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, ~~2000~~2001

or

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

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 of 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

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 UNITS
(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 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]

State the aggregate market value of the voting stock held by nonaffiliates of the registrant. Not applicable.

The Prospectus of the Registrant dated September 21, 1987, as supplemented to date and filed pursuant to Rule 424(b) and 424(c) under the Securities Act of 1933 is incorporated by reference in Parts I, II and III of this Annual Report on Form 10-K.

~~INLAND REAL ESTATE GROWTH FUND II, L.P. (a limited partnership)~~-1-

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

	Part I	Page
Item 1.	Business	3
Item 2.	Properties	4
Item 3.	Legal Proceedings	4
Item 4.	Submission of Matters to a Vote of Security Holders	4
	Part II
Item 5.	Market for the Partnership's Limited Partnership Units and Related Security Holder Matters	4
Item 6.	Selected Financial Data	5
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	7
Item 7a.	Quantitative and Qualitative Disclosure About Market Risk	9
Item 8.	Financial Statements and Supplementary Data	10
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	22
	Part III
Item 10.	Directors and Executive Officers of the Registrant	22
Item 11.	Executive Compensation	2627
Item 12.	Security Ownership of Certain Beneficial Owners and Management	2728
Item 13.	Certain Relationships and Related Transactions	2829
	Part IV
Item 14.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	2829
SIGNATURES		2930

-2-

PART I

Item 1. Business

The Registrant, 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 which $3,077,513 was invested in two properties. In addition, offering proceeds were used to repay advances from the General Partner, pay offering and organization costs and make distributions to the Limited Partners. All of the holders of these Units have been admitted to the Partnership. As of December 31, ~~2000~~2001, the Partnership has repurchased through the Unit Repurchase Program a total of ~~117~~127 Units ($4041,~~906~~739) from various Limited Partners. The Limited Partners of the Partnership share in their portion of benefits of ownership of the Partnership's real property investments according to the number of Units held. Inland Real Estate Investment Corporation is the General Partner.

The Partnership is engaged solely in the business of real estate investment. The Partnership currently owns one property, Scandinavian Health Club, which represents their industry segment. The results of the segment are presented in the financial statements of the Partnership.

The Partnership made real property investments as set forth in the following table:

Name of	Number	Purchase	Type of
Property and Location	of Units	Date	Ownership (a)
Wellington Place Apartments	108	04/19/88	Fee ownership of land
Carol Stream, Illinois		(Sold 1991)	and improvements
Scandinavian Health Club	N/A	04/21/89	Fee ownership of land
Columbus, Ohio			and improvements
Columbus, Ohio (b)		(Sold 2002)	and improvements

Reference is made to Note 2 of the Notes to Financial Statements filed with this Annual Report for the current outstanding principal balance and a description of the mortgage indebtedness secured by the Partnership's real property investment.
This property was sold January 31, 2002. See Note 6 of the Notes to Financial Statements (Item 8 of this Annual Report) to which reference is hereby made.

-3-

As of December 31, 1991, the Partnership had sold all of the eighteen buildings comprising the Wellington Place apartment complex for a total gross sales price of approximately $4,472,000 to be received in installments. These receivables were paid in full as of December 31, 1998.

The Partnership's remaining real property investment iswas located in Columbus, Ohio and iswas subject to competition from similar types of properties in the vicinity in which it is located. This property is fully leased to Scandinavian Health Club. The Partnership has no real property investments located outside the United States. The Partnership does not segregate revenues or assets by geographic region, and as such a presentation is not applicable and would not be material to an understanding of the Partnership's business taken as a whole.

The Partnership had no employees during ~~2000~~2001.

The terms of transactions between the Partnership and Affiliates of the General Partner of the Partnership are set forth in Item 11 and Note 4 of the Notes to Financial Statements (Item 8 of this Annual Report) to which reference is hereby made.

Item 2. Properties

The Partnership ~~owns~~owned directly the property referred to under Item 1 above to which reference is hereby made for a description of the property.

Item 3. Legal Proceedings

The Partnership is not subject to any material pending legal proceedings.

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

There were no matters submitted to a vote of security holders during ~~2000~~2001.

PART II

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

As of December 31, ~~2000~~2001, there were ~~338~~337 holders of Units of the Partnership. There is no public market for Units nor is it anticipated that any public market for Units will develop. Reference is made to Item 6 below for a discussion of cash distributions made to the Limited Partners.

Although the Partnership has established a Unit Repurchase Program, funds for repurchase of Units are limited. Reference is made to "Unit Repurchase Program" on page 18 of the Prospectus of the Partnership dated September 21, 1987, incorporated herein by reference. The Partnership has approximately $98,~~000~~300 restricted for the repurchase of Units at December 31, ~~2000~~2001.

-4-

Item 6. Selected Financial Data

INLAND REAL ESTATE GROWTH FUND II, L.P. (a limited partnership) For the years ended December 31, 2001, 2000, 1999, 1998, ~~1997~~ and ~~1996~~1997 (not covered by Independent Auditors' Report)

		2000	1999	1998	1997	1996
		2001	2000	1999	1998	1997
Total assets	$	1,~~195~~012,~~180~~227	1,~~467~~195,~~561~~180	1,~~430~~467,~~187~~561	1,~~509~~430,~~987~~187	1,~~576~~509,~~248~~987
Long-term debt (b)	$	-	-	-	786,015	851,755
		========	========	========	========	========
Total income	$	214,610	217,982	217,292	219,784	224,555
Long-term debt	$	-	-	-	-	786,015
Net operating income		63,191	37,976	61,971	58,989	58,003
		========	========	========	========	========
Gain on sale of investment property		-	-	9,950	-	-
Total income	$	207,912	214,610	217,982	217,292	219,784
Net income	$	63,191	37,976	71,921	58,989	58,003
		========	========	========	========	========
Net income allocated to the one General Partner Unit:
Net operating income (loss)		(200,564)	63,191	37,976	61,971	58,989
Net operating income		632	380	620	590	580
Gain on sale of investment property (b)		135,000	-	-	9,950	-
Gain on sale of investment property		-	-	99	-	-
Net income (loss)	$	(65,564)	63,191	37,976	71,921	58,989
	$	632	380	719	590	580
		========	========	========	========	========
Net income allocated per Limited Partnership Unit (c):
Net income (loss) allocated to the one General Partner Unit:
Net operating income		15.95	9.45	15.32	14.58	14.34
Net operating income (loss)		(2,006)	632	380	620	590
Gain on sale of investment property		-	-	2.46	-	-
Gain on sale of investment property (b)		1,350	-	-	99	-
	$	~~15.95~~(656)	~~9.45~~632	~~17.78~~380	~~14.58~~719	~~14.34~~590
		========	========	========	========	========
Net income (loss) allocated per Limited Partnership Unit (c):
Net operating income (loss)		(50.66)	15.95	9.45	15.32	14.58
Gain on sale of investment property (b)		34.10	-	-	2.46	-
	$	(16.56)	15.95	9.45	17.78	14.58
		========	========	========	========	========

-5-

Item 6. Selected Financial Data, continued

INLAND REAL ESTATE GROWTH FUND II, L.P. (a limited partnership) For the years ended December 31, 2001, 2000, 1999, 1998, ~~1997~~ and ~~1996~~1997 (not covered by Independent Auditors' Report)

		2000	1999	1998	1997	1996
		2001	2000	1999	1998	1997
Cash distributions to Limited Partners	$	-	-	~~63,710~~-	6463,~~671~~710	1664,~~850~~671
Cash distributions to Limited Partners per Unit (c)	$	-	-	15.91	16.15	4.21
		========	========	========	========	========
Weighted average of Limited Partnership Units outstanding	$	3,921.25	3,976.50	4,004.25	4,004.25	4,004.25
Cash distributions to Limited Partners per Unit (c)	$	-	-	-	15.91	16.15
		========	========	========	========	========
Weighted average of Limited Partnership Units outstanding	$	3,919.25	3,921.25	3,976.50	4,004.25	4,004.25
		========	========	========	========	========

The above selected financial data should be read in conjunction with the financial statements and related notes appearing elsewhere in this Annual Report.
~~Reference~~The isgain ~~made~~in to2001 ~~Note~~relates 2to of the ~~Notes~~reversal toof ~~Financial~~accrued ~~Statements~~sales ~~filed~~commission ~~with~~related to ~~this~~the ~~Annual~~prior ~~Report~~sale ~~for further discussion~~ of the ~~mortgage~~Wellington ~~indebtedness~~Place ~~secured by the Partnership's real property investment~~Apartments.
The net income per Unit, basic and diluted, and cash distribution per Limited Partner Unit data are based upon the weighted average number of such Units.

