SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-Q
(Mark One)

  X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
-----
     EXCHANGE ACT OF 1934.

For the quarterly period ended March 31, 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 0-13348
                       -------

                     BALCOR EQUITY PENSION INVESTORS-II
                     A REAL ESTATE LIMITED PARTNERSHIP         
          -------------------------------------------------------
         (Exact name of registrant as specified in its charter)

          Illinois                                      36-3314331    
-------------------------------                     -------------------
(State or other jurisdiction of                      (I.R.S. Employer  
incorporation or organization)                      Identification No.)

2355 Waukegan Road
Bannockburn, Illinois                                     60015    
----------------------------------------            ------------------- 
(Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code (847) 267-1600
                                                   --------------

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

Yes   X    No     
    -----     -----
<PAGE>
                      BALCOR EQUITY PENSION INVESTORS-II
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (AN ILLINOIS LIMITED PARTNERSHIP)

                                BALANCE SHEETS
                     March 31, 1998 and December 31, 1997 
                                  (Unaudited)

                                    ASSETS

                                                 1998             1997
                                             ------------     ------------
Cash and cash equivalents                  $   4,362,441    $   4,301,091
Accounts and accrued interest receivable         155,356          159,149
Prepaid expenses                                   2,024
                                             ------------     ------------
                                           $   4,519,821    $   4,460,240
                                             ============     ============

                       LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                           $      55,651    $      33,835
Due to affiliates                                 53,991           45,302
                                             ------------     ------------
    Total liabilities                            109,642           79,137
                                             ------------     ------------

Commitments and Contingencies

Limited Partners' capital (939,587 Interests
  issued and outstanding)                      5,189,077        5,160,001
General Partner's deficit                       (778,898)        (778,898)
                                             ------------     ------------
    Total partners' capital                    4,410,179        4,381,103
                                             ------------     ------------
                                           $   4,519,821    $   4,460,240
                                             ============     ============
                                              
The accompanying notes are an integral part of the financial statements.
<PAGE>
                      BALCOR EQUITY PENSION INVESTORS-II
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (AN ILLINOIS LIMITED PARTNERSHIP)
                                                  
                       STATEMENTS OF INCOME AND EXPENSES
                for the quarters ended March 31, 1998 and 1997
                                  (UNAUDITED)

                                                    1998          1997
                                                ------------  ------------
Income:
  Rental income                                             $   1,426,653
  Service income                                                  244,010
  Interest on short-term investments          $      59,184       339,423
  Other income                                      117,892
                                                ------------  ------------
    Total income                                    177,076     2,010,086
                                                ------------  ------------
Expenses:
  Depreciation                                                    364,942
  Amortization of deferred expenses                               353,503
  Property operating                                              822,249
  Real estate taxes                                               172,790
  Property management fees                                         58,880
  Administrative                                    148,000       166,261
                                                ------------  ------------
    Total expenses                                  148,000     1,938,625
                                                ------------  ------------
Income  before net gain on sale of 
  properties                                         29,076        71,461
Net gain on sales of properties                                 6,670,023
                                                ------------  ------------
Net income                                    $      29,076 $   6,741,484
                                                ============  ============
Net income allocated to General Partner                None $     138,507
                                                ============  ============
Net income allocated to Limited Partners      $      29,076 $   6,602,977
                                                ============  ============
Net income per Limited Partnership Interest
  (939,587 issued and outstanding)-Basic and
  diluted                                     $        0.03 $        7.03
                                                ============  ============
Distribution to General Partner                        None $     350,464
                                                ============  ============
Distribution to Limited Partners                       None $  61,046,108
                                                ============  ============
Distribution per Limited Partnership Interest:
  Taxable                                              None $        2.60
                                                ============  ============
  Tax-exempt                                           None $       73.46
                                                ============  ============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                      BALCOR EQUITY PENSION INVESTORS-II
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (AN ILLINOIS LIMITED PARTNERSHIP)

                           STATEMENTS OF CASH FLOWS
                for the quarters ended March 31, 1998 and 1997
                                  (Unaudited)

