<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   March 31, 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  0-17876
                      ----------------------------------------------------

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

              Georgia                          58-1754703       
-------------------------------    ---------------------------------------
(State or other jurisdiction of    (I.R.S. Employer Identification Number)
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 - March 31, 1999 and
                    December 31, 1998.......................................3
                                                                         
                  Statements of Income for the Three Months              
                    Ended March 31, 1999 and 1998...........................4
                                                                         
                  Statements of Partners' Capital for the Year Ended     
                    December 31, 1998 and the Three Months               
                    Ended March 31, 1999....................................5
                                                                         
                  Statements of Cash Flows for the Three Months          
                    Ended March 31, 1999 and 1998...........................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

                                       2
<PAGE>
 
                          WELLS REAL ESTATE FUND II-OW
                     (A Georgia Public Limited Partnership)

                                 BALANCE SHEETS

<TABLE>
<CAPTION>

                  Assets                                          March 31, 1999         December 31, 1998
                  ------                                        ----------------         -----------------
<S>                                                             <C>                       <C>             
Investment in joint venture (Note 2)                            $      1,216,727          $      1,235,838
Cash and cash equivalents                                                    669                       669
Due from affiliate                                                        22,663                    18,870
                                                                ----------------          ----------------

         Total assets                                           $      1,240,059          $      1,255,377
                                                                ================          ================


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

Liabilities:
   Accounts payable                                             $            165          $            164
   Partnership distributions payable                                      22,767                    18,974
                                                                ----------------          ----------------
         Total liabilities                                                22,932                    19,138
                                                                ----------------          ----------------

Partners' Capital:
   Limited Partners:
     Class A - 6,062 units                                             1,217,127                 1,236,239
     Class B - 1,626 units                                                     0                         0
                                                                ----------------          ----------------

         Total partners' capital                                       1,217,127                 1,236,239
                                                                ----------------          ----------------

             Total liabilities and partners' capital            $      1,240,059          $      1,255,377
                                                                ================          ================
</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
                                                                         ------------------

                                                                March 31, 1999            March 31, 1998
                                                              ------------------        ------------------
<S>                                                           <C>                       <C>               
Revenues:
     Equity income of joint venture (Note 2)                  $            3,551        $            2,510
     Interest income                                                           0                         0
                                                              ------------------        ------------------
                                                              $            3,551        $            2,510
                                                              ------------------        ------------------

Net  income allocated to
     Class A Limited Partners                                 $            3,551        $            2,510

Net loss allocated to
     Class B Limited Partners                                 $             0.00        $             0.00
                                                                                        
Net income per Class A                                                                  
     Limited Partner Unit                                     $             0.59        $             0.41
                                                                                        
Net loss per Class B                                                                    
     Limited Partner Unit                                     $             0.00        $             0.00
                                                                                        
Cash distribution per Class A                                                           
     Limited Partner Unit                                     $             3.74        $             3.54
</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 THREE MONTHS ENDED
                                 MARCH 31, 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            3,551                0                0            3,551
  Partnership distributions                    0          (22,662)               0                0          (22,662)
                                     -----------    -------------       ----------    -------------    ------------- 
BALANCE, March 31, 1999                    6,062    $   1,217,128            1,626    $           0    $   1,217,128
                                     ===========    =============       ==========    =============    ============= 
</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>
                                                                                  Three Months Ended
                                                                                  ------------------
                                                                      March 31, 1999             March 31, 1998
                                                                   ------------------         ------------------
<S>                                                                <C>                        <C>               
Cash flows from operating activities:
   Net income                                                      $            3,551         $            2,510
                                                                   ------------------         ------------------
   Adjustments to reconcile net income to net
    cash provided by (used in) operating activities:
       Equity in (income) of joint ventures                                    (3,551)                    (2,510)
       Changes in assets and liabilities:
         Accounts payable                                                           0                         30
                                                                   ------------------         ------------------
         Total adjustments                                                     (3,551)                    (2,480)
                                                                   ------------------         ------------------ 
           Net cash provided by
              operating activities                                              1,190                         30
                                                                   ------------------         ------------------

Cash flow from investing activities:
   Distributions received from joint ventures                                  18,870                     18,109
                                                                   ------------------         ------------------

Cash flow from financing activities:
   Partnership distributions paid                                             (20,060)                   (18,109)
                                                                   ------------------         ------------------

Net increase in cash and cash equivalents                                           0                         30

Cash and cash equivalents, beginning of year                                      669                        741
                                                                   ------------------         ------------------

Cash and cash equivalents, end of period                           $              669         $              771
                                                                   ==================         ==================
</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 a Corporation. 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 March 31, 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 currently being developed in Fulton County,
         Georgia ("Holcomb Bridge Road"); (v) a retail

                                       7
<PAGE>
 
         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.