-6-

Item 7. 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 annual report on Form 10-K 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, competition for tenants; federal, state, or local regulations; adverse changes in general economic or local conditions; 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 (as described in Note 2 of the Notes to Financial Statements filed with this Annual Report). 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 December 31, ~~2000~~2001, the Partnership has repurchased ~~117~~127 Units ($4041,~~906~~739) from various Limited Partners through the Unit Repurchase Program.

At December 31, ~~2000~~2001, the Partnership had cash and cash equivalents of $69216,~~822~~929, which includes approximately $98,~~000~~300 restricted for the repurchase of Units through the Unit Repurchase Program. The Partnership intends to use available cash for working capital requirements and cash distributions.

The Partnership is generating sufficient cash flow to cover operating expenses and debt service. To the extent that these sources are 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 the remaining property~~.

The General Partner has agreed to make, ~~if necessary,~~ 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. The General Partner made a Supplemental Capital Contribution of approximately $450,000 in March 2002. After consideration of the Supplemental Capital Contribution, the Partnership believes that it has sufficient funds to satisfy its obligations.

-7-

Results of Operations

As of December 31, 1991, the Partnership had sold all of the eighteen buildings comprising the Wellington Place apartment complex. The remaining property owned by the Partnership, a health club, is leased until ~~October~~March ~~2001~~2002 to Scandinavian Health Spa Inc., a wholly owned subsidiary of Bally's Health and Tennis Corporation on a "triple-net" basis, which means that in addition to paying base rent, the tenant is also responsible for the payment of insurance, taxes and maintenance. ~~The~~ ~~General Partner does not anticipate an early termination of this lease.~~

As of September 23, 1998, the Partnership had listed and began 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 Partnership iscontinued ~~continuing~~ to market the property for sale. The Partnership, which had ceased depreciation as of September 23, 1998, began depreciation of the property, and all previously unrecognized depreciation was recorded in 1999.

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~~had a current interest rate of 9.5% and ~~requires~~required monthly interest only payments. A final balloon payment of all outstanding principal and all accrued and unpaid interest, if any, iswas due on December 31, 2001. This loan ~~may~~was be extended at the Partnership's option.

~~The~~In ~~Partnership's~~July ~~business~~2001, ~~plan~~a ~~continues~~contract towas besigned to sell the ~~property~~Partnership's ~~and~~remaining ~~pay~~property ~~off~~for ~~the debt~~$900,000. InThe ~~the~~Partnership's ~~event~~remaining ~~the~~asset ~~property~~was ~~cannot be~~ sold ~~before~~on ~~the~~January ~~lease~~31, ~~expires~~2002. After inthe ~~October~~costs ~~2001~~of ~~and~~sale, the ~~tenant~~Partnership ~~does~~received ~~not~~$795,298. ~~hold~~Based ~~over~~on ~~for~~the ansale ~~additional amount of time~~price, the Partnership ~~may~~has ~~need~~recorded ~~to consider~~ a ~~redevelopment~~provision ~~and~~for ~~refinancing~~impairment of ~~the~~$292,346 ~~property~~relating ~~from it's current use~~ to ~~offices.~~the ~~The~~Scandinavian ~~General~~Health ~~Partner~~Club ~~has~~for ~~agreed~~the ~~not~~year toended ~~demand~~December ~~payment~~31, ~~under the loan~~2001.

~~The~~Based ~~increase~~on the sale price received on the Partnership's remaining asset the Limited Partners will not receive the necessary return specified in ~~professional~~the ~~services~~Partnership toAgreement ~~Affiliates~~in order for the ~~year~~Partnership ~~ended~~to ~~December~~pay ~~31,~~the ~~2000,~~deferred assales ~~compared~~commission to the ~~year~~Affiliate ~~ended~~of ~~December~~the ~~31,~~General ~~1999,~~Partner isrelated ~~due~~ to anthe ~~increase~~Wellington inPlace ~~accounting~~apartment ~~services~~complex. ~~and~~Accordingly, ~~legal~~the ~~services~~Partnership ~~required~~has byrecorded additional gain relating to the ~~Partnership~~sales at the Wellington Place apartment complex.

The ~~decrease~~increase in ~~general~~professional services to Affiliates for the year ended December 31, 2001, as compared to the year ended December 31, 2000, is due to an increase in legal services required by the Partnership. The increase in professional services to Affiliates for the year ended December 31, 2000, as compared to the year ended December 31, 1999, is due to an increase in accounting services and ~~administrative~~legal ~~expenses~~services required by the Partnership. The decrease in professional services to non-affiliates for the year ended December 31, ~~2000~~2001, as compared to the year ended December 31, ~~1999~~2000, is due to a decrease in ~~state~~accounting ~~taxes~~fees.

The decrease in general and administrative expenses to Affiliates for the year ended December 31, 2001, as compared to the year ended December 31, 2000, is due to a decrease in data processing and investor service expenses. The decrease in general and administrative expenses to non-affiliates for the year ended December 31, ~~1999~~2001, as compared to the year ended December 31, ~~1998~~2000, is due to ana ~~increase~~decrease in printing. The decrease in general and administrative expenses to non-affiliates for the year ended December 31, 2000, as compared to the year ended December 31, 1999, is due to a decrease in state taxes.

AsProperty ofoperating ~~December~~expenses ~~31,~~to ~~1998,~~non-affiliates ~~the~~increased ~~Partnership~~for ~~received~~the ~~payment~~year inended ~~full~~December on31, ~~the~~2001, ~~five-second~~as ~~mortgages~~compared ~~from~~to the ~~sale~~year ofended ~~the~~December ~~Wellington~~31, ~~Place~~2000, ~~apartments~~due ~~and~~to ~~recognized~~expenses ~~the~~relating ~~remaining~~to ~~gain~~the ~~from~~marketing of the ~~sale~~Partnership's remaining asset.

The decrease in mortgage interest to Affiliates for the year ended December 31, 2001, as compared to the year ended December 31, 2000, is the result of the paydowns on the mortgage payable in 2000. The Partnership made a $150,000 paydown on the mortgage in January 2002 and paid the remaining principal and accrued interest totaling $316,280 in February 2002, after the sale of the final asset.

-8-

Selected Quarterly Financial Data (unaudited)

The following represents the results of operations, for each quarter during the years ended December 31, ~~2000~~2001 and ~~1999~~2000.

		2001
		12/31	09/30	06/30	03/31
Total income	$	55,988	47,320	52,431	52,173
Net income (loss)		(72,292)	165,878	(166,615)	7,465
Net income (loss) per common share, basic and diluted:		(18.47)	42.30	(42.49)	1.90
		2000
		12/31	09/30	06/30	03/31
Total income	$	52,730	52,349	53,659	55,872
Net income		20,455	20,759	21,617	360
Net income per common share, basic and diluted:		5.22	5.29	5.51	.09
		1999
		12/31	09/30	06/30	03/31
Total income	$	55,326	54,679	54,025	53,952
Net income/(loss)		19,098	(6,930)	19,284	6,524
Net income per common share, basic and diluted:		4.87	(1.74)	4.82	1.63

Inflation

The health club's triple-net lease offsets any inflationary effect on the property operating expenses relating to that property.

Continued inflation may cause capital appreciation of the Partnership's property held for sale over a period of time as rental rates and replacement cost of this property continue to increase.

