UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period Ended ~~September~~March 3031, ~~2000~~2001
or

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

For the transition period from __________ to ____________

Commission File #0-16780

Inland Real Estate Growth Fund II, L.P.
(Exact name of registrant as specified in its charter)

Delaware	#36-3547165
(State or other jurisdiction of incorporation or organization	(I.R.S. Employer Identification Number)


2901 Butterfield Road, Oak Brook, Illinois	60523
(Address of principal executive office)	(Zip Code)

Registrant's telephone number, including area code: 630-218-8000

N/A
(Former name, former address and former fiscal
year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes: X ;No:

INLAND REAL ESTATE GROWTH FUND II, L.P. (a limited partnership) Balance Sheets ~~September~~March 3031, ~~2000~~2001 and December 31, ~~1999~~2000 (unaudited) Assets

		2000	1999
		2001	2000
Current assets:
Cash and cash equivalents (including amounts held by property manager (Note 1)	$	87,097	287,520
Cash and cash equivalents including amounts held by property manager	$	98,029	69,822
Accrued interest receivable		~~178~~34	~~465~~659
Total current assets		8798,~~275~~063	~~287~~70,~~985~~481
Investment property (including acquisition fees paid to Affiliates of $59,500) (Notes 1 and 2):
Investment property (including acquisition fees paid to Affiliates of $59,500 at March 31, 2001 and December 31, 2000)
Land		438,388	438,388
Building and improvements		1,096,872	1,096,872
		1,535,260	1,535,260
Less accumulated depreciation		~~420~~438,~~193~~475	~~392~~429,~~772~~334
Total investment property, net of accumulated depreciation		1,~~115~~096,~~067~~785	1,~~142~~105,~~488~~926
Accrued rents receivable (Notes 1 and 3)		20,690	32,424
Accrued rents receivable		12,866	16,774
Deferred leasing fees to Affiliates (net of accumulated amortization of $23,320 and $21,321 at September 30, 2000 and December 31, 1999, respectively) (Note 1)		2,665	4,664
Deferred leasing fees to Affiliates (net of accumulated amortization of $24,652 and $23,986 at March 31, 2001 and December 31, 2000, respectively)		1,333	1,999
Total assets	$	1,~~225~~209,~~697~~047	1,~~467~~195,~~561~~180
		==========	==========

See accompanying notes to financial statements

INLAND REAL ESTATE GROWTH FUND II, L.P. (a limited partnership) Balance Sheets (continued) ~~September~~March 3031, ~~2000~~2001 and December 31, ~~1999~~2000 (unaudited) Liabilities and Partners' Capital

		2000	1999
		2001	2000
Current liabilities:
Accounts payable	$	~~708~~6,332	-
Current portion of long-term debt (Note 4)		500,000	786,081
Current portion of long-term debt		450,000	450,000
Due to Affiliates (Note 2)		1,651	878
Due to Affiliates		1,457	1,387
Total current liabilities		~~502~~457,~~359~~789	~~786~~451,~~959~~387
Commission payable to Affiliates (Note 2)		135,000	135,000
Commission payable to Affiliates		135,000	135,000
Total liabilities		~~637~~592,~~359~~789	~~921~~586,~~959~~387
Partners' capital (Notes 1 and 2):
Partners' capital:
General Partner:
Capital contribution		500	500
Cumulative net income		17,~~176~~456	1617,~~749~~381
Cumulative cash distributions		(9,939)	(9,939)
		7,737	7,310
		8,017	7,942
Limited Partners:
Units of $1,000. Authorized 25,000 Units, 3,921.25 Units outstanding at September 30, 2000 and December 31,1999 (net of offering costs of $462,824, of which $59,476 was paid to Affiliates)		3,534,495	3,534,495
Units of $1,000. Authorized 25,000 Units, 3,921.25 outstanding at March 31, 2001 and December 31, 2000 (net of offering costs of $462,849, of which $59,476 was paid to Affiliates)		3,534,495	3,534,495
Cumulative net income		1,~~700~~728,~~518~~158	1,~~658~~720,~~209~~768
Cumulative cash distributions		(4,654,412)	(4,654,412)
		580,601	538,292
		608,241	600,851
Total Partners' capital		~~588~~616,~~338~~258	~~545~~608,~~602~~793
Total liabilities and Partners' capital	$	1,~~225~~209,~~697~~047	1,~~467~~195,~~561~~180
		==========	==========

See accompanying notes to financial statements.

