<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 September 30, 2000 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                            0-17876
                        --------------------------------------------------------

                         WELLS REAL ESTATE FUND II-OW
--------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)
<TABLE>
<S>                                                                  <C>
                          Georgia                                                               58-1754703
---------------------------------------------------------            ---------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)                    (I.R.S. Employer Identification Number)

    6200 The Corners Pkwy., Norcross, Georgia                                                      30092
---------------------------------------------------------            ---------------------------------------------------------------
    (Address of principal executive offices)                                                    (Zip Code)
</TABLE>

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

                    (A Georgia Public Limited Partnership)

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                        Page No.
                                                                                                        --------
<S>                                                                                                     <C>
    PART I.  FINANCIAL INFORMATION

    Item 1.  Financial Statements

             Balance Sheets--September 30, 2000 and December 31, 1999                                        3

             Statements of Income for the Three Months and Nine Months Ended September 30, 2000
                 and 1999                                                                                    4

             Statements of Partners' Capital for the Year Ended December 31, 1999 and the Nine
                 Months Ended September 30, 2000                                                             5

             Statements of Cash Flows for the Nine Months Ended September 30, 2000 and 1999                  6

             Condensed Notes to Financial Statements                                                         7

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

PART II.  OTHER INFORMATION                                                                                 19
</TABLE>

                                      -2-
<PAGE>

                          WELLS REAL ESTATE FUND II-OW

                     (A Georgia Public Limited Partnership)

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                September 30,      December 31,
                                                                                    2000                1999
                                                                                -------------      -------------
<S>                                                                             <C>                <C>
ASSETS:
    Investment in joint venture (Note 2)                                        $   1,102,196      $   1,159,995
    Cash and cash equivalents                                                           1,860              3,865
    Due from affiliate                                                                 26,476             25,335
                                                                                -------------      -------------
              Total assets                                                      $   1,130,532      $   1,189,195
                                                                                =============      =============

LIABILITIES AND PARTNERS' CAPITAL:
    Liabilities:
       Accounts payable                                                         $         381      $         264
       Partnership distributions payable                                               27,475             26,536
                                                                                -------------      -------------
              Total liabilities                                                        27,856             26,800
                                                                                -------------      -------------
    Partners' capital:
       Limited partners:
           Class A--6,062 units                                                     1,102,676          1,162,395
           Class B--1,626 units                                                             0                  0
                                                                                -------------      -------------
              Total partners' capital                                               1,102,676          1,162,395
                                                                                -------------      -------------
              Total liabilities and partners' capital                           $   1,130,532      $   1,189,195
                                                                                =============      =============
</TABLE>

           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                Nine Months Ended
                                                   -----------------------------   --------------------------------
                                                    September 30,  September 30,    September 30,     September 30,
                                                        2000           1999             2000              1999
                                                   -------------   -------------   --------------     -------------
<S>                                                <C>             <C>             <C>                <C>
REVENUES:
   Equity in income of joint venture (Note 2)          $5,736          $8,246           $21,668         $15,834
   Other income                                            89             130                89             130
                                                       ------          ------           -------         -------
NET INCOME                                             $5,825          $8,376           $21,757         $15,964
                                                       ======          ======           =======         =======
NET INCOME ALLOCATED TO CLASS A LIMITED
   PARTNERS                                            $5,825          $8,376           $21,757         $15,964
                                                       ======          ======           =======         =======
NET LOSS ALLOCATED TO CLASS B LIMITED
   PARTNERS                                            $ 0.00          $ 0.00           $  0.00         $  0.00
                                                       ======          ======           =======         =======

NET INCOME PER CLASS A LIMITED PARTNER UNIT            $ 0.96          $ 1.38           $  3.59         $  2.63
                                                       ======          ======           =======         =======

NET LOSS PER CLASS B LIMITED PARTNER UNIT              $ 0.00          $ 0.00           $  0.00         $  0.00
                                                       ======          ======           =======         =======
CASH DISTRIBUTION PER CLASS A LIMITED
   PARTNER UNIT                                        $ 4.53          $ 4.06           $ 13.44         $ 11.25
                                                       ======          ======           =======         =======
</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, 1999 AND