Item 7a. Quantitative and Qualitative Disclosures About Market Risk

Not Applicable

-9-

Item 8. Financial Statements and Supplementary Data

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

Index		Page
Independent Auditors' Report		11
Financial Statements:
Balance Sheets, December 31, 2000 and 1999	12
Balance Sheets, December 31, 2001 and 2000	12
Statements of Operations, for the years ended December 31, 2000, 1999 and 1998	14
Statements of Operations, for the years ended December 31, 2001, 2000 and 1999	14
Statements of Partners' Capital, for the years ended December 31, 2000, 1999 and 1998	15
Statements of Partners' Capital, for the years ended December 31, 2001, 2000 and 1999	15
Statements of Cash Flows, for the years ended December 31, 2000, 1999 and 1998	16
Statements of Cash Flows, for the years ended December 31, 2001, 2000 and 1999	16
Notes to Financial Statements	17

Schedules not filed:

All schedules have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.

-10-

Independent Auditors' Report

The Partners Inland Real Estate Growth Fund II, L.P.:

Inland Real Estate Growth Fund II, L.P.

We have audited the financial statements of Inland Real Estate Growth Fund II, L.P. (a limited partnership) as listed in the accompanying index. These financial statements are the responsibility of the General Partner of the Partnership. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 amount and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the General Partner of the Partnership, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Inland Real Estate Growth Fund II, L.P. as of December 31, ~~2000~~2001 and ~~1999~~2000 and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, ~~2000~~2001, in conformity with accounting principles generally accepted in the United States of America.

KPMG LLP

Chicago, Illinois March 21, 2002

~~February 1, 2001~~ -11-

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

Assets

		2000	1999
		2001	2000
Current assets:
Cash and cash equivalents including amounts held by property manager (Note 1)	$	69,822	287,520
Cash and cash equivalents including amounts held by property manager	$	216,929	69,822
Accrued interest receivable		~~659~~-	~~465~~659
Total current assets		70216,~~481~~929	~~287~~70,~~985~~481
Investment property (including acquisition fees paid to Affiliates of $59,500 at December 31, 2000 (Notes 1 and 2):
Investment property held for sale (including acquisition fees paid to Affiliates of $59,500 at December 31, 2001 and 2000) (Notes 1 and 2):
Land		438,388	438,388
Building and improvements		1,096,872	1,096,872
Building and improvements less provision for impairment at December 31, 2001		804,526	1,096,872
		1,535,260	1,535,260
		1,242,914	1,535,260
Less accumulated depreciation		~~429~~447,~~334~~616	~~392~~429,~~772~~334
Total investment property, net of accumulated depreciation		1,105,926	1,142,488
Total investment property, net of accumulated depreciation and provision for impairment		795,298	1,105,926
Accrued rents receivable (Notes l and 5)		~~16,774~~-	3216,~~424~~774
Deferred leasing fees to Affiliates (net of accumulated amortization of $23,986 and $21,321 at December 31, 2000 and 1999, respectively) (Note 1)		1,999	4,664
Deferred leasing fees to Affiliates (net of accumulated amortization of $25,985 and $23,986 at December 31, 2001 and 2000, respectively) (Note 1)		-	1,999
Total assets	$	1,~~195~~012,~~180~~227	1,~~467~~195,~~561~~180
		=========	=========

See accompanying notes to financial statements.
-12-

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

Balance Sheets
(continued)

December 31, 2001 and 2000

Liabilities and Partners' Capital

		2001	2000
Current liabilities:
Accounts payable	$	7,385	-
Current portion of long-term debt (Note 2)		450,000	450,000
Accrued interest payable		10,775	-
Due to Affiliates (Note 4)		1,671	1,387

Total current liabilities		469,831	451,387

Commission payable to Affiliates (Notes 2 and 4)		-	135,000

Total liabilities		469,831	586,387

Partners' capital (Notes 1, 3 and 4):
General Partner:
Capital contribution		500	500
Cumulative net income		16,725	17,381
Cumulative cash distributions		(9,939)	(9,939)

		7,286	7,942
Limited Partners:
Units of $1,000. Authorized 25,000 Units, 3,911.25 and 3,921.25 outstanding at December 31, 2001 and 2000, respectively (net of offering costs of $462,849, of which $59,476 was paid to Affiliates)		3,533,662	3,534,495
Cumulative net income		1,655,860	1,720,768
Cumulative cash distributions		(4,654,412)	(4,654,412)

		535,110	600,851

Total Partners' capital		542,396	608,793

Total liabilities and Partners' capital	$	1,012,227	1,195,180
		=========	=========

See accompanying notes to financial statements.

~~INLAND REAL ESTATE GROWTH FUND II, L.P. (a limited partnership) Balance Sheets (continued) December 31, 2000 and 1999 Liabilities and Partners' Capital~~-13-

		2000	1999
Current liabilities:
Current portion of long-term debt (Note 2)	$	450,000	786,081
Due to Affiliates (Note 4)		1,387	878
Total current liabilities		451,387	786,959
Commission payable to Affiliates (Note 4)		135,000	135,000
Total liabilities		586,387	921,959
Partners' capital (Notes 1, 3 and 4):
General Partner:
Capital contribution		500	500
Cumulative net income		17,381	16,749
Cumulative cash distributions		(9,939)	(9,939)
		7,942	7,310
Limited Partners:
Units of $1,000. Authorized 25,000 Units, 3,921.25 outstanding at December 31, 2000 and 1999, (net of offering costs of $462,849, of which $59,476 was paid to Affiliates)		3,534,495	3,534,495
Cumulative net income		1,720,768	1,658,209
Cumulative cash distributions		(4,654,412)	(4,654,412)
		600,851	538,292
Total Partners' capital		608,793	545,602
Total liabilities and Partners' capital	$	1,195,180	1,467,561

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

Statements of Operations

For the years ended December 31, 2001, 2000 and 1999

		2001	2000	1999

Income:
Rental income (Note 5)	$	205,513	206,640	206,640
Interest income		2,399	7,970	11,342

		207,912	214,610	217,982
Expenses:
Professional services to Affiliates		7,914	6,629	3,740
Professional services to non-affiliates		22,003	24,850	24,583
General and administrative expenses to Affiliates		9,782	16,101	16,861
General and administrative expenses to non-affiliates		4,846	6,086	10,079
Property operating expenses to Affiliates		2,223	2,223	2,223
Property operating expenses to non-affiliates		6,331	-	-
Mortgage interest		42,750	56,303	73,674
Depreciation		18,282	36,562	45,235
Amortization		1,999	2,665	3,611
Provision for impairment		292,346	-	-

		408,476	151,419	180,006

Net operating income (loss)		(200,564)	63,191	37,976
Gain on prior sale of investment property (Note 2)		135,000	-	-

Net income (loss)	$	(65,564)	63,191	37,976
		=========	=========	=========
Net income (loss) allocated to (Note 3):
General Partner		(656)	632	380
Limited Partners		(64,908)	62,559	37,596

Net income (loss)	$	(65,564)	63,191	37,976
		=========	=========	=========
Net income (loss) allocated to the one General Partner Unit	$	(656)	632	380
		=========	=========	=========
Net income (loss) per weighted average Limited Partnership Unit, basic and diluted (3,919.25, 3,921.25 and 3,976.50 for the years ended December 31, 2001, 2000 and 1999, respectively)	$	(16.56)	15.95	9.45
		=========	=========	=========

See accompanying notes to financial statements.

~~INLAND REAL ESTATE GROWTH FUND II, L.P. (a limited partnership) Statements of Operations For the years ended December 31, 2000, 1999 and 1998~~-14-

		2000	1999	1998
Income:
Rental income (Note 5)	$	206,640	206,640	206,640
Interest income		7,970	11,342	10,652
		214,610	217,982	217,292
Expenses:
Professional services to Affiliates		6,629	3,740	3,508
Professional services to non-affiliates		24,850	24,583	20,945
General and administrative expenses to Affiliates		16,101	16,861	16,032
General and administrative expenses to non-affiliates		6,086	10,079	3,798
Property operating expenses to Affiliates		2,223	2,223	2,223
Mortgage interest		56,303	73,674	67,369
Depreciation		36,562	45,235	27,423
Amortization		2,665	3,611	14,023
		151,419	180,006	155,321
Net operating income		63,191	37,976	61,971
Gain on sale of investment property (Note 2)		-	-	9,950
Net income	$	63,191	37,976	71,921
Net income allocated to (Note 3):
General Partner		632	380	719
Limited Partners		62,559	37,596	71,202
Net income	$	63,191	37,976	71,921
Net income allocated to the one General Partner Unit	$	632	380	719
Net income per weighted average Limited Partnership Units, basic and diluted	$	15.95	9.45	17.78

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

Statements of Partners' Capital

For the years ended December 31, 2001, 2000 and 1999

		General	Limited
		Partner	Partners	Total

Balance January 1, 1999	$	6,930	507,609	514,539

Net income (Note 3)		380	37,596	37,976
Repurchase of Units		-	(6,913)	(6,913)

Balance December 31, 1999		7,310	538,292	545,602

Net income (Note 3)		632	62,559	63,191

Balance December 31, 2000		7,942	600,851	608,793

Net income (loss) (Note 3)		(656)	(64,908)	(65,564)
Repurchase of Units		-	(833)	(833)

Balance December 31, 2001	$	7,286	535,110	542,396
		=========	=========	=========

See accompanying notes to financial statements.

