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 September 30, 1996
                               ------------------
                                    OR
     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
-----
     EXCHANGE ACT OF 1934.

For the transition period from              to             
                               ------------    ------------
Commission file number 0-13348
                       -------

                     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
                   September 30, 1996 and December 31, 1995
                                  (Unaudited)

                                    ASSETS

                                                   1996              1995
                                               -------------     -------------
Cash and cash equivalents                    $   29,466,364    $   24,596,293
Accounts and accrued interest receivable            558,363           538,041
Prepaid expenses                                    559,078           213,241
Deferred expenses, net of accumulated
  amortization of $1,176,850 in 1996 and
  $989,273 in 1995                                  766,440           740,093
Investment in joint venture with an affiliate     1,413,158         1,336,859
                                               -------------     -------------
                                                 32,763,403        27,424,527
                                               -------------     -------------
Investment in real estate
  Land                                           25,856,876        26,808,775
  Buildings and improvements                    100,134,625       108,826,412
                                               -------------     -------------
                                                125,991,501       135,635,187
  Less accumulated depreciation                  41,018,757        42,404,072
                                               -------------     -------------
Investment in real estate, net of
  accumulated depreciation                       84,972,744        93,231,115
                                               -------------     -------------
                                             $  117,736,147    $  120,655,642
                                               =============     =============

                       LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                             $      284,254    $      282,014
Due to affiliates                                    85,510            33,578
Accrued real estate taxes                           433,067           448,030
Security deposits                                   468,452           467,600
                                               -------------     -------------
    Total liabilities                             1,271,283         1,231,222

Affiliates' participation in joint ventures      16,793,963        16,983,307

Limited Partners' capital (939,587 Interests
  issued and outstanding)                       100,025,848       102,429,946
General Partner's (deficit) capital                (354,947)           11,167
                                               -------------     -------------
   Total partners' capital                       99,670,901       102,441,113
                                               -------------     -------------
                                             $  117,736,147    $  120,655,642
                                               =============     =============

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 nine months ended September 30, 1996 and 1995
                                  (Unaudited)

                                                   1996              1995
                                               -------------     -------------
Income:
   Rental income                             $   14,453,352    $   13,417,322
   Service income                                 1,490,164         1,508,946
   Interest on short-term investments               867,598           823,795
   Interest on loan receivable - first mortgage,                      
     net of amortization of $50,232 in 1995                           392,298
   Participation in income of joint venture     
     with an affiliate                               93,398            70,555
                                               -------------------------------
     Total income                                16,904,512        16,212,916
                                               -------------------------------
Expenses:
   Depreciation                                   2,445,941         2,424,626
   Amortization of deferred expenses                187,577           180,926
   Property operating                             5,806,348         5,103,101
   Real estate taxes                              1,545,081         1,534,999
   Property management fees                         534,580           517,056
   Administrative                                   844,161           739,346
   Provision for loan receivable writedown                            768,066
                                               -------------------------------
    Total expenses                               11,363,688        11,268,120
                                               -------------------------------
Income before gain on sale of property and
  affiliates' participation in joint ventures     5,540,824         4,944,796
Gain on sale of property                          3,282,612
Affiliates' participation in income from                     
  joint ventures                                 (1,079,747)         (949,199)
                                               -------------------------------
Net income                                   $    7,743,689    $    3,995,597
                                               =============     =============
Net income allocated to General Partner      $      685,277    $      672,349
                                               =============     =============
Net income allocated to Limited Partners     $    7,058,412    $    3,323,248
                                               =============     =============
Net income per Limited Partnership Interest
     (939,587 issued and outstanding)        $         7.51    $         3.54
                                               =============     =============
Distributions to General Partner             $    1,051,391    $      525,696
                                               =============     =============
Distributions to Limited Partners            $    9,462,510    $    4,731,255
                                               =============     =============
Distributions per Limited Partnership Interest:

    Taxable                                  $         7.80    $         3.90
                                               =============     =============
    Tax - exempt                             $        10.38    $         5.19
                                               =============     =============

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 September 30, 1996 and 1995