                     NINE MONTHS ENDED SEPTEMBER 30, 2000

<TABLE>
<CAPTION>
                                                                  Limited Partners
                                                  ------------------------------------------------
                                                          Class A                   Class B               Total
                                                  -----------------------     --------------------      Partners'
                                                   Units         Amounts       Units      Amounts        Capital
                                                  -------       ---------     -------    ---------     ------------
<S>                                               <C>           <C>           <C>        <C>           <C>
BALANCE, December 31, 1998                           6,062      $1,236,239       1,626   $       0     $  1,236,239

    Net income                                           0          20,918           0           0           20,918
    Partnership distributions                            0         (94,762)          0           0          (94,762)
                                                  --------      ----------    --------  ----------     ------------
BALANCE, December 31, 1999                           6,062       1,162,395       1,626           0        1,162,395

    Net income                                           0          21,757           0           0           21,757
    Partnership distributions                            0         (81,476)          0           0          (81,476)
                                                  --------      ----------    --------  ----------     ------------
BALANCE, September 30, 2000                          6,062      $1,102,676       1,626  $        0     $  1,102,676
                                                  ========      ==========    ========  ==========     ============
</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>
                                                                                        Nine Months Ended
                                                                             ------------------------------------
                                                                               September 30,        September 30,
                                                                                    2000                 1999
                                                                             ---------------        -------------
<S>                                                                          <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                                     $ 21,757           $  15,964
                                                                             --------------         -----------
    Adjustments to reconcile net income to net cash provided by
       operating activities:
           Equity in income of joint ventures                                       (21,668)            (15,834)
           Changes in assets and liabilities:
           Accounts payable                                                             117                  57
                                                                             --------------         -----------
              Total adjustments                                                     (21,551)            (15,777)
                                                                             --------------         -----------
              Net cash provided by operating activities                                 206                 187
                                                                             --------------         -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Distributions received from joint ventures                                       78,325              62,431
                                                                             --------------         -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Distributions to partners                                                       (80,536)            (62,536)
                                                                             --------------         -----------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                 (2,005)                 82

CASH AND CASH EQUIVALENTS, beginning of year                                          3,865                 669
                                                                             --------------         -----------
CASH AND CASH EQUIVALENTS, end of period                                           $  1,860           $     751
                                                                             ==============         ===========
</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., a
     Corporation, 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 among the Fund II-Fund II-OW Joint Venture and Wells Real
     Estate Fund III, L.P. ("Fund II-Fund III Associates"); (iii) Fund
     II-III-VI-VII Joint Venture, a joint venture among 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 Associates"); (iv) Fund I-Fund II Joint
     Venture, a joint venture among 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 Joint Venture, a joint venture among 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").

     As of September 30, 2000, 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 in Fulton County, Georgia ("Holcomb Bridge Road"); (v) a retail
     shopping and commercial office complex located in Tucker, Georgia (the
     "Heritage Place at Tucker"); and (vi) a shopping center located in Cherokee
     County, Georgia (the "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, 1999.

     (b) Basis of Presentation

     The financial statements of 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

                                      -7-
<PAGE>

     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.

2.   INVESTMENT IN JOINT VENTURE

     The Partnership owned interests in six properties as of September 30, 2000
     through its interest in the Fund II-Fund II-OW Joint Venture. The
     Partnership does not have control over the operations of the joint
     ventures; however, it does exercise significant influence. Accordingly,
     investment in joint venture 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 September
     30, 2000, the Partnership's equity interest in the 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-Fund II-OW:

                               FUND II-FUND II-OW

                            (A Georgia Joint Venture)

