<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, 2001                or
                               ----------------------------------------------

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

For the transition period from  ______________________ to  ___________________

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

                         WELLS REAL ESTATE FUND II-OW
------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)

                  Georgia                                 58-1754703
------------------------------------------------       -----------------------
(State or other jurisdiction of incorporation or       (I.R.S. Employer
organization)                                          Identification Number)

6200 The Corners Pkwy., 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

                    (A Georgia Public Limited Partnership)

                                     INDEX


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

 Item 1. Financial Statements

         Balance Sheets-September 30, 2001 and December 31, 2000                                        3

         Statements of (Loss) Income for the Three Months and Nine Months Ended September 30,
           2001 and 2000                                                                                4

         Statements of Partners' Capital for the Nine Months Ended September 30, 2001 and the
           Year Ended December 31, 2000                                                                 5

         Statements of Cash Flows for the Nine Months Ended September 30, 2001 and 2000                 6

         Condensed Notes to Financial Statements                                                        7

 Item 2. Management's Discussion and Analysis of Financial Condition and Results
           of Operations                                                                               10

PART II.  OTHER INFORMATION                                                                            13
</TABLE>

                                       2
<PAGE>

                         WELLS REAL ESTATE FUND II-OW

                    (A Georgia Public Limited Partnership)


                                BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                    September 30,      December 31,
                                                                        2001               2000
                                                                    ------------      ------------
<S>                                                                 <C>              <C>
ASSETS:
  Investment in joint venture (Note 2)                              $1,034,009         $1,082,280
  Cash and cash equivalents                                              4,626              1,127
  Due from affiliate                                                    10,835             26,245
                                                                    ----------         ----------
       Total assets                                                 $1,049,470         $1,109,652
                                                                    ==========         ==========
LIABILITIES AND PARTNERS' CAPITAL:
  Liabilities:
     Accounts payable                                               $      664         $      630
     Partnership distributions payable                                  10,417             26,342
                                                                    ----------         ----------
       Total liabilities                                                11,081             26,972
                                                                    ----------         ----------
  Partners' capital:
     Limited partners:
      Class A-6,062 units                                            1,038,389          1,082,680
      Class B-1,626 units                                                    0                  0
                                                                    ----------         ----------
       Total partners' capital                                       1,038,389          1,082,680
                                                                    ----------         ----------
       Total liabilities and partners' capital                      $1,049,470         $1,109,652
                                                                    ==========         ==========
</TABLE>

           See accompanying condensed notes to financial statements.

                                       3
<PAGE>

                         WELLS REAL ESTATE FUND II-OW

                    (A Georgia Public Limited Partnership)


                          STATEMENTS OF (LOSS) INCOME


<TABLE>
<CAPTION>
                                                Three Months Ended                    Nine Months Ended
                                          --------------------------------    --------------------------------
                                          September 30,      September 30,     September 30,      September 30,
                                              2001               2000              2001               2000
                                          ------------       -------------     -------------      ------------
<S>                                       <C>                 <C>              <C>               <C>
REVENUES:
  Equity in (loss) income of
    joint venture (Note 2)                   $(5,656)            $5,736            $5,897            $21,668
  Interest income                                  2                 89                11                 89
                                          ----------         ----------        ----------         ----------
                                             $(5,654)            $5,825            $5,908            $21,757
                                          ==========         ==========        ==========         ==========
NET (LOSS) INCOME ALLOCATED TO
CLASS A LIMITED PARTNERS                     $(5,654)            $5,825            $5,908            $21,757
                                          ==========         ==========        ==========         ==========
NET LOSS ALLOCATED TO
  CLASS B LIMITED PARTNERS                   $     0             $    0            $    0            $     0
                                          ==========         ==========        ==========         ==========

NET (LOSS) INCOME PER CLASS A
LIMITED PARTNER UNIT                         $ (0.93)            $ 0.96            $ 0.97            $  3.59
                                          ==========         ==========        ==========         ==========
CASH DISTRIBUTION PER
  CLASS A LIMITED PARTNER UNIT               $  1.72             $ 4.53            $ 8.28            $ 13.44
                                          ==========         ==========        ==========         ==========
</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, 2000 AND