                                                    1998          1997
                                                ------------  ------------
Operating activities:
  Net income                                  $      29,076 $   6,741,484
  Adjustments to reconcile net (loss)  income
      to net cash provided by operating 
      activities:
      Net gain on sales of properties                          (6,670,023)
      Depreciation of properties                                  364,942
      Amortization of deferred expenses                           353,503
      Payment of leasing commissions                              (75,421)
      Net change in:
        Accounts and accrued interest
          receivable                                  3,793      (274,094)
        Prepaid expenses                             (2,024)       89,131
        Accounts payable                             21,816      (278,516)
        Due to affiliates                             8,689        (2,481)
        Accrued real estate taxes                                  52,265
        Security deposits                                         (96,390)
                                                ------------  ------------
  Net cash provided by operating 
    activities                                       61,350       204,400
                                                ------------  ------------
Investing activities:
  Proceeds from sales of properties                            25,478,000
  Payment of selling costs                                       (812,679)
                                                              ------------
  Net cash provided by investing activities                    24,665,321
                                                              ------------
Financing activities:
  Distribution to Limited Partners                            (61,046,108)
  Distribution to General Partner                                (350,464)
  Capital contribution from  joint venture
    partner - affiliate                                            39,705
  Distribution to  joint venture partner-
    affiliate                                                    (220,882)
                                                              ------------
  Net cash used in financing activities                       (61,577,749)
                                                ------------  ------------

Net change in cash and cash equivalents              61,350   (36,708,028)
Cash and cash equivalents at
  beginning of period                             4,301,091    66,445,811
                                                ------------  ------------
Cash and cash equivalents at end of period    $   4,362,441 $  29,737,783
                                                ============  ============
                                                 
The accompanying notes are an integral part of the financial statements.
<PAGE>
                      BALCOR EQUITY PENSION INVESTORS-II
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                         NOTES TO FINANCIAL STATEMENTS

1. Accounting Policies:

(a) The loss allocation between the Limited Partners and the General Partner
has been adjusted for financial statement purposes during 1998 in order that
the capital account balances more accurately reflect their remaining economic
interests as provided for in the Partnership Agreement.

(b)In the opinion of management, all adjustments necessary for a fair
presentation have been made to the accompanying statements for the quarter
ended March 31, 1998, and all such adjustments are of a normal and recurring
nature.

(c) A reclassification has been made to the previously reported 1997 financial
statements in order to provide comparability with the 1998 statements. This
reclassification has not changed the 1997 results. 

2. Partnership Termination:

The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. During 1997, the Partnership sold its four remaining properties.
The Partnership has retained a portion of the cash to satisfy obligations of
the Partnership, as well as establish a reserve for contingencies. The timing
of the termination of the Partnership and final distribution of cash will
depend upon the nature and extent of liabilities and contingencies which exist
or may arise. Such contingencies may include legal and other fees and costs
stemming from litigation involving the Partnership, including, but not limited
to, the lawsuit discussed in Note 4 of Notes to Financial Statements. In the
absence of any contingency, the reserves will be paid within twelve months of
the last property being sold.  In the event a contingency continues to exist or
arises, reserves may be held by the Partnership for a longer period of time.

3. Transactions with Affiliates:

Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1998 are:
                                               
                                        Paid       Payable      
                                    ------------  ---------         
   Reimbursement of expenses to                           
     the General Partner, at cost   $   15,504  $   53,991

4. Contingencies:

The Partnership is currently involved in a lawsuit whereby the Partnership, the
General Partner and certain third parties have been named as defendants seeking
damages relating to tender offers to purchase interests in the Partnership and 
<PAGE>
nine affiliated partnerships initiated by the third party defendants in 1996.
The defendants continue to vigorously contest this action. The action has been
dismissed with prejudice and plaintiffs have filed an appeal, which is pending.
It is not determinable at this time whether or not an unfavorable decision in
this action would have a material adverse impact on the financial position,
operations and liquidity of the Partnership. The Partnership believes it has
meritorious defenses to contest the claims.

5. Other Income:

The Pacific Center Office Buildings, which were owned by a joint venture
consisting of the Partnership and an affiliate, were sold during December 1996.
During April 1998, the Partnership received $117,892 related to a settlement of
a dispute with a former tenant at the property. This amount has been recognized
as other income for financial statement purposes during the first quarter of
1998. 

6. Subsequent Event:

In April 1998, the Partnership made a distribution of $785,676 ($0.95 per
Tax-exempt Interest) to the holders of Tax-exempt Limited Partnership
Interests. This amount represents a special distribution of Net Cash Proceeds
from the release of the holdback on the 100 Ashford Center North Office
Building.
<PAGE>
                      BALCOR EQUITY PENSION INVESTORS-II
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                     MANAGEMENT'S DISCUSSION AND ANALYSIS

Balcor Equity Pension Investors-II A Real Estate Limited Partnership (the
"Partnership") is a limited partnership formed in 1984 to make first mortgage
loans and to invest in and operate income-producing real property. The
Partnership raised $234,896,750 through the sale of Limited Partnership
Interests and utilized these proceeds to fund seven loans and acquire five real
property investments and a minority joint venture interest in one additional
real property. As of March 31, 1998, the Partnership has no loans outstanding
or properties remaining in its portfolio.

Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1997 for a more complete understanding of
the Partnership's financial position.

Operations
----------

Summary of Operations
---------------------

During 1998, the Partnership received a settlement from a former tenant at the
Pacific Center Office Buildings and earned interest on short-term investments,
which was partially offset by administrative expenses.  During 1997, the
Partnership recognized a gain in connection with the sale of the 100 Ashford
Center North office building. This was the primary reason the Partnership
recognized lower net income during the quarter ended March 31, 1998 than the
same period in 1997.  Further discussion of the Partnership's operations is
summarized below. 

1998 Compared to 1997
---------------------

Discussions of fluctuations between 1998 and 1997 refer to the quarters ended
March 31, 1998 and 1997.

The Partnership sold the Ammendale Technology Park - Phase I, the 100 Ashford
Center North office buildings, the Bingham Farms Office Plaza - Phase V, and
the Ross Plaza Shopping Center during 1997. As a result, rental income, service
income, depreciation, amortization expense, property operating expenses, real
estate taxes and property management fees ceased during 1997.

Higher average cash balances were available for investment during 1997 due to
the proceeds received by the Partnership from the 1997 and 1996 property sales
a portion of which was distributed to Partners in January 1997. This resulted
in a decrease in interest income on short-term investments in 1998 as compared
to 1997.
<PAGE>
The Pacific Center Office Buildings, which were owned by a joint venture
consisting of the Partnership and an affiliate, were sold during December 1996.
During April 1998, the Partnership received $117,892 related to a settlement of
a dispute with a former tenant at the property. This amount has been recognized
as other income for financial statement purposes during the first quarter of
1998.

The Partnership incurred higher investor processing, printing and postage costs
in connection with its response to a tender offer during 1997.  As a result,
administrative expenses decreased during 1998 as compared to 1997.
 
The Partnership sold the 100 Ashford Center North office building in February
1997 and recognized a gain of $6,748,971 on the property sale.  The Partnership
sold the Ammendale Technology Park - Phase I office building in February 1997
and recognized a loss of $78,948 on the property sale.

Liquidity and Capital Resources
------------------------------

The cash position of the Partnership increased by approximately $61,000 as of
March 31, 1998 when compared to December 31, 1997 . Operating activities
generated cash of approximately $61,000 primarily as a result of cash flow from
the collection of a receivable related to a sold property and interest income
earned from short-term investments, which was partially offset by the payment
of administrative expenses.  

The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. During 1997, the Partnership sold its four remaining properties.
The Partnership has retained a portion of the cash to satisfy obligations of
the Partnership, as well as establish a reserve for contingencies. The timing
of the termination of the Partnership and final distribution of cash will
depend upon the nature and extent of liabilities and contingencies which exist
or may arise. Such contingencies may include legal and other fees and costs
stemming from litigation involving the Partnership, including, but not limited
to, the lawsuit discussed in Note 4 of Notes to Financial Statements. In the
absence of any contingency, the reserves will be paid within twelve months of
the last property being sold.  In the event a contingency continues to exist or
arises, reserves may be held by the Partnership for a longer period of time.

The Pacific Center Office Buildings, which were owned by a joint venture
consisting of the Partnership and an affiliate, were sold during December 1996.
The Partnership receieved $117,892 related to a settlement of a dispute with a
former tenant at the property. This amount has been recognized as other income.

The Partnership sold the Ross Plaza Shopping Center during 1997. Pursuant to
the sale agreement, $100,000 of the proceeds is being retained by the
Partnership and is not available for distribution until a dispute with a tenant
at the property is resolved. 

In April 1998, the Partnership made a distribution of $785,676 ($0.95 per
Tax-exempt Interest) to the holders of Tax-exempt Limited Partnership
Interests. This amount represents a special distribution of Net Cash Proceeds
from the release of the holdback on the 100 Ashford Center North office 
<PAGE>
building. To date, Taxable Limited Partners have received cash distributions
aggregating $116.78 per $250 Taxable Interest, of which $90.95 represents Net
Cash Receipts and $25.83 represents Net Cash Proceeds. Including the April 1998
distribution, Tax-exempt Limited Partners have received cash distributions
aggregating $279.05 per $250 Tax-exempt Interest, of which $121.03 represents
Net Cash Receipts and $158.02 represents Net Cash Proceeds. In accordance with
the Partnership Agreement, Net Cash Proceeds from property sales were allocated
to the Tax-exempt Limited Partners. Taxable and Tax-exempt Limited Partners
received quarterly distributions from Net Cash Receipts. No additional
distributions are anticipated to be made prior to the termination of the
Partnership. However, after paying final partnership expenses, any remaining
cash reserves will be distributed in accordance with the Partnership Agreement.
Taxable Limited Partners will not receive aggregate distributions from the
Partnership equal to their original investment. However, Taxable Limited
Partners will receive a distribution from amounts allocated to the Repurchase
Fund.
  
