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 30, 2014

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

For the transition period from __________ to __________

Commission File Number: 0-11909

REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - II

(Exact name of registrant as specified in its charter)

Delaware		16-1212761
(State of organization)		(IRS Employer Identification No.)

2350 North Forest Road, Getzville, New York 14068

(Address of principal executive offices)

(716) 636-9090

(Registrant’s telephone number)

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 [ ] No [X]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files) Yes [ ] No [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer (Do not check if a smaller reporting company) [ ] Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No [X]

REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - II

Part 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements

Consolidated Balance Sheets

	(Unaudited)
Assets	September 30, 2014		December 31, 2013

Property and equipment, at cost:
Land and improvements	$	518,481	$	518,481
Buildings and improvements		4,374,048		4,374,048
Furniture and equipment		9,950		9,950
		4,902,479		4,902,479
Less accumulated depreciation		(3,921,279)		(3,899,393)
Net property and equipment		981,200		1,003,086
Equity interest in unconsolidated joint ventures		1,221,170		1,211,771
Cash		78,468		33,986
Accounts receivable, net		3,953		2,275
Receivables from affiliates		178,371		178,564
Other assets		62,338		115,987
Total assets	$	2,525,500	$	2,545,669
Liabilities and Partners' Equity
Liabilities:
Accounts payable and accrued expenses	$	151,861	$	107,153
Payables to affiliates Security deposits and prepaid rents		40,587 54,056		- 46,702
Total liabilities		246,504		153,855
Partners' deficit:
General partners		637,101		641,038
Limited partners		1,641,895		1,750,777
Total partners' equity		2,278,996		2,391,814
Total liabilities and partners' equity	$	2,525,500	$	2,545,669

See accompanying notes to the Consolidated Financial Statements

REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - II

Consolidated Statements of Operations

(Unaudited)

	Three months ended September 30,		Nine months ended September 30,
Income:	2014	2013	2014	2013
Rental	$ 114,444	$ 118,206	$ 339,133	$ 388,507
Interest and other	5,541	819	23,309	1,817
Total Income	119,985	119,025	362,442	390,324
Expenses:
Property operations	111,947	129,059	403,661	383,222
Administrative:
Affiliates	9,786	22,271	31,524	67,648
Other	26,265	10,707	61,275	29,143
Depreciation expenses	6,830	7,222	21,886	21,022
Total Expenses	154,828	169,259	518,346	501,035
Loss before equity in earnings of
unconsolidated joint ventures	(34,843)	(50,233)	(155,904)	(110,711)
Equity in earnings of unconsolidated
joint ventures	10,525	10,497	43,656	52,189
Net Loss	$ (24,318)	$ (39,737)	$ (112,248)	$ (58,522)
Net loss per limited partnership unit	$ (2.36)	$ (3.85)	$ (10.89)	$ (5.68)
Weighted average number of limited
partnership units outstanding	10,000	10,000	10,000	10,000

See accompanying notes to the Consolidated Financial Statements

REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - II

Consolidated Statements of Cash Flows
for the Nine months ended September 30,
(Unaudited)

		2014			2013 (restated)
Cash flows from operating activities:
Net loss	$	(112,248)		$	(58,522)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation		21,886			21,022
Equity in earnings of joint ventures		(43,656)			(52,189)
Changes in:
Accounts receivable		(1,484)			(168,622)
Other assets		53,649			24,929
Accounts payable and accrued expenses		85,296			(13,729)
Security deposits and prepaid rents		7,353			(21,016)
Net cash provided by (used in) operating activities		10,796			(268,127)
Cash flows investing activities-
Additions to property and equipment		-			(31,873)
Proceeds from the return of Invested Capital in joint venture		34,256			-
Repurchased shares		(570)			-
Net cash provided by investing activities		33,686			(31,873)
Net increase (decrease) in cash		44,482			(300,000)
Cash at beginning of period		33,986			364,890
Cash at end of period	$	78,468	$	$	64,890
Cash paid for interest	$	-	$	$	-

See accompanying notes to the Consolidated Financial Statements

REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - II

Notes to Consolidated Financial Statements

Nine Months ended September 30, 2014 and 2013

1)	Formation and Operation of Partnership

Realmark Property Investors Limited Partnership - II (the Partnership) is a Delaware limited partnership formed on March 25, 1982, to invest in a diversified portfolio of income producing real estate investments.

