  $  90,382  $  50,375   $ (69,464)   $  20,031

1996
----
Revenues           $ 1,387,766  $ 199,099  $ 582,345   $1,068,983   $ 286,674
Expenses             1,171,977    109,090    671,080    1,087,519     278,219
                   ----------------------------------------------------------
Net Income (Loss)  $   215,789  $  90,009  $ (88,735)  $ (18,536)   $   8,455

Note:  In 1995,  the  Registrant  owned only a partial  interest in three of its
properties.  The results of  operations  for those years  reflect the  following
percentage.

                   NorthCreek    Tower      Northeast  Countryside  Leawood
                   Office Park  Industrial  Commerce    Executive   Fountain
                     (45%)        (100%)      (45%)    Center (50%) Plaza (24%)
                   -----------  ---------  ---------- -------------  -----------
1995
----
Revenues           $ 588,137    $ 189,118  $ 190,971   $ 537,615    $ 279,202
Expenses             426,096       98,856    235,966     619,398      258,081
                   ----------------------------------------------------------

Net Income (Loss)  $ 162,041    $  90,262  $ (44,995)  $ (81,783)   $  21,121

1997 Property Comparisons

At NorthCreek Office Park, revenues decreased $83,923 from 1996 to 1997 due to a
decrease in base rental income  ($37,501)  and a decrease in  escalation  income
($44,162).  Expenses  increased  $50,178 when  comparing the two years due to an
increase in depreciation  expense  ($54,217),  an and an increase in real estate
taxes ($8,032), partially offset by a decrease in parking lot expense ($14,402).


                                      -10-

<PAGE>



The operations at Tower Industrial Building,  which remains occupied by a single
tenant, have been relatively stable over the three-year period.

Operating  results at Northeast  Commerce Center improved  significantly  during
1997.  Revenues  increased  $93,720 due to a  continuing  increase in  occupancy
during the year.  Expenses at Northeast  Commerce Center  decreased  $45,390 due
mainly to a decrease in real estate tax  expenses  ($80,788)  due to a lower tax
assessment  in the current  year.  In addition,  parking lot expenses  decreased
($14,163),   partially  offset  by  increases  in  depreciation  ($45,497),  and
amortization  ($22,168)  due to the  addition  of  capital  improvements  at the
property  as a result of the  tenants  that have been put in place over the past
two years.

At Countryside  Executive Center,  revenues  decreased $163,149 during 1997. The
decrease in revenues is attributable  to a decrease in occupancy.  The occupancy
at the  beginning  of the year was 61%.  It  decreased  to 51%  during the year,
however, leasing at year end improved and the occupancy ended at 72%. Thus, this
decrease in revenues is due to decreases in the rental  income.  Offsetting  the
decrease in rental income was an increase in miscellaneous  rental income due to
the fact that one major  tenant  paid  double  rent for five  months of the year
while they were remaining on a month-to-month lease. This tenant ultimately left
the building due to the  Registrant's  inability to  accommodate  its  expansion
needs.   Expenses  at  Countryside  Executive  Center  decreased  $112,221  when
comparing 1997 to the prior year.  Expenses which decreased were mainly cleaning
($11,949),  heating,  ventilating and air  conditioning  repairs and maintenance
($15,125), and real estate taxes ($72,563).

At Leawood  Fountain  Plaza,  revenues were relatively  stable,  decreasing only
$2,793 when  comparing  the two years.  Expenses  also  decreased  $14,69 due to
decreases in electric expense ($8,509),  parking lot expenditures  ($3,442), and
electric  repairs and maintenance  ($2,412),  partially offset by an increase in
building repairs and maintenance ($7,418).

The Registrant  has a first mortgage with a floating  interest rate of 3/4% over
the then published prime rate of the lender. The properties which are collateral
for this loan are  NorthCreek  Office  Park,  Countryside  Executive  Center and
Northeast  Commerce Center.  The balance of the loan as of December 31, 1997, is
$7,096,532. The interest rate at year end was 9.25%. The mortgage note agreement
provides for a 3.25%  interest rate on  outstanding  prinicpal if a compensating
balance is maintained  during the immediately  preceding month.  During 1997 the
Partnership  decreased  interest  expense  by  approximately  $60,000  from  the
compensating balance clause.



                                      -11-

<PAGE>



The  occupancy  levels at the  Registrant's  properties as of December 31, 1997,
1996 and 1995 are detailed in the schedule below.