~~INLAND REAL ESTATE GROWTH FUND II, L.P. (a limited partnership) Statements of Partners' Capital For the years ended December 31, 2000, 1999 and 1998~~-15-

		General	Limited
		Partner	Partners	Total
Balance January 1, 1998	$	6,776	500,117	506,893
Net income (Note 3)		719	71,202	71,921
Cash distributions ($15.91 per weighted average Limited Partnership Units of 4,004.25)		(565)	(63,710)	(64,275)
Balance December 31, 1998		6,930	507,609	514,539
Net income (Note 3)		380	37,596	37,976
Repurchase of Units		-	(6,913)	(6,913)
Balance December 31, 1999		7,310	538,292	545,602
Net income (Note 3)		632	62,559	63,191
Balance December 31, 2000	$	7,942	600,851	608,793

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

Statements of Cash Flows

For the years ended December 31, 2001, 2000 and 1999

		2001	2000	1999

Cash flows from operating activities:
Net income (loss)	$	(65,564)	63,191	37,976
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Gain on prior sale of investment property		(135,000)	-	-
Accrued rents receivable		16,774	15,650	15,650
Depreciation		18,282	36,562	45,235
Amortization		1,999	2,665	3,611
Provision for impairment		292,346	-	-
Accrued interest payable		10,775	-	-
Due to Affiliates		284	509	518
Changes in other assets and liabilities		8,044	(194)	(263)
Net cash provided by operating activities		147,940	118,383	102,727

Cash flows from financing activities:
Proceeds from note payable to Affiliate		-	-	786,081
Principal payments of long-term debt		-	(336,081)	(780,288)
Repurchase of Units		(833)	-	(6,913)
Net cash used in financing activities		(833)	(336,081)	(1,120)
Net increase (decrease) in cash and cash equivalents		147,107	(217,698)	101,607
Cash and cash equivalents at beginning of year		69,822	287,520	185,913
Cash and cash equivalents at end of year	$	216,929	69,822	287,520
		=========	=========	=========
Supplemental disclosure of cash flow information:

Cash paid for mortgage interest	$	31,975	56,303	73,674
		=========	=========	=========

See accompanying notes to financial statements.

~~INLAND REAL ESTATE GROWTH FUND II, L.P. (a limited partnership) Statements of Cash Flows For the years ended December 31, 2000, 1999 and 1998~~-16-

		2000	1999	1998
Cash flows from operating activities:
Net income	$	63,191	37,976	71,921
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale		-	-	(9,950)
Accrued rents receivable		15,650	15,650	15,650
Depreciation		36,562	45,235	27,423
Amortization		2,665	3,611	14,023
Accrued interest payable		-	-	(5,856)
Due to Affiliates		509	518	(173)
Changes in other assets and liabilities		(194)	(263)	72
Net cash provided by operating activities		118,383	102,727	113,110
Cash flows from investing activities:
Principal payments received on installment contracts receivable		-	-	80,000
Net cash provided by investing activities		-	-	80,000
Cash flows from financing activities:
Proceeds from note payable to Affiliate		-	786,081	-
Principal payments of long-term debt		(336,081)	(780,288)	(71,467)
Repurchase of Units		-	(6,913)	-
Distributions		-	-	(64,275)
Net cash used in financing activities		(336,081)	(1,120)	(135,742)
Net increase (decrease) in cash and cash equivalents		(217,698)	101,607	57,368
Cash and cash equivalents at beginning of year		287,520	185,913	128,545
Cash and cash equivalents at end of year	$	69,822	287,520	185,913
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest	$	56,303	73,674	73,225

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

Notes to Financial Statements

For the years ended December 31, 2001, 2000 and 1999

See accompanying notes to financial statements.

INLAND REAL ESTATE GROWTH FUND II, L.P. (a limited partnership) Notes to Financial Statements For the years ended December 31, 2000, 1999 and 1998

(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. All of the holders of these Units have been admitted to the Partnership. As of December 31, ~~2000~~2001, the Partnership has repurchased a total of ~~117~~127 units ($4041,~~906~~739) from various Limited Partners. At December 31, ~~2000~~2001, included in cash and cash equivalents, is approximately $98,~~000~~300 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 in the United States of America ("GAAP") 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.

Offering costs have been offset against the Limited Partners' capital accounts.

Deferred loan costs were amortized on a straight-line basis over the life of the loan. Deferred leasing fees ~~are~~were amortized on a straight-line basis over the term of the related lease.

Statement of Financial Accounting Standards No. 121 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 their 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 or is expected to commence in the near term. Effective September 23, 1998, the Partnership began to actively market its investment property which was then classified as held for sale. In accordance with SFAS 121, any property identified as "held for sale or disposition" is no longer depreciated. The listing agreement expired on January 31, 1999; however, the Partnership ~~is continuing~~continued to market the property for sale. The Partnership which had ceased depreciation as of September 23, 1998, began depreciation of the property, and all previously unrecognized depreciation has been recorded in 1999. 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 December 31, ~~2000~~2001, the Partnership has ~~not~~recorded ~~recognized~~a ~~any~~provision ~~such~~for impairment of $292,346 on its property based upon the estimated sales proceeds to be received from the sale of its investment property (Note 6).

The Partnership uses the straight-line method of depreciation with a useful life of thirty years for buildings and improvements. Maintenance and repair expenses are charged to operations as incurred. Significant improvements are capitalized and depreciated over their estimated useful lives.

-17-

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

Notes to Financial Statements
(continued)

Rental income is recognized on a straight-line basis over the term of the lease. The excess of rental income earned over the cash rent due under the provisions of the lease agreement is recorded as accrued rent receivable.

The Partnership believes that the interest rate associated with the mortgage payable approximates the market interest rate for this type of debt instrument, and as such, the carrying amount of the mortgage payable approximates its fair value.

The Partnership considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.

No provision for Federal income taxes has been made, as the liability for such taxes is that of the Partners rather than the Partnership.

The Partnership's records are maintained on the accrual basis of accounting in accordance with ~~generally accepted accounting principles ("~~GAAP"). The Federal income tax return has been prepared from such records after making appropriate adjustments to reflect the Partnership's accounts as adjusted for Federal income tax reporting purposes. Such adjustments are not recorded on the records of the Partnership. The net effect of these items is summarized as follows:

		2000 1999
2001		2000
			Tax		Tax
		GAAP	Basis	GAAP	Basis
		Basis	(unaudited)	Basis	(unaudited)
Total assets	$	1,~~195~~012,~~180~~227	1,~~668~~762,~~804~~350	1,~~467~~195,~~561~~180	1,~~924~~668,~~595~~804
Partner's capital:
General Partner		7,~~942~~286	810,~~063~~164	7,~~310~~942	78,~~265~~063
Limited Partners		~~600~~535,~~851~~110	1,~~075~~282,~~199~~355	~~538~~600,~~292~~851	~~996~~1,~~217~~075,199
Net income:
Net income (loss):
General Partner		~~632~~(656)	~~798~~2,100	~~380~~632	~~632~~798
Limited Partners		62(64,~~559~~908)	78207,~~982~~988	3762,~~596~~559	6278,~~610~~982
Net income per Limited Partnership Unit, basic and diluted		15(16.9556)	2053.1417	915.4595	1520.7514

-18-

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

Notes to Financial Statements
(continued)

(2) Investment Properties

(a) Wellington Place, Carol Stream, Illinois

During 1991, the Partnership sold all of the eighteen buildings comprising the Wellington Place apartment complex to unaffiliated third parties. The Partnership had recorded wrap around installment contracts receivable as a result of these sales, subject to existing mortgage notes. The gain was recognized as cash was received over the life of the related installment contracts. As of December 31, 1998, all of the gain had been recognized. The gain recognized was net of $135,000 of sales commission payable to Affiliates of the General Partner, which was reversed in 2001 (Note 4).