                     NINE MONTHS ENDED SEPTEMBER 30, 2001


<TABLE>
<CAPTION>
                                                        Limited Partners                         Total
                                          --------------------------------------------------
                                                Class A                    Class B              Partners'
                                          --------------------------------------------------
                                            Units       Amounts          Units       Amounts     Capital
                                          --------    ------------     --------     --------   -------------
<S>                                     <C>         <C>              <C>         <C>          <C>
BALANCE, December 31, 1999                   6,062      $1,162,395        1,626           $0      $1,162,395

  Net income                                     0          28,101            0            0          28,101
  Partnership distributions                      0        (107,816)           0            0        (107,816)
                                          --------    ------------     --------     --------   -------------
BALANCE, December 31, 2000                   6,062       1,082,680        1,626            0       1,082,680

  Net income                                     0           5,908            0            0           5,908
  Partnership distributions                      0         (50,199)           0            0         (50,199)
                                          --------    ------------     --------     --------   -------------
BALANCE, September 30, 2001                  6,062      $1,038,389        1,626           $0      $1,038,389
                                          ========    ============     ========     ========   =============
</TABLE>

                                       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,
                                                                                2001              2000
                                                                           --------------    --------------
<S>                                                                        <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                                  $  5,908           $ 21,757
  Adjustments to reconcile net income to net cash provided by
   operating activities:
        Equity in income of joint ventures                                      (5,897)           (21,668)
        Changes in assets and liabilities:
        Accounts payable                                                            34                117
                                                                           --------------    --------------
          Net cash provided by operating activities                                 45                206
                                                                           --------------    --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Distributions received from joint ventures                                    69,578             78,325
                                                                           --------------    --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Distributions to partners                                                    (66,124)           (80,536)
                                                                           --------------    --------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                             3,499             (2,005)

CASH AND CASH EQUIVALENTS, beginning of year                                     1,127              3,865
                                                                           --------------    --------------
CASH AND CASH EQUIVALENTS, end of period                                      $  4,626           $  1,860
                                                                           ==============    ==============
</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

                              SEPTEMBER 30, 2001

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  (a) General

  Wells Real Estate Fund II-OW (the "Partnership") is a Georgia public limited
  partnership with Leo F. Wells, III and Wells Capital, Inc., a Georgia
  Corporation, serving as a General Partners.  The Partnership was formed on
  October 23, 1987 for the purpose of acquiring, developing, constructing,
  owning, operating, improving, leasing, and otherwise managing income-producing
  commercial or industrial properties for investment purposes.  The Partnership
  has two classes of limited partnership interests, Class A and Class B units.
  Limited partners may vote to, among other things, (a) amend the partnership
  agreement, subject to certain limitations, (b) change the business purpose or
  investment objectives of the Partnership, and (c) add or remove a general
  partner.  A majority vote on any of the above described matters will bind the
  Partnership, without the concurrence of the general partners.  Each limited
  partnership unit has equal voting rights, regardless of class.

  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, comprised 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 between the Partnership and other Wells Real
  Estate Funds: (i) a joint venture between the Partnership and Wells Real
  Estate Fund II ("Fund II-Fund IIOW Joint Venture"), (ii) a joint venture
  between Fund II-Fund IIOW Joint Venture and Wells Real Estate Fund III, L.P.
  ("Fund II-III Associates"), (iii) a joint venture among Fund II-III
  Associates, Wells Real Estate Fund VI, L.P. and Wells Real Estate Fund VII,
  L.P. ("Fund II-III-VI-VII Associates"), (iv) a joint venture between  Fund II-
  Fund IIOW Joint Venture and Wells Real Estate Fund I ("Tucker Joint Venture"),
  and (v) a joint venture among Wells Real Estate Fund I, Fund II-Fund IIOW
  Joint Venture, Wells Real Estate Fund VI, L.P. and Wells Real Estate Fund VII,
  L.P. ("Fund I-II-IIOW-VI-VII Joint Venture").

