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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q

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

                    FOR THE QUARTER ENDED SEPTEMBER 11, 1998

                                       OR

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


                           Commission File No. 0-14374


                 ATLANTA MARRIOTT MARQUIS II LIMITED PARTNERSHIP
             (Exact name of registrant as specified in its charter)
        Delaware                                          52-1427553
  ------------------------                    ----------------------------------
   (State of Organization)               (I.R.S. Employer Identification Number)
   10400 Fernwood Road, Bethesda, MD                      20817-1109
------------------------------------          ----------------------------------
(Address of principal executive offices)                  (Zip Code)

       Registrant's telephone number, including area code: (301) 380-2070
           Securities registered pursuant to Section 12(b) of the Act:
                                 Not Applicable
               Securities registered pursuant to Section 12(g) of
                                    the Act:
                      Units of Limited Partnership Interest
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.  Yes No (Not  Applicable.  The  Partnership  became subject to
Section 13 reporting on November 10, 1997.)

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                 ATLANTA MARRIOTT MARQUIS II LIMITED PARTNERSHIP
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                                TABLE OF CONTENTS
<TABLE>
<S>                                                                             <C>

                                                                                PAGE NO.
                         PART I - FINANCIAL INFORMATION



Item 1.    Financial Statements

           Condensed Consolidated Statement of Operations
              Twelve and Thirty-Six Weeks ended September 11, 1998 (Unaudited) 
              and September 12, 1997 (Unaudited)......................................1

           Condensed Consolidated Balance Sheet
              September 11, 1998 (Unaudited) and December 31, 1997....................2

           Condensed Consolidated Statement of Cash Flows
              Thirty-Six Weeks ended September 11, 1998 (Unaudited) and
              September 12, 1997 (Unaudited)..........................................3

           Notes to Condensed Consolidated Financial Statements (Unaudited)...........4

Item 2.    Management's Discussion and Analysis of Financial
              Condition and Results of Operations.....................................7


                                            PART II - OTHER INFORMATION


Item 1.    Legal Proceedings.........................................................14

Item 6.    Exhibits and Reports on Form 8-K..........................................15

</TABLE>

<PAGE>


     
                          PART I. FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

        ATLANTA MARRIOTT MARQUIS II LIMITED PARTNERSHIP AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                   (Unaudited)
                     (in thousands, except per Unit amounts)
<TABLE>
<S>                                                  <C>               <C>                <C>               <C>   

                                                             Twelve Weeks Ended                 Thirty-Six Weeks Ended
                                                       September 11,    September 12,       September 11,     September 12,
                                                           1998             1997                1998              1997
                                                     ----------------  ---------------    ----------------  ---------------
HOTEL REVENUES
   Rooms.............................................$         11,203  $        11,138    $         38,112  $        38,848
   Food and beverage.................................           4,374            5,016              16,643           18,270
   Other.............................................           1,091            1,194               3,870            3,994
                                                     ----------------  ---------------    ----------------  ---------------

                                                               16,668           17,348              58,625           61,112
                                                     ----------------  ---------------    ----------------  ---------------

OPERATING COSTS AND EXPENSES
   Hotel property-level costs and expenses
     Rooms...........................................           2,523            2,515               8,059            8,267
     Food and beverage...............................           3,489            3,954              11,675           12,324
     Other department costs and expenses.............             389              515               1,310            1,551
     Selling, administrative and other...............           3,805            3,751              12,059           12,184
                                                     ----------------  ---------------    ----------------  ---------------

       Total hotel property-level costs and expenses.          10,206           10,735              33,103           34,326

   Depreciation .....................................           1,131            1,169               4,022            3,518
   Property taxes and other..........................           1,090              904               3,013            2,611
   Base management fee...............................             500              536               1,759            1,847
   Incentive management fee..........................             (18)            (551)                 72            1,447
                                                     ----------------  ---------------    ----------------  ---------------

                                                               12,909           12,793              41,969           43,749
                                                     ----------------  ---------------    ----------------  ---------------

OPERATING PROFIT.....................................           3,759            4,555              16,656           17,363
   Interest expense..................................          (3,156)          (5,976)            (11,101)         (16,838)
   Interest income...................................             963              251               1,117              630
                                                     ----------------  ---------------    ----------------  ---------------

NET INCOME (LOSS) BEFORE
   EXTRAORDINARY ITEM................................           1,566           (1,170)              6,672            1,155

EXTRAORDINARY ITEM
   Gain on forgiveness of incentive management fees..              --               --               4,155               --
                                                     ----------------  ---------------    ----------------  ---------------

NET INCOME (LOSS)....................................$          1,566  $        (1,170)   $         10,827  $         1,155
                                                     ================  ===============    ================  ===============

ALLOCATION OF NET INCOME (LOSS)
   General Partner...................................$              7  $           (12)   $              7  $            11
   Class A Limited Partners..........................             695           (1,158)                695            1,144
   Class B Limited Partner...........................             864               --              10,125               --
                                                     ----------------  ---------------    ----------------  ---------------
                                                     $          1,566  $        (1,170)   $         10,827  $         1,155
                                                     ================  ===============    ================  ===============

NET INCOME (LOSS) PER CLASS A
   LIMITED PARTNER UNIT (530 Units)..................$          1,311  $        (2,185)   $          1,311  $         2,158
                                                     ================  ===============    ================  ===============

</TABLE>

            See Notes to Condensed Consolidated Financial Statements.


<PAGE>


        ATLANTA MARRIOTT MARQUIS II LIMITED PARTNERSHIP AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 (in thousands)

<TABLE>
<S>                                                                             <C>                 <C>


                                                                                  September 11,       December 31,
                                                                                      1998                1997
                                                                                ----------------    ---------------
                                                                                  (unaudited)

                                                       ASSETS

    Property and equipment, net.................................................$        167,711    $       165,372
    Due from Marriott International, Inc........................................           6,444              4,425
    Property improvement fund...................................................           3,760              2,756
    Deferred financing costs, net of accumulated amortization...................           3,147                321
    Other assets................................................................             275                 --
    Restricted cash reserves....................................................          19,043                 --
    Cash and cash equivalents...................................................           8,001             21,502
                                                                                ----------------    ---------------

                                                                                $        208,381    $       194,376
                                                                                ================    ===============


                   LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

LIABILITIES
    Mortgage debt...............................................................$        162,712    $       199,019
    Due to Host Marriott Corporation under Original Debt Service
      Guarantee and Commitment and Interest Guarantee...........................              --             30,524
    Term loan payable to Host Marriott Corporation..............................          20,134                 --
    Accrued interest............................................................             224             12,391
    Accounts payable and accrued expenses.......................................             127                352
    Due to Marriott International, Inc..........................................             115              4,198
                                                                                ----------------    ---------------

         Total Liabilities......................................................         183,312            246,484
                                                                                ----------------    ---------------

PARTNERS' CAPITAL (DEFICIT)
    General Partner.............................................................            (513)              (520)
    Class A Limited Partners....................................................         (59,543)           (57,588)
    Class B Limited Partner.....................................................          85,125              6,000
                                                                                ----------------    ---------------

         Total Partners' Capital (Deficit)......................................          25,069            (52,108)
                                                                                ----------------    ---------------

                                                                                $        208,381    $       194,376
                                                                                ================    ===============




</TABLE>



            See Notes to Condensed Consolidated Financial Statements.

