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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2010

Commission File Number: 000-53650

Behringer Harvard Opportunity REIT II, Inc.(Exact Name of Registrant as Specified in Its Charter)

Maryland(State or other jurisdiction of
incorporation or organization)

20-8198863(I.R.S. Employer
Identification No.)


15601 Dallas Parkway, Suite 600, Addison, Texas 75001(Address of principal executive offices) (Zip Code)

Registrant's
telephone number, including area code:(866) 655-3600

None(Former name, former address and former fiscal year, if changed since last report)

Indicate
by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past
90 days. Yes ý    No o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes o    No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer o

Accelerated filer o

Non-accelerated filer o (Do not check if a
smaller reporting company)

Smaller reporting company ý


Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes o    No ý

As of April 30, 2010, Behringer Harvard Opportunity REIT II, Inc. had 18,198,314 shares of common stock outstanding.



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BEHRINGER HARVARD OPPORTUNITY REIT II, INC.  FORM 10-Q  Quarter Ended March 31, 2010



PagePART I
FINANCIAL INFORMATIONItem 1.

Financial Statements (Unaudited)Consolidated Balance Sheets as of March 31, 2010 and December 31, 2009

3Consolidated Statements of Operations for the Three Months Ended March 31, 2010 and
2009

4Consolidated Statements of Equity for the Three Months Ended March 31, 2010 and 2009

5Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2010 and
2009

6Notes to Consolidated Financial Statements

7Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

25Item 3.

Quantitative and Qualitative Disclosures About Market Risk

38Item 4T.

Controls and Procedures

39PART II
OTHER INFORMATIONItem 1.

Legal Proceedings

40Item 1A.

Risk Factors

40Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

40Item 3.

Defaults Upon Senior Securities

42Item 4.

(Removed and Reserved)

42Item 5.

Other Information

42Item 6.

Exhibits

42Signature

43


2

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PART I  FINANCIAL INFORMATION

Item 1.    Financial Statements.



Behringer Harvard Opportunity REIT II, Inc.

Consolidated Balance Sheets

(in thousands, except shares)

(unaudited)

March 31,
2010

December 31,
2009AssetsReal estateLand

$
9,000

$
9,000Buildings, net


25,290


25,314Total real estate


34,290


34,314Real estate loans receivable, net


39,730


39,712Total real estate and real estate-related investments, net


74,020


74,026Cash and cash equivalents


87,991


67,509Accounts receivable, net


250


344Interest receivable-real estate loans receivable


675


398Prepaid expenses and other assets


467


564Investment in unconsolidated joint venture


508


506Lease intangibles, net


1,330


1,590Total assets

$
165,241

$
144,937Liabilities and EquityNote payable

$
18,500

$
18,500Accounts payable


2


11Payables to related parties


442


582Acquired below-market leases, net


889


1,134Distributions payable


710


607Accrued and other liabilities


1,712


1,504Total liabilities


22,255


22,338EquityPreferred stock, $.0001 par value per share; 50,000,000 shares authorized, none outstanding





Convertible stock, $.0001 par value per share; 1,000 shares authorized, 1,000 outstanding





Common stock, $.0001 par value per share; 350,000,000 shares authorized, 17,134,274 and 14,648,698 shares issued and outstanding at March 31, 2010 and
December 31, 2009, respectively


2


1Additional paid-in capital


148,480


126,815Cumulative distributions and net loss


(8,119
)

(6,839
)Total Behringer Harvard Opportunity REIT II, Inc. Equity


140,363


119,977Noncontrolling interest


2,623


2,622Total equity


142,986


122,599Total liabilities and equity

$
165,241

$
144,937


See Notes to Consolidated Financial Statements.

3

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Behringer Harvard Opportunity REIT II, Inc.

Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

Three months
ended
March 31,2010

2009RevenuesRental revenue

$
1,312

$
1,325Interest income from real estate loans receivable


1,376


Total revenues


2,688


1,325Expenses:Property operating expenses


330


344Interest expense


322


326Real estate taxes


160


140Property management fees


47


46Asset management fees


186


86General and administrative


430


421Depreciation and amortization


557


603Total expenses


2,032


1,966Interest income, net


110


100Income (loss) before equity in losses of unconsolidated joint venture


766


(541
)Equity in losses of unconsolidated joint venture


(7
)

Net income (loss)


759


(541
)Add: Net income attributable to the noncontrolling interest


(72
)

Net income (loss) attributable to Behringer Harvard Opportunity REIT II, Inc.

$
687

$
(541
)Weighted average shares outstanding:Basic and diluted


15,937


7,901Net income (loss) per share attributable to Behringer Harvard Opportunity REIT II, Inc.:Basic and diluted

$
0.04

$
(0.07
)


See
Notes to Consolidated Financial Statements.

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Behringer Harvard Opportunity REIT II, Inc.

Consolidated Statements of Equity

(in thousands)

(unaudited)

Convertible Stock

Common StockNumber
of Shares

Par
Value

Number
of Shares

Par
Value

Additional
Paid-in
Capital

Cumulative
Distributions and
Net Income/(Loss)

Noncontrolling
Interest

Total
EquityBalance at January 1, 2009


1

$



7,323

$
1

$
59,987

$
(1,166
)
$


$
58,822Issuance of common stock, net








1,237





10,803








10,803Distributions declared on common stock

















(586
)




(586
)Net loss

















(541
)




(541
)Balance at March 31, 2009


1

$



8,560

$
1

$
70,790

$
(2,293
)
$


$
68,498Balance at January 1, 2010


1





14,649

$
1

$
126,815

$
(6,839
)
$
2,622

$
122,599Issuance of common stock, net








2,517


1


21,950








21,951Redemption of common stock








(32
)




(285
)







(285
)Distributions declared on common stock

















(1,967
)




(1,967
)Distributions to noncontrolling interest




















(71
)

(71
)Net income

















687


72


759Balance at March 31, 2010


1

$



17,134

$
2

$
148,480

$
(8,119
)
$
2,623

$
142,986


See Notes to Consolidated Financial Statements.

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Behringer Harvard Opportunity REIT II, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three months
ended
March 31,2010

2009Cash flows from operating activities:Net income (loss)

$
759

$
(541
)Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities:Depreciation and amortization


313


334Amortization of deferred financing fees


33


33Amortization of deferred financing fee income


(5
)

Equity in losses of unconsolidated joint venture


7


Change in accounts receivable


94


(39
)Change in interest receivable-real estate loan receivable


(277
)

Change in prepaid expenses and other assets


66


45Change in accounts payable


(9
)

39Change in accrued and other liabilities


208


1Change in net payables to related parties


8


27Addition of lease intangibles


(27
)

(50
)Cash provided by (used in) operating activities


1,170


(151
)Cash flows from investing activities:Acquisition deposits


(2
)

Investment in unconsolidated joint venture


(9
)

Investment in real estate loans receivable


(13
)

Additions to buildings


(246
)

(217
)Cash used in investing activities


(270
)

(217
)Cash flows from financing activities:Issuance of common stock


23,747


11,922Redemptions of common stock


(285
)

Offering costs


(3,278
)

(1,270
)Distributions


(531
)

(138
)Distributions to noncontrolling interest holders


(71
)

Cash provided by financing activities


19,582


10,514Net change in cash and cash equivalents


20,482


10,146Cash and cash equivalents at beginning of period


67,509


47,375Cash and cash equivalents at end of period

$
87,991

$
57,521


See
Notes to Consolidated Financial Statements.

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Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

1. Business and Organization



Behringer Harvard Opportunity REIT II, Inc. (which may be referred to as the "Company," "we," "us," or "our") was organized as a
Maryland corporation on January 9, 2007 and has elected to be taxed, and currently qualifies, as a real estate investment trust ("REIT") for federal income tax purposes.

We
acquire and operate commercial real estate and real estate-related assets. In particular, we focus generally on acquiring commercial properties with significant possibilities for
short-term capital appreciation, such as those requiring development, redevelopment, or repositioning, those located in markets and submarkets with high growth potential, and those
available from sellers who are distressed or face time-sensitive deadlines. In addition, given economic conditions as of March 31, 2010, our opportunistic investment strategy also
includes investments in real estate-related assets that present opportunities for higher current income. Such investments may have capital gain characteristics, whether as a result of a discount
purchase or related equity participations. We may acquire a wide variety of commercial properties, including office, industrial, retail, hospitality, recreation and leisure, single-tenant,
multifamily, and other real properties. These properties may be existing, income-producing properties, newly constructed properties, or properties under development or construction and may include
multifamily properties purchased for conversion into condominiums and single-tenant properties that may be converted for multi-tenant use. Further, we may invest in real estate-related securities,
including securities issued by other real estate companies, either for investment or in change of control transactions completed on a negotiated basis or otherwise. We also may originate or invest in
collateralized mortgage-backed securities, mortgage, bridge or mezzanine loans, and Section 1031 tenant-in-common interests (including those issued by affiliates of our
advisor), or in entities that make investments similar to the foregoing. We expect to make our investments in or in respect of real estate assets located in the United States and other countries based
on our view of existing market conditions. We completed our first property acquisition, an office building located in Denver, Colorado, on October 28, 2008, and, as of March 31, 2010, we
have invested in four real estate and real estate-related assets.

Substantially
all of our business is conducted through Behringer Harvard Opportunity OP II LP, a limited partnership organized in Delaware on January 12, 2007
("Behringer Harvard Opportunity OP II"). As of March 31, 2010, our wholly-owned subsidiary, BHO II, Inc., a Delaware corporation, was the sole general partner of Behringer
Harvard Opportunity OP II and owned a 0.1% partnership interest in Behringer Harvard Opportunity OP II. As of March 31, 2010, our wholly-owned subsidiary, BHO Business
Trust II, a Maryland business trust, was the sole limited partner of Behringer Harvard Opportunity OP II and owned the remaining 99.9% interest in Behringer Harvard Opportunity
OP II.

We
are externally managed and advised by Behringer Harvard Opportunity Advisors II, LLC, a Texas limited liability company that was formed on March 16, 2010
("Behringer Opportunity Advisors II") when Behringer Harvard Opportunity Advisors II LP, a Texas limited partnership formed in January 2007
was converted to a limited liability company. Behringer Opportunity Advisors II is responsible for managing our day-to-day affairs and for identifying and making acquisitions
and investments on our behalf.

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Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

1. Business and Organization (Continued)

Our
office is located at 15601 Dallas Parkway, Suite 600, Addison, Texas 75001, and our toll-free telephone number is (866) 655-3600. The name
Behringer Harvard is the property of Behringer Harvard Holdings, LLC ("Behringer Harvard Holdings") and is used by permission.



On February 26, 2007, we filed a Registration Statement on Form S-11 with the Securities and Exchange
Commission ("SEC") to offer up to 125,000,000 shares of common stock for sale to the public (the "Offering"), of which 25,000,000 shares are being offered pursuant to our distribution reinvestment
plan (the "DRP"). We reserve the right to reallocate the shares we are offering between our primary offering and the DRP. The SEC declared our Registration Statement effective on January 4,
2008, and we commenced our ongoing initial public offering on January 21, 2008.