  As of September 30, 2001, the Partnership owned interests in the following
  properties through its ownership in the foregoing joint ventures:  (i) a two-
  story office building located in Charlotte, North Carolina ("First Union at
  Charlotte"), owned by Fund II-Fund IIOW Joint Venture, (ii) a four-story
  office building located in metropolitan Houston, Texas ("Boeing at the
  Atrium"), owned by Fund II-III Associates, (iii) a restaurant located in
  Fulton County, Georgia ("Brookwood Grill"), owned by Fund II-III Associates,
  (iv) an office/retail center in Fulton County, Georgia ("Holcomb Bridge Road
  Property"), owned by Fund II-III-VI-VII Associates, (v) a retail shopping and
  commercial office complex located in Tucker, Georgia ("Heritage Place"), owned
  by Tucker Joint Venture, and (vi) a shopping center located in Cherokee
  County, Georgia ("Cherokee Commons"), owned by the Fund I-

                                       7
<PAGE>

  II-IIOW-VI-VII Joint Venture. 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, 2000.

   (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 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 and necessary to
  present a fair presentation of the results for such periods.  For further
  information, refer to the financial statements and footnotes included in the
  Partnership's Form 10-K for the year ended December 30, 2000.

2. INVESTMENT IN JOINT VENTURE

  As of September 30, 2001, the Partnership owned interests in each of the six
  aforementioned properties through its interest in the Fund II-Fund IIOW Joint
  Venture.  The Partnership does not have control over the operations of this
  joint venture; however, it does exercise significant influence.  Accordingly,
  the investment in the Fund II-Fund IIOW Joint Venture is recorded using the
  equity method.

  Fund II-Fund IIOW Joint Venture

  The Fund II-Fund IIOW Joint Venture was 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,
  2001, the Partnership's equity interest in the Fund II-Fund IIOW Joint Venture
  was approximately 5%, and the equity interest of Wells Fund II was
  approximately 95%.

                                       8
<PAGE>

  SUMMARY OF OPERATIONS

  The following information summarizes the operations of the Fund II-Fund IIOW
  Joint Venture for the three and nine months ended September 30, 2001 and 2000,
  respectively.

<TABLE>
<CAPTION>
                                                                                              Partnership's Share of Net
                                      Total Revenues               Net (Loss) Income                   (Loss) Income
                               ---------------------------   ----------------------------    ---------------------------------
                                    Three Months Ended            Three Months Ended                Three Months Ended
                               ---------------------------   ----------------------------    ---------------------------------
                               September 30,  September 30,  September 30,   September 30,   September 30,      September 30,
                                    2001           2000           2001            2000            2001               2000
                               ------------ -------------   -------------- -------------    ------------- --------------------
<S>                            <C>            <C>            <C>             <C>            <C>                <C>
Fund II-Fund IIOW
        Joint Venture          $ 88,646       $ 238,415      $(106,512)     $108,029           $(5,656)           $ 5,736
                               ============= ============   ============== =============     ============= =====================
<CAPTION>
                                      Total Revenues                  Net Income             Partnership's Share of Net Income
                               --------------------------   ----------------------------    ----------------------------------
                                    Nine Months Ended              Nine Months Ended                 Nine Months Ended
                               --------------------------   ----------------------------    ----------------------------------
                               September 30,  September 30,  September 30,   September 30,   September 30,      September 30,
                                    2001           2000           2001          2000              2001               2000
                               ------------- ------------   -------------- -------------    --------------- ------------------
<S>                            <C>            <C>            <C>             <C>            <C>                <C>
 Fund II-Fund IIOW
        Joint Venture          $631,514       $ 847,678      $ 111,062      $408,068           $ 5,897            $21,668
                               ============= ============   ============= ==============    ================ =================
</TABLE>

  The following information summarizes the operations of the unconsolidated
  joint ventures in which the Fund II-Fund IIOW Joint Venture had ownership
  interests as of September 30, 2001 and 2000, respectively.

<TABLE>
<CAPTION>
                                                                                              Fund II-Fund IIOW Joint Venture's
                                       Total Revenues               Net (Loss) Income             Share of Net (Loss) Income
                                --------------------------   ----------------------------    ----------------------------------
                                     Three Months Ended             Three Months Ended                 Three Months Ended
                                --------------------------   ----------------------------    ----------------------------------
                                September 30,  September 30,  September 30,   September 30,    September 30,      September 30,
                                    2001           2000           2001            2000             2001               2000
                                --------------------------   ----------------------------    ----------------------------------
<S>                             <C>            <C>            <C>             <C>             <C>                <C>