<PAGE>


        ATLANTA MARRIOTT MARQUIS II LIMITED PARTNERSHIP AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)
<TABLE>
<S>                                                                             <C>                   <C>    



                                                                                       Thirty-Six Weeks Ended
                                                                                  September 11,       September 12,
                                                                                      1998                1997
                                                                                ----------------    ---------------

OPERATING ACTIVITIES
     Net income.................................................................$         10,827    $         1,155
     Less extraordinary item....................................................          (4,155)                --
                                                                                ----------------    ---------------
     Net income before extraordinary item.......................................           6,672              1,155
       Noncash items............................................................           4,189              4,985
       Changes in operating accounts............................................            (725)             1,933
       Change in accrued interest...............................................         (12,167)             3,422
                                                                                ----------------    ---------------

           Cash (used in) provided by operating activities......................          (2,031)            11,495
                                                                                ----------------    ---------------

INVESTING ACTIVITIES
     Changes in capital expenditure reserves....................................         (13,279)                --
     Additions to property and equipment, net...................................          (6,361)            (4,064)
     Working capital provided to Marriott International, Inc....................          (2,639)                --
     Change in property improvement fund........................................          (1,004)               877
                                                                                ----------------    ---------------

           Cash used in investing activities....................................         (23,283)            (3,187)
                                                                                ----------------    ---------------

FINANCING ACTIVITIES
     Proceeds from mortgage debt................................................         164,000                 --
     Repayment of mortgage debt.................................................        (200,288)                --
     Capital contributions from General Partner for Class B
      Limited Partnership Interest..............................................          69,000                 --
     Changes in restricted lender reserves......................................          (4,866)                --
     Repayments under Original Debt Service Guarantee and Commitment
       and Interest Guarantee to Host Marriott Corporation......................         (10,390)            10,390
     Payment of financing costs.................................................          (2,993)                --
     Capital distributions......................................................          (2,650)                --
     Payment of deferred interest on mortgage note payable......................              --            (17,590)
                                                                                ----------------    ---------------

           Cash provided by (used in) financing activities......................          11,813             (7,200)
                                                                                ----------------    ---------------

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS................................         (13,501)             1,108

CASH AND CASH EQUIVALENTS at beginning of period................................          21,502              5,601
                                                                                ----------------    ---------------

CASH AND CASH EQUIVALENTS at end of period......................................$          8,001    $         6,709
                                                                                ================    ===============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
     Cash paid for mortgage and other interest..................................$         23,119    $        28,470
                                                                                ================    ===============

</TABLE>

            See Notes to Condensed Consolidated Financial Statements.


<PAGE>


        ATLANTA MARRIOTT MARQUIS II LIMITED PARTNERSHIP AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   The  accompanying  condensed  consolidated  financial  statements have been
     prepared  by the  Atlanta  Marriott  Marquis  II Limited  Partnership  (the
     "Partnership")  without audit. Certain information and footnote disclosures
     normally  included in financial  statements  presented in  accordance  with
     generally  accepted  accounting  principles  have been condensed or omitted
     from the accompanying statements.  The Partnership believes the disclosures
     made  are  adequate  to make  the  information  presented  not  misleading.
     However, the condensed  consolidated financial statements should be read in
     conjunction with the Partnership's  consolidated  financial  statements and
     notes thereto  included in the  Partnership's  Form 10-K for the year ended
     December 31, 1997.

     In the opinion of the  Partnership,  the accompanying  unaudited  condensed
     consolidated  financial  statements  reflect all adjustments (which include
     only  normal  recurring   adjustments)  necessary  to  present  fairly  the
     financial position of the Partnership as of September 11, 1998, the results
     of operations for the twelve and thirty-six  weeks ended September 11, 1998
     and  September  12,  1997 and cash  flows for the  thirty-six  weeks  ended
     September  11,  1998  and  September  12,  1997.  Interim  results  are not
     necessarily  indicative of fiscal year performance  because of seasonal and
     short-term variations.

     Through  December 31, 1997, for financial  reporting  purposes the net
     income/(loss)  of the Partnership was allocated 99% to the limited partners
     and  1%  to  Marriott  Marquis  Corporation  (the  "General  Partner"),   a
     wholly-owned subsidiary of Host Marriott Corporation ("Host Marriott").  As
     reported in the Partnership's  Form 10-K for the fiscal year ended December
     31,  1997,  Atlanta  Marriott  Marquis  Limited   Partnership's   ("AMMLP")
     partnership  agreement  was amended as a result of the  Partnership  Merger
     (see   below)to   incorporate  a  revision  of  AMMLP's   allocations   and
     distributions  such that Partnership net income is generally  allocated (i)
     to the  General  Partner,  until the General  Partner has  received a 13.5%
     cumulative  compounded annual return on its Class B invested capital,  (ii)
     to the  General  Partner  and Class A limited  partners,  until the General
     Partner and the Class A limited  partners have  received a  non-cumulative,
     non-compounded  annual  return  of 5% on their  initial  investment  in the
     Partnership,  and (iii) thereafter, in proportion to total invested capital
     through  completion  of the merger  transactions  of  approximately  41% to
     limited partners and 59% to the General  Partner.  Net losses are generally
     allocated in  proportion  to the partners'  capital  accounts.  Significant
     differences  exist between the net  income/(loss)  for financial  reporting
     purposes  and  the  net  income/(loss)  reported  for  Federal  income  tax
     purposes.  These  differences  are due primarily to the use, for income tax
     purposes, of accelerated  depreciation  methods,  shorter depreciable lives
     for the assets,  and  differences in the timing of the  recognition of 1997
     incentive management fee expense.