In
connection with our initial capitalization, on January 19, 2007, we issued 22,471 shares of our common stock and 1,000 shares of our convertible stock to Behringer Harvard
Holdings, an affiliate of our advisor. As of March 31, 2010, we had 17,134,274 shares of common stock outstanding, which includes the 22,471 shares issued to Behringer Harvard Holdings. As of
March 31, 2010, we had 1,000 shares of convertible stock issued and outstanding to Behringer Harvard Holdings. On April 2, 2010, Behringer Harvard Holdings transferred ownership of the
convertible stock to Behringer Opportunity Advisors II.

We
commenced operations on April 1, 2008 upon satisfaction of the conditions of our escrow agreement and our acceptance of initial subscriptions of common stock. Upon admission of
new stockholders, subscription proceeds are used for payment of dealer manager fees and selling commissions and may be utilized as consideration for investments and the payment or reimbursement of
offering expenses and operating expenses. Until required for such purposes, net offering proceeds are held in short-term, liquid investments. Through March 31, 2010, we had sold
17,227,730 shares in the Offering, including the DRP, for gross proceeds of $171.7 million.

Our
common stock is not currently listed on a national securities exchange. Depending upon then prevailing market conditions, it is our intention to consider beginning the process of
liquidating our assets and distributing the net proceeds to our stockholders within three to six years after the termination of our primary offering. If we do not begin an orderly liquidation within
that period, we may seek to have our shares listed on a national securities exchange.

2. Interim Unaudited Financial Information

The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on
Form 10-K for the year ended December 31, 2009, which was filed with the SEC on March 30, 2010. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted from this quarterly report pursuant to
the rules and regulations of the SEC.

The
results for the interim periods shown in this report are not necessarily indicative of future financial results. The accompanying consolidated balance sheet and consolidated
statement of equity as of March 31, 2010 and consolidated statements of operations and cash flows for the three months

8

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Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

2. Interim Unaudited Financial Information (Continued)

ended
March 31, 2010 and 2009 have not been audited by our independent registered public accounting firm. In the opinion of management, the accompanying unaudited consolidated financial
statements include all adjustments necessary to fairly present our consolidated financial position as of March 31, 2010 and December 31, 2009 and our consolidated results of operations
and cash flows for the three months ended March 31, 2010 and 2009. Such adjustments are of a normal recurring nature.

3. Summary of Significant Accounting Policies



The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. These estimates include such items as purchase price allocation for real estate acquisitions, impairment of long-lived assets, depreciation and amortization, and
allowance for doubtful accounts. Actual results could differ from those estimates.



Our consolidated financial statements include our accounts and the accounts of other subsidiaries over which we have control. All
inter-company transactions, balances, and profits have been eliminated in consolidation. Interests in entities acquired will be evaluated based on applicable GAAP, which includes the requirement to
consolidate entities deemed to be variable interest entities ("VIE") in which we are the primary beneficiary. If the interest in the entity is determined not to be a VIE, then the entities will be
evaluated for consolidation based on legal form, economic substance, and the extent to which we have control and/or substantive participating rights under the respective ownership agreement. In the
Notes to Consolidated Financial Statements, all dollar and share amounts in tabulation are in thousands of dollars and shares, respectively, unless otherwise noted.

There
are judgments and estimates involved in determining if an entity in which we have made an investment is a VIE and if so, whether we are the primary beneficiary. The entity is
evaluated to determine if it is a VIE by, among other things, calculating the percentage of equity being risked compared to the total equity of the entity. Determining expected future losses involves
assumptions of various possibilities of the results of future operations of the entity, assigning a probability to each possibility, and using a discount rate to determine the net present value of
those future losses. A change in the judgments, assumptions, and estimates outlined above could result in consolidating an entity that should not be consolidated or accounting for an investment using
the equity method that should in fact be consolidated, the effects of which could be material to our financial statements. We have evaluated subsequent events for recognition or disclosure in our
consolidated financial statements.



Upon the acquisition of real estate properties, we recognize the assets acquired, the liabilities assumed, and any noncontrolling
interest as of the acquisition date, measured at their fair values. The acquisition date is the date on which we obtain control of the real estate property. The assets acquired and liabilities assumed
may consist of buildings, any assumed debt, identified intangible assets and asset

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Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

3. Summary of Significant Accounting Policies (Continued)

retirement
obligations. Identified intangible assets generally consist of the above-market and below-market leases, in-place leases, in-place tenant improvements and tenant
relationships. Goodwill is recognized as of the acquisition date and measured as the aggregate fair value of the consideration transferred and any noncontrolling interests in the acquiree over the
fair value of identifiable net assets acquired. Likewise, a bargain purchase gain is recognized in current earnings when the aggregate fair value of the consideration transferred and any
noncontrolling interests in the acquiree is less than the fair value of the identifiable net assets acquired. Acquisition-related costs are expensed in the period incurred.

Initial
valuations are subject to change until our information is finalized, which is no later than twelve months from the acquisition date.

We
determine the fair value of assumed debt by calculating the net present value of the scheduled note payments using interest rates for debt with similar terms and remaining maturities
that we believe we could obtain. Any difference between the fair value and stated value of the assumed debt is recorded as a discount or premium and amortized over the remaining life of the loan.

The
fair value of the tangible assets acquired, consisting of land and buildings, is determined by valuing the property as if it were vacant, and the
"as-if-vacant" value is then allocated to land and buildings. Land values are derived from appraisals, and building values are calculated as replacement cost less depreciation
or management's estimates of the relative fair value of these assets using discounted cash flow analyses or similar methods. The value of the commercial office building is depreciated over the
estimated useful life of 25 years using the straight-line method.

We
determine the value of above-market and below-market in-place leases for acquired properties based on the present value (using an interest rate that reflects the risks
associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the in-place leases and (2) management's estimate of current
market lease rates for the corresponding in-place leases, measured over a period equal to (a) the remaining non-cancelable lease term for above-market leases, or
(b) the remaining non-cancelable lease term plus any fixed rate renewal option for below-market leases. We record the fair value of above-market and below-market leases as
intangible assets or intangible liabilities, respectively, and amortize them as an adjustment to rental income over the above determined lease term.

The
total value of identified real estate intangible assets acquired is further allocated to in-place lease values and tenant relationships based on our evaluation of the
specific characteristics of each tenant's lease and our overall relationship with that respective tenant. The aggregate value of in-place leases acquired and tenant relationships is
determined by applying a fair value model. The estimates of fair value of in-place leases include an estimate of carrying costs during the expected lease-up periods for the
respective spaces, considering current market conditions. In estimating fair value of in-place leases, we consider items such as real estate taxes, insurance and other operating expenses,
as well as lost rental revenue during the expected lease-up period and carrying costs that would have otherwise been incurred had the leases not been in place, including tenant
improvements and commissions. The estimates of the fair value of tenant relationships also include costs to execute similar leases, including leasing commissions, legal costs and tenant improvements
as well as an estimate of the likelihood of renewal as determined by management on a tenant-by-tenant basis.

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Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

3. Summary of Significant Accounting Policies (Continued)

We
amortize the value of in-place leases to expense over the term of the respective leases. The value of tenant relationship intangibles is amortized to expense over the
initial term and any anticipated renewal periods, but in no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. Should a tenant terminate
its lease, the unamortized portion of the in-place lease value and tenant relationship intangibles is charged to expense. As of March 31, 2010, the estimated remaining useful life
for acquired lease intangibles was approximately one year.

Anticipated
amortization expense associated with the acquired lease intangibles as of March 31, 2010 is as follows:

Year

Lease
IntangiblesApril 1, 2010 - December 31, 2010

$
1932011


382012


2013


2014





Accumulated
depreciation and amortization related to our consolidated investments in real estate assets and intangibles were as follows:

As of March 31, 2010

Buildings and
Improvements

Lease
Intangibles

Acquired
Below-Market
LeasesCost

$
26,795

$
2,814

$
(2,143
)Less: depreciation and amortization


(1,505
)

(1,484
)

1,254Net

$
25,290

$
1,330

$
(889
)




As of December 31, 2009

Buildings and
Improvements

Lease
Intangibles

Acquired
Below-Market
LeasesCost

$
26,548

$
2,787

$
(2,143
)Less: depreciation and amortization


(1,234
)

(1,197
)

1,009Net

$
25,314

$
1,590

$
(1,134
)




We consider investments in highly-liquid money market funds or investments with original maturities of three months or less to be cash
equivalents. The carrying amount of cash and cash equivalents reported on the balance sheet approximates fair value.

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Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

3. Summary of Significant Accounting Policies (Continued)



For real estate we wholly own, we monitor events and changes in circumstances indicating that the carrying amounts of the real estate
assets may not be recoverable. When such events or changes in circumstances are present, we assess potential impairment by comparing estimated future undiscounted operating cash flows expected to be
generated over the life of the asset and from its eventual disposition to the carrying amount of the asset. In the event that the carrying amount exceeds the estimated future undiscounted operating
cash flows, we recognize an impairment loss to adjust the carrying amount of the asset to estimated fair value. We consider projected future undiscounted cash flows, trends, strategic decisions
regarding future development plans, and other factors in our assessment of whether impairment conditions exist. While we believe our estimates of future cash flows are reasonable, different
assumptions regarding factors such as market rents, economic conditions, and occupancy rates could significantly affect these estimates.

In
addition, we evaluate our investments in real estate loans receivable each reporting date and if it is probable we will not collect all principal and interest in accordance with the
terms of the loan, we will record an impairment charge based on these evaluations. While we believe it is currently probable we will collect all scheduled principal and interest with respect to the
PAL Loan, current market conditions with respect to credit availability and with respect to real estate market fundamentals create a significant amount of uncertainty. Given this, any future adverse
development in market conditions may cause us to re-evaluate our conclusions, and could result in material impairment charges with respect to the PAL Loan.

We
initiated foreclosure proceedings against the Palms of Monterrey borrower in order to secure a fee simple interest in the property. A final judgment of foreclosure was entered on
March 22, 2010 and the foreclosure sale for Palms of Monterrey was held on April 27, 2010. We were the only bidder in the sale and acquired a fee simple interest in the property on
May 10, 2010. We believe that the fair value of the underlying collateral exceeds the carrying value of the Palms of Monterrey note receivable at March 31, 2010. Accordingly, we have not
recorded any impairment charge against the Palms of Monterrey note receivable for the three months ended March 31, 2010.

In
evaluating our investments for impairment, management may use appraisals and makes estimates and assumptions, including, but not limited to, the projected date of disposition of the
properties, the estimated future cash flows of the properties during our ownership, and the projected sales price of each of the properties. A future change in these estimates and assumptions could
result in understating or overstating the book value of our investments, which could be material to our financial statements.

We
believe the carrying value of our operating real estate and loan investments is currently recoverable. Accordingly, there were no impairment charges for the three months ended
March 31, 2010 or 2009. However, if market conditions worsen beyond our current expectations, or if changes in our strategy significantly affect any key assumptions used in our fair value
calculations, we may need to take charges
in future periods for impairments related to our existing investments. Any such non-cash charges would have an adverse effect on our consolidated financial position and results of
operations.

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Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

3. Summary of Significant Accounting Policies (Continued)



We recognize rental income generated from leases on real estate assets on a straight-line basis over the terms of the
respective leases, including the effect of rent holidays, if any. Straight-line rental revenue of less than $0.1 million was recognized in rental revenues for each of the three
months ended March 31, 2010 and 2009. Below market lease amortization of $0.2 million and $0.3 million was recognized in rental revenues for the three months ended
March 31, 2010 and 2009, respectively.

