BRAUVIN HIGH YIELD FUND L P II, 10-K, 1999-04-15

BRAUVIN HIGH YIELD FUND L P II
10-K, 1999-04-15
REAL ESTATE

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<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

[X]Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the fiscal year ended December 31, 1998
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 0-17556

Brauvin High Yield Fund L.P. II
(Exact name of registrant as specified in its charter)

Delaware 36-358013
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

30 North LaSalle Street, Chicago, Illinois 60602
(Address of principal executive offices) (Zip Code)

(312) 759-7660
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on
which registered

None None

Securities registered pursuant to Section 12(g) of the Act:

Limited Partnership Interests
(Title of class)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (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 .

Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K (Section 229.405 of this chapter) is
not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K [ X ]

The aggregate sales price of the limited partnership interests of
the registrant (the "Units") to unaffiliated investors of the
registrant during the initial offering period was $38,923,000.
This does not reflect market value. This is the price at which the
Units were sold to the public during the initial offering period.
There is no current market for the Units nor have any Units been
sold within the last 60 days prior to this filing except for Units
sold to or by the registrant pursuant to the registrant's
distribution reinvestment plan as described in the prospectus of
the registrant dated June 17, 1988, as supplemented (the
"Prospectus").

Portions of the Prospectus of the registrant dated June 17, 1988,
as supplemented July 12, 1988, March 1, 1989, April 28, 1989, and
June 7, 1989 and filed pursuant to Rule 424(b) and Rule 424(c)under
the Securities Act of 1933, as amended, are incorporated by
reference into Parts II, III and IV of this Annual Report on Form
10-K.
<PAGE>
BRAUVIN HIGH YIELD FUND L.P. II
1998 FORM 10-K ANNUAL REPORT
INDEX
PART I
Page
Item 1. Business. . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Item 2. Properties. . . . . . . . . . . . . . . . . . . . . . . . . . .6

Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . 23

Item 4. Submission of Matters to a Vote of Security Holders . . . . . 29

PART II

Item 5. Market for the Registrant's Units and Related
Security Holder Matters . . . . . . . . . . . . . . . . . . . 30

Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . 31

Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . 33

Item 7A. Quantitative and Qualitative Disclosures About
Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . 45

Item 8. Consolidated Financial Statements and Supplementary
Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure. . . . . . . . . . .. . . 45

PART III

Item 10. Directors and Executive Officers of the Partnership . . . . . 46

Item 11. Executive Compensation. . . . . . . . . . . . . . . . . . . . 48

Item 12. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . . . . . . . . . 50

Item 13. Certain Relationships and Related Transactions. . . . . . . . 50

PART IV

Item 14. Exhibits, Consolidated Financial Statement
Schedules and Reports on Form 8-K . . . . . . . . . . . . . . 51

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

<PAGE>
BRAUVIN HIGH YIELD FUND II
(a Delaware limited partnership)

PART I

Item 1.Business.

Brauvin High Yield Fund L.P. II (the "Partnership") is a Delaware
limited partnership formed in May 1988 for the purpose of acquiring
debt-free ownership of existing, free-standing, income-producing
retail, office or industrial real estate properties predominantly
all of which would involve "triple-net" leases. It was anticipated
at the time the Partnership first offered its Units (as defined
below) that a majority of these properties would be leased to
operators of national franchise fast food and sit-down restaurants,
automotive service businesses and convenience stores, as well as
banks and savings and loan branches. The leases would provide for
a base minimum annual rent and increases in rent such as through
participation in gross sales above a stated level, fixed increases
on specific dates or indexation of rent to indices such as the
Consumer Price Index. The Partnership sold $38,923,000 of limited
partnership interests (the "Units") commencing June 17, 1988,
pursuant to a Registration Statement on Form S-11 under the
Securities Act of 1933, as amended, to the public at a price of
$1,000 per Unit (the "Offering"). The Offering closed on September
30, 1989. The investors in the Partnership (the "Limited
Partners") share in the benefits of ownership of the Partnership's
real property investments according to the number of Units each
owns. An additional $4,059,178 of Units have been purchased by
Limited Partners investing their distributions of Operating Cash
Flow in the Partnership's distribution reinvestment plan (the
"Plan") through December 31, 1998. These Units were purchased from
the Units reserved for the Plan after termination of the Offering.
These Units were issued at the Offering price per Unit, less any
amounts per Unit of the Offering price that have been returned to
participants. Of the Units issued under the Plan as of December
31, 1998, $2,886,915 have been repurchased by the Partnership from
investors liquidating their investment and have been retired.

The principal investment objectives of the Partnership are: (i)
distribution of current cash flow from the Partnership's cash flow
attributable to rental income; (ii) capital appreciation; (iii)
preservation and protection of capital; (iv) the potential for
increased income and protection against inflation through
escalation in the base rent or participation and growth in the
sales of the lessees of the Partnership's properties; (v) the
partial shelter of cash distributions for Taxable Class Limited
Partners; and (vi) the production of "passive" income to offset
"passive" losses from other investments.

Some tax shelter of cash distributions by the Partnership will
be available to Taxable Class Limited Partners through depreciation
of the underlying properties. Taxable Class Limited Partners will
benefit from the special allocation of all depreciation to the
Units which they acquired from the Partnership because their
reduced taxable income each year will result in a reduction in
taxes due, although no "spill-over" losses are expected. Taxable
income generated by property operations will likely be considered
passive income for federal income tax purposes because Section
469(c)(2) of the Internal Revenue Code states that a passive
activity includes "any rental activity" and, therefore, is
available to offset losses Taxable Class Limited Partners may have
realized in other passive investments.

It was originally contemplated that the Partnership would dispose
of its properties approximately six to nine years after their
acquisition with a view towards liquidation of the Partnership
within that period.

In accordance therewith, the Partnership entered into an
agreement and plan of merger dated as of June 14, 1996, as amended
March 24, 1997, June 30, 1997, September 30, 1997, December 31,
1997, March 31, 1998 and June 30, 1998 (the "Merger Agreement").
The Partnership proposed to merge with and into Brauvin Real Estate
Funds, L.L.C., a Delaware limited liability company affiliated with
certain of the General Partners (the "Purchaser") through a merger
(the "Merger") of its Units. Although the Merger will not be
consummated, the following text describes the transaction. Promptly
upon consummation of the Merger, the Partnership would have ceased
to exist and the Purchaser, as the surviving entity, would succeed
to all of the assets and liabilities of the Partnership. The
Limited Partners holding a majority of the Units voted to approve
the Merger on November 8, 1996. The Limited Partners also voted to
approve an amendment of the Agreement allowing the Partnership to
sell or lease property to affiliates (this amendment, together with
the Merger shall be referred to herein as the "Transaction").
However, as described below, on August 12, 1998, the District Court
in the Christman litigation (as defined below) granted plaintiffs
motion for partial summary judgement, holding that the Partnership
Agreement did not allow the Limited Partners to vote in favor or
against the Transaction.

The redemption price to be paid to the Limited Partners in
connection with the Merger was based on the fair market value of the
properties of the Partnership (the "Assets"). Cushman & Wakefield
Valuation Advisory Services ("Cushman & Wakefield"), an independent
appraiser, the largest real estate valuation and consulting
organization in the United States, was engaged by the Partnership
to prepare an appraisal of Assets, to satisfy the Partnership's
requirements under the Employee Retirement Income Security Act of
1974, as amended. Cushman & Wakefield determined the fair market
value of the Assets at April 1, 1996 to be $30,183,300, or $748.09
per Unit. Subsequently, the Partnership purchased a 26% interest
in Brauvin Bay County Venture. Based on the terms of the Merger
Agreement, the fair market value of the Assets will be increased by
the amount of the investment in Brauvin Bay County Venture, and
correspondingly, the Partnership's cash holdings were reduced by the
same amount and, therefore, the total redemption amount would remain
unchanged. The redemption price of $779.22 per Unit also included
all remaining cash of the Partnership, less net earnings of the
Partnership from and after August 1, 1996 through December 31, 1996,
less the Partnership's actual costs incurred and accrued through the
effective time at the filing of the certificate of merger, including
reasonable reserves in connection with: (i) the proxy solicitation;
(ii) the Transaction (as detailed in the Merger Agreement); and
(iii) the winding up of the Partnership, including preparation of
the final audit, tax return and K-1s (collectively, the "Transaction
Costs") and less all other Partnership obligations. Of the original
cash redemption amount, approximately $31.13 was distributed to the
Limited Partners in the December 31, 1997 distribution.

The General Partners were not to receive any payment in exchange
for the redemption of their general partnership interests nor would
they have received any fees from the Partnership in connection with
the Transaction. The Managing General Partner and his son, James
L. Brault, an executive officer of the Corporate General Partner,
were to have a minority ownership interest in the Purchaser.

The Merger was not completed primarily due to certain litigation,
as described below, that was still pending at December 31, 1998.
The General Partners believe that these lawsuits are without merit
and, therefore, continue to vigorously defend against them.
However, because of the August 12, 1998 rulings of the District
Court in the Christman Litigation, as described in Item 3, it is not
possible for the Merger to be consummated.

The terms of the transactions between the Partnership and
affiliates of the General Partners are set forth in Item 13 below.
Reference is hereby made for a description of such terms and
transactions.

The restated limited partnership agreement of the Partnership
(the "Agreement") provides that the Partnership shall terminate
December 31, 2025, unless sooner terminated pursuant to its terms.

The Partnership has no employees.

As the result of a property sale by Brauvin High Yield Venture
a return of capital distribution was made to Limited Partners on May
8, 1998 in the amount of approximately $743,000. Additionally, on
August 15, 1998, a return of capital distribution was made to
Limited Partners in the amount of approximately $611,500 from the
sale of the Ponderosa located in Sweden, New York.

Market Conditions/Competition

The Partnership has utilized its proceeds available for
investment towards the acquisition of properties. Since the leases
at certain of the Partnership's properties entitle the Partnership
to participate in gross receipts of lessees above fixed minimum
amounts, the success of the Partnership will depend in part on the
ability of those lessees to compete with similar businesses in their
respective vicinities.

Item 2. Properties.

The Partnership is landlord only and does not participate in the
operations of any of the properties discussed herein. All
properties are occupied and all lease payments to the Partnership
are current with the exception of the former Hardee's restaurant
located in Albion, Michigan; the Ponderosa restaurants in Joliet,
Illinois, Bloomington, Illinois, Pendleton Pike, Indiana and Tipp
City, Ohio are unoccupied but continue to pay rent to the
Partnership per the terms of the leases. All properties were paid
for in cash, without any financing. The General Partners believe
that the Partnership's properties are adequately insured.

The following is a summary of the real estate and improvements,
of each of the Ponderosa restaurants, the two Taco Bell restaurants,
the Scandinavian Health Spa, the three Children's World Learning
Centers, the three Avis Lubes, the Hardee's restaurant, the
Blockbuster Video store, the three Chi-Chi's restaurants, the St.
Johns, Michigan property and the Albion, Michigan property. No
property had a cost basis in excess of 10% of the gross proceeds of
the Offering or had rental income in excess of 10% of the total
rental income of the Partnership.

Ponderosas:

Rockford, Illinois

Unit 112 is located at 3725 East State Street. The building,
built in 1969, consists of 5,930 square feet situated on a 31,476
square foot parcel. The building was constructed utilizing wood
siding over concrete block.

In June 1997, Ponderosa closed and vacated this restaurant.
Ponderosa, in accordance with the lease, continued to pay rent and
certain occupancy costs for this property. In September 1997,
Ponderosa and the Partnership agreed to sub-lease this property to
a local tenant. Ponderosa continues to remain responsible to the
Partnership for all rent and certain occupancy expenses through the
original lease term.

During the third quarter of 1998, the Partnership recorded an
impairment of $64,000 related to an other than temporary decline in
the value of real estate for the Ponderosa located in Rockford,
Illinois. This allowance has been recorded as a reduction of the
property's cost, and allocated to the land and buildings based on
the original acquisition cost allocation of 30% (land) and 70%
(building).

Bloomington, Illinois

Unit 128 is located at 1329 East Empire Street. The building,
built in 1970, consists of 4,608 square feet situated on a 60,725
square foot parcel. The building was constructed utilizing wood
siding over concrete block.

Ponderosa closed this facility on May 26, 1997, but continues to
pay rent to the Partnership per the terms of lease.

During the third quarter of 1998, the Partnership recorded an
impairment of $141,000 related to an other than temporary decline
in the value of real estate for the Ponderosa located in
Bloomington, Illinois. This allowance has been recorded as a
reduction of the property's cost, and allocated to the land and
buildings based on the original acquisition cost allocation of 30%
(land) and 70% (building).

Orchard Park, New York

Unit 728 is located at 3019 Union Road. The building, built in
1980, consists of 5,600 square feet situated on a 75,000 square foot
parcel. The building was constructed utilizing wood siding over
concrete block.

In July 1995, Metromedia, the parent of Ponderosa, closed the
Orchard Park, New York restaurant. In exchange for the closed
Ponderosa, the Partnership agreed to accept the building and land
underlying a Tony Roma's restaurant. The Tony Roma property is
located at 3780 Towne Crossing Boulevard in Mesquite, Texas. The
building, built in 1984, consists of 5,600 square feet situated on
a 49,810 square foot parcel of land. The Tony Roma's restaurant
provides additional base rent of approximately $2,000 per year plus
percentage rents and future rent escalations upon exercise of lease
renewals.

Oneonta, New York

Unit 740 is located at 333 Chestnut. The building, built in
1979, consists of 5,250 square feet situated on a 61,600 square foot
parcel. The building was constructed utilizing wood siding over
concrete block and facebrick.

During the third quarter of 1998, the Partnership recorded an
impairment of $89,000 related to an other than temporary decline in
the value of real estate for the Ponderosa located in Oneonta, New
York. This allowance has been recorded as a reduction of the
property's cost, and allocated to the land and buildings based on
the original acquisition cost allocation of 30% (land) and 70%
(building).

The tenant has given the Partnership notice of its intent to
purchase the property under the tenant's existing purchase options
contained within the lease. The purchase price of the property will
be based on the appraised value of the asset.

Middletown, New York

Unit 779 is located at 163 Dolson Avenue. The building, built
in 1980, consists of 6,120 square feet situated on a 71,708 square
foot parcel. The building was constructed utilizing stained wood
veneer and flagstone.

Joliet, Illinois

Unit 129 is located at 2200 West Jefferson Street. The building,
built in 1970, consists of 4,500 square feet situated on a 57,000
square parcel. The building was constructed utilizing brick and
wood siding. This Ponderosa was received in exchange for Ponderosa
Unit 1055 in Apopka, Florida, an original purchase of the
Partnership, in December 1994.

In June 1995, Metromedia, the parent of Ponderosa, closed the
Joliet, Illinois Ponderosa with the intent of converting the site
into a Bennigan's restaurant. Subsequently, Metromedia changed its
position and with the approval of the Partnership has subleased this
space to Texas Steakhouse, Inc. In 1998, Texas Steakhouse closed
this facility, but Ponderosa is still responsible to the Partnership
under the terms of the original lease.

During the third quarter of 1998, the Partnership recorded an
impairment of $90,000 related to an other than temporary decline in
the value of real estate for the Ponderosa located in Joliet,
Illinois. This allowance has been recorded as a reduction of the
property's cost, and allocated to the land and buildings based on
the original acquisition cost allocation of 30% (land) and 70%
(building).

Franklin, Ohio

Unit 1071 is located at 3320 Village Drive. The building, built
in 1987, consists of 4,550 square feet situated on a 9,242 square
foot parcel. The building was constructed utilizing wood siding
over concrete block.

During the third quarter of 1998, the Partnership recorded an
impairment of $7,000 related to an other than temporary decline in
the value of real estate for the Ponderosa located in Franklin,
Ohio. This allowance has been recorded as a reduction of the
property's cost, and allocated to the land and buildings based on
the original acquisition cost allocation of 30% (land) and 70%
(building).