     Through December 31, 1997, AMMLP owned an 80% general partnership  interest
     in Ivy Street Hotel  Limited  Partnership  ("Ivy")  which owned the Atlanta
     Marriott  Marquis Hotel (the "Hotel").  The Partnership also owned the land
     (the  "Land") on which the Hotel is  located.  On  December  31, 1997 AMMLP
     merged (the "Partnership Merger") with and into the Partnership. Subsequent
     to the Partnership  Merger, the Partnership owns an 80% general partnership
     interest in Ivy. The  Partnership  Merger of AMMLP and the  Partnership was
     treated as a reorganization of affiliated entities and AMMLP's basis in its
     assets and  liabilities  were carried over. On January 29, 1998,  the Hotel
     and the Land were conveyed to a special purpose,  bankruptcy remote entity,
     HMA Realty Limited  Partnership  ("HMA").  The sole general  partner of HMA
     with a 1% interest, is HMA-GP, Inc., a wholly-owned  subsidiary of Ivy. The
     sole  limited  partner,  with  a 99%  interest,  is  Ivy.  The  Partnership
     consolidates Ivy and HMA, and all significant intercompany transactions and
     balances between the Partnership,  Ivy and HMA have been eliminated.  There
     is a deficit capital account for the minority partner in Ivy which resulted
     from operating losses of Ivy. The Partnership's policy is to record 100% of
     the  income/(loss)  of Ivy until excess income allocated to the Partnership
     equals the excess losses previously recorded by the Partnership.

2.   Certain  reclassifications were made to the prior year financial statements
     to conform to the 1998 presentation.

3.   The  Partnership's   revenues   represent  gross  sales  generated  by  the
     Partnership's  Hotel.  As  discussed  below,  the  Partnership   previously
     recorded  only the house  profit  generated by the  Partnership's  Hotel as
     revenues.  House  profit,  which  reflects the net revenues  flowing to the
     Partnership  as  property   owner,   represents   gross  hotel  sales  less
     property-level costs and expenses.

     On November  20,  1997,  the  Emerging  Issues  Task Force  ("EITF") of the
     Financial  Accounting  Standards  Board  reached a consensus  on EITF 97-2,
     "Application  of FASB  Statement No. 94 and APB Opinion No. 16 to Physician
     Practice  Management  Entities and Certain Other Entities with  Contractual
     Management  Arrangements." EITF 97-2 addresses the circumstances in which a
     management entity may include the revenues and expenses of a managed entity
     in its financial statements.

     The  Partnership  has  considered  the impact of EITF 97-2 on its financial
     statements and has determined  that EITF 97-2 requires that the Partnership
     include  property-level  revenues and  operating  costs and expenses of its
     Hotel in its statement of operations. The Partnership was required to apply
     EITF 97-2 on  January 3, 1998 to the  modified  management  agreement  with
     Marriott  International,  Inc. (the  "Manager").  The Partnership has given
     retroactive  effect  to the  adoption  of  EITF  97-2  in the  accompanying
     consolidated  statement of operations.  The adoption of EITF 97-2 increased
     both revenues and  operating  costs and expenses by $10.2 million and $10.7
     million for the twelve weeks ended  September  11, 1998 and  September  12,
     1997, respectively,  and $33.1 million and $34.3 million for the thirty-six
     weeks ended  September 11, 1998 and September 12, 1997,  respectively,  and
     had no impact on operating profit or net income/(loss).

4.   On February 2, 1998, HMA obtained new 12-year first  mortgage  financing of
     $164 million (the  "Mortgage  Debt") which,  together with $35 million from
     the additional $69 million capital contributed by the General Partner,  was
     used to pay the maturing mortgage debt. The Mortgage Debt is nonrecourse to
     HMA, bears interest at a fixed rate of 7.4% and requires  monthly  payments
     of principal  and interest  calculated  to fully  amortize the loan over 25
     years.  Annual debt service on the new mortgage  debt is $12.4  million for
     1998 and $14.4 million annually until the end of the 12-year term.

5.   To facilitate the refinancing,  effective January 3, 1998, a new management
     agreement  was  entered  into by HMA and the  Manager.  The new  management
     agreement  expires on July 1, 2010 and is renewable at the Manager's option
     for  five  additional  10-year  terms.  Pursuant  to the  terms  of the new
     management  agreement,  no  incentive  management  fees are  payable to the
     Manager  with respect to the first $29.7  million of operating  profit (the
     "Owner's Priority"). Thereafter, the Manager will receive 20% of the profit
     in  excess  of  such  Owner's  Priority.  As  part  of the  new  management
     agreement, all accrued incentive management fees totaling $4.2 million were
     forgiven by the Manager.  The Partnership recorded an extraordinary gain in
     the  first  quarter  of 1998 in  conjunction  with the  forgiveness  in the
     accompanying condensed consolidated financial statements.

6.   Pursuant to the terms of the Mortgage  Debt,  HMA was required to establish
     with the  lender a separate  reserve  account  for  payments  of  insurance
     premiums and real estate taxes for the mortgaged  property as a result of a
     decline in the credit  rating of Marriott  International,  Inc.  Thus,  the
     Partnership has transferred $2.9 million into the reserve through September
     11, 1998. Out of the balance,  approximately $2.0 million of property taxes
     have been paid. The reserve is included in restricted cash reserves in the
     accompanying condensed consolidated balance sheet.

     Additionally,  HMA was required to establish the following  reserves  which
     are classified as restricted  cash reserves in the  accompanying  condensed
     consolidated  balance  sheet  and  are  held  by the  agent  of the  lender
     including:

     o   $3.6 million debt service  reserve--This reserve is equal to three 
         months of debt service.

     o   $10.1   million   deferred    maintenance   and   capital   expenditure
         reserve--This  reserve  will be expended for capital  expenditures  for
         repairs  to the  facade of the Hotel as well as  various  renewals  and
         replacements  and site  improvements.  As of September  11,  1998,  the
         reserve balance was $10.1 million.

     o   $7.5 million rooms refurbishment reserve--This reserve will be expended
         to refurbish  the  remaining 711 rooms and 16 suites at the Hotel which
         have not already  been  refurbished.  As of  September  11,  1998,  the
         reserve balance was $3.1 million.

7.   Host  Marriott,  the  parent  company  of  the  General  Partner  of  the
     Partnership,  has adopted a plan to restructure its business  operations so
     that it will qualify as a real estate investment trust ("REIT"). As part of
     this  restructuring  (the  "REIT   Conversion"),   Host  Marriott  and  its
     consolidated   subsidiaries  will  contribute  their   full-service   hotel
     properties and certain other businesses and assets to Host Marriott,  L.P.,
     a Delaware limited partnership (the "Operating  Partnership"),  in exchange
     for units of limited partnership interest in the Operating Partnership ("OP
     Units") and the assumption of liabilities.  As part of the REIT Conversion,
     Host Marriott proposes to merge into HMC Merger  Corporation (to be renamed
     "Host Marriott  Corporation"),  a Maryland  corporation  ("Host REIT"), and
     thereafter  continue and expand its full-service hotel ownership  business.
     Host REIT  expects  to  qualify  as a REIT  beginning  with its first  full
     taxable year commencing after the REIT Conversion is completed,  which Host
     Marriott  currently  expects to be the year beginning  January 1, 1999 (but
     which might not be until the year  beginning  January 1,  2000).  Host REIT
     will be the sole general partner of the Operating Partnership.