We
recognize interest income from real estate loans receivable on an accrual basis over the life of the loan using the interest method. Direct loan origination fees and origination or
acquisition costs, as well as acquisition premiums or discounts, are amortized over the life of the loan as an adjustment to interest income. We will stop accruing interest on loans when there is
concern as to the ultimate collection of principal or interest of the loan. In the event that we stop accruing interest on a loan, we will generally not recognize subsequent interest income until cash
is received or we make the decision to restart interest accrual on the loan.



Accounts receivable primarily consist of straight-line rental revenue receivables of $0.2 million as of
March 31, 2010 and December 31, 2009 and receivables from our tenants related to 1875 Lawrence, a multi-tenant office building located in Denver, Colorado ("1875 Lawrence").



Prepaid expenses and other assets include prepaid directors' and officers' insurance, as well as prepaid insurance of our consolidated
property.



Deferred financing fees are recorded at cost and are amortized to interest expense of our note payable using a
straight-line method that approximates the effective interest method over the life of the related debt. Accumulated amortization of deferred financing fees was $0.2 million and
$0.1 million as of March 31, 2010 and the year ended December 31, 2009, respectively.



We reimburse our advisor or its affiliates for any organization and offering expenses incurred on our behalf in connection with the
primary offering (other than selling commissions and the dealer manager fee). Before October 2, 2009 we did not reimburse expenses that caused our total organization and offering expenses
(other than selling commissions and the dealer manager fee) related to our primary offering to exceed 1.5% of gross offering proceeds from the primary offering as of the date of reimbursement. At each
balance sheet date, we estimated the total gross public offering proceeds expected to be received under the Offering and recognized the amount of organization and offering reimbursement. We recorded
the amount of reimbursement at the lower of (a) 1.5% of the estimated gross public offering proceeds, or (b) the actual organization and offering costs incurred by our advisor or its
affiliates. Effective October 2, 2009, we changed the timing in determining the limit on the amount of the reimbursement of organization and offering expenses (other than selling commissions

13

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Table of Contents

Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

3. Summary of Significant Accounting Policies (Continued)

and
the dealer manager fee). Until $7.5 million of organization and offering expenses are reimbursed, we record the actual organization and offering costs incurred by our advisor or its
affiliates and reimbursed by us. See Note 11.

Organization
and offering expenses are defined generally as any and all costs and expenses incurred by us in connection with our formation, preparing for the Offering, the qualification
and registration of the Offering, and the marketing and distribution of our shares. Organization and offering expenses include, but are not limited to, accounting and legal fees, costs to amend the
registration statement and supplement the prospectus, printing, mailing and distribution costs, filing fees, amounts to reimburse our advisor or its affiliates for the salaries of employees, and other
costs in connection with preparing supplemental sales literature, telecommunication costs, fees of the transfer agent, registrars, trustees, escrow holders, depositories and experts, and fees and
costs for employees of our advisor or its affiliates to attend industry conferences.

All
offering costs are recorded as an offset to additional paid-in capital, and all organization costs are recorded as an expense at the time we become liable for the payment
of these amounts.



We have elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the
"Code"), and have qualified as a REIT since the year ended December 31, 2008. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement
that we distribute at least 90% of our REIT taxable income to our stockholders. As a REIT, we generally will not be subject to federal income tax at the corporate level. We are organized and operate
in such a manner as to qualify for taxation as a REIT under the Code and intend to continue to operate in such a manner, but no assurance can be given that we will operate in a manner so as to qualify
or remain qualified as a REIT.

We
have reviewed our tax positions under GAAP guidance that clarifies the relevant criteria and approach for the recognition and measurement of uncertain tax positions. The guidance
prescribes a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken, or expected to be taken, in a tax return. A tax position may only be
recognized in the financial statements if it is more likely than not that the tax position will be sustained upon examination. We believe it is more likely than not that the tax positions taken
relative to our status as a REIT will be sustained in any tax examination.



We have adopted a stock-based incentive award plan for our directors and consultants and for employees, directors and consultants of
our affiliates. We have not issued any stock-based awards under the plan as of March 31, 2010.

14

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Table of Contents

Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

3. Summary of Significant Accounting Policies (Continued)



At March 31, 2010 and December 31, 2009, we had cash and cash equivalents deposited in certain financial institutions in
excess of federally insured levels. We have diversified our cash and cash equivalents among several banking institutions in an attempt to minimize exposure to any one of these entities. We regularly
monitor the financial stability of these financial institutions and believe that we are not exposed to any significant credit risk in cash and cash equivalents or restricted cash.



Earnings (loss) per share is calculated based on the weighted average number of common shares outstanding during each period. The
weighted average shares outstanding used to calculate both basic and diluted income (loss) per share were the same for the three months ended March 31, 2010 and 2009 as there were no
stock-based awards outstanding.

4. New Accounting Pronouncements

There have been no developments to new accounting pronouncements, including the expected dates of adoption and estimated effects on our consolidated financial statements, from those
disclosed in our 2009 Annual Report on Form 10-K.

5. Real Estate and Real Estate Investments

As of March 31, 2010, we consolidated three real estate assets. In addition, we have a noncontrolling, unconsolidated ownership interest in one real estate asset that we account
for using the equity method. The following table presents certain information about our consolidated investments as of March 31, 2010:

Property Name

Location

Approximate
Rentable
Square Footage

Description

Ownership
Interest1875 Lawrence

Denver, CO

185,000

15-story office building

100%PAL Loan

(1)

n/a

redevelopment property

LenderPalms of Monterrey

Fort Myers, FL

n/a

multifamily

Lender


(1)Hotel
lodging units located on U.S. Army installations at Fort Hood, Texas; Fort Leavenworth, Kansas; Fort Myer, Virginia; Fort Polk,
Louisiana; Fort Riley, Kansas; Fort Rucker, Alabama; Fort Sam Houston, Texas; Tripler Army Medical Center and Fort Shafter, Hawaii;Fort Sill, Oklahoma; and Yuma Proving Ground, Arizona.


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Table of Contents

Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

5. Real Estate and Real Estate Investments (Continued)






The following table presents certain information about our unconsolidated investment as of March 31, 2010 and
December 31, 2009.

Carrying Value of InvestmentProperty Name

Ownership
Interest

March 31, 2010

December 31, 2009Stone Creek

9.99%

$
508

$
506


Our
investment in an unconsolidated joint venture as of March 31, 2010 and December 31, 2009 consisted of our proportionate share of the combined assets and liabilities of
our investment property as follows:

March 31, 2010

December 31, 2009Real estate assets, net

$
13,651

$
13,886Cash and cash equivalents


566


641Other assets


341


46Total assets

$
14,558

$
14,573Notes payable

$
12,881

$
12,917Other liabilities


249


151Total liabilities


13,130


13,068Equity


1,428


1,505Total liabilities and equity

$
14,558

$
14,573


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Table of Contents

Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

5. Real Estate and Real Estate Investments (Continued)

Our
equity in losses from this investment is our proportionate share of the combined loss of our unconsolidated joint venture for the three months ended March 31, 2010. We had no
unconsolidated joint ventures for the three months ended March 31, 2009.

Three Months
Ended
March 31, 2010Revenue

$
706Operating expenses:Operating expenses


222Property taxes


82Total operating expenses


304Operating income


402Non-operating expenses:Depreciation and amortization


242Interest and other, net


236Total non-operating expenses


478Net loss

$
(76
)Company's share of net loss

$
(7
)


6. Variable Interest Entities

GAAP requires the consolidation of VIEs in which an enterprise has a controlling financial interest. A controlling financial interest will have both of the following characteristics:
(a) the power to direct the activities of a VIE that most significantly impact the VIEs economic performance and (b) the obligation to absorb losses of the VIE that could potentially be
significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Our
variable interest in VIEs may be in the form of (1) equity ownership and/or (2) loans provided by us to a VIE, or other partner. We examine specific criteria and use
judgment when determining if we are the primary beneficiary of a VIE. Factors considered in determining whether we are the primary beneficiary include risk and reward sharing, experience and financial
condition of other partner(s), voting rights, involvement in day-to-day capital and operating decisions, representation on a VIE's executive committee, existence of unilateral
kick-out rights or voting rights, level of economic disproportionality between us and the other partner(s), and contracts to purchase assets from VIEs.



On August 14, 2009, we entered into a loan agreement with an unaffiliated third party (borrower) to provide up to
$25 million of second lien financing for the privatization of, and improvements to, approximately 3,200 hotel lodging units on ten U.S. Army installations, the PAL Loan. As of March 31,
2010, $12.8 million of the aggregate $25 million available under the loan agreement was outstanding and is included in real estate loans receivable on the Consolidated Balance Sheet at
March 31, 2010.

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Table of Contents

Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

6. Variable Interest Entities (Continued)

Based
on our evaluation, we have determined that the entity meets the criteria of a variable interest entity but that we are not the primary beneficiary because we do not have the power to direct the
activities that most significantly affect the entity's economic performance. The power to direct these activities resides with the general partner of the unaffiliated third party. Accordingly, we do
not consolidate the unaffiliated third-party entity.



In November 2009, we acquired a 9.99% limited partnership interest in a multifamily property, Stone Creek, in Killeen, Texas for
$0.5 million. Based on our evaluation, we have determined that the entity meets the criteria of a variable interest entity under GAAP but that we are not the primary beneficiary because we do
not have a significant obligation to absorb losses or significant right to receive benefits. These obligations and rights are held by the owner of the 90% interest. Accordingly, we do not consolidate
the Stone Creek entity and instead account for it under the equity method of accounting.

At
March 31, 2010 and December 31, 2009, our recorded investment in VIEs that are unconsolidated and our maximum exposure to loss were as follows:

As of March 31, 2010

Investments in
Unconsolidated VIEs

Our Maximum
Exposure to LossPAL Loan(1)

$


$
25,000Stone Creek


508


508$
508

$
25,508




As of December 31, 2009

Investments in
Unconsolidated VIEs

Our Maximum
Exposure to LossPAL Loan(1)

$


$
25,000Stone Creek


506


506$
506

$
25,506


(1)We
have no equity interest in the PAL Loan VIE. Our maximum exposure to loss consists of the $25 million loan commitment of second lien
financing.


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Table of Contents

Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)




7. Real Estate Loans Receivable

As of March 31, 2010 and December 31, 2009, we had invested in two real estate loans receivable.

Loan Name

Date Acquired

Property Type

Book Value as
of 3/31/2010

Book Value as
of 12/31/2009

Annual
Effective
Interest Rate

Maturity DatePAL Loan


8/14/2009

Hospitality

$
12,639

$
12,634

18%

9/1/2016Palms of Monterrey


10/2/2009

Multifamily


27,091


27,078

(1)

(1)$
39,730

$
39,712


(1)We
acquired the loan in default with the intent to foreclose on the borrower and secure a fee simple interest in the underlying collateral.
Because we have no reasonable expectation about the timing and amount of cash flows expected to be collected, while the loan remains in default we are recognizing interest income only to the extent of
cash received.


During
the three months ended March 31, 2010, we earned $1.4 million in interest income from our real estate loans receivable, $0.6 related to the PAL Loan. Until the
foreclosure process is complete, we recognize interest income on the defaulted note when cash is received. During the three months ended March 31, 2010, we received $0.8 million related
to the Palms of Monterrey real estate loan receivable, which was recognized as interest income in the period received. On January 20, 2010, we reached an agreement with the borrower under the
Palms of Monterrey real estate loan receivable pursuant to which the borrower will no longer contest the foreclosure proceedings in exchange for $0.3 million. A final judgment of foreclosure
was entered on March 22, 2010 and the foreclosure sale for Palms of Monterrey was held on April 27, 2010. We were the only bidder in the sale and we acquired a fee simple interest in the
property on May 10, 2010.