(b) Scandinavian Health Club, Columbus, Ohio

On April 21, 1989, the Partnership purchased an existing 20,000 square-foot health and racquet club known as Scandinavian Health Club located in Columbus, Ohio. The property was purchased from an unaffiliated party. The total costs were $1,529,171, which included the purchase price of $1,442,000, acquisition costs of $87,171, including the acquisition fee paid to the General Partner of $59,500 and closing costs.

At closing, the Partnership obtained a $1,000,000 loan secured by the property from an unaffiliated lender. The loan had an interest rate of 8.25% and required monthly principal and interest payments. The interest rate adjusted annually to 3% over the one-year Treasury constant maturity average and payments were adjusted concurrently with the interest rates. The Partnership paid a $20,000 loan fee to the lender and incurred $8,188 of other costs associated with funding the loan. The mortgage loan ballooned in May 1996 and a modification and extension agreement was entered into on January 30, 1997. The Partnership paid a $18,149 loan fee to the lender and incurred $3,332 of legal fees in connection with this extension. The maturity date was extended to February 1, 1999. The payments of principal and interest for the period May 1, 1996 through January 1, 1997 remained consistent with the original terms of the note. Monthly principal and interest payments beginning February 1, 1997 were calculated on the unpaid principal balance at January 1, 1997 with an interest rate of 8.25%, adjusted annually, based on a ten year amortization period.

OnAs ~~February~~of 1September 23, ~~1999~~1998, the ~~General Partner of the~~ Partnership ~~advanced~~listed ~~funds~~and onwas aactively ~~short-term~~marketing ~~basis to~~ the ~~Partnership~~Scandinavian toHealth ~~pay~~Club ~~off~~property ~~its~~for ~~mortgage~~sale ~~payable~~at ~~balance~~an ofamount ~~$780,288~~in ~~plus~~excess ~~accrued~~of ~~interest~~its ~~through~~carrying ~~the maturity date~~value. ~~During~~The ~~2000,~~listing ~~the Partnership~~agreement ~~made~~expired ~~principle paydowns~~ on ~~this~~January ~~note~~31, ~~totaling~~1999, ~~$336~~however,~~081.~~ ~~The balance of~~ the ~~mortgage~~Partnership ~~payable~~continued to market the ~~General~~property ~~Partner~~for ofsale. ~~$450,000~~The ~~has~~Partnership awhich ~~current~~had ~~interest~~ceased ~~rate~~depreciation as of ~~9.5%~~September ~~and~~23, ~~requires~~1998, ~~monthly~~began ~~interest~~depreciation ~~only~~of ~~payments.~~the Aproperty ~~final~~as ~~balloon payment~~ of ~~all outstanding~~July ~~principal~~28, 1999 and all ~~accrued~~previously ~~and~~unrecognized ~~unpaid~~depreciation ~~interest,~~totaling ~~if any~~$8,672 was ~~due~~recorded onas ~~December~~of ~~31, 1999 but was extended to~~ December 31, ~~2001~~1999. ~~This loan may be extended at the Partnership's option.~~

AsOn ofFebruary ~~September 23~~1, ~~1998~~1999, the ~~Partnership~~General ~~listed~~Partner ~~and~~of ~~was~~the ~~actively~~Partnership ~~marketing~~advanced ~~the~~funds ~~Scandinavian~~on ~~Health~~a ~~Club~~short-term ~~property~~basis ~~for~~to ~~sale~~the atPartnership anto ~~amount~~pay inoff ~~excess~~its ofmortgage ~~its~~payable ~~carrying~~balance ~~value.~~of ~~The~~$780,288 ~~listing~~plus ~~agreement~~accrued ~~expired~~interest onthrough ~~January~~the ~~31,~~maturity ~~1999,~~date. ~~however~~During 2000, the ~~property~~ ~~was~~Partnership ~~included~~made inprinciple apaydowns ~~sealed~~on ~~bid~~this ~~auction~~note intotaling ~~June 1999~~$336,081. The ~~sole~~balance ~~acceptable~~of ~~contract~~the ~~received~~mortgage ~~from~~payable to the ~~sealed~~General ~~bid~~Partner ~~auction~~of ~~was~~$450,000 ~~terminated~~has bya ~~the~~current ~~potential~~interest ~~purchaser~~rate onof ~~July~~9.5% ~~28,~~and ~~1999.~~requires ~~The~~monthly ~~Partnership~~interest ~~which~~only ~~had~~payments. ~~ceased~~A ~~depreciation~~final asballoon payment of ~~September~~all ~~23, 1998,~~outstanding ~~began~~principal ~~depreciation~~and ofall ~~the~~accrued ~~property~~and asunpaid ofinterest, ~~July~~if 28any, ~~1999~~was ~~and~~due ~~all~~on ~~previously~~December ~~unrecognized~~31, ~~depreciation~~1999 ~~totaling~~but ~~$8,672~~ was ~~recorded~~extended asto of December 31, ~~1999~~2001. This loan can be extended at the Partnership's option. The General Partner had agreed not to demand payment under the loan.

In July 2001, a contract was signed to sell the Partnership's remaining property for $900,000 and the Partnership ceased depreciation. The Partnership remaining asset was sold on January 31, 2002. After the costs of sale, the Partnership received $795,298. Based on the sale price, the Partnership has recorded a provision for impairment of $292,346 relating to the Scandinavian Health Club.

-19-

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

Notes to Financial Statements
(continued)

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.

(3) Partnership Agreement

Pursuant to the terms of the Partnership Agreement, net profits or losses of the Partnership from operations are generally allocated 99% to the Limited Partners and 1% to the General Partner. Gains from the sale or other disposition of the Partnership's properties will generally be allocated to the General and Limited Partners in relation to the distributions of proceeds from such transactions.

Cash available for distribution from operations will be distributed 99% to the Limited Partners and 1% to the General Partner. Net sale or refinancing proceeds will generally be distributed first to the Limited Partners up to an amount equal to their Invested Capital plus any deficiency in a 10% cumulative annual return. Next, to the General Partner in an amount equal to any Supplemental Capital Contributions, as defined, made by it. Any remaining proceeds will be distributed 80% to the Limited Partners and 20% to the General Partner.

The General Partner has agreed to make, if necessary, 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. ~~After~~The ~~consideration~~General ofPartner ~~the~~made a Supplemental Capital Contribution, ~~the~~of ~~Partnership~~approximately ~~believes~~$450,000 ~~that~~in itMarch ~~has sufficient funds to satisfy its obligations~~2002.

(4) 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,~~387~~671 and $~~878~~1,378 remained unpaid at December 31, ~~2000~~2001 and ~~1999~~2000, respectively.

In connection with the sales at Wellington Place apartment complex during 1991, the Partnership ~~has~~had recorded $135,000 of sales commissions payable to Affiliates of the General Partner. ~~Such~~to ~~commissions will~~ be deferred until the Limited Partners ~~have~~ received their Original Capital plus a return as specified in the Partnership Agreement. Based on the contract price related to the sale of the Partnership's remaining asset the Limited Partners did not receive the necessary return specified in the Partnership Agreement in order to pay the deferred sales commission to the Affiliate of the General Partner. Accordingly, as of December 31, 2001, the Partnership has recorded additional gain relating to the sales at the Wellington Place apartment complex.

An Affiliate of the General Partner is entitled to receive Property Management Fees for management and leasing services. Management fees of $2,223 for each of the years ended December 31, ~~2000~~2001, ~~1999~~2000, and ~~1998~~1999, respectively have been incurred and paid to an Affiliate and are included in the Partnership's property operating expenses to Affiliates.