     The Operating  Partnership is proposing to acquire by merger (the "Merger")
     the Partnership. The Limited Partners in the Partnership have been given an
     opportunity to receive,  on a tax-deferred basis, OP Units in the Operating
     Partnership in exchange for their current limited partnership interests. At
     any time prior to 5:00 p.m.  on the  fifteenth  trading day  following  the
     effective  date of the Merger,  the Limited  Partners can elect to exchange
     the OP Units received in connection with the Merger for either common stock
     of  Host  REIT  or a 6.56%  callable  note  due  December  15,  2005 of the
     Operating  Partnership.  Exercise of either the election to receive  common
     stock or a note would be a taxable transaction.

     Beginning one year after the Merger,  Limited  Partners who retain OP Units
     may  exchange  such OP Units for Host REIT  common  stock on a  one-for-one
     basis (or their cash equivalent, as determined by Host REIT).

     On June 2, 1998, the Operating  Partnership filed a Registration  Statement
     on Form S-4 with the Securities and Exchange  Commission.  In October 1998,
     the Prospectus/Consent  Solicitation Statement, which formed a part of such
     Registration  Statement,  was mailed to the Limited Partners who have until
     December 12, 1998 to vote on this Merger, unless extended.



<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS


FORWARD-LOOKING STATEMENTS

Certain matters discussed in this Form 10-Q include  forward-looking  statements
including,  without  limitation,  statements related to the proposed real estate
investment trust ("REIT") conversion,  the terms,  structure and timing thereof,
and the  expected  effects of the  proposed  REIT  conversion  and  business and
operating strategies in the future. All forward-looking statements involve known
and unknown  risks,  uncertainties  and other factors which may cause the actual
transactions,  results,  performance or achievements to be materially  different
from any future transactions,  results, performance or achievements expressed or
implied  by  such  forward-looking  statements.   Certain  of  the  transactions
described  herein are  subject to certain  consents  of  shareholders,  lenders,
debtholders  and partners of Host Marriott and its affiliates and of other third
parties and various other  conditions  and  contingencies,  and future  results,
performance and achievements will be affected by general economic,  business and
financing  conditions,   competition  and  government  actions.  The  cautionary
statements set forth in reports filed under the Securities Act of 1934 contained
important factors with respect to such  forward-looking  statements,  including:
(i) national and local economic and business  conditions that will,  among other
things,  affect demand for hotels and other  properties,  the level of rates and
occupancy that can be achieved by such properties and the availability and terms
of  financing;  (ii) the ability to maintain  the  properties  in a  first-class
manner;  (iii) the  ability to compete  effectively;  (iv) the ability to obtain
required  consents of shareholders,  lenders,  debtholders,  partners and ground
lessors in connection with Host Marriott's  proposed conversion to a REIT and to
consummate all of the transactions constituting the REIT conversion; (v) changes
in  travel  patterns,  taxes  and  government  regulations;   (vi)  governmental
approvals, actions and initiatives; (vii) the effects of tax legislative action;
and (viii) the timing of Host Marriott's  election to be taxed as a REIT and the
ability to satisfy  complex rules in order to qualify for taxation as a REIT for
federal income tax purposes and to operate  effectively  within the  limitations
imposed by these rules.  Although  the  Partnership  believes  the  expectations
reflected  in  such   forward-looking   statements  are  based  upon  reasonable
assumptions,  it can give no assurance that its expectations will be attained or
that  any  deviations  will  not be  material.  The  Partnership  undertakes  no
obligation   to  publicly   release  the  result  of  any   revisions  to  these
forward-looking  statements  that may be made to reflect  any  future  events or
circumstances.

RESULTS OF OPERATIONS

During  1998,  the  Partnership  adopted  EITF  97-2  which  requires  that  the
Partnership include property-level  revenues and operating costs and expenses in
the statement of operations. The Partnership has given retroactive effect to the
adoption of EITF 97-2 in the accompanying statement of operations.

Revenues.  Revenues represent sales generated by the Partnership's  hotel. Hotel
revenues  for the third  quarter 1998  decreased  3.9%,  or  $680,000,  to $16.7
million when compared to the third  quarter 1997,  primarily due to decreases in
food and beverage sales of 12.8%, or $642,000,  to $4.4 million.  Hotel revenues
for the  thirty-six  weeks ended  September  11, 1998  decreased  4.1%,  or $2.5
million,  to $58.6  million,  when  compared  to the same  period in 1997 due to
decreases in room sales of 1.9%, or $736,000,  to $38.1 million and decreases in
food and beverage sales of 8.9%, or $1.6 million, to $16.6 million when compared
to the same period in 1997. The decrease in food and beverage sales is primarily
due to lower occupancy levels at the Hotel in 1998 as compared to 1997.

Room sales  increased  for the third  quarter  1998 due to a slight  increase in
REVPAR to $80 when compared to the third quarter  1997.  REVPAR,  or revenue per
available  room,  represents  the  combination  of the  average  daily room rate
charged  and  the  average  daily  occupancy  achieved  and is a  commonly  used
indicator of hotel performance (although it is not a GAAP, or generally accepted
accounting principles,  measure of revenue). For the third quarter 1998, average
occupancy  decreased  two  percentage  points to 68% when  compared to the third
quarter  1997.  The  decrease  in average  occupancy  was offset by a 3%, or $4,
increase in average room rate to  approximately  $117 for the third quarter 1998
when  compared  to the  third  quarter  1997.  For the  thirty-six  weeks  ended
September  11, 1998,  rooms sales  decreased due to a 1.9% decrease in REVPAR to
$90. Average occupancy decreased four percentage points to 69% in the thirty-six
weeks ended  September  11, 1998 when  compared  to the  thirty-six  weeks ended
September 12, 1997. The decrease in average  occupancy was partially offset by a
4%,  or $5,  increase  in  average  room  rate  to  approximately  $131  for the
thirty-six  weeks ended September 11, 1998 when compared to the thirty-six weeks
ended September 12, 1997. The decrease in average  occupancy is primarily due to
a decrease in the number of city-wide conventions in 1998 when compared to 1997.
The increase in average room rate is due to a shift in group mix to higher-rated
group business.

