<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C. 20549

                                   Form 10-Q

(Mark one)

[X]   Quarterly report pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934

For the quarterly period ended June 30, 1999 or
                               -------------

[ ]   Transition report pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934

For the transition period from              to
                               ------------    --------------

Commission file number  0-16518
                        -------

                         Wells Real Estate Fund II-OW
            ------------------------------------------------------
            (Exact name of registrant as specified in its charter)

            Georgia                                  58-1678709
---------------------------------        ------------------------------------
  (State or other jurisdiction of        (I.R.S. Employer Identification No.)
  incorporation or organization)

          3885 Holcomb Bridge Road, Norcross, Georgia           30092
          -------------------------------------------         ----------
           (Address of principal executive offices)           (Zip Code)

Registrant's telephone number, including area code (770) 449-7800
                                                   --------------

--------------------------------------------------------------------------------
             (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  X    No
    ---      ---
<PAGE>

                                   Form 10-Q
                                   ---------

                         Wells Real Estate Fund II-OW
                         ----------------------------

                                     INDEX
                                     -----

                                                                       Page No.
                                                                       --------
PART I. FINANCIAL INFORMATION

        Item 1. Financial Statements

                Balance Sheets - June 30, 1999
                 and December 31, 1998...............................     3

                Statements of Income for the Three Months and
                 Six Months Ended June 30, 1999 and 1998.............     4

                Statements of Partners' Capital for the Year
                 Ended December 31, 1998 and the Six Months
                 Ended June 30, 1999.................................     5

                Statements of Cash Flows for the Six Months
                 Ended June 30, 1999 and 1998........................     6

                Condensed Notes to Financial Statements..............     7

        Item 2. Management's Discussion and Analysis of Financial
                Financial Condition and Results of Operations........    11

PART II. OTHER INFORMATION...........................................    20


                                       2
<PAGE>

                         WELLS REAL ESTATE FUND II-OW
                    (A Georgia Public Limited Partnership)

                                BALANCE SHEETS


           Assets                               June 30, 1999  December 31, 1998
           ------                               -------------  -----------------

Investment in joint venture (Note 2)              $1,199,865       $1,235,838
Cash and cash equivalents                              1,387              669
Due from affiliate                                    20,900           18,870
                                                  ----------       ----------
     Total assets                                 $1,222,152       $1,255,377
                                                  ==========       ==========

   Liabilities and Partners' Capital
   ---------------------------------

Liabilities:
  Accounts payable                                $    1,022       $      164
  Partnership distributions payable                   20,864           18,974
                                                  ----------       ----------
      Total liabilities                               21,886           19,138
                                                  ----------       ----------
Partners' Capital:
  Limited Partners:
    Class A - 6,062 units                          1,200,266        1,236,239
    Class B - 1,626 units                                  0                0
                                                  ----------       ----------
       Total partners' capital                     1,200,266        1,236,239
                                                  ----------       ----------
         Total liabilities and partners' capital  $1,222,152       $1,255,377
                                                  ==========       ==========



           See accompanying condensed notes to financial statements.

                                       3
<PAGE>

                         WELLS REAL ESTATE FUND II-OW
                    (A Georgia Public Limited Partnership)

                             STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                     Three Months Ended               Six Months Ended
                               -----------------------------   ----------------------------
                               June 30, 1999   June 30, 1998   June 30, 1999  June 30, 1998
                               -------------   -------------   -------------  -------------
<S>                            <C>             <C>             <C>            <C>
Revenues:
  Equity in income of joint
    ventures (Note 2)              $4,037          $2,737          $7,588        $5,248
                                   ------          ------          ------        ------
Expenses:
  Partnership administration            0               0               0             0
                                   ------          ------          ------        ------
  Net income                       $4,037          $2,737          $7,588        $5,248
                                   ======          ======          ======        ======
Net income allocated to
  Class A Limited Partners         $4,037          $2,737          $7,588        $5,248

Net loss allocated to Class
  B Limited Partners               $ 0.00          $ 0.00          $ 0.00        $ 0.00

Net income per Class A
  Limited Partner Unit             $ 0.67          $ 0.46          $ 1.25        $ 0.87

Net loss per Class B Limited
  Partner Unit                     $ 0.00          $ 0.00          $ 0.00        $ 0.00

Cash distribution per Class A
  Limited Partner Unit             $ 3.45          $ 3.73          $ 7.19        $ 7.27
</TABLE>



           See accompanying condensed notes to financial statements.