                                                    1996              1995
                                               -------------     -------------
Income:
   Rental income                             $    4,842,705    $    4,552,017
   Service income                                   407,838           477,498
   Interest on short-term investments               284,452           289,217
   Interest on loan receivable - first mortgage,             
     net of amortization of $37,127 in 1995                            86,368
   Participation in income of joint venture     
     with an affiliate                               33,289            16,354
                                               -------------------------------
     Total income                                 5,568,284         5,421,454
                                               -------------------------------
Expenses:
   Depreciation                                     812,901           808,208
   Amortization of deferred expenses                 62,002            65,801
   Property operating                             1,977,247         1,924,780
   Real estate taxes                                515,422           461,480
   Property management fees                         171,699           170,127
   Administrative                                   313,685           238,510
   Provision for loan receivable writedown                            768,066
                                               -------------------------------
    Total expenses                                3,852,956         4,436,972
                                               -------------------------------
Income before gain on sale of property and                 
  affiliates' participation in joint ventures     1,715,328           984,482
Gain on sale of property                          3,282,612
Affiliates' participation in income from                     
  joint ventures                                   (385,207)         (269,873)
                                               -------------------------------
Net income                                   $    4,612,733    $      714,609
                                               =============     =============
Net income allocated to General Partner      $      235,709    $      208,842
                                               =============     =============
Net income allocated to Limited Partners     $    4,377,024    $      505,767
                                               =============     =============
Net income per Limited Partnership Interest     
     (939,587  issued and outstanding)       $         4.66    $         0.54
                                               =============     =============
Distribution to General Partner              $      350,463    $      175,232
                                               =============     =============
Distribution to Limited Partners             $    3,154,170    $    1,577,085
                                               =============     =============
Distribution per Limited Partnership Interest:  
    Taxable                                  $         2.60    $         1.30
                                               =============     =============
    Tax - exempt                             $         3.46    $         1.73
                                               =============     =============

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 nine months ended September 30, 1996 and 1995
                                  (Unaudited)

                                                   1996              1995
                                               -------------     -------------
Operating activities:                           
Net Income                                   $    7,743,689    $    3,995,597
  Adjustments to reconcile net income to net
    cash provided by operating activities:
      Gain on sale of property                   (3,282,612)
      Affiliates' participation in income from
       joint ventures                             1,079,747           949,199
      Participation in income of joint venture
       with an affiliate                            (93,398)          (70,555)
      Depreciation of properties                  2,445,941         2,424,626
      Amortization of deferred expenses             187,577           180,926
      Amortization of loan application and
        processing fees                                                50,232
      Provision for loan receivable writedown                         768,066
      Payment of leasing commissions               (213,924)         (185,702)
      Net change in:
        Accounts and accrued interest           
          receivable                                (20,322)           66,579
        Prepaid expenses                           (345,837)         (494,744)
        Accounts payable                              2,240          (175,934)
        Due to affiliates                            51,932           (89,365)
        Accrued real estate taxes                   (14,963)           66,100
        Security deposits                               852            37,287
                                               -------------     -------------
  Net cash provided by operating activities       7,540,922         7,522,312
                                               -------------     -------------
Investing activities:
    Proceeds from sale of property                9,872,500
    Payment of selling costs                       (346,860)
    Capital contribution to joint venture       
      with an affiliate                             (45,552)
    Distributions from joint venture with an    
      affiliate                                      62,651            99,615
    Collection of principal payment on loan 
      receivable                                                    6,772,920
    Improvements and additions to properties       (430,598)         (191,404)
                                               -------------     -------------
   Net cash provided by investing activities      9,112,141         6,681,131
                                               -------------     -------------
Financing activities:
   Distributions to Limited Partners             (9,462,510)       (4,731,255)
   Distributions to General Partner              (1,051,391)         (525,696)
   Distributions to joint venture partners -    
     affiliates                                  (1,269,091)       (1,244,986)
                                               -------------     -------------
  Cash used in financing activites              (11,782,992)       (6,501,937)
                                               -------------     -------------
Net change in cash and cash equivalents           4,870,071         7,701,506
Cash and cash equivalents at beginning of       
  period                                         24,596,293        17,106,496
                                               -------------     -------------
Cash and cash equivalents at end of period   $   29,466,364    $   24,808,002
                                               =============     =============

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 Policy:

In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the nine months and quarter
ended September 30, 1996, and all such adjustments are of a normal and
recurring nature.

