REALTY PARKING PROPERTIES II
                                                   L.P.
                                           Letter to Investors

                                                    1

<PAGE>
                                    REALTY PARKING PROPERTIES II L.P.

Dear Investor:

OPERATIONS

         In 1996,  the operating  results of Realty  Parking  Properties II L.P.
continued to trend up.  Parking lot rental  income  increased  $212,431 or 9.4%
during 1996,  as compared to 1995.  This increase is  attributable  to scheduled
base  rental  rate  increases  at  nine  of the  Fund's  properties,  as well as
increased percentage rents earned at several properties.

         Percentage rents were earned at seven of the Fund's twelve  properties.
In 1996, the Nashville,  San Diego (Union),  Atlanta, San Francisco,  Tulsa, San
Antonio and Phoenix  facilities  earned a total of $409,050 in percentage rents.
This represents a 36% increase over the percentage rents earned in 1995.

         Of particular interest during 1996 was the revenue received by Allright
from the rental of our Atlanta facility to a retail vendor during the Summer
Olympics.   The rents from this use resulted in a significant increase over
the facility's normal monthly gross parking revenues of approximately $65,000. 
The Fund owns 67% of the facility and  contemplates that this revenue  will 
contribute  to a large  increase in the facility's percentage rent, which in
accordance with the lease, is not earned until April of 1997.

         The Fund moved one step closer to the sale of its first  property  when
the King County Budget and Finance  Committee gave preliminary  approval for the
purchase of our Seattle facility.  Several approvals must still be granted,  and
it is anticipated that the sale would close in October 1997.

CASH DISTRIBUTION

         The  Fund  made a fourth  quarter  1996  distribution  of  $439,640  to
partners on February 12, 1997.  Each partner  received (or had deposited  into a
pre-designated  account) his or her share of this  distribution in the amount of
$.31 per unit. This distribution represents a 5% annualized return.

OUTLOOK

         Our  1996  site   visits   enabled   management   to  gain  a  stronger
understanding  of  each  of the  Fund's  real  estate  markets.  We are  sensing
increased  activity  in several of our  markets,  and while no  additional  sale
contracts  were  consummated  in 1996,  the  increased  level of  interest is an
important indicator of the potential future site activity.

                                                    2

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                                    REALTY PARKING PROPERTIES II L.P.

SUMMARY

         We are pleased with 1996's results and look forward to continued  gains
in 1997. We are optimistic  that the increased  interest in our properties  will
continue in 1997,  and lead to possible  future sales.  It is  noteworthy,  that
certain  downtown  areas  are  beginning  to  experience  the  need  for  future
development.

Very truly yours,



John M. Prugh, President
Realty Parking Company II, Inc.
General Partner

                                                    3

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                                    REALTY PARKING PROPERTIES II L.P.

                                       REALTY PARKING PROPERTIES II
                                                   L.P.
                                           Financial Statements

                                                    4

<PAGE>

                                    

                                       INDEPENDENT AUDITORS' REPORT




The Partners
Realty Parking Properties II L.P.:



We     have audited the accompanying balance sheets of Realty Parking Properties
       II L.P.  (the  "Fund") as of  December  31, 1996 and 1995 and the related
       statements of  operations,  partners'  capital and cash flows for each of
       the  years in the  three-year  period  ended  December  31,  1996.  These
       financial statements are the responsibility of the Fund's management. Our
       responsibility  is to express an  opinion on these  financial  statements
       based on our audits.



We     conducted  our audits in  accordance  with  generally  accepted  auditing
       standards.  Those standards require that we plan and perform the audit to
       obtain  reasonable  assurance about whether the financial  statements are
       free of material  misstatement.  An audit includes  examining,  on a test
       basis,  evidence  supporting the amounts and disclosures in the financial
       statements.  An audit also includes  assessing the accounting  principles
       used and significant estimates made by management,  as well as evaluating
       the overall financial statement presentation.  We believe that our audits
       provide a reasonable basis for our opinion.