8. Note Payable

The following table sets forth information on our note payable on 1875 Lawrence as of March 31, 2010 and December 31, 2009.

Description

March 31, 2010

December 31, 2009

Interest Rate

Maturity
Date1875 Lawrence

$
18,500

$
18,500

30-day LIBOR + 2.5%(1)

12/31/12


(1)30-day
LIBOR was 0.249% at March 31, 2010. The loan has a minimum interest rate of 6.25%.


We
have unconditionally guaranteed payment of the loan for an amount not to exceed the lesser of (i) $11.75 million and (ii) 50% of the total amount advanced under
the loan agreement if the aggregate amount advanced is less than $23.5 million. Due to the variable interest rate nature of this loan, we believe that this loan is stated at its fair value as
of March 31, 2010.

We
are subject to customary affirmative, negative, and financial covenants, representations, warranties and borrowing conditions, all as set forth in the loan agreement. As of
March 31, 2010, we believe we were in compliance with the covenants under our loan agreement.

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Table of Contents

Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

8. Note Payable (Continued)

The
following table summarizes our contractual obligations for principal payments as of March 31, 2010:

Year

Amount Due2011

$
2932012


18,207$
18,500


9. Leasing Activity

Future minimum base rental payments due to us under non-cancelable leases in effect as of March 31, 2010 for 1875 Lawrence are as follows:

Year

Minimum
Rental
PaymentsApril 1, 2010 - December 31, 2010

$
2,3142011


1,9992012


1,4582013


7212014


225Thereafter


Total

$
6,717


As
of March 31, 2010, one of our tenants accounted for 10% or more of our aggregate annual rental revenues from our consolidated property, 1875 Lawrence. Policy
Studies, Inc., a tenant in the healthcare consulting services industry, accounted for rental revenue of approximately $0.2 million, or approximately 15%, of our aggregate rental revenues
for the three months ended March 31, 2010. Policy Studies, Inc. has exercised its termination option and plans to vacate the building on or before August 31, 2010.

10. Distributions

We initiated the payment of monthly distributions in April 2008 in an amount equal to a 3% annualized rate of return, based on an investment in our common stock of $10.00 per share and
calculated on a daily record basis of $0.0008219 per share. The annualized rate of return was raised to 5% effective June 1, 2009, calculated on a daily record basis of $0.0013699 per share. A
portion of each distribution is expected to constitute a return of capital for tax purposes. Pursuant to the DRP, stockholders may elect to reinvest any cash distribution in additional shares of
common stock. We record all distributions when declared, except that the stock issued through the DRP is recorded when the shares are actually issued. Distributions declared and payable as of
March 31, 2010 were $0.7 million, which included $0.2 million of cash distributions payable. Distributions declared and payable as of March 31, 2009 were
$0.2 million, which included $0.1 million of cash distributions payable.

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Table of Contents

Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

10. Distributions (Continued)

The
following are the distributions declared for the three months ended March 31, 2010 and 2009:

2010

Cash

DRP

Total

Per Share1st Quarter

$
571

$
1,396

$
1,967


0.123




2009

Cash

DRP

Total

Per Share1st Quarter

$
147

$
439

$
586


0.074


On
December 16, 2009, the Company's board of directors declared distributions payable to the stockholders of record each day during the months of January, February, and March
2010. On March 26, 2010, the Company's board of directors declared distributions payable to stockholders of record each day during the months of April, May, and June 2010. Distributions payable
to each stockholder of record will be paid on or before the 16th day of the following month.

11. Related Party Transactions

Our advisor and certain of its affiliates will receive fees and compensation in connection with the Offering, and in connection with the acquisition, management, and sale of our assets.

Behringer
Securities LP ("Behringer Securities"), the dealer-manager and an affiliate of our advisor, receives commissions of up to 7% of gross offering proceeds. Behringer
Securities reallows 100% of selling commissions earned to participating broker-dealers. In addition, we pay Behringer Securities a dealer manager fee of up to 2.5% of gross offering proceeds. Pursuant
to separately negotiated agreements, Behringer Securities may reallow a portion of its dealer manager fee in an aggregate amount up to 2% of gross offering proceeds to broker-dealers participating in
the Offering; provided, however, that Behringer Securities may reallow, in the aggregate, no more than 1.5% of gross offering proceeds for marketing fees and expenses, conference fees and
non-itemized, non-invoiced due diligence efforts and no more than 0.5% of gross offering proceeds for out-of-pocket and bona fide, separately invoiced
due diligence expenses incurred as fees, costs or other expenses from third parties. Further, in special cases pursuant to separately negotiated agreements and subject to applicable limitations
imposed by the Financial Industry Regulatory Authority, Behringer Securities may use a portion of its dealer manager fee to reimburse certain broker-dealers participating in the Offering for
technology costs and expenses associated with the Offering and costs and expenses associated with the facilitation of the marketing and ownership of our shares by such broker-dealers' customers. No
selling commissions or dealer manager fee will be paid for sales under the DRP. For the three months ended March 31, 2010, Behringer Securities earned selling commissions and dealer manager
fees of $1.6 million and $0.6 million, respectively, which were recorded as a reduction to additional paid-in capital. For the three months ended March 31, 2009,
Behringer Securities earned selling commissions and dealer manager fees of $0.8 million and $0.3 million, respectively, which were recorded as a reduction to additional
paid-in capital.

We
reimburse Behringer Opportunity Advisors II or its affiliates for any organization and offering expenses incurred on our behalf in connection with our primary offering (other than
selling commissions and the dealer manager fee). On October 2, 2009, we entered into an Amended and

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Table of Contents

Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

11. Related Party Transactions (Continued)

Restated
Advisory Management Agreement with Behringer Opportunity Advisors II. The Amended and Restated Advisory Management Agreement changes the timing in determining the reimbursement of
organization and offering expenses by us during the offering and waives the reimbursement of $3.5 million of organization and offering expenses (other than selling commissions and the dealer
manager fee) the advisor incurred on our behalf through December 31, 2008. We wrote off the $3.5 million of organization and offering expenses in the fourth quarter of 2009 which reduced
the outstanding balance payable to affiliates, and increased our additional paid-in capital. Pursuant to the Amended and Restated Advisory Management Agreement we will reimburse our
advisor for organization and offering expenses (other than selling commissions and the dealer manager fee) incurred on our behalf until an aggregate of $7.5 million of such organization and
offering expenses have been reimbursed to our advisor. Thereafter, we will not reimburse any such organization and offering expenses until the completion of our primary offering. Upon completion of
our primary offering, we will reimburse our advisor for any additional organization and offering expenses (other than selling commissions and the dealer manager fee) incurred up to 1.5% of the gross
proceeds from the completed primary offering; provided however, we will not be required to reimburse our advisor any additional amounts and our advisor will be required to reimburse us to the extent
that the total amount spent by us on organization and offering expenses (other than selling commissions and the dealer manager fee) would exceed 1.5% of the gross proceeds from the completed primary
offering. In connection with the Amended and Restated Advisory Management Agreement, we reimbursed
$3.4 million of organization and offering expenses to Behringer Opportunity Advisors II on October 20, 2009.

Since
our inception through March 31, 2010, approximately $10.5 million of organization and offering expenses had been incurred by Behringer Opportunity Advisors II or its
affiliates on our behalf. Of this amount, $6.8 million had been reimbursed by us, $3.5 million had been written off per the Amended and Restated Advisory Management Agreement (discussed
above), and $0.2 million of reimbursements payable is included in payables to affiliates on our balance sheet. Of the $0.2 million of organization and offering expenses reimbursable by
us through March 31, 2010, none was expensed as organizational costs. Therefore, the entire $0.2 million was recorded as a reduction of additional paid-in capital. Behringer
Opportunity Advisors II or its affiliates determines the amount of organization and offering expenses owed based on specific invoice identification as well as an allocation of costs to us and other
Behringer Harvard programs, based on respective equity offering results of those entities in offering.

Our
advisor or its affiliates will also receive acquisition and advisory fees of 2.5% of the amount paid and/or budgeted in respect of the purchase, development, construction, or
improvement of each asset we acquire, including any debt attributable to these assets. Our advisor and its affiliates will also receive acquisition and advisory fees of 2.5% of the funds advanced in
respect of a loan or other investment.

Our
advisor or its affiliates also receive an acquisition expense reimbursement in the amount of 0.25% of the funds paid for purchasing an asset, including any debt attributable to the
asset, plus 0.25% of the funds budgeted for development, construction, or improvement in the case of assets that we acquire and intend to develop, construct, or improve. Our advisor or its affiliates
will also receive an acquisition expense reimbursement in the amount of 0.25% of the funds advanced in respect of a

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Table of Contents

Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

11. Related Party Transactions (Continued)

loan
or other investment. In addition, to the extent our advisor or its affiliates directly provide services formerly provided or usually provided by third parties, including without limitation
accounting services related to the preparation of audits required by the SEC, property condition reports, title services, title insurance, insurance brokerage or environmental services related to the
preparation of environmental assessments in connection with a completed investment the direct employee costs and burden to our advisor of providing these services will be acquisition expenses for
which we will reimburse our advisor. We also pay third parties, or reimburse the advisor or its affiliates, for any investment-related expenses due to third parties in the case of a completed
investment, including, but not limited to, legal fees and expenses, travel and communication expenses, costs of appraisals, accounting fees and expenses, third-party brokerage or finder's fees, title
insurance, premium expenses, and other closing costs. In addition, acquisition expenses for which we will reimburse our advisor, include any payments made to (i) a prospective seller of an
asset, (ii) an agent of a prospective seller of an asset, or (iii) a party that has the right to control the sale of an asset intended for investment by us that are not refundable and
that are not ultimately applied against the purchase price for such asset. Except as described above with respect to services customarily or previously provided by third parties, our advisor is
responsible for paying all of the expenses it incurs associated with persons employed by the advisor to the extent dedicated to making investments for us, such as wages and benefits of the investment
personnel. Our
advisor or its affiliates are also responsible for paying all of the investment-related expenses that we or our advisor or its affiliates incur that are due to third parties or related to the
additional services provided by our advisor as described above with respect to investments we do not make other than certain non-refundable payments made in connection with any
acquisition. For the three months ended March 31, 2010 and 2009, we incurred no acquisition and advisory fees or acquisition expense reimbursements.

We
pay our advisor or its affiliates a debt financing fee of 1% of the amount available under any loan or line of credit made available to us. It is anticipated that our advisor will pay
some or all of these fees to third parties with whom it subcontracts to coordinate financing for us. We did not incur any debt financing fees for the three months ended March 31, 2010 or 2009.

We
pay our advisor or its affiliates a development fee in an amount that is usual and customary for comparable services rendered to similar projects in the geographic market of the
project if such affiliate provides the development services and if a majority of our independent directors determines that such development fee is fair and reasonable and on terms and conditions not
less favorable than those available from unaffiliated third parties. We incurred no such fees for the three months ended March 31, 2010 or 2009.