INLAND REAL ESTATE GROWTH FUND II, L.P. (a limited partnership) Statements of Operations For the three ~~and nine~~ months ended ~~September~~March 3031, ~~2000~~2001 and ~~1999~~2000 (unaudited)

		Three months	Three months	Nine months	Nine months
		2001	2000
		ended	ended	ended	ended
Income:
		September 30, 2000	September 30, 1999	September 30, 2000	September 30, 1999
Rental income	$	51,661	51,661
Income:
Interest income		512	4,211
Rental income (Note 3)	$	51,661	51,658	154,983	154,980
		52,173	55,872
Interest income		688	3,021	6,897	7,676
Expenses:
		52,349	54,679	161,880	162,656
Professional services to Affiliates		2,089	1,009
Expenses:
Professional services to non-affiliates		11,250	16,600
Professional services to Affiliates		2,393	758	3,802	3,168
General and administrative expenses to Affiliates		3,780	6,220
Professional services to non-affiliates		2,750	2,500	22,100	22,010
General and administrative expenses to non-affiliates		354	2,754
General and administrative expenses to Affiliates		3,138	1,612	12,370	13,697
Property operating expenses to Affiliates		556	556
General and administrative expenses to non-affiliates		974	600	5,207	9,346
Property operating expenses to non-affiliates		6,331	-
Property operating expenses to Affiliates		555	555	1,667	1,667
Mortgage interest		10,541	18,567
Mortgage interest to non-affiliates		-	-	-	5,543
Depreciation		9,141	9,140
Mortgage interest to Affiliates		11,973	18,823	44,578	49,308
Amortization		666	666
Depreciation		9,140	36,094	27,421	36,094
		44,708	55,512
Amortization		667	667	1,999	2,945
Net income	$	7,465	360
		31,590	61,609	119,144	143,778
Net income allocated to:
Net income (loss)	$	20,759	(6,930)	42,736	18,878
General Partner		75	4
		=========	=========	=========	=========
Limited Partners		7,390	356
Net income (loss) allocated to:
Net income	$	7,465	360
General Partner		207	(69)	427	189
Net income allocated to the one General Partner Unit	$	75	4
Limited Partners		20,552	(6,861)	42,309	18,689
Net income per weighted average Limited Partnership Units, basic and diluted	$	1.88	.09
Net income (loss)	$	20,759	(6,930)	42,736	18,878
		=========	=========	=========	=========
Net income (loss) allocated to the one General Partner Unit	$	207	(69)	427	189
		=========	=========	=========	=========
Net income (loss) per 3,921 and 3,995 weighted average Limited Partner Units for 2000 and 1999, respectively	$	5.24	(1.73)	10.79	4.68
		=========	=========	=========	=========

See accompanying notes to financial statements.

INLAND REAL ESTATE GROWTH FUND II, L.P. (a limited partnership) Statements of Cash Flows For the ~~nine~~three months ended ~~September~~March 3031, ~~2000~~2001 and ~~1999~~2000 (unaudited)

		2000	1999
		2001	2000
Cash flows from operating activities:
Net income	$	427,~~736~~465	~~18,878~~360
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		279,~~421~~141	369,~~094~~140
Amortization		~~1,999~~666	~~2,945~~666
Changes in assets and liabilities:
Accrued rents receivable		113,~~734~~908	113,~~738~~913
Accrued interest and other receivable		~~287~~625	~~(477)~~10
Accounts payable and accrued expenses		708	2,500
Accounts payable		6,332	8,834
Accrued interest payable		-	618,~~543~~567
Due to Affiliates		~~773~~70	~~847~~2,410
Net cash provided by operating activities		8528,~~658~~207	7943,~~068~~900
Cash flows from financing activities:
Net increase in cash and cash equivalents		28,207	43,900
Proceeds from note payable to Affiliates		-	786,081
Cash and cash equivalents at beginning of period		69,822	287,500
Principal payments of long-term debt		(286,081)	(780,288)
Cash and cash equivalents at end of period	$	98,029	331,420
Repurchase of Units		-	(6,913)
Net cash used in financing activities		(286,081)	(1,120)
Net increase (decrease) in cash and cash equivalents		(200,423)	77,948
Cash and cash equivalents at beginning of period		287,520	185,913
Cash and cash equivalents at end of period	$	87,097	263,861
		=========	=========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest	$	4410,~~578~~541	~~48,308~~-
		=========	=========