                                       Occupancy rates at December 31,
                                        1997      1996        1995
                                        --------------------------

       NorthCreek Office Park            89%       98%         97%
       Tower Industrial                 100%      100%        100%
       Northeast Commerce Center         94%       87%         56%
       Countryside Executive Center      72%       61%         73%
       Leawood Fountain Plaza            89%       92%         92%

Operating  results for NorthCreek  Office Park,  Northeast  Commerce  Center and
Countryside Executive Center varify significantly when comparing 1996 results to
1995. To analyze these three  properties,  the Registrant will reflect operating
results as if the properties were 100% owned by Registrant throughout 1995.

For the quarter ended  December 31, 1997,  occupancy at  NorthCreek  Office Park
decreased  from 92% at the beginning of the quarter to 89% at the quarter's end.
During the quarter, leasing activity consisted of four new tenants leasing 6,797
square feet,  one tenant  renewing its lease in 597 square feet, and two tenants
vacating 9,485 square feet. Leasing activity for the year consisted of eight new
leases for tenants  occupying  15,698 square feet,  ten tenants  renewing  their
leases for 10,936  square feet,  and nine tenants  vacating  24,201 square feet.
NorthCreek  Office  Park has one major  tenant  which  occupies  space under two
leases which, together, comprise 33% of the available space. These leases expire
in December 1998 and 2003.

Tower  Industrial  Building is leased by a single  tenant whose lease expires on
April 30, 2000.

At Northeast  Commerce  Center,  there was no leasing activity during the fourth
quarter. During 1997, one tenant moved in occupying 6,222 square feet. There are
three major  tenants at this property  occupying  50%, 17% and 19% of the space,
respectively, with lease expirations of 1998, 2002 and 1999.

During the fourth  quarter at  Countryside  Executive  Center,  four new tenants
leased  21,929 square feet,  one tenant  renewed it lease for 1,457 square feet,
and one tenant  vacated 423 square  feet.  Leasing  activity for the year can be
summarized as follows.  Eight new tenants  signed leases for 29,734 square feet,
five tenants  renewed  their leases for 8,977  square  feet,  and seven  tenants
vacated  19,289  square  feet.  There is one  major  tenant at  Countryside  who
occupies 14% of the space with a lease which expires in 2005.

During the fourth quarter at Leawood Fountain Plaza,  occupancy increased to 89%
from 87%.  The  increase is  attributable  to three new leases  being signed for
4,095 square feet.  In addition,  one tenant  renewed  1,142 square feet and one
tenant vacated 2,760 square feet.  During the year, the Registrant  signed seven
new leases for 6,678 square feet,  renewed leases with eleven tenants  occupying
16,441 square feet, while six tenants  occupying 9,174 square feet vacated.  The
property  has two major  tenants  who occupy 11% of the space with a lease which
expires in July 1998 and 10% of the  available  space with a lease which expires
in July 1999, respectively.


                                      -12-

<PAGE>



Year 2000 issues

The  Registrant  believes  that  the  impact  of the year  2000  will not have a
material  impact on future  results.  The  management  company  employed  by the
Registrant  utilizes various computer  software packages as tools in running its
accounting  operations.  The Registrant's  properties are maintained on software
provided by a third party. The management company has received  information from
that company indicating that the main software program has all its core products
already  compatible with 2000 dates and that these have been proven in the field
for over five years.  A few of the add on products  that are not critical to the
management  company's  business  are in process of being  updated  and the third
party vendor anticipates compliance by the end of 1998.

1997 Comparisons

For the year ended December 31, 1997,  the  Registrant's  consolidated  revenues
were  $3,356,773  compared to $3,509,669  for the year ended  December 31, 1996.
Thus, revenues decreased $152,896 when comparing the two years. This decrease in
revenue is due to a decrease  in base  rental  income at  Countryside  Executive
Center and NorthCreek Office Park.

For the year ended December 31, 1997,  consolidated  expenses were $3,293,186 as
compared to  $3,426,098  for the year ended 1996.  Expenses  decreased  due to a
decrease in real estate tax expense  ($156,800) due to the decreased real estate
tax assessment  noted above, a decrease in other operating  expenses  ($45,874),
partially offset by an increase in professional  services ($92,379).  Net income
for the year ended 1997 was  $63,587 as  compared  to $83,571 for the year ended
1996. During 1997, net cash provided by operating activities was $954,807.  This
cash was used to provide  capital  improvements  to the  properties of $551,260,
cash  distributions  to  partners  were  paid in the  amount  of  $254,967,  and
principal payments on the mortgage loan were made in the amount of $93,468.