 Fund II-III
        Joint Venture          $  448,347     $  436,391       $(52,455)      $ (78,229)          $(31,780)          $(47,460)
 Fund II-III-IV-VII
        Joint Venture             215,407        214,052         84,664          52,629             12,706              7,898
 Tucker Joint
        Venture                   309,535        341,286         36,301          62,864             16,303             28,232
 Fund I-II-IIOW-VI-
        VII Joint Venture         253,155        230,688        165,105          58,293             90,083             31,805
                               ------------------------------------------------------------------------------------------------
                               $1,226,444     $1,222,417       $233,615       $  95,557           $ 87,312           $ 20,475
                               ================================================================================================
<CAPTION>

                                                                                              Fund II-Fund IIOW Joint Venture's
                                                                                                  Share of Net (Loss) Income
                                       Total Revenues               Net (Loss)                              Income
                                ---------------------------   ----------------------------    ----------------------------------
                                     Nine Months Ended              Nine Months Ended                  Nine Months Ended
                                ---------------------------   ----------------------------    ----------------------------------
                                September 30,  September 30,  September 30,   September 30,    September 30,      September 30,
                                     2001           2000           2001            2000            2001               2000
                                ---------------------------   ----------------------------    ----------------------------------
<S>                             <C>            <C>            <C>             <C>             <C>                <C>
 Fund II-III
        Joint Venture          $1,323,286         $1,315,847       $(17,827)      $(129,785)          $ (9,785)          $(78,413)
 Fund II-III-IV-VII
       Joint Venture              631,698            658,907        175,834         191,051             26,388             28,672
 Tucker Joint
       Venture                    993,851          1,029,696        184,020         202,580             82,643             90,979
 Fund I-II-IIOW-VI-
       VII Joint Venture          764,131            713,787        452,799         304,760            247,052            166,280
                               --------------------------------------------------------------------------------------------------
                               $3,712,966         $3,718,237       $794,826       $ 568,606           $346,298           $207,518
                               ==================================================================================================
</TABLE>

                                       9
<PAGE>

SUMMARY OF OPERATIONS

  The following information summarizes the operations of the properties, which
  are owned by the above joint ventures and significant to the Partnership, for
  the periods ended September 30, 2001 and September 30, 2000, respectively.
  Audited financial statements of these properties are included in the
  Partnership's Annual Report on Form 10-K filed for the year ended December 31,
  2000:

<TABLE>
<CAPTION>
                                                                                                 Partnership's Share of Net
                        Total Revenues                       Net (Loss) Income                        (Loss) Income
                   -----------------------------------------------------------------------------------------------------------------
                     Three Months Ended                      Three Months Ended                    Three Months Ended
                   -----------------------------------------------------------------------------------------------------------------
                     September 30,     September 30,     September 30,      September 30,      September 30,      September 30,
                        2001              2000              2001                 2000              2001               2000
                   -----------------------------------------------------------------------------------------------------------------
<S>                <C>                  <C>               <C>                 <C>              <C>                  <C>
First Union at
Charlotte           $       189        $  211,141         $  (168,988)        $   98,920         $   (8,973)          $  5,253
Boeing at the
Atrium                  368,814           367,536             (88,199)          (125,292)            (2,871)            (4,078)
                   -----------------------------------------------------------------------------------------------------------------
                    $   369,003        $  578,677         $  (257,187)        $  (26,372)        $  (11,844)          $  1,175
                   =================================================================================================================

                                                                                                   Partnership's Share of Net
                        Total Revenues                            Net (Loss) Income                     (Loss) Income
                   -----------------------------------------------------------------------------------------------------------------
                      Nine Months Ended                           Nine Months Ended                    Nine Months Ended
                   -----------------------------------------------------------------------------------------------------------------
                       September 30,     September 30,     September 30,      September 30,      September 30,      September 30,
                         2001               2000              2001               2000               2001               2000
                   -----------------------------------------------------------------------------------------------------------------
First Union at
Charlotte           $   281,738        $  633,361         $  (137,442)        $  294,552         $   (7,298)          $ 15,641
Boeing at the
Atrium                1,109,273         1,101,248            (126,659)          (238,911)            (4,123)            (7,777)
                   -----------------------------------------------------------------------------------------------------------------
                    $ 1,391,011        $1,734,609         $  (264,101)        $   55,641         $  (11,421)          $  7,864
                   =================================================================================================================
</TABLE>

3.   SUBSEQUENT EVENT

     On October 1, 2001, Fund I-II-IIOW-VI-VII Joint Venture sold Cherokee
     Commons for a gross sales price of $8,660,000. The Partnership received net
     proceeds of approximately $245,000, resulting in a gain of approximately
     $50,000.

