February 28, 2000



United States
Securities and Exchange Commission
Washington, D.C.  20549


RE:   Shelter Properties II
      Form 10-KSB
      File No. 0-10256

To Whom it May Concern:

The  accompanying  Form 10-KSB for the year ended  December 31, 1999 describes a
change in the method of  accounting to  capitalize  exterior  painting and major
landscaping,   which  would  have  been  expensed  under  the  old  policy.  The
Partnership believes that this accounting principle change is preferable because
it  provides a better  matching  of  expenses  with the  related  benefit of the
expenditures and it is consistent with industry practice and the policies of the
Corporate General Partner.

Please do not hesitate to contact the undersigned with any questions or comments
that you might have.

Very truly yours,



Stephen Waters
Real Estate Controller

<PAGE>



                      FORM 10-KSB--Annual or Transitional Report Under

                               SECTION 13 OR 15(d)

                                   Form 10-KSB

[X] ANNUAL  REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
    1934 [No Fee Required]

                        For the fiscal year ended December 31, 1999


[ ] TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
    OF 1934 [No Fee Required]

                      For the transition period _________to _________

                         Commission file number 0-10256

                              SHELTER PROPERTIES II
                 (Name of small business issuer in its charter)

      South Carolina                                        57-0709233
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                         Identification No.)

                         55 Beattie Place, P.O. Box 1089
                        Greenville, South Carolina 29602

                    (Address of principal executive offices)

                                 (864) 239-1000
                            Issuer's telephone number

         Securities registered under Section 12(b) of the Exchange Act:

                                      None

         Securities registered under Section 12(g) of the Exchange Act:

                      Units of Limited Partnership Interest
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act of 1934 during the past 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___

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will 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-KSB or any
amendment to this Form 10-KSB. [ ]

State issuer's revenues for its most recent fiscal year.  $6,044,000

State the aggregate  market value of the voting  partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  partnership
interests  were sold,  or the average bid and asked  prices of such  partnership
interests, as of December 31, 1999. No market exists for the limited partnership
interests of the Registrant,  and,  therefore,  no aggregate market value can be
determined.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None

<PAGE>


                                     PART I

Item 1.     Description of Business:

Shelter Properties II (the "Registrant" or the "Partnership") was organized as a
limited partnership under the laws of the State of South Carolina on October 10,
1980.  The general  partner  responsible  for  management  of the  Partnership's
business is Shelter Realty II  Corporation,  a South Carolina  corporation  (the
"Corporate General Partner").  The only other general partner of the Partnership
was N. Barton Tuck,  Jr. Mr. Tuck was not an affiliate of the Corporate  General
Partner  and  was  effectively  prohibited  by  the  Partnership's   partnership
agreement (the "Partnership  Agreement") from participating in the management of
the Partnership.  In June 1999, Mr. Tuck's general  partnership  interest in the
Registrant was purchased by AIMCO Properties,  LP, an affiliate of the Corporate
General  Partner.  The  Corporate  General  Partner is a subsidiary of Apartment
Investment and Management Company ("AIMCO").  The Partnership Agreement provides
that the  Partnership  is to terminate  on December  31, 2020 unless  terminated
prior to such date.

The  Registrant  is engaged in the business of operating and holding real estate
properties for investment. In 1981, during its acquisition phase, the Registrant
acquired five existing apartment properties. The Registrant continues to own and
operate three of these properties. See "Item 2. Description of Properties".

Commencing February 2, 1981, the Registrant offered,  pursuant to a Registration
Statement filed with the Securities and Exchange Commission,  up to 27,400 Units
of Limited Partnership  Interest (the "Units") at a purchase price of $1,000 per
Unit with a minimum  purchase of 5 Units ($5,000),  or 1.5 Units ($1,500) for an
Individual  Retirement  Account.  An additional  100 Units were purchased by the
Corporate General Partner.  Since its offering, the Registrant has not received,
nor are limited partners required to make additional capital contributions.

The offering terminated on April 30, 1981. Upon termination of the offering, the
Registrant  had accepted  subscriptions  for 27,500  Units,  including 100 Units
purchased by the Corporate General Partner, for an aggregate of $27,500,000. The
Registrant invested approximately  $21,000,000 of such proceeds in five existing
apartment  properties.  Prior to December 31,  1999,  the  Partnership  sold one
property and lost one property to the lender through foreclosure.

The Registrant  has no employees.  Management  and  administrative  services are
provided  by the  Corporate  General  Partner  and  by  agents  retained  by the
Corporate General Partner.

The  real  estate  business  in which  the  Partnership  is  engaged  is  highly
competitive.  There are other  residential  properties within the market area of
the Partnership's properties.  The number and quality of competitive properties,
including  those which may be managed by an affiliate of the  Corporate  General
Partner,  in such market area could have a material  effect on the rental market
for the  apartments at the  Partnership's  properties  and the rents that may be
charged  for such  apartments.  While  the  Corporate  General  Partner  and its
affiliates  own and/or  control a significant  number of apartment  units in the
United  States,  such  units  represent  an  insignificant  percentage  of total
apartment  units in the United  States and  competition  for the  apartments  is
local.

There have been, and it is possible there may be other, Federal, state and local
legislation  and  regulations   enacted   relating  to  the  protection  of  the
environment.  The Partnership is unable to predict the extent,  if any, to which
such new  legislation  or  regulations  might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.

The Partnership  monitors its properties for evidence of pollutants,  toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental  testing has been performed which resulted in no material  adverse
conditions or liabilities.  In no case has the Partnership  received notice that
it is a potentially  responsible party with respect to an environmental clean up
site.

Both  the  income  and  expenses  of  operating  the  properties  owned  by  the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand for similar  properties  resulting from various
market  conditions,  increases/decreases  in unemployment or population  shifts,
changes in the availability of permanent mortgage  financing,  changes in zoning
laws,  or changes in patterns or needs of users.  In  addition,  there are risks
inherent in owning and operating residential  properties because such properties
are  susceptible to the impact of economic and other  conditions  outside of the
control of the Partnership.

A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operation"  included in "Item 6" of this Form
10-KSB.

Transfer of Control

Pursuant  to a series  of  transactions  which  closed  on  October  1, 1998 and
February 26, 1999,  Insignia  Financial  Group,  Inc.  ("Insignia") and Insignia
Properties  Trust merged into AIMCO,  a publicly  traded real estate  investment
trust, with AIMCO being the surviving  corporation (the "Insignia Merger"). As a
result, AIMCO acquired 100% ownership interest in the Corporate General Partner.
The Corporate  General Partner does not believe that this transaction has had or
will have a material effect on the affairs and operations of the Partnership.

Item 2.     Description of Properties:

The following table sets forth the Registrant's investments in properties:

                               Date of
Properties                    Purchase         Type of Ownership         Use

Parktown Townhouses           03/01/81    Fee ownership, subject to   Apartment
Deer Park, Texas                          first and second mortgages  309 units

Raintree Apartments           04/30/81    Fee ownership, subject to   Apartment
Anderson, South Carolina                  first and second mortgages  176 units

Signal Pointe Apartments      06/30/81    Fee ownership, subject to   Apartment
Winter Park, Florida                      first and second mortgages  368 units



<PAGE>


Schedule of Properties:

Set forth below for each of the  Registrant's  properties is the gross  carrying
value, accumulated depreciation,  depreciable life, method of depreciation,  and
Federal tax basis.

                         Gross
                        Carrying    Accumulated                       Federal
Properties               Value     Depreciation   Rate   Method     Tax Basis
                            (in thousands)                        (in thousands)

Parktown Townhouses     $10,350      $ 6,823      5-35     S/L       $ 3,395
Raintree Apartments       4,434        2,981      5-38     S/L           705
Signal Pointe Apartments 12,162        8,080      5-37     S/L         2,320

          Totals        $26,946      $17,884                         $ 6,420

See  "Note  A" to the  financial  statements  included  in  "Item  7.  Financial
Statements" for a description of the Partnership's depreciation policy and "Note
I - Change in Accounting Principle".

Schedule of Property Indebtedness:

The  following  table  sets  forth  certain  information  relating  to the loans
encumbering the Registrant's properties.

<TABLE>
<CAPTION>
                           Principal                                     Principal
                           Balance At    Stated                           Balance
                          December 31,  Interest    Period   Maturity      Due At
Property                      1999        Rate    Amortized    Date     Maturity (3)
                         (in thousands)                                (in thousands)
<S>                         <C>         <C>         <C>    <C>            <C>
Parktown Townhouses
  1st mortgage              $ 2,908       7.60%      (1)     11/15/02     $ 2,552
  2nd mortgage                  109       7.60%      (2)     11/15/02         109

Raintree Apartments
  1st mortgage                1,290       7.60%      (1)     11/15/02       1,133
  2nd mortgage                   48       7.60%      (2)     11/15/02          48

Signal Pointe Apartments
  1st mortgage                3,854       7.60%      (1)     11/15/02       3,383
  2nd mortgage                  145       7.60%      (2)     11/15/02         145
                              8,354                                       $ 7,370
Less unamortized
  mortgage discounts           (252)

         Total              $ 8,102
</TABLE>

(1)  The  principal  balance is being  amortized  over 257 months with a balloon
     payment due November 15, 2002.

(2)  Payments are interest only.

(3)  See "Item 7. Financial Statements - Note C" for information with respect to
     the  Registrant's  ability to prepay these loans and other specific details
     about the loans.