2. Transactions with Affiliates:

Fees and expenses paid and payable by the Partnership to affiliates during the
nine months and quarter ended September 30, 1996 are:

                                           Paid
                                   -----------------------
                                    Nine Months    Quarter      Payable
                                    ------------  ---------    ----------     
   Reimbursement of expenses to                           
     the General Partner, at cost    $119,074     $42,851     $85,510


3.  Property Sale:

In September 1996, the Partnership sold the Spalding Bridge Apartments in an
all cash sale for $9,872,500.  From the proceeds of the sale, the Partnership
paid $346,860 in selling costs.  The basis of the property was $6,243,028 which
is net of accumulated depreciation of $3,831,256.  For financial statement
purposes, the Partnership recognized a gain of $3,282,612 from the sale of the
property.  

4. Subsequent Event:

In October 1996, the Partnership made a distribution of $9,919,256 ($2.60 per
Taxable Interest and $11.64 per Tax-exempt Interest) to the holders of Limited
Partnership Interests for the third quarter of 1996.  Of this amount,
$3,154,170 ($2.60 per Taxable Interest and $3.46 per Tax-exempt Interest)
represents the regular quarterly distribution of Net Cash Receipts for the
third quarter of 1996.  In addition, $6,765,086 ($8.18 per Tax-exempt Interest)
of the distribution represents a special distribution of Net Cash Proceeds from
the Colonial Coach and Castlewood West loan prepayment in 1995.
<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. Subsequently, the Partnership acquired three properties through
foreclosure on loans and accepted prepayments on four additional loans.  The
Partnership sold one property in September 1996.  As of September 30, 1996, the
Partnership operates seven properties and holds a minority joint venture
interest in one additional property.

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 1995 for a more complete understanding of
the Partnership's financial position.

Operations
----------

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

The Partnership recognized a gain related to the sale of Spalding Bridge
Apartments in September 1996, which was the primary reason for the  increase in
net income during the nine months and quarter ended September 30, 1996 as
compared to the same periods in 1995.  Further discussion of the Partnership's
operations is summarized below.

1996 Compared to 1995
---------------------

Discussions of fluctuations between 1996 and 1995 refer to the nine months and
quarters ended September 30, 1996 and 1995, unless otherwise mentioned.

Primarily as a result of higher average occupancy and rental rates at the 1275
K Street office building, higher rental rates at the Westech 360 office
building, and higher percentage rents at the Ross Plaza shopping center, rental
income increased during 1996 as compared to 1995.
 
As a result of lower reimbursements for property operating expenses from the
tenants at the Partnership's commercial properties, service income decreased
during the quarter ended September 30, 1996 as compared to the same period in
1995.

In September 1995, the Partnership accepted a discounted prepayment on the
Colonial Coach and Castlewood West loan receivable.  The Partnership recognized
interest income on this loan receivable prior to prepayment during 1995 and
also recognized a provision of $768,066 for loan receivable write-down in the
quarter ended September 30, 1995.
<PAGE>
Primarily as a result of higher rental income due to increased occupancy at the
Pacific Center office building, in which the Partnership holds a joint venture
interest, participation in income of joint venture with an affiliate increased
during 1996 as compared to 1995.

Primarily as a result of higher leasing costs due to increased leasing activity
at the 1275 K Street, Ammendale Technology Park - Phase I, Denver Centerpoint
and Westech 360 office buildings and higher repairs and maintenance at the 1275
K Street, Ammendale Technology Park - Phase I, and Denver Centerpoint office
buildings, property operating expenses increased during 1996 as compared to
1995.  

As a result of higher 1996 real estate taxes at Spalding Bridge Apartments due
to a higher assessed value, real estate tax expense increased during the
quarter ended September 30, 1996 as compared to the same period in 1995.

The Partnership incurred  higher consulting, printing, legal and postage costs
in connection with its response to a tender offer and related litigation during
1996.  As a result, administrative expenses increased during 1996 as compared
to 1995. This increase was partially offset by lower accounting fees.