(2)      Investment in Joint Venture
         ---------------------------

         The Partnership owned interests in six properties as of March 31, 1999
         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 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 March 31, 1999, 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 and II-OW:


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

                                 BALANCE SHEETS
<TABLE>
<CAPTION>
                             Assets                                    March 31, 1999              March 31, 1998
                             ------                                   -----------------          -----------------
<S>                                                                   <C>                        <C>              
Real estate, at cost:                                                                         
   Land                                                               $       1,367,856          $       1,367,856
   Building and improvements, less accumulated
   depreciation of $2,715,701in 1999 and
   $2,623,785 in 1998                                                         5,055,417                  5,147,333
                                                                      -----------------          -----------------

         Total real estate assets                                             6,423,273                  6,515,189
                                                                      -----------------          -----------------

Investment in joint ventures                                                 16,428,159                 16,676,111
Cash and cash equivalents                                                        87,519                     94,367
Due from affiliates                                                             339,398                    267,581
Accounts receivable                                                               6,745                     23,184
Prepaid expenses and other assets                                                37,015                     42,828
                                                                      -----------------          -----------------

         Total assets                                                 $      23,322,109          $      23,619,260
                                                                      =================          =================

               Liabilities and Partners' Capital
               ---------------------------------
Liabilities:
   Partnership distributions payable                                  $         426,789          $         355,370
   Due to affiliates                                                                329                      8,988
                                                                      -----------------          -----------------

         Total liabilities                                                      427,118                    364,358
                                                                      -----------------          -----------------

Partners' capital:
   Wells Real Estate Fund II                                                 21,678,264                 22,019,064
   Wells Real Estate Fund II-OW                                               1,216,727                  1,235,838
                                                                      -----------------          -----------------

         Total partners' capital                                             22,894,991                 23,254,902
                                                                      -----------------          -----------------

         Total liabilities and partners' capital                      $      23,322,109          $      23,619,260
                                                                      =================          =================
</TABLE>

            See accompanying condensed notes to financial statements.

                                       9
<PAGE>
 
                                FUND II and II-OW
                            (A Georgia Joint Venture)

                              STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                                            Three Months Ended
                                                                            ------------------
                                                                March 31, 1999               March 31, 1998
                                                               ----------------             ----------------
<S>                                                             <C>                          <C>          
Revenues:
  Rental income                                                 $     114,717                $     114,717
  Equity in income of joint ventures                                   90,697                       64,339
  Interest income                                                         105                          130
                                                                -------------                -------------
                                                                      205,519                      179,186
                                                                -------------                -------------
Expenses:
  Management & leasing expenses                                         6,883                        6,883
  Lease acquisition costs                                               4,589                        4,589
  Operating costs - rental property                                     6,892                        3,854
  Depreciation                                                         91,917                       91,917
  Legal and accounting                                                  3,684                       12,021
  Computer costs                                                        1,664                        2,075
  Partnership administration                                           23,012                       10,570
                                                                -------------                -------------
                                                                      138,641                      131,909
                                                                -------------                -------------

Net income                                                      $      66,878                $      47,277
                                                                =============                =============

Net income allocated to Wells
  Real Estate Fund II                                           $      63,327                $      44,767

Net income allocated to Wells
  Real Estate Fund II-OW                                        $       3,551                $       2,510
</TABLE>

                                       10
<PAGE>
 
         Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
         --------------------------------------------------------------------
         AND RESULTS OF OPERATION
         ------------------------

         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 March 31, 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 March 31, 1998.

         The increase in gross revenues of the Partnership to $3,551 for the
         three months ended March 31, 1999, as compared to $2,510 for the three
         months ended March 31, 1998, is due to the occupancy of Cherokee
         Commons and Heritage Place.

         The Partnership's cash flow from investing activities and cash flow
         from financing activities increased slightly 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 three month periods ended March 31, 1999 and March 31,
         1998 were $22,663 and $18,870, respectively.

         The Partnership made cash distributions in the amount of $3.74 per Unit
         to the Limited Partners holding Class A Units for the first quarter of
         1999. No cash distributions were made by the Partnership to the Limited
         Partners holding Class B Units.

                                       11
<PAGE>
 
As of March 31, 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 from 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. Some testing of systems has begun and all testing is
expected to be complete by 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 with the
exception of the accounting and property management package are Year 2000
compliant. The Partnership's affiliated entities are purchasing the upgrade for
the accounting and property management package system; however, it is not slated
to be available until the end of the second quarter of 1999. At the present
time, it is believed that all non-major information technology systems are Year
2000 compliant. The cost to upgrade any non-compliant systems is believed to be
immaterial.