                                       4
<PAGE>

                         WELLS REAL ESTATE FUND II-OW
                    (A Georgia Public Limited Partnership)

                        STATEMENTS OF PARTNERS' CAPITAL

           FOR THE YEAR ENDED DECEMBER 31, 1998 AND SIX MONTHS ENDED
                                 JUNE 30, 1999




<TABLE>
<CAPTION>
                                              Limited Partners
                                     -----------------------------------
                                           Class A           Class B         Total
                                     -------------------  --------------   Partners'
                                     Units    Amounts     Units  Amounts    Capital
                                     -----  -----------   -----  -------  -----------
<S>                                  <C>    <C>           <C>    <C>      <C>
BALANCE, December 31, 1997           6,062   $1,315,655   1,626    $0      $1,315,655

  Net income                             0        5,190       0     0           5,190
  Partnership distributions              0      (84,606)      0     0         (84,606)
                                     -----   ----------   -----    --      ----------
BALANCE, December 31, 1998           6,062    1,236,239   1,626     0       1,236,239

  Net income                             0        7,589       0     0           7,589
  Partnership distributions              0      (43,562)      0     0         (43,562)
                                     -----   ----------   -----    --      ----------
BALANCE, June 30, 1999               6,062   $1,200,266   1,626    $0      $1,200,266
                                     =====   ==========   =====    ==      ==========
</TABLE>


           See accompanying condensed notes to financial statements.

                                       5
<PAGE>

                         WELLS REAL ESTATE FUND II-OW
                    (A Georgia Public Limited Partnership)

                           STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                              Six Months Ended
                                                       -----------------------------
                                                       June 30, 1999   June 30, 1998
                                                       -------------   -------------
<S>                                                    <C>             <C>
Cash flows from operating activities:
 Net income                                               $  7,589       $  5,248
 Adjustments to reconcile net income to net cash
  provided by (used in) operating activities:
   Equity in (income) of joint ventures                     (7,589)        (5,248)
   Changes in assets and liabilities:
     Accounts payable                                          858            (72)
                                                          --------       --------
     Total adjustments                                      (6,731)        (5,320)
                                                          --------       --------
      Net cash provided by (used in)
       operating activities                                    858            (72)
                                                          --------       --------
Cash flow from investing activities:
 Distributions received from joint venture                  41,532         39,590
                                                          --------       --------
                                                            41,532         39,590
Cash flow from financing activities:
 Distributions to partners                                 (41,672)       (39,591)
                                                          --------       --------
Net increase (decrease) in cash and cash equivalents           718            (73)
Cash and cash equivalents, beginning of year                   669            741
                                                          --------       --------
Cash and cash equivalents, end of period                  $  1,387       $    668
                                                          ========       ========
</TABLE>

           See accompanying condensed notes to financial statements.


                                       6
<PAGE>

                         WELLS REAL ESTATE FUND II-OW
                    (A Georgia Public Limited Partnership)

                    Condensed Notes to Financial Statements

(1)  Summary of Significant Accounting Policies
     ------------------------------------------

     (a)  General
     ------------

     Wells  Real  Estate  Fund II-OW(the "Partnership")  is a  Georgia  public
     limited partnership having Leo F. Wells, III and Wells Capital, Inc., as
     General Partners.  The Partnership was formed on October 23, 1987, for the
     purpose of acquiring, developing, constructing, owning, operating,
     improving, leasing and otherwise managing for investment purposes income-
     producing commercial or industrial properties.

     On November 6, 1987, the Partnership commenced a public offering of its
     limited partnership units pursuant to a Registration Statement filed on
     Form S-11 under the Securities Act of 1933.  The Partnership terminated its
     offering on September 7, 1988, and received gross proceeds of $1,922,000
     representing subscriptions from 219 Limited Partners, composed of two
     classes of limited partnership interests, Class A and Class B limited
     partnership units.