See accompanying notes to financial statements.

INLAND REAL ESTATE GROWTH FUND II, L.P. (a limited partnership) Notes to Financial Statements ~~September~~March 3031, ~~2000~~2001 (unaudited)

Readers of this Quarterly Report should refer to the Partnership's audited financial statements for the fiscal year ended December 31, ~~1999~~2000, which are included in the Partnership's ~~1999~~2000 Annual Report, as certain footnote disclosures which would substantially duplicate those contained in such audited financial statements have been omitted from this Report. (1) Organization and Basis of Accounting Inland Real Estate Growth Fund II, L.P. (the "Partnership"), was formed in June 1987, pursuant to the Delaware Revised Uniform Limited Partnership Act, to invest in improved residential, retail, industrial and other income producing properties. On September 21, 1987, the Partnership commenced an Offering of 25,000 Limited Partnership Units (the "Units") pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The Partnership terminated the Offering on September 21, 1989. A total of 4,038.25 Units were sold to the public at $1,000 per Unit, yielding gross offering proceeds of $4,038,250, not including the General Partner's contribution of $500. All of the holders of these Units were admitted to the Partnership. As of September 30, 2000, the Partnership has repurchased a total of 117 Units ($40,906) from various Limited Partners. At September 30, 2000, included in cash and cash equivalents, is approximately $8,800 restricted for use by the Unit Repurchase Program. The Limited Partners of the Partnership share in their portion of benefits of ownership of the Partnership's real property investment according to the number of Units held. Inland Real Estate Investment Corporation is the General Partner. 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 periods. Actual results could differ from those estimates. In the opinion of management, the financial statements contain all the adjustments necessary, which are of a normal recurring nature, to present fairly the financial position and results of operations. Interim periods are not necessarily indicative of results to be expected for the year.

~~INLAND REAL ESTATE GROWTH FUND II, L.P.~~ (~~a limited partnership~~1) ~~Notes~~ toOrganization ~~Financial~~and ~~Statements (continued) September~~Basis ~~30,~~of ~~2000 (unaudited)~~ Accounting