The  Partnership   exercised  interest  rate  buy-down  options  for  the  three
properties  when the debt was refinanced in 1992,  reducing the stated rate from
8.76%  to  7.60%.   The  fee  for  the  interest  rate  reduction   amounted  to
approximately  $700,000  and is being  amortized  as a loan  discount  using the
effective  interest method over the life of the loans. The discount is reflected
as a reduction of the mortgage notes payable and increases the effective rate of
the debt to 8.76%.

Rental Rates and Occupancy:

Average  annual  rental rates per unit and  occupancy for 1999 and 1998 for each
property:

                                     Average Annual                 Average
                                      Rental Rate                  Occupancy
                                       (per unit)

 Properties                       1999            1998         1999         1998

 Parktown Townhouses             $8,487         $8,163          94%          95%
 Raintree Apartments              5,828          5,751          96%          94%
 Signal Pointe Apartments         6,926          6,518          95%          96%

As noted under "Item 1.  Description of Business",  the real estate  industry is
highly  competitive.  All of the  properties of the  Partnership  are subject to
competition  from  other  residential  apartment  complexes  in  the  area.  The
Corporate  General  Partner  believes that all of the  properties are adequately
insured.  Each  property is an  apartment  complex  which leases units for lease
terms of one year or  less.  No  residential  tenant  leases  10% or more of the
available  rental space.  All of the properties are in good physical  condition,
subject to normal  depreciation  and  deterioration  as is typical for assets of
this type and age.

Real Estate Taxes and Rates:

Real estate taxes and rates in 1999 for each property were:

                                                1999            1999
                                               Billing          Rate
                                           (in thousands)

       Parktown Townhouses                      $192            3.13%
       Raintree Apartments                        75            2.35%
       Signal Pointe Apartments                  165            1.79%



<PAGE>


Capital Improvements:

Parktown Townhouses

As of December 31, 1999, the Partnership has completed approximately $797,000 in
capital  improvements   consisting  primarily  of  structural  and  parking  lot
improvements,   electrical   upgrades,   roof  replacement,   landscaping,   air
conditioning  unit  replacement,   and  carpet  and  vinyl  replacement.   These
improvements  were funded from the Partnership's  reserves,  operating cash flow
and insurance  proceeds.  The  Partnership  is currently  evaluating the capital
improvement  needs of the property for the upcoming  year. The minimum amount to
be budgeted is expected to be $300 per unit or $92,700.  Additional improvements
may be considered  and will depend on the physical  condition of the property as
well  as  replacement  reserves  and  anticipated  cash  flow  generated  by the
property.

Raintree Apartments

As of December 31, 1999, the Partnership has completed approximately $305,000 in
capital improvements consisting primarily of carpet and vinyl replacement,  roof
replacement,  and exterior  painting.  These  improvements  were funded from the
Partnership's  reserves.  The  Partnership  is currently  evaluating the capital
improvement  needs of the property for the upcoming  year. The minimum amount to
be budgeted is expected to be $300 per unit or $52,800.  Additional improvements
may be considered  and will depend on the physical  condition of the property as
well  as  replacement  reserves  and  anticipated  cash  flow  generated  by the
property.

Signal Pointe Apartments

As of December 31, 1999, the Partnership has completed approximately $656,000 in
capital  improvements  consisting  primarily of  structural  upgrades,  exterior
building  enhancements,  electrical upgrades, air conditioning unit replacement,
major landscaping,  fencing,  recreation facility improvements,  appliances, and
carpet  and  vinyl  replacements.   These  improvements  were  funded  from  the
Partnership's  reserves and operating  cash flow.  The  Partnership is currently
evaluating the capital  improvement needs of the property for the upcoming year.
The minimum  amount to be budgeted is expected to be $300 per unit or  $110,400.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition of the property as well as replacement  reserves and anticipated  cash
flow generated by the property.

The additional  capital  expenditures will be incurred only if cash is available
from  operations  and  Partnership  reserves.  To the extent that such  budgeted
capital improvements are completed, the Registrant's distributable cash flow, if
any, may be adversely affected at least in the short term.

Item 3.     Legal Proceedings:

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial  Group,  Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs  named as defendants,  among others,
the Partnership,  the Corporate  General Partner and several of their affiliated
partnerships  and corporate  entities.  The action  purports to assert claims on
behalf of a class of limited  partners and derivatively on behalf of a number of
limited  partnerships  (including  the  Partnership)  which are named as nominal
defendants,  challenging  the  acquisition  by Insignia  Financial  Group,  Inc.
("Insignia")  and  entities  which  were,  at one time,  affiliates  of Insignia
("Insignia  Affiliates") of interests in certain general partner entities,  past
tender offers by Insignia  Affiliates to acquire limited  partnership units, the
management of partnerships  by Insignia  Affiliates and the Insignia Merger (see
"Item 7. Financial  Statements,  Note B - Transfer of Control").  The plaintiffs
seek monetary damages and equitable relief,  including  judicial  dissolution of
the Partnership.  On June 25, 1998, the Corporate General Partner filed a motion
seeking  dismissal  of the action.  In lieu of  responding  to the  motion,  the
plaintiffs have filed an amended complaint.  The Corporate General Partner filed
demurrers to the amended  complaint which were heard February 1999.  Pending the
ruling on such  demurrers,  settlement  negotiations  commenced.  On November 2,
1999,  the parties  executed and filed a  Stipulation  of  Settlement,  settling
claims,  subject to final court  approval,  on behalf of the Partnership and all
limited partners who own units as of November 3, 1999.  Preliminary  approval of
the  settlement  was obtained on November 3, 1999 from the Superior Court of the
State of  California,  County of San Mateo,  at which time the Court set a final
approval  hearing for December 10, 1999.  Prior to the December 10, 1999 hearing
the Court received various  objections to the settlement,  including a challenge
to the Court's preliminary  approval based upon the alleged lack of authority of
class  plaintiffs'  counsel to enter the  settlement.  On December 14, 1999, the
Corporate General Partner and its affiliates terminated the proposed settlement.
Certain  plaintiffs  have filed a motion to disqualify  some of the  plaintiffs'
counsel in the action.  The Corporate  General  Partner does not anticipate that
costs  associated with this case will be material to the  Partnership's  overall
operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.

Item 4.     Submission of Matters to a Vote of Security Holders:

During the quarter ended December 31, 1999, no matter was submitted to a vote of
Unit holders through the solicitation of proxies or otherwise.


<PAGE>


                                     PART II

Item 5.     Market for the Partnership Equity and Related Partner Matters:

The Partnership,  a publicly-held  limited partnership,  offered and sold 27,400
limited partnership units aggregating $27,400,000.  An additional 100 units were
purchased by the Corporate General Partner. The Partnership  currently has 1,027
holders  of  record  owning an  aggregate  of 27,500  Units.  Affiliates  of the
Corporate General Partner owned 16,429 units or 59.742% at December 31, 1999. No
public  trading  market has developed for the Units,  and it is not  anticipated
that such a market will develop in the future.

The following table sets forth the distributions made by the Partnership for the
years ended December 31, 1998 and 1999. See "Item 6. Management's Discussion and
Analysis  or Plan of  Operations"  for  information  on split  of  distributions
between general and limited partners.

                                                   Distributions
                                                               Per Limited
                                        Aggregate           Partnership Unit
                                     (in thousands)

       01/01/98 - 12/31/98              $2,686 (1)               $96.69
       01/01/99 - 12/31/99               $ 300 (2)               $10.80

(1)   Consists of $2,330,000 of cash from  operations  and $356,000 of cash from
      previously   undistributed   surplus   funds  from   previous   sales  and
      refinancings.

(2)   Distribution was made from cash from operations.

Future cash  distributions  will depend on the levels of net cash generated from
operations, the availability of cash reserves and the timing of debt maturities,
refinancings,  and/or property sales. The Partnership's  distribution  policy is
reviewed on a semi-annual  basis. There can be no assurance,  however,  that the
Partnership  will  generate  sufficient  funds from  operations  after  required
capital expenditures to permit distributions to its partners in the year 2000 or
subsequent   periods.   See  "Item  2.   Description  of  Properties  -  Capital
Improvements" for information  relating to anticipated  capital  expenditures at
the  properties.  Distributions  may be restricted by the requirement to deposit
net operating  income (as defined in the mortgage note) into the reserve account
until the reserve  account is funded in an amount equal to a minimum of $400 and
a maximum of $1,000 per apartment unit for each respective  property for a total
of approximately  $341,000 to $853,000. The reserve accounts are currently fully
funded.

Several tender offers were made by various parties,  including affiliates of the
general partners, during the calendar years ended December 31, 1999 and 1998. As
a result of these tender offers,  AIMCO and its affiliates  currently own 16,429
limited  partnership  units  in  the  Partnership  representing  59.742%  of the
outstanding  units. It is possible that AIMCO or its affiliates will make one or
more additional offers to acquire  additional limited  partnership  interests in
the Partnership  for cash or in exchange for units in the operating  partnership
of AIMCO. Consequently, AIMCO is in a position to influence all voting decisions
with respect to the  Registrant.  Under the Partnership  Agreement,  unitholders
holding a majority of the Units are  entitled  to take action with  respect to a
variety of matters.  When voting on matters,  AIMCO would in all likelihood vote
the Units it acquired in a manner  favorable  to the  interest of the  Corporate
General Partner because of their affiliation with the Corporate General Partner.

Item 6.     Management's Discussion and Analysis or Plan of Operation:

The  matters  discussed  in this Form  10-KSB  contain  certain  forward-looking
statements  and  involve  risks and  uncertainties  (including  changing  market
conditions, competitive and regulatory matters, etc.) detailed in the disclosure
contained  in this Form 10-KSB and the other  filings  with the  Securities  and
Exchange  Commission made by the Registrant from time to time. The discussion of
the Registrant's business and results of operations,  including  forward-looking
statements  pertaining to such matter, does not take into account the effects of
any changes to the Registrant's business and results of operation.  Accordingly,
actual   results   could  differ   materially   from  those   projected  in  the
forward-looking  statements as a result of a number of factors,  including those
identified herein.

