UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                 FORM 10-K

               [X]     ANNUAL REPORT PURSUANT TO SECTION 13
              OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

               For the fiscal year ended December 31, 1998

                                   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 0-19198

                 FIRST DEARBORN INCOME PROPERTIES L.P. II
          (Exact name of registrant as specified in its charter)

       	Delaware	                                    36-3591517
	(State of organization)                  	(IRS Employer Identification No.)

	154 West Hubbard Street, Suite 250, Chicago, IL              	60610
    	(Address of principal executive offices)               	(Zip Code)

Registrant's telephone number, including area code:  (312) 464-0100

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

                                                   Names of each exchange 
Title of each class                                 on which registered
      None                                                 None

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

                      LIMITED PARTNERSHIP UNITS
                          (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 ____

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.  [X]

State the aggregate market value of the voting stock held by non-affiliates of 
the registrant.  Not applicable. 

<PAGE>

PART 1
Item 1.  Business

The registrant, First Dearborn Income Properties L.P. II (the "Partnership"),
is a limited partnership formed in May 1988 under the Revised Uniform Limited
Partnership Act of the State of Delaware to invest in income producing 
commercial and residential real estate consisting principally of existing 
shopping centers and office buildings, as well as apartment complexes, 
parking garages and lots and warehouse and industrial buildings.  On 
February 1, 1989, the Partnership commenced an offering of $10,000,000 
(subject to increase by an additional $5,000,000) of its limited partnership
interests (the "Units") at $500 per Unit, pursuant to a Registration 
Statement on Form S-11 under the  Securities Act of 1933 (File No. 33-23048).
A total of 10,000 Units was sold.  The holders of 3,345 Units were admitted 
to the Partnership in 1989, holders of 4,444 Units were admitted to the 
Partnership in 1990, and holders of 2,211 Units were admitted in 1991.  Of 
the 2,211 Units purchased in 1991, 1,669 Units were  purchased by an 
affiliate of the General Partners pursuant to its Agreement to Purchase 
Units.  The offering terminated on January 31, 1991 (extended from its 
originally scheduled termination date of January 31, 1990).  Since admission
to the Partnership, no holder of Units (hereinafter, a "Limited Partner") 
has made any additional capital contributions.  The Limited Partners of the
Partnership share in the benefits of ownership of the Partnership's real 
property investments in proportion to the number of Units held.

Net of offering costs, Limited Partners have contributed a total of $4,058,963 
to the Partnership.  The Partnership is engaged solely in the business of 
real estate investment.  It is the Partnership's objective to realize cash 
flow from operations and appreciation in the value of the real estate.  The 
Partnership has entered into three joint venture agreements with partnerships
sponsored by affiliates of the General Partners.  Pursuant to such agreements,
the Partnership has made capital contributions aggregating $3,652,066 through
December 31, 1998.  The Partnership has acquired, through these ventures, 
interests in two shopping centers and a mixed use apartment/retail building.
No investments have been made since 1991.  The Country Isles property was 
sold in December 1997.  As of December 31, 1998, the Partnership had made the
real property investments set forth in the following table:

<TABLE>
<CAPTION>
	Name, Type of Property                		Date of         Type of
  and Location 	             Size       	Purchase       	Ownership    
	<S>                     	<C>           	<C>            	<C>
	Evanston Galleria      	 36,068 S.F.   	11/1/89        	23.87% interest in a
	Retail/Apartments	          and	                       	partnership that has
	Evanston, Illinois     	55 apartments	                 	fee ownership of land
			                                                     	and improvements

	Country Isles           106,000 S.F.   	7/21/91	        21.00% interest in a
	Shopping Center		                                      	partnership that has
	Ft. Lauderdale, Florida                              			fee ownership of land
		                                                     		and improvements
			                                                     	Sold December 1997

	Sycamore Mall          	240,206 S.F.  	10/26/90        	53.40% interest in a
	Shopping Center		                                      	partnership that has
	Iowa City, Iowa 		                                     	fee ownership of land
			                                                     	and improvements 

<FN>
(a)  Reference is made to Note 3 of Notes to Consolidated Financial Statements 
filed with this annual report for the current outstanding principal balance 
and a description of the long-term mortgage indebtedness secured by the 
Partnership's real property investments.

Note:  "S.F." represents the amount of rentable square feet of retail area in 
each of the properties.
</TABLE>
<PAGE>


Sycamore Mall represents the most significant investment made by the 
Partnership.  A total of $2,275,000 has been invested by the Partnership 
which represents 62% of the Partnership's real estate investments.  Since 
acquiring the Sycamore Mall investment in 1990, the Partnership has received
cash distributions of $1,423,351 from Sycamore Mall Associates.  Country 
Isles represents an investment of $775,000 or 21% of the Partnership's real 
estate investments.  Since acquiring the Country Isles investment in 1991, 
the Partnership had received distributions of $1,536,718, including 
distributions from the sale of the property.  Evanston Galleria accounts 
for $602,066 or 17% of the Partnership's real estate investments.  Since 
acquiring the Evanston Galleria investment in 1989, the Partnership has 
received distributions of $50,133.

During the past five years, operations at the Partnership's three properties
have provided sufficient cash flow to meet the obligations of the Partnership
and continue to make distributions to its partners.  Each of the properties
has been able to sustain adequate cash flow even though they have each had 
some releasing issues over the last few years.  The real estate market in 
general had suffered from overbuilding which occurred during the 1980's.  
This increased the competition for the Partnership's properties, which 
resulted in a decrease in rental rates from 1990 to 1994.  Since 1994, the 
market rental rates have continued to increase moderately.

During 1996, Randall's, a tenant at Sycamore Mall, vacated its leased 
premises of 19,800 square feet.  As a result of the Randall's vacancy, 
occupancy at Sycamore Mall fell to approximately 86% during the second 
quarter of 1996.  However, Randall's continued to pay rent through December,
1996.  Sears, Roebuck and Co. was a tenant under a lease which had an 
original termination date of March 31, 1992.  Prior to that termination, a 
ten-year extension was agreed to which provided Sears an option to terminate
the lease at any time after March 31, 1997 by giving landlord a one year 
written notice.  Sears gave such notice on September 17, 1997 and terminated
its lease on September 1, 1998.  Management is currently negotiating with a 
potential replacement tenant, however there can be no assurance that a new 
lease will be entered into.  If this space is not released, the ability of 
Sycamore Mall to meet its financial obligations could be effected, as a 
result of the decreased revenues.  In response to the uncertainty relative 
to Sycamore Mall Associates ability to recover the net carrying value of 
Sycamore Mall through future operations and sale, Sycamore Mall Associates, 
as a matter of prudent accounting practices and for financial reporting 
purposes, recorded a provision for value impairment in 1998 in the amount 
of $1,100,000.

During 1995, the Evanston Galleria experienced a problem with retail tenants.
There was 13,635 square feet of retail space of which the tenants were in 
default of their leases for non payment of rent.  Occupancy in the apartments
at Evanston Galleria has remained in the 94% - 100% range during the last 
five years.  The retail space has had a problem with tenant defaults, which 
has reduced overall occupancy to as low as 80% in 1991.  As of December 31, 
1996, occupancy was 84%.  During the fourth quarter of 1997, Evanston 
Galleria collected $50,000 as a settlement for past due rents.  Management 
has settled its legal actions against the previously defaulted tenants.  
Also during the fourth quarter of 1997, management was successful in signing
two new leases.  As of December 31, 1997 occupancy was 83%.  During 1998, a 
lease was entered into to lease the lower level space of 11,300 square feet 
which has increased occupancy to over 93%, as of December 31, 1998.

As of October 1, 1997, the Evanston Galleria property was considered to be 
held for sale.  In accordance with SFAS 121, no depreciation expense relative
to the property was recorded by the Partnership from October 1, 1997 through
December 31, 1998.  The net book value of the Evanston Galleria property at 
December 31, 1998 and 1997 was $8,422,717 and $8,408,900, respectively, and 
net loss from operations for the years ended December 31, 1998, 1997 and 
1996, net of the Venture Partners share were $35,661, $90,086 and $78,686 
respectively.

On February 16, 1999, a contract was entered into for the sale of the 
Evanston Galleria.  The purchase price, net of closing costs and prorations,
should be sufficient to repay all liabilities of the Evanston Galleria 
Limited Partnership.  However there will not be a significant distribution 
to the Partnership.  The Partnership is expected to recognize a gain on the 
sale of approximately $100,000.

The Partnership's real property investments are subject to competition from 
similar types of properties in the vicinities in which they are located.  
Approximate occupancy levels for the Partnership's properties are set forth 
on a quarterly basis in the table set forth in Item 2 below to which 
reference is hereby made.  The Partnership has no real property investments 
located outside the United States.  

<PAGE>


Only one of the three Partnership's investments is consolidated for financial
reporting purposes.  Information is presented below in order to illustrate 
applicable information about each of the three properties individually and 
does not relate to financial information presented about the Partnership in 
Item 6 and Item 8.

<TABLE>
<CAPTION>
	Sycamore Mall,
	Iowa City, Iowa                        	1998           	1997          	1996
	<S>                                 	<C>            	<C>           	<C>
	Total revenue                        	1,515,937     	1,828,997     	1,947,827
	Operating profit (loss)             	(1,010,483)      	222,766       	380,405
	Total assets                         	6,484,454     	8,113,686     	8,425,247
	Mortgage indebtedness                	4,408,025     	4,574,933     	4,728,868

<CAPTION>
	Country Isles Shopping Center (sold December 1997)
	Ft. Lauderdale, Florida                  	1998         	1997          	1996
	<S>                                         	<C>    	<C>           	<C>
	Total revenue                               	-	      1,708,274     	1,734,027
	Operating profit                            	-        	385,746       	159,718
	Gain on sale of investment property         	-      	9,116,946             	-
	Total assets                                	-        	165,311     	4,007,615
	Mortgage indebtedness                       	-              	-     	8,028,160

<CAPTION>
	Evanston Galleria
	Evanston, Illinois	1998	1997	1996
	<S>	<C>	<C>	<C>
	Total revenue                       	1,384,467      	1,346,682     	1,467,431
	Operating loss                       	(149,393)      	(377,401)     	(329,645)
	Total assets                        	8,719,746      	8,686,165     	9,027,234
	Mortgage indebtedness               	8,486,740      	8,486,740     	8,486,740
</TABLE>


The Partnership has no employees and is largely dependent on the General 
Partners and their affiliates for services.  A description of the terms of 
transactions between the Partnership and affiliates of the General Partners 
is set forth in Item 11 below to which reference is hereby made.


Evanston Galleria Limited Partnership
On October 31, 1989, the Partnership acquired an interest in Evanston 
Galleria Limited Partnership (the "Galleria Partnership") which owns a 100% 
beneficial interest in the Evanston Galleria, a mixed-use residential and 
retail property located in Evanston, Illinois.  The property, located on a 
0.79 acre site, contains 36,068 square feet of rentable retail space and 55
loft apartments.  The Partnership's acquisition of its interest was effected
through its acquisition of an 18.30% general partnership interest in the 
Galleria Partnership from First Dearborn Evanston Associates Limited 
Partnership ("Evanston Associates"), an affiliate of the General Partners.  
Evanston Associates originally agreed to purchase a 76.67% interest in the 
Galleria Partnership by agreeing to contribute an aggregate $2,313,125 to 
the Galleria Partnership.  The Partnership acquired a portion of the 76.67% 
general partnership interest on the same terms by contributing $552,066 for 
its 18.30% general partnership interest.  The seller retained a 23.33% 
limited partnership interest.

The Partnership and Evanston Associates, as general partners of the Galleria
Partnership, have certain preferences from operating cash flow and 
distributions from sales or refinancing.  Profits are generally allocated 
in accordance with cash distributions (including preferences) and then in 
accordance with the respective partner's interest.  Losses are allocated 
first to partners with positive capital account balances and then in 
accordance with the respective partner's interest.
<PAGE>


The limited partners ("Guarantors") of the Galleria Partnership had provided
the Partnership and Evanston Associates with a guaranty of minimum rentals 
on certain retail space, maximum debt service levels and maximum real estate
tax expenses in the Galleria Partnership.  The property has failed to perform
as expected and the Galleria Partnership has called upon the Guarantors to 
satisfy their obligations under the guaranties.  The Guarantors have failed
to fulfill their obligations to the Partnership, and the General Partners 
have taken actions to protect the rights of the Partnership, including 
receipt of an assignment in favor of the Partnership of the Guarantors' 
limited partnership interests in the Galleria Partnership of 5.57% and the 
receipt of security interests in certain other limited partnership interests
owned by the Guarantors.  Amounts owed pursuant to such guaranties which are
secured by the limited partners' partnership interests will be recorded upon
receipt. 

The property is managed by an affiliate of the General Partners.  During 
1998, 1997 and 1996, management fees totaling $41,681 $41,550 and $25,091, 
respectively, were paid to an affiliate of the General Partners. 

In connection with the loan modification to the first mortgage on the 
Evanston Galleria, which closed in February of 1993 and was effective August
1, 1992, the Galleria Partnership received an infusion of additional capital
and obtained modifications of the terms of its loans.  $202,000 of additional
capital was contributed to the Galleria Partnership by Evanston Associates,
of which the Partnership's share was $50,000, in exchange for a preferred 
equity position.  The preferred equity holders shall receive an annual 
preferred return from cash distributions in an amount equal to the lesser of: 
a) prime rate plus 2%, or b) 10% per annum.  For financial reporting purposes,
the Partnership has a 23.87% interest in the Galleria Partnership.