~~Statement~~Inland ofReal ~~Financial~~Estate ~~Accounting~~Growth ~~Standards~~Fund NoII, L.P. ~~121 requires~~ (the "Partnership"), towas ~~record~~formed anin ~~impairment~~June ~~loss~~1987, onpursuant ~~its property~~ to ~~be held for investment whenever its carrying value cannot be fully recovered through estimated undiscounted future cash flows from its operations and sale. The amount of~~ the ~~impairment~~Delaware ~~loss~~Revised toUniform beLimited ~~recognized would be the difference between the property's carrying value and the property's estimated fair value. The~~ Partnership's ~~policy~~Act, is to ~~consider~~invest ain ~~property to~~improved beresidential, ~~held~~retail, ~~for~~industrial ~~sale or disposition when the Partnership has committed to sell such property~~ and ~~active~~other ~~marketing~~income ~~activity has commenced~~producing properties. ~~Effective~~On September 2321, ~~1998~~1987, the Partnership's ~~investment~~commenced ~~property~~an ~~was~~Offering ~~held~~of ~~for~~25,000 ~~sale~~Limited ~~and the~~ Partnership ~~listed~~Units ~~and was actively marketing~~ (the ~~Scandinavian~~"Units") ~~Health~~pursuant ~~Club~~to ~~property~~a ~~for~~Registration ~~sale~~Statement ~~at an amount in excess of its carrying value. The listing agreement expired~~ on ~~January~~Form ~~31,~~S-11 ~~1999,~~under ~~however,~~ the ~~property~~Securities ~~was~~Act ~~included~~of ~~in a sealed bid auction in June 1999~~1933. The ~~sole acceptable~~Partnership ~~contract received from the sealed bid auction was~~ terminated by the ~~potential~~Offering ~~purchaser~~ on September ~~July 28~~21, ~~1999~~1989. A Intotal ~~accordance~~of ~~with SFAS 121~~4,038.25 ~~any~~Units ~~property~~were ~~identified~~sold asto ~~"held~~the ~~for~~public ~~sale~~at or$1,000 ~~disposition"~~per isUnit, noyielding ~~longer~~gross ~~depreciated.~~offering ~~The~~proceeds ~~Partnership which had ceased depreciation as~~ of ~~September 23~~$4, ~~1998~~038,250, ~~began~~not ~~depreciation~~including of the ~~property~~General asPartner's ofcontribution ~~July 28, 1999 and all previously unrecognized depreciation was recorded as~~ of ~~December 31, 1999~~$500. ~~Adjustments~~All ~~for~~of ~~impairment loss for such a property are made in each period as necessary to report~~ the ~~property~~holders ~~at the lower~~ of ~~carrying~~these ~~value~~Units orwere ~~fair~~admitted ~~value less cost~~ to ~~sell~~the Partnership. As of ~~September~~March 3031, ~~2000~~2001, the Partnership ~~believes~~has norepurchased ~~such~~a ~~impairment~~total ~~exists on its property. (2) Transactions with Affiliates The General Partner and its Affiliates are entitled to reimbursement for salaries and expenses~~ of ~~employees~~117 ofUnits ~~the General Partner and its Affiliates relating to the administration of the Partnership, of which~~ ($140,~~651~~906) ~~and~~from ~~$878~~various ~~remained~~Limited ~~unpaid~~Partners. At atMarch ~~September 30, 2000 and December~~ 31, ~~1999~~2001, ~~respectively. In~~included ~~connection~~in ~~with~~cash ~~the~~and ~~sales~~cash ~~at Wellington Place apartment complex during 1991~~equivalents, ~~the~~is ~~Partnership~~approximately ~~has recorded~~ $~~135~~9,000 ofrestricted ~~sales~~for ~~commissions~~use ~~payable~~by ~~to Affiliates of~~ the ~~General~~Unit ~~Partner~~Repurchase Program. ~~Such~~The ~~commissions~~Limited ~~will~~Partners beof ~~deferred until~~ the ~~Limited~~Partnership ~~Partners~~share ~~have received~~in their ~~Original~~portion ~~Capital~~of ~~plus~~benefits aof ~~return~~ownership asof ~~specified in~~ the Partnership's ~~Agreement. An~~real ~~Affiliate~~property ofinvestment ~~the~~according ~~General Partner is entitled~~ to ~~receive~~the ~~Property~~number ~~Management~~of ~~Fees~~Units ~~for management and leasing services~~held. ~~Management~~Inland ~~fees~~Real ofEstate ~~$1,667~~Investment ~~for~~Corporation ~~both~~is the ~~nine~~General ~~months ended September 30, 2000 and 1999, have been incurred and paid to an Affiliate and are included in the Partnership's property operating expenses to Affiliates~~Partner.

~~INLAND~~The ~~REAL~~preparation ~~ESTATE~~of ~~GROWTH~~financial ~~FUND~~statements ~~II,~~in ~~L.P. (a~~conformity ~~limited~~with ~~partnership) Notes~~accounting principles generally accepted in the United States of America requires management to ~~Financial~~make ~~Statements (continued) September~~estimates ~~30,~~and ~~2000~~assumptions that affect the reported amounts of assets and ~~(unaudited)~~ 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 periods. Actual results could differ from those estimates.