                                 BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                 September 30,         December 31,
                                                                                     2000                 1999
                                                                                 -------------        ------------
<S>                                                                              <C>                  <C>
ASSETS:
    Real estate, at cost:
       Land                                                                        $  1,367,856       $  1,367,856
       Building and improvements, less accumulated depreciation of
           $3,267,202 in 2000 and $2,991,452 in 1999                                  4,503,917          4,779,666
                                                                                  -------------       ------------
              Total real estate assets                                                5,871,773          6,147,522
                                                                                  -------------       ------------
    Investments in joint ventures                                                    14,855,445         15,654,420
    Cash and cash equivalents                                                           153,867            162,241
    Due from affiliates                                                                 344,540            312,901
    Accounts receivable                                                                       0              2,149
    Prepaid expenses and other assets                                                    11,068             24,473
                                                                                  -------------       ------------
              Total assets                                                          $21,236,693        $22,303,706
                                                                                  =============      =============
LIABILITIES AND PARTNERS' CAPITAL:
    Liabilities:
       Partnership distributions payable                                          $     498,599      $     477,122
                                                                                  -------------      -------------
    Partners' capital:
       Wells Real Estate Fund II                                                     19,635,898         20,666,589
       Wells Real Estate Fund II-OW                                                   1,102,196          1,159,995
                                                                                  -------------      -------------
              Total partners' capital                                                20,738,094         21,826,584
                                                                                  -------------      -------------
              Total liabilities and partners' capital                               $21,236,693        $22,303,706
                                                                                  =============      =============
</TABLE>

           See accompanying condensed notes to financial statements.

                                      -9-
<PAGE>

                       FUND II-FUND II-OW Joint Venture

                           (A Georgia Joint Venture)

                             STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                       Three Months Ended                 Nine Months Ended
                                                   ------------------------------    -------------------------------
                                                   September 30,    September 30,    September 30,      September 30,
                                                        2000             1999             2000              1999
                                                   ------------     -------------    -------------      ------------
<S>                                                <C>              <C>              <C>                <C>
REVENUES:
   Rental income                                   $  211,018       $  264,259       $  633,054         $ 506,658
   Equity in income of joint ventures                  20,475           27,064          207,518           217,098
   Interest income                                      6,922              155            7,106               247
                                                   ------------     ------------     ------------       ----------
                                                      238,415          291,478          847,678           724,003
                                                   ------------     ------------     ------------       ----------
EXPENSES:
   Management and leasing fees                         12,661           15,855           38,112            30,279
   Lease acquisition costs                              4,589            4,589           13,766            13,766
   Operating costs--rental property                     3,054            4,756           11,180            15,816
   Depreciation                                        91,917           91,917          275,750           275,750
   Legal and accounting                                 5,513             (650)          37,985            27,847
   Computer costs                                       2,354            2,661            8,847             5,402
   Partnership administration                          10,298           17,071           53,970            56,952
                                                   ------------     ------------     ------------       ----------
                                                      130,386          136,199          439,610           425,812
                                                   ------------     ------------     ------------       ----------
NET INCOME                                         $  108,029       $  155,279       $  408,068         $ 298,191
                                                   ============     ============     ============       ==========
NET INCOME ALLOCATED TO WELLS REAL ESTATE
   FUND II                                         $  102,293       $  147,033       $  386,400         $ 282,357
                                                   ============     ============     ============       ==========
NET INCOME ALLOCATED TO WELLS REAL ESTATE
   FUND II-OW                                      $    5,736       $    8,246       $   21,668         $  15,834
                                                   ============     ============     ============       ==========
</TABLE>

           See accompanying condensed notes to financial statements.

                                      -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 Section 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 this
   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.

1. RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL CONDITIONS

General

   As of September 30, 2000, the developed properties owned by the Fund II-Fund
   II-OW Joint Venture were 97.1% occupied as compared to 97.5% occupied as of
   September 30, 1999.

   Gross revenues of the Partnership increased to $21,757 for the nine months
   ended September 30, 2000 from $15,964 for the nine months ended September 30,
   1999 due to increased rental renewal rates at the Charlotte Property but
   decreased for the three months ended September 30, 2000, as compared to the
   same period in 1999, due to a catch up of May and June increased Charlotte
   rentals in July 1999. Total administrative expenses of the Partnership which
   are incurred at the joint venture level increased slightly for the nine month
   period ended September 30, 2000 due to increased management and leasing fees
   which are charges based on rental income. As a result, net income increased
   to $21,757 for the nine months ended September 30, 2000, as compared to
   $15,964, for the same period during 1999.

   The Partnership's net cash provided by investing activities and net cash used
   in financing activities increased in 2000, compared to 1999, due to the
   increases in distributions from joint ventures as net income increased at the
   Charlotte property.