Herkimer, New York

Unit 665 is located at the corner of State and King Streets. The
building, built in 1979 and remodeled in 1988, consists of 5,817
square feet situated on a 44,932 square foot parcel. The building
was constructed using wood siding over concrete block and face
brick.

Sweden, New York

Unit 876 is located at 6460 Brockport-Spencerport Road. The
building, built in 1981 and remodeled in 1987, consists of 5,400
square feet situated on a 47,500 square foot parcel. The building
was constructed using wood paneling over concrete block.

During the first quarter of 1998, the Partnership recorded an
impairment of $130,000 related to an other than temporary decline
in the value of real estate for the Ponderosa located in Sweden, New
York. This allowance has been recorded as a reduction of the
property's cost, and allocated to the land and buildings based on
the original acquisition cost allocation of 30% (land) and 70%
(building).

On October 31, 1996, the Partnership's property was damaged by
a fire. As a result of this casualty, Ponderosa terminated its
lease at this property as of December 31, 1996. The Partnership is
contesting this lease termination. Subsequent to the lease
termination, no rents have been received for this property.

The Partnership has received $199,452 in initial insurance
proceeds to repair the fire damaged property. In addition, the
Partnership received, in the first quarter of 1999, $50,000 in
additional insurance proceeds.

In April 1998, Ponderosa unit 876 was sold by the Partnership.
This closed property was sold to an unaffiliated third party for
approximately $425,000. In addition, as a result of the sale, the
Partnership transferred the undisbursed insurance proceeds of
$199,452 from its reserve account to its general cash account. The
sale resulted in a loss to the Partnership of approximately
$130,000, which was recognized as a provision for impairment during
the first quarter of 1998. The Partnership is continuing to pursue
its lawsuit against the former tenant for lost rents.

Appleton, Wisconsin

Unit 182 is located at 130 South Bluemond Road. The building,
built in 1969 and renovated in 1986, is a one-story, 5,400 square
foot building constructed with stucco and painted concrete block
with wood trim over wood frame on an approximately 54,450 square
foot site.

During the third quarter of 1998, the Partnership recorded an
impairment of $202,000 related to an other than temporary decline
in the value of real estate for the Ponderosa located in Appleton,
Wisconsin. This allowance has been recorded as a reduction of the
property's cost, and allocated to the land and buildings based on
the original acquisition cost allocation of 30% (land) and 70%
(building).

The tenant has given the Partnership notice of its intent to
purchase the property under the tenants existing purchase options
contained within the lease. The purchase price of the property will
be based on the appraised value of the asset.

Dublin, Ohio

Unit 347 is located at 1671 East Dublin-Granville Road. The
building, built in 1973 and renovated in 1987, is a one-story, 5,360
square foot building constructed with wood siding over wood frame
on an approximately 47,000 square foot site.

In June 1997, Ponderosa closed and vacated this restaurant.
Ponderosa, in accordance with the lease, continued to pay rent and
certain occupancy costs for this property. In October 1997,
Ponderosa and the Partnership agreed to sub-lease this property to
a local tenant. Ponderosa continues to remain responsible to the
Partnership for all rent and certain occupancy expenses through the
original lease term.

Penfield, New York

Unit 755 is located at 1610 Penfield Road. The building, built
in 1981 and renovated in 1987, is a one-story, 5,400 square foot
building constructed with vinyl siding over wood frame on an
approximately 54,900 square foot site.

Pendleton Pike, Indiana

Unit 816 is located at 8502 Pendleton Pike. The building, built
in 1984 and renovated in 1987, is a one-story, 5,400 square foot
building constructed with a prefab stucco facade with an atrium
front and wood panels on the sides of the building on an
approximately 95,000 square foot site.

During the third quarter of 1998, the Partnership recorded an
impairment of $127,000 related to an other than temporary decline
in the value of real estate for the Ponderosa located in Pendelton
Pike, Indiana. This allowance has been recorded as a reduction of
the property's cost, and allocated to the land and buildings based
on the original acquisition cost allocation of 30% (land) and 70%
(building).

During the first quarter of 1999, Ponderosa closed this facility,
but remains current on all of its lease obligations.

Eureka, Missouri

Unit 857 is located at 80 Hilltop Village Center. The building,
built in 1981 and renovated in 1986, is a one-story, 5,360 square
foot building constructed with wood over wood frame on an
approximately 71,400 square foot site.

Joint Venture Ponderosas:

The Partnership has a 99% interest in a Joint Venture with an
affiliated public real estate limited partnership that acquired the
following six Ponderosas:

Louisville, Kentucky

Unit 110 is located at 4801 Dixie Highway. The building, built
in 1969, consists of 5,100 square feet situated on a 62,496 square
foot parcel. The building was constructed utilizing wood siding
over concrete block with flagstone.

Cuyahoga Falls, Ohio

Unit 268 is located at 1641 State Road. The building, built in
1973, consists of 5,587 square feet situated on a 40,228 square foot
parcel. The building was constructed utilizing wood siding over
concrete block.

In September 1997, Ponderosa and the Partnership agreed to sub-
lease this property to a local franchisee. Ponderosa continues to
remain responsible to the Partnership for all rent and certain
occupancy expenses through the original lease term.

During the third quarter of 1998, the Partnership recorded an
impairment of $8,000 related to an other than temporary decline in
the value of real estate for the Ponderosa located in Cuyahoga
Falls, Ohio. This allowance has been recorded as a reduction of the
property's cost, and allocated to the land and buildings based on
the original acquisition cost allocation of 30% (land) and 70%
(building).

Tipp City, Ohio

Unit 785 is located at 135 South Garber. The building, built in
1980, consists of 6,080 square feet situated on a 53,100 square foot
parcel. The building was constructed utilizing wood siding over
concrete block.

Ponderosa closed this facility on June 1, 1997, but continues to
pay rent to the Partnership per the terms of lease.

In April of 1999, the property was subleased to an operator of
a sports bar concept through the remaining term of the original
lease. The original tenant remains fully liable under the terms of
the original lease through maturity.

In April 1999, the Partnership agreed to a sublease of this
facility to Bullie's Sports Bar & Grill, Inc.

During the third quarter of 1998, the Partnership recorded an
impairment of $130,000 related to an other than temporary decline
in the value of real estate for the Ponderosa located in Tipp City,
Ohio. This allowance has been recorded as a reduction of the
property's cost, and allocated to the land and buildings based on
the original acquisition cost allocation of 30% (land) and 70%
(building).

Mansfield, Ohio

Unit 850 is located at 1075 Ashland Road. The building, built
in 1980, consists of 5,600 square feet situated on a 104,500 square
foot parcel. The building was constructed utilizing wood siding
over concrete block and flagstone.

In January 1998, the joint venture sold this closed property to
an unaffiliated third party for approximately $750,000. This sale
resulted in a loss to the joint venture partnership of approximately
$112,000.

Tampa, Florida

Unit 1060 is located at 4420 West Gandy. The building, built in
1986, consists of 5,777 square feet situated on a 50,094 square foot
parcel. The building was constructed utilizing wood siding over
concrete block.

During the third quarter of 1998, the Partnership recorded an
impairment of $58,000 related to an other than temporary decline in
the value of real estate for the Ponderosa located in Tampa,
Florida. This allowance has been recorded as a reduction of the
property's cost, and allocated to the land and buildings based on
the original acquisition cost allocation of 30% (land) and 70%
(building).

Mooresville, Indiana

Unit 1057 is located at 499 South Indiana Street. The building,
built in 1981, consists of 6,770 square feet situated on a 63,525
square foot parcel. The building was constructed utilizing wood
siding over concrete block.

During the third quarter of 1998, the Partnership recorded an
impairment of $68,000 related to an other than temporary decline in
the value of real estate for the Ponderosa located in Mooresville,
Indiana. This allowance has been recorded as a reduction of the
property's cost, and allocated to the land and buildings based on
the original acquisition cost allocation of 30% (land) and 70%
(building).

Taco Bell:

Lansing, Michigan

Unit 1848 is located at 4238 West Saginaw on the outskirts of
Lansing, Michigan. The building, built in 1979, consists of 1,566
square feet situated on a 21,186 square foot parcel. The building
was constructed utilizing painted brick on a concrete foundation.

Scandinavian Health Spa

The Partnership has a 51% interest in a joint venture with an
affiliated public real estate limited partnership that purchased the
Scandinavian Health Spa. The Scandinavian Health Spa is a 36,556
square foot health club located on a three-acre parcel in Glendale,
Arizona, a suburb of Phoenix. The Health Spa is a two-story health
and fitness workout facility located within the 195,000 square foot
Glendale Galleria Shopping Center.

Children's World Learning Centers:

Livonia, Michigan

The Children's World Learning Center is located at 38880 West Six
Mile Road in Livonia, Michigan, approximately 12 miles west of
downtown Detroit. The 6,095 square foot, single-story building was
built in 1984 utilizing concrete block and has a pitched roof with
asphalt shingles.

Farmington Hills, Michigan

The Children's World Learning Center is located at 29047 13 Mile
Road in Farmington Hills, Michigan, approximately 26 miles northwest
of Detroit. The 6,175 square foot, single-story building was built
in 1989 utilizing a wood frame and has a pitched roof with asphalt
shingles.

Waterford, Michigan

The Children's World Learning Center is located at 3100 Dixie
Highway in Waterford, Michigan, approximately 35 miles northwest of
Detroit. The 6,175 square foot, single-story building was built in
1988 utilizing a wood frame and has a pitched roof with asphalt
shingles.

Avis Lubes:

Orlando, Florida

The Avis Lube is located at 2699 Delaney Street across the street
from a 91,000 square foot shopping center anchored by Publix and
Woolworths. The building, built in 1989, consists of 1,532 square
feet situated on a 12,150 square foot parcel. The building was
constructed using concrete block and has two oil change bays.

Orlando, Florida

The Avis Lube is located at 1625 South Conway Road across the
street from a 123,000 square foot shopping center anchored by Publix
and Eckard Drugs. The building, built in 1989, consists of 1,947
square feet situated on a 24,939 square foot parcel. The building
was constructed using concrete block and has three oil change bays.

The lessee of the two Orlando Avis Lubes defaulted on its payment
obligations under the lease in 1991 and in January 1992 vacated the
properties. The Partnership continued to receive rent payments from
the lessee, which Avis Lube, Inc. guaranteed to the Partnership
until the lease expired in June 1996. Avis Lube, Inc. subleased
the properties until June 1996 to an unaffiliated sublessee, Florida
Express Lubes, Inc. The Partnership signed new leases with the
sublessee to operate the properties, as lessee, which commenced on
June 1, 1996. The leases are for a 14 year term. Base annual rent
at 2699 Delaney Street is $48,000 and at 1625 South Conway Road is
$54,000.

Rock Hill, Missouri

The Avis Lube is located at 9725 Manchester Road, two miles west
of the St. Louis, Missouri city limits. The building, built in
1988, consists of 2,940 square feet situated on a 21,143 square foot
parcel. The building was constructed using brick veneer and has
four oil change bays, two with service pit work access and two with
ground level work access.

The lessee of the Rock Hill, Missouri property defaulted on its
payment obligations and vacated the property in April 1994. The
Partnership had continued to receive rent payments from the
guarantor, Avis Lube, Inc. Avis Lube, Inc. subleased the property
through March 1996 to an unaffiliated sublessee, FOCO, Inc., an
auto/oil repair operator. The Partnership signed a new lease with
the sublessee to operate the property effective March 26, 1996. The
lease is for 42 months and provides for annual base rent of $55,000.

Hardee's:

Newcastle, Oklahoma

The restaurant is an outparcel of a 67,500 square foot shopping
center located on the 400 & 500 block of N.W. 32nd. The 3,300
square foot, single-story building was built on a 35,200 square foot
parcel in 1990 utilizing a wood frame with brick facing. This
restaurant is currently being operated as a Carl's Jr. restaurant.

St. Johns, Michigan

The restaurant is an outparcel of a 70,000 square foot Wal-Mart
department store located at the corner of U.S. 27 and Townsend Road.
The 3,300 square foot, single-story building was built on a 47,200
square foot parcel in 1990 utilizing a wood frame with brick facing.

During the fourth quarter of 1994, the Partnership executed a
lease with a Dairy Queen franchisee. The lease is for a five year
term and commenced February 1, 1995. Base rent is $2,500 per month
with monthly percentage rent of 5% due after monthly sales exceed
$37,500. The lease provides an option to renew for one five year
period.

During the third quarter of 1998, the Partnership recorded an
impairment of $30,000 related to an other than temporary decline in
the value of real estate for the Hardee's located in St. Johns,
Michigan. This allowance has been recorded as a reduction of the
property's cost, and allocated to the land and buildings based on
the original acquisition cost allocation of 30% (land) and 70%
(building).

Albion, Michigan

The restaurant is located at 118 E. Michigan Avenue. The 3,034
square foot, single-story building was built on a 32,670 square foot
parcel in 1990 utilizing a wood frame with brick facing.

The Partnership continues to actively market this property for
a replacement tenant.

During the third quarter of 1994, the Partnership recorded a
provision for impairment of $500,000 related to an other than
temporary decline in the value of real estate for the St. Johns,
Michigan and Albion, Michigan properties. This allowance has been
recorded as a reduction of the properties' cost, and allocated to
the land and building based on the original acquisition cost
allocation of 30% (land) and 70% (building).

In 1996, the Partnership engaged Cushman & Wakefield Valuation
Advisory Services ("Cushman & Wakefield") to prepare an appraisal
of the Partnership's properties. As a result of this appraisal, the
Partnership recorded an additional provision for impairment of
$550,000 related to an other than temporary decline in real estate
for the St. Johns, Michigan and Albion, Michigan properties during
the fourth quarter of 1996. This allowance has been recorded as a
reduction of the properties' cost, and allocated to the land and
building based on the original acquisition cost allocation of 30%
(land) and 70% (building).

During the third quarter of 1998, the Partnership recorded an
impairment of $162,000 related to an other than temporary decline
in the value of real estate for the Hardee's located in Albion,
Michigan. This allowance has been recorded as a reduction of the
property's cost, and allocated to the land and buildings based on
the original acquisition cost allocation of 30% (land) and 70%
(building).

Blockbuster Video:

South Orange, New Jersey

The video store is located at 57 South Orange Avenue in downtown
South Orange. The 6,705 square foot brick building was completely
renovated in 1990 and consists of a primary level, a mezzanine level
plus a full basement for storage.

Chi-Chi's:

During 1995, Chi-Chi's, the sub-tenant under a master lease with
Foodmaker, closed each of its three restaurants owned by the
Partnership because they were not profitable. Under the terms of
the three leases, Foodmaker, the master tenant and guarantor, is
continuing to pay rent for the properties, while actively seeking
subtenants. In February 1995, the Chi-Chi's restaurant in
Clarksville, Tennessee closed. During the third quarter of 1995 the
Chi-Chi's restaurants in Charlotte, North Carolina and Richmond,
Virginia were closed.

Foodmaker owns, operates and franchises Jack In The Box, a chain
of fast-food restaurants located principally in the western and
southwestern United States. Until January 27, 1994, Foodmaker also
owned Chi-Chi's, a chain of full-service, casual Mexican restaurants
located primarily in the Midwestern and Midatlantic United States.

Richmond, Virginia

Unit 353 is located at 9135 West Broad Street in Richmond and
consists of a 7,270 square foot restaurant with a seating capacity
of 280. The property was built in January 1990 and is situated on
approximately one acre of land.

In April 1996, a sub-tenant executed a second sub-lease with Chi-
Chi's for the Richmond, Virginia property. This new sub-tenant
(Sino-American of Richmond, Virginia) began occupying this facility
in September 1997. Foodmaker continues as the guarantor under the
terms of the second sub-lease.