We
pay our property manager and affiliate of our advisor, Behringer Harvard Opportunity II Management Services, LLC ("BHO II Management"), or its affiliates, fees for the
management, leasing, and construction supervision of our properties. Property management fees are 4.5% of the gross revenues of the properties managed by BHO II Management or its affiliates plus
leasing commissions based upon the customary leasing commission applicable to the same geographic location of the respective property. In the event that we contract directly with a third-party
property manager in respect of a property, BHO II Management or its affiliates receives an oversight fee equal to 0.5% of the gross revenues of the property managed. In no event will BHO II Management
or its affiliates receive both a property management fee and an oversight fee with respect to any particular property.

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Table of Contents

Behringer Harvard Opportunity REIT II, Inc.

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

11. Related Party Transactions (Continued)

In
the event we own a property through a joint venture that does not pay BHO II Management directly for its services, we will pay BHO II Management a management fee or oversight fee, as applicable,
based only on an economic interest in the property. We incurred and expensed property management fees or oversight fees to BHO II Management of less than $0.1 million for each of the three
months ended March 31, 2010 and 2009.

We
pay our advisor or its affiliates a monthly asset management fee of one-twelfth of 1.0% of the sum of the higher of the cost or value of each asset. For the three months
ended March 31, 2010 and 2009, we expensed $0.2 million and $0.1 million, respectively, of asset management fees.

We
reimburse our advisor or its affiliates for all expenses paid or incurred by the advisor in connection with the services provided to us, subject to the limitation that we will not
reimburse our advisor for any amount by which its operating expenses (including the asset management fee) at the end of the four preceding fiscal quarters exceeds the greater of: (A) 2% of our
average invested assets, or (B) 25% of our net income determined without reduction for any additions to reserves for depreciation, bad debts or other similar non-cash reserves and
excluding any gain from the sale of our assets for that period. Notwithstanding the above, we may reimburse the advisor for expenses in excess of this limitation if a majority of our independent
directors determines that such excess expenses are justified based on unusual and non-recurring factors. For each of the three months ended March 31, 2010 and 2009, we incurred and
expensed such costs for administrative services totaling $0.1 million.

We
are dependent on Behringer Securities, Behringer Opportunity Advisors II, and BHO II Management for certain services that are essential to us, including the sale of shares of our
common stock, asset acquisition and disposition decisions, property management and leasing services, and other general administrative responsibilities. In the event that these companies were unable to
provide us with their respective services, we would be required to obtain such services from other sources.

12. Supplemental Cash Flow Information

Supplemental cash flow information is summarized below:

Three months
ended March 31,2010

2009Interest paid

$
289

$
193Non-cash financing activities:Common stock issued in distribution reinvestment plan

$
1,333

$
416Accrued dividends payable

$
710

$
213Offering costs payable to related parties

$
262

$
265


*****

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Table of Contents

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

The following discussion and analysis should be read in conjunction with our accompanying financial statements and the notes thereto.

Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q constitute "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These
forward-looking statements include discussion and analysis of the financial condition of Behringer Harvard Opportunity REIT II, Inc. and our subsidiaries (which may
be referred to herein as the "Company," "we," "us" or "our"), including our ability to rent space on favorable terms, to address our debt maturities and to fund our liquidity requirements, the value
of our assets, our anticipated capital expenditures, the amount and timing of anticipated future cash distributions to our stockholders, the estimated per share value of our common stock and other
matters. Words such as "may," "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "would," "could," "should" and variations of these words and similar expressions are
intended to identify forward-looking statements.

These
forward-looking statements are not historical facts but reflect the intent, belief or current expectations of our management based on their knowledge and understanding of the
business and industry, the economy and other future conditions. These statements are not guarantees of future performance, and we caution stockholders not to place undue reliance on forward-looking
statements. Actual results may differ materially from those expressed or forecasted in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not
limited to the factors listed and described under Item 1A, "Risk Factors" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on
March 30, 2010 and the factors described below:



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Forward-looking
statements in this Quarterly Report on Form 10-Q reflect our management's view only as of the date of this Report, and may ultimately prove to be
incorrect. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results. We
intend for these forward-looking statements to be covered by the applicable safe harbor provisions created by Section 27A of the Securities Act and Section 21E of the Exchange Act.

Cautionary Note

The representations, warranties, and covenants made by us in any agreement filed as an exhibit to this quarterly report are made solely
for the benefit of the parties to the agreement, including, in some cases, for the purpose of allocating risk among the parties to the agreement, and should not be deemed to be representations,
warranties, or covenants to or with any other parties. Moreover, these representations, warranties or covenants should not be relied upon as accurately describing or reflecting the current state of
our affairs.

Executive Overview

We were formed primarily to acquire and operate commercial real estate and real estate-related assets on an opportunistic basis. In
particular, we focus generally on acquiring commercial properties with significant possibilities for short-term capital appreciation, such as those requiring development, redevelopment or
repositioning, those located in markets and submarkets with high growth potential, and those available from sellers who are distressed or face time-sensitive deadlines. In addition, given
current economic conditions, our opportunistic investment strategy may also include investments in loans secured by or related to real estate at more attractive rates of current return than have been
available for some time. Such loan investments may have capital gain characteristics, whether as a result of a discount purchase or related equity participations. We may acquire a wide variety of
commercial properties, including office, industrial, retail, hospitality, recreation and leisure, single-tenant, multifamily, and other real properties. These properties may be existing,
income-producing properties, newly constructed properties or properties under development or construction, and may include multifamily properties purchased for conversion into condominiums and
single-tenant properties that may be converted for multi-tenant use. Further, we may invest in real estate-related securities, including securities issued by other real estate companies, either for
investment or in change of control transactions completed on a negotiated basis
or otherwise. We also may originate or invest in collateralized mortgage-backed securities, mortgage, bridge or mezzanine loans, and Section 1031 tenant-in-common
interests (including those issued by affiliates of our advisor), or in entities that make investments similar to the foregoing. We expect to make our investments in or in respect of real estate assets
located in the United States and other countries based on current market conditions.

On
February 26, 2007, we filed a Registration Statement on Form S-11 with the SEC to offer up to 125,000,000 shares of common stock for sale to the public, of
which 25,000,000 shares are being offered pursuant to our DRP. We reserve the right to reallocate the shares we are offering between our primary offering and the DRP. The SEC declared our Registration
Statement effective on January 4, 2008, and we commenced our ongoing initial public offering on January 21, 2008. We commenced operations on April 1, 2008 upon satisfaction of the
conditions of our escrow agreement and acceptance of initial subscriptions of common stock.

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Market Outlook

Beginning in 2008, the U.S. and global economies have experienced a significant downturn. This downturn included disruptions in the
broader financial and credit markets, declining consumer confidence, and an increase in unemployment rates. These conditions have contributed to weakened market conditions. Due to the struggling U.S.
and global economies, including losses in the financial and professional services industries, overall demand across most real estate sectors including office, multifamily, hospitality, and retail
remains low. We believe that corresponding rental rates will also remain weak at least through the first half of 2010. The national vacancy percentage for office space increased from 14.5% in the
fourth quarter of 2008 to 19.7% in the fourth quarter of 2009. Office vacancies are expected to peak at over 21% in 2010. Further, we believe that tenant defaults and bankruptcies are likely to
increase in the short-term. To date, we have not experienced any significant tenant defaults resulting in the loss of material rental income.

As
a result of the existing economic conditions, our primary objectives are to raise capital and to take advantage of favorable investment opportunities. We believe that the current
economic environment will result in investment opportunities for many high-quality real estate and real estate-related assets. To the extent that we have capital available to invest, we
plan to actively pursue investment opportunities.

Liquidity and Capital Resources

Our principal demands for funds will be for the acquisition of real estate and real estate-related assets, for the payment of operating
expenses and distributions, and for the payment of interest on our outstanding indebtedness. Generally, we expect to meet cash needs for items other than acquisitions from our cash flow from
operations, and we expect to meet cash needs for acquisitions from the net proceeds of the Offering and from financings.

We
expect to fund our short-term liquidity requirements by using the net proceeds realized from the Offering and cash flow from the operations of investments we acquire.
Operating cash flows are expected to increase as additional real estate assets are added to the portfolio. For both our short-term and long-term liquidity requirements, other
potential future sources of capital may include proceeds from secured or unsecured financings from banks or other lenders, proceeds from the sale of our investments, if and when any are sold, and
undistributed funds from operations. If necessary, we may use financings or other sources of capital in the event of unforeseen significant capital expenditures.

Our
advisor may, but is not required to, establish capital reserves from gross offering proceeds, out of cash flow generated by operating properties and other investments, or out of
non-liquidating net sale proceeds from the sale of our properties and other investments. Capital reserves are typically utilized for non-operating expenses such as tenant
improvements, leasing commissions and major capital expenditures. Alternatively, a lender may require its own formula for escrow of capital reserves.

We
intend to borrow money to acquire properties and make other investments. There is no limitation on the amount we may invest in any single property or other asset or on the amount we
can borrow for the purchase of any individual property or other investment. Under our charter, the maximum amount of our indebtedness shall not exceed 300% of our "net assets" (as defined by our
charter) as of the date of any borrowing; however, we may exceed that limit if approved by a majority of our independent directors. In addition to our charter limitation, our board of directors has
adopted a policy to generally limit our aggregate borrowings to approximately 75% of the aggregate value of our assets unless substantial justification exists that borrowing a greater amount is in our
best interests. Our policy limitation, however, does not apply to individual real estate assets and will only apply once we have ceased raising capital under the Offering or any subsequent offering
and invested substantially all of our capital. As a result, we expect to borrow more than 75% of the contract purchase price of

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each
real estate asset we acquire during the early periods of our operations to the extent our board of directors determines that borrowing at these levels is prudent.

The
commercial real estate debt markets are continuing to experience volatility as a result of certain factors, including the tightening of underwriting standards by lenders and credit
rating agencies. Credit spreads for major sources of capital have widened significantly as investors have demanded a higher risk premium. This is resulting in lenders increasing the cost for debt
financing. Consequently, there is greater uncertainty regarding our ability to access the credit markets in order to attract financing on reasonable terms. Our ability to borrow funds to finance
future acquisitions could be adversely affected by our inability to secure permanent financing on reasonable terms, if at all.

Should
the overall cost of borrowings increase, either by increases in the index rates or by increases in lender spreads, we will need to factor such increases into the economics of our
acquisitions, developments and property contributions. This may result in our investment operations generating lower overall economic returns and a reduced level of cash flow, which could potentially
impact our ability to make distributions to our stockholders at current levels. In addition, the recent dislocations in the debt markets have reduced the amount of capital that is available to finance
real estate, which, in turn: (i) leads to a decline in real estate values generally; (ii) slows real estate transaction activity; (iii) reduces the loan to value upon which
lenders are willing to extend debt; and, (iv) results in difficulty in refinancing debt as it becomes due, all of which may reasonably be expected to have a material adverse impact on the value
of real estate investments and the revenues, income or cash flow from the acquisition and operations of real properties and mortgage loans. In addition, the current state of the debt markets has
negatively impacted the ability to raise equity capital.

If
the current debt market environment persists, we may modify our investment strategies in order to seek to optimize our portfolio performance. Our strategies may include, among other
options, limiting or eliminating the use of debt and focusing on those investments that do not require the use of leverage to meet our portfolio goals.