The Partnership sold Spalding Bridge Apartments in September 1996 and
recognized a gain on the sale of $3,282,612.  See Note 3 of Notes to Financial
Statements for additional information.

The 1275 K Street and Westech 360 office buildings are owned through joint
ventures with affiliates.  Primarily as a result of higher rental income due to
higher average occupancy and rental rates at the 1275 K Street office building
and higher rental income due to higher rental rates at the Westech 360 office
building, affiliates' participation in income from joint ventures increased
during 1996 as compared to 1995.  The increases in income at these properties
were partially offset by higher leasing costs at both of these properties. 

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

The cash position of the Partnership increased by approximately $4,870,000 as
of September 30, 1996 as compared to December 31, 1995. Cash flow of
approximately $7,541,000 provided by the Partnership's operating activities
includes cash flow from the operations of the properties and interest income on
short-term investments, which were partially offset by the payment of
administrative expenses. Investing activities consisted of net proceeds
received from the sale the Spalding Bridge Apartments of approximately
$9,526,000, a net distribution received from the joint venture with an
affiliate of approximately $17,000 and improvements to certain of the
Partnership's properties of approximately $431,000. Financing activities
consisted of distributions to the Partners of approximately $10,514,000 and to
the affiliated joint venture partners of approximately $1,269,000. 

The Partnership defines cash flow generated from its properties as an amount
equal to the property's revenue receipts less property related expenditures.
During the nine months ended September 30, 1996 and 1995, all of the remaining
properties, including the Pacific Center Office Buildings in which the
Partnership holds a minority joint venture interest, generated positive cash
flow.  Spalding Bridge Apartments, which was sold in September 1996, generated
positive cash flow during 1995 and prior to its sale in 1996.
<PAGE>
As of September 30, 1996, occupancy rates at the Partnership's commercial
properties ranged from 91% to 100%.  Many rental markets continue to remain
extremely competitive; therefore, the General Partner's goals are to maintain
high occupancy levels while increasing rents where possible and to monitor and
control operating expenses and capital improvement requirements at the
properties.

In October 1996, the Partnership paid $9,919,256 ($2.60 per Taxable Interest
and $11.64 per Tax-exempt Interest) to Limited Partners.  Of this amount,
$3,154,170 ($2.60 per Taxable Interest and $3.46 per Tax-exempt Interest)
represents the regular quarterly distribution of Net Cash Receipts for the
third quarter of 1996.  The level of the regular quarterly distribution was
consistent with the amount distributed to Limited Partners for the previous
quarter.  In addition, $6,765,086 ($8.18 per Tax-exempt Interest) of the
distribution represents a special distribution of Net Cash Proceeds to
Tax-exempt Limited Partners pursuant to the Partnership Agreement from the
Colonial Coach and Castlewood West loan prepayment in 1995.  During October
1996, the Partnership paid $262,847 to the General Partner, representing its
quarterly distribution for the third quarter of 1996 and made a contribution of
$87,616 to the Repurchase Fund. To date, including the October 1996
distribution, Limited Partners have received distributions aggregating
approximately $114 per $250 Taxable Interest, of which $88 represents Net Cash
Receipts and $26 represents Net Cash Proceeds, and $152 per $250 Tax-exempt
Interest, of which $118 represents Net Cash Receipts and $34 represents Net
Cash Proceeds. The General Partner expects that the cash flow from property
operations should enable the Partnership to continue making quarterly
distributions to Limited Partners. However, the level of future distributions
will be dependent on the amount of cash flow generated from property operations
and property sales, as to which there can be no assurances.

The General Partner believes that the market for multifamily housing and office
properties has become increasingly favorable to sellers of these properties.
During September 1996, the Partnership sold the Spalding Bridge Apartments, and
in October 1996, the joint venture consisting of the Partnership and an
affiliate contracted to sell the Pacific Center office buildings for a sale
price of $16,750,000.  The Partnership is actively marketing five of the
remaining properties in its portfolio.  The General Partner examines each
property individually by property type and market in determining the optimal
time to sell each property.