1996 Comparisons

As of December 31, 1996, the Registrant's  consolidated revenues were $3,509,669
compared to $1,786,540  for the year ended  December 31, 1995.  This increase of
96% is attributable to the fact that the Registrant now owns 100% of Countryside
Executive Center, Northeast Commerce Center and NorthCreek Office Park. In prior
years, the Registrant owned 50%, 45% and 45%, respectively.

For the year ended  December 31, 1996,  consolidated  expenses  were  $3,426,098
compared  to  $1,577,023  for  the  year  ended  1995.   Consolidated   expenses
significantly  increased  due to the fact that the  Registrant  now owns 100% of
Countryside  Executive Center,  Northeast  Commerce Center and NorthCreek Office
Park.  In  addition,  the  Registrant  placed  a first  mortgage  loan on  these
properties at the time of the purchase.  Consolidated  interest expense for 1996
was $614,006. Net income on a consolidated basis decreased from $209,517 in 1995
to $83,571 in 1996.  Net income per  limited  partnership  unit  decreased  from
$10.17 to $3.69 in 1996.  The  decreases  in net  income  were  attributable  to
depreciation  expense and to the  interest  expense the  Registrant  now incurs.
During 1996,  the  Registrant  distributed  $254,946 to the partners and had net
additions to the investment properties of $225,189.


                                      -13-

<PAGE>



Inflation

The effects of inflation  did not have a material  impact upon the  Registrant's
operations in fiscal l996 or 1997.

Interest Rates

Interest rates on floating rate debt remained  constant in 1996 and went down in
1997.  Future  increases in the prime  interest  rate can  adversely  affect the
operations of the Registrant.



ITEM 8:      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial  Statements of the  Registrant  are filed herewith as Exhibit 99.3 and
are  incorporated  herein by reference (see Item  14(a)(1)).  The  supplementary
financial information specified by Item 302 of Regulation S-K is not applicable.

ITEM 9:      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
             FINANCIAL DISCLOSURE

                                      None

                                    PART III
                                    --------

ITEM 10:     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The  General  Partners  of the  Registrant  responsible  for all  aspects of the
Registrant's  operations  are Gregory J.  Nooney,  Jr.,  age 67,  Nooney  Income
Investments  Two,  Inc.,  a  Missouri  corporation,  and PAN,  Inc.,  a Missouri
corporation.  Gregory J. Nooney, Jr. is a senior officer of Nooney Company,  the
sponsor of the Registrant.

The background and experience of the General Partners are as follows:

Gregory J. Nooney,  Jr. joined Nooney Company in 1954 and is currently  Chairman
of the Board and Chief Executive Officer.

John J. Nooney is a Special General Partner of the Partnership and as such, does
not exercise  control of the affairs of the  Partnership.  John J. Nooney joined
Nooney  Company in 1958 and was  President  and  Treasurer  until he resigned in
1992.  Mr. Nooney is currently  Chairman of the Board of Dalton  Investments,  a
real estate asset management firm.

Nooney Income  Investments Two, Inc. was formed in November 1984 for the purpose
of being a general  and/or  limited  partner in the Registrant and other limited
partnerships.  Gregory J. Nooney, Jr. is a director of Nooney Income Investments
Two, Inc.

                                      -14-

<PAGE>



Gregory J. Nooney,  Jr. and John J. Nooney are brothers.  Gregory J. Nooney, Jr.
and the estate of Faith L.  Nooney  (the  deceased  wife of John J.  Nooney) are
stockholders  of Nooney  Company,  with Gregory J. Nooney,  Jr.  controlling all
voting stock of Nooney Company.

PAN, Inc.  became a General  Partner during 1997 and is wholly-owned by Patricia
A. Nooney, the daughter of Gregory J. Nooney, Jr.

The General  Partners  will  continue to serve as General  Partners  until their
withdrawal or their removal from office by the Limited Partners.

Certain of the General Partners act as general partners of limited  partnerships
and  hold  directorships  of  companies  with a class of  securities  registered
pursuant to Section 12(g) of the  Securities  Exchange Act of 1934 or subject to
the requirements of Section 15(d) of the Act. A list of such directorships,  and
the  limited  partnerships  for  which the  General  Partners  serve as  general
partners,  is  filed  herewith  as  Exhibit  99.1  and  incorporated  herein  by
reference.