     The Partnership owns equity interests in properties through its ownership
     in the following joint ventures:  (i) Fund II-Fund II-OW Joint Venture, a
     joint venture between the Partnership and Wells Real Estate Fund II (the
     "Fund II-Fund II-OW Joint Venture"); (ii) Fund II-Fund III Joint Venture, a
     joint venture between the Fund II-Fund II-OW Joint Venture and Wells Real
     Estate Fund III, L.P. ("Fund II-Fund III Joint Venture"); (iii) Fund II-
     III-VI-VII Associates, a  joint venture between the Fund II-Fund III Joint
     Venture, Wells Real Estate Fund VI, L.P., and Wells Real Estate Fund VII,
     L.P. ("Fund II, III, VI, VII Joint Venture"); (iv) Fund I-Fund II Joint
     Venture, a joint venture between the Fund II-Fund II-OW Joint Venture and
     Wells Real Estate Fund I ("the Tucker Joint Venture"); and (v) Fund I, II,
     II-OW, VI, VII Associates, a joint venture between Wells Real Estate Fund
     I, the Fund II-Fund II-OW Joint Venture, Wells Real Estate Fund VI, L.P.,
     and Wells Real Estate Fund VII, L.P. ("Fund I, II, II-OW, VI, VII Joint
     Venture").   Please refer to the Partnership's Form 10-K for the year ended
     December 31, 1998 for additional information on the joint ventures and
     properties in which the Partnership owns an interest.

     As of June 30, 1999, the Partnership owned interests in the following
     properties through its ownership of the foregoing joint ventures: (i) a
     two-story office building located in Charlotte, North Carolina ("First
     Union at Charlotte"); (ii) a four-story office building located in
     metropolitan Houston, Texas (the "Atrium"); (iii) a restaurant located in
     Fulton County, Georgia ("the Brookwood Grill"); (iv) an office/retail
     center developed in Fulton

                                       7
<PAGE>

     County, Georgia ("Holcomb Bridge Road"); (v) a retail shopping and
     commercial office complex located in Tucker, Georgia ("Heritage Place at
     Tucker"); and (vi) a shopping center located in Cherokee County, Georgia
     ("Cherokee Commons"). All of the foregoing properties were acquired on an
     all cash basis. For further information regarding these joint ventures and
     properties, refer to the Partnership's Form 10-K for the year ended
     December 31, 1998.

     (b)  Basis of Presentation
     --------------------------

     The financial statements of Wells Real Estate Fund II-OW (the
     "Partnership") have been prepared in accordance with instructions to Form
     10-Q and do not include all of the information and footnotes required by
     generally accepted accounting principles for complete financial statements.
     These quarterly statements have not been examined by independent
     accountants, but in the opinion of the General Partners, the statements for
     the unaudited interim periods presented include all adjustments, which are
     of a normal and recurring nature, necessary to present a fair presentation
     of the results for such periods.  For further information, refer to the
     financial statements and footnotes included in the Partnership's Form 10-K
     for the year ended December 31, 1998.

(2)  Investment in Joint Ventures
     ----------------------------

     The Partnership owned interests in six properties as of June 30, 1999.  The
     Partnership does not have control over the operations of the joint
     ventures; however, it does exercise significant influence.  Accordingly,
     investment in joint ventures is recorded on the equity method.

     Fund II-Fund II-OW Joint Venture
     --------------------------------

     The Partnership owns all of its properties through a joint venture (the
     "Fund II-Fund II-OW Joint Venture") formed on March 1, 1988, between the
     Partnership and Wells Real Estate Fund II ("Wells Fund II).  Wells Fund II
     is a Georgia public limited partnership affiliated with the Partnership
     through common general partners.  The investment objectives of Wells Fund
     II are substantially identical to those of the Partnership.  As of June 30,
     1999, the Partnership's equity interest in Wells Fund II-Fund II-OW Joint
     Venture was approximately 5%, and the equity interest of Wells Fund II was
     approximately 95%.