Operating Costs and Expenses. For the third quarter of 1998, operating costs and
expenses  increased  0.9%,  or $116,000,  to $12.9  million when compared to the
third quarter 1997. For the thirty-six weeks ended September 11, 1998, operating
costs and  expenses  decreased  4.1%,  or $1.8  million,  to $42.0  million when
compared to the  thirty-six  weeks ended  September  12, 1997,  primarily due to
decreases in hotel  property-level  costs and expenses and incentive  management
fees.  For the third quarter 1998 and the thirty-six  weeks ended  September 11,
1998, hotel  property-level  costs and expenses decreased 4.9%, or $529,000,  to
$10.2 million and 3.6%,  or $1.2 million,  to $33.1 million when compared to the
same  periods in 1997,  primarily  because of lower  occupancy  levels and lower
sales at the Hotel. For the thirty-six  weeks ended September 11, 1998,  $72,000
of  incentive  management  fees were earned as compared to $1.4  million for the
thirty-six weeks ended September 12, 1997.  Incentive  management fees decreased
due to an increase in Owner's  Priority to the first $29.7  million of operating
profit  effective under the new management  agreement.  Thereafter,  the Manager
will  receive 20% of the profit in excess of such  figure.  As a  percentage  of
hotel  revenues,  operating  costs and expenses  represented  77.4% and 73.7% of
revenues  for the third  quarters of 1998 and 1997,  respectively,  and 71.6% of
revenues for the  thirty-six  weeks ended  September  11, 1998 and September 12,
1997.

Operating Profit. As a result of the changes in revenues and expenses  discussed
above,  operating profit  decreased 17.5%, or $796,000,  to $3.8 million for the
third  quarter 1998 and decreased  4.1%,  or $707,000,  to $16.7 million for the
thirty-six  weeks ended  September 11, 1998 when compared to the same periods in
1997.

Interest  Expense.  Interest expense  decreased 47.2%, or $2.8 million,  to $3.2
million and 34.1%, or $5.7 million,  to $11.1 million for third quarter 1998 and
the thirty-six  weeks ended September 11, 1998,  respectively,  when compared to
the same periods in 1997.  The decrease is primarily due to the  refinancing  of
the mortgage  debt on February 2, 1998.  On that date,  HMA obtained new 12-year
first mortgage  financing of $164 million which,  together with $35 million from
the additional $69 million capital contributed by the General Partner,  was used
to pay the $199 million maturing mortgage debt. The Mortgage Debt bears interest
at a fixed rate of 7.4% and requires  monthly  principal  and interest  payments
based on a 25-year amortization  schedule. The prior mortgage debt bore interest
at a fixed rate of 10.3%.

Net Income (Loss) Before  Extraordinary Item. For the third quarter of 1998, the
Partnership's net loss before  extraordinary item improved $2.7 million over the
third quarter 1997 to net income before  extraordinary item of $1.6 million. For
the thirty-six  weeks ended September 11, 1998, net income before  extraordinary
item increased $5.5 million over the thirty-six  weeks ended  September 12, 1997
to $6.7  million.  The  increase is  primarily  due to  decreases  in  incentive
management fees and interest expense.

Extraordinary Item. Pursuant to the terms of the new management  agreement,  all
unpaid incentive  management fees accrued through December 31, 1997 amounting to
$4.2 million were  forgiven by the Manager.  During the  thirty-six  weeks ended
September  11,  1998,  the  Partnership   recorded  an  extraordinary   gain  in
conjunction with the write off.

Net Income (Loss).  As a result of the items discussed above, the  Partnership's
net loss  improved  $2.7  million  to net income of $1.6  million  for the third
quarters of 1998 and 1997. For the thirty-six weeks ended September 11, 1998 and
September 12, 1997, net income increased $9.7 million to $10.8 million.

CAPITAL RESOURCES AND LIQUIDITY

The  Partnership's  financing needs have been  historically  funded through loan
agreements  with  independent  financial  institutions.   As  a  result  of  the
transactions  associated with the Partnership Merger,  including the $75 million
equity infusion by the General  Partner,  and the successful  refinancing of the
Partnership's  mortgage debt, the General Partner  believes that the Partnership
will have sufficient  capital  resources and liquidity to conduct its operations
in the ordinary course of business.

Mortgage Debt

On February 2, 1998, the mortgage debt was successfully  refinanced with a third
party lender.  The  Partnership's  debt now consists of a $164 million  mortgage
loan (the "Mortgage Debt"), which is nonrecourse to HMA, which bears interest at
a fixed rate of 7.4% for a 12-year term. The mortgage loan requires  payments of
principal and interest based upon a 25-year  amortization  schedule.  As part of
the  refinancing,  HMA was  required to  establish  certain  reserves  which are
classified  as  restricted   cash   reserves  in  the   accompanying   condensed
consolidated balance sheet and are held by an agent of the lender including:

      $3.6 million debt service  reserve--This  reserve is equal to three months
     of debt service.

      $10.1 million deferred  maintenance and capital expenditure  reserve--This
     reserve will be expended for capital expenditures for repairs to the facade
     of the  Hotel  as  well as  various  renewals  and  replacements  and  site
     improvements.  As of  September  11,  1998,  the reserve  balance was $10.1
     million.

      $7.5 million rooms refurbishment reserve--This reserve will be expended to
     refurbish the remaining 711 rooms and 16 suites at the Hotel which have not
     already been refurbished. As of September 11, 1998, the reserve balance was
     $3.1 million.

      $1.3 million tax and insurance  reserve--This  reserve will be used to pay
     real estate tax and insurance premiums for the Hotel. During the thirty-six
     weeks ended September 11, 1998, the  Partnership  transferred an additional
     $1.6 million into this  reserve.  Out of the total  balance,  approximately
     $2.0 million of property taxes have been paid.

In addition,  during the thirty-six weeks ended September 11, 1998, HMA advanced
an additional $2.6 million to the Manager for working capital needs and used the
remaining cash to pay transaction costs associated with the refinancing.

Principal Sources and Uses of Cash

The Partnership's  principal source of cash is cash from Hotel  operations.  Its
principal  uses of cash are to pay debt  service  payments on the  Partnership's
mortgage debt, to make guarantee  repayments,  to fund the property  improvement
fund and to make cash distributions to the partners.  Additionally,  in 1998 the
Partnership  received cash through an equity infusion by the General Partner and
utilized cash to pay financing costs incurred in connection with the refinancing
of the  Partnership's  mortgage debt and to establish  reserves  required by the
lender.