During 1993 Lindbergh Boulevard Partners,  L.P. filed a voluntary petition under
Chapter 11 of the United States Bankruptcy Code.  Gregory J. Nooney,  Jr. is the
general  partner of Nooney Ltd. II, L.P, which in turn is the general partner of
Nooney  Development  Partners,  L.P.,  which in turn is the  general  partner of
Nooney-Hazelwood  Associates,  L.P.  which is the general  partner of  Lindbergh
Boulevard  Partners,  L.P.  Lindbergh  Boulevard  Partners,  L.P.  emerged  from
bankruptcy on May 17, 1994, when its Plan of Reorganization was confirmed.

On October 31, 1997,  Nooney Company sold its  wholly-owned  subsidiary,  Nooney
Income  Investments Two, Inc., the corporate  general partner of the Partnership
to  S-P  Properties,  Inc.,  a  California  corporation,  which  in  turn  is  a
wholly-owned  subsidiary of CGS Real Estate Company,  Inc., a Texas corporation.
Simultaneously,  Gregory J. Nooney,  Jr., an individual general partner and PAN,
Inc.,  a  corporate  general  partner,  sold  their  economic  interests  to S-P
Properties, Inc. and resigned as general partners.

ITEM 11:     EXECUTIVE COMPENSATION

The General  Partners  are entitled to a share of  distributions  and a share of
profits and losses as more fully described under the headings  "Compensation  to
General  Partners and Affiliates" on pages 26-27 and "Profits and Losses for Tax
Purposes; Distributions; and Expenses of General Partners" on pages A-17 to A-22
of the Prospectus of the Registrant dated February 15, 1985, as supplemented and
filed pursuant to Rule 424(c) of the Securities Act of 1933 (the  "Prospectus"),
which are incorporated herein by reference.

During 1997, cash  distributions of $14,704 were paid to the General Partners by
the Registrant.

See Item 13 below for a discussion of  transactions  between the  Registrant and
certain affiliates of the General Partners.

                                      -15-

<PAGE>




ITEM 12:     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a) Security Ownership of Certain Beneficial Owners.

On or about November 20, 1997, a Schedule 13D ("Schedule 13D") setting forth the
following  information  was filed  with the SEC by  Everest  Properties  II, LLC
("Everest"),  Millenium  Investors,  LLC ("Millenium")  and KM Investments,  LLC
("KM").  The Schedule 13D indicates that Everest is the beneficial  owner of 929
Interests,  or approximately 4.8% of the total outstanding  Interests,  and that
Everest has sole voting power and sole dispositive  power with respect to all of
such Interests.  The Schedule 13D also indicates that KM is the beneficial owner
of 929 Interests, or approximately 4.8% of the total outstanding Interests,  and
that KM has sole voting power and sole dispositive  power with respect to all of
such  Interests.  The  Schedule  13D further  indicates  that  Millenium  is the
beneficial  owner  of  121  Interests,   or  approximately  0.6%  of  the  total
outstanding Interests, and has sole voting power and sole dispositive power with
respect to all of such  Interests.  The Schedule 13D reports that Everest serves
as the manager of each of  Millenium  and KM and that  because it serves in such
capacity for KM and because it owns a majority  interest in the majority  member
of KM, it may be deemed to beneficially own the Interests  directly owned by KM.
[The Schedule 13D indicates that although each of Everest, Millenium and KM deny
that they are  members of a "group" as that term is used in Section  13(d)(3) of
the  Securities  Exchange Act of 1934,  as amended  (the  "Exchange  Act"),  the
Schedule  13D was  filed as a  precaution  because  the  individuals  performing
management services for Everest Properties,  LLC, which owns a majority interest
in Everest, and Everest are substantially the same and such entities have agreed
to  submit  a joint  proposal  for the sale of their  Interests  to the  General
Partner and to share  information  regarding such proposal.  Section 13(d)(3) of
the Exchange Act  provides  that when two or more persons act as a  partnership,
limited  partnership,  syndicate  or other group for the  purpose of  acquiring,
holding,  or disposing of securities of an issuer, such syndicate or group shall
be deemed a  "person"  for  purposes  of filing  Schedule  13D].  The  principal
business  address of each of each of Everest,  Millenium and KM is 199 South Los
Robles Avenue, Suite 440, Pasadena, California 91101.

(b) Security Ownership of Management.

None of the General  Partners is known to the  Registrant  to be the  beneficial
owner, either directly or indirectly, of any Interests in the Registrant.

(c) Changes in Control.

There are no arrangements known to the Registrant, the operation of which may at
a subsequent date result in a change in control of the Registrant.




                                      -16-

<PAGE>



ITEM 13:     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

(a) Transactions with Management and Others.