                                       8
<PAGE>

Following are the financial statements for Fund II and II-OW:

                               FUND II and II-OW
                           (A Georgia Joint Venture)

                                BALANCE SHEETS


           Assets                              June 30, 1999   December 31, 1998
           ------                              -------------   -----------------
Real estate, at cost:
  Land                                          $ 1,367,856       $ 1,367,856
  Building and improvements, less
    accumulated depreciation of $2,807,617
    in 1999 and $2,623,785 in 1998                4,963,500         5,147,333
                                                -----------       -----------
      Total real estate assets                    6,331,356         6,515,189
                                                -----------       -----------
Investment in joint ventures                     16,212,262        16,676,111
Cash and cash equivalents                            76,315            94,367
Due from affiliates                                 316,642           267,581
Accounts receivable                                   1,265            23,184
Prepaid expenses and other assets                    33,186            42,828
                                                -----------       -----------
       Total assets                             $22,971,026       $23,619,260
                                                ===========       ===========
    Liabilities and Partners' Capital
    ---------------------------------

Liabilities:
  Partnership distributions payable             $   393,588       $   355,370
  Due to affiliates                                       0             8,988
                                                -----------       -----------
      Total liabilities                             393,588           364,358
                                                -----------       -----------
Partners' capital:
  Wells Real Estate Fund II                      21,377,573        22,019,064
  Wells Real Estate Fund II-OW                    1,199,865         1,235,838
                                                -----------       -----------
      Total partners' capital                    22,577,438        23,254,902
                                                -----------       -----------
      Total liabilities and
        partners' capital                       $22,971,026       $23,619,260
                                                ===========       ===========

           See accompanying condensed notes to financial statements.

                                       9
<PAGE>

                               FUND II and II-OW
                           (A Georgia Joint Venture)

                          STATEMENTS OF (LOSS) INCOME

<TABLE>
<CAPTION>
                                                   Three Months Ended               Six Months Ended
                                              -----------------------------   -----------------------------
                                              June 30, 1999   June 30, 1998   June 30, 1999   June 30, 1998
                                              -------------   -------------   -------------   -------------
<S>                                          <C>             <C>             <C>             <C>
Revenues:
  Rental income                                  $127,682        $114,717        $242,399        $229,434
  Equity in income of joint
    ventures                                       99,337          84,001         190,034         148,340
  Interest income                                     (13)            114              92             244
                                                 --------        --------        --------        --------
                                                  227,006         198,832         432,525         378,018
                                                 --------        --------        --------        --------
Expenses:
  Management and leasing fees                       7,541           6,883          14,424          13,766
  Lease acquisition costs                           4,588           4,588           9,177           9,177
  Operating costs-rental property                   4,168           2,972          11,060           6,826
  Depreciation                                     91,916          91,916         183,833         183,833
  Legal and accounting                             24,813          21,574          28,497          33,595
  Computer costs                                    1,077           1,309           2,741           3,384
  Partnership administration                       16,869          18,032          39,881          28,602
                                                 --------        --------        --------        --------
                                                  150,972         147,274         289,613         279,183
                                                 --------        --------        --------        --------
Net income                                       $ 76,034        $ 51,558        $142,912        $ 98,835
                                                 ========        ========        ========        ========
Net income allocated to
  Wells Real Estate Fund II                      $ 71,997        $ 48,821        $135,324        $ 93,587
Net income allocated to Wells
  Real Estate Fund II-OW                         $  4,037        $  2,737        $  7,588        $  5,248
</TABLE>

                                       10
<PAGE>

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 the
accompanying financial statements of the Partnership and notes thereto. This
Report contains forward-looking statements, within the meaning of Section 27A of
the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934,
including discussion and analysis of the financial condition of the Partnership,
anticipated capital expenditures required to complete certain projects, amounts
of cash distributions anticipated to be distributed to Limited Partners in the
future and certain other matters. Readers of this Report should be aware that
there are various factors that could cause actual results to differ materially
from any forward-looking statement made in the Report, which include
construction costs which may exceed estimates, construction delays, lease-up
risks, inability to obtain new tenants upon the expiration of existing leases,
and the potential need to fund tenant improvements or other capital expenditures
out of operating cash flow.

Results of Operations and Changes in Financial Conditions
---------------------------------------------------------

General
-------

As of June 30, 1999, the developed properties owned by the Fund II-Fund II-OW
Joint Venture were 97.5% occupied, as compared to 95% occupied as of June 30,
1998.