-20-

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

Notes to Financial Statements
(continued)

(5) Leases

At December 31, ~~1999~~2001, the Partnership's principal asset consists of a health club which is occupied by one tenant, Scandinavian Health Spa Inc. which is a wholly owned subsidiary of Bally's Health and Tennis Corporation, under a triple net lease which requires that in addition to paying base rent, the tenant is also responsible for the payment of insurance, taxes and maintenance.

The property is subject to a lease which ~~expires~~expired in October 2001 but was extended to March 2002, and required an initial base rent per annum of $183,710. The rent increased to $202,082 in October 1991 and $222,288 in October 1996. ~~The General Partner does not anticipate an early termination of this lease.~~

The Partnership has determined that the lease relating to this property is properly classified as an operating lease; therefore, rental income is reported when earned and the cost of the property, excluding the cost of land, is depreciated over the estimated useful life.

~~Minimum~~The lease ~~payments~~contains toprovisions providing for stepped rent increases. Generally accepted accounting principles require that rental income be ~~received~~recorded infor the ~~future~~period of occupancy using the effective monthly rent, which is the average monthly rent for the ~~health~~entire ~~club~~period of occupancy during the term of the lease. The accompanying financial statements include a decrease of $16,774 in 2001 and $15,650 in 2000, and 1999, of rental income for the period of occupancy for which stepped rent increases apply and $0 and $16,774 in related accrued rents receivable as of December 31, 2001 and 2000, respectively. Those amounts are expected to be collected over the terms of the related lease as ~~follows:~~scheduled rent payments are made.

~~2001~~(6) Subsequent ~~$ 166,716~~Events

~~The~~In ~~lease~~January ~~contains~~2002, ~~provisions providing for stepped rent increases. Generally accepted accounting principles require that rental income be recorded for~~ the ~~period~~Partnership ofmade ~~occupancy~~a ~~using the effective monthly rent~~$150,000 ~~which~~principal ispaydown ~~the~~on ~~average monthly rent for~~ the ~~entire~~note ~~period~~payable ofto ~~occupancy during~~ the ~~term~~General ~~of the lease~~Partner. ~~The~~In ~~accompanying~~February ~~financial statements include a decrease of $15~~2002,~~650~~ inthe ~~2000,~~Partnership ~~1999,~~paid ~~and 1998, of rental income for~~ the ~~period~~remaining ofprincipal ~~occupancy for which stepped rent increases apply~~ and ~~$16,774 and $32,424 in related~~ accrued ~~rents~~interest ~~receivable as~~ of ~~December 31~~$316, ~~2000 and 1999, respectively~~280. ~~Those amounts are expected to be collected over the terms of the related lease as scheduled rent payments are made.~~

On January 31, 2002, the Partnership sold its remaining asset, the Scandinavia Health Club for $795,298, net of closing costs.

-21-

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

There were no disagreements on accounting or financial disclosure during ~~2000~~2001.

PART III

Item 10. Directors and Executive Officers of the Registrant

The General Partner of the Partnership, Inland Real Estate Investment Corporation, was organized in 1984 for the purpose of acting as general partner of limited partnerships formed to acquire, own and operate real properties. The General Partner is a wholly-owned subsidiary of The Inland Group, Inc. In 1990, Inland Real Estate Investment Corporation became the replacement General Partner for an additional 301 privately-owned real estate limited partnerships syndicated by Affiliates. The General Partner has responsibility for all aspects of the Partnership's operations. The relationship of the General Partner to its Affiliates is described under the caption "Conflicts of Interest" at pages 11 to 13 of the Prospectus, a copy of which description is hereby incorporated herein by reference.

Officers and Directors

The officers, directors, and key employees of The Inland Group, Inc. and its Affiliates ("Inland") that are likely to provide services to the Partnership are as follows:

	Functional Title

Daniel L. Goodwin	Chairman and Chief Executive Officer
Robert H. Baum	Executive Vice President-General Counsel
G. Joseph Cosenza	Senior Vice President-Acquisitions
Robert D. Parks	Senior Vice President-Investments
Brenda G. Gujral	President and Chief Operating Officer-IREIC
Catherine L. Lynch	Treasurer
Roberta S. Matlin	Assistant Vice President-Investments
Patricia A. DelRosso	Vice President-Asset Management
Kelly Tucek	Assistant Vice President-Partnership Accounting

DANIEL L. GOODWIN (age 57) is Chairman of the Board of Directors of The Inland Group, Inc., a billion-dollar real estate and financial organization located in Oak Brook, Illinois. Among Inland's subsidiaries is ~~the largest property management firm in Illinois and one of the largest commercial real estate and mortgage banking firms in the Midwest.~~ -22-

DANIEL L. GOODWIN (age 58) is Chairman of the Board of Directors of The Inland Group, Inc., a billion-dollar real estate and financial organization located in Oak Brook, Illinois. Among Inland's subsidiaries is the largest property management firm in Illinois and one of the largest commercial real estate and mortgage banking firms in the Midwest.

Mr. Goodwin has served as Director of the Avenue Bank of Oak Park and as a director of the Continental Bank of Oakbrook Terrace. He was Chairman of the Bank Holding Company of American National Bank of DuPage. Currently he is the Chairman of the Board of Inland Mortgage Corporation.

Mr. Goodwin has been in the housing industry for more than 30 years, and has demonstrated a lifelong interest in housing-related issues. He is a licensed real estate broker and a member of the National Association of Realtors, the Illinois Association of Realtors and the Northern Illinois Commercial Association of Realtors. He has developed thousands of housing units in the Midwest, New England, Florida, and the Southwest. He is also the author of a nationally recognized real estate reference book for the management of residential properties.

Mr. Goodwin has served on the Board of the Illinois State Affordable Housing Trust Fund for six years and was recently appointed to serve once again by Governor George Ryan. He is an advisor for the Office of Housing Coordination Services of the State of Illinois, and a member of the Seniors Housing Committee of the National Multi-Housing Council. He was appointed Chairman of the Housing Production Committee for the Illinois State Affordable Housing Conference by former Governor Edgar. He also served as a member of the Cook County Commissioner's Economic Housing Development Committee, and he was the Chairman of the DuPage County Affordable Housing Task Force. The 1992 Catholic Charities Award was presented to Mr. Goodwin for his work in addressing affordable housing needs. The City of Hope designated him as the Man of the Year for the Illinois construction industry. In 1989, the Chicago Metropolitan Coalition on Aging presented Mr. Goodwin with an award in recognition of his efforts in making housing more affordable to Chicago's Senior Citizens. On May 4, 1995, PADS, Inc. (Public Action to Deliver Shelter) presented Mr. Goodwin with the affordable housing award, recognizing The Inland Group as the leading corporate provider of transitional housing for the homeless people of DuPage County. Mr. Goodwin also serves as Chairman of New Directions Housing Corporation, which provides affordable housing in the Midwest.

Mr. Goodwin is a product of Chicago-area schools, and obtained his Bachelor's and Master's Degrees from Illinois Universities. Following graduation, he taught for five years in the Chicago Public Schools. His commitment to education has continued through his work with the BBF Family Services' Pilot Elementary School in Chicago, and the development of the Inland Vocational Training Center for the Handicapped located at Little City in Palatine, Illinois. He personally established an endowment which funds a perpetual scholarship program for inner-city disadvantaged youth. In 1990 he received the Northeastern Illinois University President's Meritorious Service Award. Mr. Goodwin holds a Master's Degree in Education and in 1986, he was awarded an Honorary Doctorate from Northeastern Illinois University College of Education. More than 12 years ago, under Mr. Goodwin's direction, Inland instituted a program to educate disabled students about the workplace. Most of those original students are employed at Inland today, and Inland continues as one of the largest employers of the disabled in DuPage County. Mr. Goodwin has served as a member of the Board of Governors of Illinois State Colleges and Universities, and he is currently Vice Chairman of the Board of Trustees of Benedictine University. Since January 1996, he has been Chairman of the Northeastern Illinois University Board of Trustees.