This item should be read in conjunction with the financial  statements and other
items contained elsewhere in this report.

Results of Operations

The  Partnership  realized net income for the year ended  December 31, 1999,  of
approximately  $1,140,000 compared to approximately  $838,000 for the year ended
December  31,  1998.   (See  "Note  D"  of  the  financial   statements   for  a
reconciliation of these amounts to the Registrant's federal taxable income.) The
increase in net income was due to an increase in total  revenues  and a decrease
in total  expenses.  Total  revenues  increased  due to increased  rental income
partially  offset  by a  decrease  in  other  income.  Rental  income  increased
primarily due to increased  average annual rental rates at all the Partnership's
properties and increased occupancy at Raintree Apartments.  Partially offsetting
the  increases in rental  income was a slight  decrease in occupancy at Parktown
Townhouses and Signal Pointe Apartments. Other income decreased primarily due to
reduced  interest  income due to lower cash  balances  held in interest  bearing
accounts.

Total  expenses  decreased for the year ended December 31, 1999 primarily due to
decreased  operating  expenses and  depreciation  expense,  partially  offset by
increased  general and  administrative  expense.  Operating  expenses  decreased
primarily due to decreased  courtesy  patrol during 1999 at Parktown  Townhouses
and decreased  contract  services  during 1999 at Signal Pointe  Apartments.  In
addition, insurance expense at all of the Partnership's properties decreased due
to a change in insurance  carriers late in 1998.  Offsetting these decreases was
the  recognition of a casualty gain during the year ended December 31, 1999. The
gain resulted from foundation and sewer  impairments  that involved one building
with four units and a fire that damaged four units at Parktown Townhouses.

Depreciation  expense decreased due to certain assets becoming fully depreciated
at Parktown Townhouses during 1998. General and administrative expense increased
primarily  due  to an  increase  in  professional  fees.  These  increases  were
partially  offset by  reduced  management  reimbursements  and  appraisal  fees.
Included in general and  administrative  expenses at both  December 31, 1999 and
1998, are  reimbursements  to the Corporate  General  Partner  allowed under the
Partnership  Agreement.  In addition,  costs  associated  with the quarterly and
annual  communications  with  investors and  regulatory  agencies and the annual
audit required by the Partnership Agreement are also included.

Effective  January 1, 1999, the Partnership  changed its method of accounting to
capitalize the cost of exterior  painting and major landscaping on a prospective
basis.  The  Partnership  believes  that  this  accounting  principle  change is
preferable  because it provides a better  matching of expenses  with the related
benefit of the expenditures and it is consistent with industry  practice and the
policies of the Corporate General Partner.  The effect of the change in 1999 was
to increase income by  approximately  $331,000  ($11.92 per limited  partnership
unit). The cumulative effect, had this change been applied to prior periods,  is
not material.  The accounting  principle  change will not have an effect on cash
flow, funds available for distribution or fees payable to the Corporate  General
Partner and affiliates.

As part of the ongoing  business plan of the Registrant,  the Corporate  General
Partner  monitors  the  rental  market  environment  of each  of its  investment
properties  to assess  the  feasibility  of  increasing  rents,  maintaining  or
increasing  occupancy  levels and protecting the  Partnership  from increases in
expenses.  As part of this plan,  the  Corporate  General  Partner  attempts  to
protect  the  Partnership  from the  burden of  inflation-related  increases  in
expenses by increasing  rents and  maintaining a high overall  occupancy  level.
However,  due to  changing  market  conditions,  which can  result in the use of
rental  concessions and rental reductions to offset softening market conditions,
there is no guarantee that the Corporate General Partner will be able to sustain
such a plan.

Liquidity and Capital Resources

At  December  31,  1999,  the  Partnership  had  cash and  cash  equivalents  of
approximately  $1,327,000  compared to  approximately  $576,000 at December  31,
1998.  Cash and  cash  equivalents  increased  approximately  $751,000  from the
Partnership's  previous  year ended  December 31,  1998.  The increase is due to
approximately  $2,342,000  of cash  provided by operating  activities  which was
partially offset by approximately  $991,000 of cash used in investing activities
and approximately  $600,000 of cash used in financing  activities.  Cash used in
investing  activities  consisted  of  property  improvements  and  replacements,
partially  offset by net  withdrawals  from escrow  accounts  maintained  by the
mortgage  lender  and  insurance  proceeds  received.  Cash  used  in  financing
activities consisted of payments of principal made on the mortgages  encumbering
the Registrant's properties and distributions paid to the partners.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the  properties  to  adequately  maintain the physical
assets and other  operating  needs of the Registrant and to comply with Federal,
state, and local legal and regulatory requirements. The Partnership is currently
evaluating the capital  improvement needs of the property for the upcoming year.
The minimum  amount to be budgeted is expected to be $300 per unit or  $255,900.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition of the property as well as replacement  reserves and anticipated  cash
flow  generated  by the  property.  To the  extent  that such  budgeted  capital
improvements are completed,  the Registrant's  distributable  cash flow, if any,
may be adversely affected at least in the short term.

The  Registrant's  current assets are thought to be sufficient for any near term
needs  (exclusive  of capital  improvements)  of the  Registrant.  The  mortgage
indebtedness of approximately $8,102,000, net of discount, is amortized over 257
months  with  required  balloon  payments  of  approximately  $7,370,000  due on
November 15, 2002. The Corporate  General Partner will attempt to refinance such
indebtedness  and/or sell the  properties  prior to such  maturity  date. If the
properties cannot be refinanced or sold for a sufficient  amount, the Registrant
may risk losing such properties through foreclosure.

During the year ended December 31, 1999, the Partnership paid cash distributions
from operations of approximately $300,000 (approximately $297,000 to the limited
partners or $10.80 per limited partnership unit.) During the year ended December
31,  1998,  the  Partnership  paid  cash  distributions  totaling  approximately
$2,686,000  (approximately  $2,659,000  to the  limited  partners  or $96.69 per
limited partnership unit). These distributions consisted of cash from operations
of approximately $2,330,000 (approximately $2,307,000 to the limited partners or
$83.89 per limited partnership unit) and previously  undistributed proceeds from
sales  and   refinancings   in   previous   years  of   approximately   $356,000
(approximately   $352,000  to  the  limited   partners  or  $12.80  per  limited
partnership  unit).  Future cash  distributions will depend on the levels of net
cash generated  from  operations,  the  availability  of cash reserves,  and the
timing of debt maturities, refinancings, and/or property sales. The Registrant's
distribution  policy is reviewed on a semi-annual  basis.  Distributions  may be
restricted by the requirement to deposit net operating income (as defined in the
mortgage note) into the reserve  account until the reserve  account is funded in
an amount equal to a minimum of $400 and a maximum of $1,000 per apartment  unit
for each respective property for a total of approximately  $341,000 to $853,000.
There  can  be  no  assurance,  however,  that  the  Partnership  will  generate
sufficient funds from operations  after required capital  expenditures to permit
any distributions to its partners in the year 2000 or subsequent periods.

Several tender offers were made by various parties,  including affiliates of the
general partners, during the calendar years ended December 31, 1999 and 1998. As
a result of these tender offers,  AIMCO and its affiliates  currently own 16,429
units of limited  partnership units in the Partnership  representing  59.742% of
the outstanding units. It is possible that AIMCO or its affiliates will make one
or more additional offers to acquire additional limited partnership interests in
the Partnership  for cash or in exchange for units in the operating  partnership
of AIMCO. Consequently, AIMCO is in a position to influence all voting decisions
with respect to the  Registrant.  Under the Partnership  Agreement,  unitholders
holding a majority of the Units are  entitled  to take action with  respect to a
variety of matters.  When voting on matters,  AIMCO would in all likelihood vote
the Units it acquired in a manner  favorable  to the  interest of the  Corporate
General Partner because of their affiliation with the Corporate General Partner.

Year 2000 Compliance

General Description

The Year 2000 issue is the result of computer  programs  being written using two
digits rather than four digits to define the applicable year. The Partnership is
dependent upon the Corporate  General  Partner and its affiliates for management
and  administrative  services  ("Managing  Agent").  Any of the Managing Agent's
computer programs or hardware that had date-sensitive software or embedded chips
might have  recognized  a date using "00" as the year 1900  rather than the year
2000.  This could have resulted in a system failure or  miscalculations  causing
disruptions of operations,  including, among other things, a temporary inability
to process  transactions,  send invoices,  or engage in similar normal  business
activities.

Computer Hardware, Software and Operating Equipment

In 1999,  the Managing  Agent  completed  all phases of its Year 2000 program by
completing  the  replacement  and repair of any  hardware or software  system or
operating  equipment that was not yet Year 2000 compliant.  The Managing Agent's
hardware  and software  systems and its  operating  equipment  are now Year 2000
compliant.  No  material  failure or  erroneous  results  have  occurred  in the
Managing Agent's computer  applications  related to the failure to reference the
Year 2000 to date.

Third Parties

To  date,  the  Managing  Agent  is not  aware of any  significant  supplier  or
subcontractor  (external agent) or financial institution of the Partnership that
has a Year 2000 issue that  would  have a material  impact on the  Partnership's
results of operations,  liquidity or capital  resources.  However,  the Managing
Agent  has no means of  ensuring  or  determining  the Year 2000  compliance  of
external  agents.  At this time, the Managing Agent does not believe that a Year
2000 issue of any  non-compliant  external agent will have a material  impact on
the Partnership's financial position or results of operations.