The Partnership is in the process of confirming with the Partnership's vendors,
including third-party service providers such as banks, that their systems will
be Year 2000 compliant. Based on the information received thus far, the primary
third-party service providers with which the Partnership has relationships have
confirmed their Year 2000 readiness.

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.

                                       12
<PAGE>
 
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 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 March 31, 1998, 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
                                                                            ------------------
                                                              March 31, 1999                March 31, 1998
                                                             ----------------              ----------------
<S>                                                           <C>                           <C>          
Revenues:
  Rental income                                               $     114,717                 $     114,717

Expenses:
  Depreciation                                                       91,917                        91,917
  Management & leasing expenses                                      11,472                        11,472
  Other operating expenses                                            6,787                         3,724
                                                              -------------                 -------------
                                                                    110,176                       107,113
                                                              -------------                 -------------
                                                                                                        
Net income                                                    $       4,541                 $       7,604
                                                              =============                 =============

Occupied %                                                             100%                          100%
Partnership's Ownership %                                              5.3%                          5.3%

Cash distributions to the
  Fund II-Fund II-OW Joint Venture*                           $     116,499                 $     111,344

Net income allocated to the
  Fund II-Fund II-OW Joint Venture*                           $       4,541                 $       7,604
</TABLE>

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

Rental income remained stable for the three months ended March 31, 1999 and
1998. The decrease in net income for the first quarter of 1999 compared to 1998
was primarily due to the increase in accounting fees and property insurance. A
refund of 1997 insurance premiums was received in the first quarter of 1998.
Since actual rents received was higher for the three months ended March 31, 1999
than the same period in 1998, offset by the increase in expenses, cash generated
increased in 1999 as compared to 1998.

                                       14
<PAGE>
 
Boeing at the Atrium/Fund II and Fund III Joint Venture
-------------------------------------------------------
<TABLE>
<CAPTION>
                                                                            Three Months Ended
                                                                            ------------------
                                                               March 31, 1999                March 31, 1998
                                                              ----------------              ----------------
<S>                                                           <C>                           <C>          
Revenues:
  Rental income                                               $     367,536                 $     367,536
                                                              -------------                 -------------


Expenses:
  Depreciation                                                      214,105                       216,930
  Management & leasing expenses                                      44,774                        44,488
  Other operating expenses                                          196,170                       158,431
                                                              -------------                 -------------
                                                                    455,049                       419,849
                                                              -------------                 -------------

Net (loss)                                                    $     (87,513)                $     (52,313)
                                                              ==============                ==============

Occupied %                                                             100%                          100%

Partnership's Ownership %                                             3.25%                         3.25%

Cash distributions to the
  Fund II-Fund II-OW Joint Venture*                           $      89,632                 $     112,949

Net (loss) allocated to the
  Fund II-Fund II-OW Joint Venture*                           $     (53,646)                $     (32,068)
</TABLE>

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

Rental income and occupancy remained the space for the same three months ended
March 31, 1999 and 1998. Expenses increased due to additional landscaping and
HVAC repairs of approximately $12,000 received from Boeing in 1998 that reduced
expenses for that year. As a result net loss increased and cash distributions to
the Partnership decreased for the period ended March 31, 1999.

                                       15
<PAGE>
 
Brookwood Grill /Fund II and Fund III Joint Venture
---------------------------------------------------
<TABLE>
<CAPTION>
                                                                           Three Months Ended
                                                                           ------------------
                                                              March 31, 1999                March 31, 1998
                                                             ----------------              ----------------
<S>                                                           <C>                          <C>          
Revenues:
  Rental income                                               $      56,188                 $      56,338
  Equity in income of joint venture                                  33,056                        16,131
                                                              -------------                 -------------
                                                                     89,244                        72,469
                                                              -------------                 -------------
Expenses:
  Depreciation                                                       13,503                        13,503
  Management & leasing expenses                                       8,728                         7,033
  Other operating expenses                                            5,525                         5,229
                                                              -------------                 -------------
                                                                     27,756                        25,765
                                                              -------------                 -------------

Net income                                                    $      61,488                 $      46,704
                                                              =============                 =============

Occupied %                                                             100%                          100%
Partnership's Ownership %                                              3.3%                          3.3%

Cash distributions to the
  Fund II-Fund II-OW Joint Venture*                           $      65,445                 $      57,651

Net income allocated to the
  Fund II-Fund II-OW Joint Venture*                           $      38,338                 $      29,120
</TABLE>

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

Rental income have increased for the three months ended March 31, 1999 as
compared to 1998, due primarily to the increase in equity in income of joint
venture, which is the result of increased occupancy at the Holcomb Bridge
Property for the full three months of 1999 compared to 1998. Expenses remained
relatively stable with a minor increase in leasing expense. As a result net
income and cash distributions to the partnership increased for the three months
ended March 31, 1999 as compared to the same period of 1998.