In September 1996, the Partnership sold the Spalding Bridge Apartments in an
all cash sale for $9,872,500.  From the proceeds of the sale, the Partnership
paid $346,859 in selling costs.  In accordance with the Partnership Agreement,
the Partnership expects to distribute the proceeds to the Tax-exempt Limited
Partners in January 1997.  See Note 3 of Notes to Financial Statements for
additional information.

Changing interest rates can impact real estate values in several ways.
Generally, declining interest rates may lower the cost of capital allowing
buyers to pay more for a property whereas rising interest rates may increase
the cost of capital and lower the price of real estate.
<PAGE>
During the nine months ended September 30, 1996, the General Partner, on behalf
of the Partnership, used amounts placed in the Repurchase Fund to repurchase
1,647 interests from Limited Partners at a cost of $205,302.

Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices,
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
<PAGE>
                      BALCOR EQUITY PENSION INVESTORS-II
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                          PART II - OTHER INFORMATION


Item 1. Legal Proceedings
-------------------------

Proposed Class and Derivative Action Lawsuits
---------------------------------------------

On June 14, 1996, a proposed class and derivative action complaint was filed,
Dee vs. Walton Street Capital Acquisition II, LLC (Circuit Court of Cook
County, Illinois, County Department, Chancery Division ("Chancery Court"), Case
No. 96 CH 06283) (the "Dee Case"), naming the General Partner and the general
partners (the "Balcor Defendants") of nine other limited partnerships sponsored
by The Balcor Company (together with the Partnership, the "Affiliated
Partnerships"), as well as the Affiliated Partnerships, as defendants.
Additional defendants were Insignia Management Group ("Insignia") and Walton
Street Capital Acquisition II, LLC ("Walton") and certain of their affiliates
and principals (collectively, the "Walton and Insignia Defendants"). The
complaint alleged, among other things, that the tender offers for the purchase
of limited partnership interests in the Affiliated Partnerships made by a joint
venture consisting of affiliates of Insignia and Walton were coercive and
unfair.  

On July 1, 1996, another proposed class action complaint was filed in the same
court, Anderson vs. Balcor Mortgage Advisors (Case No. 96 CH 06884) (the
"Anderson Case").  An amended complaint consolidating the Dee and Anderson
Cases (the "Dee/Anderson Case") was filed on July 25, 1996.  

The complaint seeks to assert class and derivative claims again the Walton and
Insignia Defendants and alleges that, in connection with the tender offers, the
Walton and Insignia Defendants misused the Balcor Defendants' and Insignia's
fiduciary positions and knowledge in breach of the Walton and Insignia
Defendants' fiduciary duty and in violation of the Illinois Securities and
Consumer Fraud Acts. The plaintiffs amended their complaint on October 8, 1996,
adding additional claims. The plaintiffs request certification as a class and
derivative action, unspecified compensatory damages and rescission of the
tender offers. Each of the defendants have filed motions to dismiss the
complaint. The court has not yet ruled on these motions.

The Balcor Defendants intend to vigorously contest this action. No class has
been certified as of this date. Management of each of the Balcor Defendants
believes they have meritorious defenses to contest the claims. It is not
determinable at this time whether or not an unfavorable decision in this action
would have a material adverse impact on the Partnership.
<PAGE>
Proposed class action
---------------------

On August 30, 1996, a proposed class action complaint was filed, Lenore Klein
vs. Lehman Brothers, Inc., et al. (Superior Court of New Jersey, Law Division,
Union County, Docket No. Unn-L-5162-96). The Partnership, additional limited
partnerships which were sponsored by The Balcor Company (together with the
Partnership, the "Affiliated Partnerships"), American Express Company, Lehman
Brothers, Inc., additional limited partnerships sponsored by the predecessor of
Lehman Brothers, Inc. (together with the Partnership and the Affiliated
Partnerships, the "Defendant Partnerships") and Smith Barney Holdings, Inc. are
the named defendants in the action. The complaint was amended on October 18,
1996 to add additional plaintiffs. The amended complaint alleges, among other
things, common law fraud and deceit, negligent misrepresentation, breach of
contract, breach of fiduciary duty and violation of certain New Jersey statutes
relating to the disclosure of information in the offering of limited
partnership interests in the Defendant Partnerships. The amended complaint
seeks judgment for compensatory damages equal to the amount invested in the
Defendant Partnerships by the proposed class plus interest accrued thereon;
general damages for injuries arising from the defendants' actions; equitable
relief, including rescission, on certain counts; punitive damages; treble
damages on certain counts; recovery from the defendants of all profits received
by them as a result of their actions relating to the Defendant Partnerships;
attorneys' fees and other costs.