Evanston Galleria is located in downtown Evanston, Illinois, a short distance
from Northwestern University.  Demand for the apartments has been strong over
the past five years with occupancy averaging 98%.  Apartment rents have been 
rising approximately 3% per year.  The ground floor retail space had been 
100% occupied during the past five years, except for several instances where
tenants defaulted.  This resulted in vacancies and a reduction in rental 
income.  Demand for the ground floor retail space has generally been strong.
The lower level retail space, however, has been vacant since 1995.  One 
retail tenant, with a lease for 11,500 square feet, filed a petition for 
bankruptcy on January 11, 1994.  The tenant stopped paying rent and vacated 
the premises during the third quarter of 1995.  During the fourth quarter of
1995, a second tenant representing 2,135 square feet defaulted under the 
terms of its lease and vacated the space.  Management has taken legal action
against the defaulted tenants, but currently has no estimate of the amount, 
if any, or timing of collection of amounts due from these tenants.  During 
the fourth quarter of 1997, Evanston Galleria collected $50,000 as a 
settlement for past due rents.  Management has settled its legal actions 
against the previously defaulted tenants.  As of December 31, 1997 occupancy 
was 83%.  During 1998, a lease was entered into to lease the lower level 
space of 11,300 square feet which has increased occupancy to over 93%, as 
of December 31, 1998.

The property is subject to a first mortgage which matured May 1, 1996.  
Effective May 1, 1996, a modification of the first mortgage was entered 
into which, among other modifications, extended the maturity of the loan 
until May 1, 1998.  Commencing on May 1, 1996, monthly payments were 
adjusted to $57,143, which represents interest only payments at an annual 
rate of 8.25%, based on the outstanding principal balance of the loan as of 
May 1, 1996.  Notwithstanding the pay rate of 8.25%, interest on the loan 
continues to accrue and compound monthly on the unpaid principal balance 
at the annual rate of 9.00%.  The interest differential, as defined, will 
be paid only from proceeds resulting from a sale or refinancing of the 
property or from any remaining funds in the cash flow escrow.  The unpaid 
interest together with the unpaid principal balance of the loan was due 
and payable May, 1 1998.  The first mortgage loan maturity has been extended
to August 1, 1999.  All net cash flow from the property, in excess of the 
payments due for interest, shall be deposited into a cash flow escrow account.
If cash flow in any month is insufficient to pay amounts due under the loan,
then the amounts may be withdrawn from the cash flow escrow account. 

On February 16, 1999, a contract was entered into for the sale of the 
Evanston Galleria.  The purchase price, net of closing costs and prorations 
should be sufficient to repay all liabilities of the Evanston Galleria 
Limited Partnership.  However there will not be a significant distribution 
to the Partnership.  If the sale is consummated, the Partnership is expected
to recognize a gain on the sale of approximately $100,000.  The closing is 
currently scheduled to occur on April 30, 1999.  However, the Purchaser has 
requested a 90 day extension.

<PAGE>


Sycamore Mall Associates
On October 26, 1990, the Partnership contributed $2,275,000 to acquire a 
53.40% general partnership interest in Sycamore Mall Associates, a general 
partnership formed to acquire the Sycamore Mall Shopping Center in Iowa City,
Iowa.  The property, situated on an approximate 21.2 acre site, includes a 
main building containing 213,206 square feet and an out parcel building 
containing 27,000 square feet.  A 14,000 square foot parcel  which contains 
a 4,590 square foot building is under a ground lease to McDonald's.  Sycamore
Mall Associates acquired the property on October 26, 1990 for a purchase 
price of $9,400,000, subject to a purchase money note of $5,140,000 bearing
interest at 10% payable interest only until maturity on October 26, 1995.  
On August 8, 1991, Sycamore Mall Associates obtained a first mortgage in the
amount of $5,140,000 which bore interest at a rate of 9.625% payable in 
monthly installments of principal and interest of $45,355 commencing October
1, 1991 for 60 months until September 30, 1996.  The proceeds of this first 
mortgage were used to repay the original purchase money note.  In October 
1995, the first mortgage loan was modified.  The terms of the modification 
reduced the interest rate to 8.125%, reduced the monthly payments of 
principal and interest to $44,375 and extended the maturity to March 1, 2002.

First Dearborn Income Properties L.P., a public limited partnership 
affiliated with the General Partners of the Partnership, and First Dearborn 
Sycamore Associates Limited Partnership  ("FDSALP"), a privately offered 
limited partnership also affiliated with the General Partners, are the joint
venture partners in Sycamore Mall Associates and contributed a total of 
$1,075,000 and $910,000 for 25.24% and 21.36% of the general partner 
interests, respectively.  The terms of the Sycamore Mall Associates 
partnership agreement provide that cash flow, sale or refinancing proceeds 
and profit and loss will be distributed or allocated in proportion to the 
partner's ownership interests.

The property is managed by an affiliate of the General Partners and an 
affiliate of the seller under a five year management agreement that provides
for a fee equal to 5% of the effective gross income, of which 1% is paid to 
an affiliate of the General Partners.  During 1998, 1997 and 1996 the 
property incurred management fees of $84,679, $93,053 and $96,048, 
respectively.

During 1996, Randall's vacated its leased premises of 19,800 square feet.  
Occupancy fell to 86%, however, Randall's continued to pay rent through 
December, 1996 so that there was no adverse financial impact in 1996  Sears,
Roebuck and Co. was a tenant under a lease which had an original termination
date of March 31, 1992.  Prior to that termination, a ten-year extension was
agreed to which provided Sears an option to terminate the lease at any time 
after March 31, 1997 by giving landlord a one year written notice.  Sears 
gave such notice on September 17, 1997, and terminated its lease on September
1, 1998.  The Sears lease comprised 82,605 square feet which is 34% of the 
leaseable area of the shopping center.  However, the annual rental income 
received from Sears was approximately $109,000 or approximately 6% of total 
revenues.

The Partnership has, so far, been unsuccessful in its efforts to find new 
tenants for the property, although it continues its leasing efforts.  
Sycamore Mall is located in Iowa City, Iowa.  A new 1,000,000 square foot 
regional mall has opened, which created additional competition for Sycamore 
Mall.  As of December 31, 1998, the property was 47% occupied, and it has 
needed to provide concessions to the remaining tenants in order to keep them
from leaving.  Management is currently negotiating with potential replacement
tenants, however there can be no assurance that a new lease will be entered 
into.  If this space is not released, the ability of Sycamore Mall to meet 
its financial obligations could be effected, as a result of decreased 
revenues.  In response to the uncertainty relative to Sycamore Mall 
Associates ability to recover the net carrying value of Sycamore Mall 
through future operations and sale, Sycamore Mall Associates, as a matter 
of prudent accounting practices and for financial reporting purposes, 
recorded a provision for value impairment in 1998 in the amount of $1,100,000.

As a precautionary measure, the partners of Sycamore Mall Associates have 
maintained additional working capital reserves.  It is believed that the 
additional working capital might be necessary to help maintain existing 
tenants and attract new tenants, due to the increased competition from the 
new shopping center.  The partners of Sycamore Mall Associates have agreed 
to maintain these additional reserves and will contribute these amounts back
to Sycamore Mall Associates if it is considered appropriate by the partners.
The Partnership has no definite plans for improvements to the property at 
this time.  Distributions to the partners in 1998 were $420,000 as compared 
to $295,000 in 1997 and $408,000 in 1996.

<PAGE>


Country Isles
On July 12, 1991 the Partnership acquired from an unaffiliated seller, a 21%
interest in Country Isles Associates, an Illinois general partnership owning
Country Isles Shopping Center.  The Partnership paid $775,000 for its 21% 
interest in the joint venture.  The remaining interest in the joint venture
is held by the Seller.  The partners of Country Isles Associates are the 
Partnership and Arvida/JMB Partners.  Arvida/JMB Partners, which owns a 79% 
interest in Country Isles Associates, is the managing general partner.  All 
profits, losses and cash distributions of Country Isles Associates were 
allocated between its partners in accordance with their percentage interests,
described above, except that, in the case of the Partnership, a special 
preferential distribution of cash was to be made to the Partnership to 
compensate it for certain rental discounts granted by the Seller in 
connection with the lease of the property.

The Country Isles Shopping Center, located in Fort Lauderdale, Florida, was 
an approximately 106,000 square foot retail shopping center containing 
approximately 71,000 square feet which opened in 1986 and an additional 
expansion of approximately 35,000 square feet which opened in 1989.  The 
Country Isles Shopping Center was managed by an affiliate of the Seller.

On December 17, 1997, Country Isles Associates, sold the Country Isles 
Shopping Center in Fort Lauderdale, Florida, to Principal Mutual Life 
Insurance Company ("Buyer").  The total purchase price received by Country 
Isles was $13.2 million, which price was determined through arm's length 
negotiations with Buyer.  Of this total purchase price, approximately $7.9 
million was used to repay amounts owed to the lender holding the mortgage 
on the shopping center and approximately $595,000 was used for customary 
additional selling expenses and prorations.  The net proceeds to Country 
Isles after these deductions were approximately $4.7 million. Of these 
proceeds, the Partnership received approximately $991,000 for its 21% 
interest.

Country Isles Shopping Center was managed by JMB Property Management, an 
affiliate of Arvida/JMB Partners, the Seller.  The Management Agreement 
provided that the Manager rent and manage the project for an initial term of
five years, and thereafter for yearly periods, unless otherwise terminated by
the parties in accordance with the management agreement.  Country Isles 
Associates paid the Manager a management fee in an amount equal to 4% of the
monthly operating revenues from the operation of the property.  
Notwithstanding the foregoing, until such time as the management agent 
notifies owner of its election to receive the management fee discussed 
immediately above, Country Isles Associates was to pay the Manager, in 
lieu of the management fee, an amount equal to 15% of amounts paid by 
tenants at the property on account of reimbursement of operating expenses, 
excluding taxes and insurance.  During 1997 and 1996 the property incurred 
management fees of $68,600 and $68,053, respectively.

<PAGE>

Item 2.  Properties

The  Partnership owns through joint venture partnerships the properties 
referred to in Item 1.  The three properties in which the Partnership has 
held an interest in are described below:

Sycamore Mall Associates
The property is a retail shopping center located in Iowa City, Iowa, and is 
situated on an approximate 21.2 acre site.  It includes a main building 
containing 213,206 square feet and an out parcel building containing 27,000 
square feet.  A 14,000 square foot parcel  which contains a 4,590 square 
foot building is under a ground lease.  The property is owned fee simple 
by a partnership of which the Partnership is a partner.  It is subject to a 
first mortgage in the amount of $4,574,933 which bears interest at a rate 
of 8.125% payable in monthly installments of principal and interest of 
$44,375 until March 1, 2002, when the balance comes due.

The major tenant is Von Maur which occupies approximately 17% of the net 
rentable area.  Occupancy at Sycamore Mall had remained in the 94% - 99% 
range through 1995.  During 1996, Randall's vacated its leased premises of 
19,800 square feet.  Occupancy fell to 86%, however, Randall's continued to 
pay rent through December, 1996 so that there was no adverse financial impact
in 1996.  Sears, Roebuck and Co. was a tenant under a lease which had an 
original termination date of March 31, 1992.  Prior to that termination, a 
ten-year extension was agreed to which provided Sears an option to terminate
the lease at any time after March 31, 1997 by giving landlord a one year 
written notice.  Sears gave such notice on September 17, 1997 and terminated
its lease on September 1, 1998.  Management is currently negotiating with 
potential replacement tenants, however there can be no assurance that a new
lease will be entered into.  As of December 31, 1998, the property is over 
50% vacant.  If this space is not released, the ability of Sycamore Mall to 
meet its financial obligations could be effected, as a result of decreased 
revenues.  The Sears lease comprised 82,605 square feet which is 34% of the
leaseable area of the shopping center.  However, the annual rental income 
received from Sears is approximately $109,000 or approximately 6% of total 
revenues.  The Von Maur lease expires in 2009 and the annual rent is 
approximately $210,000.  Average total rents received per square foot at 
the property during the last three years are $6.98 in 1998, $7.65 in 1997, 
and $8.15 in 1996.

There are currently no plans for any significant improvements to the property.
However, construction has begun on a new regional shopping center in the 
area.  The location of the new mall will create additional competition for 
Sycamore Mall.  Management is closely monitoring the situation.

The following table illustrates the scheduled lease expirations for Sycamore
Mall, over the next ten years:

<TABLE>
<CAPTION>
                        		# of		                             	% of total
                         leases       square       annual       annual 
	               	       expiring  	    feet	        rent	        rent
             	<S>         	<C>       	<C>         	<C>           	<C>
             	1999        	11        	18,675	       48,940        	7%
             	2000         	4        	11,623	       69,666       	10%
             	2001         	3         	6,100	       95,200       	13%
             	2002         	5        	21,321	      184,710       	26%
	             2003         	1         	1,203	       12,000        	2% 
             	2004         	1         	3,464	       54,212        	8%
	             2005         	-             	-            	-        	-
             	2006         	-             	-            	-        	-
             	2007         	-             	-            	-        	-
	             2008         	-             	-            	-        	-

</TABLE>

Management believes that the Sycamore Mall property has adequate insurance 
coverage.

<PAGE>

Country Isles
The Country Isles Shopping Center, located in the Weston community of Fort 
Lauderdale, Florida, was an approximately 106,000 square foot retail shopping
center containing approximately 71,000 square feet which opened in 1986 and 
an additional expansion of approximately 35,000 square feet which opened in 
1989.  On April 25, 1996, Country Isles Associates completed the refinancing
of Country Isles Plaza in Ft. Lauderdale, Florida.  The new mortgage provided
funding of $8,100,000, the proceeds of which were used to repay the 
outstanding balance of $6,807,669 on the previous mortgage, pay the costs of 
completing the new loan (approximately $174,000), and provide for property 
tax escrow and working capital.  Out of the remaining proceeds, the 
Partnership received a distribution of $210,650 from Country Isles 
Associates.  The Partnership made a special distribution to the Limited 
Partners.  As a result of the refinancing, the interest rate was reduced 
from 9.75% to 7.00%, the monthly payments  decreased from $60,141 to $57,250.
The mortgage was due to mature on May 1, 2001.

On December 17, 1997, Country Isles Associates, sold the Country Isles 
Shopping Center in Fort Lauderdale, Florida, to Principal Mutual Life 
Insurance Company ("Buyer").  The total purchase price received by Country 
Isles was $13.2 million, which price was determined through arm's length 
negotiations with Buyer.  Of this total purchase price, approximately $7.9 
million was used to repay amounts owed to the lender holding the mortgage 
on the shopping center and approximately $595,000 was used for customary 
additional selling expenses and prorations.  The net proceeds to Country 
Isles after these deductions were approximately $4.7 million. Of these 
proceeds, the Partnership received approximately $991,000 for its 21% 
interest.