   Fund II-Fund II-OW Joint Venture distributions accrued to the Partnership as
   of September 30, 2000 and 1999 were $26,476 and $27,735, respectively.

   The Partnership made cash distributions to the Limited Partners holding Class
   A units for the third quarter of 2000 in the amount of $4.53 per unit as
   compared to $4.06 for the third quarter of 1999. No cash distributions were
   made by the Partnership to the Limited Partners holding Class B units or to
   the General Partner.

   As of September 30, 2000, 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 from the normal
   operations of its properties that will result in the

                                      -11-
<PAGE>

Partnership's liquidity increasing or decreasing in any material way. The
Partnership expects to meet liquidity requirements and demands through cash flow
from operations.

At this time, four properties are being marketed for sale. CB Richard Ellis is
marketing the sale of 880 Holcomb Bridge, Brookwood Grill, and Cherokee Commons.
The marketing piece is being broadly distributed to investors throughout the
country. The Heritage Place at Tucker property is being marketed by The First
Fidelity Companies. To maximize the disposition value, the management team is
separating the retail and creating a condominium for the office buildings. The
legal and site work should be complete so that the management team can market
this property to investors in early fall. The Partnership's goal is to have
these properties sold by the end of 2002. As the properties are sold, all
proceeds will be returned to the Limited Partners in accordance with the
Partnership's prospectus. Management estimates that the fair market value of
each of the properties exceeds the carrying value of the corresponding real
estate assets; consequently, no impairment loss has been recorded. In the event
that the net sales proceeds are less than the carrying value of the property
sold, the Partnership would recognize a loss on the sale. Management is not
contractually or financially obligated to sell any of its properties, and it is
management's current intent to fully realize the Partnership's investment in
real estate. The success of the Partnership's future operations and the ability
to realize investment in its assets will be dependent on the Partnership's
ability to maintain rental rates, occupancy, and an appropriate level of
operating expenses in future years. Management believes that the steps that it
is taking will enable the Partnership to realize its investment in its assets.

                                      -12-
<PAGE>

2.  PROPERTY OPERATIONS

    As of September 30, 2000, the Partnership owned interests in the following
    properties through the Fund II-Fund II-OW Joint Venture:

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

<TABLE>
<CAPTION>
                                                       Three Months Ended                  Nine Months Ended
                                                 -------------------------------    -------------------------------
                                                 September 30,     September 30,    September 30,     September 30,
                                                      2000             1999              2000             1999
                                                 -------------     -------------    -------------     -------------
<S>                                              <C>               <C>              <C>               <C>
Revenues:
    Rental income                                $    211,018      $    264,259     $    633,054      $    506,658
                                                 -------------     -------------    -------------     -------------
Expenses:
    Depreciation                                       91,917            91,917          275,750           275,750
    Management and leasing expenses                    17,249            20,444           51,878            44,045
    Other operating expenses                            2,932             4,601           10,874            15,569
                                                 -------------     -------------    -------------     -------------
                                                      112,098           116,962          338,502           335,364
                                                 -------------     -------------    -------------     -------------
Net income                                       $     98,920      $    147,297     $    294,552      $    171,294
                                                 =============     =============    =============     =============

Occupied percentage                                       100%              100%             100%              100%
                                                 =============     =============    =============     =============

Partnership's ownership percentage                        5.3%              5.3%             5.3%              5.3%
                                                 =============     =============    =============     =============
Cash generated to the Fund II-
    Fund II-OW Joint Venture*                    $    195,426      $    243,802     $    584,069      $    481,414
                                                 =============     =============    =============     =============
Net income allocated to the Fund II-
    Fund II-OW Joint Venture*                    $     98,920      $    147,297     $    294,552      $    171,294
                                                 =============     =============    =============     =============
</TABLE>

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


Rental income, net income, and cash generated to the Fund II-Fund II-OW Joint
Venture increased for the nine months ended September 30, 2000, as compared to
the same period in 1999, due to a renewed, increased rent beginning in May 1999,
but decreased for the three month period due to a catch up of May and June
increased rentals in July 1999. Other operating expenses for the three months
and nine months ended September 30, 2000 decreased as compared to the same
period in 1999 due primarily to decreased accounting fees.



