UNITED STATES
                SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549
                            FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 1997
                                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:   0-17094       

USAA Real Estate Income Investments II Limited Partnership  
(Exact name of registrant as specified in its charter)   
  
Texas                                 74-2473951        
(State or other jurisdiction of     (I.R.S. Employer
incorporation or organization)     Identification No.)

8000 Robert F. McDermott Fwy., IH 10 West, Suite 600 
San Antonio, Texas                           78230-3884  
(Address of principal executive offices)     (Zip Code)

(210) 498-7391  
(Registrant's telephone number, including area code)

N/A 
(Former name, former address and former fiscal year, if changed
since last report.)

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

                                             [X]  Yes   [ ]  No
                             1
<PAGE>

                             PART I

                  Item 1.  Financial Statements

<TABLE>
USAA REAL ESTATE INCOME INVESTMENTS II LIMITED PARTNERSHIP
Condensed Balance Sheets
<CAPTION>



                                                        March 31,
                                                           1997          June 30,
                                                       (Unaudited)         1996
<S>                                                  <C>                <C> 
Assets
Rental properties, net                               $   9,258,183       9,493,829
Investment in joint venture                              2,143,965       2,147,966
Temporary investments, at cost 
   which approximates market value -
      Money market fund                                    772,817         804,821
Cash                                                       115,904          30,737
   Cash and cash equivalents                               888,721         835,558

Accounts receivable                                          2,141             --
Deferred charges and other assets                          308,009         230,824

                                                     $  12,601,019      12,708,177


Liabilities and Partners' Equity
Accounts payable, including amounts due 
   to affiliates of $8,105 and $7,981                $      44,347         113,426
Accrued expenses and other liabilities                     170,351         172,579
         Total liabilities                                 214,698         286,005

Partners' equity:
   General Partner:
      Capital contribution                                   1,000           1,000
      Cumulative net income                                753,011         677,435
      Cumulative distributions                            (790,104)       (710,943)
                                                           (36,093)        (32,508)

   Limited Partners (27,141 interests):
      Capital contributions, net of offering 
         costs                                          12,756,270      12,756,270
      Cumulative net income                              6,777,085       6,096,899
      Cumulative distributions                          (7,110,941)     (6,398,489)
                                                        12,422,414      12,454,680
         Total Partners' equity                         12,386,321      12,422,172
                                                     $  12,601,019      12,708,177

See accompanying notes to condensed financial statements.
</TABLE>
                             2

<PAGE>
<TABLE>
USAA REAL ESTATE INCOME INVESTMENTS II LIMITED PARTNERSHIP
Condensed Statements of Income
(Unaudited)
<CAPTION>

                                                       Three Months    Three Months
                                                          Ended           Ended
                                                        March 31,       March 31,
                                                           1997            1996
<S>                                                  <C>                   <C>
Income
Rental income                                        $     349,453         303,519
Equity in earnings of joint venture                         39,006          33,407
Interest income                                              9,587          14,026
    Total income                                           398,046         350,952

Expenses
Direct expenses, $5,397 and $4,844
  to affiliates (note 1)                                    23,002          22,955
Depreciation                                                78,555          65,386
General and administrative, $32,889
  and $19,814 to affiliates (note 1)                        41,929          33,783
    Total expenses                                         143,486         122,124
Net income                                           $     254,560         228,828

Net income per limited partnership interest          $        8.44            7.59


<CAPTION>

                                                       Nine Months     Nine Months
                                                          Ended           Ended
                                                        March 31,       March 31,
                                                           1997            1996
<S>                                                  <C>                 <C>               
Income
Rental income                                        $   1,054,033         865,557
Equity in earnings of joint venture                        112,399         109,392
Interest income                                             28,434          65,268
    Total income                                         1,194,866       1,040,217

Expenses
Direct expenses, $12,249 and $11,238
  to affiliates (note 1)                                    72,016          65,637
Depreciation                                               235,693         184,906
General and administrative, $91,854
  and $52,032 to affiliates (note 1)                       131,395          96,873
    Total expenses                                         439,104         347,416
Net income                                           $     755,762         692,801