Evanston Galleria Limited Partnership
Evanston Galleria is a mixed-use residential and retail property located in 
Evanston, Illinois.  The property, located on a 0.79 acre site, contains 
36,068 square feet of rentable retail space and 55 loft apartments 
containing a total of 45,190 square feet of rentable area.  The apartments 
are leased on a one or two year lease term.  The retail space is generally 
leased with 5 to 10 year leases.

The property is owned fee simple by a partnership of which the Partnership 
is a partner.  The property is subject to a first mortgage which matured 
May 1, 1996.  Effective May 1, 1996, a modification of the first mortgage 
was entered into which, among other modifications, extended the maturity of 
the loan until May 1, 1998.  Commencing on May 1, 1996, monthly payments were
adjusted to $57,143, which represents interest only payments at an annual
rate of 8.25%, based on the outstanding principal balance of the loan as of 
May 1, 1996.  Notwithstanding the pay rate of 8.25%, interest on the loan 
continues to accrue and compound monthly on the unpaid principal balance at 
the annual rate of 9.00%.  The interest differential, as defined, will be 
paid only from proceeds resulting from a sale or refinancing of the property
or from any remaining funds in the cash flow escrow.  The unpaid interest 
together with the unpaid principal balance of the loan was due and payable 
May, 1 1998. The first mortgage loan maturity has been extended to August 1,
1999.  All net cash flow from the property, in excess of the payments due for
interest, shall be deposited into a cash flow escrow account.  If cash flow 
in any month is insufficient to pay amounts due under the loan, then the 
amounts may be withdrawn from the cash flow escrow account.

On February 16, 1999, a contract was entered into for the sale of the 
Evanston Galleria.  The purchase price, net of closing costs and prorations 
should be sufficient to repay all liabilities of the Evanston Galleria 
Limited Partnership, including the first mortgage.  However there will not 
be a significant distribution to the Partnership.  If the sale is consummated,
the Partnership is expected to recognize a gain on the sale of approximately
$100,000.  The closing is currently scheduled to occur on April 30, 1999.
However, the Purchaser has requested a 90 day extension.

Evanston Galleria has no single tenant which accounts for more then 10% of 
the rentable area.  Occupancy in the apartments at Evanston Galleria has 
remained in the 94% - 100% range during the last five years.  The retail 
space has had a problem with tenant defaults, which has reduced overall 
occupancy to as low as 80% in 1991.  As of December 31, 1996, occupancy 
was 84% and as of December 31, 1998 had increased to 97%.  Average total 
rents received per square foot at the property during the last three years 
were $16.83 in 1998, $19.57 in 1997, and $21.85 in 1996.
<PAGE>

The residential leases have terms typically expiring in one year.  During 
1998 residential leases representing $698,640 of annual rent will expire.  
During the fourth quarter of 1997, Evanston Galleria collected $50,000 as a 
settlement for past due rents.  Management has settled its legal actions 
against the previously defaulted tenants.  Also during the fourth quarter of 
1997, management was successful in signing two new leases.  As of December 31,
1997 occupancy was 83%.  During 1998, a lease was entered into to lease the 
lower level space of 11,300 square feet which has increased occupancy to over
93%, as of December 31, 1998.  The Evanston Bible Fellowship has leased the 
lower level through September 30, 2002.  Rents will be $45,142 in 1998, 
$69,486 in 1999, $71,571 in 2000, $73,718 in 2001 and $56,523 in 2002.

The following table illustrates the scheduled lease expirations relating to 
the retail space, for Evanston Galleria, over the next ten years:

<TABLE>
<CAPTION>
		# of			% of total
		leases expiring	square feet	annual rent	annual rent
	<C>	<S>	<S>	<S>	<S>
            	1998         	2           	5,133	      78,675       	15%
            	1999         	-               	-           	-        	-
            	2000         	1	           3,362	     135,402       	26%
            	2001	         1           	2,135	      51,879	       10%
            	2002         	2          	12,213	      93,012       	18%
            	2003         	1           	1,421      	22,471        	4%
            	2004         	-               	-           	-        	-
            	2005         	-               	-           	-        	-
            	2006         	-               	-           	-        	-
            	2007         	1           	3,920      131,594       	26%
</TABLE>

As of October 1, 1997, the Evanston Galleria property was considered to be 
held for sale.  In accordance with SFAS 121, no depreciation expense relative
to the property was recorded by the Partnership from October 1, 1997 through 
December 31, 1998.  The net book value of the Evanston Galleria property at 
December 31, 1998 and 1997 was $8,422,717 and $8,408,908, respectively, and 
net loss from operations for the years ended December 31, 1998, 1997 and 
1996, net of the Venture Partners share were $35,661, $90,086 and $78,686, 
respectively.

Management believes that the Evanston Galleria property has adequate 
insurance coverage.

Occupancy Summary
The following is a list of approximate occupancy levels by quarter for the 
Partnership's investment properties:
<TABLE>
<CAPTION>
                			               1997   	                        1998                   	 
	                  		  at   	  at	     at   	  at   	  at	     at	     at   	  at
                  			03/31  	06/30  	09/30  	12/31  	03/31  	06/30  	09/30  	12/31
	<S>               		<C>     	<C>    	<C>     	<C>    	<C>   	<C>     	<C>    	<C>
	Evanston Galleria
	Evanston,
	Illinois	           	86%    	86%     	77%    	83%    	95%    	94%    	94%    	97%

	Country Isles
 (sold December 1997)
	Ft. Lauderdale,
	Florida	           	100%	    99%    	100%    	n/a    	n/a    	n/a    	n/a    	n/a

	Sycamore Mall
	Iowa City,
	Iowa	               	88%    	89%     	89%    	90%    	85%    	79%    	84%    	47%
</TABLE>
<PAGE>


Item 3.  Legal Proceedings

The Partnership is not aware of any material pending legal proceedings to 
which it or its properties are subject.
 

Item 4.  Submission of Matters to a Vote of Security Holders
     
     None


Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

As of December 31, 1998, there were 532 Limited Partners holding 10,000 
Units.  There is no public market for Units and it is not anticipated that a
public market for Units will develop.  Pursuant to the terms of the Limited 
Partnership Agreement of the Partnership (the "Partnership Agreement"), there
are restrictions on the ability of the Limited Partners to transfer their 
Units.  In all cases, the General Partners must consent to the substitution 
of a Limited Partner.

Distributions to Limited Partners, through December 31, 1997, have totaled 
$1,394,298 since the Partnership's formation.  This is approximately $139.43
of cash distributions per Unit.  Each Unit originally sold for $500 and the 
offering was closed on January 31, 1991.  Reference is made to Item 6 herein
for a summary of annual cash distributions, per Unit, made to the Limited 
Partners.


<PAGE>


Item 6.  Selected Financial Data
<TABLE>
                  FIRST DEARBORN INCOME PROPERTIES L.P. II
                         (a limited partnership)
                        and Consolidated Venture

                December 31, 1998, 1997, 1996, 1995 and 1994

               (not covered by Independent Auditors' Report)

<CAPTION>
                                     		1998       	1997       	1996       	1995       	1994
<S>                               		<C>        	<C>        	<C>	        <C>        	<C>
Total revenues                    	 1,596,719  	1,847,296  	1,955,397  	1,965,788  	1,786,895

Operating income (loss)	             (997,364)   	173,953    	303,285    	201,314	    125,828

Partnership's share of operations
  of unconsolidated ventures        	 (35,661)    	(9,079)  	(45,145)    	(99,645)   	(68,131)

Partnership's share of gain on sale
  of investment property of 
  unconsolidated venture        	           -    	698,447        	-            	-         	-

Venture partners' share of
  consolidated venture's operations	  470,886   	(103,809)	 (177,269)   	(124,786)   	(96,382)

Net income (loss)	                   (562,139)   	759,512    	80,871	     (23,117)	   (38,685)

Net income (loss) per Unit             (55.65)     	75.19	      8.01       	(2.29)     	(3.83)

Total assets	                       7,277,641  	9,541,824 	9,144,952   	9,515,465  	9,696,537

Long-term debt 	                    4,227,032  	4,408,018 	4,574,933   	4,728,865	  4,881,129

Cash distributions per Unit (a)	        80.24       	8.25     	29.30       	12.38      	16.49

<FN>
The above selected financial data should be read in conjunction with the 
Consolidated Financial Statements and the related notes appearing elsewhere 
in this annual report.

   (a)   The net income (loss) per Unit and cash distributions per Unit are 
based on the number of Units outstanding at the end of each period (10,000).

</TABLE>
<PAGE>

Item 7.  Management's Discussion and Analysis of 
         Financial Condition and Results of Operations

Liquidity and Capital Resources:

On February 1, 1989, the Partnership commenced a public offering of 
$10,000,000 of units of Limited Partnership interest (the "Units") (subject 
to increase by an additional $5,000,000 of Units) pursuant to a Registration 
Statement on Form S-11 under the Securities Act of 1933.  The Partnership 
terminated the offering of Units on January 31, 1991, having issued 10,000 
Units, resulting in gross proceeds of $5,000,000 and net proceeds to the 
Partnership (after deducting offering costs and selling discounts related 
to the purchase of Units by the General Partners and their affiliates) of 
$4,058,963.

At December 31, 1998, the Partnership had cash and cash equivalents of 
$968,437 as compared to $1,659,443 as of December 31, 1997.  The decrease 
in cash and cash equivalents results primarily because the partnership made
a distribution, to its Limited Partners, during the first quarter of 1998, 
in the amount of $740,600 resulting from $991,000 of net cash provided from 
the sale of Country Isles shopping center.  Cash Flow from operations has 
been sufficient to meet the Partnerships' obligations in the past, however, 
past performance is not necessarily indicative of future performance.

As of December 31, 1998, the Partnership has no material commitments for 
capital expenditures.  The Partnership does not anticipate any need for 
external sources of liquidity.  As of October 1, 1997, the Evanston Galleria
property was considered to be held for sale.  In accordance with SFAS 121, 
no depreciation expense relative to the property was recorded by the 
Partnership from October 1, 1997 through December 31, 1998.  The net book 
value of the Evanston Galleria property at December 31, 1998 and 1997 was 
$8,422,717 and $8,408,908, respectively, and net loss from operations for 
the years ended December 31, 1998, 1997 and 1996, net of the Venture 
Partners share were $41,715, $90,086 and $78,686 respectively.

As the Partnership intends to distribute all "net cash receipts" and "sales 
proceeds" in accordance with the terms of the Partnership Agreement, and 
does not intend to reinvest any such proceeds, the Partnership is intended 
to be self-liquidating in nature.  The Partnership's future source of 
liquidity and distributions is expected to come from cash generated by the 
Partnership's investment properties and from the sale and refinancing of 
such properties.  To the extent a property does not generate adequate cash 
flow to meet its working capital requirements, the Partnership may (i) 
withdraw funds from the working capital reserve it maintains, (ii) fund 
such shortfall from excess cash generated by other properties owned or 
(iii) pursue outside financing sources.   However, the Partnership may 
decide not to, or may not be able to, commit additional funds to certain 
of its investment properties. Nonetheless, it is anticipated that the 
current and future capital resources of the Partnership will be adequate to 
fund currently anticipated short and long-term requirements of its investment
portfolio taken as a whole.

There are certain risks and uncertainties associated with the Partnership's 
investments made through joint ventures including the possibility that the 
Partnership's joint venture partners in an investment might become unable or
unwilling to fulfill their financial or other obligations, or that such joint
venture partners may have economic or business interests or goals that are 
inconsistent with those of the Partnership.  To date, the Partnership has 
not experienced any significant detrimental impact from these uncertainties 
and risks, except at Evanston Galleria as more fully described in Note 2 (b)
to the Notes to Consolidated Financial Statements included in Item 8.

In response to the weakness of the U.S. economy in general and the problems 
being experienced at the Sycamore Mall property in particular, the 
Partnership is taking steps to preserve its working capital.  Therefore, 
the Partnership carefully scrutinizes the appropriateness of any possible 
discretionary expenditures, particularly as such expenditures relate to the
amount of working capital reserves the Partnership has available.  By 
conserving working capital, the Partnership expect to be in a better position
to meet future needs of its properties without having to rely on external 
financing sources.

<PAGE>

Results of Operations:

The results of operations for the years ended December 31, 1998, reflect the
consolidated operations of the Partnership and Sycamore Mall Associates 
(the "Sycamore Partnership") and the Partnership's equity investments in 
Evanston Galleria Limited Partnership (the "Galleria Partnership.  The 
results of operations for the years ended December 31, 1997 and December 31,
1996 reflect the consolidated operations of the Partnership and Sycamore Mall
Associates (the "Sycamore Partnership") and the Partnership's equity 
investments in Evanston Galleria Limited Partnership (the "Galleria 
Partnership") and Country Isles Associates ("Country  Isles").  The results 
of operations of the Sycamore Partnership reflect the operations of the 
Sycamore Mall Shopping Center.  The equity investment in the Galleria 
Partnership reflects the Partnership's share of the operations of the 
Evanston Galleria.  The equity investment in Country Isles reflects the 
Partnership's share of the operations of the Country Isles Plaza Shopping 
Center.

Changes from 1997 to 1998:

The Partnership's net income in 1998 decreased $1,321,651 to ($562,139) in 
1998 from $759,512 in 1997.  This decrease resulted primarily from the 
Partnership's recognition of its share of the loss of value impairment from 
Sycamore Mall Associates of approximately $583,000 and the gain on the sale 
of the Country Isles property in December 1997.  The Partnership's share of 
the gain was $698,447.  The loss allocated from Evanston Galleria was $90,086
in 1997 as compared to $35,661 in 1998.  The improvement in operating results
from the Evanston Galleria resulted from increased occupancy in the 
commercial spaces at Evanston Galleria. In response to the uncertainty 
relative to Sycamore Mall Associates ability to recover the net carrying 
value of Sycamore Mall through future operations and sale, Sycamore Mall 
Associates, as a matter of prudent accounting practices and for financial 
reporting purposes, recorded a provision for value impairment in 1998 in 
the amount of $1,100,000.