In     our opinion,  the financial  statements referred to above present fairly,
       in all  material  respects,  the  financial  position  of Realty  Parking
       Properties  II L.P. as of December 31, 1996 and 1995,  and the results of
       its operations and its cash flows for each of the years in the three-year
       period ended  December 31, 1996 in  conformity  with  generally  accepted
       accounting principles.



                                              KPMG PEAT MARWICK LLP



Baltimore, Maryland
       January 24, 1997

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                                    REALTY PARKING PROPERTIES II L.P.


                                                   Balance Sheets

<TABLE>
<CAPTION>

                                                                                    December 31,
                                                                         1996                          1995

Assets

<S>                                                                <C>                           <C>            
  Investment in real estate (Note 3)                               $    31,457,822               $    31,616,733
  Cash and cash equivalents                                                694,405                       367,930
  Other assets
    Accounts receivable                                                    307,582                       291,318
    Organization and start-up costs
          less accumulated amortization
          of $50,863 and $40,423, respectively (Note 2)                      1,366                        11,806
    Financing costs less accumulated
          amortization of $15,000 and $9,000, respectively                  15,003                        21,003
                                                                           323,951                       324,127

                                                                   $    32,476,178               $    32,308,790

Liabilities and Partners' Capital

    Accounts payable and accrued expenses                          $       123,891               $        39,541
    Due to affiliates (Note 5)                                             121,206                       197,594
    Real estate taxes payable                                              304,754                       282,500
    Note payable (Note 6)                                                3,061,000                     2,945,000
                                                                         3,610,851                     3,464,635


  Partners' Capital (Note 8)
    General Partner                                                         (20,782)                      (20,993)
    Assignee and Limited Partnership
         Interests  -  $25 stated value per
         unit, 1,392,800 units outstanding                              28,886,009                    28,865,048
    Subordinated Limited Partner                                               100                           100
                                                                        28,865,327                    28,844,155

                                                                   $    32,476,178               $    32,308,790
</TABLE>

See accompanying notes to financial statements

                                                         6

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                                    REALTY PARKING PROPERTIES II L.P.


<TABLE>
<CAPTION>
                                              Statements of Operations
                                          For the years ended December 31,

                                                                     1996              1995             1994

Revenues
<S>                                                            <C>               <C>               <C>            
  Parking lot rental (Note 4)                                  $     2,464,856   $     2,252,425   $     1,648,982
  Interest income                                                       14,495            15,020           122,854
                                                                     2,479,351         2,267,445         1,771,836

Expenses
   Administrative, including amounts to
        related party (Note 5)                                          88,682            78,160            73,359
   Professional fees                                                    32,480            46,640            36,995
   Management fees to related party (Note 5)                           238,295           238,975           207,113
   Insurance and property taxes                                           --                --              25,954
   Interest                                                            284,366           271,305           108,392
   Depreciation of property                                            171,248           153,980           135,669
   Amortization of organization and
       start-up costs and financing costs                               16,440            16,440            13,440
                                                                       831,511           805,500           600,922

Net earnings                                                   $     1,647,840   $     1,461,945   $     1,170,914

Net earnings per unit of assignee and
        limited partnership interests (Note 8)                 $          1.17   $          1.04   $          0.83

See accompanying notes to financial statements
</TABLE>

                                                         7

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                                    REALTY PARKING PROPERTIES II L.P.


                                          Statements of Partners' Capital
                                          For the years ended December 31,
<TABLE>
<CAPTION>
                                                           Assignee
                                                        and Limited   Subordinated
                                                        Partnership       Limited        General
                                                           Interests       Partner       Partner          Total


<S>                                                     <C>             <C>           <C>            <C>          
Balance at December 31, 1993                            $  29,435,801   $       100   $     (15,226) $  29,420,675

Net earnings                                                1,159,205            --          11,709       1,170,914

Distributions to partners                                   (1,610,408)          --         (16,267)     (1,626,675)


Balance at December 31, 1994                               28,984,598           100         (19,784)    28,964,914

Net earnings                                                1,447,326            --          14,619       1,461,945

Distributions to partners                                   (1,566,876)          --         (15,828)     (1,582,704)


Balance at December 31, 1995                               28,865,048           100         (20,993)     28,844,155

Net earnings                                                1,631,362            --          16,478       1,647,840

Distributions to partners                                   (1,610,401)          --         (16,267)     (1,626,668)


Balance at December 31, 1996                            $  28,886,009   $       100   $     (20,782) $  28,865,327
</TABLE>

See accompanying notes to financial statements

                                                         8

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                                    REALTY PARKING PROPERTIES II L.P.