                                      -13-
<PAGE>

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

<TABLE>
<CAPTION>
                                                       Three Months Ended                  Nine Months Ended
                                                 -------------------------------  --------------------------------
                                                 September 30,     September 30,    September 30,     September 30,
                                                      2000             1999              2000             1999
                                                 -------------     -------------    -------------     -------------
<S>                                              <C>               <C>              <C>               <C>
Revenues:
    Rental income                                  $  367,536         $ 367,536       $ 1,101,248      $ 1,102,608
                                                 ------------      ------------     -------------     ------------
Expenses:
    Depreciation                                      221,010           216,930           656,230          650,790
    Management and leasing expenses                    45,748            45,060           139,286          134,703
    Other operating expenses                          226,070           185,397           544,643          498,892
                                                 ------------      ------------     -------------     ------------
                                                      492,828           447,387         1,340,159        1,284,385
                                                 ------------      ------------     -------------     ------------
Net loss                                           $ (125,292)        $ (79,851)      $  (238,911)     $  (181,777)
                                                 ============      ============     =============     ============

Occupied percentage                                       100%              100%              100%             100%
                                                 ============      ============     =============     ============

Partnership's ownership percentage                        3.3%              3.3%              3.3%             3.3%
                                                 ============      ============     =============     ============

Cash distribution to the Fund II-
    Fund II-OW Joint Venture*                      $   75,001         $ 103,572       $   262,756      $   323,621
                                                 ============      ============     =============     ============

Net loss allocated to Fund II-
    Fund II-OW Joint Venture*                      $  (76,805)        $ (48,948)      $  (146,453)     $  (111,429)
                                                 ============      ============     =============     ============
</TABLE>

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

Rental income remained stable for the three months and nine months ended
September 30, 2000, as compared to the same periods in 1999. Net income and cash
distributions have decreased for the three month and nine month periods, as
compared to the same periods in 1999, due primarily to increased expenditures in
electricity, HVAC repairs, plumbing repairs, and glass maintenance in the
building.

                                      -14-
<PAGE>

               The Brookwood Grill/Fund II-Fund III Joint Venture

<TABLE>
<CAPTION>
                                                       Three Months Ended                  Nine Months Ended
                                                 -----------------------------      ------------------------------
                                                 September 30,     September 30,    September 30,     September 30,
                                                      2000             1999              2000             1999
                                                 --------------    -------------    -------------     -------------
<S>                                              <C>               <C>              <C>               <C>
Revenues:
    Rental income                                  $  56,188           $56,188         $ 168,613          $168,563
    Equity in income of joint venture                 12,668            23,307            45,986            62,611
                                                 -------------     -------------    -------------     -------------
                                                      68,856            79,495           214,599           231,174
                                                 -------------     -------------    -------------     -------------
Expenses:
    Depreciation                                      13,503            13,503            40,509            40,509
    Management and leasing expenses                    6,878             6,704            18,909            23,387
    Other operating expenses                         (11,256)            2,467                69             8,797
                                                 -------------     -------------    -------------     -------------
                                                       9,125            22,674            59,487            72,693
                                                 -------------     -------------    -------------     -------------
Net income                                         $  59,731           $56,821         $ 155,112          $158,481
                                                 =============     =============    =============     =============

Occupied percentage                                      100%              100%              100%              100%
                                                 =============     =============    =============     =============

Partnership's ownership percentage                       3.3%              3.3%              3.3%              3.3%
                                                 =============     =============    =============     =============

Cash distribution to the Fund II-
    Fund II-OW Joint Venture*                      $  68,167           $59,606         $ 189,697          $175,037
                                                 =============     =============    =============     =============

Net income allocated to the Fund II-
    Fund II-OW Joint Venture*                      $  37,242           $35,428         $  96,712          $ 98,813
                                                 =============     =============    =============     =============
</TABLE>

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

Although rental income remained stable, total revenues decreased for the three
months and nine months ended September 30, 2000, as compared to the same periods
in 1999, due to decreased equity in income from the Fund II, III, VI, and VII
Joint Venture, as the Holcomb Bridge Road property decreased its occupancy rate
during the third quarter of this year.