Total cash used in  operating  activities  was $2.0  million for the  thirty-six
weeks ended  September 11, 1998 as compared to total cash provided by operations
of $11.5 million for the  thirty-six  weeks ended  September 12, 1997. The large
decline is due primarily to the payment of accrued interest on the Partnership's
debt in 1998.  In  addition,  pursuant to the terms of the  Mortgage  Debt,  the
Partnership was required to establish with the lender a separate reserve account
for  payments of  insurance  premiums  and real estate  taxes for the  mortgaged
property as a result of the credit rating of Marriott International,  Inc. Thus,
the Partnership has transferred $2.9 million into the reserve through  September
11, 1998. Out of the balance,  approximately $2.0 million of property taxes have
been  paid.  The  reserve  is  included  in  restricted  cash  reserves  in  the
accompanying condensed consolidated balance sheet.

Cash used in  investing  activities  was $23.3  million and $3.2 million for the
thirty-six weeks ended September 11, 1998 and September 12, 1997,  respectively.
The increase in cash used in investing activities is primarily due to an advance
of $2.6  million to the Manager  for  working  capital  needs,  $6.4  million of
refurbishments  to the Hotel, and the  establishment of $17.6 million of capital
expenditure reserves from the new mortgage debt financing discussed below. As of
September 11, 1998, $4.4 million of the established capital expenditure reserves
was spent on the rooms refurbishment and facade repair projects.

Total cash provided by financing activities was $11.8 million for the thirty-six
weeks ended  September  11,  1998 as  compared  to total cash used in  financing
activities of $7.2 million for the  thirty-six  weeks ended  September 12, 1997,
respectively. The decrease in cash used in financing activities is primarily the
result of the  restructuring  and  refinancing  transactions.  During 1998,  the
Partnership  acquired new mortgage  debt  financing of $164 million and received
the  remaining $69 million of the $75 million  equity  infusion from the General
Partner.  These  proceeds were used as follows:  to repay the $199.0  million of
mortgage debt; to repay $10.4 million of the debt service  guarantee and related
interest  outstanding under the Host Marriott interest  guarantee;  to establish
$22.5  million of  reserves  required by the lender,  which  includes  the $17.6
million of capital  expenditure  reserves  discussed above; and to pay financing
costs of $3.0  million.  The  remaining  $4.9 million of reserves  includes $1.3
million to be utilized for the October 11, 1998  mortgage  debt payment and $3.6
million  reserved  in the event the  Partnership  is unable to meet its  current
mortgage  debt   obligations.   Additionally,   the  Partnership   made  a  cash
distribution  in February 1998 to the Class A limited  partners of $2.7 million,
or $5,000 per limited partner unit, from 1997 operations.

The General  Partner  believes that cash from Hotel  operations and the reserves
established in conjunction  with the refinancing will continue to meet the short
and long-term operational needs of the Partnership.

Capital Expenditures

The  Partnership is required to maintain the Hotel in good repair and condition.
The new  management  agreement  provides  for the  establishment  of a  property
improvement  fund to cover  the cost of  routine  repairs  and  maintenance  and
renewals and replacements to the Hotel's  property and equipment.  Contributions
to  the  fund  are 5% of  Hotel  gross  sales.  Contributions  to  the  property
improvement  fund were $2.9  million and $2.8 million for the  thirty-six  weeks
ended September 11, 1998 and September 12, 1997, respectively.

In 1997, the Hotel completed a $7.0 million  refurbishment of approximately half
its guest rooms which included the  replacement  of the  carpeting,  bedspreads,
upholstery,  drapes and other similar items and also the dressers,  chairs, beds
and other furniture.  The refurbishment of the remaining 711 rooms and 16 suites
began in  mid-1998.  This  portion of the  refurbishment  will be funded  from a
reserve which was established by the Partnership  with the lender on February 2,
1998.  The facade repair  project which entails a repair of the entire facade of
the building is underway.  The project is expected to cost $9.0 million and will
be funded by the  Partnership  from the $10.1 million  deferred  maintenance and
capital  expenditure  reserve  which  was also  established  with the  lender in
conjunction with the refinancing on February 2, 1998. The project is expected to
be completed by the spring of 2001.

The General  Partner  believes  the  property  improvement  fund and the capital
reserves  established in conjunction  with the refinancing  will be adequate for
the future capital repairs and replacement needs of the Hotel.

YEAR 2000 ISSUE

The "Year 2000 Issue" has arisen  because many  existing  computer  programs and
chip-based  embedded technology systems use only the last two digits to refer to
a year,  and  therefore do not  properly  recognize a year that begins with "20"
instead of the familiar "19." If not corrected, many computer applications could
fail or create erroneous results.  The following disclosure provides information
regarding the current status of the Partnership's Year 2000 compliance program.

The Partnership  processes its records on computer hardware and software systems
maintained by Host Marriott,  the parent  company of the General  Partner of the
Partnership.   Host  Marriott  has  adopted  a  compliance  program  because  it
recognizes  the  importance  of  minimizing  the number and  seriousness  of any
disruptions  that may occur as a result of the Year 2000 Issue.  Host Marriott's
compliance  program  includes an  assessment  of Host  Marriott's  hardware  and
software computer systems and embedded systems,  as well as an assessment of the
Year 2000 issues  relating to third  parties  with which the  Partnership  has a
material  relationship  or whose  systems are material to the  operations of the
Partnership's Hotel. Host Marriott's efforts to ensure that its computer systems
are Year 2000 compliant have been segregated into two separate phases:  in-house
systems and third-party systems.

In-House  Systems.   Host  Marriott  has  invested  in  the  implementation  and
maintenance of accounting and reporting  systems and equipment that are intended
to  enable  the  Partnership  to  provide  adequately  for its  information  and
reporting  needs and which are also Year 2000  compliant.  Substantially  all of
Host  Marriott's  in-house  systems  have  already  been  certified as Year 2000
compliant through testing and other mechanisms and Host Marriott has not delayed
any systems projects due to the Year 2000 Issue. Host Marriott is in the process
of  engaging a third  party to review its Year 2000  in-house  compliance.  Host
Marriott  believes  that future costs  associated  with Year 2000 Issues for its
in-house  systems  will be  insignificant  and will  therefore  not  impact  the
Partnership's  business,  financial  condition and results of  operations.  Host
Marriott has not developed, and does not plan to develop, a separate contingency
plan  for its  in-house  systems  due to their  current  Year  2000  compliance.
However,  Host Marriott does have  detailed  contingency  plans for its in-house
systems  covering a variety of possible  events,  including  natural  disasters,
interruption of utility service and similar events.