<TABLE>
<CAPTION>
                                              Statements of Cash Flows
                                          For the years ended December 31,

                                                                     1996              1995             1994

Cash flows from operating activities
<S>                                                            <C>               <C>               <C>                      
          Net earnings                                         $     1,647,840   $     1,461,945   $     1,170,914          
Adjustments to reconcile net earnings to net cash
                  provided by operating activities
                  Depreciation  of property                            171,248           153,980           135,669
                  Amortization of organization and start-up costs
                        and financing costs                             16,440            16,440            13,440
                  Changes in assets and liabilities
                        (Increase) decrease in accounts receivable       5,990            (8,906)           58,231
                        Increase (decrease) in accounts payable
                                and accrued expenses                    84,350            34,746           (44,223)
                        Increase in amounts due to affiliates           40,579            10,855             2,521
Net cash provided by operating activities                            1,966,447         1,669,060         1,336,552


Cash flows from investing activities -
         additions to investment in real estate                        (129,304)        (412,974)      (10,554,379)

Cash flows from financing activities
         Proceeds from note borrowing                                  116,000           445,000         3,000,000
         Repayment of note borrowing                                      --                --            (500,000)
         Financing costs                                                  --                --             (30,003)
         Distributions to partners                                   (1,626,668)      (1,582,704)       (1,626,675)
Net cash provided by (used in) financing activities                  (1,510,668)      (1,137,704)          843,322

Net increase (decrease) in cash and cash equivalents                   326,475           118,382         (8,374,505)
Cash and cash equivalents
         Beginning of year                                             367,930           249,548         8,624,053

         End of year                                           $       694,405   $       367,930   $       249,548

See accompanying notes to financial statements
</TABLE>

                                                         9

<PAGE>
                                   
                                       REALTY PARKING PROPERTIES II L.P.
                                      Notes To Financial Statements

                                                    10

<PAGE>
                                    REALTY PARKING PROPERTIES II L.P.

                                          Notes to Financial Statements
                                                December 31, 1996

(1)    Organization

Realty Parking Properties II L.P. (the "Fund") is a Delaware limited partnership
       formed on December 26, 1990 to acquire  surface  lots and parking  garage
       structures to be held for appreciation and used for parking operations to
       produce current income. The general partner is Realty Parking Company II,
       Inc. and the subordinated  limited partner is Realty  Associates  Limited
       Partnership, an affiliate of the general partner.

The    Fund has entered into parking  consulting  and advisory  agreements  with
       Central  Parking  System,  Inc.   ("Central")  and  Allright  Corporation
       ("Allright"),  respec tively.  Central  purchased 42,104 assignee limited
       partnership  interests,  net of  selling  commissions,  representing  its
       maximum allowable purchase of $1,000,000.

The    Fund owns twelve  properties in total,  nine of which are wholly owned by
       the  Fund.  The  undivided  tenants-in-common  ownership  of three of the
       properties is noted below.  The  Properties are not subject to a mortgage
       or other  lien or  encumbrance  under  the  terms of the loan  agreement,
       however, the collateral security provision of the loan agreement provides
       for the  assignment  of the Fund's  rights as a lessor to its interest in
       the parking lot leases, contracts and income. As of December 31, 1996 the
       Fund owned the following Properties:
<TABLE>
<CAPTION>
                                                         Approximate
         Location                                         Size (Sq. Ft.)                Type