Other operating expenses decreased for the three months and nine months ended
September 30, 2000, as compared to the same periods in 1999, due to 2000
property tax reimbursement being charged to the tenant in the third quarter of
2000 instead of being charged in the fourth quarter in 1999.

This property is currently being marketed for sale by CB Richard Ellis. The
marketing piece is being broadly distributed to investors throughout the
country. The Partnership's goal is to have this property sold by the end of
2002.

                                      -15-
<PAGE>

       Holcomb Bridge Road Property/Fund II, III, VI, VII Joint Venture

<TABLE>
<CAPTION>
                                                       Three Months Ended                  Nine Months Ended
                                                 -------------------------------    -------------------------------
                                                 September 30,     September 30,    September 30,     September 30,
                                                     2000               1999            2000               1999
                                                 -------------     -------------    -------------     -------------
<S>                                              <C>               <C>              <C>               <C>
Revenues:
    Rental income                                   $ 214,051         $ 213,028        $ 658,907         $ 670,852
                                                 -------------     -------------    -------------     -------------
Expenses:
    Depreciation                                      104,129            79,605          312,389           277,862
    Management and leasing expenses                    28,099            22,263           85,165            93,200
    Other operating expenses                           29,194            14,889           70,302            39,670
                                                 -------------     -------------    -------------     -------------
                                                      161,422           116,757          467,856           410,732
                                                 -------------     -------------    -------------     -------------
Net income                                          $  52,629         $  96,271        $ 191,051         $ 260,120
                                                 =============     =============    =============     =============

Occupied percentage                                        92%               94%              92%               94%
                                                 =============     =============    =============     =============

Partnership's ownership percentage                        0.8%              0.8%             0.8%              0.8%
                                                 =============     =============    =============     =============

Cash distribution to the Fund II-
    Fund III Joint Venture*                         $  41,546         $  41,093        $ 132,952         $ 122,693
                                                 =============     =============    =============     =============

Net income allocated to the Fund II-
    Fund III Joint Venture*                         $  12,668         $  23,307        $  45,986         $  62,611
                                                 =============     =============    =============     =============
</TABLE>

*The Partnership holds a 3.3% ownership in the Fund II-Fund III Joint Venture.

Rental income decreased for the nine months ended September 30, 2000, as
compared to the same period in 1999, due to decreased occupancy. Other operating
expenses increased for the three months and nine months ended September 30,
2000, as compared to the same periods in 1999, due to appraisal fees for this
property which is currently being marketed for sale and a decrease in common
area maintenance reimbursements from tenants. Monthly common area maintenance
billings were increased in 1999 to offset 1998 underpayment. Tenants are billed
an estimated amount for the current year common area maintenance which is then
reconciled the following year and the difference billed to the tenant.

Cash distributions to the Partnership increased for the three months and nine
months ended September 30, 2000, as compared to the same periods in 1999, even
though there is a decrease in net income this year due to lease acquisition fees
and procurement fees paid in 1999.

This property is currently being marketed for sale by CB Richard Ellis. The
marketing piece is being broadly distributed to investors throughout the
country. The Partnership's goal is to have this property sold by the end of
2002.

                                      -16-
<PAGE>

                 Heritage Place at Tucker/Tucker Joint Venture

<TABLE>
<CAPTION>
                                                       Three Months Ended                  Nine Months Ended
                                                 -------------------------------    -------------------------------
                                                 September 30,     September 30,    September 30,     September 30,
                                                      2000             1999              2000             1999
                                                 -------------     -------------    -------------     -------------
<S>                                              <C>               <C>              <C>               <C>
Revenues:
    Rental income                                   $ 341,100         $ 351,124      $ 1,029,160       $ 1,031,027
    Interest income                                       187                53              536               326
                                                 -------------     -------------    -------------     -------------
                                                      341,287           351,177        1,029,696         1,031,353
                                                 -------------     -------------    -------------     -------------
Expenses:
    Depreciation                                      123,119           127,287          368,681           356,539
    Management and leasing expenses                    32,737            36,741           93,118           124,707
    Other operating expenses                          122,566           165,238          365,317           364,186
                                                 -------------     -------------    -------------     -------------
                                                      278,422           329,266          827,116           845,432
                                                 -------------     -------------    -------------     -------------
Net income                                          $  62,865         $  21,911      $   202,580       $   185,921
                                                 =============     =============    =============     =============