Third-Party  Systems.  The  Partnership  relies upon  operational and accounting
systems provided by third parties,  primarily Marriott International,  Inc., the
Manager of its Hotel,  to provide the  appropriate  property-specific  operating
systems  (including  reservation,  phone,  elevator,  security,  HVAC and  other
systems) and to provide it with financial information. Based on discussions with
the third parties that are critical to the Partnership's business, including the
Manager of its Hotel,  Host  Marriott  believes  that these  parties  are in the
process of studying  their systems and the systems of their  respective  vendors
and service  providers and, in many cases, have begun to implement  changes,  to
ensure that they are Year 2000  compliant.  To the extent these  changes  impact
property-level  systems,  the  Partnership  may  be  required  to  fund  capital
expenditures for upgraded equipment and software.  Host Marriott does not expect
these charges to be material,  but is committed to making these  investments  as
required.  To the extent that these changes relate to the Manager's  centralized
systems (including reservations,  accounting,  purchasing,  inventory, personnel
and other systems),  the Partnership's  management  agreement generally provides
for these costs to be charged to the Partnership's  Hotel. Host Marriott expects
that the Manager will incur Year 2000 costs for its centralized  systems in lieu
of costs related to system  projects that otherwise  would have been pursued and
therefore,  its overall level of centralized charges allocated to the Hotel will
not materially  increase as a result of the Year 2000  compliance  effort.  Host
Marriott  believes that this deferral of certain system projects will not have a
material  impact on its future  results  of  operations,  although  it may delay
certain productivity enhancements at the Partnership's Hotel. Host Marriott will
continue  to monitor  the  efforts of these  third  parties to become  Year 2000
compliant and will take appropriate steps to address any non-compliance  issues.
The Partnership  believes that in the event of material Year 2000 non-compliance
caused by a breach of the Manager's duties,  the Partnership will have the right
to seek recourse against the Manager under its third party management agreement.
The management  agreement generally does not specifically  address the Year 2000
compliance issue. Therefore the amount of any recovery in the event of Year 2000
non-compliance at a property, if any, is not determinable at this time.

Host  Marriott  will work  with the third  parties  to ensure  that  appropriate
contingency  plans will be developed to address the most reasonably likely worst
case  Year  2000  scenarios,  which  may not  have  been  identified  fully.  In
particular,  Host Marriott has had extensive discussions regarding the Year 2000
Issue  with  Marriott  International,  the  Manager  of  the  Hotel.  Due to the
significance of Marriott International to the Partnership's business, a detailed
description of Marriott International's state of readiness follows.

Marriott  International  has  adopted an  eight-step  process  toward  Year 2000
readiness,  consisting of the following: (i) Awareness:  fostering understanding
of, and  commitment  to, the problem and its potential  risks;  (ii)  Inventory:
identifying and locating systems and technology components that may be affected;
(iii)  Assessment:  reviewing  these  components for Year 2000  compliance,  and
assessing the scope of Year 2000 issues;  (iv) Planning:  defining the technical
solutions and labor and work plans  necessary for each  particular  system;  (v)
Remediation/Replacement:  completing the  programming to renovate or replace the
problem software or hardware; (vi) Testing and Compliance Validation: conducting
testing,  followed by independent validation by a separate internal verification
team; (vii)  Implementation:  placing the corrected  systems and technology back
into the  business  environment;  and  (viii)  Quality  Assurance:  utilizing  a
dedicated  audit team to review and test  significant  projects for adherence to
quality standards and program methodology.

Marriott  International  has  grouped  its  systems  and  technology  into three
categories  for  purposes  of Year 2000  compliance:  (i)  information  resource
applications  and  technology  (IT  Applications)  --  enterprise-wide   systems
supported  by  Marriott   International's   centralized  information  technology
organization ("IR"); (ii) Business-initiated Systems ("BIS") - systems that have
been  initiated by an individual  business  unit,  and that are not supported by
Marriott  International's  IR organization;  and (iii) Building Systems - non-IT
equipment at properties  that use embedded  computer  chips,  such as elevators,
automated  room  key  systems  and HVAC  equipment.  Marriott  International  is
prioritizing its efforts based on how severe an effect  noncompliance would have
on customer service, core business processes or revenues,  and whether there are
viable, non-automated fallback procedures (System Criticality).

Marriott International measures the completion of each phase based on documented
and quantified results,  weighted for System  Criticality.  As of the end of the
1998 third  quarter,  the awareness  and  inventory  phases were complete for IT
Applications  and  nearly  complete  for  BIS  and  Building  Systems.   For  IT
Applications,  the Assessment,  Planning and Remediation/Replacement phases were
each over 80 percent  complete,  and Testing and Compliance  Validation had been
completed for a number of key systems,  with most of the  remaining  work in its
final stage. For BIS and Building  Systems,  Assessment and Planning were in the
mid- to upper-range of completion, with a substantial amount of work in process,
while the progress level for  Remediation/Replacement and Testing and Compliance
Validation had not yet been documented and quantified. Quality Assurance is also
in progress for IT  Applications  and is scheduled to begin for BIS and Business
Systems in the near future.  Marriott  International's  goal is to substantially
complete the  Remediation/Replacement and Testing phases for its System Critical
IT   Applications  by  the  end  of  1998,  with  1999  reserved  for  unplanned
contingencies and for Compliance  Validation and Quality  Assurance.  For System
Critical BIS and Building Systems,  the same level of completion is targeted for
June 1999 and September 1999, respectively.

Marriott  International has initiated Year 2000 compliance  communications  with
its significant third party suppliers,  vendors and business partners, including
its franchisees.  Marriott International is focusing its efforts on the business
interfaces most critical to its customer  service and revenues,  including those
third parties that support the most critical  enterprise-wide  IT  Applications,
franchisees  generating  the most  revenues,  suppliers  of the most widely used
Building  Systems and BIS, the top 100 suppliers,  by dollar  volume,  of non-IT
products,  and  financial  institutions  providing  the  most  critical  payment
processing functions.  Responses have been received from a majority of the firms
in this group.

Marriott  International  is also  establishing a common approach for testing and
addressing  Year  2000   compliance   issues  for  its  managed  and  franchised
properties.  This includes a guidance  protocol for operated  properties,  and a
Year 2000 "Toolkit" for  franchisees  containing  relevant Year 2000  compliance
information. Marriott International is also utilizing a Year 2000 best-practices
sharing system.