Charlotte, North Carolina

Unit 373 is located at 2522 Sardis Road North at the intersection
of Independence Boulevard. The property is situated on a 1.5 acre
parcel and consists of a 7,270 square foot restaurant with a seating
capacity for 280. The property opened in May 1990.

In March 1996, a sub-tenant executed a second sub-lease with Chi-
Chi's for the Charlotte, North Carolina property. This new sub-
tenant (Carolina Country BBQ of Charlotte, North Carolina) occupied
the facility in June 1996. Foodmaker continues to be the guarantor
under terms of the second sub-lease.

Clarksville, Tennessee

Unit 366 is located in Governor's Square Shopping Center at 2815
Guthrie Road in Clarksville. The property consists of a 5,678
square foot restaurant with seating for 180 people and is situated
on an approximately 50,000 square foot parcel of land. The property
opened in May 1990.

In October 1996, a sub-tenant executed a second sub-lease with
Chi-Chi's for the Clarksville, Tennessee property. This new sub-
tenant (Loco Lupe of Clarksville, Tennessee) opened to the public
on February 17, 1997. Foodmaker continues as the guarantor under
terms of the second sub-lease.

In January 1998, Loco Lupe of Clarksville, Tennessee was closed.
However, Chi-Chi's continues to pay rent to the Partnership per the
terms of lease.

Joint Venture Blockbuster:

Callaway, Florida

The Partnership owns a 26.0% interest in a joint venture with
affiliated public real estate limited partnerships that acquired the
land and building underlying a Blockbuster Video Store. The
property is located at 123 N. Tydall Parkway on the major arterial
in the Panama City, Florida area. The property contains a 6,466
square foot building located on a 40,075 square foot parcel of land.

The following table summarizes the operations of the
Partnership's properties.
<PAGE>
<TABLE>
BRAUVIN HIGH YIELD FUND L.P. II
SUMMARY OF OPERATING DATA
DECEMBER 31, 1998
<CAPTION>
1998
PERCENT OF 1998 PERCENT OF LEASE
PURCHASE ORIGINAL RENTAL RENTAL EXPIRATION RENEWAL
PROPERTIES PRICE UNITS SOLD INCOME INCOME DATES OPTIONS
<S> <C> <C> <C> <C> <C> <C>
51% OF 1 SCANDINAVIAN HEALTH SPA $ 2,677,500 6.9% $ 364,755 9.8% 2009 4 FIVE YEAR OPTIONS
99% OF 6 PONDEROSA RESTAURANTS 5,628,150 14.5% 625,536 16.7% 2003 4 FIVE YEAR OPTIONS
TACO BELL RESTAURANT-LANSING, MI 381,200 1.0% 68,589 1.8% 2003 NONE
TACO BELL RESTAURANT-
SCHOFIELD, WI (A) 246,300 0.6% -- -- -- NONE
14 PONDEROSA RESTAURANTS 12,269,992 31.5% 1,475,968 39.4% 2003-2004 2 FIVE YEAR OPTIONS
3 CHILDREN'S WORLD LEARNING CENTERS 2,368,922 6.1% 314,947 8.4% 2004-2009 2 FIVE YEAR OPTIONS
3 AVIS LUBE OIL CHANGE CENTERS 1,539,964 4.0% 157,000 4.2% 2010 2 TEN YEAR OPTIONS
HARDEE'S RESTAURANT-ST. JOHNS, MI(B) 897,348 2.3% 30,000 .8% 2010 NONE
HARDEE'S RESTAURANT -
ALBION, MI PROPERTY (C) 883,477 2.3% -- -- -- NONE
HARDEE'S RESTAURANT -
NEWCASTLE, OK 479,025 1.2% 61,986 1.7% 2010 2 TEN YEAR OPTIONS
BLOCKBUSTER VIDEO RENTAL 1,100,000 2.8% 154,223 4.1% 2010 2 TEN YEAR OPTIONS
3 CHI-CHI'S RESTAURANTS 3,369,000 8.6% 461,051 12.3% 2011 4 FIVE YEAR OPTIONS
26% OF 1 BLOCKBUSTER VIDEO STORE -
CALLAWAY, FL 263,596 0.7% 28,405 0.8% 2006 3 FIVE YEAR OPTIONS
$32,104,474 82.5% $3,742,460 100.0%
<FN>
<F1>
NOTE - THE FORMAT OF THIS SCHEDULE DIFFERS FROM THE INCOME STATEMENT OF THE PARTNERSHIP.
THIS SCHEDULE ALLOCATES THE PARTNERSHIP'S SHARE OF PURCHASE PRICE AND RENTAL INCOME FROM EACH JOINT VENTURE.
(A) SOLD FEBRUARY 18, 1994
(B) RELEASED TO DAIRY QUEEN FRANCHISEE. LEASE COMMENCED FEBRUARY 1, 1995.
(C) FOR LEASE
</FN>
</TABLE>
<PAGE>
Risks of Ownership

The possibility exists that the tenants of the Partnership's
properties may be unable to fulfill their obligations pursuant to
the terms of their leases, including making base rent or percentage
rent payments to the Partnership. Such a default by the tenants or
a premature termination of any one of the leases could have an
adverse effect on the financial position of the Partnership. The
Partnership may be unable to successfully locate a substitute
tenant for the Albion, Michigan property due to the fact that the
building had been designed or built primarily to house a specific
operation. Thus, the Albion, Michigan property and other
Partnership properties may not be readily marketable to a new
tenant without substantial capital improvements or remodeling.
Such improvements may require expenditure of Partnership funds
otherwise available for distribution. In addition, because in
excess of 45% of the Partnership's cash available for investment
has been invested in properties operated as Ponderosa family
restaurants, the Partnership is subject to some risk of loss should
adverse events affect Ponderosa and in turn adversely affect the
Ponderosa lessees' ability to pay rent to the Partnership.

Item 3. Legal Proceedings.

Two legal actions, as hereinafter described, were pending against
the General Partners and affiliates of such General Partners, as
well as against the Partnership on a nominal basis in connection
with the Merger. On April 13, 1999, all the parties to the
litigation reached an agreement to settle the litigation, subject
to the approval by the United States District Court for the
Northern District of Illinois. The settlement will not have a
material financial impact on the Partnership. The terms of the
settlement agreement, along with a Notice to the Class, will be
forwarded to the Limited Partners in the second quarter of 1999. One
additional legal action, which was dismissed on January 28, 1998,
had also been brought against the General Partners and affiliates
of such General Partners, as well as against the Partnership on a
nominal basis in connection with the Merger. Each of these actions
was brought by limited partners of the Partnership. With respect
to the actions the Partnership and the General Partners and their
named affiliates denied all allegations set forth in the complaints
and vigorously defended against such claims.

A. The Dismissed Florida Lawsuit

On September 17, 1996, a lawsuit was filed in the Circuit Court
of the Seventeenth Judicial Circuit in and for Broward County,
Florida, styled Rebecca Scialpi and Helen Friedlander v. Jerome J.
Brault, Brauvin Realty Advisors, Inc., Brauvin Realty Advisors II,
Inc., Brauvin Realty Advisors III, Inc., and Brauvin Realty
Advisors IV, Inc., James L. Brault, and Brauvin Real Estate Funds,
L.L.C. and Brauvin High Yield Fund L.P., Brauvin High Yield Fund
L.P. II, Brauvin Income Plus L.P. III, and Brauvin Corporate Lease
Program IV, L.P., Docket No. 96012807. The Plaintiffs, Scialpi and
Friedlander, are Limited Partners in the Partnership. The
Partnership and the other affiliated partnerships named in this
lawsuit (the "Affiliated Partnerships") that were proposed to be a
party to a merger or sale with the Purchaser, were each named as a
"Nominal Defendant" in this lawsuit. Jerome J. Brault, the
Managing General Partner of the Partnership, and Brauvin Realty
Advisors II, Inc., the Corporate General Partner of the
Partnership, as well as certain corporate general partners of the
Affiliated Partnerships, were named as defendants in this lawsuit.
James L. Brault, an officer of the Corporate General Partner and
the son of Jerome J. Brault, was also named as a defendant. This
lawsuit was dismissed for want of prosecution on January 28, 1998.

B. The Illinois Christman Lawsuit

On September 18, 1996, a class action lawsuit was filed in the
United States District Court for the Northern District of Illinois,
styled M. Barbara Christman, Joseph Forte, Janet M. Toolson, John
Archbold, and Ben O. Carroll v. Brauvin Realty Advisors, Inc.,
Brauvin Realty Advisors II, Inc., Brauvin Realty Advisors III,
Inc., Brauvin Realty Advisors IV, Inc., Jerome J. Brault, Brauvin
Real Estate Funds, L.L.C. and Brauvin High Yield Fund L.P., Brauvin
High Yield Fund L.P. II, Brauvin Income Plus L.P. III, and Brauvin
Corporate Lease Program IV L.P., Docket No. 96C6025. The
Partnership and the Affiliated Partnerships are each named as a
"Nominal Defendant" in the lawsuit. Jerome J. Brault and the
Corporate General Partner of the Partnership, as well as the
corporate general partners of the Affiliated Partnerships, are
named as defendants.

The plaintiffs filed an amended complaint on October 8, 1996,
which alleges claims for breach of fiduciary duties, breaches of
the Agreement, and violation of the Illinois Deceptive Trade
Practices Act. The amended complaint seeks injunctive relief,as
well as compensatory and punitive damages, relating to the
Transaction.

On October 2, 1996, the District Court certified plaintiffs'
proposed class as all of the limited partners of the Partnership
and of the Affiliated Partnerships, and appointed plaintiffs'
counsel, The Mills Law Firm, as counsel for the class. On October
2, 1996, the District Court also conducted a hearing on plaintiffs'
motion to preliminarily enjoin the special meetings of the limited
partners and the Transaction. The District Court denied
plaintiffs' motion for a preliminary injunction at the conclusion
of the October 2, 1996 hearing.

On September 27, 1996, counsel for plaintiffs, The Mills Law
Firm, mailed a solicitation to all of the Limited Partners,
requesting that they revoke their previously-mailed proxies in
favor of the Merger. On October 11, 1996, the General Partners
filed a counterclaim against plaintiffs and their counsel, The
Mills Law Firm, alleging that plaintiffs and The Mills Law Firm
violated the federal securities laws and proxy rules by sending
their September 27, 1996 letter to the Limited Partners. The
plaintiffs and The Mills Law Firm have moved to dismiss this
counterclaim. The District Court has taken this motion under
advisement and has yet to issue a ruling.

On October 10 and 11, 1996, the District Court conducted an
evidentiary hearing on the motion of the General Partners to
invalidate revocations of proxies procured as a result of The Mills
Law Firm's September 27, 1996 letter. In that evidentiary hearing,
The Mills Law Firm admitted that it violated the proxy rules by
sending its September 27, 1996 letter to the Limited Partners
without filing such letter with the Commission in violation of the
Commission's requirements. At the conclusion of the hearing on
October 10 and 11, the District Court found that the General
Partners have a likelihood of succeeding on the merits with respect
to their claim that the September 27, 1996 letter sent to the
Limited Partners by plaintiffs and The Mills Law Firm is false or
misleading in several significant respects.

Notwithstanding this finding, the District Court did not
invalidate the revocations of proxies resulting from The Mills Law
Firm's September 27, 1996 letter because it did not believe it
possessed the authority to do so under present law. This ruling
was appealed to the Seventh Circuit Court of Appeals. The Seventh
Circuit Court of Appeals subsequently dismissed this appeal on the
grounds that the appeal was rendered moot by the Limited Partners'
approval November 8, 1996 of the Merger.

On October 16, 1996 and on November 6, 1996, the parties filed
cross-motions for partial summary judgement addressing the
allegation in plaintiffs' amended complaint that the Agreement does
not allow the Limited Partners to vote in favor of or against the
Transaction by proxy. On August 12, 1998, the District Court
granted plaintiff's motion for partial summary judgement, holding
that the Agreement did not allow the Limited Partners to vote in
favor or against the transaction by proxy.

On April 2, 1997, the Court granted plaintiffs' leave to again
amend their complaint. In their second amended complaint,
plaintiffs have named the Partnership as a "Nominal Defendant."
Plaintiffs have also added a new claim, alleging that the General
Partners violated certain of the rules of the Securities and
Exchange Commission (the "Commission") by making false and
misleading statements in the Proxy. Plaintiffs also allege that
the General Partners breached their fiduciary duties, breached
various provisions of the Agreement, violated the Illinois
Deceptive Trade Practice Act, and violated section 17-305 of the
Delaware Revised Uniform Limited Partnership Act. The General
Partners deny those allegations and will continue to vigorously
defend against these claims.

On April 2, 1997, plaintiffs again requested that the District
Court enjoin the closing of the Transaction. After conducting a
lengthy hearing on May 1, 1997, the District Court denied
plaintiffs' motion to preliminarily enjoin the closing of the
Transaction with the Purchaser. Plaintiffs filed a notice of
appeal to the Seventh Circuit Court of Appeals from the District
Court's May 1, 1997 order denying plaintiffs' motion to
preliminarily enjoin the closing of the Transaction. This appeal
was dismissed by the Seventh Circuit Court of Appeals on January
23, 1998, based on the appeal court's finding that the District
Courts order of January 16, 1998 (as described below) rendered the
appeal moot.

On January 16, 1998, by agreement of the Partnership and the
General Partners and pursuant to a motion of the General Partners,
the District Court entered an order preventing the Partnership and
the General Partners from completing the Merger, or otherwise
disposing of all or substantially all of the Partnership's assets,
until further order of the court.

On January 28, 1998, the District Court entered an Order of
Reference to Special Master, designating a Special Master and
vesting the Special Master with authority to resolve certain
aspects of the lawsuit subject to the District Court's review and
confirmation. The Special Master has been empowered to determine
how the assets of the Partnership should be sold or disposed of in
a manner which allows the Limited Partners to maximize their
financial return in the shortest practicable time frame. In
addition, early in the second quarter of 1998, the Special Master
retained a financial advisor (the "Financial Advisor"), at the
expense of the Partnership to assist the Special Master. The
Financial Advisor has been engaged to perform a valuation of the
properties of the Partnership as well as a valuation of the
Partnership itself. The cost to the Partnership for the services
of the Financial Advisor was approximately $185,000.

On August 4, 1998, the Special Master filed a Report and
Recommendation with the District Court, expressing the Special
Master's recommendation the Partnership's properties be disposed of
in an auction conducted by the Financial Advisor under the
direction of the Special Master. The District Court accepted this
Report and Recommendation. On November 4, 1998, the Special
Master filed an additional Report and Recommendation with the
District Court, requesting that the Court withdraw its Order of
Reference to Special Master on the grounds it would be impossible
to effect the sale of the Partnerships in a manner that maximizes
the financial return to Limited Partners in a short time frame,
unless certain litigation issues are resolved. The District Court
has accepted this Report and Recommendation.

On January 21, 1999, plaintiffs filed another amended complaint,
adding additional claims against the General Partners and seeking
class certification under Federal Rule 23 as to the newly added
claims, and as to all other claims in plaintiffs' complaint which
had not been previously certified. The District Court granted
plaintiffs' request for class certification as to all of the claims
not previously certified, and certified all of the claims of the
plaintiffs' complaint under Rule 23(b)(1), 23(b)(2)and 23(b)(3).

In addition, pursuant to the General Partners' motion, the
District Court dismissed as moot certain of plaintiffs' claims,
including plaintiffs' claim that the General Partners violated
certain of the rules of the Securities and Exchange Commission by
allegedly making false and misleading statements in the Proxy. The
District Court similarly dismissed as moot a counterclaim that had
been made against class plaintiffs and their counsel for violating
the federal securities laws.