<S>                                                            <C>                                 
         Phoenix, Arizona                                      275,310                  surface lot
         San Diego, California                                  50,000                  surface lot
         San Diego, California (Union)                          35,000                  surface lot
         San Francisco, California                              12,720                  surface lot
         Denver, Colorado                                      106,250                  surface lot
         Atlanta, Georgia                                       78,582                  surface lot and garage
         Tulsa, Oklahoma                                        39,646                  surface lot
         Nashville, Tennessee                                   57,720                  surface lot and garage
         Dallas, Texas                                          45,714                  surface lot and garage
         Dallas, Texas (Metro)                                  19,450                  surface lot and garage
         San Antonio, Texas                                     43,341                  surface lot
         Seattle, Washington                                    66,179                  surface lot
</TABLE>



The    Fund owns an 80% undivided interest in the Denver,  Colorado property and
       a 60% undivided interest in the Tulsa,  Oklahoma property.  The remaining
       interests of these two Properties are owned by Central.

The    Fund  owns  a  two-thirds  undivided  interest  in the  Atlanta,  Georgia
       Property. The remaining interest of this Property is owned by Allright.

                                                    11

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                                    REALTY PARKING PROPERTIES II L.P.

                                    Notes to Financial Statements (continued)


(2)    Summary of Significant Accounting Policies

The    accompanying financial statements have been prepared on the accrual basis
       of  accounting.  The Fund  reports its  operating  results for income tax
       purposes on the accrual  basis.  No  provision  for income  taxes is made
       because any liability for income taxes is that of the individual partners
       and not that of the Fund.

The    Fund has joint  interest  and control  with other  venturers in the three
       properties which are accounted for using the proportionate  share method.
       The financial  statements include the Fund's  proportionate  share of the
       properties' historical cost, revenues and expenses.

Lease revenues are recorded as earned under terms of the lease agreements.

Costs  associated with the marketing of assignee limited  partnership  interests
       to the public were offset against the related  partners'  capital.  Costs
       associated  with the  organization  of the Fund were  capitalized and are
       being amortized on a straight-line basis over a period of five years.

The    Fund considers all highly liquid investments with original  maturities of
       three  months  or less as cash  equivalents.  Cash and  cash  equivalents
       consists  of a cash and a money  market  account  and are stated at cost,
       which approximates market value at December 31, 1996 and 1995.

Investment in real  estate is stated at the lower of fair value or cost,  net of
       accumulated  depreciation,  and includes all related acquisition costs of
       the properties.  Depreciation of the parking garage buildings is computed
       using the  straight-line  method over 31.5 years for  property  placed in
       service  prior to  January  1, 1994 and 39 years for  property  placed in
       service after January 1, 1994. Land  improvements  are depreciated  using
       the straight-line method over 15 years.

Management of the Fund has made a number of estimates and  assumptions  relating
       to the reporting of assets, liabilities, revenues and expenses to prepare
       these  financial   statements  in  conformity  with  generally   accepted
       accounting principles.
       Actual results could differ from those estimates.

The    fair value of financial instruments is determined by reference to various
       market  data  and  other  valuation  considerations.  The  fair  value of
       financial instruments approximate their recorded values.

In     accordance  with  Statement of Financial  Accounting  Standards  No. 121,
       "Accounting  for the  Impairment of Long-Lived  Assets and for Long-Lived
       Assets  to Be  Disposed  Of,"  the  Fund  records  impairment  losses  on
       long-lived  assets  used in  operations  when  events  and  circumstances
       indicate  that the  individual  assets might be  impaired,  based on fair
       value, and the undiscounted cash flows estimated to be generated by those
       assets are less than the carrying amounts of the assets.

                                                    12

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                                    REALTY PARKING PROPERTIES II L.P.


                                    Notes to Financial Statements (continued)


(2)    Summary of Significant Accounting Policies (continued)

During 1996, no events or  circumstances  indicated  that the assets of the Fund
       were impaired.  Prior to 1996,  the Fund's  investment in real estate was
       carried at the lower of net realizable  value or cost, net of accumulated
       depreciation, on an individual property basis.

Certainamounts in prior years have been  reclassified  to conform  with  current
       year presentation.