The Partnership's rental income decreased $153,213 (12%), from $1,293,749 
in 1997 to $1,140,536 in 1998.  Revenue from tenant charges decreased 
$172,219 (32%) from $530,597 in 1997 to $358,378 in 1998.  This decrease is 
due to a decrease in occupancy at Sycamore Mall, and a decrease in property 
tax expense.

Interest income increased $22,094 (96%) from $22,950 in 1997 to $45,044 in 
1998.  The increase results from the increase in cash reserves which have 
been held and invested by the Partnership.

Property operating expenses decreased to $682,200 for the year ended December
31, 1998 from $912,456 for the year ended December 31, 1997.  This $230,256 
(25%) decrease results primarily from a decrease of property taxes at 
Sycamore Mall.

Interest expense decreased $13,068 (3%) from $377,530 in 1997 to $364,462 in
1998.  The reduction results from the repayment of mortgage indebtedness 
throughout the year.

The Partnership's share of operations of unconsolidated venture resulted in 
a loss of $35,661 in 1998 compared to $9,079 in 1997. This decrease is 
attributable to the elimination of income which had previously been allocated
from Country Isles.

General and administrative expenses increased $76,109 (96%) from $79,647 in 
1997 to $155,756 in 1998.  The increase results from the increase in 
professional and legal fees.


Changes from 1996 to 1997:

The Partnership's net income in 1997 increased $678,641 from $80,871 in 1996
to $759,512 in 1997.  This increase resulted primarily from the Partnership's
recognition of its share of the gain on the sale of the Country Isles 
property, in December 1997.  The Partnership's share of the gain was 
$698,447.  The loss allocated from Evanston Galleria was $90,086 in 1997 as 
compared to $78,686 in 1996.  The decrease in operating results from the 
Evanston Galleria resulted from increased vacancy in the commercial spaces 
at Evanston Galleria.  The income allocated from Country Isles in 1996 was 
$33,541 as compared to a gain of $81,007 in 1997.  Operations at Country 
Isles continued to improve from increased rental rates and increased 
occupancy.
<PAGE>


The Partnership's rental income decreased $62,046 (5%) from $1,355,795 in 
1996 to $1,293,749 in 1997.  The decrease in rental income results from an 
increase in vacancy at Sycamore Mall.  Occupancy fell during the second 
quarter of 1996, although occupancy has been increasing slightly since then,
the overall average for the year was a decrease in occupancy.

Revenue from tenant charges decreased $51,337 (9%) from $581,934 in 1996 to 
$530,597 in 1997.  The decrease in rental income results from an increase in
the average vacancy at Sycamore Mall, over the year.

Interest income increased $5,282 (30%) from $17,668 in 1996 to $22,950 in 
1997.  The increase results from the increase in cash reserves which have 
been held and invested by the Partnership.

Property operating expenses increased to $912,456 for the year ended December
31, 1997 from $871,550 for the year ended December 31, 1996.  This $40,906 
(5%) increase results primarily from an increase in maintenance and 
landscaping expenses at Sycamore Mall.

Interest expense decreased $12,056 (3%) from $389,586 in 1996 to $377,530 in
1997.  The reduction results from the repayment of $153,932 of mortgage 
indebtedness throughout the year.  Interest expense in 1998 is expected to 
decrease further as a result of the continued repayment of the mortgage 
indebtedness.

General and administrative expense decreased $7,205 (8%) from $86,852 during
the year ended December 31, 1996 to $79,647 during the year ended December 
31, 1997. This decrease resulted in a decrease in administrative costs 
charged by an affiliate of the General Partner.


Inflation:

The Partnership has completed its tenth full year of operations.  During 
the ten years the annual inflation rate has ranged from 3.01% to 5.40% with 
an average of 4.21%.  The effect which inflation has had on income from 
operations is minimal primarily due to the weak real estate market.

Inflation in future periods may increase rental income levels (from leases 
to new tenants or renewals of existing leases) in accordance with normal 
market conditions.  Such increases in rental income should offset most of 
the adverse impact that inflation has on property operating expenses with 
little effect on operating income.  Continued inflation may also tend to 
cause capital appreciation of the Partnership's investment properties over 
a period of time as rental rates and replacement costs of properties 
continue to increase.


Year 2000:

The General Partner has determined that it does not expect that the 
consequences of the Partnership's year 2000 issues will have a material 
effect on the Partnership's business, results of operations or financial 
condition.



Item 7a.  Quantitative and Qualitative Disclosures about Market Rate:

The Partnership has identified interest rate changes as a potential market 
risk.  However, as a majority of the Partnership`s long-term debt bears 
interest at a fixed rate, the Partnership does not believe that it is 
exposed to market risk relative to interest rate changes.


<PAGE>


Item 8.  Financial Statements and Supplementary Data

                  FIRST DEARBORN INCOME PROPERTIES L.P. II
                          (a limited partnership)
                          and Consolidated Venture
 
                                   INDEX

<TABLE>
<S>                                                                 	<C>
                                                                   
Independent Auditors' Report                                             	18
Consolidated Balance Sheets, December 31, 1998 and 1997	             19 - 20
Consolidated Statements of Operations,
  years ended December 31, 1998, 1997 and 1996                           	21
Consolidated Statements of Partners' Capital Accounts (Deficits),
  years ended December 31, 1998, 1997 and 1996                           	22
Consolidated Statements of Cash Flows, 
  years ended December 31, 1998, 1997 and 1996                           	23
Notes to Consolidated Financial Statements                          	24 - 31

	
Consolidated Real Estate and Accumulated Depreciation Schedule III       	32
</TABLE>

Schedules not filed:

All schedules other than those indicated in the index have been omitted as the 
required information is inapplicable or the information is presented in the 
financial statements or the related notes.


                           Evanston Galleria, L.P.
                           (a limited partnership) 
                                   INDEX
<TABLE>
<S>                                                                	<C>
Independent Auditors' Report                                             	33
Balance Sheets, December 31, 1998 and 1997                          	34 - 35
Statements of Operations,
  years ended December 31, 1998, 1997 and 1996                           	36
Statements of Partners' Capital Accounts (Deficits),
  years ended December 31, 1998, 1997 and 1996	                           37
Statements of Cash Flows, 
  years ended December 31, 1998, 1997 and 1996                           	38
Notes to Financial Statements                                       	39 - 41


Real Estate and Accumulated Depreciation Schedule III                    	42
</TABLE>
Schedules not filed:

All schedules other than those indicated in the index have been omitted as 
the required information is inapplicable or the information is presented in 
the financial statements or the related notes.


<PAGE>

                         Independent Auditors' Report

The Partners
First Dearborn Income Properties L.P. II

We have audited the consolidated financial statements of First Dearborn 
Income Properties L.P. II (a limited partnership) and consolidated venture 
as listed in the accompanying index.  In connection with our audits of the 
consolidated financial statements, we also have audited the financial 
statement schedule as listed in the accompanying index.  These consolidated
financial statements and the financial statement schedule are the 
responsibility of the General Partners of the Partnership.  Our 
responsibility is to express an opinion on these consolidated financial 
statements and financial statement schedule 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 the General Partners of the Partnership, 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 consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of First 
Dearborn Income Properties L.P. II and consolidated venture as of December 
31, 1998 and 1997 and the results of their operations and their cash flows 
for each of the years in the three-year period ended December 31, 1998, in 
conformity with generally accepted accounting principles.  Also in our 
opinion, the related financial statement schedule, when considered in 
relation to the basic consolidated financial statements taken as a whole, 
presents fairly, in all material respects, the information set forth therein.


                                           KPMG LLP
Chicago, Illinois
April 14, 1999



<PAGE>

<TABLE>
                  FIRST DEARBORN INCOME PROPERTIES L.P. II
                           (a limited partnership)
                          and Consolidated Venture

                         Consolidated Balance Sheets

                         December 31, 1998 and 1997

                                   Assets


<CAPTION>
                                                      	1998          	1997
<S>                                               	<C>	            <C>
Current assets:
     Cash and cash equivalents (note 1)	              968,437      	1,659,443
     Rents and other receivables                     	168,676        	317,315
     Due from affiliates                              	13,147         	14,122
     Prepaid expense                                   21,279     	    19,122

          Total current assets                     	1,171,539      	2,010,002

Investment property:
     Land                                          	1,201,880      	1,201,880
     Buildings and improvements                  	  7,273,400      	8,372,099
                                                   	8,475,280      	9,573,979
     Less accumulated depreciation                	(2,315,063)    	(2,032,976)
                                                  	 6,160,217    	  7,541,003

Investment in unconsolidated ventures,
  at equity (notes 2 and 7)                          	(94,330)	       (58,669)
Deferred leasing and loan costs 	                      40,215	         49,488

Total assets                                      	 7,277,641      	9,541,824








<FN>
See accompanying notes to Consolidated Financial Statements.

</TABLE>


<PAGE>

<TABLE>
                  FIRST DEARBORN INCOME PROPERTIES L.P. II
                           (a limited partnership)
                          and Consolidated Venture

                    Consolidated Balance Sheets - Continued

                         December 31, 1998 and 1997

             Liabilities and Partners' Capital Accounts (Deficits)

<CAPTION>
                                                        	1998	         1997
<S>                                                 	<C>          	<C>
Current liabilities:
     Accounts payable and accrued expenses	             297,921      	328,632
     Accrued interest                                   	29,846       	30,976
     Current portion of long-term debt  (note 3)	       180,993      	166,915

          Total current liabilities	                    508,760      	526,523

Long-term liabilities:
     Long-term debt (note 3)                         	4,227,032	    4,408,018
     Venture partners' equity 
       in consolidated venture (note 2)                	807,336    	1,508,231
     Tenant security deposits	                            5,433 	       5,433

     Total long-term liabilities                     	5,039,801    	5,921,682

          Total liabilities                          	5,548,561    	6,448,205

Partners' capital accounts (deficits) 
     General partners:
        Capital contributions                            	1,000        	1,000
        Cumulative net income (losses)                  	(1,341)       	4,280
     Total general partners' capital (deficits)           	(341)       	5,280

     Limited partners (10,000 units):
          Capital contributions                      	4,058,963    	4,058,963
          Cumulative net income (losses)              	(132,844)     	423,674
          Cumulative cash distributions             	(2,196,698)  	(1,394,298)
    Total limited partners' capital                  	1,729,421    	3,088,339

          Total partners' capital accounts	           1,729,080    	3,093,619

Commitments and contingencies (notes 2 and 6)

Total liabilities and partners' capital	              7,277,641    	9,541,824
                                                  


<FN>
See accompanying notes to Consolidated Financial Statements.

</TABLE>

<PAGE>

<TABLE>
                 FIRST DEARBORN INCOME PROPERTIES L.P. II
                        (a limited partnership)
                        and Consolidated Venture

                  Consolidated Statements of Operations

               Years ended December 31, 1998, 1997, and 1996


<CAPTION>
                                          	1998         	1997         	1996
<S>                                    	<C>          	<C>          	<C>
Revenues:
     Rental income	                     1,140,536    	1,293,749    	1,355,795
     Tenant charges	                      358,378      	530,597      	581,934
     Interest income                      	45,044	       22,950	       17,668     
     Miscellaneous income                 	52,761	            -	            -

          Total revenues               	1,596,719    	1,847,296	    1,955,397

Expenses:
     Property operating expenses         	682,200      	912,456	      871,550
     Interest	                            364,462      	377,530      	389,586
     Depreciation	                        282,087      	293,925      	293,925
     Amortization                          	9,578        	9,785       	10,199
     Provision for value impairment    	1,100,000            	-            	-
     General and administrative expense   155,756       	79,647       	86,852

          Total expenses               	2,594,083    	1,673,343    	1,652,112

Operating income (loss)                 	(997,364)     	173,953      	303,285

Partnership's share of operations
    of unconsolidated ventures	           (35,661)	      (9,079)	     (45,145)

Partnership's share of gain 
   on sale of investment property
   of unconsolidated venture                   	-      	698,447            	-

Venture partners' share of
  consolidated venture's operations       470,886     	(103,809)    	(177,269)

Net income (loss)       	                (562,139)	     759,512       	80,871

Net income (loss) per
  limited partnership unit (note 1)        (55.65)       	75.19         	8.01






<FN>
See accompanying notes to Consolidated Financial Statements.

</TABLE>
<PAGE>

<TABLE>
                  FIRST DEARBORN INCOME PROPERTIES L.P. II
                         (a limited partnership)
                        and Consolidated Venture

       Consolidated Statements of Partners' Capital Accounts (Deficits)

                Years ended December 31, 1998, 1997 and 1996


<CAPTION>
                       		General Partners  	.             	Limited Partners (10,000 Units)            . 

                                          		Net		Contributions,	Net	Cash
                        		income	net of 	 	income	distrib-
                        	Contributions	(loss)	Total	offering costs	(loss)	utions	Total
<S>                     	<C>     	<C>       	<C>       	<C>         	<C>         	<C>           	<C>
Balance (deficit)
 at December 31, 1995	   1,000   	(4,124)   	(3,124)   	4,058,963   	(408,305)   	(1,018,750)   	2,631,908

Net income                  	-      	809       	809            	-     	80,062             	-	       80,062
Cash distributions	          -         -          -             -           -       (293,045)    	(293,045)

Balance (deficit)
 at December 31, 1996 	  1,000   	(3,315)	   (2,315)   	4,058,963   	(328,243)   	(1,311,795)   	2,418,925

Net income                  	-    	7,595     	7,595            	-    	751,917	             -      	751,917
Cash distributions           -         -          -             -           -        (82,503)	     (82,503)

Balance (deficit)
 at December 31, 1997	   1,000 	   4,280     	5,280    	4,058,963    	423,674    	(1,394,298)   	3,088,339

Net loss                    	-   	(5,621)   	(5,621)           	-   	(556,518)            	-     	(556,518)
Cash distributions	          -         -          -             -           -       (802,400)    	(802,400)

Balance (deficit)
 at December 31, 1998	   1,000   	(1,341)     	(341)   	4,058,963   	(132,844)	   (2,196,698)	   1,729,421






<FN>
See accompanying notes to Consolidated Financial Statements.