On April 13, 1999, all of the parties reached a Settlement
Agreement encompassing all matters in the lawsuit. The Settlement
Agreement is subject to the approval by the District Court, and the
Limited Partners will be provided with a written notice concerning
its terms. The settlement will not have a material financial
impact on the Partnership.

C. The Scialpi Illinois Lawsuit

On June 20, 1997, another lawsuit was filed in the United States
District Court for the Northern District of Illinois, styled
Benjamin Siegel, Rebecca Scialpi, Helen Friedlander, and BHS &
Associates, Inc. v. Jerome J. Brault, Brauvin Realty Advisors,
Inc., Brauvin Realty Advisors II, Inc., Brauvin Realty Advisors
III, Inc., Brauvin Realty Advisors IV, Inc., James L. Brault,
Brauvin Real Estate Funds LLC, Brauvin High Yield Fund L.P.,
Brauvin High Yield Fund II L.P., Brauvin Income Plus L.P. III, and
Brauvin Corporate Lease Program IV, L.P. docket number 97 C 4450.
The Partnership and the Affiliated Partnerships are each named as
"Nominal Defendant" in the lawsuit, Jerome J. Brault and the
Corporate General Partner of the Partnership, as well as the
corporate general partners of the Affiliated Partnerships, have
been named as defendants in this lawsuit. James L. Brault, an
officer of the Corporate General Partner and the son of Jerome J.
Brault, is also named as a defendant.

Notably, the complaint was filed by two of the same parties,
Scialpi and Friedlander, who were plaintiffs in the Florida
lawsuit, which is described above. As also described above,
Scialpi and Friedlander are Limited Partners in the Partnership,
but have no relationship with the Affiliated Partnerships. On
August 15, 1997, the plaintiffs filed an amended complaint dropping
Benjamin Siegel as a plaintiff. The plaintiffs are also
represented by the same lawyers that represented them in the
Florida lawsuit.

The complaint alleges a putative class action consisting of
claims that certain Commission rules were violated by making false
and misleading statements in the Proxy, the defendants breached
their fiduciary duties and breached the Agreement. The complaint
was consolidated with the Christman lawsuit, which is described
above, pursuant to General Rule 2.31 of the United States District
Court of the Northern District of Illinois. The General Partners
deny these allegations and intend to vigorously defend these
claims. There have been no material developments with respect to
this lawsuit since it was filed on June 20, 1997; however,
management believes that the terms of the April 13, 1999 settlement
agreement described above will encompass this lawsuit.

Item 4. Submission of Matters To a Vote of Security Holders.

None.

<PAGE>
PART II

Item 5. Market for the Registrant's Units and Related Security
Holder Matters.

At December 31, 1998, there were approximately 2,647 Limited
Partners in the Partnership. There is no established public
trading market for Units and it is not anticipated that there will
be a public market for Units. Neither the Corporate General
Partner nor the Partnership are obligated, but reserve the right,
to redeem or repurchase the Units. Units may also be purchased by
the Plan. Any Units so redeemed or repurchased shall be retired.

Pursuant to the terms of the Agreement, there are restrictions
on the ability of the Limited Partners to transfer their Units. In
all cases, the General Partners must consent to the substitution of
a Limited Partner.

Cash distributions to Limited Partners for 1998, 1997 and 1996
were $2,572,158, $4,787,596 and $1,814,767, respectively. Prior to
the commencement of the Partnership's proxy solicitation in August
1996, distributions were paid four times per year, within 60 days
after the end of each calendar quarter. See Item 7. Pursuant to
the terms of the Merger Agreement, net income after August 1, 1996
was to accrue to the Purchaser and, therefore, the net income
through July 31, 1996 was to be distributed to the Limited Partners
at the time of the closing of the Merger. Since the net income of
the Partnership after August 1, 1996 was to accrue to the
Purchaser, no distributions of net income were paid to the Limited
Partners for the two months of August and September 1996 and the
quarter ended December 31, 1996. Included in the December 31, 1997
distribution was any prior period earnings including amounts
previously reserved for anticipated closing costs. Since the
Transaction will not be completed the General Partners have decided
to distribute part of the net earnings earned during this time
period after August 1996 to the Limited Partners. Included in the
February 15, 1999 distribution was approximately $184,000 related
to this time period.

The Partnership provided for a reserve in its initial offering
to fund cash distributions in excess of operating cash flow. Such
payments from the reserve represent a return of capital and
represent less than 2% of cumulative distributions through February
15, 1998.

<PAGE>
Item 6. Selected Financial Data.

BRAUVIN HIGH YIELD FUND L.P. II
(a Delaware limited partnership)
(not covered by Independent Auditors' Report)
Years Ended December 31, 1998, 1997 and 1996

1998 1997 1996
Selected Income Statement Data:
Rental Income (a) $4,070,823 $4,239,915 $4,130,302

Interest Income 116,702 161,260 93,923

Net Income 968,545 2,677,113 1,824,011

Net Income Per Unit (b) $ 23.41 $ 65.78 $ 45.23

Selected Balance Sheet Data:
Cash and Cash Equivalents $1,585,830 $ 1,198,267 $2,413,914

Land and Buildings 32,260,654 35,401,164 35,401,164

Total Assets 28,471,346 31,464,133 33,290,582

Cash Distributions to
Limited Partners (c) 2,552,358(d) 4,787,596 1,814,767

Cash Distributions to Limited
Partners Per Unit (b) $ 63.26(d)$ 118.66 $ 45.00

(a) This includes $67,563, $67,561, and $67,561 of non-cash income
related to the change in the deferred rent receivable balance for
1998, 1997 and 1996, respectively.

(b) Net income per Unit and cash distributions to Limited Partners per
Unit are based on the average Units outstanding during the year
since they were of varying dollar amounts and percentages based
upon the dates Limited Partners were admitted to the Partnership
and additional Units were purchased through the Plan.

(c) This includes $11,521, $10,278 and $9,060 paid to various states
for income taxes on behalf of all Limited Partners for the years
1998, 1997 and 1996, respectively.

(d) Not included in cash distributions to Limited Partners and the
calculation was Return of Capital Distributions of $1,354,535 which
is $33.57 per unit.

The above selected financial data should be read in conjunction with
the consolidated financial statements and the related notes appearing
elsewhere in this annual report.

<PAGE>
Item 6. Selected Financial Data - continued.

BRAUVIN HIGH YIELD FUND L.P. II
(a Delaware limited partnership)
(not covered by Independent Auditors' Report)
Years Ended December 31, 1995 and 1994

1995 1994
Selected Income Statement Data:
Rental Income (a) $4,192,243 $4,198,955
Interest Income 68,435 31,248

Net Income 3,039,738 2,564,375

Net Income Per Unit (b) $ 75.82 $ 64.69

Selected Balance Sheet Data:
Cash and Cash Equivalents $1,374,779 $1,106,917

Land and Buildings 35,951,164 35,951,164

Total Assets 33,207,008 33,630,071

Cash Distributions to
Limited Partners (c) 3,582,492 3,478,020

Cash Distributions to Limited
Partners Per Unit (b) $ 89.36 $ 87.74

(a) This includes $67,561 and $73,122 of non-cash income related to the
change in the deferred rent receivable balance for 1995 and 1994,
respectively.

(c) This includes $9,060 and $14,717 paid to various states for
income taxes on behalf of all Limited Partners for the years 1995
and 1994, respectively.

The above selected financial data should be read in conjunction with
the consolidated financial statements and the related notes appearing
elsewhere in this annual report.

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

General

Certain statements in this Annual Report that are not historical
fact constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Discussions
containing forward-looking statements may be found in this section and
in the section entitled "Business." Without limiting the foregoing,
words such as "anticipates," "expects," "intends," "plans" and similar
expressions are intended to identify forward-looking statements. These
statements are subject to a number of risks and uncertainties. Actual
results could differ materially from those projected in the forward-
looking statements. The Partnership undertakes no obligation to update
these forward-looking statements to reflect future events or
circumstances.

Year 2000

The "Year 2000" problem concerns the inability of computer
technology systems to correctly identify and process date sensitive
information beyond December 31, 1999. Many computers automatically add
the "19" prefix to the last two digits the computer reads for the year
when date information is needed in computer software programs. Thus
when a date beginning on January 1, 2000 is entered into a computer, the
computer may interpret this date as the year "1900" rather than "2000".

The Partnership's computer information technology systems consists
of a network of personal computers linked to a server built using
hardware and software from mainstream suppliers. The Partnership does
not own any equipment that contains embedded microprocessors, which may
also pose a potential Year 2000 problem. Additionally, the Partnership
has no internally generated software coding to correct as all of the
Partnership's software is purchased and licensed from external
providers. These external providers have assured management that their
systems are, or will be, Year 2000 compliant.

The Partnership has two main software packages that contain date
sensitive information, (i) accounting and (ii) investor relations. In
1997, the Partnership initiated and completed the conversion from its
existing accounting software to a new software program that is Year 2000
compliant. In 1998, the investor relations software was also updated to
a new software program that is Year 2000 compliant. Management has
determined that the Year 2000 issue will not pose significant
operational problems for its remaining computer software systems. All
costs associated with these conversions are expensed as incurred, and
are not material. Management does not believe that any further
expenditures will be necessary for the Partnership to be Year 2000
compliant. However, additional personal computers may be purchased from
time to time to replace existing machines.

Also in 1997, management of the Partnership initiated formal
communications with all of its significant third party vendors, service
providers and financial institutions to determine the extent to which
the Partnership is vulnerable to those third parties failure to remedy
their own Year 2000 issue. There can be no guarantee that the systems
of these third parties will be timely converted and would not have an
adverse effect on the Partnership.

The most reasonably likely worst case scenario for the Partnership
with respect to the Year 2000 issue would be the inability of certain
tenants to timely make their rental payments beginning in January 2000.
This could result in the Partnership temporarily suffering a depletion
of the Partnership's cash reserves as expenses will need to be paid
while the cash flows from revenues are delayed. The Partnership has no
formal Year 2000 contingency plan.

Liquidity and Capital Resources

The Partnership commenced an offering to the public on June 17,
1988 of 25,000 Units (subject to increase to 40,000 units). The
offering was anticipated to close on June 16, 1989 but was extended and
closed on September 30, 1989. A total of $38,923,000 of Units were
subscribed and issued between June 17, 1988 and September 30, 1989,
pursuant to the public offering.

Until the proxy solicitation process began, the Plan raised
$4,059,178 through December 31, 1998 from Limited Partners investing
their distributions of Operating Cash Flow in additional Units. As of
December 31, 1998, Units valued at $2,886,915 have been repurchased by
the Partnership from Limited Partners liquidating their investment in
the Partnership and have been retired.

The Partnership purchased the land and buildings underlying seven
Ponderosa restaurants in 1988, and owns a 99% equity interest in an
affiliated joint venture formed in 1988 which purchased the land and
buildings underlying six Ponderosa restaurants. In 1989, the
Partnership purchased the land and buildings underlying two Taco Bell
restaurants, formed a 51% equity interest in an affiliated joint venture
which purchased a Scandinavian Health Spa and purchased the land and
buildings underlying seven additional Ponderosa restaurants. In 1990,
the Partnership purchased the land and buildings underlying three
Children's World Learning Centers, three Hardee's restaurants, one
Blockbuster video store and three Avis Lubes. The Partnership purchased
three Chi-Chi's restaurants in 1991.

On October 31, 1996, the Partnership purchased a 26% equity
interest in a joint venture with affiliated public real estate limited
partnerships (the "Bay County Venture"). The Bay County Venture
purchased real property upon which a newly constructed Blockbuster Video
store is operated. The property contains a 6,466 square foot building
located on a 40,075 square foot parcel of land.

The Partnership's acquisition process is now completed.

In 1996, the Partnership engaged Cushman & Wakefield to prepare an
appraisal of the Partnership's properties. As a result of this
appraisal, the Partnership recorded an additional provision for
impairment of $550,000 related to an other than temporary decline in
real estate for the St. Johns, Michigan and Albion, Michigan properties
during the fourth quarter of 1996. This allowance has been recorded as
a reduction of the properties' cost, and allocated to the land and
building based on the original acquisition cost allocation of 30% (land)
and 70% (building).

During the first quarter of 1998, the Partnership recorded an
impairment of $130,000 related to an other than temporary decline in the
value of real estate for the Ponderosa located in Sweden, New York.
This allowance has been recorded as a reduction of the property's cost,
and allocated to the land and buildings based on the original
acquisition cost allocation of 30% (land) and 70% (building).

During the fourth quarter of 1998, the Partnership recorded an
impairment of $984,000 related to an other than temporary decline in the
value of real estate for several Ponderosa properties in various
locations. Additionally an impairment of $192,000 related to an other
than temporary decline in the value of real estate was also recorded
for the Hardee's properties located in Michigan. These allowances were
recorded as a reduction of the properties' cost, and allocated to the
land and buildings based on the original acquisition cost allocation of
30% (land) and 70% (building).

As contemplated in the Prospectus, the distributions prior to full
property specification exceeded the amount of Operating Cash Flow, as
such term is defined in the Agreement, available for distribution. As
described in Footnote 8 to the section of the Prospectus on pages 8 and
9 entitled "Estimated Use of Proceeds of Offering", the Partnership set
aside 1% of the gross proceeds of the Offering in a reserve (the
"Distribution Guaranty Reserve"). The Distribution Guaranty Reserve was
structured so as to enable the Partnership to make quarterly
distributions of Operating Cash Flow equal to at least 9.25% per annum
on Adjusted Investment during the period from the Escrow Termination
Date (February 28, 1989), as such term is defined in Section H.3 of the
Agreement, through the earlier of: (i) the first anniversary of the
Escrow Termination Date (February 28, 1990); or (ii) the expenditure of
95% of the proceeds available for investment in properties, which date
was July 26, 1989. The General Partners guaranteed payment of any
amounts in excess of the Distribution Guaranty Reserve and were entitled
to receive any amounts of the Distribution Guaranty Reserve not used to
fund distributions.

The Partnership's acquisition process was not completed until March
1991 due to an unusually high number of properties being declined during
the due diligence process because of the General Partners' unwillingness
to lower the Partnership's investment standards. As a result, the
Partnership had a substantial amount of cash invested in short-term
investments, as opposed to properties, and during 1990 did not generate
sufficient Operating Cash Flow to fully support the distributions to
Limited Partners.

In order to continue to maintain the 9.25% per annum distribution
through December 31, 1990, the General Partners agreed to continue the
Distribution Guaranty up to the net $140,000 of Distribution Guaranty
Reserve previously paid to them. At December 31, 1998, 1997 and 1996,
$140,000 was due from the original General Partners related to the
Distribution Guaranty.

Below is a table summarizing the four year historical data for
distribution rates per unit:

Distribution
Date 1999 1998 (a) 1997 1996 1995

February 15 $24.9281 $ -- $20.1875 $22.3597 $22.3597

May 15 -- 21.9087 18.8614 22.3597 22.3597

August 15 -- 14.7020 22.8662 -- 22.3597

November 15 (b) -- 26.3634 56.6001 -- 22.3597

(a) The 1998 distributions were made on May 8, 1998, August 15,
1998, November 15, 1998, and February 15, 1999 respectively,
and the amounts indicated above do not include return of
capital distributions of approximately $18.4152, $15.1571,
$0.00, and $0.00 per Unit, respectively.

(b) The 1997 distributions were made on March 31, 1997, July 15,
1997, October 22,1997 and December 31, 1997.

Distributions of the Partnership's net earnings for the periods
January 1, 1997 to March 31, 1997, April 1, 1997 to June 30, 1997,
July 1, 1998 to September 30, 1997 and October 1, 1997 to December
31, 1997 were made to the Limited Partners on March 31, 1997, July
15, 1997, October 22, 1997 and December 31, 1997, respectively in
the amounts of approximately $814,500, $761,000, $922,600 and
$2,283,600, respectively. In addition, distributions of
approximately $5,900 were paid to various states for income taxes
on behalf of all Limited Partners.