(3)    Investment in Real Estate

Investment in real estate is summarized as follows at December 31:
<TABLE>
<CAPTION>

                                                                   1996                       1995

<S>                                                              <C>                         <C>        
         Land                                                    $26,356,118                 $26,347,870
         Building                                                  5,583,532                   5,579,443

                                                                  31,939,650                  31,927,313
         Less: Accumulated depreciation                              481,828                     310,580

                                                                 $31,457,822                 $31,616,733
</TABLE>

(4)    Leases

The    Fund leased seven  properties to Central and five  properties to Allright
       for periods of 10 years (expiring between August 2002 and July 2004) with
       options to extend  these leases for two  additional  terms of five years.
       Under the terms of the typical lease  agreement the lessees are obligated
       to pay the Fund the greater of the  minimum  rent plus  reimbursement  of
       real  estate  taxes or 65% of the  gross  parking  revenues  ("percentage
       rent").  Percentage  rents  earned  during  1996,  1995 and 1994  totaled
       $409,050,  $300,843  and  $129,440,   respectively.   The  typical  lease
       agreement calls for minimum rents of 6.0% of certain acquisition costs in
       the first year, 6.5% in the second year and 7.0% thereafter.  Parking lot
       rents of $2,055,806,  $1,951,582  and $1,519,542 in 1996,  1995 and 1994,
       respectively,  represented minimum rents due in accordance with the lease
       agreements in effect during each period. Additionally, under the terms of
       the leases,  the parking lot operator is  responsible  for all  operating
       costs,  including  ad valorem  real  estate  taxes and general and garage
       liability insurance  coverage.  Each lease is cancelable by the Fund upon
       the sale of the property and the payment to the lessee of a  "termination
       fee". The termination fee generally equals 15% of the amount,  if any, by
       which the property's sales proceeds exceed the original  acquisition cost
       of the  property  plus a 12%  compounded  annual  return on the  original
       acquisition  cost minus all rents received by the Fund from the property.
       Some of the leases may differ from the terms  outlined  above in order to
       accommodate specific circumstances of an acquired property.

                                                    13

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                                    REALTY PARKING PROPERTIES II L.P.


                                    Notes to Financial Statements (continued)


(4)    Leases (continued)

The    minimum rents to be received  under the terms of the operating  leases in
       effect at December 31, 1996 are summarized as follows:

<TABLE>
<CAPTION>
<S>      <C>                                                   <C>          
         1997                                                  $   2,092,952
         1998                                                      2,107,026
         1999                                                      2,113,096
         2000                                                      2,121,594
         2001                                                      2,127,664
         Subsequent to 2001                                        4,189,458

         Total                                                  $ 14,751,790

</TABLE>

(5)    Related Party Transactions

The    general  partner  earned  an  asset-based  management  fee  of  $238,295,
       $238,975 and $207,113 in 1996, 1995 and 1994, respectively,  for advising
       the Fund and managing its investments.  This fee is equal to 0.75% of the
       Fund's capital contributions invested in properties or updated appraisals
       for certain of the Fund's  properties  and 0.5% of capital  contributions
       temporarily  held awaiting  investment in properties.  Additionally,  the
       general  partner was reimbursed  for certain costs  incurred  relating to
       administrative services of the Fund totaling $74,556, $80,555 and $73,263
       in 1996, 1995 and 1994, respectively.

Under  the terms of the lease  agreements,  real  estate  taxes paid by the Fund
       will be  reimbursed  by Central or Allright and are not  reflected on the
       statements of operations.  The Fund has recorded $304,754 and $282,500 of
       real estate  taxes in both of accounts  receivable  and real estate taxes
       payable at December 31, 1996 and 1995, respectively.

(6)    Note Payable

On     July  18,  1994 the  Fund  closed  on its  $5.6  million  line of  credit
       agreement  with a  bank.  Borrowings  under  the  credit  agreement  bear
       interest on the  outstanding  principal  amount at the bank's  prime rate
       (8.25% at December 31, 1996) plus 1% per annum. The principal  balance at
       December 31, 1996 and 1995 was $3,061,000 and  $2,945,000,  respectively,
       and is due no later than July 17, 1997. The collateral security provision
       of the loan agreement provides for the assignment of the Fund's rights as
       a lessor to its interest in the parking lot leases, contracts and income.
       Interest paid on the  outstanding  principal  balance  totaled  $284,366,
       $271,305 and $108,392  during the years ended December 31, 1996, 1995 and
       1994, respectively.  The Fund expects to renew this credit agreement with
       the existing lender under similar terms.