The increase in gross revenues of the Partnership to $7,588 for the six months
ended June 30, 1999, as compared to $5,248 for the six months ended June 30,
1998 , is due to the increase occupancy of Cherokee Commons and Heritage Place.
Total administrative expenses of the Partnership which are incurred at the joint
venture level, remained relatively stable for the six months ended June 30,
1999, compared to the same period of 1998. The Partnership's cash flow from
investing activities and cash flow from financing activities increased in 1999,
compared to 1998, due to the increase in distributions from joint ventures as
occupancies increased. Since all cash received from joint ventures is
distributed currently, cash and cash equivalents remained stable.

Distributions accrued to the Partnership from Fund II-Fund II-OW Joint Venture
for the six month periods ended June 30, 1999 and June 30, 1998 were $20,900 and
$22,621, respectively.

The Partnership made cash distributions in the amount of $3.45 per Unit to the
Limited Partners holding Class A Units for the second quarter of 1999. No cash
distributions were made by the Partnership to the Limited Partners holding Class
B Units.

                                       11
<PAGE>

As of June 30, 1999, the Fund II-Fund II-OW Joint Venture had used all of the
remaining funds available for investment in properties.

The Partnership is unaware of any known demands, commitments, events or capital
expenditures other than that which is required form the normal operations of its
properties that will result in the Partnership's liquidity increasing or
decreasing in any material way. The Partnership expects to meet liquidity
requirements and demands through cash flow from operations.

Year 2000
---------

The Partnership is presently reviewing the potential impact of Year 2000
compliance issues on its information systems and business operations. A full
assessment of Year 2000 compliance issues was begun in late 1997 and was
completed by March 31, 1999. Renovations and replacements of equipment have been
and are being made as warranted as the assessment progresses. The costs incurred
by the Partnership and its affiliates thus far for renovations and replacements
have been immaterial. All testing of systems has been completed as of June 30,
1999.

As to the status of the Partnership's information technology systems, it is
presently believed that all major systems and software packages are Year 2000
compliant. At the present time, it is believed that all major non-information
technology systems are Year 2000 compliant. The cost to upgrade any non-
compliant systems is believed to be immaterial.

The Partnership has confirmed with the Partnership's vendors, including third-
party service providers such as banks, that their systems are Year 2000
compliant.

The Partnership relies on computers and operating systems provided by equipment
manufacturers, and also on application software designed for use with its
accounting, property management and investment portfolio tracking. The
Partnership has preliminarily determined that any costs, problems or
uncertainties associated with the potential consequences of Year 2000 issues are
not expected to have a material impact on the future operations or financial
condition of the Partnership. The Partnership will perform due diligence as to
the Year 2000 readiness of each property owned by the Partnership and each
property contemplated for purchase by the Partnership.

The Partnership's reliance on embedded computer systems (i.e., microcontrollers)
is limited to facilities related matters, such as office security systems and
environmental control systems.

The Partnership is currently formulating contingency plans to cover any areas of
concern. Alternate means of operating the business are being developed in the
unlikely circumstance

                                       12
<PAGE>

that the computer and phone systems are rendered inoperable. An off-site
facility from which the Partnership could operate is being sought as well as
alternate means of communication with key third-party vendors. A written plan is
being developed for testing and dispensation to each staff member of the General
Partner of the Partnership.

Management believes that the Partnership's risk of Year 2000 problems is
minimal. In the unlikely event there is a problem, the worst case scenarios
would include the risks that the elevator or security systems within the
Partnership's properties would fail or the key third-party vendors upon which
the Partnership relies would be unable to provide accurate investor information.
In the event that the elevator shuts down, the Partnership has devised a plan
for each building whereby the tenants will use the stairs until the elevators
are fixed. In the event that the security system shuts down, the Partnership has
devised a plan for each building to hire temporary on-site security guards. In
the event that a third-party vendor has Year 2000 problems relating to investor
information, the Partnership intends to perform a full system back-up of all
investor information as of December 31, 1999 so that the Partnership will have
accurate hard-copy investor information.