Distributions of the Partnership's net earnings for the periods
January 1, 1998 to March 31, 1998, April 1, 1998 to June 30, 1998,
July 1, 1998 to September 30, 1998, and October 1, 1998 to December
31, 1998 were made to Limited Partners on May 8, 1998, August 15,
1998, November 15, 1998, and February 15, 1999, respectively, in the
amounts of approximately $884,000, $593,200, $1,063,700, and
$1,005,800.

As the result of a property sale by Brauvin High Yield Venture
a return of capital distribution was also made to Limited Partners
on May 8, 1998 in the amount of approximately $743,000.
Additionally on August 15, 1998, a return of capital distribution
was made to Limited Partners in the approximate amount of $611,500
from the sale of the Ponderosa located in Sweden, New York.

Per the terms of the Merger, the Partnership's net earnings from
April 1996 through July 1996 were to be distributed to the Limited
Partners in conjunction with the closing of the Merger. However,
because of the lengthy delay and the uncertainty of the ultimate
closing date, the General Partners decided to make a significant
distribution on December 31, 1997 of the Partnership's earnings.
Included in the December 31, 1997 distribution was any prior period
earnings including amounts previously reserved for anticipated
closing costs.

Based on the August 12, 1998 ruling of the District Court in the
Christman litigation, it is not possible for the Merger to be
consummated. The reserves will be re-established by the Partnership
as soon as a definitive sale process has been determined and the
associated costs and reserves can be identified.

Future increases in the Partnership's distributions will largely
depend on increased sales at the Partnership's properties resulting
in additional percentage rent and, to a lesser extent, on rental
increases which will occur due to increases in receipts from certain
leases based upon increases in the Consumer Price Index or scheduled
increases of base rent.

During the years ended December 31, 1998, 1997 and 1996 the
General Partners and their affiliates earned management fees of
$40,657, $41,080, and $42,653, respectively. In January 1998, the
Partnership paid the General Partners approximately $19,800 as an
Operating Cash Flow distribution for the year ended December 31,
1997.

Although the Merger will not be consummated, the following text
describes the Transaction. Pursuant to the terms of the Merger
Agreement, the Limited Partners would have received approximately
$779.22 per Unit in cash (of this original amount approximately
$31.13 has already been distributed to the Limited Partners).
Promptly upon consummation of the Merger, the Partnership would have
ceased to exist and the Purchaser, as the surviving entity, would
have succeeded to all of the assets and liabilities of the
Partnership.

The Partnership drafted a proxy statement, which required prior
review and comment by the Securities and Exchange Commission, to
solicit proxies for use at the Special Meeting originally to be held
at the offices of the Partnership on September 24, 1996. As a
result of the various legal issues, as described in Item 3, the
Special Meeting was adjourned to November 8, 1996 at 9:30 a.m. The
purpose of the Special Meeting was to vote upon the Merger and
certain other matters as described in the Proxy.

By approving the Merger, the Limited Partners also would have
approved an amendment of the Agreement allowing the Partnership to
sell or lease property to affiliates (this amendment, together with
the Merger shall be referred to herein as the "Transaction"). The
Delaware Revised Uniform Limited Partnership Act (the "Act")
provides that a merger must also be approved by the general partners
of a partnership, unless the limited partnership agreement provides
otherwise. Because the Agreement did not address this matter, at
the Special Meeting, Limited Partners holding a majority of the
Units were asked to approve the adoption of an amendment to the
Agreement to allow the majority vote of the Limited Partners to
determine the outcome of the transaction with the Purchaser without
the vote of the General Partners. Neither the Act nor the Agreement
provides the Limited Partners not voting in favor of the Transaction
with dissenters' appraisal rights.

The redemption price to be paid to the Limited Partners in
connection with the Merger was based on the fair market value of the
properties of the Partnership (the "Assets"). Cushman & Wakefield,
an independent appraiser, the largest real estate valuation and
consulting organization in the United States, was engaged by the
Partnership to prepare an appraisal of the Assets, to satisfy the
Partnership's requirements under the Employee Retirement Income
Security Act of 1974, as amended. Cushman & Wakefield determined
the fair market value of the Assets to be $30,183,300, or $748.09
per Unit, at April 1, 1996. Subsequently, the Partnership purchased
a 26% interest in Brauvin Bay County Venture. Based on the terms
of the Merger Agreement, the fair market value of the Assets will
be increased by the amount of the investment in Brauvin Bay County
Venture, and correspondingly, the Partnership's cash holdings were
reduced by the same amount and therefore the total redemption amount
would remain unchanged. The redemption price of $779.22 per Unit
also included all remaining cash of the Partnership, less net
earnings of the Partnership from and after August 1, 1996 through
December 31, 1996, less the Partnership's actual costs incurred and
accrued through the effective time at the filing of the certificate
of merger, including reasonable reserves in connection with: (i)
the proxy solicitation; (ii) the Transaction (as detailed in the
Merger Agreement); and (iii) the winding up of the Partnership,
including preparation of the final audit, tax return and K-1s
(collectively, the "Transaction Costs") and less all other
Partnership obligations. Of the total redemption price stated
above, approximately $31.13 was distributed to Limited Partners in
the December 31, 1997 distribution.

Cushman & Wakefield subsequently provided an opinion as to the
fairness of the Transaction to the Limited Partners from a financial
point of view. In its opinion, Cushman & Wakefield advised that the
price per Unit reflected in the Transaction was fair, from a
financial point of view, to the Limited Partners. Cushman &
Wakefield's determination that a price is "fair" does not mean that
the price was the highest price which might be obtained in the
marketplace, but rather that based on the appraised values of the
Assets, the price reflected in the Transaction is believed by
Cushman & Wakefield to be reasonable.

Mr. Jerome J. Brault is the Managing General Partner of the
Partnership and Brauvin Realty Advisors II, Inc. is the Corporate
General Partner. On April 23, 1997, Mr. David M. Strosberg resigned
as an Individual General Partner of the Partnership. Mr. Cezar M.
Froelich resigned his position as an Individual General Partner
effective as of September 17, 1996. The General Partners were not
to receive any payment in exchange for the redemption of their
general partnership interests nor were they to receive any fees from
the Partnership in connection with the Transaction. The remaining
General Partners do not believe that Mr. Strosberg's or Mr.
Froelich's lack of involvement has had an adverse effect, and should
not in the future have any adverse effect, on the operations of the
Partnership.

The Managing General Partner and his son, James L. Brault, an
executive officer of the Corporate General Partner, were to have a
minority ownership interest in the Purchaser. Therefore, the
Messrs. Brault had an indirect economic interest in consummating the
Transaction that was in conflict with the economic interests of the
Limited Partners. Messrs. Froelich and Strosberg have no
affiliation with the Purchaser.

Although the Special Meeting was held and an affirmative vote of
the majority of the Limited Partners was received, the District
Court in the Christman litigation ruled on August 12, 1998 in favor
of the Plaintiff's motion for partial summary judgement, holding
that the Agreement did not allow the Limited Partners to vote in
favor or against the Transaction by proxy.

As discussed in Item 3, all the parties to the litigation reached
an agreement to settle the litigation, subject to the approval by
the United States District Court for the Northern District of
Illinois.

The 1998 and 1997 distributions were lower than prior
distributions because the Partnership incurred significant
valuation fees and legal costs to defend against the lawsuit. In
addition, the remaining term of the Partnership's properties'
leases continue to shrink. This fact is causing the Partnership to
potentially face the risks and costs of lease rollover. This
heightened degree of risk may also have an adverse effect on the
ultimate value of the Assets. Further, the Partnership's most
significant tenant, Ponderosa, has recently closed and vacated six
of the Partnership's properties. (The Partnership owned three of
them directly and had a majority joint venture interest in the
other three.) The General Partners are working to remedy this
vacancy situation. As of December 31, 1998, two of the closed
properties have been sublet to local concept operators. However,
one of the closed properties incurred significant fire damage and
Ponderosa terminated its lease. The Partnership has commenced a
lawsuit against the tenant to recover lost rent and damages related
to the fire. In addition, these recent developments could
materially affect the Assets' long term prospects. Unfortunately,
these recent developments are some of the exact risks and costs the
Partnership was seeking to avoid with the successful completion of
the Merger. In January 1998, one of the closed joint venture
Ponderosa restaurants located in Mansfield, Ohio was sold to an
unaffiliated third party. In April 1998, the fire damaged property
located in Sweden, New York was sold by the Partnership to an
unaffiliated third party.

On January 28, 1998, the District Court entered an Order of
Reference to Special Master, designating a Special Master and
vesting the Special Master with authority to resolve certain
aspects of the lawsuit subject to the District Court's review and
confirmation. The Special Master has been empowered to determine
how the assets of the Partnership should be sold or disposed of in
a manner which allows the Limited Partners to maximize their
financial return in the shortest practicable time frame. In
addition, early in the second quarter of 1998, the Special Master
retained a financial advisor (the "Financial Advisor"), at the
expense of the Partnership, to assist the Special Master. The
Financial Advisor was engaged to perform a valuation of the
properties of the Partnership as well as a valuation of the
Partnership itself. The cost to the Partnership for the services
of the Financial Advisor was approximately $185,000.

On August 4, 1998, the Special Master filed a Report and
Recommendation with the District Court expressing the Special
Master's recommendation that the Partnership's properties be
disposed of in an auction conducted by the Financial Advisor under
the direction of the Special Master. The District Court accepted
this Report and Recommendation.

On November 4, 1998, the Special Master filed an additional
Report and Recommendation with the District Court, requesting that
the Court withdraw its Order of Reference to Special Master on the
grounds it would be impossible to effect the sale of the
Partnership's properties in a manner that maximizes the financial
return to Limited Partners in a short time frame, unless certain
litigation issues are resolved. The District Court has accepted
this Report and Recommendation.

Results of Operations - Years ended December 31, 1998 and 1997

Results of operations for the year ended December 31, 1998
reflected net income of $968,545 compared to net income of
$2,677,113 for the year ended December 31, 1997, a decrease of
$1,708,568. The decrease in net income is primarily due to the
$1,306,000 provision for an other than temporary decline in the
value of the partnerships properties.

Total income for the year ended December 31, 1998 was $4,191,659
compared to $4,410,859 for the year ended December 31, 1997, a
decrease of $219,200. The decrease in total income was a result of
a 1997 one-time settlement of outstanding issues with a major
tenant of the Partnership which increased rental income. Further,
rental income also declined as a result of the 1998 property sales.
Additionally, total income declined as a result of decreased
interest income which is a result of decreased funds invested
during 1998.

Total expenses for the year ended December 31, 1998 were
$2,842,462 compared to $1,459,974 for the year ended December 31,
1997, an increase of approximately $1,382,500. The increase in
total expenses was primarily due to the provision for impairment
for an other than temporary decline in the value of real estate of
approximately $1,306,000, which was recorded in 1998. Depreciation
expense in 1998 was $667,467 compared to $708,742 in 1997, a
decrease of $41,275, due primarily to the provision for impairment
for an other than temporary decline in the value of real estate and
the two 1998 property sales. In addition, total expenses increased
as a result of an increase in valuation fees of $184,500 in 1998.
Partially offsetting these increases in expenses was a decrease in
Transaction costs of approximately $56,324 in 1998 as compared to
1997.

Results of Operations - Years ended December 31, 1997 and 1996

Results of operations for the year ended December 31, 1997
reflected net income of $2,677,113 compared to net income of
$1,824,011 for the year ended December 31, 1996, an increase of
approximately $853,100.

Total income for the year ended December 31, 1997 was $4,410,859
as compared to $4,227,229 for the year ended December 31, 1996, an
increase of approximately $183,600. The increase in total income
was primarily due to a one time settlement of outstanding issues
with a major tenant of the Partnership which increased rental
income. Additionally, total income increased a result of an
increase in interest income, which was the result of higher cash
balances during 1997.

Total expenses for the year ended December 31, 1997 were
$1,459,974 as compared to $2,106,603 for the year ended December
31, 1996, a decrease of approximately $646,600. The decrease in
total expenses was primarily due to the provision for impairment on
other than a temporary decline in the value of the real estate of
approximately $550,000 which was recorded in 1996. Additional
expenses decreasing in 1997 were transaction costs of approximately
$108,000 and a decrease in valuation fees of approximately $90,800.
Partially offsetting the decrease in these expenses was an increase
in general and administrative expenses of approximately $118,100,
which was primarily the result of the Partnership recognizing
certain receivables as uncollectible.

Results of Operations - Years ended December 31, 1996 and 1995

Results of operations for the year ended December 31, 1996
reflected net income of $1,824,011 compared to $3,039,738 for the
year ended December 31, 1995, a decrease of approximately
$1,215,700. The decrease in net income resulted from an increase
in expense as a result of the Transaction, the Partnership hiring
an independent real estate company to conduct property valuations
and a provision for impairment on other than a temporary decline in
the value of the real estate. The increase in expenses was
partially offset by an increase in interest income.

Total expenses for the year ended December 31, 1996 were
$2,106,603 as compared to $930,775 for the year ended December 31,
1995, a an increase of approximately $1,175,800. The increase in
expenses was primarily the result of an increase in Transaction
costs of $453,013 due to legal and other professional fees paid or
accrued as a result of the Transaction and a provision for
impairment on other than a temporary decline in the value of real
estate of $550,000 for the St. Johns, Michigan and Albion, Michigan
properties. Total expenses also increased in 1996 as compared to
1995 as a result of the Partnership hiring an independent real
estate company to conduct property valuations to provide a
valuation of the Units to satisfy the Partnership's requirements
under the Employee Retirement Income Security Act of 1974, as
amended.

Impact of Inflation

The Partnership anticipates that the operations of the
Partnership will not be significantly impacted by inflation. To
offset any potential adverse effects of inflation, the Partnership
has entered into "triple-net" leases with tenants, making the
tenants responsible for all operating expenses, insurance and real
estate taxes. In addition, several of the leases require
escalations of rent based upon increases in the Consumer Price
Index, scheduled increases in base rents, or tenant sales.

<PAGE>
Item 7A. Quantitative and Qualitative Disclosures About Market
Risk.

The Partnership does not engage in any hedge transactions or
derivative financial instruments, or have any interest sensitive
obligations.

Item 8. Consolidated Financial Statements and Supplementary
Data.

See Index to Consolidated Financial Statements and Schedule on
Page F-1 of this Annual Report on Form 10-K for consolidated
financial statements and financial statement schedule, where
applicable.

The supplemental financial information specified in Item 302 of
Regulation S-K is not applicable.

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.

During the Partnership's two most recent fiscal years, there have
been no changes in, or disagreements with, the accountants.
<PAGE>
PART III

Item 10. Directors and Executive Officers of the Partnership.

The General Partners of the Partnership are:

Brauvin Realty Advisors II, Inc., an Illinois corporation
Mr. Jerome J. Brault, individually

Brauvin Realty Advisors II, Inc. (the "Corporate General
Partner") was formed under the laws of the State of Illinois in
1988, with its issued and outstanding shares being owned by Messrs.
Jerome J. Brault (beneficially)(44%), Cezar M. Froelich (44%) and
David M. Strosberg (12%).