Net income per limited partnership interest          $       25.06           22.97


See accompanying notes to condensed financial statements.
</TABLE>
                             3

<PAGE>
<TABLE>
USAA REAL ESTATE INCOME INVESTMENTS II LIMITED PARTNERSHIP
Condensed Statements of Cash Flows
Nine months ended March 31, 1997 and 1996
(Unaudited)
<CAPTION>



                                                           1997            1996
<S>                                                  <C>                <C>   
Cash flows from operating activities:
   Net income                                        $     755,762         692,801
   Adjustments to reconcile net income to net
      cash provided by operating activities:
         Depreciation                                      235,693         184,906
         Amortization                                        1,896           1,896
         Earnings from joint venture                      (112,399)       (109,392)
         Distributions from joint venture                  116,400         145,499
         Decrease (increase) in accounts receivable         (2,141)          5,745
         Decrease (increase) in deferred charges and
            other assets                                   (79,081)         22,706
         Increase (decrease) in accounts payable and 
            other liabilities                              (71,307)        160,133

            Cash provided by operating activities          844,823       1,104,294

Cash flows used in investing activities -
   Additions to rental properties                              (47)     (1,573,390)

Cash flows used in financing activities -
   Payment of distributions                               (791,613)       (633,290)

Net increase (decrease) in cash and cash equivalents        53,163      (1,102,386)

Cash and cash equivalents at beginning of period           835,558       2,007,371

Cash and cash equivalents at end of period           $     888,721         904,985

See accompanying notes to condensed financial statements.
</TABLE>
                             4
<PAGE>
Notes to Condensed Financial Statements
March 31, 1997
(Unaudited)


1.  Transactions with Affiliates

    A summary of transactions with affiliates follows for the nine
    months ended March 31, 1997:

                                     Quorum
                        USAA       Real Estate
                     Real Estate    Services
                       Company     Corporation

Reimbursement
  of expenses (a)  $     61,762         2,527
Management fees              --         9,722
Lease commissions            --        30,092
    Total          $     61,762        42,341


  (a)  Reimbursement of expenses represents amounts paid or
       accrued as reimbursement of expenses incurred on behalf
       of the Partnership at actual cost and does not include
       any mark-up or items normally considered as overhead.


2.  Other
  
    Reference is made to the financial statements in the Annual
    Report filed as part of the Form 10-K for the year ended June
    30, 1996 with respect to significant accounting and financial
    reporting policies as well as to other pertinent information
    concerning the Partnership.  Information furnished in this
    report reflects all normal recurring adjustments which are, in
    the opinion of management, necessary for a fair presentation
    of the results for the periods presented.  Further, the
    operating results presented for these interim periods are not
    necessarily indicative of the results which may occur for the
    remaining three months of this fiscal year or any other future
    period.

    The financial information included in this interim report as
    of March 31, 1997 and for the three-month and nine-month
    periods ended March 31, 1997 and 1996 has been prepared by
    management without audit by independent certified public
    accountants who do not express an opinion thereon. The
    Partnership's annual report includes audited financial
    statements.

    Certain 1996 balances have been reclassified to conform to the
    1997 presentation.

                            5
<PAGE>
                              PART I

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

Liquidity and Capital Resources

At March 31, 1997, the Partnership had cash of $115,904 and
temporary investments of $772,817.  These funds were held in the
working capital reserve for the payment of obligations of the
Partnership.  Deferred charges and other assets included an
acquisition fee paid in 1988 to USAA Investors II, Inc., the
General Partner, in connection with the acquisition of the
interest in the joint venture which owns Sequoia Plaza - Building
I.  Deferred charges also included deferred rent resulting from
recognition of income as required by generally accepted
accounting principles.  Accounts payable included amounts due to
affiliates for reimbursable expenses and to third parties for
expenses incurred for operations.  Accrued expenses and other
liabilities consisted primarily of a security deposit and prepaid
rent. 