Certain  affiliates  of the General  Partners  are  entitled to certain fees and
other payments from the Registrant in connection  with certain  transactions  of
the  Registrant  as more fully  described  under the headings  "Compensation  to
General  Partners and Affiliates" on pages 26-27 and "Management" on pages 23-25
of the Prospectus, which are incorporated herein by reference.

Nooney  Krombach  Company,  the  manager of the  Registrant's  properties,  is a
wholly-owned  subsidiary of Nooney Company.  Nooney Krombach Company is entitled
to receive monthly  compensation from the Registrant for property management and
leasing  services,  plus  administrative   expenses.   During  fiscal  1997  the
Registrant paid property  management fees of $171,525 to Nooney Krombach Company
and $33,334 as reimbursement  for indirect  expenses incurred in connection with
management  of the  Registrant.  On October 31,  1997,  CGS Real Estate  Company
purchased the real estate  management  business of Nooney  Krombach  Company and
formed Nooney, Inc. to perform the management of the Registrant.  The Registrant
paid  Nooney,  Inc.  $30,467 in property  management  fees in 1997 and $6,666 as
reimbursement  for indirect  expenses incurred in connection with the management
of the Registrant.

See Item 11 above for a  discussion  of cash  distributions  paid to the General
Partners during the year ended December 31, 1997.

(b) Certain Business Relationships.

The  relationship  of  certain  of the  General  Partners  to  certain  of their
affiliates  is set forth in Item 13(a)  above.  Also see Item 13(a)  above for a
discussion of amounts paid by the  Registrant  to the General  Partners or their
affiliates  during the year ended  December 31, 1997 in connection  with various
transactions.

(c) Indebtedness of Management.

Not Applicable.

(d) Transactions with promoters.

Not Applicable.

                                      -17-

<PAGE>




                                     PART IV
                                     -------


ITEM 14:     EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)      The following documents are filed as a part of this report:

               1.    Financial Statements (filed herewith as Exhibit 99.3):

                     Independent auditors' report
                     Balance sheets
                     Statements of operations
                     Statements of partners' equity (deficit)
                     Statements of cash flows
                     Notes to financial statements

               2.    Financial  Statement  Schedules  (filed herewith as Exhibit
                     99.3):

                     Schedule -  Reconciliation of partners'  equity (deficit)
                     Schedule III  -  Real estate and accumulated depreciation

                     All other  schedules  are  omitted  because  they are
                     inapplicable or not required under the instructions.

               3.    Exhibits:

                     See Exhibit Index on Page 20.

(b)      Reports on Form 8-K

         On November 14, 1997, the  Registrant  filed a report on Form 8-K which
         reported an Item 1, Changes in Control of Registrant.

(c)      Exhibits:

         See Exhibit Index on Page 20.

(d)      Not applicable.



                                      -18-

<PAGE>



                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) 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.

                                          NOONEY INCOME FUND LTD. II, L.P.



Date:         March 30, 1998              Nooney Income Investments Two, Inc.
      -----------------------------



                                          By:/s/ Gregory J. Nooney, Jr.
                                          --------------------------------------
                                             Gregory J. Nooney, Jr.- Director
                                             Chairman of the Board and
                                             Chief Executive Officer



                                          By:/s/ Patricia A. Nooney
                                          --------------------------------------
                                             Patricia A. Nooney - Director
                                             Senior Vice President and Secretary

                                          BEING A MAJORITY OF THE DIRECTORS
                                          OF NOONEY INCOME INVESTMENTS TWO, INC.

                                      -19-

<PAGE>



                                  EXHIBIT INDEX


Exhibit
Number                               Description
------                               -----------

 3          Amended and Restated Agreement and Certificate of Limited
            Partnership dated February 3, 1986, is incorporated by
            reference to the Registrant's Annual Report on Form 10-K
            for the fiscal year ended October 31, 1986, as filed
            pursuant to Rule 13a-1 of the Securities Exchange Act of
            1934 (File No. 0-14360).


10          Management Contract between Nooney Income Fund Ltd. II
            and Nooney Management Company (now Nooney, Inc.)
            dated March 12, 1985, is incorporated by reference to the
            Registrant's Annual Report on Form 10-K for the fiscal year
            ended October 31, 1985, as filed pursuant to Rule 15d-1 of
            the Securities Exchange Act of 1934 (File No. 2-94533).

99.1        List of Directorships filed in response to Item 10.

99.2        Pages  23-27  and A-17 - A-22 of the  Prospectus  of the  Registrant
            dated February 15, 1985, as supplemented  and filed pursuant to Rule
            424(c) of the Securities Act of 1933 are incorporated by reference.

99.3        Financial Statements and Schedules.





                                      -20-