                                       13
<PAGE>

Property Operations
-------------------

As of June 30, 1999, the Partnership owned interests in the following properties
through the Fund II-Fund II-OW Joint Venture:

First Union at Charlotte/Fund II and II-OW Joint Venture
--------------------------------------------------------

<TABLE>
<CAPTION>
                                             Three Months Ended                Six Months Ended
                                        -----------------------------    -----------------------------
                                        June 30, 1999   June 30, 1998    June 30, 1999   June 30, 1998
                                        -------------   -------------    -------------   -------------
<S>                                     <C>             <C>              <C>             <C>
Revenues:
  Rental income                            $127,682        $114,717         $242,399        $229,434
                                           --------        --------         --------        --------
Expenses:
  Depreciation                               91,916          91,916          183,833         183,833
  Management & leasing expenses              12,129          11,472           23,601          22,944
  Other operating expenses                    4,180           2,954           10,968           6,678
                                           --------        --------         --------        --------
                                            108,225         106,342          218,402         213,455
                                           --------        --------         --------        --------
Net income                                 $ 19,457        $  8,375         $ 23,997        $ 15,979
                                           ========        ========         ========        ========

Occupied %                                    100.0%          100.0%           100.0%          100.0%

Partnership Ownership %                         5.3%            5.3%             5.3%            5.3%

Cash generated to the Fund II-
  Fund II-OW Joint Venture*                $121,163        $117,594         $237,612        $228,938

Net income generated to the Fund II-
  Fund II-OW JointVenture*                 $ 19,457        $  8,375         $ 23,997        $ 15,979
</TABLE>


*  The Partnership holds a 5% ownership in the Fund II-Fund II-OW Joint Venture.

   Property operations remained stable for the three and six months ended June
   30, 1999 and 1998. Rental income has increased for the three months ended
   June 30, 1999, as compared to the same period in 1998, due primarily to an
   underestimate of straight line rent adjustments in 1998.

                                       14
<PAGE>

Boeing at the Atrium/Fund II and Fund III Joint Venture
-------------------------------------------------------

<TABLE>
<CAPTION>
                                              Three Months Ended                 Six Months Ended
                                         -----------------------------    -----------------------------
                                         June 30, 1999   June 30, 1998    June 30, 1999   June 30, 1998
                                         -------------   -------------    -------------   -------------
<S>                                      <C>             <C>              <C>             <C>
Revenues:
  Rental income                             $367,536        $367,536        $ 735,072       $ 735,072
  Interest income                                  0          13,280                0          13,280
                                            --------        --------        ---------       ---------
                                             367,536         380,816          735,072         748,352
                                            --------        --------        ---------       ---------
Expenses:
  Depreciation                               219,755         216,930          433,860         433,860
  Management & leasing expenses               44,869          44,679           89,643          89,167
  Other operating expenses                   117,325         183,393          313,495         341,824
                                            --------        --------        ---------       ---------
                                             381,949         445,002          836,998         864,851
                                            --------        --------        ---------       ---------
Net loss                                    $(14,413)       $(64,186)       $(101,926)      $(116,499)
                                            ========        ========        =========       =========

Occupied %                                     100.0%          100.0%           100.0%          100.0%

Partnership Ownership %                         3.25%            3.2%            32.5%            3.2%

Cash distributed to the Fund II-
  Fund II-OW Joint Venture*                 $130,417        $105,670        $ 220,049       $ 218,619

Net loss allocated to the Fund II-
  Fund II-OW Joint Venture*                 $ (8,835)       $(39,346)       $ (62,481)      $ (71,414)

</TABLE>

*  The Partnership holds a 5% ownership in the Fund II-Fund II-OW Joint Venture.

   Rental income remained stable for 1999 as compared to 1998. The decrease in
   operating expenses in 1999, as compared to 1998, are due to increased common
   area maintenance billings to tenants that were under estimated in 1998.
   Tenants are billed an estimated amount for the current year common area
   maintenance which is then reconciled the second quarter of the following year
   and the difference billed to the tenant.