~~(3)~~In ~~Accrued Rents Receivable The health club lease contains provisions providing for stepped rent increases. Generally accepted accounting principles require that rental income be recorded for~~ the ~~period~~opinion of ~~occupancy using the effective monthly rent~~management, ~~which is~~ the ~~average monthly rent for the entire period of occupancy during the term of the lease. The accompanying~~ financial statements ~~include~~contain aall ~~decrease~~the ofadjustments ~~$11~~necessary,~~734~~ ~~and $11,738 in 2000 and 1999, respectively, of rental income for the period of occupancy for~~ which ~~stepped~~are ~~rent increases apply and $20,690 and $32,424 in related accounts receivable as~~ of ~~September~~a ~~30,~~normal ~~2000~~recurring ~~and December 31~~nature, ~~1999, respectively. Those amounts are expected~~ to bepresent ~~collected~~fairly ~~over~~ the ~~terms~~financial ofposition ~~the~~and ~~related~~results ~~leases as scheduled rent payments are made. (4) Note Payable to Affiliate As~~ of February 1, 1999, the General Partner of the Partnership advanced funds on a short-term basis to the Partnership to pay off its mortgage payable balance of $780,288 plus accrued interest through the maturity dateoperations. ~~The~~Interim ~~note~~periods ~~payable~~are ~~to the General~~not ~~Partner~~necessarily ofindicative ~~$786,081 has a current interest rate~~ of ~~9.5%~~results ~~and requires monthly interest only payments. A final balloon payment of all outstanding principal and all accrued and unpaid interest, if any, was due on December 31, 1999 and was extended~~ to ~~December~~ ~~31, 2000. This note may~~ be ~~extended~~expected atfor the ~~Partnership's option~~year. ~~On May 1, 2000, the Partnership made a $286,081 principal paydown on this note payable.~~

~~Item~~INLAND ~~2 Management's~~REAL ~~Discussion~~ESTATE ~~and~~GROWTH ~~Analysis~~FUND of Financial Condition and Results of Operations Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this quarterly report on Form 10-Q constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risksII, uncertainties and other factors which may cause the Partnership's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statementsL. These factors include, among other things, federal, state or local regulations; adverse changes in general economic or local conditions; inability of borrower to meet financial obligations; uninsured losses; and potential conflicts of interest between the Partnership and its Affiliates, including the General PartnerP. Liquidity and Capital Resources On September 21, 1987, the Partnership commenced an Offering of 25,000 Limited Partnership Units pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The Offering terminated on September 21, 1989 with a total of 4,038.25 Units being sold to the public at $1,000 per Unit resulting in $4,038,250 in gross offering proceeds, not including the General Partner's contribution, of which $3,077,513 was invested in two properties. In addition, proceeds were used to repay advances from the General Partner, pay offering and organization costs and make distributions to the Limited Partners. As of September 30, 2000, the Partnership has repurchased 117 Units ($40,906) from various Limited Partners through the Unit Repurchase Program. At September 30, 2000, the Partnership had cash and cash equivalents of $87,097, which includes approximately $8,800 restricted for the repurchase of Units through the Unit Repurchase Program. The Partnership intends to use available cash to paydown debt, for working capital requirements and cash distributions. The Partnership's property is generating sufficient cash flow to cover operating expenses and debt service. To the extent that this source is insufficient to meet the Partnership's needs, the Partnership may rely on advances from Affiliates of the General Partner, other short-term financing or may sell this property. The General Partner has agreed to make, if necessary, a ~~Supplemental~~limited Capital Contribution. The Supplemental Capital Contribution shall be in an amount which will enable the Partnership to pay a liquidating distribution to the Limited Partners equal to their Adjusted Invested Capital plus a noncompounded Minimum Return of 2% per annum on their Invested Capital. After consideration of the Supplemental Capital Contribution, the Partnership believes that it has sufficient funds to satisfy its obligations. Results of Operations As of September 23, 1998, the Partnership listed and was actively marketing the Scandinavian Health Club property for sale at an amount in excess of its carrying value. The listing agreement expired on January 31, 1999, however, the property was included in a sealed bid auction in June 1999. The sole acceptable contract received from the sealed bid auction was terminated by the potential purchaser on July 28, 1999. The Partnership which had ceased depreciation as of September 23, 1998, began depreciation of the property as of July 28, 1999 and all previously unrecognized depreciation was recorded as of December 31, 1999. The Company intends to continue to seek a purchaser and to sell the property at an amount in excess of its book value. The increase in mortgage interest to Affiliates and the decrease in mortgage interest to non-affiliates for the nine months ended September 30, 2000, as compared to the nine months ended September 30, 1999, is the result of the refinancing of the mortgage payable. As of February 1, 1999, the General Partner of the Partnership advanced funds on a short-term basis to the Partnership to pay off its third party mortgage payable balance of $780,288 plus accrued interest through the maturity date. The note payable to the General Partner of $786,081 has a current interest rate of 9.5% and requires monthly interest only payments. A final balloon payment of all outstanding principal and all accrued and unpaid interest, if any, is due on December 31, 2000. This note may be extended at the Partnership's option. On May 1, 2000, in order to reduce interest expense, the Partnership made a $286,081 principal paydown on this note payable. The decrease in general and administrative expenses to non-affiliates for the nine months ended September 30, 2000, as compared to the nine months ended September 30, 1999, is due to a decrease in the Illinois Replacement Tax. partnership)