-23-

In 1988 Mr. Goodwin received the Outstanding Business Leader Award from the Oak Brook Jaycees and in March 1994 he won the Excellence in Business Award from the DuPage Area Association of Business and Industry. Additionally, he was honored by Little Friends on May 17, 1995 for rescuing their Parent-Handicapped Infant Program. He was the recipient of the 1995 March of Dimes Life Achievement Award and was recognized as the 1998 Corporate Leader of the Year by the Oak Brook Area Association of Commerce and Industry. The Ray Graham Association for People with Disabilities honored Mr. Goodwin as the 1999 Employer of the Year. Also, in 1999, the YWCA DuPage District bestowed the Corporate Recognition Award for Inland's policies and practices that demonstrate a commitment to the advancement of women in the workplace. For many years, he has been Chairman of the National Football League Players Association Mackey Awards for the benefit of inner-city youth and he served as the recent Chairman of the Speakers Club of the Illinois House of Representatives.

ROBERT H. BAUM (age 5657) has been with The Inland Group, Inc. and its affiliates since 1968 and is one of the four original principals. Mr. Baum is Vice Chairman and Executive Vice President-General Counsel of The Inland Group, Inc. In his capacity as General Counsel, Mr. Baum is responsible for the supervision of the legal activities of The Inland Group, Inc. and its affiliates. This responsibility includes the supervision of The Inland Law Department and serving as liaison with outside counsel. Mr. Baum has served as a member of the North American Securities Administrators Association Real Estate Advisory Committee and as a member of the Securities Advisory Committee to the Secretary of State of Illinois. He is a member of the American Corporation Counsel Association and has also been a guest lecturer for the Illinois State Bar Association. Mr. Baum has been admitted to practice before the Supreme Court of the United States, as well as the bars of several federal courts of appeals and federal district courts and the State of Illinois and is a licensed real estate broker. He has served as a director of American National Bank of DuPage and currently serves as a director of Westbank. Mr. Baum also is a member of the Governing Council of Wellness House, a charitable organization that provides educational and emotional support for cancer patients and their families.

G. JOSEPH COSENZA (age 5657) has been with The Inland Group, Inc. and its affiliates since 1968 and is one of the four original principals. Mr. Cosenza is a Director and Vice Chairman of The Inland Group, Inc. and oversees, coordinates and directs Inland's many enterprises. In addition, Mr. Cosenza immediately supervises a staff of ten persons who engage in property acquisition. Mr. Cosenza has been a consultant to other real estate entities and lending institutions on property appraisal methods. He has directly overseen the purchase of close to $4 billion of income producing real estate from 1968 to the present.

Mr. Cosenza received his B.A. Degree from Northeastern Illinois University and his M.S. Degree from Northern Illinois University. From 1967 to 1968, he taught in the LaGrange, Illinois School District and from 1968 to 1972, he served as Assistant Principal and taught in the Wheeling, Illinois School District. Mr. Cosenza has been a licensed real estate broker since 1968 and an active member of various national and local real estate associations, including the National Association of Realtors and the Urban Land Institute.

Mr. Cosenza has also been Chairman of the Board of American National Bank of DuPage, and has served on the Board of Directors of Continental Bank of Oakbrook Terrace. He was the Chairman and is presently a Director on the Board of Westbank in Westchester, Hillside and Lombard, Illinois.

~~ROBERT D. PARKS (age 57) is a Director of The Inland Group, Inc. and one of its four original principals; Chairman of Inland Real Estate Investment Corporation and Director of Inland Securities~~ Corporation. Mr. Parks was President, Chief Executive Officer, Chief Operating Officer and a Director of Inland Real Estate Corporation from October 1994 to July 2000. He is still Chairman of Inland Real Estate Corporation. He is Chairman, Chief Executive ~~Officer and Affiliated Director of Inland Retail Real Estate Trust, Inc.~~ -24-

ROBERT D. PARKS (age 58) has been with The Inland Group Inc. ("Inland") and its affiliates since 1968 and is one of the four original principals; Chairman of Inland Real Estate Investment Corporation and Director of Inland Securities Corporation. Mr. Parks is president, chief executive officer, and a director of Inland Real Estate Corporation. He is Chairman, Chief Executive Officer and Affiliated Director of Inland Retail Real Estate Trust, Inc. He is a director of Inland Real Estate Advisory Services, Inc., Inland Investment Advisors, Inc., Partnership Ownership Corp., Inland Southern Acquisitions, Inc. and Inland Southeast Investment Corp., and he is a Trustee of Inland Mutual Fund Trust.

Mr. Parks is responsible for the ongoing administration of existing investment programs, corporate budgeting and administration for Inland Real Estate Investment Corporation. He oversees and coordinates the marketing of all investments and investor relations.

Prior to joining Inland, Mr. Parks ~~taught~~was a school teacher in Chicago's public schools. He received his B.A. Degree from Northeastern Illinois University and his M.A. Degree from the University of Chicago. He is a registered Direct Participation Program Limited Principal with the National Association of Securities Dealers, Inc. He is also a member of the Real Estate Investment Association, the Financial Planning Association, the Foundation for Financial Planning, as well as a member of the National Association of Real Estate ~~Investment~~Investments Trusts, ~~(NAREIT)~~Inc.

BRENDA G. GUJRAL (age 5960) is President and Chief Operating Officer of Inland Real Estate Investment Corporation (IREIC). She is also President and Chief Operating Officer of Inland Securities Corporation (ISC), a member firm of the National Association of Securities Dealers (NASD).

Mrs. Gujral has overall responsibility for the operations of IREIC, including the distribution of checks to over 50,000 investors, review of periodic communications to those investors, the filing of quarterly and annual reports for Inland's publicly registered investment programs with the Securities and Exchange Commission, compliance with other SEC and NASD securities regulations both for IREIC and ISC, review of asset management activities, and marketing and communications with the independent broker/dealer firms selling Inland's current and prior programs. Mrs. Gujral works with internal and outside legal counsel in structuring and registering the prospectuses for IREIC's investment programs.

Mrs. Gujral began her career with Inland in 1977, becoming an officer in 1982. Prior to joining Inland, she worked for the Land Use Planning Commission establishing an office in Portland, Oregon, to implement land use legislation for that state.

CATHERINE L. LYNCH (age 4243) joined Inland in 1989 and is the Treasurer of Inland Real Estate Investment Corporation. Ms. Lynch is responsible for managing the Corporate Accounting Department. Prior to joining Inland, Ms. Lynch worked in the field of public accounting for KPMG Peat Marwick since 1980. She received her B.S. Degree in Accounting from Illinois State University. Ms. Lynch is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants and the Illinois CPA Society. She is registered with the National Association of Securities Dealers as a Financial Operations Principal.

ROBERTA S. MATLIN (age 56) joined Inland in 1984 as Director of Investor Administration and currently serves as Senior Vice President-Investments. Prior to that, Ms. Matlin spent 11 years with the Chicago Region of the Social Security Administration of the United States Department of Health and Human Services. She is a Director of Inland Real Estate Investment Corporation, Inland Securities Corporation, and Inland Investment Advisors, Inc. As Senior Vice ~~President~~ -~~Investments, she directs the day~~25-to-day internal operations of the General Partner. Ms. Matlin received her B.A. degree from the University of Illinois. She is registered with the National Association of Securities Dealers, Inc. as a General Securities Principal and a Registered Investment Advisor.

~~PATRICIA~~ROBERTA AS. ~~DELROSSO~~MATLIN (age 4857) joined Inland in ~~1985.~~1984 ~~Ms.~~as ~~DelRosso~~Director of Investor Administration and currently serves as Senior Vice President--Investments of ~~Inland~~IREIC, ~~Real~~directing ~~Estate~~the ~~Investment~~day-to-day ~~Corporation~~internal inoperations of the ~~area~~General ofPartner. ~~Asset Management~~Ms. AsMatlin ~~head~~is a Director of ~~the~~IREIC ~~Asset~~and ~~Management Department,~~ISC. ~~she~~She ~~develops~~is ~~operating~~President and ~~disposition~~Director ~~strategies~~of ~~for~~Inland ~~all~~Investment ~~investment-owned~~Advisors, ~~properties~~Inc. ~~Ms.~~and ~~DelRosso~~Intervest ~~received~~Southern ~~her~~Real ~~Bachelor's~~Estate ~~degree~~Corporation ~~from~~and ~~George~~a ~~Washington~~trustee ~~University~~of ~~and~~Inland ~~her~~Mutual ~~Master's~~Fund ~~from~~Trust. ~~Virginia~~Until ~~Tech~~December ~~University.~~31, ~~Ms.~~2001, ~~DelRosso~~she iswas a ~~licensed real~~Director ~~estate~~of ~~broker~~Inland Apartment Acquisitions, ~~NASD~~Inc. ~~registered~~Prior ~~securities~~to ~~sales~~joining ~~representative~~Inland, ashe ~~member~~spent 11 years with the Chicago Region of the ~~Urban~~Social ~~Land~~Security ~~Institute~~Administration ~~and~~of athe ~~member~~United States Department of Health and Human Services. Ms. Matlin received her B.A. Degree from the ~~Northern~~University of Illinois. ~~Commercial~~She ~~Association~~is ofregistered ~~Realtors~~with the NASD as a general securities principal and investment advisor.