(7)    Earnings for Federal Income Tax Purposes

There  was no difference between the Fund's net earnings for income tax purposes
       and the net earnings for financial reporting purposes.

                                                    14

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                                    REALTY PARKING PROPERTIES II L.P.


                                    Notes to Financial Statements (continued)


(8)    Partners' Capital

The Partnership Agreement provides, among other provisions, for the following:

(a)        The Fund will  consist  of the  general  partner,  the  assignee  and
           limited partners and the subordinated limited partner.

(b)        Distributions   to  the  Partners   relating  to  operations  of  the
           properties  will  be  based  on net  cash  flow,  as  defined  in the
           partnership agreement. Assignee and limited partners will receive 99%
           of net  cash  flow and the  general  partner  will  receive  1%.  Net
           earnings per unit of assignee and limited partnership  interests,  as
           disclosed  on the  statement  of  operations,  for  the  years  ended
           December 31, 1996, 1995 and 1994 is based upon 1,392,800 Units.

(c)    Net proceeds of sale or financing of the properties will be distributed
           as follows:

-  99% to the assignee and limited partners and 1% to the general partner until
     each investor has recovered his original  capital  contribution in full and
received  a  cumulative,  noncompounded  annual  return  of 12% of his  adjusted
capital  balance to the extent that such return has not been provided from prior
distributions of net cash flow.

    - Any  remainder  will  be  distributed  90% to the  assignee  and  limited
partners, 1% to the general partner and 9% to the subordinated limited partner.

(d)        Assignee  limited  partners  may elect to become  substitute  limited
           partners, as defined in the Partnership  Agreement.  Assignee limited
           partners who elect to become substitute limited partners will receive
           one  limited   partnership   interest  for  each   assignee   limited
           partnership interest they convert and will not be able to re-exchange
           their limited partnership  interests for assignee limited partnership
           interests.

(e)    Restrictions exist regarding transferability or disposition of 
           partnership interests.


(9)    Distributions to Investors

Distributions  of  cash  to  investors   during  1996,  1995  and  1994  totaled
       $1,626,668,  $1,582,704 and  $1,626,675,  respectively,  of which 99% was
       allocated  to assignee and limited  partners.  These  distributions  were
       derived from net cash  provided by operating  activities  and a return of
       capital of $527,868 during 1994.


(10)   Subsequent Event


On     February 12, 1997, the Fund made a cash distribution totaling $439,640 of
       which  99%  was  allocated  to  assignee  and  limited   partners.   This
       distribution  was derived  from funds  provided by  operating  activities
       during 1996.  Assignee and limited partners  received a cash distribution
       of $0.31 per $25 Unit.

                                                    15

<PAGE>

                                    REALTY PARKING PROPERTIES II L.P.

Directors and Executive Officers

Realty Parking Company II, Inc.
General Partner

         John M. Prugh
         President and Director

         Peter E. Bancroft
         Vice President and Director

         Terry F. Hall
         Vice President and Secretary

         Timothy M. Gisriel
         Treasurer
                                                Form 10-K
A copy of the Fund's Annual Report on Form 10-K for the year ended  December 31,
1996 as filed with the  Securities  and  Exchange  Commission  is  available  to
partners without charge on request by writing to:

         Investor Relations
         Realty Parking Properties II L.P.
         225 East Redwood Street
         Baltimore, Maryland 21202


                                                 Auditors

         KPMG Peat Marwick LLP
         111 South Calvert Street
         Baltimore, Maryland 21202


                                              Legal Counsel

         Piper & Marbury
         1100 Charles Center South
         36 South Charles Street
         Baltimore, Maryland 21201



                                           Further Information

Please  submit  changes  in  name,   address,   investment   representative  and
distribution instructions to Investor Relations at the above address.

For further  information  or questions  regarding your  investment,  please call
Denise Shaduk, Investment Coordinator
at (410) 727-4083.

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