Costs

The total cost of the Managing Agent's Year 2000 project was approximately  $3.2
million and was funded from operating cash flows.

Risks Associated with the Year 2000

The Managing  Agent  completed all necessary  phases of its Year 2000 program in
1999,  and did not  experience  system or  equipment  malfunctions  related to a
failure to reference the Year 2000. The Managing  Agent or  Partnership  has not
been  materially  adversely  affected by  disruptions  in the economy  generally
resulting from the Year 2000 issue.

At this  time,  the  Managing  Agent  does not  believe  that the  Partnership's
businesses,  results of  operations  or financial  condition  will be materially
adversely affected by the Year 2000 issue.

Contingency Plans Associated with the Year 2000

The  Managing  Agent has not had to implement  contingency  plans such as manual
workarounds or selecting new relationships for its banking or elevator operation
activities in order to avoid the Year 2000 issue.


<PAGE>


Item 7.     Financial Statements:

SHELTER PROPERTIES II

LIST OF FINANCIAL STATEMENTS

      Report of Ernst & Young, LLP Independent Auditors

      Balance Sheet - December 31, 1999

      Statements of Operations - Years ended December 31, 1999 and 1998

      Statements  of  Changes  in  Partners'  (Deficit)  Capital  - Years  ended
      December 31, 1999 and 1998

      Statements of Cash Flows - Years ended December 31, 1999 and 1998

      Notes to Financial Statements


<PAGE>


                Report of Ernst & Young LLP, Independent Auditors

The Partners
Shelter Properties II

We have audited the  accompanying  balance sheet of Shelter  Properties II as of
December  31,  1999,  and the  related  statements  of  operations,  changes  in
partners'  (deficit)  capital  and cash  flows  for each of the two years in the
period  ended   December  31,  1999.   These   financial   statements   are  the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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  Partnership's  management,  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 Shelter  Properties  II at
December 31, 1999, and the results of its operations and its cash flows for each
of the two years in the period  ended  December  31, 1999,  in  conformity  with
accounting principles generally accepted in the United States.

As discussed in Note I to the financial statements,  the Partnership changed its
method of  accounting  to  capitalize  the cost of exterior  painting  and major
landscaping effective January 1, 1999.

                                                            /s/ERNST & YOUNG LLP

Greenville, South Carolina
February 24, 2000


<PAGE>




                              SHELTER PROPERTIES II

                                  BALANCE SHEET
                        (in thousands, except unit data)

                                December 31, 1999

Assets

   Cash and cash equivalents                                            $ 1,327
   Receivables and deposits                                                 369
   Restricted escrows                                                       385
   Other assets                                                             172
   Investment properties (Notes C & F):
      Land                                                 $ 1,814
      Buildings and related personal property               25,132
                                                            26,946

      Less accumulated depreciation                        (17,884)       9,062
                                                                        $11,315

Liabilities and Partners' (Deficit) Capital
Liabilities
      Accounts payable                                                    $ 243
      Tenant security deposit liabilities                                   150
      Accrued property taxes                                                195
      Other liabilities                                                     442
      Mortgage notes payable (Note C)                                     8,102

Partners' (Deficit) Capital
   General partners                                        $ (127)
   Limited partners (27,500 units issued and
      outstanding)                                          2,310         2,183
                                                                        $11,315

                     See Accompanying Notes to Financial Statements


<PAGE>


                              SHELTER PROPERTIES II

                            STATEMENTS OF OPERATIONS

                        (in thousands, except unit data)



                                                        Years Ended December 31,
                                                           1999          1998
Revenues:
   Rental income                                         $ 5,785       $ 5,545
   Other income                                              259           313
      Total revenues                                       6,044         5,858

Expenses:
   Operating                                               2,515         2,618
   General and administrative                                233           196
   Depreciation                                              954         1,010
   Interest                                                  772           778
   Property taxes                                            430           418
      Total expenses                                       4,904         5,020

Net income (Note D)                                      $ 1,140       $   838

Net income allocated to general partners (1%)            $    11       $     8

Net income allocated to limited partners (99%)             1,129           830
                                                         $ 1,140       $   838

Net income per limited partnership unit                  $ 41.05       $ 30.18

Distributions per limited partnership unit               $ 10.80       $ 96.69


                     See Accompanying Notes to Financial Statements


<PAGE>


                              SHELTER PROPERTIES II

              STATEMENTS OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
                        (in thousands, except unit data)


<TABLE>
<CAPTION>

                                        Limited
                                       Partnership    General     Limited
                                          Units       Partners   Partners     Total

<S>                                       <C>           <C>       <C>        <C>
Original capital contributions            27,500        $ 2       $27,500    $27,502

Partners' (deficit) capital at
  December 31, 1997                       27,500       $ (116)    $ 3,307    $ 3,191

Distribution to partners                      --          (27)     (2,659)    (2,686)

Net income for the year ended
  December 31, 1998                           --            8         830        838

Partners' (deficit) capital at
  December 31, 1998                       27,500         (135)      1,478      1,343

Distribution to partners                      --           (3)       (297)      (300)

Net income for the year ended
  December 31, 1999                           --           11       1,129      1,140

Partners' (deficit) capital at
  December 31, 1999                       27,500       $ (127)    $ 2,310    $ 2,183
</TABLE>


                     See Accompanying Notes to Financial Statements


<PAGE>




                              SHELTER PROPERTIES II

                            STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>

                                                             Years Ended December 31,
                                                                 1999         1998
Cash flows from operating activities:

<S>                                                             <C>           <C>
  Net income                                                    $ 1,140       $ 838
  Adjustments to reconcile net income to net
   cash provided by operating activities:
      Depreciation                                                  954        1,010
      Amortization of discounts and loan costs                      100          109
      Casualty gain                                                 (59)          --
      Change in accounts:
        Receivables and deposits                                    (35)          24
        Other assets                                                (40)          19
        Accounts payable                                             84           54
        Tenant security deposit liabilities                          16            4
        Accrued property taxes                                      (41)          57
        Other liabilities                                           223          (13)

          Net cash provided by operating activities               2,342        2,102

Cash flows from investing activities:

  Property improvements and replacements                         (1,703)        (512)
  Net withdrawals from (deposits to) restricted escrows             599          (43)
  Insurance proceeds received                                       113           --

          Net cash used in investing activities                    (991)        (555)

Cash flows from financing activities:

  Payments on mortgage notes payable                               (300)        (278)
  Distributions to partners                                        (300)      (2,686)

          Net cash used in financing activities                    (600)      (2,964)

Net increase (decrease) in cash and cash equivalents                751       (1,417)

Cash and cash equivalents at beginning of period                    576        1,993

Cash and cash equivalents at end of period                      $ 1,327        $ 576

Supplemental disclosure of cash flow information:

  Cash paid for interest                                         $ 647         $ 669

Supplemental disclosure of non-cash activity:
  Property improvements and replacements in accounts
   payable                                                       $ 55          $ --
</TABLE>


                     See Accompanying Notes to Financial Statements


<PAGE>




                              SHELTER PROPERTIES II

                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 1999

Note A - Organization and Significant Accounting Policies

Organization:  Shelter  Properties II (the  "Partnership" or  "Registrant")  was
organized as a limited partnership under the laws of the State of South Carolina
on October 10, 1980.  The general  partner  responsible  for  management  of the
Partnership's  business  is  Shelter  Realty II  Corporation,  a South  Carolina
corporation (the "Corporate General Partner"). The only other general partner of
the  Partnership  was N. Barton  Tuck,  Jr. Mr. Tuck was not an affiliate of the
Corporate  General Partner and was effectively  prohibited by the  Partnership's
partnership  agreement (the "Partnership  Agreement") from  participating in the
management of the  Partnership.  In June 1999,  Mr. Tuck's  general  partnership
interest in the Registrant was purchased by AIMCO Properties, L.P., an affiliate
of the Corporate General Partner.  The Corporate General Partner is a subsidiary
of Apartment Investment and Management Company ("AIMCO") (see "Note B - Transfer
of Control").  The directors and officers of the Corporate  General Partner also
serve as executive  officers of AIMCO. The Partnership  Agreement  provides that
the Partnership is to terminate on December 31, 2020 unless  terminated prior to
such date. The Partnership  commenced operations on March 1, 1981, and completed
its  acquisition  of  apartment  properties  on June 30, 1981.  The  Partnership
operates three apartment properties located in the South and Southeast.

Use of Estimates:  The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Allocation of Cash  Distributions:  Cash  distributions  by the  Partnership are
allocated between general and limited partners in accordance with the provisions
of the Partnership  Agreement.  The Partnership Agreement provides that net cash
from operations  means revenue received less operating  expenses paid,  adjusted
for certain  specified items which primarily  include mortgage payments on debt,
property improvements and replacements not previously reserved,  and the effects
of other  adjustments to reserves  including reserve amounts deemed necessary by
the  Corporate  General  Partner.  In  the  following  notes  to  the  financial
statements,  whenever  "net cash  provided by  operations"  is used,  it has the
aforementioned meaning. The following is a reconciliation of the subtotal on the
accompanying  statements of cash flows captioned "net cash provided by operating
activities"  to "net  cash  from  operations",  as  defined  in the  Partnership
Agreement.  However,  "net cash from  operations"  should not be  considered  an
alternative  to  net  income  as an  indicator  of the  Partnership's  operating
performance or to cash flows as a measure of liquidity.