During the quarter ended March 31, 1997, the Partnership
distributed $237,484 to Limited Partners and $26,387 to the
General Partner for a total of $263,871.

During the second fiscal quarter, Star Forms, Inc., the single
tenant at the Bowater Building in Lakeland, Florida, was sold to
CST Office Products, Inc.  The lease has an expiration date of
July 1999.  Also during the second fiscal quarter, the
Partnership entered into a contract to sell the Bowater Building. 
During the due diligence period, the potential buyer inspects the
property, arranges for financing, evaluates the tenant and the
lease terms and has the option to cancel the contract.  The
contract with the potential buyer was canceled during April due
to the buyer being unable to arrange for third-party financing. 
The property will continue to be marketed to other interested
buyers.

Future liquidity is expected to result from cash generated from
operations of the properties and ultimately through the sale of
such properties, equity in earnings of the joint venture,
interest on temporary investments, and the possible participation
in the profits from the sale of the underlying assets of the
joint venture.
       
                             6
<PAGE>
Results of Operations

For the three months and nine months ended March 31, 1997 and
1996, income was generated from rental income from the income-
producing properties, earnings from the joint venture investment
and interest income earned on the funds invested in temporary
investments. 

Expenses incurred during the same periods were associated with
operation of the Partnership's properties and various other costs
required for administration of the Partnership.

Rental properties at March 31, 1997 decreased from June 30, 1996
due to depreciation.  Deferred charges and other assets at March
31, 1997 increased from June 30, 1996 due to deferred rent at
Continental Plastic.  

Rental income was higher for the three-month and nine-month
periods ended March 31, 1997 as compared to the three-month and
nine-month periods ended March 31, 1996 as a result of the lease
renewal and the building addition at Continental Plastic.  The
tenant began paying the increased rent on March 1, 1996.  

Equity in earnings increased for the three-month and nine-month
periods ended March 31, 1997 as compared to the three-month and
nine-month periods ended March 31, 1996 as a result of an
increase in net income of Sequoia I, the joint venture property. 
Net income increased at Sequoia I due to an increase in
occupancy.

Interest income decreased as a result of lower cash balances for
the three-month and nine-month periods ended March 31, 1997 as
compared to the three-month and nine-month periods ended March
31, 1996.

Direct expenses increased for the nine-month period ended March
31, 1997 as compared to the nine-month period ended March 31,
1996 due to loading dock repairs at the Bowater Building.

Depreciation increased for the three-month and nine-month periods
ended March 31, 1997 due to the building addition at Continental
Plastic.

General and administrative expenses for the three-month and nine-
month periods ended March 31, 1997 increased as compared to the
three-month and nine-month periods ended March 31, 1996 due to
lease commissions paid at Continental Plastic on the lease
renewal.

                               7
<PAGE>
                             PART II

                                 
Item 6.    Exhibits and Reports on Form 8-K

(a)    Exhibits  

                                                      Sequentially
 Exhibit                                               Numbered
   No.                  Description                      Page

   4     Amended and Restated Agreement of 
         Limited Partnership dated as of February
         11, 1988, attached as Exhibit A to
         the Partnership's Prospectus dated
         February 11, 1988, filed pursuant to
         Rule 424(b), Registration No. 33-16479
         and incorporated herein by this reference.         --

  27     Financial Data Schedule                            10


(b) During the quarter ended March 31, 1997, there were no
    Current Reports on Form 8-K filed.
                                 
                             8
<PAGE>

                            FORM 10-Q
                            SIGNATURES

    USAA REAL ESTATE INCOME INVESTMENTS II LIMITED PARTNERSHIP


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.



USAA REAL ESTATE INCOME INVESTMENTS II
LIMITED PARTNERSHIP (Registrant)

BY:  USAA Investors II, Inc., 
     General Partner


May 12, 1997          BY: /s/Edward B. Kelley
                          Edward B. Kelley
                          Chairman, President and
                          Chief Executive Officer



May 12, 1997          BY: /s/Martha J. Barrow
                          Martha J. Barrow
                          Vice President -
                          Administration and 
                          Finance/Treasurer  

                              9