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 December 31, 1996
                                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>


                                                December 31,
                                                    1996          June 30,
                                                (Unaudited)         1996
<S>                                           <C>                <C> 
Assets
Rental properties, net                        $   9,347,383       9,493,829
Investment in joint venture                       2,148,609       2,147,966
Temporary investments, at cost 
   which approximates market value -
      Money market fund                             687,699         804,821
Cash                                                126,481          30,737
   Cash and cash equivalents                        814,180         835,558

Accounts receivable                                   5,141             --
Deferred charges and other assets                   282,758         230,824

                                              $  12,598,071      12,708,177


Liabilities and Partners' Equity
Accounts payable, including amounts due 
   to affiliates of $9,441 and $7,981         $      44,114         113,426
Accrued expenses and other liabilities              158,325         172,579
         Total liabilities                          202,439         286,005

Partners' equity
   General Partner:
      Capital contribution                            1,000           1,000
      Cumulative net income                         727,555         677,435
      Cumulative distributions                     (763,717)       (710,943)
                                                    (35,162)        (32,508)

   Limited Partners (27,141 interests):
      Capital contributions, net of offering 
         costs                                   12,756,270      12,756,270
      Cumulative net income                       6,547,981       6,096,899
      Cumulative distributions                   (6,873,457)     (6,398,489)
                                                 12,430,794      12,454,680
         Total Partners' equity                  12,395,632      12,422,172
                                              $  12,598,071      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
                                                December 31,    December 31,
                                                    1996            1995
<S>                                           <C>                   <C>
Income
Rental income                                 $     327,390         259,451
Equity in earnings of joint venture                  36,241          35,631
Less direct expenses, including depreciation
  of $78,775 and $59,760                            (80,850)        (56,301)
    Net operating income                            282,781         238,781
Interest income                                       9,358          23,372
    Total income                                    292,139         262,153

Expenses
General and administrative (note 1)                  43,537          27,735
Net income                                    $     248,602         234,418

Net income per limited partnership interest   $        8.24            7.77


<CAPTION>

                                                 Six Months      Six Months
                                                   Ended           Ended
                                                December 31,    December 31,
                                                    1996            1995
<S>                                           <C>                  <C> 
Income
Rental income                                 $     658,441         519,826
Equity in earnings of joint venture                  73,393          75,985
Less direct expenses, including depreciation
  of $157,137 and $119,519                         (160,012)       (119,990)
    Net operating income                            571,822         475,821
Interest income                                      18,846          51,241
    Total income                                    590,668         527,062

Expenses
General and administrative (note 1)                  89,466          63,090
Net income                                    $     501,202         463,972

Net income per limited partnership interest   $       16.62           15.39

See accompanying notes to condensed financial statements.
</TABLE>
                              3
<PAGE>
<TABLE>
USAA REAL ESTATE INCOME INVESTMENTS II LIMITED PARTNERSHIP
Condensed Statements of Cash Flows
Six months ended December 31, 1996 and 1995
(Unaudited)
<CAPTION>



                                                    1996            1995
<S>                                           <C>                 <C>  
Cash flows from operating activities:
   Net income                                 $     501,202         463,972
   Adjustments to reconcile net income to net
      cash provided by operating activities:
         Depreciation                               157,137         119,519
         Amortization                                 1,264           1,264
         Earnings from joint venture                (73,393)        (75,985)
         Distributions from joint venture            72,750         101,850
         Decrease (increase) in accounts receiva     (5,141)          6,000
         Decrease (increase) in deferred charges and
            other assets                            (53,198)         23,346
         Decrease in accounts payable and 
            other liabilities                       (83,566)        (67,742)

            Cash provided by operating activities   517,055         572,224

Cash flows used in investing activities -
   Additions to rental properties                   (10,691)       (780,992)

Cash flows used in financing activities -
   Payment of distributions                        (527,742)       (422,193)

Net decrease in cash and cash equivalents           (21,378)       (630,961)

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

Cash and cash equivalents at end of period    $     814,180       1,376,410

See accompanying notes to condensed financial statements.
</TABLE>
                             4
<PAGE>
Notes to Condensed Financial Statements
December 31, 1996
(Unaudited)


1. Transactions with Affiliates

  A summary of transactions with affiliates follows for the six
  months ended December 31, 1996:

                                   Quorum
                      USAA       Real Estate
                   Real Estate    Services
                     Company     Corporation

Reimbursement
  of expenses (a)$     38,689         1,456
Management fees            --         5,395
Lease commissions          --        20,276
    Total        $     38,689        27,127


  (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 six months of this fiscal year or any other future
  period.

  The financial information included in this interim report as
  of December 31, 1996 and for the three-month and six-month
  periods ended December 31, 1996 and 1995 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.

                             5
<PAGE>
                            PART I

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


Liquidity and Capital Resources

At December 31, 1996, the Partnership had cash of $126,481 and
temporary investments of $687,699.  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 December 31, 1996, 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, the Partnership entered into a
contract to sell the Bowater Building in Lakeland, Florida.  Due
diligence procedures are currently underway by the potential
buyer.  During this 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.  During the quarter, Star Forms, Inc., the single
tenant at Bowater, was sold to CST Office Products, Inc.  The
lease has an expiration date of July 1999.

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.

Results of Operations

For the three months and six months ended December 31, 1996 and
1995, 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. 

                             6
<PAGE>

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

Rental income was higher for the three-month and six-month
periods ended December 31, 1996 than the three-month and six-
month periods ended December 31, 1995 as a result of the lease
renewal and the building addition at Continental Plastic. 
Depreciation increased for the three-month and six-month periods
ended December 31, 1996 due to the building addition at
Continental Plastic.  Other direct expenses increased for the
three-month and six-month periods ended December 31, 1996 due to
loading dock repairs at the Bowater Building.

Interest income decreased as a result of lower cash balances for
the three-month and six-month periods ended December 31, 1996 as
compared to the three-month and six-month periods ended December
31, 1995.

General and administrative expenses for the three-month and six-
month periods ended December 31, 1996 increased as compared to
the three-month and six-month periods ended December 31, 1995 due
to lease commissions paid at the Continental Plastic building 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 December 31, 1996, 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


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



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

                             9