The principal officers and directors of the Corporate General
Partner are:

Mr. Jerome J. Brault . . . . Chairman of the Board of
Directors, President, Chief
Executive Officer and Director

Mr. James L. Brault . . . . Vice President and Secretary

Mr. Thomas E. Murphy . . . . Treasurer and Chief Financial
Officer

The business experience during the past five years of the General
Partners and the principal officers and directors of the Corporate
General Partner are as follows:

MR. JEROME J. BRAULT (age 65) chairman of the board of directors,
president and chief executive officer of the Corporate General
Partner, as well as a principal shareholder of the Corporate
General Partner. He is a member and manager of Brauvin Real Estate
Funds, L.L.C. He is a member of Brauvin Capital Trust L.L.C.
Since 1979, he has been a shareholder, president and a director of
Brauvin/Chicago, Ltd. He is an officer, director and one of the
principal shareholders of various Brauvin entities which act as the
general partners of six other publicly registered real estate
programs. He is an officer, director and one of the principal
shareholders of Brauvin Associates, Inc., Brauvin Management
Company, Brauvin Advisory Services, Inc. and Brauvin Securities,
Inc., Illinois companies engaged in the real estate and securities
businesses. He is a director, president and chief executive
officer of Brauvin Net Lease V, Inc. He is the chief executive
officer of Brauvin Capital, Inc. Mr. Brault received a B.S. in
Business from DePaul University, Chicago, Illinois in 1959.

MR. JAMES L. BRAULT (age 38) is a vice president and secretary
and is responsible for the overall operations of the Corporate
General Partner and other affiliates of the Corporate General
Partner. He is a manager of Brauvin Real Estate Funds, L.L.C.,
Brauvin Capital Trust, L.L.C. and BA/Brauvin L.L.C. He is an
officer of various Brauvin entities which act as the general
partners of six other publicly registered real estate programs.
Mr. Brault is executive vice president and assistant secretary and
is responsible for the overall operations of Brauvin Management
Company. He is also an executive vice president and secretary of
Brauvin Net Lease V, Inc. He is the president of Brauvin Capital
Trust, Inc. Prior to joining the Brauvin organization in May 1989,
he was a Vice President of the Commercial Real Estate Division of
the First National Bank of Chicago ("First Chicago"), based in
their Washington, D.C. office. Mr. Brault joined First Chicago in
1983 and his responsibilities included the origination and
management of commercial real estate loans, as well as the direct
management of a loan portfolio in excess of $150 million. Mr.
Brault received a B.A. in Economics from Williams College,
Williamstown, Massachusetts in 1983 and an M.B.A. in Finance and
Investments from George Washington University, Washington, D.C. in
1987. Mr. Brault is the son of Mr. Jerome J. Brault.

MR. THOMAS E. MURPHY (age 32) is the treasurer and chief
financial officer of the Corporate General Partner and other
affiliates of the Corporate General Partner. He is the chief
financial officer of various Brauvin entities which act as the
general partners of six other publicly registered real estate
programs. Mr. Murphy is also the chief financial officer of
Brauvin Associates, Inc., Brauvin Management Company, Brauvin
Financial, Inc., Brauvin Securities, Inc. and Brauvin Net Lease V,
Inc. He is the treasurer, chief financial officer and secretary of
Brauvin Capital Trust, Inc. He is responsible for the Partnership's
accounting and financial reporting to regulatory agencies. He
joined the Brauvin organization in July 1994. Prior to joining the
Brauvin organization he worked in the accounting department of
Zell/Merrill Lynch and First Capital Real Estate Funds where he was
responsible for the preparation of the accounting and financial
reporting for several real estate limited partnerships and
corporations. Mr. Murphy received a B.S. degree in Accounting from
Northern Illinois University in 1988. Mr. Murphy is a Certified
Public Accountant and is a member of the Illinois Certified Public
Accountants Society.

Item 11. Executive Compensation.

(a & b) The Partnership is required to pay certain fees, make
distributions and allocate a share of the profits and losses of the
Partnership to the Corporate General Partner and its affiliates as
described under the caption "Compensation Table" on pages 10 to 12
of the Partnership's Prospectus, as supplemented, and the sections
of the Agreement entitled "Distribution of Operating Cash Flow,"
"Allocation of Profits, Losses and Deductions," "Distribution of
Net Sale or Refinancing Proceeds" and "Compensation of General
Partners and Their Affiliates" on pages A-10 to A-15 of the
Agreement, attached as Exhibit A to the Prospectus. The
relationship of the Corporate General Partner (and its directors
and officers) to its affiliates is set forth above in Item 10.
Reference is also made to Note 2 of the Notes to the Consolidated
Financial Statements filed with this annual report for a
description of such distributions and allocations.

The General Partners are entitled to receive Acquisition Fees
for services rendered in connection with the selection, purchase,
construction or development of any property by the Partnership
whether designated as real estate commissions, acquisition fees,
finders' fees, selection fees, development fees, construction fees,
non-recurring management fees, consulting fees or any other similar
fees or commissions, however designated and however treated for tax
or accounting purposes. Aggregate Acquisition Fees payable to all
persons in connection with the purchase of Partnership properties
may not exceed such compensation as is customarily charged in
arm's-length transactions by others rendering similar services as
an ongoing public activity in the same geographic locale and for
comparable properties. The aggregate Acquisition Fees to be paid
to the General Partners and their affiliates shall not exceed 6% of
the gross proceeds of the Offering. No amounts were paid in 1998
or 1997. An acquisition fee of $19,171 was paid in 1996 related to
the purchase of the Bay County Venture.

As described in Item 7, the General Partners were also entitled
to receive any portion of the 1% of the gross proceeds of the
Offering placed in the Distribution Guaranty Reserve not utilized
to pay the Distribution Guaranty through the Distribution Guaranty
Termination Date. The General Partners received approximately
$140,000 in consideration for providing such guaranty to the
Partnership through the Distribution Guaranty Termination date of
July 28, 1989. However, in order to continue to maintain the 9.25%
per annum distribution through December 31, 1990, the General
Partners agreed to continue the Distribution Guaranty up to the net
$140,000 of Distribution Guaranty previously paid to them. At
December 31, 1998, 1997, and 1996, $140,000 was due from the
General Partners related to the Distribution Guaranty.

An affiliate of the General Partners provides leasing and
re-leasing services to the Partnership in connection with the
management of Partnership properties. The maximum property
management fee payable to the General Partners or their affiliates
shall be equal to 1% of the gross revenues of each Partnership
property or interest therein, however, the receipt of such property
management fee by the General Partners or their affiliates is
subordinated to the receipt by the Limited Partners of a 9%
non-cumulative, non-compounded annual return on Adjusted
Investment. An affiliate of the General Partners received $40,477,
$37,668 and $42,653 in 1998, 1997 and 1996, respectively, for
providing such services to the Partnership.

(c, d, e & f) Not applicable.

(g) The Partnership has no employees and pays no
employee or director compensation.

(h & i) Not applicable.

(j) Compensation Committee Interlocks and Insider
Participation. Since the Partnership has no
employees, it did not have a compensation committee
and is not responsible for the payment of any
compensation.

(k) Not applicable.

(l) Not applicable.

The following is a summary of all fees, commissions and other
expenses paid or payable to the General Partners or their
affiliates for the years ended December 31,1998, 1997 and 1996:

1998 1997 1996

Selling commissions $ -- $ -- $12,307
Management fees 40,657 41,080 42,653
Reimbursable operating expenses 161,072 172,954 135,590
Legal fees -- 239 3,993
Acquisition fees -- -- 19,171
Transaction costs -- -- 14,873

As of December 31, 1998, and 1997 the Partnership has made all
payments to affiliates except for $3,592 and $3,412, respectively
related to management fees.

Item 12. Security Ownership of Certain Beneficial Owners and
Management.

(a) No person or group is known by the Partnership to own
beneficially more than 5% of the outstanding Units of
the Partnership.

(b) None of the officers and directors of the Corporate
General Partner purchased Units.

(c) Other than as described in the Proxy, the
Partnership is not aware of any arrangements which
may result in a change in control of the
Partnership.

No officer or director of the Corporate General Partner
possesses a right to acquire beneficial ownership of Units. The
General Partners will share in the profits, losses and
distributions of the Partnership as outlined in Item 11, "Executive
Compensation."

Item 13. Certain Relationships and Related Transactions.

(a & b) The Partnership is entitled to engage in various
transactions involving affiliates of the Corporate
General Partner, as described in the sections of
the Partnership's Prospectus, as supplemented,
entitled "Compensation Table" and"Conflicts of
Interest" at pages 10 to 15 and the section of the
Agreement entitled "Rights, Duties and Obligations
of General Partners" at pages A-17 to A-20 of the
Agreement. The relationship of the Corporate
General Partner to its affiliates is set forth in
Item 10. Cezar M. Froelich, a former Individual
General Partner and a shareholder of the Corporate
General Partner, is a principal of the law firm of
Shefsky & Froelich Ltd., which firm acted as
securities and real estate counsel to the
Partnership, the General Partners and certain of
its affiliates.

(d) There have been no transactions with promoters.
<PAGE>
PART IV

Item 14. Exhibits, Consolidated Financial Statement Schedules, and
Reports on Form 8-K.

(a) The following documents are filed as part of this
report:

(1) (2) Consolidated Financial Statements and Schedule
indicated in Part II, Item 8 "Consolidated
Financial Statements and Supplementary Data." (See
Index to Consolidated Financial Statements and
Schedule on page F-1 of Form 10-K).

(3) Exhibits required by the Securities and Exchange
Commission Regulation S-K Item 601:

(21) Subsidiaries of the Registrant.

(27) Financial Data Schedule.

The following exhibits are incorporated by reference from the
Registrant's Registration Statement (File No. 33-21928) on Form
S-11 filed under the Securities Act of 1933:

Exhibit No. Description

3.(a) Restated Limited Partnership Agreement
3.(b) Articles of Incorporation of Brauvin Realty
Advisors II, Inc.
3.(c) By-Laws of Brauvin Realty Advisors II, Inc.
3.(d) Amendment to the Certificate of Limited Partnership
of the Partnership
10.(a) Escrow Agreement

(b) Form 8-K. None

The following exhibits are incorporated by references to the
Registrant's fiscal year ended December 31, 1995 Form 10-K (File
No. 0-17756):

Exhibit No. Description

(10)(b)(1) Management Agreement

(19)(a) Amendment to Distribution Reinvestment Plan

(28) Pages 8-15 of the Partnership's Prospectus
dated June 17, 1988 as supplemented, and pages
A-10 to A-15 and A-17 to A-20 of the Agreement.

The following exhibits are incorporated by reference to the
Registrant's definitive proxy statement dated August 23, 1997 (File
No. 0-17557):

Exhibit No. Description

(10)(c) Merger Agreement.

<PAGE>
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

BRAUVIN HIGH YIELD FUND L.P. II

BY: Brauvin Realty Advisors II, Inc.
Corporate General Partner

By:/s/ Jerome J. Brault

Jerome J. Brault
Chairman of the Board of Directors,
President and Chief Executive
Officer

By:/s/Thomas E. Murphy
Thomas E. Murphy
Chief Financial Officer and
Treasurer

By:/s/ James L. Brault

James L. Brault
Vice President and
Secretary

INDIVIDUAL GENERAL PARTNER

By:/s/ Jerome J. Brault

Jerome J. Brault

DATED: April 15, 1999
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

Page

Independent Auditors' Report . . . . . . . . . . . . . . . . . .. F-2

Consolidated Financial Statements:

Consolidated Balance Sheets, December 31, 1998 and 1997 . . F-3

Consolidated Statements of Operations, for the years
ended December 31, 1998, 1997 and 1996 . . . . . . . . . . .F-4

Consolidated Statements of Partners' Capital, for the years
ended December 31, 1998, 1997 and 1996 . . . . . . . . . . F-5

Consolidated Statements of Cash Flows, for the years ended
December 31, 1998, 1997 and 1996 . . . . . . . . . . . . F-6

Notes to Consolidated Financial Statements . . . . . . . . F-7

Schedule III -- Real Estate and Accumulated Depreciation,
December 31, 1998. . . . . . . . . . . . . . . . . . . . . . . . F-29

All other schedules provided for in Item 14(a)(2) of Form 10-K
are either not required, not applicable, or not material.

<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Partners
Brauvin High Yield Fund L.P. II
Chicago, Illinois

We have audited the accompanying consolidated balance sheets of
Brauvin High Yield Fund L.P. II (a limited partnership) and
subsidiaries as of December 31, 1998 and 1997, and the related
consolidated statements of operations, partners' capital, and cash
flows for each of the three years in the period ended December 31,
1998. Our audits also included the financial statement schedule
listed in the Index to Consolidated Financial Statements and
Schedule on page F-1. These consolidated financial statements and
the financial statement schedule are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these consolidated financial statements and the
financial statement schedule based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of Brauvin
High Yield Fund L.P. II and subsidiaries at December 31, 1998 and
1997, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 1998 in
conformity with generally accepted accounting principles. Also, in
our opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a
whole, presents fairly in all material respects the information set
forth therein.

/s/ Deloitte & Touche LLP
Chicago, Illinois
February 16, 1999
(April 14, 1999 as to Note 8)
<PAGE>
CONSOLIDATED BALANCE SHEETS

December 31, December 31,
1998 1997
ASSETS
Investment in real estate (Note 6):
Land $10,018,972 $10,961,124
Buildings 22,241,682 24,440,040
32,260,654 35,401,164
Less: Accumulated depreciation (6,364,451) (6,066,215)

Net investment in real estate 25,896,203 29,334,949

Investment in Brauvin Bay
County Venture (Note 7) 274,777 275,500

Cash and cash equivalents 1,585,830 1,198,267
Rent receivable 76,374 79,726
Deferred rent receivable 477,663 410,100
Due from General Partners (Note 5) 140,000 140,000
Other assets 20,499 25,591

Total Assets $28,471,346 $31,464,133

LIABILITIES AND PARTNERS' CAPITAL

LIABILITIES:
Accounts payable and accrued
expenses $ 377,213 $ 165,430
Rent received in advance 35,784 50,768
Due to an affiliate 3,592 3,412
Undisbursed insurance proceeds -- 199,452
Tenant security deposits 85,903 87,992

Total Liabilities 502,492 507,054

MINORITY INTEREST:
Brauvin High Yield Venture 18,726 31,007
Brauvin Funds Joint Venture 2,413,241 2,431,037

PARTNERS' CAPITAL:
General Partners 346,855 342,441
Limited Partners 25,190,032 28,152,594

Total Partners' Capital 25,536,887 28,495,035

Total Liabilities and
Partners' Capital $28,471,346 $31,464,133
See accompanying notes to consolidated financial statements
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 1998, 1997 and 1996

1998 1997 1996
INCOME
Rental (Note 4) $4,070,823 $4,239,915 $4,130,302
Interest 116,702 161,260 93,923
Other 4,134 9,684 3,004

Total income 4,191,659 4,410,859 4,227,229

EXPENSES
General and administrative 349,764 363,643 245,571
Management fees (Note 3) 40,657 41,080 42,653
Amortization of deferred
organization costs and
other assets 5,089 1,200 2,497
Depreciation 667,467 708,742 722,089
Transaction costs (Note 8) 288,985 345,309 453,013
Valuation fees 184,500 - 90,780
Provision for
impairment(Note 6) 1,306,000 -- 550,000

Total expenses 2,842,462 1,459,974 2,106,603

Income before loss on
sale of property and minority
interest and equity interests'
share of net income 1,349,197 2,950,885 2,120,626

Loss on sale of property (110,741) - --

Income before minority interest
and equity interest share in
net income 1,238,456 2,950,885 2,120,626

Minority interest share
in net income:
Brauvin High Yield Venture (1,424) (5,833) (5,828)
Brauvin Funds Joint Venture (290,904) (286,426) (291,814)
Equity interest in:
Brauvin Bay County Venture's
net income 22,417 18,487 1,027
Net income $ 968,545 $2,677,113 $1,824,011
Net income allocated to the
General Partners $ 24,214 $ 23,012 $ --
Net income allocated to the
Limited Partners $ 944,331 $2,654,101 $1,824,011
Net income per
Unit outstanding (a) $ 23.41 $ 65.78 $ 45.23

(a) Net income per Unit is based on the average Units
outstanding during the year since they were of varying
dollar amounts and percentages based upon the dates Limited
Partners were admitted to the Partnership and additional
Units were purchased through the distribution reinvestment
plan (the "Plan").
See accompanying notes to consolidated financial statements

<PAGE>
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
For the years ended December 31, 1998, 1997 and 1996

General Limited
Partners Partners * Total

Balance, January 1,1996 $319,429 $30,261,083 $30,580,512

Contributions, net -- 30,965 30,965
Selling commissions and
other offering costs -- (15,203) (15,203)
Net income -- 1,824,011 1,824,011
Cash distributions -- (1,814,767) (1,814,767)
Balance,
December 31, 1996 319,429 30,286,089 30,605,518

Net income 23,012 2,654,101 2,677,113
Cash distributions -- (4,787,596) (4,787,596)
Balance,
December 31, 1997 342,441 28,152,594 28,495,035

Net income 24,214 944,331 968,545
Cash distributions (19,800) (2,552,358) (2,572,158)
Return of capital
distributions -- (1,354,535) (1,354,535)
Balance,
December 31, 1998 $ 346,855 $25,190,032 $25,536,887

* Total Units outstanding at December 31, 1998, 1997 and 1996 were
40,347, 40,347, and 40,347, respectively. Operating distributions to
Limited Partners per Unit were $63.26, $118.66, and $45.00, for the
years ended December 31, 1998, 1997 and 1996, respectively. Return of
capital distributions to the Limited Partners were $33.57 for the year
ended December 31, 1998. Distributions to Limited Partners per Unit
are based on the average Units outstanding during the year since they
were of varying dollar amounts and percentages based upon the dates
Limited Partners were admitted to the Partnership and additional Units
were purchased through the Plan.