Debt Financings

We may, from time to time, make mortgage, bridge, or mezzanine loans and other loans for acquisitions and investments as well as
property development. We may obtain financing at the time an asset is acquired or an investment is made or at such later time as determined to be necessary, depending on multiple factors.

At
March 31, 2010, our note payable balance was $18.5 million and consisted of the note payable related to 1875 Lawrence. We have unconditionally guaranteed payment of the
loan for an amount not to exceed the lesser of (i) $11.75 million and (ii) 50% of the total amount advanced under the loan agreement if the aggregate amount advanced is less than
$23.5 million. At March 31, 2010, the interest rate on this note was 6.25%, and the loan matures on December 31, 2012. Our loan agreement stipulates that we comply with certain
reporting and financial covenants. These covenants include, among other things, maintaining minimum debt service coverage ratios. As of March 31, 2010, we believe we were in compliance with the
debt covenants under our loan agreement.

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One
of our principal long-term liquidity requirements includes the repayment of maturing debt. The following table provides information with respect to the maturities and
scheduled principal repayments of our indebtedness as of March 31, 2010. The table does not represent any extension options.

Payments Due by PeriodApril 1, 2010 -
December 31, 2010

2011

2012

After 2012

TotalPrincipal paymentsvariable rate debt

$


$
293

$
18,207

$


$
18,500Interest paymentsvariable rate debt (based on rates in effect as of March 31, 2010)


883


1,164


1,241





3,288Total

$
883

$
1,457

$
19,448

$


$
21,788


Results of Operations

As of March 31, 2010, we had invested in four real estate and real estate-related assets and consolidated
three:



In
addition, we have noncontrolling, unconsolidated interest in an investment that is accounted for using the equity method of accounting, a 9.99% interest in a multifamily property,
Stone Creek, in Killeen, Texas.

As
of March 31, 2009, we had invested in one property, 1875 Lawrence, located in Denver, Colorado.

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Three months ended March 31, 2010 as compared to the three months ended March 31, 2009

Three Months
Ended
March 31,

Increase
(Decrease)2010

2009

Amount

PercentRevenues:Rental revenue

$
1,312

$
1,325

$
(13
)

-1
%Interest income from real estate loans receivable


1,376





1,376


n/aTotal revenue

$
2,688

$
1,325

$
1,363


103
%Expenses:Property operating expenses

$
330

$
344

$
(14
)

-4
%Interest expense


322


326


(4
)

-1
%Real estate taxes


160


140


20


14
%Property management fees


47


46


1


2
%Asset management fees


186


86


100


116
%General and administrative


430


421


9


2
%Depreciation and amortization


557


603


(46
)

-8
%Total expenses

$
2,032

$
1,966

$
66


3
%


Revenues.Revenues for the three months ended March 31, 2010 were $2.7 million and consisted of rental revenue of
$1.3 million
generated by our consolidated property 1875 Lawrence and interest income from our real estate loans receivable of $1.4 million, of which $0.6 was related to the PAL Loan. We also
received $0.8 million related to the Palms of Monterrey real estate loan receivable, which was recognized as interest income in the period received. Revenues for the three months ended
March 31, 2009 were $1.3 million and consisted of rental revenue generated by 1875 Lawrence. We expect increases in rental revenue in the future as we have completed the foreclosure of
the Palms of Monterrey property and as we purchase additional real estate properties. We expect increases in interest income from real estate loans receivable as the remaining amounts available under
the PAL Loan are funded in the first half of 2010.

Property Operating Expenses.Property operating expenses for each of the three months ended March 31, 2010 and 2009 were
$0.3 million
and were comprised of operating expenses for 1875 Lawrence. We expect increases in property operating expenses in the future as we purchase additional real estate properties.

Interest Expense.Interest expense for each of the three months ended March 31, 2010 and 2009 was $0.3 million and was
comprised of
interest expense related to our note payable balance of $18.5 million.

Real Estate Taxes.Real estate taxes for the three months ended March 31, 2010 were $0.2 million as compared to
$0.1 million for
the three months ended March 31, 2009 and were comprised of real estate taxes related to 1875 Lawrence. We expect increases in real estate taxes in the future as we purchase additional real
estate properties.

Property Management Fees.Property management fees for each of the three months ended March 31, 2010 and 2009 were less than
$0.1 million and were comprised of fees related to 1875 Lawrence. We expect increases in property management fees in the future as we purchase additional real estate properties.

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Asset Management Fees.Asset management fees for the three months ended March 31, 2010 were $0.2 million and were comprised
primarily
of fees related to 1875 Lawrence. We also incurred asset management fees of less than $0.1 million each related to the PAL Loan, Palms of Monterrey, and Stone Creek. Asset management fees for
the three months ended March 31, 2009 were $0.1 million and were comprised of fees related to 1875 Lawrence. We expect increases in asset management fees in the future as we purchase
additional real estate and real estate-related investments.

General and Administrative Expenses.General and administrative expenses for the each of the three months ended March 31, 2010 and
2009 were
$0.4 million and were comprised of auditing fees, legal fees, board of directors' fees, and other administrative expenses. We expect increases in general and administrative expenses in the
future as we purchase additional real estate and real estate-related investments.

Depreciation and Amortization Expense.Depreciation and amortization expense for the each of the three months ended March 31, 2010
and 2009
was $0.6 million and was comprised of depreciation and
amortization related to 1875 Lawrence. We expect increases in depreciation and amortization expense in the future as we purchase additional real estate properties.

Cash Flow Analysis

Cash provided by operating activities for the three months ended March 31, 2010 was $1.2 million, and was comprised
primarily of net income of $0.8 million, depreciation and amortization of $0.3 million, an increase in accrued and other liabilities of $0.2 million, a decrease in accounts
receivable of $0.1 million, and a decrease in prepaid expenses and other assets of $0.1 million, offset by an increase in interest receivable-real estate loans receivable of
$0.3 million. Cash used in operating activities for the three months ended March 31, 2009 was $0.2 million, and was comprised primarily of net loss of $0.5 million, offset
by depreciation and amortization of $0.3 million.

Cash
used in investing activities for the three months ended March 31, 2010 and 2009 was $0.3 million and $0.2 million, respectively, and was comprised primarily of
additions of property and equipment at 1875 Lawrence.

Cash
provided by financing activities for the three months ended March 31, 2010 was $19.6 million, and was comprised primarily of the issuance of common stock, net of
offering costs, of approximately $20.5 million offset by distributions of $0.5 million and redemptions of common stock of $0.3 million. Cash provided by financing activities for
the three months ended March 31, 2009 was $10.5 million, and was comprised of the issuance of common stock, net of offering costs, of approximately $10.7 million offset by
distributions of $0.1 million.

Total Operating Expenses

In accordance with the Statement of Policy Regarding Real Estate Investment Trusts published by the North American Securities
Administrators Association, also known as the NASAA REIT Guidelines, our charter requires that we monitor our expenses on a trailing twelve month basis. Our charter defines the following terms and
requires that our Total Operating Expenses ("TOE") are deemed to be excessive if at the end of any quarter they exceed for the prior trailing twelve month period the greater of 2% of our Average
Invested Assets ("AIA") or 25% of our Net Income ("NI"). For the trailing twelve months ended March 31, 2010, TOE of $2.1 million exceeded the greater of 2% of our AIA or 25% of our NI
by $0.9 million. Our Board of Directors, including all of our independent directors, have reviewed this analysis and unanimously determined the excess to be justified because the Company was in
its development stage through April 1, 2008 when the Company accepted its first investors under its initial public offering and did not acquire its first real estate or real estate-related
asset until October 28, 2008 and did not acquire any additional assets until the third quarter of 2009,

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which
caused the expenses it incurred in connection with its organization and as a result of being a public company for audit and legal services, director and officer liability insurance, and fees and
expenses for board members in connection with service on the board and its committees to be disproportionate to the Company's AIA and its NI.

Funds from Operations and Modified Funds from Operations

Funds from operations ("FFO") is a non-GAAP financial measure that is widely recognized as a measure of REIT operating
performance. We use FFO, defined by the National Association of Real Estate Investment Trusts as net income (loss), computed in accordance with GAAP, excluding extraordinary items, as defined by GAAP,
and gains (or losses) from sales of property, plus depreciation and amortization on real estate assets, and after adjustments for unconsolidated partnerships, joint ventures, subsidiaries, and
noncontrolling interests as one measure to evaluate our operating performance. In addition to FFO, we use modified funds from operations ("Modified Funds from Operations" or "MFFO"), which excludes
from FFO acquisition-related costs, impairment charges, and adjustments to fair value for derivatives not qualifying for hedge accounting, to further evaluate our operating performance.

Historical
cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate diminishes predictably over time. Since real estate values have
historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost
accounting alone to be insufficient.
As a result, our management believes that the use of FFO and MFFO, together with the required GAAP presentations, provides a more complete understanding of our performance.

We
believe that FFO is helpful to investors and our management as a measure of operating performance because it excludes depreciation and amortization, gains and losses from property
dispositions, and extraordinary items, and as a result, when compared year to year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, development
activities, general and administrative expenses, and interest costs, which is not immediately apparent from net income. We believe MFFO is helpful to our investors and our management as a measure of
operating performance because it excludes costs that management considers more reflective of investing activities and other non-operating items included in FFO. By providing MFFO, we
present information that assists investors in aligning their analysis with management's analysis of long term, core operating activities. We believe fluctuations in MFFO are more indicative of changes
in operating activities and provide comparability in evaluating our performance over time and as compared to other real estate companies that may not have acquisition activities, derivatives, or
affected by impairments.

As
explained below, management's evaluation of our operating performance excludes the items considered in the calculation of MFFO based on the following economic
considerations:



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FFO
or MFFO should not be considered as an alternative to net income (loss), as an indication of our liquidity, nor as an indication of funds available to fund our cash needs, including
our ability to make distributions and should be reviewed in connection with other GAAP measurements.

For
the three months ended March 31, 2010, MFFO per share has been impacted by the increase in net proceeds realized from the Offering. During the three months ended
March 31, 2010, we sold 2.4 million shares of our common stock, increasing our outstanding shares by 17%. The proceeds from the issuance are temporarily invested in
short-term cash equivalents until they can be invested in real estate and real estate-related assets. Due to lower interest rates on cash equivalent investments, interest earnings were
minimal. We expect to invest these proceeds in higher earning real estate and real estate-related assets consistent with our investment policy. We believe this will add value to our stockholders over
our longer term investment horizon, even if this results in less current period earnings.

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Our
calculation of FFO and MFFO for the three months ended March 31, 2010 and 2009 is presented below (amounts in thousands except per share amounts):

Three Months
Ended March 31,2010

2009Net income (loss)

$
759

$
(541
)Net income (loss) attributable to noncontrolling interest


(72
)

Adjustments for:Real estate depreciation and amortization


557


603Pro rata share of unconsolidated JV depreciation and amortization(1)


24


Funds from operations (FFO)

$
1,268

$
62Other Adjustments:Acquisition expenses


48


MFFO

$
1,316

$
62GAAP weighted average shares:Basic and diluted


15,937


7,901MFFO per share

$
0.08

$
0.01


(1)This
represents the depreciation and amortization expense of our share of depreciation and amortization expense of Stone Creek which we
account for under the equity method of accounting.(2)This
reflects the noncontrolling interest adjustment for the third-party partners' proportionate share of the real estate depreciation and
amortization.