Risks.  There can be no assurance that Year 2000  remediation by the Partnership
or third  parties  will be properly and timely  completed,  and failure to do so
could have a material  adverse effect on the  Partnership,  its business and its
financial condition.  The Partnership cannot predict the actual effects to it of
the Year 2000  Issue,  which  depends  on  numerous  uncertainties  such as: (i)
whether  significant  third  parties  properly and timely  address the Year 2000
Issue;  and (ii) whether  broad-based or systemic  economic  failures may occur.
Host  Marriott is also unable to predict the  severity  and duration of any such
failures,  which  could  include  disruptions  in  passenger  transportation  or
transportation  systems  generally,  loss of utility  and/or  telecommunications
services,  the loss or  distortion of hotel  reservations  made on a centralized
reservation  system and errors or failures in financial  transactions or payment
processing systems such as credit cards. Due to the general uncertainty inherent
in the Year 2000 Issue and the  Partnership's  dependence on third parties,  the
Partnership is unable to determine at this time whether the consequences of Year
2000 failures will have a material  impact on the  Partnership.  Host Marriott's
Year 2000 compliance  program is expected to  significantly  reduce the level of
uncertainty  about  the Year  2000  Issue and Host  Marriott  believes  that the
possibility of significant interruptions of normal operations should be reduced.




<PAGE>


                           PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

The Partnership and the Partnership Hotel are involved in routine litigation and
administrative  proceedings arising in the ordinary course of business,  some of
which are expected to be covered by liability  insurance and which  collectively
are not expected to have a material  adverse  effect on the business,  financial
condition or results of operations of the Partnership.

On December 12, 1997, Hiram and Ruth Sturm, limited partners in Atlanta Marriott
Marquis Limited  Partnership  ("AMMLP"),  filed a class-action  lawsuit,  styled
Hiram  and  Ruth  Sturm  v.  Marriott  Marquis  Corporation,  et al.,  Case  No.
97-CV-3706,  in the U.S.  District  Court for the  Northern  District of Georgia
against Marriott Marquis Corporation ("MMC"), its directors,  and Host Marriott,
regarding the merger of AMMLP into a new partnership (the "Partnership Merger"),
Atlanta Marriott Marquis Limited Partnership II ("AMMLP-II").  MMC, formerly the
general partner of AMMLP, is the sole general partner of AMMLP-II. AMMLP-II owns
an 80%  interest in Ivy Street  Hotel  Limited  Partnership  ("Ivy"),  a Georgia
limited  partnership.  The other  general  and  limited  partners of Ivy are not
affiliated with Host Marriott.  A wholly-owned  bankruptcy  remote subsidiary of
Ivy owns the Atlanta Marriott Marquis Hotel.

The Sturms allege,  among other things,  that the defendants  misled the limited
partners  in order to induce them to approve the  Partnership  Merger,  violated
securities  regulations by filing a prospectus with the SEC that contained false
statements,  violated Federal roll-up  regulations and Sections 14 and 20 of the
Exchange Act,  breached their  fiduciary  duties,  and breached the  partnership
agreement.  The plaintiffs sought to enjoin, or in the alternative  rescind, the
Partnership  Merger and damages.  Howard H. Poorvu,  another  limited partner of
AMMLP, filed a similar and separate lawsuit, styled Howard H. Poorvu v. Marriott
Marquis Corporation, et al., Civil Action No. 16095-NC, on December 19, 1997, in
Delaware State Chancery Court. The Partnership Merger took place on December 31,
1997, and the refinancing of the first mortgage debt closed on January 10, 1998.
The defendants filed answers to the Delaware  complaint on January 16, 1998, and
moved to dismiss  the Georgia  complaint  on March 6, 1998.  Although  AMMLP and
AMMLP-II have not been named as defendants  in the lawsuits,  their  partnership
agreements  include an indemnity  provision  which requires them,  under certain
circumstances,  to indemnify the general partners  against losses,  expenses and
fees.

On March 16, 1998,  limited partners in several  partnerships  sponsored by Host
Marriott,  filed a lawsuit,  styled Robert M. Haas, Sr. and Irwin Randolph Joint
Tenants, et al. v. Marriott  International,  Inc., et al., Case No. 98-CI-04092,
in the 57th  Judicial  District  Court of Bexar County,  Texas against  Marriott
International, Inc. ("Marriott International"),  Host Marriott, various of their
subsidiaries,  J.W. Marriott,  Jr., Stephen Rushmore,  and Hospitality Valuation
Services,  Inc.  (collectively,  the  "Defendants").  The lawsuit relates to the
following  limited  partnerships:  Courtyard  by Marriott  Limited  Partnership,
Courtyard by Marriott II Limited  Partnership,  Marriott  Residence  Inn Limited
Partnership,  Marriott  Residence Inn II Limited  Partnership,  Fairfield Inn by
Marriott Limited  Partnership,  Desert Springs Marriott Limited  Partnership and
Atlanta  Marriott  Marquis  Limited   Partnership   (collectively,   the  "Seven
Partnerships").  The  plaintiffs  allege that the  Defendants  conspired to sell
hotels to the Seven  Partnerships  for inflated prices and that they charged the
Seven Partnerships  excessive management fees to operate the Seven Partnerships'
hotels. The plaintiffs further allege,  among other things,  that the Defendants
committed  fraud,  breached  fiduciary  duties,  and violated the  provisions of
various  contracts.   The  plaintiffs  are  seeking  unspecified   damages.  The
Defendants,  which do not include the Seven Partnerships,  believe that there is
no truth to the  plaintiffs'  allegations and that the lawsuit is totally devoid
of merit. The Defendants intend to vigorously defend against the claims asserted
in the  lawsuit.  They  have  filed an answer to the  plaintiffs'  petition  and
asserted a number of  defenses.  Although the Seven  Partnerships  have not been
named as Defendants in the lawsuit,  the partnership  agreements relating to the
Seven  Partnerships  include an  indemnity  provision  which  requires the Seven
Partnerships,  under certain  circumstances,  to indemnify the general  partners
against losses, expenses and fees.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

a.     Exhibits - None.

b.     Reports on Form 8-K

       A Form 8-K was filed  with the  Securities  and  Exchange  Commission  on
       September 16, 1998.  This filing,  Item 5 -- Other Events,  discloses
       that the General  Partner sent the limited  partners of the Partnership a
       letter to inform them that September 18, 1998 will be the record date for
       voting in the forthcoming  consent  solicitation.  Those limited partners
       whose  ownership is reflected on the records of the General Partner as of
       September  18, 1998 will be  eligible to vote on the merger and  proposed
       amendments. A copy of the letter was included as an Item 7 -- Exhibit
       in this Form 8-K filing.



<PAGE>


                                    SIGNATURE



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this Form  10-Q to be signed on its  behalf by the
undersigned, thereunto duly authorized.


                                             ATLANTA MARRIOTT MARQUIS II
                                             LIMITED PARTNERSHIP

                                             By:    MARRIOTT MARQUIS CORPORATION
                                                    General Partner



October 26, 1998                    By:      /s/ Earla L. Stowe
                                             ------------------
                                             Earla L. Stowe
                                             Vice President and 
                                             Chief Accounting Officer