See accompanying notes to consolidated financial statements

<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31,

1998 1997 1996
Cash Flows From Operating Activities:

Net income $968,545 $2,677,113 $1,824,011
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 672,556 709,942 724,586
Provision for impairment 1,306,000 -- 550,000
Loss on sale of property 110,741 -- --
Minority interest's share of income:
Brauvin High Yield Venture 1,424 5,833 5,828
Brauvin Funds Joint Venture 290,904 286,426 291,814
Equity interest share of income
from Brauvin Bay County Venture (22,417) (18,487) (1,027)
Changes in:
Rent receivable 3,352 (42,663) 19,912
Deferred rent receivable (67,563) (67,561) (67,561)
Other assets 3 2,791 (654)
Accounts payable and accrued expenses 211,783 106,197 (2,526)
Rent received in advance (14,984) (91,828) 84,252
Due to affiliate 180 3,412 --
Tenant security deposits (2,089) 87,992 --
Net cash provided by operating
activities 3,458,435 3,659,167 3,428,635

Cash Flows From Investing Activities:

Proceeds from sale of property 1,354,538 -- --
Investment in Brauvin Bay County
Venture -- -- (282,766)
Change in undisbursed insurance
proceeds (199,452) 199,452 --
Distributions from Brauvin Bay
County Venture 23,140 26,780 --
Net cash provided by (used in)
investing activities 1,178,226 226,232 (282,766)

Cash Flows From Financing Activities:

Sale of Units, net of liquidations,
selling commissions and other
offering costs -- -- 18,658
Return of capital to
Limited Partners (1,354,535) -- --
Cash distributions to Limited
Partners (2,552,358)(4,787,596) (1,814,767)
Change in due from General Partners -- -- 10,175
Cash distribution to General Partners (19,800) -- --
Return of capital to minority interest
Brauvin High Yield Venture (7,505) -- --
Cash distribution to minority interest:
Brauvin High Yield Venture (6,200) (7,200) (7,200)
Brauvin Funds Joint Venture (308,700) (306,250) (313,600)

Net cash used in financing activities (4,249,098) (5,101,046) (2,106,734)

Net increase (decrease)in cash
and cash equivalents 387,563 (1,215,647) 1,039,135
Cash and cash equivalents at
beginning of year 1,198,267 2,413,914 1,374,779
Cash and cash equivalents at
end of year $1,585,830 $1,198,267 $2,413,914

See accompanying notes to consolidated financial statements
<PAGE>
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION

BRAUVIN HIGH YIELD FUND L.P. II (the "Partnership") is a Delaware
limited partnership organized for the purpose of acquiring
debt-free ownership of existing, free-standing, income-producing
retail, office or industrial real estate properties predominantly
all of which subject to "triple-net" leases. The General Partners
of the Partnership are Brauvin Realty Advisors II, Inc. and Jerome
J. Brault. Brauvin Realty Advisors II, Inc. is owned primarily by
Messrs. Brault (beneficially) (44%) and Cezar M. Froelich (44%).
Mr. Froelich resigned as a director of Brauvin Realty Advisors II,
Inc. in December 1994 and as an Individual General Partner
effective as of September 17, 1996. Brauvin Securities, Inc., an
affiliate of the General Partners, is the selling agent of the
Partnership.

The Partnership was formed on May 3, 1988 and filed a
Registration Statement on Form S-11 with the Securities and
Exchange Commission which became effective on June 17, 1988. The
minimum of $1,200,000 of limited partnership interests of the
Partnership (the "Units") necessary for the Partnership to commence
operations was achieved on July 26, 1988. The offering was
anticipated to close on June 16, 1989 but was extended until and
closed on September 30, 1989. A total of $38,923,000 of Units were
subscribed for and issued between June 17, 1988 and September 30,
1989, pursuant to the Partnership's public offering. Through
December 31, 1998, 1997 and 1996, the Partnership has sold
$42,982,178, $42,982,178, and $42,982,178 of Units, respectively.
These totals include $4,059,178 of Units, purchased by Limited
Partners who utilized their distributions of Operating Cash Flow to
purchase Units through the distribution reinvestment plan (the
"Plan"). Units valued at $2,886,915 have been repurchased by the
Partnership from Limited Partners liquidating their investment in
the Partnership and have been retired as of December 31, 1998, 1997
and 1996. As of December 31, 1998, the Plan participants have
acquired Units under the Plan which approximate 9% of the total
Units outstanding.

The Partnership has acquired the land and buildings underlying
14 Ponderosa restaurants, two Taco Bell restaurants, three
Children's World Learning Centers, three Hardee's restaurants, one
Blockbuster Video store, three Avis Lube Oil Change Centers and
three Chi-Chi's restaurants. Also acquired were 99%, 51% and 26%
equity interests in three joint ventures with affiliated entities,
which ventures purchased the land and buildings underlying six
Ponderosa restaurants, a Scandinavian Health Spa and a Blockbuster
Video store, respectively. In 1995, the Partnership and
Metromedia, the parent of Ponderosa Restaurants, exchanged one of
the Ponderosa restaurants for a Tony Roma's restaurant. The
Partnership's acquisition process is now completed.

In February 1994, the Partnership sold Taco Bell Restaurant
located in Schofield, Wisconsin. In January 1998, the Partnership
sold Ponderosa unit 850 located in Mansfield, Ohio. In April 1998,
the Partnership sold Ponderosa unit 876 located in Sweden, New
York.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Management's Use of Estimates

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from these estimates.

Accounting Method

The accompanying financial statements have been prepared using
the accrual method of accounting.

Rental Income

Rental income is recognized on a straight line basis over the
life of the related leases. Differences between rental income
earned and amounts due per the respective lease agreements are
credited or charged, as applicable, to deferred rent receivable.

Consolidation of Joint Ventures

The Partnership owns a 99% equity interest in a joint venture,
Brauvin High Yield Venture, which owns six Ponderosa restaurants,
and a 51% equity interest in another joint venture, Brauvin Funds
Joint Venture, which owns a Scandinavian Health Spa. The
accompanying financial statements have consolidated 100% of the
assets, liabilities, operations and partners' capital of these
ventures. All significant intercompany accounts have been
eliminated.

Investment in Joint Venture

The Partnership owns a 26% equity interest in a joint venture,
Brauvin Bay County Venture, which owns one Blockbuster Video Store.
The accompanying financial statements include the investment in
Brauvin Bay County Venture using the equity method of accounting.

Federal Income Taxes

Under the provisions of the Internal Revenue Code, the
Partnership's income and losses are reportable by the partners on
their respective income tax returns. Accordingly, no provision is
made for Federal income taxes in the financial statements.
However, in certain instances, the Partnership has been required
under applicable state law to remit directly to the tax authorities
amounts representing withholding from distributions paid to
partners.

Investment in Real Estate

The operating properties acquired by the Partnership are stated
at cost including acquisition costs, net of an allowance for
impairment. Depreciation expense is computed on a straight-line
basis over approximately 35 years.

The Partnership provides an allowance for impairment to reduce
the cost basis of real estate to its estimated fair value when the
real estate is judged to have suffered an impairment that is other
than temporary. The Partnership has performed an analysis of its
long-lived assets, and the Partnership's management determined that
there were no events or changes in circumstances that indicated
that the carrying amount of the assets may not be recoverable at
December 31, 1998, 1997 and 1996, except as described in Note 6.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid debt
instruments with an original maturity within three months of
purchase.

Estimated Fair Value of Financial Instruments

Disclosure of the estimated fair value of financial instruments
is made in accordance with the requirements of Statement of
Financial Accounting Standards No. 107, "Disclosures About Fair
Value of Financial Instruments." The estimated fair value amounts
have been determined by using available market information and
appropriate valuation methodologies. However, considerable
judgement is necessarily required in interpreting market data to
develop estimates of fair value.

The fair value estimates presented herein are based on
information available to management as of December 31, 1998 and
1997, but may not necessarily be indicative of the amounts that the
Partnership could realize in a current market exchange. The use of
different assumptions and/or estimation methodologies may have a
material effect on the estimated fair value amounts.

The carrying amounts of the following items are a reasonable
estimate of fair value: cash and cash equivalents; rent
receivable; due from General Partners; accounts payable and accrued
expenses; rent received in advance; due to an affiliate;
undisbursed insurance proceeds; and tenant security deposits.

(2) PARTNERSHIP AGREEMENT

Distributions

All Operating Cash Flow, as defined in the Partnership Agreement
(the "Agreement"), shall be distributed: (a) first, to the Limited
Partners until the Limited Partners receive an amount equal to
their 10% Current Preferred Return, as such term is defined in the
Agreement; and (b) thereafter, any remaining amounts will be
distributed 97.5% to the Limited Partners and 2.5% to the General
Partners.

The net proceeds of a sale or refinancing of a Partnership
property shall be distributed as follows:

first, to the Limited Partners until the Limited Partners have
received an amount equal to the 10% Cumulative Preferred Return,
as such term is defined in the Agreement;

second, to the Limited Partners until the Limited Partners have
received an amount equal to the amount of their Adjusted
Investment, as such term is defined in the Agreement; and

third, 95% to the Limited Partners and 5% to the General
Partners.

Profits and Losses

Net profits and losses from operations of the Partnership
[computed without regard to any allowance for depreciation or cost
recovery deductions under the Internal Revenue Code of 1986, as
amended (the "Code")] for each taxable year of the Partnership
shall be allocated between the Limited Partners and the General
Partners in accordance with the ratio of aggregate distributions of
Operating Cash Flow attributable to such tax year, although if no
distributions are made in any year, net losses (computed without
regard to any allowance for depreciation or cost recovery
deductions under the Code) shall be allocated 99% to the Limited
Partners and 1% to the General Partners. Notwithstanding the
foregoing, all depreciation and cost recovery deductions allowed
under the Code shall be allocated 2.5% to the General Partners and
97.5% to the Taxable Class Limited Partners, as defined in the
Agreement.

The net profit of the Partnership from any sale or other
disposition of a Partnership property shall be allocated (with
ordinary income being allocated first) as follows: (a) first, an
amount equal to the aggregate deficit balances of the Partners'
Capital Accounts, as such term is defined in the Agreement, shall
be allocated to each Partner who or which has a deficit Capital
Account balance in the same ratio as the deficit balance of such
Partner's Capital Account bears to the aggregate of the deficit
balances of all Partners' Capital Accounts; (b) second, to the
Limited Partners until the Limited Partners have been allocated an
amount of profits equal to their 10% Cumulative Preferred Return as
of such date; (c) third, to the Limited Partners until the Limited
Partners have been allocated an amount of profit equal to the
amount of their Adjusted Investment; and (d) thereafter, 95% to the
Limited Partners and 5% to the General Partners. The net loss of
the Partnership from any sale or other disposition of a Partnership
property shall be allocated as follows: (a) first, an amount equal
to the aggregate positive balances in the Partners' Capital
Accounts, to each Partner in the same ratio as the positive balance
in such Partner's Capital Account bears to the aggregate of all
Partners' positive Capital Account balances; and (b) thereafter,
95% to the Limited Partners and 5% to the General Partners.

(3) TRANSACTIONS WITH RELATED PARTIES

An affiliate of the General Partners manages the Partnership's
real estate properties for an annual property management fee equal
to up to 1% of gross revenues derived from the properties. The
property management fee is subordinated, annually, to receipt by
the Limited Partners of a 9% non-cumulative, non-compounded return
on their Adjusted Investment.

The original General Partners owe the Partnership $140,000 at
December 31, 1998 and 1997, relating to the Distribution Guaranty
Reserve.

The Partnership pays affiliates of the General Partners selling
commissions of 8-1/2% of the capital contributions received for
Units sold by the affiliates.

The Partnership pays an affiliate of the General Partners an
acquisition fee in the amount of up to 6% of the gross proceeds of
the Partnership's offering for the services rendered in connection
with the process pertaining to the acquisition of a property.
Acquisition fees related to the properties not ultimately purchased
by the Partnership are expensed as incurred.

An affiliate of one of the General Partners provided securities
and real estate counsel to the Partnership.

Fees, commissions and other expenses paid or payable to the
General Partners or its affiliates for the years ended December 31,
1998, 1997 and 1996 were as follows:

1998 1997 1996
Selling commissions $ -- $ -- $12,307
Management fees 40,657 41,080 42,653
Reimbursable operating
expenses 161,072 172,954 135,590
Legal fees -- 239 3,993
Acquisition fees -- -- 19,171
Transaction costs -- -- 14,873

As of December 31, 1998 and 1997, the Partnership has made all
payments to affiliates except for $3,592 and $3,412, respectively
related to management fees.

(4) LEASES

The Partnership's rental income is principally obtained from
tenants through rental payments provided under triple-net
noncancelable operating leases.

The leases provide for a base minimum annual rent and increases
in rent such as through participation in gross sales above a stated
level. The following is a schedule of noncancelable future minimum
rental payments due to the Partnership under operating leases as of
December 31, 1998:

Year ending December 31:
1999 $ 3,919,177
2000 3,852,350
2001 3,849,850
2002 3,849,850
2003 3,355,291
Thereafter 10,964,508
$29,791,026
Additional rent based on percentages of tenant sales increases
was $127,236, $164,769, and $83,633 in 1998, 1997 and 1996,
respectively.

Approximately 56% of the Partnership's rental income is from
properties operated as Ponderosa restaurants. The Partnership is
subject to some risk of loss should adverse events affect those
Ponderosa restaurants and in turn adversely affect the lessees'
ability to pay rent to the Partnership.

(5) WORKING CAPITAL RESERVES

As contemplated in the Prospectus, the distributions prior to
full property specification exceeded the amount of Operating Cash
Flow, as such term is defined in the Agreement, available for
distribution. The Partnership set aside 1% of the gross proceeds
of its offering in a reserve (the "Distribution Guaranty Reserve").
The Distribution Guaranty Reserve was structured so as to enable
the Partnership to make quarterly distributions of Operating Cash
Flow equal to at least 9.25% per annum on Adjusted Investment
during the period from the Escrow Termination Date (February 28,
1989), as such term is defined in Section H.3 of the Agreement,
through the earlier of: (i) the first anniversary of the Escrow
Termination Date (February 28, 1990); or (ii) the expenditure of
95% of the proceeds available for investment in properties, which
date was July 26, 1989. The original General Partners guaranteed
payment of any amounts in excess of the Distribution Guaranty
Reserve and were entitled to receive any amounts of the
Distribution Guaranty Reserve not used to fund distributions.