Provided
below is additional information related to selected non-cash items included in net loss above, which may be helpful in assessing our operating results.



In
addition, cash from MFFO may be used to fund all or a portion of certain capitalizable items that are excluded from MFFO, such as capital expenditures and payments of principal on
debt, each of which may impact the amount of cash available for distribution to our stockholders.

Distributions

Distributions are authorized at the discretion of our board of directors based on its analysis of our performance over the previous
period, expectations of performance for future periods, including actual and anticipated operating cash flow, changes in market capitalization rates for investments suitable for our portfolio, capital
expenditure needs, general financial condition, and other factors that our board deems relevant. The board's decision will be influenced, in substantial part, by its obligation to ensure

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that
we maintain our status as a REIT. In light of the pervasive and fundamental disruptions in the global financial and real estate markets, we cannot provide assurance that we will be able to
achieve expected cash flows necessary to continue to pay distributions at any particular level, or at all. If the current economic conditions continue, our board could determine to reduce our current
distribution rate or cease paying distributions in order to conserve cash.

Until
proceeds from the Offering are fully invested and generating sufficient operating cash flow to fully fund the payment of distributions to our stockholders, we have and will
continue to pay some or all of our distributions from sources other than operating cash flow. We may, for example, generate cash to pay distributions from financing activities, components of which may
include proceeds from the Offering and borrowings (including borrowings secured by our assets) in anticipation of future operating cash flow. In addition, from time to time, our advisor and its
affiliates may agree to waive or defer all, or a portion, of the acquisition, asset management or other fees or incentives due to them, pay general administrative expenses or otherwise supplement
investor returns in order to increase the amount of cash that we have available to pay distributions to our stockholders.

Cash
amounts distributed to stockholders during the three months ended March 31, 2010 were $0.5 million. Distributions funded through the issuance of shares under the DRP
during the three months ended March 31, 2010 were $1.3 million. For the three months ended March 31, 2010, cash flows provided by operating activities were $1.2 million.
Accordingly, for the three months ended March 31, 2010, all cash amounts distributed to stockholders were funded from cash flows provided by operating activities. Cash amounts distributed to
stockholders during the three months ended March 31, 2009 were $0.1 million. Distributions funded through the issuance of shares under the DRP during the three months ended
March 31, 2009 were $0.4 million. For the three months ended March 31, 2009, cash flows used in operating activities were $0.2 million. Accordingly, for the three months
ended March 31, 2009, none of the cash flows distributed to stockholders were funded from cash flow from operations. The shortfall for the three months ended March 31, 2009 was funded
from proceeds from the Offering.

The
following are the distributions paid and declared as of March 31, 2010 and 2009 (amounts in thousands except per share amounts).

Distributions PaidCash Flow
Provided by (Used
In) Operations

Total
Distributions
Declared

Declared
Distribution
Per Share2010

Cash

Reinvested

Total1st Quarter

$
531

$
1,333

$
1,864

$
1,170

$
1,967

$
0.123




Distributions PaidCash Flow
Provided by (Used
In) Operations

Total
Distributions
Declared

Declared
Distribution
Per Share2009

Cash

Reinvested

Total1st Quarter

$
138

$
416

$
554

$
(151
)
$
586

$
0.074


Distributions
declared per share assumes the share was issued and outstanding each day during the period and was based on a declared daily distribution rate of $0.0008219 per share per
day for the period through May 31, 2009. As of June 1, 2009, the effective daily distribution rate is $0.0013699. Each day during the first quarter of 2010 was a record date for
distributions. On March 26, 2010, the Company's board of directors declared distributions payable to the stockholders of record each day during the months of April, May, and June 2010.
Distributions payable to each stockholder of record will be paid in cash on or before the 16th day of the following month.

Operating
performance cannot be accurately predicted due to numerous factors, including our ability to raise and invest capital at favorable yields, the financial performance of our
investments in the

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current
real estate environment, the types and mix of investments in our portfolio and the accounting treatment of our investments in accordance with our accounting policies.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that are reasonably likely to have a current or future material effect on our
financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies and Estimates

Management's discussion and analysis of financial condition and results of operations are based upon our consolidated financial
statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires our management
to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On a regular basis, we
evaluate these estimates, including investment impairment. These estimates are based on management's historical industry experience and on various other assumptions that are believed to be reasonable
under the circumstances. Actual results may differ from these estimates.

Below
is a discussion of the accounting policies that we consider to be critical in that they may require complex judgment in their application or require estimates about matters that
are inherently uncertain.



Our consolidated financial statements include our accounts and the accounts of other subsidiaries over which we have control. All
inter-company transactions, balances, and profits have been eliminated in consolidation. Interests in entities acquired will be evaluated based on applicable GAAP, which includes the requirement to
consolidate entities deemed to be variable interest entities ("VIE") in which we are the primary beneficiary. If the interest in the entity is determined not to be a VIE, then the entities will be
evaluated for consolidation based on legal form, economic substance, and the extent to which we have control and/or substantive participating rights under the respective ownership agreement.

There
are judgments and estimates involved in determining if an entity in which we have made an investment is a VIE and, if so, whether we are the primary beneficiary. The entity is
evaluated to determine if it is a VIE by, among other things, calculating the percentage of equity being risked compared to the total equity of the entity. Determining expected future losses involves
assumptions of various possibilities of the results of future operations of the entity, assigning a probability to each possibility and using a discount rate to determine the net present value of
those future losses. A change in the judgments, assumptions, and estimates outlined above could result in consolidating an entity that should not be consolidated or accounting for an investment using
the equity method that should in fact be consolidated, the effects of which could be material to our financial statements.



Upon the acquisition of real estate properties, we recognize the assets acquired, the liabilities assumed, and any noncontrolling
interest as of the acquisition date, measured at their fair values. The acquisition date is the date on which we obtain control of the real estate property. The assets acquired and liabilities assumed
may consist of buildings, any assumed debt, identified intangible assets and asset retirement obligations. Identified intangible assets generally consist of the above-market and below-market leases,
in-place leases, in-place tenant improvements and tenant relationships. Goodwill is

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recognized
as of the acquisition date and measured as the aggregate fair value of the consideration transferred and any noncontrolling interests in the acquiree over the fair value of identifiable net
assets acquired. Likewise, a bargain purchase gain is recognized in current earnings when the aggregate fair value of the consideration transferred and any noncontrolling interests in the acquiree is
less than the fair value of the identifiable net assets acquired. Acquisition-related costs are expensed in the period incurred.

Initial
valuations are subject to change until our information is finalized, which is no later than twelve months from the acquisition date.

We
determine the value of above-market and below-market in-place leases for acquired properties based on the present value (using an interest rate that reflects the risks
associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management's estimate of
current market lease rates for the corresponding in-place leases, measured over a period equal to (a) the remaining non-cancelable lease term for above-market leases, or
(b) the remaining non-cancelable lease term plus any fixed rate renewal option for below-market leases. We record the fair value of above-market and below-market leases as
intangible assets or intangible liabilities, respectively, and amortize them as an adjustment to rental income over the above determined lease term.

The
total value of identified real estate intangible assets acquired is further allocated to in-place lease values and tenant relationships based on our evaluation of the
specific characteristics of each tenant's lease and our overall relationship with that respective tenant. The aggregate value of in-place leases acquired and tenant relationships is
determined by applying a fair value model. The estimates of fair value of in-place leases include an estimate of carrying costs during the expected lease-up periods for the
respective spaces, considering current market conditions. In estimating fair value of in-place leases, we consider items such as real estate taxes, insurance and other operating expenses,
as well as lost rental revenue during the expected lease-up period and carrying costs that would have otherwise been incurred had the leases not been in place, including tenant
improvements and commissions. The estimates of the fair value of tenant relationships also include costs to execute similar leases, including leasing commissions, legal costs and tenant improvements
as well as an estimate of the likelihood of renewal as determined by management on a tenant-by-tenant basis.

We
amortize the value of in-place leases to expense over the term of the respective leases. The value of tenant relationship intangibles is amortized to expense over the
initial term and any anticipated renewal periods, but in no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. Should a tenant terminate
its lease, the unamortized portion of the in-place lease value and tenant relationship intangibles is charged to expense.



We recognize rental income generated from leases on real estate assets on a straight-line basis over the terms of the
respective leases, including the effect of rent
holidays, if any. Straight-line rental revenue of less than $0.1 million was recognized in rental revenues for each of the three months ended March 31, 2010 and 2009.

We
recognize interest income from real estate loans receivable on an accrual basis over the life of the loan using the interest method. Direct loan origination fees and origination or
acquisition costs, as well as acquisition premiums or discounts, are amortized over the life of the loan as an adjustment to interest income. We will stop accruing interest on loans when there is
concern as to the ultimate collection of principal or interest of the loan. In the event that we stop accruing interest on a loan, we will generally not recognize subsequent interest income until cash
is received or we make the decision to restart interest accrual on the loan.

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For real estate we wholly own, we monitor events and changes in circumstances indicating that the carrying amounts of the real estate
assets may not be recoverable. When such events or changes in circumstances are present, we assess potential impairment by comparing estimated future undiscounted operating cash flows expected to be
generated over the life of the asset and from its eventual disposition to the carrying amount of the asset. In the event that the carrying amount exceeds the estimated future undiscounted operating
cash flows, we recognize an impairment loss to adjust the carrying amount of the asset to estimated fair value. We consider projected future undiscounted cash flows, trends, strategic decisions
regarding future development plans, and other factors in our assessment of whether impairment conditions exist. While we believe our estimates of future cash flows are reasonable, different
assumptions regarding factors such as market rents, economic conditions, and occupancy rates could significantly affect these estimates.

In
addition, we evaluate our investments in real estate loans receivable each reporting date and if it is probable we will not collect all principal and interest in accordance with the
terms of the loan, we will record an impairment charge based on these evaluations. While we believe it is currently probable we will collect all scheduled principal and interest with respect to our
real estate loans receivable, current market conditions with respect to credit availability and with respect to real estate market fundamentals create a significant amount of uncertainty. Given this,
any future adverse development in market conditions may cause us to re-evaluate our conclusions, and could result in material impairment charges with respect to our real estate loans
receivable.

In
evaluating our investments for impairment, management may use appraisals and makes estimates and assumptions, including, but not limited to, the projected date of disposition of the
properties, the estimated future cash flows of the properties during our ownership, and the projected sales price of each of the properties. A future change in these estimates and assumptions could
result in understating or overstating the book value of our investments, which could be material to our financial statements.

We
believe the carrying value of our operating real estate and loan investments is currently recoverable. Accordingly, there were no impairment charges for the three months ended
March 31, 2010 or 2009. However, if market conditions worsen beyond our current expectations, or if changes in our strategy significantly affect any key assumptions used in our fair value
calculations, we may need to take charges in future periods for impairments related to our existing investments. Any such non-cash charges would have an adverse effect on our consolidated
financial position and results of operations.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.