The defendants intend to vigorously contest this action. No class has been
certified as of this date. Management of each of the defendants believes they
have meritorious defenses to contest the claims. It is not determinable at this
time whether or not an unfavorable decision in this action would have a
material adverse impact on the Partnership.


Item 5.  Other Information
--------------------------

Spalding Bridge Apartments
--------------------------

In 1985, the Partnership acquired the Spalding Bridge Apartments, Atlanta,
Georgia, utilizing approximately $10,074,000 of offering proceeds. On August
26, 1996, the Partnership contracted to sell the property for a sale price of
$9,872,500 to RREEF America L.L.C., a Delaware limited liability company, an
unaffiliated party. The purchaser subsequently assigned its rights under the
contract to an affiliate, TMT Spalding Bridge Inc., and the sale closed on
September 25, 1996. From the proceeds of the sale, the Partnership paid
$100,047 in closing costs, $148,088 to an unaffiliated party as a brokerage
commission and $98,725 to an affiliate of the third party providing property
management services for the property as a fee for services in connection with
the sale of the property. The Partnership received the remaining proceeds of
$9,525,640.  Neither the General Partner nor any affiliate will receive a
brokerage commission in connection with the sale of the property. The General
Partner will be reimbursed by the Partnership for its actual expenses incurred
in connection with the sale. 

An affiliate of the Partnership has recently sold one other property to an
affiliate of the purchaser.
<PAGE>
Pacific Center Office Buildings
-------------------------------

In 1984, the Pacific Center Office Buildings, Dallas, Texas, were acquired by a
joint venture (the "Joint Venture") in which the Partnership and an affiliate
held joint venture interests of 22.91% and 77.09%, respectively. The
Partnership contributed approximately $8,593,000  and the affiliate contributed
approximately $28,907,000 from their respective offering proceeds towards the
purchase of the property.

On October 10, 1996, the Joint Venture contracted to sell the property for a
sale price of $16,750,000 to an unaffiliated party, Transwestern Investment
Company, L.L.C. The purchaser has deposited $160,000 into an escrow account as
earnest money. The remainder of the sale price will be payable in cash at
closing, scheduled to occur December 16, 1996. From the proceeds of the sale,
the Joint Venture will pay $335,000 as a brokerage commission to an affiliate
of the third party providing property management services for the property. The
Joint Venture will receive the remaining proceeds of approximately $16,415,000,
of which the Partnership_s share will be approximately $3,761,000, less the
Partnership's share of closing costs.

An affiliate of the Partnership has simultaneously contracted to sell another
property to the purchaser.

The closing is subject to the satisfaction of numerous terms and conditions.
There can be no assurance that all of the terms and conditions will be complied
with and, therefore, it is possible the sale of the property may not occur.
<PAGE>
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 25, 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 Report on Form 10-Q for the quarter
ended September 30, 1992 (Commission File No. 0-13348) are incorporated herein
by reference.

(27) Financial Data Schedule of the Registrant for the nine month period ending
September 30, 1996 is attached hereto.

(99) Additional Exhibits:

(i) Agreement of Sale relating to the sale of Spalding Bridge Apartments,
Atlanta, Georgia, is attached hereto.

(ii)(a) Agreement of Sale relating to the sale of the Pacific Center office
buildings, Dallas, Texas, is attached hereto.

(ii)(b) First Amendment to Agreement of Sale relating to the sale of the
Pacific Center office buildings, Dallas, Texas, is attached hereto.

(b) Reports on Form 8-K: No reports were filed on Form 8-K during the quarter
ended September 30, 1996.
<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
                                  Vice President, and Chief Financial 
                                  Officer (Principal Accounting Officer) of 
                                  Balcor Equity Partners-II, the General
                                  Partner



Date: November 14, 1996
      -------------------------------
<PAGE>