</TABLE>

<PAGE>

<TABLE>
                  FIRST DEARBORN INCOME PROPERTIES L.P. II
                          (a limited partnership)
                         and Consolidated Venture

                  Consolidated Statements of Cash Flows

               Years ended December 31, 1998, 1997 and 1996
<CAPTION>
                                            	1998         	1997         	1996
<S>	                                     <C>           	<C>          	<C>
Cash flows from operating activities:
   Net income (loss)	                      (562,139)     	759,512 	     80,871
   Items not requiring cash
        or cash equivalents:
     Depreciation                          	282,087      	293,925     	293,925
     Amortization                            	9,578        	9,785      	10,199
     Provision for value impairment      	1,100,000            	-           	-
     Partnership's share of operations
      of unconsolidated ventures,
      net of distributions                  	35,661      	104,686     	341,931
     Partnership's share of gain
      on sale of investment property
      of unconsolidated venture                  	-	     (698,447)          	-
     Venture partners' share of
      consolidated venture's operations   	(470,886)     	103,809     	177,269

  Changes in:
     Rents and other receivables           	148,639      	(12,271)    	(15,651)
     Due from affiliates                       	975       	(9,186)      	2,063
     Prepaid expense	                        (2,157)      	12,380      	(9,946)
     Deferred leasing and loan costs          	(305)           	-           	-
     Accounts payable and accrued expense  	(30,711)     	(84,348)      	6,840
     Due to affiliates                           	-       	(7,160)     	(3,155)
     Accrued interest                       	(1,130)      	(1,042)       	(962)
     Tenant security deposits	                    -	           (6)       	(894)
Net cash provided by operating activities  	509,612      	471,637     	882,490

Cash flows from investing activities:
     Additions to investment property       	(1,301)     	(21,643)    	(13,538)
     Distribution from sale
      of investment property
      of unconsolidated venture     	             -      	991,341           	-
Net cash provided by (used in)
   investing activities                     	(1,301)     	969,698     	(13,538)

Cash flows from financing activities:
     Venture partners' distributions
      from consolidated venture           	(230,009)    	(137,458)   	(195,479)
     Distributions to limited partners    	(802,400)     	(82,503)   	(293,045)
     Principal payments on long-term debt 	(166,908)    	(153,932)   	(141,958)
Net cash used in financing activities   	(1,199,317)    	(373,893)   	(630,482)

   Net increase in cash
     and cash equivalents                 	(691,006)   	1,067,442     	238,470
Cash and cash equivalents
     at beginning of year                	1,659,443      	592,001	     353,531

Cash and cash equivalents
     at end of year	                        968,437    	1,659,443     	592,001

Supplemental disclosure of
     cash flow information:
     Cash paid for mortgage
        and other interest       	          365,592      	378,572     	390,548
<FN>
See accompanying notes to Consolidated Financial Statements.
</TABLE>
<PAGE>

                    FIRST DEARBORN INCOME PROPERTIES L.P. II
                            (a limited partnership)
                           and Consolidated Venture

                  Notes to Consolidated Financial Statements

                      December 31, 1998, 1997 and 1996

(1)  Organization and Basis of Accounting

The Partnership was formed under the Delaware Revised Uniform Limited 
Partnership Act by the recording of a Certificate of Limited Partnership as 
of  May 19, 1988.  Initial capital contributions were $1,000 by the General 
Partners and $1,000 by the Initial Limited Partner.  The Initial Limited 
Partner (an affiliate of the Managing General  Partner) withdrew as a Limited
Partner upon the admission of the first additional Limited Partners on 
October 16, 1989 when the initial closing of the offering was consummated.
The Agreement of Limited Partnership authorized the issuance of up to 20,000
additional Units (subject to increase by an additional 10,000 Units) at 
$500 per Unit.  A total of 7,789 Units was subscribed for and issued between
February 1, 1989 and December 31, 1990.  An additional 2,211 Units were 
issued during 1991 of which 1,669 Units were purchased by an affiliate of 
the General Partners pursuant to its Agreement to Purchase Units.   The 
offering terminated on January 31, 1991 at which time an aggregate 10,000 
Units had been sold.

The accompanying consolidated financial statements include the accounts of 
the Partnership and its consolidated venture - Sycamore Mall Associates.  
The effect of all transactions between the Partnership and the venture has 
been eliminated.

The equity method of accounting has been applied in the accompanying 
consolidated financial statements with respect to the Partnership's interest
in Evanston Galleria Limited Partnership, for the years ended December 31, 
1998, 1997 and 1996, and in Country Isles Associates, for the years ended 
December 31, 1997 and 1996.

The Partnership records are maintained on the accrual basis of accounting 
as adjusted for Federal income tax reporting purposes.  The accompanying 
Consolidated Financial Statements have been prepared from such records 
after making appropriate adjustments, where applicable, to present the 
Partnership's accounts in accordance with generally accepted accounting 
principles (GAAP).  Such adjustments are not recorded for the Partnership. 
The net effect of these is as follows:

<TABLE>
<CAPTION>
	                                	(Unaudited)	              	(Unaudited)
                              	1998        	1998         	1997        	1997
                              	GAAP        	Tax          	GAAP        	Tax
                               Basis 	      Basis	        Basis	       Basis
<S>                        	<C>         	<C>          	<C>	          <C>
Total assets 	              7,277,641   	3,377,803    	9,541,824    	4,255,943

Partners' capital: 
    General partners            	(341)     	(8,782)	       5,280            	0
    Limited partners       	1,729,421   	3,323,584    	3,088,339    	4,077,621

Net income (loss):
  General partners            	(5,621)       	(758)       	7,595        	2,796
  Limited partners          	(556,518)    	(75,005)     	751,917	      759,652

Net income per
  limited partnership unit     (55.65)      	(7.50)       	75.19        	75.97

<FN>
The net income (loss) per limited partnership unit presented is based on the
limited partnership units outstanding at the end of each period (10,000).  
All distributions to partners through December 31, 1998 have been considered
to be a return of capital.
</TABLE>
<PAGE>

                     FIRST DEARBORN INCOME PROPERTIES L.P. II
                              (a limited partnership)
                             and Consolidated Venture
     
              Notes to Consolidated Financial Statements - Continued

Partnership distributions from unconsolidated ventures are considered cash 
flow from operating activities to the extent of the Partnership's cumulative
share of net income.  In addition, the Partnership records amounts held in 
U.S. Government obligations, commercial paper and certificates of deposit at
cost which approximates market.  For the purposes of these statements, the 
Partnership's policy is to consider all such investments, with an original 
maturity of three months or less ($788,980 and $1,400,707 at December 31, 
1998 and 1997, respectively), as cash equivalents.

Deferred loan costs are amortized over the terms of the related agreements 
using the straight-line method.  Leasing commissions are amortized over the 
terms of the related tenant leases using the straight-line method.

Depreciation on the investment properties acquired has been provided over 
the estimated useful lives of 5 to 30 years using the straight-line method.

No provision for Federal income taxes has been made as any liability for 
such taxes would be that of the partners rather than the Partnership.

The preparation of financial statements in conformity with generally 
accepted accounting principles requires the General Partner to make 
estimates and assumptions that affect the reported amounts of assets and 
liabilities and disclosure of contingent assets and liabilities at the date 
of the financial statements and the reported amounts of revenues and 
expenses during the reporting period.  Actual results could differ from 
those estimates.

The Partnership adopted Statement of Financial Accounting Standards No. 121 
("SFAS 121")  "Accounting for the Impairment of Long-Lived Assets and for 
Long Lived Assets to be Disposed Of", on January 1, 1996.  SFAS 121 requires
that the Partnership record an impairment loss on its property held for 
investment whenever the property's carrying value cannot be fully recovered 
through estimated undiscounted cash flows from its operations and sale.  
The amount of the impairment loss to be recognized would be the difference 
between the property's carrying value and the property's estimated fair 
value.  In addition, SFAS 121 provides that a property may not be 
depreciated while being held for sale.  As of October 1, 1997, the Evanston 
Galleria property was considered to be held for sale.  In accordance with 
SFAS 121, no depreciation expense relative to the property was recorded by 
the Partnership from October 1, 1997 through December 31, 1998.  The net 
book value of the Evanston Galleria property at December 31, 1998 and 1997 
was $8,422,717 and $8,408,908, respectively, and net loss from operations 
for the years ended December 31, 1998, 1997 and 1996, net of the Venture 
Partners share were $35,661, $90,086 and $78,686 respectively.  The 
remaining properties are considered to be held for investment at December 
31, 1998.

The Partnership has adopted SFAS No. 131, "Disclosures about Segments of an 
Enterprise and Related Information."  The Partnership defines each of its 
property investments as an individual operating segment and has determined 
such property investments exhibit substantially identical economic 
characteristics and meet the other criteria specified by SFAS No. 131 
which permits the property investments to be aggregated into one reportable 
segment.  The Partnership assesses and measures operating results based on 
net operating income (rental income less property operating expenses).  
With the exception of interest expense, professional services and general 
and administrative expenses, substantially all other components of net 
earnings (loss) of the Partnership relate to property investments.  With 
the exception of cash and cash equivalents, substantially all other assets 
of the Partnership relate to property investments.
<PAGE>

                 FIRST DEARBORN INCOME PROPERTIES L.P. II
                         (a limited partnership)
                        and Consolidated Venture

            Notes to Consolidated Financial Statements - Continued

(2)  Venture Agreements

     (a)  General

The Partnership has entered into three joint venture agreements with 
partnerships sponsored by affiliates of the General Partners.  Pursuant to 
such agreements, the Partnership has made capital contributions aggregating 
$3,652,066 through December 31, 1998.  The Partnership has acquired, 
through these ventures, interests in a mixed use retail/residential property
and two shopping centers.

 (b)  Evanston Galleria Limited Partnership

On October 31, 1989, the Partnership acquired an interest in Evanston 
Galleria Limited Partnership (the "Galleria Partnership") which owns a 100% 
beneficial interest in the Evanston Galleria, a mixed-use residential and 
retail property located in Evanston, Illinois.  The property, located on a 
 .79 acre site, contains 36,068 square feet of rentable retail space and 55 
loft apartments.  The Partnership's acquisition of its interest was effected
through its acquisition of an 18.30% general partnership interest in the 
Galleria Partnership from First Dearborn Evanston Associates Limited 
Partnership ("Evanston Associates"), an affiliate of the General Partners.  
Evanston Associates originally agreed to purchase a 76.67% interest in the 
Galleria Partnership by agreeing to contribute an aggregate $2,313,125 to 
the Galleria Partnership.  The Partnership acquired a portion of the 76.67% 
general partnership interest on the same terms by contributing $552,066 for 
its 18.30% general partnership interest.  The seller retained a 23.33% 
limited partnership interest.

The Partnership and Evanston Associates, as general partners of the Galleria
Partnership, have certain preferences from operating cash flow and 
distributions from sales or refinancing.  Profits are generally allocated 
in accordance with cash distributions (including preferences) and then in 
accordance with the respective partner's interest.  Losses are allocated 
first to partners with positive capital account balances and then in 
accordance with the respective partner's interest.

The limited partners ("Guarantors") of the Galleria Partnership had provided
the Partnership and Evanston Associates with a guaranty of minimum rentals 
on certain retail space, maximum debt service levels and maximum real estate
tax expenses in the Galleria Partnership.  The property has failed to 
perform as expected and the Galleria Partnership has called upon the 
Guarantors to satisfy their obligations under the guaranties.  The 
Guarantors have failed to fulfill their obligations to the Partnership, 
and the General Partners have taken actions to protect the rights of the 
Partnership, including receipt of an assignment in favor of the Partnership 
of the Guarantors' limited partnership interests in the Galleria Partnership
of 5.57% and the receipt of security interests in certain other limited 
partnership interests owned by the Guarantors. Amounts owned pursuant to 
such guaranties which are secured by the limited partners' partnership 
interests will be recorded upon receipt. 

The property is managed by an affiliate of the General Partners.  During 
1998, 1997 and 1996, management fees totaling $41,681, $41,550 and $25,091,
respectively, were paid to an affiliate of the General Partners.

The property was subject to a first mortgage which matured May 1, 1996.  
Effective May 1, 1996, a modification of the first mortgage was entered 
into which, among other modifications, extended the maturity of the loan 
until May 1, 1998.  Commencing on May 1, 1996, monthly payments were 
adjusted to $57,143, which represents interest only payments at an annual 
rate of 8.25%, based on the outstanding principal balance of the loan as of 
May 1, 1996.  Notwithstanding the pay rate of 8.25%, interest on the loan 
continues to accrue and compound monthly on the unpaid principal balance at 
the annual rate of 9.00%.  The interest differential, as defined, will be 
paid only from proceeds resulting from a sale or refinancing of the property
or from any remaining funds in the cash flow escrow.  The unpaid interest 
together with the unpaid principal balance of the loan was due and payable 
May 1, 1998.  The first mortgage maturity was extended to August 1, 1999.  
All net cash flow from the property, in excess of the payments due for 
interest, shall be deposited into a cash flow escrow account.  If cash flow 
in any month is insufficient to pay amounts due under the loan, then the 
amounts may be withdrawn from the cash flow escrow account.
<PAGE>

                FIRST DEARBORN INCOME PROPERTIES L.P. II
                        (a limited partnership)
                       and Consolidated Venture

         Notes to Consolidated Financial Statements - Continued

On February 16, 1999, a contract was entered into for the sale of the 
Evanston Galleria.  The purchase price, met of closing costs and prorations 
should be sufficient to repay all liabilities of the Evanston Galleria 
Limited Partnership, including the first mortgage.  However there will not 
be a significant distribution to the Partnership.  The Partnership is 
expected to recognize a gain on the sale of approximately $100,000.  The 
Purchaser has satisfied all of the contingencies under the contract and 
closing is currently expected to occur on April 30, 1999.  