     Rent guarantees for two tenants were provided by Fund I-II-IIOW-VI-VII
     Joint Venture to the Purchaser in the sale of Cherokee Commons. Fund I-II-
     IIOW-VI-VII Joint Venture accrued a contingent liability in October 2001
     for its rental payments due from one tenant, as management considers the
     likelihood of nonpayment by this tenant to be probable. The Partnership's
     portion of this liability is $455. Management considers the likelihood of
     nonpayment by the second tenant to be low and, accordingly, has not accrued
     a contingent liability for the related rental guarantee.

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.


                                       10
<PAGE>


1. RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL CONDITIONS

   General

   As of September 30, 2001, the developed properties owned by the Fund II-Fund
   IIOW Joint Venture were 69.3% occupied, as compared to 97.1% occupied as of
   September 30, 2000, primarily due to the expiration of First Union's (sole
   tenant at First Union at Charlotte) lease on April 30, 2001.

   Gross revenues of the Partnership decreased to $5,908 for the nine months
   ended September 30, 2001 from $21,757 for the nine months ended September 30,
   2000, primarily due to a decrease in equity in income from the Fund II-Fund
   IIOW Joint Venture resulting from the expiration of First Union's lease, bad
   debt expense at the Holcomb Bridge Road Property, and lower rental income at
   Heritage Place in 2001. The decrease in revenue from First Union was
   partially offset by increased rental rates at other properties, adjustments
   to the common area maintenance billings to the tenant at Boeing at the
   Atrium, and decreased depreciation at Cherokee Commons. In accordance with
   the provisions of SFAS No. 121, "Accounting for the Impairment of Long-Lived
   Assets and for Long-Lived Assets to be Disposed of", Fund I-II-IIOW-VI-VII
   Joint Venture reclassified the real estate assets of Cherokee Commons as
   "Held For Sale" upon finalizing negotiations with the Purchaser in August
   2001 and stopped depreciating these real estate assets.

   The Partnership's net cash provided by investing activities decreased to
   $69,578 for the nine months ended September 30, 2001 from $78,325 for the
   same period in 2000, primarily due to decreased distributions received from
   the Fund II-Fund IIOW Joint Venture as a result of the vacancy at First Union
   at Charlotte, offset by additional income from Cherokee Commons and Boeing at
   the Atrium as explained above. The Partnership anticipates receiving lower
   distributions from joint ventures until First Union at Charlotte is leased.
   The management team is currently working on leasing this space.

   The Partnership declared cash distributions to the Limited Partners holding
   Class A Units for the nine months ended September 30, 2001 in the amount of
   $8.28 per Unit, as compared to distributions of $13.44 per Class A Unit for
   the nine months ended September 30, 2000, as a result of the vacancy at First
   Union at Charlotte. No cash distributions were made by the Partnership to the
   Limited Partners holding Class B Units or to the General Partner.

   The Partnership's distributions payable through the third quarter of 2001
   have been paid from net cash from operations and from distributions received
   from its investments in the Fund II-Fund IIOW Joint Venture. The Partnership
   expects to continue to meets its short-term liquidity requirements generally
   through net cash provided by operations which the Partnership believes will
   continue to be adequate to meet both operating requirements and distributions
   to limited partners.

   The Partnership has previously made the decision to begin the process of
   selling its properties. At this time, Heritage Place is being actively
   marketed for sale. As the properties are sold, net sales proceeds will be
   distributed to limited partners in accordance with the Partnership Agreement.
   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 losses have been recorded. In the event that the
   net sales proceeds are less than the carrying value of the properties sold,
   the

                                       11
<PAGE>

   Partnership would recognize losses on the sales. Upon finalizing
   negotiations with purchasers, management will reclassify the real estate
   assets of such properties as "Held for Sale" and, pursuant to SFAS No. 121,
   discontinue depreciation at that point. 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
   the 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>

                          PART II.  OTHER INFORMATION

ITEM 6 (b.)  No reports on Form 8-K were filed during the third quarter of 2001.

                                   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 9, 2001              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

                                       13