                                                        Years Ended December 31,
                                                            1999          1998
                                                             (in thousands)
Net cash provided by operating activities                 $ 2,342       $ 2,102
   Property improvements and replacements                  (1,758)         (512)
   Payments on mortgage notes payable                        (300)         (278)
   Changes in reserves for net operating liabilities         (207)         (145)
   Changes in restricted escrows, net                         599           (43)
   Additional operating reserves                             (676)       (1,124)

      Net cash from operations                              $ --          $ --

In 1999 and 1998, the Corporate  General  Partner  believed it to be in the best
interest of the  Partnership to reserve an additional  $676,000 and  $1,124,000,
respectively,  to fund  continuing  capital  improvement  needs in order for the
properties to remain competitive.

During the year ended December 31, 1999, the Partnership paid cash distributions
of  approximately  $300,000  (approximately  $297,000 to the limited partners or
$10.80 per limited  partnership  unit.) During the year ended December 31, 1998,
the  Partnership  paid  cash  distributions  totaling  approximately  $2,686,000
(approximately  $2,659,000  to  the  limited  partners  or  $96.69  per  limited
partnership unit). The 1998  distributions  consisted of cash from operations of
approximately  $2,330,000  (approximately  $2,307,000 to the limited partners or
$83.89 per limited partnership unit) and previously  undistributed proceeds from
sales  and   refinancings   in   previous   years  of   approximately   $356,000
(approximately   $352,000  to  the  limited   partners  or  $12.80  per  limited
partnership unit).

The Partnership  Agreement  provides that 99% of  distributions of net cash from
operations  are  allocated to the limited  partners  until they receive net cash
from  operations  for such  fiscal  year equal to 7% of their  adjusted  capital
values (as  defined in the  Partnership  Agreement),  at which point the general
partners will be allocated all net cash from operations until they have received
distributions equal to 10% of the aggregate net cash from operations distributed
to partners  for such fiscal  year.  Thereafter,  the general  partners  will be
allocated 10% of any  distributions  of remaining net cash from  operations  for
such fiscal year.

All  distributions of distributable  net proceeds (as defined in the Partnership
Agreement) from property  dispositions and refinancings will be allocated to the
limited  partners  until each limited  partner has received an amount equal to a
cumulative 7% per annum of the average of the limited partners' adjusted capital
value,   less  any  prior   distributions   of  net  cash  from  operations  and
distributable net proceeds, and has also received an amount equal to the limited
partners' adjusted capital value. Thereafter, the general partners receive 1% of
the selling prices of properties sold where they acted as a broker, and then the
limited  partners  will  be  allocated  85% of any  remaining  distributions  of
distributable net proceeds and the general partners will receive 15%.

Distributions  may be  restricted  by the  requirement  to deposit net operating
income (as  defined in the  mortgage  note) into the reserve  account  until the
reserve  account is funded in an amount equal to a minimum of $400 and a maximum
of  $1,000  per  apartment  unit for  each  respective  property  for a total of
approximately $341,000 to $853,000. As of December 31, 1999, the Partnership has
deposits of approximately $362,000 in its reserve account.

Allocation  of Profits,  Gains and  Losses:  Profits,  gains,  and losses of the
Partnership  are allocated  between  general and limited  partners in accordance
with the provisions of the Partnership Agreement.

Profits, not including gain from property dispositions, are allocated as if they
were distributions of net cash from operations.

Any gain from property  dispositions  attributable to the excess, if any, of the
indebtedness relating to a property immediately prior to the disposition of such
property  over  the  Partnership's  adjusted  basis  in the  property  shall  be
allocated to each partner  having a negative  capital  account  balance,  to the
extent of such negative  balance.  The balance of any gain shall be treated on a
cumulative basis as if it constituted an equivalent  amount of distributable net
proceeds  and shall be  allocated  to the  general  partners  to the extent that
general  partners would have received  distributable  net proceeds in connection
therewith; the balance shall be allocated to the limited partners.  However, the
interest  of the general  partners  will be equal to at least 1% of each gain at
all times during the existence of the Partnership.

All  losses,  including  losses  attributable  to  property  dispositions,   are
allocated  99%  to  the  limited  partners  and  1%  to  the  general  partners.
Accordingly,  net income as shown in the statements of operations and changes in
partners'  (deficit) capital for 1999 and 1998 were allocated 99% to the limited
partners and 1% to the general partners. Net income per limited partnership unit
for 1999 and 1998 was  computed as 99% of net income  divided by 27,500  average
units outstanding.

Fair Value of Financial Instruments: Statement of Financial Accounting Standards
("SFAS") No. 107,  "Disclosures about Fair Value of Financial  Instruments",  as
amended by SFAS No. 119, "Disclosures about Derivative Financial Instruments and
Fair  Value  of  Financial  Instruments",  requires  disclosure  of  fair  value
information  about  financial  instruments,  whether  or not  recognized  in the
balance sheet, for which it is practicable to estimate fair value. Fair value is
defined in the SFAS as the amount at which the instruments could be exchanged in
a  current  transaction  between  willing  parties,  other  than in a forced  or
liquidation  sale.  The  Partnership  believes  that the carrying  amount of its
financial  instruments (except for long term debt) approximates their fair value
due to the short  term  maturity  of these  instruments.  The fair  value of the
Partnership's  long term debt, after  discounting the scheduled loan payments to
maturity, approximates its carrying balance.

Other Reserves:  The general  partners may designate a portion of cash generated
from operations as "other  reserves" in determining net cash used in operations.
Per the Partnership Agreement, the general partners designated as other reserves
an amount equal to the net  liabilities  related to the  operations of apartment
properties  during the current  fiscal year that are expected to require the use
of cash during the next fiscal year. The changes in other  reserves  during 1999
and 1998 were a decrease of approximately  $207,000 and $145,000,  respectively,
which  amounts  were  determined  by  considering  changes  in the  balances  of
receivables  and  deposits,  other assets,  accounts  payable,  tenant  security
deposits,  accrued  taxes,  and other  liabilities.  At this time, the Corporate
General  Partner  expects to continue to adjust other  reserves based on the net
change in the aforementioned account balances.

Cash and cash  equivalents:  Includes cash on hand and in banks and money market
accounts.  At certain  times,  the amount of cash deposited at a bank may exceed
the limit on insured deposits.

Reserve  Account:  A general  reserve  account was  established in 1992 with the
refinancing  proceeds for each mortgaged property.  These funds were established
to cover  necessary  repairs and  replacements  of existing  improvements,  debt
service,   out  of  pocket   expenses   incurred  for  ordinary  and   necessary
administrative tasks, and payment of real property taxes and insurance premiums.
The  Partnership is required to deposit net operating  income (as defined in the
mortgage note) from each refinanced  property to the respective  reserve account
until it equals a minimum  balance  of $400 and a maximum  balance of $1,000 per
apartment unit for each  respective  property.  The minimum  balance of $400 per
apartment  unit has currently  been attained;  however,  the maximum  balance of
$1,000 per  apartment  unit has not been  attained.  The balance at December 31,
1999, is approximately $362,000, which includes interest.

Escrows  for  Taxes:  Escrows  maintained  for the  payment  of taxes,  totaling
$196,000 at December 31, 1999, are included in receivables  and deposits and are
held by the Partnership.

Depreciation:  Depreciation  is  provided by the  straight-line  method over the
estimated lives of the apartment  properties and related personal property.  For
Federal income tax purposes,  the  accelerated  cost recovery method is used (1)
for real property over 15 years for additions  prior to March 16, 1984, 18 years
for  additions  after  March 15,  1984 and before May 9, 1985,  and 19 years for
additions  after May 8, 1985,  and before  January 1, 1987, and (2) for personal
property over 5 years for additions prior to January 1, 1987. As a result of the
Tax Reform Act of 1986,  for  additions  after  December 31, 1986,  the modified
accelerated  cost recovery method is used for  depreciation of (1) real property
additions over 27 1/2 years and (2) personal property additions over 5 years.

Effective  January 1, 1999, the Partnership  changed its method of accounting to
capitalize the costs of exterior painting and major landscaping (Note I).

Loan Costs: Loan costs of approximately $393,000, less accumulated  amortization
of approximately  $279,000, are included in other assets and are being amortized
on a straight-line basis over the life of the loans.

Tenant  Security  Deposits:  The  Partnership  requires  security  deposits from
lessees  for the  duration  of the  lease  and such  deposits  are  included  in
receivables  and  deposits.  Deposits  are  refunded  when the  tenant  vacates,
provided the tenant has not damaged the unit and is current on rental payments.

Leases: The Partnership  generally leases apartment units for twelve-month terms
or less. The Partnership recognizes income as earned on its leases. In addition,
the Corporate  General  Partner's policy is to offer rental  concessions  during
particularly  slow months or in response to heavy competition from other similar
complexes  in the  area.  Concessions  are  charged  against  rental  income  as
incurred.

Investment   Properties:   Investment  properties  consist  of  three  apartment
complexes and are stated at cost.  Acquisition fees are capitalized as a cost of
real estate. In accordance with SFAS No. 121,  "Accounting for the Impairment of
Long-Lived  Assets and for Long-Lived Assets to Be Disposed Of", the Partnership
records  impairment  losses on long-lived  assets used in operations when events
and   circumstances   indicate  that  the  assets  might  be  impaired  and  the
undiscounted  cash flows estimated to be generated by those assets are less than
the carrying  amounts of those assets.  Costs of apartment  properties that have
been  permanently  impaired  have  been  written  down to  appraised  value.  No
adjustments  for  impairment of value were recorded in the years ended  December
31, 1999 or 1998.