Notes to Financial Statements
(continued)

March 31, 2001
(unaudited)

Statement of Financial Accounting Standards No. 121 (Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of) requires the Partnership to record an impairment loss on its property to be held for investment whenever its carrying value cannot be fully recovered through estimated undiscounted future cash flows from its operations and sale. The amount of the impairment loss to be recognized would be the difference between the property's carrying value and the property's estimated fair value. The Partnership's policy is to consider a property to be held for sale or disposition when the Partnership has committed to sell such property and active marketing activity has commenced. Adjustments for impairment loss for such a property are made in each period as necessary to report the property at the lower of carrying value or fair value less cost to sell. As of March 31, 2001, the Partnership believes no such impairment exists on its property.

(2) Transactions with Affiliates

The General Partner and its Affiliates are entitled to reimbursement for salaries and expenses of employees of the General Partner and its Affiliates relating to the administration of the Partnership, of which $1,457 and $1,387 remained unpaid at March 31, 2001 and December 31, 2000, respectively.

In connection with the sales at Wellington Place apartment complex during 1991, the Partnership has recorded $135,000 of sales commissions payable to Affiliates of the General Partner. Such commissions will be deferred until the Limited Partners have received their Original Capital plus a return as specified in the Partnership Agreement.

An Affiliate of the General Partner is entitled to receive Property Management Fees for management and leasing services. Management fees of $556 for both the three months ended March 31, 2001 and 2000, have been incurred and paid to an Affiliate and are included in the Partnership's property operating expenses to Affiliates.

INLAND REAL ESTATE GROWTH FUND II, L.P.
(a limited partnership)

Notes to Financial Statements
(continued)

March 31, 2001
(unaudited)

(3) Accrued Rents Receivable

The health club lease contains provisions providing for stepped rent increases. Generally accepted accounting principles require that rental income be recorded for the period of occupancy using the effective monthly rent, which is the average monthly rent for the entire period of occupancy during the term of the lease. The accompanying financial statements include a decrease of $3,908 and $3,913 in 2001 and 2000, respectively, of rental income for the period of occupancy for which stepped rent increases apply and $12,866 and $16,774 in related accounts receivable as of March 31, 2001 and December 31, 2000, respectively. Those amounts are expected to be collected over the terms of the related leases as scheduled rent payments are made.

(4) Note Payable to Affiliate

As of February 1, 1999, the General Partner of the Partnership advanced funds on a short-term basis to the Partnership to pay off its mortgage payable balance of $780,288 plus accrued interest through the maturity date. During 2000, the Partnership made principle paydowns on this note totaling $336,081. The balance of the note payable to the General Partner of $450,000 has a current interest rate of 9.5% and requires monthly interest only payments. A final balloon payment of all outstanding principal and all accrued and unpaid interest, if any, was due on December 31, 1999 and was extended to December 31, 2001. This note may be extended at the Partnership's option.

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

Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this quarterly report on Form 10-Q constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Partnership's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among other things, federal, state or local regulations; adverse changes in general economic or local conditions; inability of borrower to meet financial obligations; uninsured losses; and potential conflicts of interest between the Partnership and its Affiliates, including the General Partner.