We may be exposed to interest rate changes primarily as a result of long-term debt used to acquire properties and make
loans and other permitted investments. Our management's objectives, with regard to interest rate risks, are to limit the impact of interest rate changes on earnings and cash flows and to lower overall
borrowing costs. To achieve these objectives, we will borrow primarily at fixed rates or variable rates with the lowest margins available and in some cases, with the ability to convert variable rates
to fixed rates. With regard to variable rate financing, we will assess interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely
impact expected future cash flows and by evaluating hedging opportunities. We may enter into derivative financial instruments such as options, forwards, interest rate swaps, caps, or floors to
mitigate our interest rate risk on a related financial instrument or to effectively lock the interest rate portion of our variable rate debt. At March 31, 2010, we had one note payable
outstanding that was subject to a variable interest rate based on LIBOR plus a margin of 2.5%. However, the note payable has a

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minimum
interest rate of 6.25%, which if the LIBOR rate increased 100 basis points would not result in an increase to a rate above the minimum.

Interest
rate fluctuations will generally not affect our future earnings or cash flows on our fixed rate real estate loan receivable, the PAL Loan, unless such instruments mature or are
otherwise terminated. However, interest rate changes will affect the fair value of our fixed rate instrument. As we expect to hold the PAL Loan to maturity and the amounts due under the loan would be
limited to the outstanding principal balance and any accrued and unpaid interest, we do not expect that fluctuations in interest rates would have a significant impact on the cash flows of our fixed
rate real estate loan receivable.

The
PAL Loan, a fixed rate real estate loan receivable, with $12.8 million outstanding under the loan as of March 31, 2010, has a maturity date of September 1, 2016
and accrues interest at 18% per annum. The PAL Loan is subject to market risk to the extent that the stated interest rate varies from current market rates for loans made under similar terms.

We
initiated foreclosure proceedings against the Palms of Monterrey borrower in order to take a fee simple interest in the property, a 408-unit multifamily complex on a
28-acre site located in Fort Myers, Florida. A final judgment of foreclosure was entered on March 22, 2010 and the foreclosure sale for Palms of Monterrey was held on
April 27, 2010. We were the only bidder in the sale and acquired a fee simple interest in the property on May 10, 2010. Accordingly, we do not believe that there is significant interest
rate risk associated with this investment.

Item 4T.    Controls and Procedures.



As required by Rule 13a-15(b) and Rule 15d-15(b) under the Exchange Act, our management,
including our Chief Executive Officer and Chief Financial Officer, evaluated, as of March 31, 2010, the effectiveness of our disclosure controls and procedures as defined in Exchange Act
Rule 13a-15(e) and Rule 15d-15(e). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and
procedures were effective, as of March 31, 2010, to provide reasonable assurance that information required to be disclosed by us in this report is recorded, processed, summarized and reported
within the time periods specified by the rules and forms of the Exchange Act and is accumulated and communicated to our management, including our Chief
Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

We
believe, however, that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls systems are met, and no
evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, within a company have been detected.



There has been no change in internal control over financial reporting that occurred during the quarter ended March 31, 2010 that
has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II  OTHER INFORMATION

Item 1.    Legal Proceedings.

We are not a party to, and none of our properties are subject to, any material pending legal proceedings.

Item 1A.    Risk Factors.

There have been no material changes from the risk factors set forth in our Annual Report on Form 10-K for the year
ended December 31, 2009.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.

Use of Proceeds from Registered Securities

On January 4, 2008, our Registration Statement on Form S-11 (File No. 333-140887),
covering a public offering of up to 125,000,000 shares of common stock, was declared effective under the Securities Act of 1933. The Offering commenced on January 21, 2008 and is ongoing. We
expect to offer the shares registered in our public offering over a three-year period. Under rules promulgated by the SEC, in some circumstances we may continue the offering beyond this
date. Our board of directors has the discretion to extend the offering period for the shares offered under the DRP up to the sixth anniversary of the termination of the primary offering.

We
are offering a maximum of 100,000,000 shares in our primary offering at an aggregate offering price of up to $1 billion, or $10.00 per share with discounts available to certain
categories of purchasers. The 25,000,000 shares offered under the DRP are being offered at an aggregate offering price of $237.5 million, or $9.50 per share. We may reallocate the shares of
common stock being offered between the primary offering and the DRP. Behringer Securities LP, an affiliate of our advisor, is the dealer manager of our offering. As of March 31, 2010, we
had sold 17,227,730 shares of our common stock, net of the 22,471 shares issued to Behringer Harvard Holdings, on a best efforts basis pursuant to the Offering for gross offering proceeds of
approximately $171.7 million.

From
the commencement of the Offering through March 31, 2010, we incurred the following expenses in connection with the issuance and distribution of the registered securities
pursuant to the Offering ($ in thousands):

Type of Expense

AmountOther expenses to affiliates(1)

$
22,519Other expenses to non-affiliates


Total expenses

$
22,519


(1)"Other
expenses to affiliates" includes commissions and dealer manager fees paid to Behringer Securities, which reallowed all or a portion of
the commissions and fees to soliciting dealers.


From
the commencement of the Offering through March 31, 2010, the net offering proceeds to us from the Offering, including the DRP, after deducting the total expenses incurred
described above, were $149.2 million. From the commencement of the Offering through March 31, 2010, we had used $67.6 million of such net proceeds to purchase interests in real
estate (net of notes payable) and real estate-related investments. Of the amount used for the purchase of these investments, $2 million was
paid to Behringer Opportunity Advisors II, as acquisition and advisory fees and acquisition expense reimbursement.

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Recent Sales of Unregistered Securities

During the period covered by this quarterly report, we did not sell any equity securities that were not registered under the Securities
Act of 1933.

Share Redemption Program

Our board of directors has adopted a share redemption program that permits stockholders to sell their shares back to us after they have
held them for at least one year, subject to the significant conditions and limitations of the program. Our board of directors can amend the provisions of our share redemption program without the
approval of our stockholders. The terms on which we redeem shares may differ between redemptions upon a stockholder's death, "qualifying disability" (as defined in the share redemption program) or
confinement to a long-term care facility (collectively referred to herein as "Exceptional Redemptions") and all other redemptions (referred to herein as "Ordinary Redemptions"). The
purchase price for shares redeemed under the redemption program is set forth below.

In
the case of Ordinary Redemptions, the purchase price per share will equal 90% of (i) the most recently disclosed estimated value per share as determined in accordance with our
valuation policy, less (ii) the aggregate distributions per share of any net sale proceeds from the sale of one or more of our assets, or other special distributions so designated by our board
of directors, distributed to stockholders after the valuation was determined (the "Valuation Adjustment"); provided, however, that the purchase price per share shall not exceed: (1) prior to
the first valuation conducted by the board of directors, or a committee thereof (the "Initial Board Valuation"), under the valuation policy, 90% of (i) average price per share the original
purchaser or purchasers of shares paid to us for all of his or her shares (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock)
(the "Original Share Price") less (ii) the aggregate distributions per share of any net sale proceeds from the sale of one or more of our assets, or other special distributions so designated by
the board of directors, distributed to stockholders prior to the redemption date (the "Special
Distributions"); or (2) on or after the Initial Board Valuation, the Original Share Price less any Special Distributions.

In
the case of Exceptional Redemptions, the purchase price per share will be equal to: (1) prior to the Initial Board Valuation, the Original Share Price less any Special
Distributions; or (2) on or after the Initial Board Valuation, the most recently disclosed valuation less any Valuation Adjustment, provided, however, that the purchase price per share may not
exceed the Original Share Price less any Special Distributions.

Notwithstanding
the redemption prices set forth above, our board of directors may determine, whether pursuant to formulae or processes approved or set by our board of directors, the
redemption price of the shares, which may differ between Ordinary Redemptions and Exceptional Redemptions; provided, however, that we must provide at least 30 days' notice to stockholders
before applying this new price determined by our board of directors.

Any
shares approved for redemption will be redeemed on a periodic basis as determined from time to time by our board of directors, and no less frequently than annually. We will not
redeem, during any twelve-month period, more than 5% of the weighted average number of shares outstanding during the twelve-month period immediately prior to the date of redemption. Generally, the
cash available for redemption on any particular date will be limited to the proceeds from our distribution reinvestment plan during the period consisting of the preceding four fiscal quarters for
which financial statements are available, less any cash already used for redemptions during the same period, plus, if we had positive operating cash flow during such preceding four fiscal quarters, 1%
of all operating cash flow during such preceding four fiscal quarters. The redemption limitations apply to all redemptions, whether Ordinary or Exceptional Redemptions.

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During
the first quarter ended March 31, 2010, we redeemed shares as follows:

2010

Total Number of
Shares
Redeemed

Average Price
Paid Per Share

Total Number of
Shares Purchased
as Part of
Publicly
Announced Plans
or Programs

Maximum
Number of Shares
That May Be
Purchased Under
the Plans or
ProgramsJanuary




$



February


31,800

$
8.97


31,800


(1)March




$



31,800

$
8.97


31,800


(1)


(1)A
description of the maximum number of shares that may be purchased under our redemption program is included in the narrative preceding this
table.


Item 3.    Defaults Upon Senior Securities.

None.

Item 4.    (Removed and Reserved.)

Item 5.    Other Information.

None.

Item 6.    Exhibits.

The exhibits filed in response to Item 601 of Regulation S-K are listed on the Exhibit Index attached hereto.

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SIGNATURE

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

BEHRINGER HARVARD OPPORTUNITY REIT II, INC.Dated: May 14, 2010

By:

/s/ GARY S. BRESKY Gary S. Bresky Executive Vice President and Chief Financial Officer
(Principal Financial Officer)


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Index to Exhibits

Exhibit Number

Description3.1

Second Articles of Amendment and Restatement as amended by the First Articles of Amendment and the Second Articles of Amendment (incorporated by reference to Exhibit 3.1 to Form 10-Q filed on
November 14, 2008)3.2

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to Form 10-K filed on March 30, 2010)3.2
(a)
Amendment to the Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2(a) to Form 10-K filed on March 30, 2010)4.1

Form of Subscription Agreement (incorporated by reference to Exhibit 4.1 to Post-Effective Amendment No. 10 to the Company's Registration Statement on Form S-11, Commission File
No. 333-140887)4.2

Amended and Restated Distribution Reinvestment Plan (incorporated by reference to Exhibit 4.2 to Post-Effective Amendment No. 10 to the Company's Registration Statement on Form S-11,
Commission File No. 333-140887)4.3

Amended and Restated Automatic Purchase Plan (incorporated by reference to Exhibit 4.3 to Post-Effective Amendment No. 10 to the Company's Registration Statement on Form S-11, Commission
File No. 333-140887)4.4

Amended and Restated Share Redemption Program (incorporated by reference to Exhibit 99.2 to Form 10-Q filed on November 12, 2009)4.5

Form of Escrow Agreement (incorporated by reference to Exhibit 4.4 to Pre-Effective Amendment No. 2 to the Company's Registration Statement on Form S-11, Commission File
No. 333-140887)4.6

Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without
certificates) (incorporated by reference to Exhibit 4.5 to Pre-Effective Amendment No. 3 to the Company's Registration Statement on Form S-11, Commission File No. 333-140887)4.7

Second Amended and Restated Advisory Management Agreement (incorporated by reference to Exhibit 10.1 to Form 10-K filed on March 30, 2010)31.1
*
Rule 13a-14(a)/15d-14(a) Certification31.2
*
Rule 13a-14(a)/15d-14(a) Certification32.1
*
Section 1350 Certifications**99.1

Valuation Policy (incorporated by reference to Exhibit 99.1 to Form 10-Q filed on November 12, 2009)


*Filed
herewith**In
accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed "filed" for purposes of Section 18 of the
Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act,
except to the extent that the registrant specifically incorporates it by reference.


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