Segment Reporting: SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related  Information"  established  standards  for the way that public  business
enterprises  report  information  about operating  segments in annual  financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports.  It also establishes  standards
for related disclosures about products and services, geographic areas, and major
customers. (See "Note G" for required disclosure).

Advertising:  The  Partnership  expenses the costs of  advertising  as incurred.
Advertising expense,  included in operating expenses,  was approximately $63,000
and $66,000 for the years ended December 31, 1999 and 1998, respectively.

Note B - Transfer of Control

Pursuant  to a series  of  transactions  which  closed  on  October  1, 1998 and
February 26, 1999,  Insignia  Financial  Group,  Inc.  ("Insignia") and Insignia
Properties  Trust merged into AIMCO,  a publicly  traded real estate  investment
trust, with AIMCO being the surviving  corporation (the "Insignia Merger"). As a
result, AIMCO acquired 100% ownership interest in the Corporate General Partner.
The Corporate  General Partner does not believe that this transaction has had or
will have a material effect on the affairs and operations of the Partnership.

Note C - Mortgage Notes Payable

The principle terms of mortgage notes payable are as follows:
<TABLE>
<CAPTION>

                            Principal     Monthly                         Principal
                           Balance At     Payment    Stated                Balance
                          December 31,   Including  Interest  Maturity      Due At
                              1999       Interest     Rate      Date       Maturity
                               (in thousands)                           (in thousands)
Properties

Parktown Townhouses

<S>                          <C>           <C>       <C>      <C>           <C>
  1st mortgage               $ 2,908       $ 28      7.60%    11/15/02     $ 2,552
  2nd mortgage                   109          1      7.60%    11/15/02         109
Raintree Apartments

  1st mortgage                 1,290         12      7.60%    11/15/02       1,133
  2nd mortgage                    48         (a)     7.60%    11/15/02          48
Signal Pointe Apartments

  1st mortgage                 3,854         37      7.60%    11/15/02       3,383
  2nd mortgage                   145          1      7.60%    11/15/02         145
                               8,354       $ 79                            $ 7,370
Less unamortized present
  value discounts               (252)

          Total              $ 8,102
</TABLE>

(a)   Monthly interest only payments are less than $1,000.

The  Partnership   exercised  interest  rate  buy-down  options  for  the  three
properties  when the debt was refinanced in 1992,  reducing the stated rate from
8.76%  to  7.60%.   The  fee  for  the  interest  rate  reduction   amounted  to
approximately  $700,000  and is being  amortized  as a loan  discount  using the
effective  interest method over the life of the loans. The discount is reflected
as a reduction of the mortgage notes payable and increases the effective rate of
the debt to 8.76%.

The  mortgage  notes  payable are  nonrecourse  and are secured by pledge of the
respective  apartment  properties  and by pledge of revenues from the respective
apartment properties.  Prepayment penalties are incurred if the notes are repaid
prior to maturity.  Further,  the properties may not be sold subject to existing
indebtedness.

Scheduled  principal  payments  of the  mortgage  notes  payable  subsequent  to
December 31, 1999 are as follows (in thousands):

                               2000              $  323
                               2001                 349
                               2002               7,682
                                                $ 8,354

Note D - Income Taxes

The Partnership has received a ruling from the Internal  Revenue Service that it
will  be  classified  as  a  partnership   for  Federal   income  tax  purposes.
Accordingly,  no provision for income taxes is made in the financial  statements
of the Partnership. Taxable income or loss of the Partnership is reported in the
income tax returns of its partners.

The  following is a  reconciliation  of reported net income and Federal  taxable
income (dollar amounts in thousands, except per unit data):

                                                     1999         1998

Net income as reported                             $ 1,140       $  838
Add (deduct):
   Depreciation differences                            480          622
   Change in prepaid rental                             61           33
   Other                                               (70)          26

Federal taxable income                             $ 1,611      $ 1,519

Federal taxable income per limited
   partnership unit                                $ 57.98      $ 54.67


The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):

                  Net assets as reported                   $ 2,183
                     Buildings and land                      2,727
                     Accumulated depreciation               (5,369)
                     Syndication fees                        3,111
                     Other                                     366
                  Net assets - tax basis                   $ 3,018
                                                            ======

Note E - Transactions with Affiliated Parties

The  Partnership  has no employees  and is dependent  on the  Corporate  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership  activities.  The Partnership Agreement provides for (i) payments to
affiliates for services and (ii)  reimbursement of certain expenses  incurred by
affiliates on behalf of the Partnership.  Balances and other  transactions  with
affiliates of the  Corporate  General  Partner for the years ended  December 31,
1999 and 1998 are as follows:

                                                         1999       1998
                                                         (in thousands)
Property management fees (included in operating
  expenses)                                             $ 303      $ 290
Reimbursement for services of affiliates
  (included in operating expense, general and
  administrative expense, and investment
  properties)                                             163        120
Due to general partners                                    58         58


During the years ended  December 31, 1999 and 1998,  affiliates of the Corporate
General  Partner were  entitled to receive 5% of gross  receipts from all of the
Registrant's  properties  as  compensation  for  providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $303,000 and
$290,000 for the years ended December 31, 1999 and 1998, respectively.

Affiliates  of  the  Corporate   General  Partner   received   reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $163,000 and
$120,000 for the years ended December 31, 1999 and 1998, respectively, including
approximately  $54,000  and  $2,000,  respectively,  of  construction  oversight
reimbursements.

During 1983, a liability  of  approximately  $58,000 was incurred to the general
partners for sales commissions  earned.  Pursuant to the Partnership  Agreement,
this liability cannot be paid until certain levels of return are received by the
limited  partners.  As of December 31, 1999,  the level of return to the limited
partners has not been met.

On September 26, 1997, an affiliate of the Corporate  General Partner  purchased
Lehman Brothers' Class "D" subordinated bonds of SASCO 1992-M1.  These bonds are
secured  by 55  multi-family  apartment  mortgage  loan  pairs  held  in  Trust,
including Parktown Townhouses, Raintree Apartments, and Signal Pointe Apartments
owned by the Partnership.

Several tender offers were made by various parties,  including affiliates of the
general partners, during the calendar years ended December 31, 1999 and 1998. As
a result of these tender offers,  AIMCO and its affiliates  currently own 16,429
units of limited  partnership units in the Partnership  representing  59.742% of
the outstanding units. It is possible that AIMCO or its affiliates will make one
or more additional offers to acquire additional limited partnership interests in
the Partnership  for cash or in exchange for units in the operating  partnership
of AIMCO. Consequently, AIMCO is in a position to influence all voting decisions
with respect to the  Registrant.  Under the Partnership  Agreement,  unitholders
holding a majority of the Units are  entitled  to take action with  respect to a
variety of matters.  When voting on matters,  AIMCO would in all likelihood vote
the Units it acquired in a manner  favorable  to the  interest of the  Corporate
General Partner because of their affiliation with the Corporate General Partner.

Note F - Real Estate and Accumulated Depreciation
<TABLE>
<CAPTION>

                                                    Initial Cost
                                                   To Partnership
                                                   (in thousands)
                                                           Buildings      Net Costs
                                                          and Related    Capitalized
                                                            Personal    Subsequent to
Description                    Encumbrances       Land      Property     Acquisition
                              (in thousands)                            (in thousands)

<S>                              <C>            <C>         <C>            <C>
Parktown Townhouses              $ 3,017        $ 1,095     $ 5,329        $ 3,926
Raintree Apartments                1,338            184       3,184          1,066
Signal Pointe Apartments           3,999            535       8,062          3,565
          Totals                 $ 8,354        $ 1,814     $16,575        $ 8,557
</TABLE>

<TABLE>
<CAPTION>

                     Gross Amount At Which
                            Carried
                      At December 31, 1999
                         (in thousands)
                            Buildings
                               And
                             Related
                             Personal          Accumulated     Date of      Date      Depreciable
Description          Land   Properties Total  Depreciation   Construction  Acquired   Life-Years
                                             (in thousands)

Parktown
<S>                <C>       <C>       <C>       <C>            <C>        <C>   <C>     <C>
Townhouses         $ 1,095   $ 9,255   $10,350   $ 6,823        1969       03/01/81      5-35
Raintree
Apartments             184     4,250    4,434      2,981      1972-1974    04/30/81      5-38
Signal Pointe
  Apartments           535    11,627   12,162      8,080        1970       06/30/81      5-37

      Totals       $ 1,814   $25,132  $26,946    $17,884
</TABLE>


Reconciliation of "Real Estate and Accumulated Depreciation":

                                               Years Ended December 31,
                                                   1999         1998
                                                    (in thousands)
Investment Properties
Balance at beginning of year                      $25,318      $24,806
    Property improvements                           1,758          512
    Disposals of property                            (130)          --
Balance at end of year                            $26,946      $25,318

Accumulated Depreciation
Balance at beginning of year                      $17,006      $15,996
    Additions charged to expense                      954        1,010
    Disposals of property                             (76)          --
Balance at end of year                            $17,884      $17,006

The  aggregate  cost of the real  estate  for  Federal  income tax  purposes  at
December  31,  1999 and 1998,  is  approximately  $29,673,000  and  $28,166,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December 31, 1999 and 1998, is  approximately  $23,253,000  and  $22,779,000,
respectively.

Note G - Segment Reporting

The Partnership has one reportable segment:  residential properties,  consisting
of three  apartment  complexes  in  Texas,  South  Carolina,  and  Florida.  The
Partnership rents apartment units to tenants for terms that are typically twelve
months or less.

The  Partnership  evaluates  performance  based on segment  profit (loss) before
depreciation.  The accounting policies of the reportable segment are the same as
those described in the summary of significant accounting policies.