Occupied percentage                                        88%               88%              88%               88%
                                                 =============     =============    =============     =============

Partnership's ownership percentage                        2.4%              2.4%             2.4%              2.4%
                                                 =============     =============    =============     =============

Cash distribution to the
    Fund II-Fund II-OW Joint Venture*               $  82,244         $  39,495      $   205,848       $   130,236
                                                 =============     =============    =============     =============
Net income generated to the
    Fund II-Fund II-OW Joint Venture*               $  28,233         $   9,840      $    90,979       $    83,497
                                                 =============     =============    =============     =============
</TABLE>

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

Rental income remained relatively stable in 2000 as compared to 1999. Total
expenses decreased in 2000, as compared to 1999, due to a decrease in management
and leasing expenses in 2000. The decrease in management and leasing expenses
was due to a decrease in leasing commissions and lease acquisition fees. As a
result, net income increased for the three months and nine months ended
September 30, 2000 as compared to the same periods in 1999.

This property is currently being marketed for sale by The First Fidelity
Companies. To maximize the disposition value, the management team is separating
the retail and creating a condominium for the office buildings. The legal and
site work should be complete so that the management team can market this
property to investors in early fall. The Partnership's goal is to have this
property sold by the end of 2002.

                                      -17-
<PAGE>

           Cherokee Commons/Fund I, II, II-OW, VI, VII Joint Venture

<TABLE>
<CAPTION>
                                             Three Months Ended                  Nine Months Ended
                                      --------------------------------    -------------------------------
                                       September 30,     September 30,    September 30,     September 30,
                                            2000             1999              2000             1999
                                      -------------      -------------    -------------     -------------
<S>                                   <C>                <C>              <C>               <C>
Revenues:
    Rental income                          $249,102          $238,923         $713,717          $703,538
    Interest income                              32                 8               71                47
                                        -----------      ------------      -----------      ------------
                                            249,134           238,931          713,788           703,585
                                        -----------      ------------      -----------      ------------
Expenses:
    Depreciation                            110,562           111,379          331,687           332,906
    Management and leasing expenses          10,360            22,863           46,653            73,992
    Other operating expenses                 51,473            48,342           30,688            28,699
                                        -----------      ------------      -----------      ------------
                                            172,395           182,584          409,028           435,597
                                        -----------      ------------      -----------      ------------
Net income                                $  76,739         $  56,347         $304,760          $267,988
                                        ===========      ============      ===========      ============

Occupied percentage                              97%               97%              97%               97%
                                        ===========      ============      ===========      ============

Partnership's ownership percentage              2.9%              2.9%             2.9%              2.9%
                                        ===========      ============      ===========      ============
Cash distribution to the
    Fund II-Fund II-OW Joint Venture*     $  89,127         $  94,923         $348,191          $322,585
                                        ===========      ============      ===========      ============
Net income generated to the
    Fund II-Fund II-OW Joint Venture*     $  31,805         $  30,743         $166,280          $146,217
                                        ===========      ============      ===========      ============
</TABLE>

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

Rental income increased for the three months and nine months ended September 30,
2000, as compared to the same periods in 1999, due to increased rental renewal
rates. Management and leasing expenses decreased in 2000, as compared to 1999,
due to increased leasing commissions for 1999 and a catch-up of 1998 management
fees in 1999. Other operating expenses remained relatively stable for the nine
months ended September 30, 2000, as compared to the same period in 1999. Net
income increased for the three months and nine months ended September 30, 2000,
as compared to the same periods in 1999, due to the lower management and leasing
expenses.

This property is currently being marketed for sale by CB Richard Ellis. The
marketing piece is being broadly distributed to investors throughout the
country. The Partnership's goal is to have this property sold by the end of
2002.

                                      -18-
<PAGE>

                          PART II. OTHER INFORMATION


ITEM 6 (b.) No reports on Form 8-K were filed during the third quarter of 2000.

                                  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:  November 10, 2000          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

                                      -19-