                                       16
<PAGE>
 
Holcomb Bridge Road /Fund II, III, VI, VII Joint Venture
---------------------------------------------------------
<TABLE>
<CAPTION>
                                                                           Three Months Ended
                                                                           ------------------
                                                              March 31, 1999                March 31, 1998
                                                             ----------------              ----------------
<S>                                                          <C>                            <C>          
Revenues:
  Rental income                                               $     230,063                 $     213,235
                                                              -------------                 -------------

Expenses:
  Depreciation                                                       94,129                        93,904
  Management & leasing expenses                                      38,874                        29,364
  Other operating expenses                                           24,394                        23,033
                                                              -------------                 -------------
                                                                    157,397                       146,301
                                                              -------------                 -------------

Net income                                                    $      72,666                 $      66,934
                                                              =============                 =============

Occupied %                                                            94.0%                         94.1%

Partnership's Ownership %                                              0.8%                          0.8%

Cash distributions to the
  Fund II-Fund II-OW Joint Venture*                           $      35,418                 $      41,168

Net income allocated to the
  Fund II-Fund II-OW Joint Venture*                           $      33,056                 $      16,131
</TABLE>

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

While occupancy remained the same at March 31, 1999 and March 31, 1998 rental
income, management and leasing fees and net income have increased as compared to
1998, due primarily to two tenants occupying space at the property late in the
first quarter of 1998.

                                       17
<PAGE>
 
Heritage Place at Tucker Property/Fund I - Fund II Joint Venture
----------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                           Three Months Ended
                                                                           ------------------
                                                              March 31, 1999                March 31, 1998
                                                             ----------------              ----------------
<S>                                                           <C>                           <C>          
Revenues:
  Rental income                                               $     336,859                 $     300,361
  Interest income                                                       136                           137
                                                              -------------                 -------------
                                                                    336,995                       300,498
                                                              -------------                 -------------
Expenses:
  Depreciation                                                      108,796                       107,288
  Management & leasing expenses                                      44,484                        42,588
  Other operating expenses                                           95,544                       109,595
                                                              -------------                 -------------
                                                                    248,824                       259,471
                                                              -------------                 -------------

Net  income                                                   $      88,171                 $      41,027
                                                              =============                 =============

Occupied %                                                              91%                           83%

Partnership's Ownership %                                              2.4%                          2.4%

Cash distributions to the
  Fund II-Fund II-OW Joint Venture*                           $      59,448                 $      44,564

Net income allocated to the
  Fund II-Fund II-OW Joint Venture*                           $      39,598                 $      18,425
</TABLE>

*The Partnership holds a 5% 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 83% to 91%. Management and leasing expenses increased over prior
year, due to increased occupancy and revenues. Other operating expenses
decreased, due primarily to a decrease in landscaping expenses.

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<PAGE>
 
Cherokee Commons/Fund I, II, II-OW, VI & VII Joint Venture
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<TABLE>
<CAPTION>
                                                                           Three Months Ended
                                                                           ------------------
                                                              March 31, 1999                March 31, 1998
                                                             ----------------              ----------------
<S>                                                           <C>                           <C>          
Revenues:
  Rental income                                               $     227,383                 $     228,977
  Interest income                                                        20                            22
                                                              -------------                 -------------
                                                                    227,403                       228,999
                                                              -------------                 -------------
Expenses:
  Depreciation                                                      110,112                       110,563
  Management & leasing expenses                                      26,135                        25,751
  Other operating expenses                                          (30,556)                        3,131
                                                              -------------                 -------------
                                                                    105,691                       139,445
                                                              -------------                 -------------

Net income                                                    $     121,712                 $      89,554
                                                              =============                 =============

Occupied %                                                              96%                           91%

Partnership's Ownership %                                              2.9%                          2.9%

Cash distributed to the
  Fund II-Fund II-OW Joint Venture*                           $     124,124                 $     102,700

Net income allocated to the
  Fund II-Fund II-OW Joint Venture*                           $      66,407                 $      48,861
</TABLE>

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

Rental income remained relatively stable in 1999 as compared to 1998. The
decrease in operating expenses in 1999, as compared to 1998, are due to increase
CAM billings to tenants that were under accrued in 1998.

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<PAGE>
 
                           PART II - OTHER INFORMATION

Item 6(b). No reports on Form 8-K were filed during the first 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:  May 11, 1999      By:   /s/Leo F. Wells, III
                                --------------------
                                Leo F. Wells, III, as Individual
                                General Partner and as President
                                and Chief Financial Officer
                                of Wells Capital, Inc.
                                the Corporate General Partner

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