The  Partnership's  reportable  segment  consists of investment  properties that
offer similar products and services.  Although each of the investment properties
is  managed  separately,  they have been  aggregated  into one  segment  as they
provide services with similar types of products and customers.

Segment information for the years 1999 and 1998 is shown in the tables below (in
thousands). The "Other" column includes Partnership administration related items
and income and expense not allocated to the reportable segment.

                 1999                    Residential     Other      Totals

Rental income                              $ 5,785       $ --       $ 5,785
Other income                                   250            9         259
Interest expense                               772           --         772
Depreciation                                   954           --         954
General and administrative expense              --          233         233
Segment profit (loss)                        1,364         (224)      1,140
Total assets                                11,183          132      11,315
Capital expenditures for investment
  properties                                 1,758           --       1,758


                 1998                    Residential     Other      Totals

Rental income                              $ 5,545       $ --       $ 5,545
Other income                                   242           71         313
Interest expense                               778           --         778
Depreciation                                 1,010           --       1,010
General and administrative expense              --          196         196
Segment profit (loss)                          963         (125)        838
Total assets                                10,060          317      10,377
Capital expenditures for investment
  properties                                   512           --         512


Note H - Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial  Group,  Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs  named as defendants,  among others,
the Partnership,  the Corporate  General Partner and several of their affiliated
partnerships  and corporate  entities.  The action  purports to assert claims on
behalf of a class of limited  partners and derivatively on behalf of a number of
limited  partnerships  (including  the  Partnership)  which are named as nominal
defendants,  challenging  the  acquisition  by Insignia  Financial  Group,  Inc.
("Insignia")  and  entities  which  were,  at one time,  affiliates  of Insignia
("Insignia  Affiliates") of interests in certain general partner entities,  past
tender offers by Insignia  Affiliates to acquire limited  partnership units, the
management of partnerships  by Insignia  Affiliates and the Insignia Merger (see
"Note B - Transfer  of  Control").  The  plaintiffs  seek  monetary  damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998,  the Corporate  General  Partner filed a motion  seeking  dismissal of the
action.  In lieu of  responding  to the  motion,  the  plaintiffs  have filed an
amended complaint.  The Corporate General Partner filed demurrers to the amended
complaint which were heard February 1999.  Pending the ruling on such demurrers,
settlement negotiations commenced. On November 2, 1999, the parties executed and
filed a  Stipulation  of  Settlement,  settling  claims,  subject to final court
approval, on behalf of the Partnership and all limited partners who own units as
of November 3, 1999.  Preliminary  approval of the  settlement  was  obtained on
November 3, 1999 from the Superior Court of the State of  California,  County of
San Mateo, at which time the Court set a final approval hearing for December 10,
1999.  Prior to the  December  10,  1999  hearing  the  Court  received  various
objections to the settlement,  including a challenge to the Court's  preliminary
approval based upon the alleged lack of authority of class  plaintiffs'  counsel
to enter the settlement. On December 14, 1999, the Corporate General Partner and
its affiliates terminated the proposed settlement. Certain plaintiffs have filed
a motion to  disqualify  some of the  plaintiffs'  counsel  in the  action.  The
Corporate  General Partner does not anticipate  that costs  associated with this
case will be material to the Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.

Note I - Change in Accounting Principle

Effective  January 1, 1999, the Partnership  changed its method of accounting to
capitalize the cost of exterior  painting and major landscaping on a prospective
basis.  The  Partnership  believes  that  this  accounting  principle  change is
preferable  because it provides a better  matching of expenses  with the related
benefit of the expenditures and it is consistent with industry  practice and the
policies of the Corporate General Partner.  The effect of the change in 1999 was
to increase income by  approximately  $331,000  ($11.92 per limited  partnership
unit). The cumulative effect, had this change been applied to prior periods,  is
not material.  The accounting  principle  change will not have an affect on cash
flow, funds available for distribution or fees payable to the Corporate  General
Partner and affiliates.


<PAGE>

Item 8.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure:

         None.


<PAGE>


                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons, Compliance
        with Section 16(a) of the Exchange Act:

Shelter  Properties II (the  "Partnership" or  "Registrant")  has no officers or
directors.  The names and ages of, as well as the positions and offices held by,
the  executive  officers and  directors of Shelter  Realty II  Corporation  (the
"Corporate   General  Partner")  are  set  forth  below.  There  are  no  family
relationships between or among any officers or directors.

     Name                    Age    Position

     Patrick J. Foye          42    Executive Vice President and Director

     Martha L. Long           40    Senior Vice President and Controller

Patrick J. Foye has been  Executive  Vice President and Director of the Managing
General  Partner  since October 1, 1998.  Mr. Foye has served as Executive  Vice
President  of AIMCO  since May 1998.  Prior to  joining  AIMCO,  Mr.  Foye was a
partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to
1998 and was  Corporate  Partner of the  firm's  Brussels,  Budapest  and Moscow
offices from 1992  through  1994.  Mr. Foye is also Deputy  Chairman of the Long
Island  Power   Authority  and  serves  as  a  member  of  the  New  York  State
Privatization  Council.  He received a B.A. from Fordham College and a J.D. from
Fordham University Law School.

Martha L. Long has been Senior Vice  President  and  Controller of the Corporate
General  Partner and AIMCO since October 1998, as a result of the acquisition of
Insignia  Financial  Group,  Inc. From June 1994 until January 1997, she was the
Controller for Insignia, and was promoted to Senior Vice President - Finance and
Controller in January 1997,  retaining that title until October 1998.  From 1988
to June 1994,  Ms. Long was Senior Vice  President and  Controller for The First
Savings Bank, FSB in Greenville, South Carolina.

Based solely upon a review of Forms 3 and 4 and amendments  thereto furnished to
the Registrant  under Rule 16a-3(e) during the  Registrant's  most recent fiscal
year and Forms 5 and amendments thereto furnished to the Registrant with respect
to its most recent  fiscal year,  the  Registrant  is not aware of any director,
officer,  beneficial  owner of more than ten  percent  of the  units of  limited
partnership interest in the Registrant that failed to file on a timely basis, as
disclosed in the above Forms,  reports required by section 16(a) of the Exchange
Act during the most recent  fiscal year or prior fiscal years except as follows:
AIMCO Properties,  L.P. and its joint filers failed to timely file a Form 3 with
respect to its  acquisition  of Units and AIMCO and its joint  filers  failed to
timely file a Form 4 with respect to its acquisition of Units.

Item 10.    Executive Compensation:

No  directors  and  officers  of the  Corporate  General  Partner  received  any
remuneration from the Registrant.


<PAGE>


Item 11.    Security Ownership of Certain Beneficial Owners and Management:

Except as noted below,  no person was known to be the  beneficial  owner of more
than 5% of the Limited  Partnership  Units of the  Registrant as of December 31,
1999.

           Entity                          Number of Units      Percentage

           Cooper River Properties, LLC        1,958.5            7.122%
             (an affiliate of AIMCO)
           Insignia Properties, LP             9,128.0           33.193%
             (an affiliate of AIMCO)
           AIMCO Properties LP                 5,342.5           19.427%
             (an affiliate of AIMCO)

Cooper  River  Properties,   LLC  and  Insignia  Properties  LP  are  indirectly
ultimately  owned  by  AIMCO.  Their  business  address  is  55  Beattie  Place,
Greenville, South Carolina 29602.

AIMCO Properties LP is indirectly  ultimately  controlled by AIMCO. Its business
address is 2000 South Colorado Boulevard, Denver, Colorado 80222.

No director or officer of the  Corporate  General  Partner  owns any units.  The
Corporate  General  Partner  owns 100  Units  as  required  by the  terms of the
Partnership Agreement.  AIMCO Properties LP, the other general partner, acquired
5,342.5 units during the current fiscal year.

Item 12.    Certain Relationships and Related Transactions:

The  Partnership  has no employees  and is dependent  on the  Corporate  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership  activities.  The Partnership Agreement provides for (i) payments to
affiliates for services and (ii)  reimbursement of certain expenses  incurred by
affiliates on behalf of the Partnership.  Balances and other  transactions  with
affiliates of the  Corporate  General  Partner for the years ended  December 31,
1999 and 1998 are as follows:

                                                         1999       1998
                                                          (in thousands)

Property management fees                                $ 303      $ 290
Reimbursement for services of affiliates                  163        120
Due to general partners                                    58         58

During the years ended  December 31, 1999 and 1998,  affiliates of the Corporate
General  Partner were  entitled to receive 5% of gross  receipts from all of the
Registrant's  properties  as  compensation  for  providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $303,000 and
$290,000 for the years ended December 31, 1999 and 1998, respectively.

Affiliates  of  the  Corporate   General  Partner   received   reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $163,000 and
$120,000 for the years ended December 31, 1999 and 1998, respectively, including
approximately  $54,000  and  $2,000,  respectively,  of  construction  oversight
reimbursements.

During 1983, a liability  of  approximately  $58,000 was incurred to the general
partners for sales commissions  earned.  Pursuant to the Partnership  Agreement,
this liability cannot be paid until certain levels of return are received by the
limited  partners.  As of December 31, 1999,  the level of return to the limited
partners has not been met.

On September 26, 1997, an affiliate of the Corporate  General Partner  purchased
Lehman Brothers' Class "D" subordinated bonds of SASCO 1992-M1.  These bonds are
secured  by 55  multi-family  apartment  mortgage  loan  pairs  held  in  Trust,
including Parktown Townhouses, Raintree Apartments, and Signal Pointe Apartments
owned by the Partnership.