                                       15
<PAGE>

The Brookwood Grill Property/Fund II and Fund III Joint Venture
---------------------------------------------------------------

<TABLE>
<CAPTION>
                                              Three Months Ended                 Six Months Ended
                                         -----------------------------    -----------------------------
                                         June 30, 1999   June 30, 1998    June 30, 1999   June 30, 1998
                                         -------------   -------------    -------------   -------------
<S>                                      <C>             <C>              <C>             <C>
Revenues:
  Rental income                              $56,187        $ 56,037         $112,375        $112,375
  Equity in income of joint venture            6,248          16,943           39,304          33,074
                                             -------        --------         --------        --------
                                              62,435          72,980          151,679         145,449
                                             -------        --------         --------        --------
Expenses:
  Depreciation                                13,503          13,503           27,006          27,006
  Management & leasing expenses                7,955           6,492           16,683          13,525
  Other operating expenses                       805         (23,721)           6,330         (18,492)
                                             -------        --------         --------        --------
                                              22,263          (3,726)          50,019          22,039
                                             -------        --------         --------        --------
Net income                                   $40,172        $ 76,706         $101,660        $123,410
                                             =======        ========         ========        ========

Occupied %                                     100.0%          100.0%           100.0%          100.0%

Partnership Ownership %                          3.3%            3.3%             3.3%            3.3%

Cash distributed to the Fund II-
  Fund II-OW Joint Venture*                  $49,986        $ 76,364         $115,431        $134,015

Net income allocated to the Fund II-
  Fund II-OW Joint Venture*                  $25,047        $ 47,826         $ 63,385        $ 76,946
</TABLE>

*  The Partnership holds a 5% ownership in the Fund II-Fund II-OW Joint Venture.

   Operating expenses increased for the six months ended June 30, 1999, as
   compared to the same period in 1998, due primarily to the billings of
   reimbursements during the second quarter in 1998. Tenants are billed an
   estimated amount for the current year common area maintenance which is then
   reconciled the second quarter of the following year and the difference billed
   to the tenant. As a result net income and cash distributions to the
   Partnership decreased for the six months ended June 30, 1999, as compared to
   the same period 1998.

                                       16
<PAGE>

Holcomb Bridge Road Property/Fund II, III, VI, VII Joint Venture
----------------------------------------------------------------
<TABLE>
<CAPTION>
                                              Three Months Ended                 Six Months Ended
                                         -----------------------------    -----------------------------
                                         June 30, 1999   June 30, 1998    June 30, 1999   June 30, 1998
                                         -------------   -------------    -------------   -------------
<S>                                      <C>             <C>              <C>             <C>
Revenues:
  Rental income                             $227,761        $208,645         $457,824        $421,880
                                            --------        --------         --------        --------
Expenses:
  Depreciation                                94,128          94,129          188,257         188,033
  Management & leasing expenses               42,063          29,888           80,937          59,252
  Other operating expenses                       387          13,797           24,781          36,830
                                            --------        --------         --------        --------
                                             136,578         137,814          293,975         284,115
                                            --------        --------         --------        --------
Net income                                  $ 91,183        $ 70,831         $163,849        $137,765
                                            ========        ========         ========        ========

Occupied %                                        94%          100.0%              94%          100.0%

Partnership Ownership %                          0.8%            0.8%             0.8%            0.8%

Cash distributed to the Fund II-
  Fund III Joint Venture*                   $ 46,181        $ 41,990         $ 81,600        $ 83,158

Net income allocated to the Fund II-
  Fund III Joint Venture*                   $  6,248        $ 16,943         $ 39,304        $ 33,074
</TABLE>

*  The Partnership holds a 5% ownership in the Fund II-Fund II-OW Joint Venture.

   Rental income has increased for the six months ended June 30, 1999 as
   compared to the same period in 1998 due primarily to an underestimate of
   straight line rent adjustments in 1998. The expense decreases due to common
   area maintenance reimbursement. Tenants are billed an estimated amount for
   the current year common area maintenance which is then reconciled the second
   quarter of the following year and the difference billed to the tenant.

                                       17
<PAGE>

Heritage Place at Tucker Property/Fund I - Fund II Joint Venture
----------------------------------------------------------------
<TABLE>
<CAPTION>
                                              Three Months Ended                 Six Months Ended
                                         -----------------------------    -----------------------------
                                         June 30, 1999   June 30, 1998    June 30, 1999   June 30, 1998
                                         -------------   -------------    -------------   -------------
<S>                                      <C>             <C>              <C>             <C>
Revenues:
  Rental income                             $343,044        $311,526        $ 679,903        $611,887
  Interest income                                137             135              273             272
                                            --------        --------        ---------        --------
                                             343,181         311,661          680,176         612,159
                                            --------        --------        ---------        --------
Expenses:
  Depreciation                               120,456         107,288          229,252         214,576
  Management & leasing expenses               43,482          34,645           87,966          77,233
  Other operating expenses                   103,404         116,379          198,948         225,974
                                            --------        --------        ---------        --------
                                             267,342         258,312          516,166         517,783
                                            --------        --------        ---------        --------
Net income                                  $ 75,839        $ 53,349        $ 164,010        $ 94,376
                                            ========        ========        =========        ========