~~KELLY~~PATRICIA ~~TUCEK~~A. DELROSSO (age 3849) joined Inland in ~~1989~~1985. ~~and~~Ms. isDelRosso anserves ~~Assistant~~as Senior Vice President of Inland Real Estate Investment Corporation in the area of Asset Management. As head of ~~August~~the ~~1996~~Asset Management Department, she develops operating and disposition strategies for all investment-owned properties. Ms. ~~Tucek~~DelRosso isalso ~~responsible~~serves ~~for~~as President of the ~~Investment~~newly ~~Accounting~~formed ~~Department which~~Inland ~~includes~~Real ~~all~~Estate ~~public~~Exchange ~~partnership~~Corporation. ~~accounting~~In ~~functions~~this ~~along~~capacity, ~~with~~she ~~quarterly~~develops, implements and ~~annual~~evaluates ~~SEC~~business ~~filings.~~plans ~~Prior~~for totenant-in-common ~~joining~~and ~~Inland,~~customized 1031 tax-deferred exchange replacement property offerings. Ms. ~~Tucek~~DelRosso ~~was~~received onher ~~the~~Bachelor's ~~audit~~degree ~~staff~~from ofGeorge ~~Coopers~~Washington University and ~~Lybrand~~her ~~since~~Master's ~~1984.~~from ~~She~~Virginia ~~received~~Tech ~~her~~University. BMs.A. ~~Degree~~DelRosso inis ~~Accounting~~a licensed real estate broker, NASD registered securities sales representative, a member of the Urban Land Institute and ~~Computer Science~~a ~~from~~member ~~North~~of ~~Central~~the ~~College~~Northern Illinois Commercial Association of Realtors.

KELLY TUCEK (age 39) joined Inland in 1989 and is an Assistant Vice President of Inland Real Estate Investment Corporation. As of August 1996, Ms. Tucek is responsible for the Investment Accounting Department which includes all public partnership accounting functions along with quarterly and annual SEC filings. Prior to joining Inland, Ms. Tucek was on the audit staff of Coopers and Lybrand since 1984. She received her B.A. Degree in Accounting and Computer Science from North Central College.

-26-

Item 11. Executive Compensation

The General Partner is entitled to receive a share of cash distributions, when and as cash distributions are made to the Limited Partners, and a share of profits or losses as described under the caption "Cash Distributions" on page 44 and "Allocation of Profits or Losses" on page 43 of the Prospectus, and on pages A-7 to A-10 of the Partnership Agreement, included as an exhibit to the Prospectus. Reference is also made to Note 3 of the Notes to Financial Statements filed with this Annual Report for a description of such distributions and allocations. The General Partner received a share of Partnership income in ~~1999~~2001.

The Partnership is permitted to engage in various transactions involving Affiliates of the General Partner of the Partnership, as described under the captions "Compensation and Fees" on pages 8 to 10 and "Conflicts of Interest" on pages 10 to 13 of the Prospectus, and on pages A-12 through A-22 of the Partnership Agreement, included as an exhibit to the Prospectus. The relationship of the General Partner (and its directors and officers) to its Affiliates is set forth above in Item 10 .

In connection with the sales at Wellington Place, the Partnership ~~has~~had recorded $135,000 of sales commissions payable to Affiliates of the General Partner. Such commissions ~~will~~were be deferred until the Limited Partners ~~have~~ received their Original Capital plus a return as specified in the Partnership Agreement. Based on the sale price received on the Partnership's remaining asset the Limited Partners will not receive the necessary return specified in the Partnership Agreement in order for the Partnership to pay the deferred sales commission to the Affiliate of the General Partner. Accordingly, the Partnership has recorded additional gain relating to the sales at the Wellington Place apartment complex.

The General Partner of the Partnership and its Affiliates may be reimbursed for their out-of-pocket expenses relating to the administration of the Partnership. In ~~2000~~2001, the General Partner of the Partnership was due reimbursement for such expenses in the amount of $2217,~~730~~696, of which $1,~~387~~671 was unpaid at December 31, ~~2000~~2001.

An Affiliate of the General Partner earned management fees of $2,223 in ~~2000~~2001, in connection with managing the Partnership's investment property, all of which was paid at December 31, ~~2000~~2001.

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 principal 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, iswas due on December 31, 2001. This loan ~~may~~can be extended at the Partnership's option. For the year ended December 31, 2001, the Partnership incurred $42,750 of interest expense, of which $10,775 was unpaid at December 31, 2001.

-27-

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)	The officers and directors of the General Partner of the Partnership own, as a group, the following Units of the Partnership:

	Amount and Nature
	of Beneficial	Percent
Title of Class	Ownership	of Class

Limited Partnership	One Unit directly	less than 1% Units

	No officer or director of the General Partner of the Partnership possesses a right to acquire beneficial ownership of Units of the Partnership.

	All of the outstanding shares of the General Partner of the Partnership are owned by an Affiliate of its officers and directors as set forth above in Item 10.


(c)	There exists no arrangement, known to the Partnership, the operation of which may at a subsequent date result in a change in control of the Partnership.

-28-

Item 13 Certain Relationships and Related Transactions

There were no significant transactions or business relationships with the General Partner, Affiliates or their management other than those described in Items 10 and 11 above. Reference is made to Note 4 of the Notes to Financial Statements (Item 8 of this annual report) for information regarding related party transactions.

PART IV

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

(a)	The financial statements listed in the index on page 10 of this Annual Report are filed as part of this Annual Report.

(b)	Exhibits. The following exhibits are incorporated herein by reference:

	3 Amended and Restated Agreement of Limited Partnership and certificate of Limited Partnership included as Exhibits A and B to the Prospectus dated September 21, 1988, as supplemented, are incorporated herein by reference thereto.

	4 Form of Certificate of Ownership representing interest in the registrant filed as Exhibit 4 to Registration Statement on S-11, File No. 33-15334, is incorporated herein by reference thereto.

	28 Prospectus dated September 21, 1988, as supplemented, included in Post-Effective Amendment No. 4 to Form S-11 Registration Statement, File No. 33-15334, is incorporated herein by reference thereto.

(c)	Financial Statement Schedules

	All schedules have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.

(d)	Reports on Form 8-K:

	None

No Annual Report or proxy material for the year ~~2000~~2001 has been sent to the Partners of the Partnership. An Annual Report will be sent to the Partners subsequent to this filing and the Partnership will furnish copies of such report to the Commission when it is sent to the Partners.

-29-

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.

	INLAND REAL ESTATE GROWTH FUND II, L.P.
	Inland Real Estate Investment Corporation
	General Partner
	/s/ Robert D. Parks
By:	Robert D. Parks
	Chairman of the Board and Chief Executive Officer
Date:	March 2825, ~~2001~~2002

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

By: Inland Real Estate Investment Corporation General Partner /s/ Robert D. Parks By: Robert D. Parks Chairman of the Board and Chief Executive Officer Date: March 2825, ~~2001~~2002 /s/ Patricia A. DelRosso By: Patricia A. DelRosso Senior Vice President Date: March 2825, ~~2001~~2002 /s/ Kelly Tucek By: Kelly Tucek Asst. Vice President Date: March 2825, ~~2001~~2002 /s/ Daniel L. Goodwin By: Daniel L. Goodwin Director Date: March 2825, ~~2001~~2002 /s/ Robert H. Baum By: Robert H. Baum Director Date: March 2825, ~~2001~~2002

-30-

Filing Compare · INLAND REAL ESTATE GROWTH FUND II LP