Several tender offers were made by various parties,  including affiliates of the
general partners, during the calendar years ended December 31, 1999 and 1998. As
a result of these tender offers,  AIMCO and its affiliates  currently own 16,429
units of limited  partnership units in the Partnership  representing  59.742% of
the outstanding units. It is possible that AIMCO or its affiliates will make one
or more additional offers to acquire additional limited partnership interests in
the Partnership  for cash or in exchange for units in the operating  partnership
of AIMCO. Consequently, AIMCO is in a position to influence all voting decisions
with respect to the  Registrant.  Under the Partnership  Agreement,  unitholders
holding a majority of the Units are  entitled  to take action with  respect to a
variety of matters.  When voting on matters,  AIMCO would in all likelihood vote
the Units it acquired in a manner  favorable  to the  interest of the  Corporate
General Partner because of their affiliation with the Corporate General Partner.


<PAGE>


Item 13.  Exhibits and Reports on Form 8-K

     (a)  Exhibits:

          Exhibit 18, Independent  Accountants'  Preferability Letter for Change
          in Accounting Principle, is filed as an exhibit to this report.

          Exhibit 27,  Financial Data  Schedule,  is filed as an exhibit to this
          report.

     (b)  Reports on Form 8-K filed in the fourth quarter of calendar year 1999:

          None.


<PAGE>


                                   SIGNATURES

In accordance  with Section 13 or 15(d) of the Exchange Act, the  Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                    SHELTER PROPERTIES II LIMITED PARTNERSHIP


                                    By:   Shelter Realty II Corporation
                                          Corporate General Partner

                                    By: /s/Patrick J. Foye
                                        Patrick J. Foye
                                        Executive Vice President

                                    By: /s/Martha L. Long
                                        Martha L. Long
                                        Senior Vice President
                                        and Controller

                                    Date:


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
date indicated.

/s/Patrick J. Foye      Executive Vice President      Date:
Patrick J. Foye         and Director


/s/Martha L. Long       Senior Vice President         Date:
Martha L. Long          and Controller


<PAGE>


                                  EXHIBIT INDEX

Exhibit

2.1  Agreement  and Plan of Merger,  dated as of October 1, 1998, by and between
     AIMCO  and IPT,  incorporated  by  reference  to  Exhibit  2.1  filed  with
     Registrant's Current Report on Form 8-K dated October 1, 1998.

3    See Exhibit 4(a)

4    (a) Amended and Restated  Certificate and Agreement of Limited  Partnership
     [included as Exhibit A to the  Prospectus of Registrant  dated  February 2,
     1981 contained in Amendment No. 1 to Registration  Statement No. 2-69507 of
     Registrant  filed  February  2, 1981 (the  "Prospectus")  and  incorporated
     herein by reference].

     (b) Subscription Agreements and Signature Pages [Filed with Amendment No. 1
     of  Registration  Statement No.  2-69507,  of Registrant  and  incorporated
     herein by reference].

     (c) Promissory  Note and Deed of Trust between Joe A.  McDermott,  Inc. and
     the  Mischer  Corporation  and New York  Life  Insurance  Company.  General
     Warranty Deed between  Parktown Realty,  N.V. and Shelter  Properties II to
     acquire Parktown Apartments.*

     (d) Mortgage Note and Mortgage Deed between  Mutual  Benefit Life Insurance
     Company and Foxcroft Investors,  Limited.  Purchase Money Note and Purchase
     Money Mortgage and Security Agreement between Foxcroft  Investors,  Limited
     and Shelter Properties II to acquire Squire One Apartments.*

     *Filed as Exhibit 4(c) and 4(e),  respectively,  to Form 10-K of Registrant
     for year ended December 31, 1987 and incorporated herein by reference.

     (e) Mortgage Note between  William C. Dailey and Fidelity  Federal  Savings
     and Loan  Association and Promissory Note between William C. Dailey and The
     Prudential  Insurance Company (filed as Exhibit 12(E) to Amendment No. 1 to
     Registration  Statement No.  2-69507 of  Registrant  filed January 1981 and
     incorporated herein by reference).  Modification and Assumption of Mortgage
     between   American   Federal  Savings  and  Loan  Association  and  Shelter
     Properties II to acquire Raintree Apartments (filed as Exhibit 4(e) to Form
     10-K of Registrant for year ended December 31, 1988 and incorporated herein
     by reference).



<PAGE>


10(i) Contracts related to acquisition or disposition of properties.

     (a) Purchase  Agreement dated December 31, 1980,  between Hubris,  Inc. and
     U.S. Shelter Corporation to purchase Parktown Townhouse.**

     (b) Purchase Agreement dated January 5, 1981, between Twin City Apartments,
     Inc. and U.S. Shelter Corporation to purchase The Village Apartments.**

     (c)  Purchase  Agreement  dated  January 2, 1981 between  Carolina  Housing
     Partners and U.S. Shelter Corporation to purchase Raintree Apartments.**

     **Filed as Exhibits 12(b), 12(c), and 12(d), respectively, to Amendment No.
     1 of  Registration  Statement No.  2-69507 of Registrant  filed February 2,
     1981 and incorporated herein by reference.

     (d)  Purchase  Agreement  dated May 28, 1981  between  Foxcroft  Investors,
     Limited and Shelter Properties II to purchase Squire One Apartments. [Filed
     with Form 8-K of Registrant dated June 8, 1981 and  incorporated  herein by
     reference.]

     (e) Sales Agreement  dated December 30, 1983 between Shelter  Properties II
     and  Security  Investors,  Ltd.-II to sell  Cambridge  Station  Apartments.
     [Filed with Form 10-K of  Registrant  for year ended  December 31, 1983 and
     incorporated herein by reference.]

(ii) Form of Management  Agreement with U.S.  Shelter  Corporation  subsequently
     assigned  to  Shelter   Management  Group,  L.P.  (now  known  as  Insignia
     Management  Group,  L.P.)  [filed  with  Amendment  No.  1 to  Registration
     Statement,   No.  2-69507,   of  Registrant  and  incorporated   herein  by
     reference].

(iii) Contracts related to refinancing of debt:

     (a) First Mortgage and Security  Agreements  dated October 28, 1992 between
     Shelter Properties II Limited Partnership and Joseph Philip Forte (Trustee)
     and First Commonwealth Realty Credit Corporation,  a Virginia  Corporation,
     securing the following  properties:  Raintree,  Parktown/Center  Court, and
     Squire One.***

     (b) Second Mortgage and Security  Agreements dated October 28, 1992 between
     Shelter Properties II Limited Partnership and Joseph Philip Forte (Trustee)
     and First Commonwealth Realty Credit Corporation,  a Virginia  Corporation,
     securing the following  properties:  Raintree,  Parktown/Center  Court, and
     Squire One.***


<PAGE>


     (c) First  Assignments  of Leases and Rents dated  October 28, 1992 between
     Shelter Properties II Limited Partnership and Joseph Philip Forte (Trustee)
     and First Commonwealth Realty Credit Corporation,  a Virginia  Corporation,
     securing the following  properties:  Raintree,  Parktown/Center  Court, and
     Squire One.***

     (d) Second  Assignments  of Leases and Rents dated October 28, 1992 between
     Shelter Properties II Limited Partnership and Joseph Philip Forte (Trustee)
     and First Commonwealth Realty Credit Corporation,  a Virginia  Corporation,
     securing the following  properties:  Raintree,  Parktown/Center  Court, and
     Squire One.***

     (e) First  Deeds of Trust Notes dated  October  28,  1992  between  Shelter
     Properties  II Limited  Partnership  and First  Commonwealth  Realty Credit
     Corporation,    relating   to   the   following    properties:    Raintree,
     Parktown/Center Court, and Squire One.***

     (f) Second  Deeds of Trust Notes dated  October  28, 1992  between  Shelter
     Properties  II Limited  Partnership  and First  Commonwealth  Realty Credit
     Corporation,    relating   to   the   following    properties:    Raintree,
     Parktown/Center Court, and Squire One.***

     ***Filed as Exhibit 10(iii) (a) through (f),  respectively,  to Form 10-KSB
     of Registrant for the year ended December 31, 1992 and incorporated  herein
     by reference.

18   Independent  Accountants'  Preferability  Letter for  Change in  Accounting
     Principle.

27   Financial Data Schedule.

99   Prospectus of Registrant  dated February 2, 1981 [included in  Registration
     Statement No. 2-69507 of Registrant and incorporated herein by reference].


<PAGE>







                                                                      Exhibit 18



February 24, 2000


Mr. Patrick J. Foye
Executive Vice President
Shelter Realty II Corporation
Corporate General Partner of Shelter Properties II
55 Beattie Place

P.O. Box 1089
Greenville, South Carolina 29602

Dear Mr. Foye:

Note I of Notes to the Financial Statements of Shelter Properties II included in
its Form 10-KSB for the year ended  December 31, 1999  describes a change in the
method of  accounting  to capitalize  exterior  painting and major  landscaping,
which would have been  expensed  under the old policy.  You have advised us that
you  believe  that the change is to a  preferable  method in your  circumstances
because it provides a better  matching of expenses  with the related  benefit of
the  expenditures  and is consistent with policies  currently being used by your
industry and conforms to the policies of the Corporate General Partner.

There are no authoritative criteria for determining a preferable method based on
the particular circumstances; however, we conclude that the change in the method
of accounting  for exterior  painting and major  landscaping is to an acceptable
alternative  method which,  based on your business  judgment to make this change
for the reasons cited above, is preferable in your circumstances.

                                                               Very truly yours,
                                                            /s/Ernst & Young LLP