In February 1997, the Partnership discontinued the repurchase of Interests from
Limited Partners. As of March 31, 1998, there were 24,071 Interests and cash of
$2,878,143 in the Repurchase Fund.
<PAGE>
                      BALCOR EQUITY PENSION INVESTORS-II
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                          PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K
-----------------------------------------

(a) Exhibits:

(4) Forms of Subscription Agreements, previously filed as Exhibits 4.1.1 and
4.1.2 to Amendment No. 2 dated September 20, 1984 to the Registrant's
Registration Statement (Registration No. 2-91810) and to Amendment No. 1 dated
January 24, 1985 to the Registrant's Registration Statement (Registration No.
2-95409) and Form of Confirmation regarding Interests in the Registrant set
forth as Exhibit 4.2 to the Registrant's Current Report on Form 10-Q for the
quarter ended September 30, 1992 (Commission File No. 0-13348), are
incorporated herein by reference.

(10) Material Contracts:

(i) Agreement of Sale and attachments thereto relating to the sale of the 1275
K Street office building, Washington, D.C., previously filed as Exhibit (2) to
the Registrant's Current Report on Form 8-K dated November 29, 1996, is
incorporated herein by reference.

(ii)(a) Agreement of Sale and attachment thereto relating to the sale of the
100 Ashford Center North office building, Atlanta, Georgia, previously filed as
Exhibit (2) to the Registrant's Current Report on Form 8-K dated January 20,
1997, is incorporated herein by reference.

(ii)(b) Letter Agreement relating to the sale of the 100 Ashford Center North
office building, Atlanta, Georgia, previously filed as Exhibit (10)(ii)(b) to
the Registrant's Annual Report on Form 10-K for the year ended December 31,
1996, is incorporated herein by reference.

(iii)(a) Agreement of Sale and attachment thereto relating to the sale of
Bingham Farms Office Plaza - Phase V, Bingham Farms, Michigan, previously filed
as Exhibit (10)(iv) to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997, is hereby incorporated by reference.

(iii)(b) First Letter Amendment to Agreement of Sale relating to the sale of
Bingham Farms Office Plaza - Phase V, Bingham Farms, Michigan, previously filed
as Exhibit (10)(iii)(b) to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1997, is hereby incorporated by reference.

(iii)(c) Second Amendment to Agreement of Sale relating to the sale of Bingham
Farms Office Plaza - Phase V, Bingham Farms, Michigan, previously filed as
Exhibit (10)(iii)(c) to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997, is hereby incorporated by reference.
 
(iv)(a) Agreement of Sale and attachment thereto relating to the sale of the 
<PAGE>
Ross Plaza Shopping Center, Federal Way, Washington, previously filed as
Exhibit (10)(iv) to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997, is hereby incorporated by reference.

(iv)(b) First Amendment to Agreement of Sale and Escrow Agreement relating to
the sale of the Ross Plaza Shopping Center, Federal Way, Washington, previously
filed as Exhibit (10)(iv)(b) to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1997, is hereby incorporated by reference.

(iv)(c) Second Amendment to Agreement of Sale and Escrow Agreement relating to
the sale of the Ross Plaza Shopping Center, Federal Way, Washington, previously
filed as Exhibit (10)(iv)(c) to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1997, is hereby incorporated by reference.
 
(27) Financial Data Schedule of the Registrant for the quarter ending March 31,
1998 is attached hereto.

(b) Reports on Form 8-K: A Current Report on Form 8-K dated February 15, 1998
was filed reporting the status of certain proposed class action litigation to
which the Registrant was a party.
<PAGE>
SIGNATURES

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

                              BALCOR EQUITY PENSION INVESTORS-II
                              A REAL ESTATE LIMITED PARTNERSHIP

                              By:/s/Thomas E. Meador                      
                                  -----------------------------
                                    Thomas E. Meador
                                    President and Chief Executive Officer     
                                    (Principal Executive Officer) of Balcor
                                    Equity Partners-II, the General Partner

                              By:/s/Jayne A. Kosik
                                  ------------------------------
                                    Jayne A. Kosik
                                    Senior Managing Director and Chief 
                                    Financial Officer (Principal Accounting 
                                    Officer) of Balcor Equity Partners-II, 
                                    the General Partner



Date: May 11, 1998
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