Occupied %                                      91.0%           82.0%            91.0%           82.0%

Partnership Ownership %                          2.4%            2.4%             2.4%            2.4%

Cash distributed to the
  Fund II-Fund II-OW Joint Venture*         $ 31,293        $ 51,429        $  90,742        $ 95,993

Net income allocated to the
  Fund II-Fund II-OW Joint Venture*         $ 34,059        $ 23,959        $  73,657        $ 42,384

</TABLE>

*  The Partnership holds a 95% ownership in the Fund II - Fund II-OW Joint
   Venture.

   Rental income increased in 1999 from 1998, due primarily to the increase in
   occupancy from 82% to 91%. Depreciation, management and leasing expenses
   increased over prior year to date, due to increased occupancy, tenant
   improvements and revenues. Other operating expenses decreased due primarily
   to prior year adjustments for common area maintenance billings to tenants.
   Tenants are billed an estimated amount for the current year common area
   maintenance which is then reconciled the second quarter of the following year
   and the difference billed to the tenant.

   Cash distributions to the Fund IIII-OW Joint Venture decreased due to capital
   improvements to the building of $101,350 and build out of tenant improvements
   of $74,168.

                                       18
<PAGE>

Cherokee Property - Fund I, II, II-OW, VI, VII Joint Venture
------------------------------------------------------------
<TABLE>
<CAPTION>
                                              Three Months Ended                 Six Months Ended
                                         -----------------------------    -----------------------------
                                         June 30, 1999   June 30, 1998    June 30, 1999   June 30, 1998
                                         -------------   -------------    -------------   -------------
<S>                                      <C>             <C>              <C>             <C>
Revenues:
  Rental income                             $237,232        $225,705         $464,615        $454,682
  Interest income                                 19              19               39              41
                                            --------        --------         --------        --------
                                             237,251         225,724          464,654         454,723
                                            --------        --------         --------        --------
Expenses:
  Depreciation                               111,415         110,564          221,527         221,127
  Management & leasing expenses               26,135          18,737           51,129          44,488
  Other operating expenses                     9,772           1,919          (19,643)          5,050
                                            --------        --------         --------        --------
                                             147,322         131,220          253,013         270,665
                                            --------        --------         --------        --------
Net income                                  $ 89,929        $ 94,504         $211,641        $184,058
                                            ========        ========         ========        ========

Occupied %                                      95.9%           91.0%            95.9%           91.0%

Partnership Ownership %                          2.9%            2.9%             2.9%            2.9%

Cash distributed to the
  Fund II-Fund II-OW Joint Venture*         $103,538        $115,766         $227,662        $218,466

Net income allocated to the
  Fund II-Fund II-OW Joint Venture*         $ 49,066        $ 51,563         $115,473        $100,424
</TABLE>


*  The Partnership holds a 95% ownership in the Fund II - Fund II-OW Joint
   Venture.

   Rental income increased in 1999 over 1998, due to increased occupancy. The
   decrease in operating expenses for the six month period ended June 30, 1999,
   as compared to the same period in 1998, was due to common area maintenance
   reimbursement billings. The increase in operating expense for the three month
   period ended June 30, 1999 was due to increased expenditures for tenant
   improvements, HVAC repairs and a partial demolition of a tenant suite.

                                       19
<PAGE>

                          PART II - OTHER INFORMATION
                          ---------------------------

Item 6(b).  No reports on Form 8-K were filed during the second quarter of 1999


                                  SIGNATURES

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

                                  WELLS REAL ESTATE FUND II-OW
                                  (Registrant)

Dated: August 10, 1999            By: /s/ Leo F. Wells, III
                                      ---------------------------------
                                      Leo F. Wells, III, as Individual
                                      General Partner and as President,
                                      Sole Director and Chief Financial
                                      Officer of Wells Capital, Inc.
                                      the Corporate General Partner

                                       20