(c)  Sycamore Mall Associates

On October 26, 1990, the Partnership contributed $2,275,000 to acquire a 
53.40% general partnership interest in Sycamore Mall Associates, a general 
partnership formed to acquire the Sycamore Mall Shopping Center in Iowa City,
Iowa.  The property, situated on an approximate 21.2 acre site, includes a 
main building containing 213,206 square feet and an out parcel building 
containing 27,000 square feet.  A 14,000 square foot parcel  which contains 
a 4,590 square foot building is under a ground lease.  Sycamore Mall 
Associates acquired the property on October 26, 1990 for a purchase price 
of $9,400,000, subject to a purchase money note of $5,140,000 bearing 
interest at 10% payable interest only until maturity on October 26, 1995.  
On August 8, 1991, Sycamore Mall Associates obtained a first mortgage in 
the amount of $5,140,000 which bore interest at a rate of 9.625% payable in 
monthly installments of principal and interest of $45,355 commencing 
October 1, 1991 for 60 months until September 30, 1996.  The proceeds of 
this first mortgage were used to repay the original purchase money note.  
In October 1995, the first mortgage loan was modified.  The terms of the 
modification reduced the interest rate to 8.125%, reduced the monthly 
payments of principal and interest to $44,375 and extended the maturity 
to March 1, 2002.

First Dearborn Income Properties L.P., a public limited partnership 
affiliated with the General Partners of the Partnership, and First Dearborn 
Sycamore Associates Limited Partnership  ("FDSALP"), a privately offered 
limited partnership also affiliated with the General Partners, are the 
joint venture partners in Sycamore Mall Associates and contributed a total 
of $1,075,000 and $910,000 for 25.24% and 21.36% of the general partner 
interests, respectively.

The terms of the Sycamore Mall Associates partnership agreement provide 
that cash flow, sale or refinancing proceeds and profit and loss will be 
distributed or allocated in proportion to the partners' ownership interests.

The property is managed by an affiliate of the General Partners and an 
affiliate of the seller under a five year management agreement that 
provides for a fee equal to 5% of the effective gross income, of which 1% 
is paid to an affiliate of the General Partners.  During 1998, 1997 and 
1996 the property incurred management fees of $84,679, $93,053 and $96,048,
respectively.

     (d)  Country Isles

The Country Isles Shopping Center, located in the Weston community of Fort 
Lauderdale, Florida, is an approximately 106,000 square foot retail 
shopping center containing approximately 71,000 square feet which opened 
in 1986 and an additional expansion of approximately 35,000 square feet 
which opened in 1989.  The Country Isles Shopping Center was managed by an 
affiliate of the seller.

On April 25, 1996, Country Isles Associates completed the refinancing of 
Country Isles Plaza in Ft. Lauderdale, Florida.  The new mortgage provided 
funding of $8,100,000, the proceeds of which were used to repay the 
outstanding balance of $6,807,669 on the previous mortgage, pay the costs 
of completing the new loan (approximately $174,000), and provide for 
property tax escrow and working capital.  Out of the remaining proceeds, 
the Partnership received a distribution of $210,650 from Country Isles 
Associates.  The Partnership made a special distribution to the Limited 
Partners.
<PAGE>

                FIRST DEARBORN INCOME PROPERTIES L.P. II
                        (a limited partnership)
                        and Consolidated Venture

          Notes to Consolidated Financial Statements - Continued

On December 17, 1997, Country Isles Associates, sold the Country Isles 
Shopping Center in Fort Lauderdale, Florida, to Principal Mutual Life 
Insurance Company ("Buyer").  The total purchase price received by Country 
Isles was $13.2 million, which price was determined through arm's length 
negotiations with Buyer.  Of this total purchase price, approximately $7.9 
million was used to repay amounts owed to the lender holding the mortgage 
on the shopping center and approximately $595,000 was used for customary 
additional selling expenses and prorations.  The net proceeds to Country 
Isles after these deductions were approximately $4.7 million. Of these 
proceeds, the Partnership received approximately $991,000 for its 21% 
interest.

Country Isles Shopping Center was managed by JMB Property Management, an 
affiliate of Arvida/JMB Partners, the Seller.  The Management Agreement 
provided that the Manager rent and manage the project for an initial term 
of five years, and thereafter for yearly periods, unless otherwise 
terminated by the parties in accordance with the management agreement.  
Country Isles Associates paid the Manager a management fee in an amount 
equal to 4% of the monthly operating revenues from the operation of the 
property.  Notwithstanding the foregoing, until such time as the management 
agent notifies owner of its election to receive the management fee 
discussed immediately above, Country Isles Associates was to pay the 
Manager, in lieu of the management fee, an amount equal to 15% of amounts 
paid by tenants at the property on account of reimbursement of operating 
expenses, excluding taxes and insurance.  During 1997 and 1996 the property 
incurred management fees of $68,600 and $68,053, respectively.


 (3)  Long-Term Debt

Long-term debt consists of the following at December 31, 1998 and 1997:
<TABLE>

<CAPTION>
                                                       	1998         	1997
<S>                                                 	<C>           	<C>
$4,899,448 mortgage note, bearing interest 
at 8.125%, payable in monthly installments 
of principal and interest of $44,375 until 
maturity on March 1, 2002 when the 
remaining principalbalance of $3,780,785 
is payable; secured by the real and personal 
property of Sycamore Mall Shopping Center.	          4,408,025     	4,574,933

     Less current portion of long-term debt       	    180,993   	    166,915

     Total long-term debt                            4,227,032     	4,408,018
</TABLE>

     Five year maturities of long-term debt are as follows:
<TABLE>
	                     <S>        	<C>
                     	1999         	180,993
                     	2000         	179,290
                     	2001         	211,382
                     	2002       	3,836,360
	

</TABLE>
<PAGE>

                 FIRST DEARBORN INCOME PROPERTIES L.P. II
                        (a limited partnership)
                        and Consolidated Venture

           Notes to Consolidated Financial Statements - Continued


(4)  Partnership Agreement

Pursuant to the terms of the Partnership Agreement, net profits or losses 
of the Partnership for Federal income tax purposes from operations generally
will be allocated 99% to the Limited Partners and 1% to the General 
Partners.  Net profits for Federal income tax purposes from the sale or 
refinancing of properties will be allocated as follows:  (i) first, to the 
Partners who have a deficit capital account balance in an amount equal to 
their deficit balance; (ii) second, to the Limited Partners in an amount 
equal to their contributed capital plus a stipulated return thereon; and 
(iii) thereafter, 90% to the Limited Partners and 10% to the General 
Partners.  Net losses from the sale or refinancing of properties will be 
allocated as follows:   (i)  first, to the Partners who have a positive 
capital account balance in an amount equal to their positive balance; 
and (ii) thereafter, 99% to the Limited Partners and 1% to the General 
Partners.

Operating Cash Flow, as defined in the Partnership Agreement, prior to the 
date the public offering terminated was distributed 100% to the Limited 
Partners.  Operating Cash Flow subsequent to termination of the public 
offering will be distributed  during the first five years, 99% to the 
Limited Partners and 1% to the General Partners and, thereafter, 90% to 
the Limited Partners and 10% to the General Partners subject to certain 
limitations.  Sale or refinancing proceeds will be distributed 100% to the 
Limited Partners until the Limited Partners have received their contributed 
capital plus a stipulated return thereon.  Any remaining sale or refinancing
proceeds will then be distributed 90% to the Limited Partners and 10% to 
the General Partners.

For financial reporting purposes, net profits or losses from operations are 
allocated 99% to the Limited Partners and 1% to the General Partners.  The 
General Partners are not required to make any capital contributions except 
under certain limited circumstances upon dissolution and termination of the 
Partnership.


(5)  Leases

The Partnership has determined that all leases relating to the properties 
are properly classified as operating leases; therefore, rental income is 
reported when earned and the cost of the property, excluding the cost of 
the land, is depreciated over the estimated useful life of the property.  
Leases with tenants range in term from one to thirty years and provide for 
fixed minimum rent and partial to full reimbursement of operating costs.  
In addition, many of the leases provide for additional rent based upon 
percentages of tenants' sales volume.

Minimum lease payments, including amounts representing executory costs 
(e.g. taxes, maintenance, insurance) and any related profit, to be received 
in the future under the operating leases are as follows:
<TABLE>
	                      <S>          	<C>
	                      1999	           714,231
                      	2000	           610,792
                      	2001	           531,875
                      	2002           	433,229
	                      2003           	321,895
                      	Thereafter 	  1,316,463
		                                   3,928,485
</TABLE>

Percentage rents (based on tenants' sales volume) included in rental income 
were $204,819, $192,100 and $180,846 for the years ended December 31, 1998, 
1997 and 1996, respectively.


<PAGE>

                  FIRST DEARBORN INCOME PROPERTIES L.P. II
                           (a limited partnership)
                           and Consolidated Venture

            Notes to Consolidated Financial Statements - Continued


(6)  Transactions with Affiliates

Affiliates of the General Partners are entitled to receive from the 
Partnership acquisition fees, equal to 9% of the gross proceeds from the 
offering of Units, in connection with the evaluation, investigation, 
negotiation, selection and purchase of the Partnership's investment 
properties.  The Managing General Partner and its affiliates are entitled 
to reimbursement for salaries and direct expenses of officers and employees 
of the Managing General Partner and its affiliates relating to the 
administration of the Partnership.

Fees, commissions and other expenses required to be paid by the Partnership 
to affiliates of the General Partners for the years ended December 31, 1998,
1997 and 1996 are as follows:
<TABLE>
<CAPTION>
		                                                                  		Unpaid at 
                                    	1998       	1997     	1996     	Dec. 31, 1998
<S>                                	<C>	        <C>      	<C>            	<C>
Reimbursement (at cost)
  for out of pocket expenses	          35      	1,168     	1,168   	       0
Reimbursement (at cost)
  for administrative services  	      975      	1,364    	14,992	          0
                                    1,010      	2,532	    16,160	          0
</TABLE>

(7)  Investment in Unconsolidated Ventures

Summary combined financial information for Evanston Galleria Limited 
Partnership, for 1998 and Evanston Galleria Limited Partnership and Country 
Isle Associates, for 1997 and 1996 is as follows:

<TABLE>
<CAPTION>
                                                       	1998	         1997
<S>                                                 	<C>	          <C>
        Current assets                            	     265,025      	234,398
        Current liabilities                         	(9,222,523)  	(9,044,675)
          Working capital                           	(8,957,498)  	(8,810,277)

        Deferred expenses                               	32,004       	42,859
        Ventures partners' equity                      	483,283	      369,547
        Investment property, net                     	8,422,717    	8,408,908
        Long-term liabilities                         	(132,036)    	(126,907)
          Partnership's capital                   	    (151,530)	    (115,870)
	
     Represented by:
          Invested capital                           	1,548,815    	1,548,815
          Cumulative cash distributions             	(1,588,495)  	(1,588,495)
          Cumulative loss                              	(18,989)	     (18,989)
                                                  	    (151,530)	    (115,870)

     Total revenues                                  	1,384,467	    1,346,682
     Total expenses	                                  1,533,860	    1,724,083
     Net loss                                          (149,393)    	(377,401)
</TABLE>
<PAGE>

                     FIRST DEARBORN INCOME PROPERTIES L.P. II
                             (a limited partnership)
                             and Consolidated Venture

              Notes to Consolidated Financial Statements - Continued


The total revenues, expenses and net loss for the above ventures for the 
year ended December 31, 1996 were $3,198,453, $3,368,380 and $169,927, 
respectively.


(8)  Subsequent Event

In March 1999, the Partnership paid cash distributions of $20,600 to the 
Limited Partners. 

<PAGE>

<TABLE>
                  FIRST DEARBORN INCOME PROPERTIES L.P. II
                          (a limited partnership)
                          and Consolidated Venture

                            December 31, 1998

                              Schedule III
           Consolidated Real Estate and Accumulated Depreciation


<CAPTION>
                            Initial Cost to Partnership         Additions         Gross amount of asset at period end    
                                           Building &   Building &              Building &                  Accumulated
                 Encumbrance     Land    Improvements  Improvements    Land    Improvements     Total      Depreciation
<S>              	<C>         	<C>         	<C>         	<C>       	<C>         	<C>         	<C>         	<C>     
Shopping Center						                                                                                              
Iowa City, IA	    4,408,025   	1,201,880	   6,810,902	   462,498   	1,201,880   	7,273,400	   8,475,280	   2,315,063

<FN>
(a)  The initial cost represents the original purchase price of the property 
     reduced by any provision for value impairment.
(b)  The aggregate cost of the above real estate at December 31, 1998 for 
     Federal income tax purposes is $9,575,280.
(c)  The property was constructed in 1972 and acquired in 1990.  It is 
     depreciated over a useful life of between 5 and 30 years.
</TABLE>
<TABLE>
<CAPTION>
                                                 	1998        	1997     	1996
       <S>                                    	<C>         	<C>        	<C>
(d)  Reconciliation of real estate owned
       Balance at beginning of period	          9,573,979  	9,552,336	  9,538,798
       Reserve for value impairment           	(1,100,000)         	-          	-
       Additions	                                   1,301     	21,643     	13,538
       Balance at end of period                	8,475,280  	9,573,979  	9,552,336

(e)  Reconciliation of accumulated depreciation
       Balance at beginning of period          	2,032,976  	1,739,051  	1,445,126
       Depreciation expense	                      282,087    	293,925	    293,925
       Balance at end of period	                2,315,063  	2,032,976	  1,739,051
</TABLE>

<PAGE>

                           Independent Auditors' Report
The Partners
Evanston Galleria L.P.

We have audited the financial statements of Evanston Galleria L.P. (a 
limited partnership) and as listed in the accompanying index. In connection 
with our audits of the financial statements, we also have audited the 
financial statement schedule as listed in the accompanying index. These 
financial statements and the financial statement schedule are the 
responsibility of the General Partners of the Partnership. Our responsibility
is to express an opinion on these financial statements and financial 
statement schedule 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 the General Partners of the Partnership, 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 Evanston Galleria L.P. 
as of December 31, 1998 and 1997 and the results of their operations and 
their cash flows for each of the years in the three-year period ended 
December 31, 1998, in conformity with generally accepted accounting 
principles. Also in our opinion, the related financial statement schedule, 
when considered in relation to the basic financial statements taken as a 
whole, presents fairly, in all material respects, the information set forth 
therein.