Liquidity and Capital Resources

On September 21, 1987, the Partnership commenced an Offering of 25,000 Limited Partnership Units pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The Offering terminated on September 21, 1989 with a total of 4,038.25 Units being sold to the public at $1,000 per Unit resulting in $4,038,250 in gross offering proceeds, not including the General Partner's contribution, of which $3,077,513 was invested in two properties. In addition, proceeds were used to repay advances from the General Partner, pay offering and organization costs and make distributions to the Limited Partners. As of March 31, 2001, the Partnership has repurchased 117 Units ($40,906) from various Limited Partners through the Unit Repurchase Program.

At March 31, 2001, the Partnership had cash and cash equivalents of $98,029, which includes approximately $9,000 restricted for the repurchase of Units through the Unit Repurchase Program. The Partnership intends to use available cash to paydown debt, for working capital requirements and cash distributions. The Partnership's property is generating sufficient cash flow to cover operating expenses and debt service. To the extent that this source is insufficient to meet the Partnership's needs, the Partnership may rely on advances from Affiliates of the General Partner, other short-term financing or may sell this property.

Upon liquidation of the Partnership, the General Partner will make a Supplemental Capital Contribution. The Supplemental Capital Contribution shall be in an amount which will enable the Partnership to pay a liquidating distribution to the Limited Partners equal to their Adjusted Invested Capital plus a noncompounded Minimum Return of 2% per annum on their Invested Capital.

Results of Operations

As of September 23, 1998, the Partnership listed and was actively marketing the Scandinavian Health Club property for sale at an amount in excess of its carrying value. The Partnership's business plan continues to be to sell the property and pay off the debt. In the event the property cannot be sold before the lease expires in October 2001 and the tenant does not hold over for an additional amount of time, the Partnership may need to consider a redevelopment and refinancing of the property from it's current use to offices. The General Partner has agreed not to demand payment under the loan.

On February 1, 1999, the General Partner of the Partnership advanced funds on a short-term basis to the Partnership to pay off its mortgage payable balance of $780,288 plus accrued interest through the maturity date. During 2000, the Partnership made principle paydowns on this note totaling $336,081. The balance of the mortgage payable to the General Partner of $450,000 has a current interest rate of 9.5% and requires monthly interest only payments. A final balloon payment of all outstanding principal and all accrued and unpaid interest, if any, is due on December 31, 2001. This loan may be extended at the Partnership's option.

The decrease in mortgage interest to Affiliates for the three months ended March 31, 2001, as compared to the three months ended March 31, 2000, is the result of the paydowns of the mortgage payable during 2000.

Professional services to Affiliates increased for the three months ended March 31, 2001, as compared to the three months ended March 31, 2000, due to an increase in accounting fees. Professional services to non-affiliates decreased for the three months ended March 31, 2001, as compared to the three months ended March 31, 2000, due to a decrease in accounting fees.

General and administrative expenses to Affiliates decreased for the three months ended March 31, 2001, as compared to the three months ended March 31, 2000, due to a decrease in data processing expense. General and administrative expenses to non-affiliates decreased for the three months ended March 31, 2001, as compared to the three months ended March 31, 2000, due to a decrease in the Illinois replacement tax.

Property operating expenses to non-affiliates increased for the three months ended March 31, 2001, as compared to the three months ended March 31, 2000, due to an increase in the expenses relating to the marketing of the Partnership's remaining property.

PART II - Other Information

Items 1 through 6 (b) are omitted because of the absence of conditions under which they are required.

SIGNATURES

Pursuant to the requirements 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.

INLAND REAL ESTATE GROWTH FUND II, L.P. By: Inland Real Estate Investment Corporation General Partner /S/ ROBERT D. PARKS By: Robert D. Parks Chairman Date: ~~November~~May 715, ~~2000~~2001 /S/ PATRICIA A. DELROSSO By: Patricia A. DelRosso Senior Vice President Date: ~~November~~May 715, ~~2000~~2001 /S/ KELLY TUCEK By: Kelly Tucek Principal Financial Officer and Principal Accounting Officer Date: ~~November~~May 715, ~~2000~~2001

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