The Partnership's acquisition process was not completed until
March 1991 due to an unusually high number of properties being
declined during the due diligence process because of the General
Partners' unwillingness to lower the Partnership's investment
standards. As a result, the Partnership had a substantial amount
of cash invested in short-term investments, as opposed to
properties and during 1990 did not generate sufficient Operating
Cash Flow to fully support the distributions to Limited Partners.

In order to continue to maintain the 9.25% per annum distribution
through December 31, 1990, the original General Partners agreed to
continue the Distribution Guaranty up to the net $140,000 of
Distribution Guaranty previously paid to them. At December 31,
1998 and 1997, $140,000 was due from the original General
Partners related to the Distribution Guaranty.

(6) PROVISION FOR IMPAIRMENT

In 1996, the Partnership engaged Cushman & Wakefield Valuation
Advisory Services ("Cushman & Wakefield") to prepare an appraisal
of the Partnership's properties. As a result of this appraisal,
during the fourth quarter of 1996, the Partnership recorded an
additional provision for impairment of $550,000 related to an other
than temporary decline in the value of the real estate for the St.
Johns, Michigan and Albion, Michigan properties. This allowance
has been recorded as a reduction of the properties' cost, and
allocated to the land and buildings based on the original
acquisition cost allocation of 30% (land) and 70% (building).

During the first quarter of 1998, the Partnership recorded an
impairment of $130,000 related to an other than temporary decline
in the value of the real estate for the Ponderosa located in
Sweden, New York. This allowance has been recorded as a reduction
of the property's cost, and allocated to the land and buildings
based on the original acquisition cost allocation of 30% (land) and
70% (building).

During the fourth quarter of 1998, the Partnership recorded an
impairment of $984,000 related to an other than temporary decline
in real estate for Ponderosa properties in various locations. An
impairment of $192,000 related to an other than temporary decline
in real estate was also recorded for Hardee's properties located in
Michigan. These allowances were recorded as a reduction of the
properties' cost, and allocated to the land and buildings based on
the original acquisition cost allocation of 30% (land) and 70%
(building).

(7) INVESTMENT IN JOINT VENTURE

The Partnership owns an equity interest in the Brauvin Bay County
Venture and reports its investment on the equity method. The
following are condensed financial statements for the Brauvin Bay
County Venture:

BRAUVIN BAY COUNTY VENTURE

December 31, December 31,
1998 1997

Land and buildings, net $1,033,942 $1,051,588
Other assets 17,330 11,989
$1,051,272 $1,063,577

Liabilities $4,296 $ 13,820
Partners' capital 1,046,976 1,049,757
$1,051,272 $1,063,577

Period from
October 31, 1996
Year Ended Year Ended (inception) to
December 31, December 31, December 31,
1998 1997 1996

Rental and
other income $110,782 $109,985 $18,502
Expenses:
Depreciation 17,646 17,689 2,898
Management fees 1,079 1,178 191
Operating and
administrative 5,838 20,014 11,463
24,563 38,881 14,552
Net income $ 86,219 $71,104 $ 3,950
<PAGE>
(8) MERGER AND LITIGATION

Merger

Pursuant to the terms of an agreement and plan of merger dated
as of June 14, 1996, as amended March 24, 1997, June 30, 1997,
September 30, 1997, December 31, 1997, March 31, 1998 and June 30,
1998 (the "Merger Agreement"), the Partnership proposed to merge
with and into Brauvin Real Estate Funds, L.L.C., a Delaware limited
liability company affiliated with certain of the General Partners
(the "Purchaser") through a merger (the "Merger") of its Units.
Although the Merger will not be consummated, the following text
describes the transaction. Promptly upon consummation of the
Merger, the Partnership would have ceased to exist and the
Purchaser, as the surviving entity, would succeed to all of the
assets and liabilities of the Partnership. The Limited Partners
holding a majority of the Units voted on the Merger on November 8,
1996. The Limited Partners voted on an amendment of the Agreement
allowing the Partnership to sell or lease property to affiliates
(this amendment, together with the Merger shall be referred to
herein as the "Transaction").

The redemption price to be paid to the Limited Partners in
connection with the Merger was based on the fair market value of
the properties of the Partnership (the "Assets"). Cushman &
Wakefield Valuation Advisory Services ("Cushman & Wakefield"), an
independent appraiser, the largest real estate valuation and
consulting organization in the United States, was engaged by the
Partnership to prepare an appraisal of Assets, to satisfy the
Partnership's requirements under the Employee Retirement Income
Security Act of 1974, as amended. Cushman & Wakefield determined
the fair market value of the Assets at April 1, 1996 to be
$30,183,300, or $748.09 per Unit. Subsequently, the Partnership
purchased a 26% interest in Brauvin Bay County Venture. Based on
the terms of the Merger Agreement, the fair market value of the
Assets will be increased by the amount of the investment in Brauvin
Bay County Venture, and correspondingly, the Partnership's cash
holdings were reduced by the same amount and, therefore, the total
redemption amount would remain unchanged. The redemption price of
$779.22 per Unit also included all remaining cash of the
Partnership, less net earnings of the Partnership from and after
August 1, 1996 through December 31, 1996, less the Partnership's
actual costs incurred and accrued through the effective time at the
filing of the certificate of merger, including reasonable reserves
in connection with: (i) the proxy solicitation; (ii) the
Transaction (as detailed in the Merger Agreement); and (iii) the
winding up of the Partnership, including preparation of the final
audit, tax return and K-1s (collectively, the "Transaction Costs")
and less all other Partnership obligations. Of the original cash
redemption amount, approximately $31.13 was distributed to the
Limited Partners in the December 31, 1997 distribution.

The Merger was not completed primarily due to certain litigation,
as described below, that was still pending at December 31, 1998.
The General Partners believe that these lawsuits are without merit
and, therefore, continue to vigorously defend against them. Because
of the August 12, 1998 rulings of the District Court in the
Christman Litigation, as described below, it is not possible for
the Merger to be consummated.

Distributions of the Partnership's net earnings for the periods
January 1, 1997 to March 31, 1997, April 1, 1997 to June 30, 1997,
July 1, 1997 to September 30, 1997 and October 1, 1997 to December
31, 1997 were made to the Limited Partners on March 31, 1997, July
15, 1997, October 22, 1997 and December 31, 1997, respectively, in
the amounts of approximately $814,500, $761,000, $922,600 and
$2,283,600, respectively. In addition, distributions of
approximately $5,900 were paid to various states on behalf of all
Limited Partners in 1997.

Distributions of the Partnership's net earnings for the periods
January 1, 1998 to March 31, 1998, April 1, 1998 to June 30, 1998,
July 1, 1998 to September 30, 1998, and October 1, 1998 to December
31, 1998 were made to Limited Partners on May 8, 1998, August 15,
1998 November 15, 1998, and February 15, 1999, respectively in the
amounts of approximately $884,000, $593,200, $1,063,700, and
$1,005,800.

As the result of a property sale by Brauvin High Yield Venture
a return of capital distribution was also made to Limited Partners
on May 8, 1998 in the amount of approximately $743,000.
Additionally, on August 15, 1998, a return of capital distribution
was made to Limited Partners in the approximate amount of $611,500
from the sale of the Ponderosa located in Sweden, New York. See
Note 9.

Litigation

Two legal actions, as hereinafter described, were pending at
December 31, 1998 against the General Partners and affiliates of
such General Partners, as well as against the Partnership on a
nominal basis in connection with the Merger. On April 13, 1999,
all the parties to the litigation reached an agreement to settle
the litigation, subject to the approval by the United States
District Court for the Northern District of Illinois. Management
believes that the settlement will not have a material impact on the
Partnership. The terms of the settlement agreement, along with a
Notice to the Class, will be forwarded to the Limited Partners in
the second quarter. One additional legal action, which was
dismissed on January 28, 1998, had also been brought against the
General Partners and affiliates of such General Partners, as well
as against the Partnership on a nominal basis in connection with
the Merger. Each of these actions was brought by Limited Partners
of the Partnership. With respect to these actions, the
Partnership, the General Partners and their named affiliates denied
all allegations set forth in the complaints and vigorously defended
against such claims.

A. The Dismissed Florida Lawsuit

B. The Illinois Christman Lawsuit

On October 16, 1996 and on November 6, 1996, the parties filed
cross-motions for partial summary judgement addressing the
allegation in plaintiffs' amended complaint that the Agreement does
not allow the Limited Partners to vote in favor of or against the
Transaction by proxy. On August 12, 1998, the District Court
granted plaintiffs' motion for partial summary judgment, holding
that the agreement did not allow the Limited Partners to vote in
favor or against the Transaction by proxy.

On January 28, 1998, the District Court entered an Order of
Reference to Special Master, designating a Special Master and
vesting the Special Master with authority to resolve certain
aspects of the lawsuit subject to the District Court's review and
confirmation. The Special Master was empowered to determine how
the assets of the Partnership should be sold or disposed of in a
manner which allows the Limited Partners to maximize their
financial return in the shortest practicable time frame. In
addition, early in the second quarter of 1998, the Special Master
retained a financial advisor ( the "Financial Advisor"), at the
expense of the Partnership, to assist the Special Master. The
Financial Advisor has been engaged to perform a valuation of the
properties of the Partnership as well as a valuation of the
Partnership itself. The cost to the Partnership for the services
of the Financial Advisor was approximately $185,000.

On August 4, 1998, the Special Master filed a Report and
Recommendation with the District Court, expressing the Special
Master's recommendation that the Partnership's properties be
disposed of in an auction conducted by the Financial Advisor under
the direction of the Special Master. The District Court accepted
this Report and Recommendation. On November 4, 1998, the Special
Master filed an additional Report and Recommendation with the
District Court, requesting that the Court withdraw its Order of
Reference to Special Master on the grounds it would be impossible
to effect the sale of the Partnerships in a manner that maximizes
the financial return to Limited Partners in a short time frame,
unless certain litigation issues are resolved. The District Court
has accepted this Report and Recommendation.

C. The Scialpi Illinois Lawsuit

Notably, the complaint was filed by two of the same parties,
Scialpi and Friedlander, who were plaintiffs in the Florida
lawsuit, which is described above. As also described above,
Scialpi and Friedlander are limited partners in the Partnership,
but have no relationship with the Affiliated Partnerships. On
August 15, 1997, the plaintiffs filed an amended complaint dropping
Benjamin Siegel as a plaintiff. The plaintiffs are also
represented by the same lawyers that represented them in the
Florida lawsuit.

<PAGE>
<TABLE>
SCHEDULE III
BRAUVIN HIGH YIELD FUND L.P. II
(a Delaware limited partnership)

REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1998
<CAPTION> Gross Amount at Which Carried
Initial Cost at Close of Period
Buildings Cost of Buildings
and Subsequent and Accumulated Date
Description Encumbrances (c) Land Improvements Improvements Land Improvements Total Depreciation (b) Acquired
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ponderosas - BHYF II $0 $ 3,907,384 $9,117,233 $0 $3,420,437 $7,981,017 $11,401,454 $2,359,930 9/88-11/89
Ponderosas - BHYV 0 1,810,770 4,225,129 0 1,413,165 3,297,387 4,710,552 1,014,805 9/88
Taco Bell 0 128,236 299,218 0 128,236 299,218 427,454 85,091 1/89
Scandinavian
Health Spa-BFJV 0 1,657,861 3,868,342 0 1,657,861 3,868,342 5,526,203 1,039,991 7/89
Children's World
Learning Centers 0 771,140 1,799,327 0 771,140 1,799,327 2,570,467 436,175 1/90-9/90
Hardee's Restaurants 0 729,798 1,702,861 0 357,198 833,461 1,190,659 332,009 5/90-7/90
Avis Lubes 0 507,620 1,184,448 0 507,620 1,184,448 1,692,068 287,492 6/90-8/90
Blockbuster Video Store 0 354,644 827,501 0 354,644 827,501 1,182,145 198,223 9/90
Chi-Chi's Restaurants 0 1,408,671 2,150,981 0 1,408,671 2,150,981 3,559,652 610,735 3/91
$0 $11,276,124 $25,175,040 $0 $10,018,972 $22,241,682 $32,260,654 $6,364,451
<FN>
<F1>
NOTES:
(a) The cost of this real estate is $34,616,656 for tax purposes (unaudited). The buildings are depreciated over
approximately 35 years using the straight line method. The properties were constructed between 1969 and 1990.
(b) The following schedule summarizes the changes in the Partnership's real estate and accumulated depreciation balances:
</FN>
<CAPTION>
Real estate 1998 1997 1996
<S> <C> <C> <C>
Balance at beginning of year $35,401,164 $35,401,164 $35,951,164
Property Sales (1,834,510)
Subtractions - land and buildings(d) (1,306,000) -- (550,000)

Balance at end of year $32,260,654 $35,401,164 $35,401,164

Accumulated depreciation 1998 1997 1996

Balance at beginning of year $ 6,066,215 $ 5,357,473 $ 4,635,384
Property sales (369,231)
Provision for depreciation 667,467 708,742 722,089

Balance at end of year $ 6,364,451 $ 6,066,215 $ 5,357,473

<FN>
<F2>
(c) Encumbrances - Brauvin High Yield Fund L.P. II did not borrow cash in order to purchase its properties. 100% of the land
and buildings were paid for with funds contributed by the Limited Partners.
(d) The 1996 amount reflects a provision for impairment of land of $165,000 and buildings of $385,000 related
to the properties in St. Johns and Albion, Michigan. The 1998 amount reflects a provision for impairment of land of
$391,800 and buildings of $914,200, related to Ponderosas, Brauvin High Yield Fund Ponderosas, and Hardee's.

</FN>
</TABLE>
<PAGE>
EXHIBITS

BRAUVIN HIGH YIELD FUND L.P. II
FORM 10-K ANNUAL REPORT
FOR THE YEAR ENDED
DECEMBER 31, 1998

<PAGE>
EXHIBIT INDEX

BRAUVIN HIGH YIELD FUND L.P. II

FORM 10-K

For the fiscal year ended December 31, 1998

Exhibit (21) Subsidiaries of the Registrant

Exhibit (27) Financial Data Schedule
<PAGE>
Exhibit 21

Name of Subsidiary State of Formation

Brauvin High Yield Venture Illinois

Brauvin Funds Joint Venture Illinois

Brauvin Bay County Venture Illinois
<PAGE>

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 1,585,830
<SECURITIES> 274,777 <F1>
<RECEIVABLES> 554,037
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 32,260,654 <F2>
<DEPRECIATION> 6,364,451
<TOTAL-ASSETS> 28,471,346
<CURRENT-LIABILITIES> 502,492
<BONDS> 2,431,967 <F3>
0
0
<COMMON> 25,536,887 <F4>
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 28,471,346
<SALES> 0
<TOTAL-REVENUES> 4,191,659 <F5>
<CGS> 0
<TOTAL-COSTS> 2,842,462 <F6>
<OTHER-EXPENSES> 269,911 <F7>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> (110,741)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 968,545
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1> "SECURITIES" REPRESENTS INVESTMENT IN JOINT VENTURE
<F2> "PP&E" REPRESENTS INVESTMENT IN REAL ESTATE [LAND AND
BUILDING]
<F3> "BONDS" REPRESENTS MINORITY INTEREST IN JOINT VENTURES
<F4> "COMMON" REPRESENTS TOTAL PARTNERS CAPITAL
<F5> "TOTAL REVENUES" REPRESENTS RENTAL, INTEREST, AND OTHER
INCOME
<F6> "TOTAL COSTS" REPRESENTS TOTAL EXPENSES
<F7> "OTHER EXPENSES" REPRESENTS MINORITY INTEREST SHARE OF AND
EQUITY INTEREST IN NET INCOME
</FN>

</TABLE>