                                            KPMG LLP
Chicago, Illinois
April 14, 1999
<PAGE>

<TABLE>
                         Evanston Galleria, L.P.
                         (a limited partnership)

                             Balance Sheets

                        December 31, 1998 and 1997

                                 Assets


<CAPTION>
                                                      	1998	           1997
<S>                                              	<C>             	<C>
Current assets:
     Cash and cash equivalents	                      260,440         	231,434
     Rents and other receivables	                      4,585	           2,964

          Total current assets                      	265,025         	234,398

Investment property held for sale:
     Land                                         	1,121,354       	1,121,354
     Buildings and improvements                	  10,650,806      	10,636,997
                                                 	11,772,160      	11,758,351
     Less accumulated depreciation               	(3,349,443)     	(3,349,443)
                                                   8,422,717	       8,408,908

Deferred leasing and loan costs 	                     32,004	          42,859

Total assets                                       8,719,746       	8,686,165








<FN>
See accompanying notes to Financial Statements.

</TABLE>


<PAGE>

<TABLE>
                             Evanston Galleria, L.P.
                             (a limited partnership)

                     Consolidated Balance Sheets - Continued

                           December 31, 1998 and 1997

             Liabilities and Partners' Capital Accounts (Deficits)

<CAPTION>
                                                       	1998         	1997
<S>                                                	<C>           	<C>
Current liabilities: 
     Current portion of long-term debt	              8,486,740     	8,486,740
     Accounts payable and accrued expenses            	447,198       	411,526
     Due to affiliates                                 	22,545        	22,545
     Accrued interest	                                 266,040       	123,864
 
Total current liabilities	                           9,222,523	     9,044,675

Long-term liabilities - tenant security deposits	      132,036    	   126,910

          Total liabilities                         	9,354,559     	9,171,585

Partners' capital accounts (deficits):
     General partners' capital                       	(284,545)     	(170,005)

     Limited partners' capital                       	(350,268)     	(315,415)

          Total partners' capital accounts           	(634,813)     	(485,420)

Commitments and contingencies

Total liabilities and partners' capital	             8,719,746     	8,686,165
                                                  


<FN>
See accompanying notes to Financial Statements.

</TABLE>

<PAGE>

<TABLE>
                            Evanston Galleria, L.P.
                            (a limited partnership)

                      Consolidated Statements of Operations

                 Years ended December 31, 1998, 1997, and 1996


<CAPTION>
                                           	1998         	1997	         1996
<S>                                     	<C>          	<C>          	<C>
Revenues:
     Rental income	                      1,172,061    	1,128,042    	1,197,475
     Tenant charges                       	208,305	      214,944      	255,277
     Miscellaneous	                              -            	-        	7,959
     Interest income	                        4,101   	     3,696	        3,720

          Total revenues                	1,384,467    	1,346,682    	1,464,431

Expenses:
     Property operating expenses          	683,336      	665,808	      612,183
     Interest                             	827,892      	703,216	      757,068
     Depreciation                               	-      	259,498      	393,578
     Amortization                          	19,075       	90,379       	26,599
     General and administrative expense      3,557	        5,182	        4,648

          Total expenses                	1,533,860    	1,724,083    	1,794,076

Net loss       	                          (149,393)    	(377,401)    	(329,645)







<FN>
See accompanying notes to Financial Statements.

</TABLE>

<PAGE>

<TABLE>
                           Evanston Galleria, L.P.
                           (a limited partnership)

       Consolidated Statements of Partners' Capital Accounts (Deficits)

               Years ended December 31, 1998, 1997 and 1996


<CAPTION>
               		          General Partners  	 Limited Partners 	      Total

<S>		                         	<C>               	<C>               	<C>
Balance (deficit)
 at December 31, 1995		        	372,087          	(150,461)          	221,626

Net loss                    			(252,739)          	(76,906)         	(329,645)

Balance (deficit)
 at December 31, 1996	        		119,348          	(227,367)         	(108,019)

Net loss                    			(289,353)          	(88,048)         	(377,401)

Balance (deficit)
 at December 31, 1997		       	(170,005)         	(315,415)         	(485,420)

Net loss                    			(114,540)          	(34,853)         	(149,393)

Balance (deficit)
 at December 31, 1998	       		(284,545)         	(350,268)	         (634,813)






<FN>
See accompanying notes to Financial Statements.

</TABLE>

<PAGE>

<TABLE>
                            Evanston Galleria, L.P.
                            (a limited partnership)

                            Statements of Cash Flows

                  Years ended December 31, 1998, 1997 and 1996
<CAPTION>
                                                     	1998	1997	1996
<S>	<C>	<C>	<C>
Cash flows from operating activities:
   Net loss	                             (149,393)	    (377,401)    	(329,645)
   Items not requiring cash
        or cash equivalents:
     Depreciation and amortization        	19,075      	349,877      	420,177

  Changes in:
     Rents and other receivables          	(1,621)      	31,273       	24,571
     Accounts payable and accrued expense 	35,672       	18,810      	(28,076)
     Accrued interest                    	142,176       	14,246       	(5,411)
     Tenant security deposits	              5,129	        7,382	          833
Net cash provided by operating activities 	51,038	       44,187       	82,449

Cash flows from investing activities:
     Additions to investment property    	(13,810)           	-      	(24,480)
     Payment of leasing commissions       	(8,222)     	(19,013)     	(21,990)
Net cash used in investing activities    	(22,032)     	(19,013)     	(46,470)

Cash flows for financing activities:
     Payment of financing costs                	-            	-      	(32,032)
     Principal payments on long-term debt	      -             -      	(25,488)
Net cash used in financing activities	          -	            -      	(57,520)

   Net increase in cash
     and cash equivalents                 	29,006       	25,174      	(21,541)

Cash and cash equivalents
 at beginning of year                    	231,434      	206,260      	227,801

Cash and cash equivalents
 at end of year	                          260,440	      231,434      	206,260

Supplemental disclosure
 of cash flow information:
   Cash paid for mortgage
   and other interest       	             685,716      	688,970      	762,479

<FN>
See accompanying notes to Financial Statements.
</TABLE>
<PAGE>

                            Evanston Galleria, L.P.
                           (a limited partnership)

                Notes to Consolidated Financial Statements 

	(1)	Organization and Basis of Accounting
The accompanying financial statements have been prepared for the purpose of 
complying with Rule 3.09 of Regulation S-X of the Securities and Exchange 
Commission. They include the accounts of the unconsolidated Partnership, 
Evanston Galleria L.P. (the "Partnership"), in which First Dearborn 
Properties L.P. II and Evanston Associates, an affiliate of the General 
Partners of First Dearborn Income Properties L.P. II are partners. The 
Partnership's acquisition of its interest was effected through its 
acquisition of an 18.30% general partnership interest in the Partnership 
from First Dearborn Evanston Associates Limited Partnership ("Evanston 
Associates"), an affiliate of the General Partners. Evanston Associates 
originally agreed to purchase a 76.67% interest in the Partnership by 
agreeing to contribute an aggregate $2,313,125 to the Partnership. The 
Partnership acquired a portion of the 76.67% general partnership interest 
on the same terms by contributing $552,066 for its 18.30% general 
partnership interest. The seller retained a 23.33% limited partnership 
interest.  The Partnership and Evanston Associates, as general partners of 
the Partnership, have certain preferences from operating cash flow and 
distributions from sales or refinancing. Profits are generally allocated in 
accordance with cash distributions (including preferences) and then in 
accordance with the respective partner's interest. Losses are allocated 
first to partners with positive capital account balances and then in 
accordance with the respective partner's interest.

The limited partners ("Guarantors") of the Partnership had provided the 
Partnership and Evanston Associates with a guaranty of minimum rentals on 
certain retail space, maximum debt service levels and maximum real estate 
tax expenses in the Galleria Partnership. The property has failed to perform
as expected and the Partnership has called upon the Guarantors to satisfy 
their obligations under the guaranties. The Guarantors have failed to 
fulfill their obligations to the Partnership, and the General Partners have 
taken actions to protect the rights of the Partnership, including receipt of 
an assignment in favor of the Partnership of the Guarantors' limited 
partnership interests in the Partnership of 5.57% and the receipt of 
security interests in certain other limited partnership interests owned by 
the Guarantors. Amounts owned pursuant to such guaranties which are secured 
by the limited partners' partnership interests will be recorded upon receipt.
The Partnership owns a 100% beneficial interest in the Evanston Galleria, a 
mixed-use residential and retail property located in Evanston, Illinois. 
The property, located on a .79 acre site, contains 36,068 square feet of 
rentable retail space and 55 loft apartments.

The Partnership records are maintained on the accrual basis of accounting 
as adjusted for Federal income tax reporting purposes. The accompanying 
financial statements have been prepared from such records after making 
appropriate adjustments, where applicable to present the Partnership's 
accounts in accordance with generally accepted accounting principles 
(GAAP). Such adjustments are not recorded for the Partnership. The net 
effect of these is as follows: 
<TABLE>
<CAPTION>


                                   1998                        1997
                            GAAP          Tax           GAAP          Tax
                            basis         basis         basis         basis
                                (Unaudited)                 (Unaudited)
<S>                       <C>          <C>            <C>          <C>
Total assets              8,719,746     7,245,885     8,686,165     7,552,677

Partners' capital
  accounts (deficits):
	General partners          (284,545)   (1,651,427)     (170,002)   (1,327,132)
	Limited partners          (350,268)     (322,260)     (315,415)     (242,961)

Net income (loss):
	General partners          (114,540)     (324,295)     (289,353)     (297,777)
	Limited partners           (34,853)      (79,299)      (88,048)      (93,525)

</TABLE>
<PAGE>

                           Evanston Galleria, L.P.
                           (a limited partnership)

                 Notes to Consolidated Financial Statements 

Deferred loan costs are amortized over the terms of the related agreements 
using the straight-line method. Leasing commissions are amortized over the 
terms of the related tenant leases using the straight-line method.  

Depreciation on buildings and improvements was provided over the estimated 
useful lives of 5 to 30 years using the straight-line method.

Maintenance and repair expenses are charged to operations as incurred. 
Significant betterments and improvements are capitalized and were 
depreciated over their estimated useful lives.

No provision for Federal income taxes has been made as any liability for 
such taxes would be that of the partners rather than the Partnership.

The preparation of financial statements in conformity with generally 
accepted accounting principles requires the General Partner to make 
estimates and assumptions that affect the reported amounts of assets and 
liabilities and disclosure of contingent assets and liabilities at the date 
of the financial statements and the reported amounts of revenues and 
expenses during the reporting period. Actual results could differ from 
those estimates.

The Partnership adopted Statement of Financial Accounting Standards No. 121 
("SFAS 121") "Accounting for the Impairment of Long-Lived Assets and for 
Long-Lived Assets to be Disposed Of", on January 1, 1996. SFAS 121 requires 
that the Partnership record an impairment loss on its property held for 
investment whenever the property's carrying value cannot be fully recovered 
through estimated undiscounted cash flows from its operations and sale. The 
amount of the impairment loss to be recognized would be the difference 
between the property's carrying value and the property's estimated fair 
value. In addition, SFAS 121 provides that a property may not be depreciated
while being held for sale. As of October 1, 1997, the Evanston Galleria 
property was considered to be held for sale. In accordance with SFAS 121, 
no depreciation expense relative to the property was recorded by the 
Partnership from October 1, 1997 through December 31, 1998. 

On February 16, 1999, a contract was entered into for the sale of the 
Evanston Galleria.  The purchase price, net of closing costs and prorations 
should be sufficient to repay all liabilities of the Evanston Galleria 
Limited Partnership.  However there will not be a significant distribution 
to the Partnership.  If the sale is consummated, the Partnership is expected
to recognize a gain on the sale of approximately $100,000.  The closing is 
currently scheduled to occur on April 30, 1999.  However, the Purchaser has 
requested a 90 day extension.

The property is managed by an affiliate of the General Partners. During 1998,
1997 and 1996, management fees totaling $41,681, $41,550 and $25,091, 
respectively, were paid to an affiliate of the General Partners. 
<PAGE>

                           Evanston Galleria, L.P.
                           (a limited partnership)

                Notes to Consolidated Financial Statements 


	(2)	Long-Term Debt
The property was subject to a first mortgage which matured May 1, 1996. 
Effective May 1, 1996, a modification of the first mortgage was entered 
into which, among other modifications, extended the maturity of the loan 
until May 1, 1998.  Commencing on May 1, 1996, monthly payments were 
adjusted to $57,143, which represents interest only payments at an annual 
rate of 8.25%, based on the outstanding principal balance of the loan as of 
May 1, 1996. Notwithstanding the pay rate of 8.25%, interest on the loan 
continues to accrue and compound monthly on the unpaid principal balance at 
the annual rate of 9.00%. The interest differential, as defined, will be 
paid only from proceeds resulting from a sale or refinancing of the property
or from any remaining funds in the cash flow escrow. The first mortgage 
maturity was extended to August 1, 1999.    The unpaid interest together 
with the unpaid principal balance of the loan will be due and payable 
August 1, 1999.  All net cash flow from the property, in excess of the 
payments due for interest, shall be deposited into a cash flow escrow 
account. If cash flow in any month is insufficient to pay amounts due under 
the loan, then the amounts may be withdrawn from the cash flow escrow 
account.  The first mortgage is expected to be retired from the proceeds of 
the expected sale of the property.

	(3)	Leases
At December 31, 1998 the Partnership's principal asset is a residential and 
retail building. The Partnership has determined that all leases related to 
the property are properly classified as operating leases; therefore, rental 
income is reported when earned and the cost of the property, excluding the 
cost of the land, is depreciated over the estimated useful life of the 
property. Leases with tenants range in term from one to thirty years and 
provide for fixed minimum rent and partial to full reimbursement of 
operating costs. In addition, many of the leases provide for additional 
rent based upon percentages of tenants' sales volume.

Minimum lease payments, including amounts representing executory costs 
(e.g., taxes, maintenance, insurance) and any related profit, to be 
received in the future under the operating leases are as follows:
<TABLE>
                          	<S>	                <C>
                          	1999              	 1,162,166
	                          2000                 	393,485
                          	2001                 	306,256
                          	2002                 	292,285
                          	2003                 	168,272
	                          Thereafter         	  359,268
		                                             2,681,732
</TABLE>
<PAGE>

<TABLE>
                          Evanston Gallaria, L.P.
                          (a limited partnership)

                            December 31, 1998

                               Schedule III
                   Real Estate and Accumulated Depreciation


<CAPTION>
   
                                 Initial Cost to Partnership       Additions         Gross amount of asset at period end    
                                               Building &     Building &               Building &                     Accumulated
                  Encumbrance      Land       Improvements   Improvements   Land      Improvements     Total         Depreciation
<S>	               <C>	          <C>          	<C>            	<C>       	<C>          	<C>	           <C>	           <C>
Residential and
retail property						
Evanston, IL	      8,486,740    	1,121,354    	10,602,516     	48,290    	1,121,354	    10,650,806    	11,772,160	    3,349,443

<FN>
(a)  The initial cost represents the original purchase price of the property.
(b)  The aggregate cost of the above real estate at December 31, 1998 for 
     Federal income tax purposes is $6,943,143.

</TABLE>
<TABLE>
<CAPTION>
                                              	1998         	1997         	1996
<S>                                        	<C>          	<C>          	<C>
(c)  Reconciliation of real estate owned
       Balance at beginning of period	      11,758,351   	11,758,351   	11,733,871
       Additions	                               13,809	            -       	24,480
       Balance at end of period            	11,772,160   	11,758,351   	11,758,351

(d)  Reconciliation of accumulated depreciation
       Balance at beginning of period       	3,349,443    	3,089,945    	2,696,367
       Depreciation expense	                         -      	259,498      	393,578
       Balance at end of period	             3,349,443    	3,349,443    	3,089,945
</TABLE>

<PAGE>


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 Partnership are:

FDIP, Inc., an Illinois corporation, Managing General Partner; and FDIP 
Associates, an Illinois general partnership, Associate General Partner.

FDIP, Inc., the Managing General Partner, is a corporation formed under the 
laws of the State of Illinois.  Its issued and outstanding shares are owned 
by Messrs. Bruce H. Block and Robert S. Ross.  The officers of the Managing 
General Partner are Robert S. Ross, President, and Bruce H. Block, Vice 
President and Secretary.  Messrs. Block and Ross are its sole directors.

FDIP Associates, the Associate General Partner, was formed under the laws 
of the State of Illinois and has a nominal net worth.  Its constituent 
partners are First Dearborn Partners, an Illinois general partnership 
formed in January, 1984, whose constituent partners are Messrs. Block and 
Ross, and Hampshire Syndications, Inc., a New Hampshire corporation.  
Hampshire Syndications, Inc. is wholly owned by Jefferson-Pilot Investments, 
Inc., a North Carolina corporation, which is a wholly-owned subsidiary of 
Jefferson-Pilot Corporation.  The officers and directors of Hampshire 
Syndications, Inc. are Ronald Angarella, President and Director, Charles C. 
Cornelio, Vice President and Director, Sheri J. Lease, Secretary, Dennis R. 
Glass, Executive Vice President and Director, E. J. Yelton, Executive Vice 
President and Director, John A. Weston, Treasurer.


Messrs. Block and Ross are not affiliated with Jefferson Pilot Securities 
Corporation, except that each is affiliated with the Associate General 
Partner.

The persons listed below occupy key management position with the General 
Partners:

Mr. Bruce H. Block, age 61, has been a principal in numerous real estate 
ventures which own, have an interest in, or have owned various types of 
property that  have included apartment and office buildings,  shopping 
centers and vacant land.  Mr. Block is an Illinois licensed attorney, a 
certified public accountant and a licensed real estate broker in the State 
of Illinois.  Mr.  Block practiced corporate  and real estate law in Chicago
for over 20 years and is a shareholder in the Chicago law firm of Ross & 
Block, P.C.

Mr. Robert S. Ross, age 61, has been a principal in many real estate
ventures which own, have an interest in, or have owned various types of 
property including apartment and office buildings, shopping centers and 
vacant land.  Mr. Ross is an Illinois licensed attorney, a licensed real 
estate broker in the State of Illinois and is an affiliate member of Real 
Estate Securities and Syndication Institute.   He also practiced general 
and real estate law in the Chicago area for over 22 years and is a 
shareholder in the Chicago law firm of Ross & Block P.C.

Mr. Ronald R. Angarella, age 41, currently serves as President, Chairman 
and Director of Jefferson Pilot Securities Corporation and Hampshire 
Funding, Inc. and President and Director of Hampshire Syndications, Inc.  
Mr. Angarella is also President and Director of Jefferson Pilot Variable 
Fund and Senior Vice President and Chief Marketing Officer of Jefferson 
Pilot Financial Insurance Company.


<PAGE>


Mr. Charles C. Cornelio, age 39, is Vice President, General Counsel and 
Secretary of Jefferson Pilot Securities Corporation and Vice President and 
Director of Hampshire Syndications, Inc.  He is also Executive Vice 
President of Jefferson Pilot Financial Insurance Company and Vice President 
and General Counsel of Jefferson Pilot Variable Fund.

Shari J. Lease, age 44, was elected Assistant Secretary of Hampshire 
Syndications, Inc. in May, 1994 and Secretary in May 1997.  She was also 
elected Secretary of Hampshire Funding, Inc. and Assistant Secretary of 
Jefferson Pilot Securities Corporation in December 1994.  Her principal 
occupation since February 1998 has been as Vice President and Counsel of 
Jefferson Pilot Financial Insurance Company.  Ms. Lease served as Assistant 
Vice President and Counsel of Jefferson Pilot Financial Insurance Company 
from April 1995 to February 1998.  Ms. Lease was elected Secretary of 
Jefferson Pilot Variable Fund in April 1992.  She served as Associate 
Counsel of Jefferson Pilot Financial Insurance Company from April 1994 
to April 1995, Assistant Counsel of Jefferson Pilot Financial Insurance 
Company from October 1990 to April 1994 and Assistant Secretary of 
Jefferson Pilot Variable Fund from July 1991 to April 1992.

John Weston, age 39, is Treasurer of Hampshire Funding, Inc., Jefferson 
Pilot Securities Corporation, Hampshire Syndications, Inc., Jefferson Pilot 
Variable Fund and Jefferson Pilot Advisory Corporation.  His principal 
occupation singe April 1995 has been as Assistant Vice President of 
Jefferson Pilot Financial Insurance Company until his election as Vice 
President of Jefferson Pilot Financial Insurance Company in February 1999.

Dennis R. Glass, age 49, was elected Executive Vice President and Director 
of Hampshire Syndications, Inc. in May 1997.  Mr. Glass is also a Director 
of Hampshire Funding, Inc.  Since October 1993 Mr. Glass has served as 
Executive Vice President, Chief Financial Officer and Treasurer of 
Jefferson-Pilot Corporation.  From 1991 to October 1993, he was associated 
with Protective Life Corporation, having last served as Executive Vice 
President and Chief Financial Officer.  From 1983 to 1991 he was associated 
with the Portman Companies, having served as Executive Vice President and 
Chief Financial Officer.

E.J. Yelton, age 59, was elected Executive Vice President and Director of 
Hampshire Syndications, Inc. in May 1997.  Mr. Yelton is also a Director of 
Hampshire Funding, Inc.  Since October 1993, Mr. Yelton has served as 
Executive Vice President of Investments of Jefferson-Pilot Corporation and 
for more than five years prior thereto was President of the Investment Centre.

Item 11.   Executive Compensation

The Partnership has no officers or directors and instead is managed by FDIP,
Inc., its Managing General Partner.

Officers and directors of the Managing General Partner receive no direct 
remuneration in such capacities from  the Partnership.  In addition, the 
Partnership is a registrant that qualifies as a small business issuer as 
defined in Item 10(a)(1) of Regulation S-B.  Accordingly, certain of the 
disclosures typically required by Item 402 are not applicable to the 
Partnership and  the information set forth herein has been appropriately 
modified.

The Partnership is required to pay certain fees to the General Partners or 
their affiliates and the General Partners are entitled to receive a share 
of cash distributions, when and as cash distributions are made to the 
Limited Partners, and a share of profits or losses as described under the 
caption "Compensation Table" at pages 9-10 of the Prospectus, a copy of 
which descriptions is filed herewith and is hereby incorporated herein by 
reference.  Reference is also made to Note 4 of Notes to Consolidated 
Financial Statements filed with this annual report for a description of 
such distributions and allocations.

Certain compensation has accrued to the General Partners and their 
affiliates for services rendered on behalf of the Partnership.  Affiliates 
of the General Partners are entitled to receive from the Partnership 
acquisition fees, equal to 9% of the gross proceeds from the offering of 
Units, in connection with the evaluation, investigation, negotiation, 
selection and purchase of the Partnership's investment properties. 
<PAGE>

The Managing General Partner and its affiliates are entitled to reimbursement
for salaries and direct expenses of officers and employees of the Managing 
General Partner and its affiliates relating to the administration of the 
Partnership.

     Fees, commissions and other expenses required to be paid by the 
Partnership to affiliates of the General Partners for the years ended 
December 31, 1998, 1997 and 1996 are as follows:

<TABLE>
<CAPTION>
			                                                                       	Unpaid at 
                                      	1998	       1997        	1996   	Dec. 31, 1998
<S>                                  	<C>	         <C>         	<C>        	<C>
Reimbursement (at cost)
  for out of pocket expenses	            35       	1,168       	1,168	      0
Reimbursement (at cost)
  for administrative services        	  975       	1,364	       14,992      0
                                   	  1,010	       2,532	       16,160	     0
</TABLE>
There are no compensatory plans or arrangements regarding termination of 
employment or change of control.

Item 12.  Security ownership of certain Beneficial Owners and Management

     (a)  No person or group is known by the Partnership to own beneficially 
more than 5% of the outstanding Units of the Partnership.

     (b)  The following table sets forth information regarding the beneficial
ownership of Units as of December 31, 1997 by directors and/or general 
partners of the General Partners, and by all officers, directors and for 
general partners of the General Partners as a group:

<TABLE>
<CAPTION> 
                                                	Amount and
       Title             	Name and address of	    nature of           	Percent
       Class             	Beneficial Owner      	Ownership	of Class
     <S>                 	<C>	                        <C>	                 <C>
     Limited             	Robert S. Ross             	0 Units             	0%   
     Partnership         	154 W. Hubbard
     Units	               Chicago, IL

     Limited             	Jefferson Pilot Financial  	1,669 Units (1)      16.7%
     Partnership         	Insurance Company
     Units               	One Granite Place,
                         	Concord, NH 03301

     Limited             	Jefferson Pilot             	20 Units (1)       	less than 1%
     Partnership         	Securities Corporation
     Units               	One Granite Place,
                         	Concord, NH 03301

     Limited             	All officers                	15 Units (1)       	less than 1%
     Partnership       	  directors, and
     Units          	     general partners
                	         as a group

<FN>
     (1)  During January 1991, Jefferson Pilot Insurance Company of America 
(JPF), an affiliate of Hampshire Syndication, Inc., acquired 1,669 Units 
under an agreement with the Partnership.  During 1993, Jefferson Pilot 
Securities Corporation, an affiliate of JPF, acquired 20 Units pursuant to 
an arbitration order.
</TABLE>
<PAGE>


Item 13.  Certain Relationships and Related Transactions

There were no significant transactions or business relationships with the 
Managing General Partner, affiliates, or other management other than those 
described in Item 10 and 11 above, and Note 6 to the Consolidated Financial 
Statements.


PART IV

Item 14.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K

     (a)  (1)(2)  See Index to Financial Statements and Financial Statement 
                  Schedules on page 16.

           (3)    Exhibits
           (3-A)  The Prospectus of the Partnership dated February 1, 1989 
as supplemented February 24, 1989, October 27, 1989, April 26, 1990, 
October 9, 1990 and December 24, 1990 filed pursuant to Rule 424(b) under 
the Securities Act of 1933 as amended (File No. 33-23048), is hereby 
incorporated herein by reference.

          (3-B)   Amended Agreement of Limited Partnership set forth as 
Exhibit A to the Prospectus, pursuant to Rule 424(b) under the Securities 
Act of 1933 as amended (File No. 33-23048), is hereby incorporated herein 
by reference.

     (b)  No reports on Form 8-K were filed in the last quarter of 1998.

     (c)  An annual report for the fiscal year 1998 will be sent to the 
          Limited Partners subsequent to this filing and the Partnership 
          will furnish copies of such report to the Securities and Exchange 
          Commission at that time.

     (d)  Exhibits - See Item 14(a) - (3).

     (e)  Financial Statement Schedules.   See Index to Financial Statements
          and Financial Statement Schedules on page 16.


<PAGE>

                                     SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Partnership has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

                               	    FIRST DEARBORN INCOME PROPERTIES L.P. II
                                       	 (Registrant)

                                   	BY: FDIP, Inc.
                                       	(Managing General Partner)


Date:  April 14, 1999             	 BY: /s/ Robert S. Ross      
                                      	 Its:  President
                                             
                                  	 BY:  FDIP Associates II
                                      	 (Associate General Partner)
                                      	 BY:  First Dearborn Partners, a Partner

Date:  April 14, 1999	             BY: /s/ Bruce H. Block     
                                           	 a Partner
                                             
Pursuant to the requirements of the Securities Exchange Act of 1934, this 
report has been signed below by the following persons on behalf of the 
registrant and in the capacities and on the dates indicated.

      	 Signatures               	Title                        	Date


     	 /s/ Robert S. Ross       	 President and Director     	 April 14, 1999
    	   Robert S. Ross           	of FDIP, Inc. (Principal
                            		    Executive Officer)

   	   /s/ Bruce H. Block       	 Secretary and Director     	 April 14, 1999
      	 Bruce H. Block         	  of FDIP, Inc. (Principal
                              		  Financial Officer)