In 1982 and 1983, the Partnership sold, through a public offering, 10,000 units of limited partnership interest. At December 31, 2013, the general partners were Realmark Properties, Inc. (the Corporate General Partner) and Joseph M. Jayson (the Individual General Partner) who was the sole shareholder of J.M. Jayson & Company, Inc. Realmark Properties, Inc. is a wholly-owned subsidiary of J.M. Jayson & Company, Inc. Joseph M. Jayson passed away on June 27, 2014. A successor Individual General Partner was not appointed following Mr. Jayson’s death. Refer to Item 9B: Other Information in the December 31, 2013 Form 10K/A for further background on the changes in Corporate General Partner’s Board and Management.

Under the partnership agreement, the general partners and their affiliates can receive compensation for services rendered, and reimbursement for expenses incurred on behalf of the Partnership.

2)	Restatement of Consolidated Financial Statements

The accompanying consolidated financial statements have been restated for September 30, 2013 from the unaudited version previously made available to reflect additional adjustments and reclassifications. The nature of these adjustments are discussed in detail in the 2013 Form 10 K/A.

The summary impacts of the restatement adjustments on the Company’s previously reported consolidated statements of operations for the three and nine months ended September 30, 2013 (in thousands):

	Three months ended September 30, 2013	Nine months ended September 30, 2013
Net Loss - Previously reported	$ (45)	$ (111)
Equity in earnings of unconsolidated joint ventures, net of misc. activity	5	53
Net Loss - Restated	$ (40)	$ (58)

3) Summary of Significant Accounting Policies

(a)	Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes

REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - II

Notes to Consolidated Financial Statements

Nine Months ended September 30, 2014 and 2013

required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. The balance sheet at December 31, 2013 has been derived from the audited consolidated financial statements at that date. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation, have been included.

The Partnership’s significant accounting policies are set forth in its December 31, 2013 Form 10-K/A. The interim consolidated financial statements should be read in conjunction with the financial statements included therein. The interim results should not be considered indicative of the annual results.

(b)	Fair Value of Financial Instruments

Due to the short-term nature and interest rates that approximate market rates, the fair value of the Partnership’s financial instruments approximated their carrying values at September 30, 2014 and 2013.

(c)	Property and Equipment

At September 30, 2014, the Partnership owned and operated an office complex in Michigan (Northwind Office Park).

(d)	Investment in Other Joint Ventures

The consolidated financial statements at September 30, 2014, reflect the closing entries for the interest that the Partnership held in a land joint venture. The final accounting contributing an additional $13,075 in equity income in the unconsolidated joint venture derived primarily from interest income on the notes held from the sale of the land and cash of $34,256 representing the net cash due the partnership. The carrying value of this equity method investment as of December 31, 2013 was $21,181.

(e)	Investment in Research Triangle Industrial Park Joint Venture

The Partnership has a 50% interest in Research Triangle Industrial Park Joint Venture (the Venture) with Realmark Property Investors Limited Partnership – VIA (RPILP – VIA), an entity affiliated through common general partners. The joint venture owned and operated the Research Triangle Industrial Park West, an office/warehouse facility in Durham, North Carolina, which was sold in December 2006.

REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - II

Notes to Consolidated Financial Statements

Nine Months ended September 30, 2014 and 2013

The joint venture agreement provides that any income, loss, gain, cash flow, or sale proceeds be allocated 50% to the Partnership and 50% to RPILP – VIA. Summary financial information of the Venture follows:

Balance Sheet Information

	(Unaudited)
	September 30, 2014		December 31, 2013
Assets
Cash and Equivalents	$	797	$	1,181
Receivables from affiliates		1,956,213		1,958,468
Accrued interest receivable from affiliate		655,330		591,529
Total Assets	$	2,612,340	$	2,551,178

Liabilities and Partners' Equity
Liabilities
Payable to affiliates	$	170,000	$	170,000
Total Liabilities		170,000		170,000
Partners Equity
The Partnership		1,221,170		1,190,589
RPILP - VIA		1,221,170		1,190,589
Total Partners Equity		2,442,340		2,381,178
Total liabilities and Partners Equity	$	2,612,340	$	2,551,178

Operating Information

	Nine Months Ended September 30,
	2014		2013
Income - interest	$	63,378	$	105,630
Expenses
Administrative		2,216		1,252
Total Expenses		2,216		1,252
Net Income		61,162		104,378
Allocation of Net income
The partnership		30,581		52,189
RPILP - VIA		30,581		52,189
Total	$	61,162	$	104,378

(4) Related Party Transactions

The Corporate General Partner and its affiliates earn fees, principally for property and partnership management and are reimbursed for services rendered to the Partnership, as provided for in the partnership agreement.

REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - II

Notes to Consolidated Financial Statements

Nine Months ended September 30, 2014 and 2013

A summary of those items for the nine months ended September 30, is as follows:

	2014	2013
Property management fees based on a percentage (generally 6%) of the rental income	$19,238	$28,448
Reimbursement for cost of services to the Partnership that include investor relations, marketing of properties, supplies, professional fees, communications, accounting, printing, postage and other items	12,286	39,200
	$31,524	$67,648

In addition to the above, other property specific expenses such as payroll, benefits, etc. are charged to property operations on the Partnership’s consolidated statements of operations. Certain receivables from affiliated parties are payable on demand and bear interest at 8% in 2014 and 2013.

At September 30, 2014 and December 2013, the Partnership has receivables from affiliates amounting to $178,371 and $178,564, respectively. The $178,371 receivable at September 30, 2014 consists of an advance to the unconsolidated joint ventures of $170,000 and $8,371 of net other corporate affiliated receivable balances. At September 30, 2014 and December 31, 2013, the Partnership has equity interest in unconsolidated joint ventures of $1,221,170 and $1,190,590, respectively. Payables to affiliates amounted to $40,587 at September 30, 2014 and $0 at December 31, 2013. The amounts consist of property expenses paid by a corporate affiliate.

Memorandum of Understanding

The Partnership has a 50% interest in the unconsolidated joint venture in Realmark Research, LLC (known as Research Triangle Industrial Park Joint Venture). Realmark Research, LLC (Research) advanced a portion of its sales proceeds in the amount of $1,066,719 to an affiliate under a Memorandum of Understanding Agreement dated December 8, 2006. Under the terms of this agreement, the affiliate agrees to repay this loan plus interest at a rate of 8% per annum, upon the sale of a remaining property, which is currently being marketed for sale. The outstanding balance, including accrued interest, related to this loan amounted to $1,711,633 and $1,647,832 at September 30, 2014 and December 31, 2013, respectively.

Property Disposition Fee

According to the terms of the partnership agreement, the general partners are also allowed to collect a property disposition fee upon sale of acquired properties. This fee is not to exceed the lesser of 50% of amounts customarily charged in arm’s-length transactions by others rendering similar services for comparable properties or 3% of the sales price. The property disposition fee is subordinate to payments to the limited partners of a cumulative annual return (not compounded) equal to 7% of their average adjusted capital balances and to repayment to the limited partners of an amount equal to their original capital contributions. Since these conditions described above have not been met, no disposition fees have been paid or accrued on properties sold in prior years.

REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - II

Notes to Consolidated Financial Statements

Nine Months ended September 30, 2014 and 2013

(5)	Investments in Real Estate

Effective January 1, 2001, the Partnership entered into a plan to dispose of the property of Northwind Office Park. The carrying value of the assets of Northwind Office Park amounts to $981,200 and $1,003,086 at Septemnber 30, 2014, and December 31, 2013, respectively. The property generated a net loss of $112,248 and $58,522 for the nine months ended September 30, 2014 and 2013, respectively. As of September 30, 2014 and December 31, 2013, based on market conditions, there was not an active program in place to sell the assets and they were not being actively marketed for sale. Accordingly, the assets have not been classified as assets held for sale. Subsequent to September 30, 2014, a real estate agent was retained and the assets are being actively marketed and a subsequent sale is probable. Accordingly, the classification is expected to change for the year ended December 31, 2014.

(6)	Settlement of Lawsuit

As previously reported, the Partnership, as a nominal defendant, the general partners of the Partnership and of affiliated public Partnerships (the “Realmark Partnerships”) and the officers and directors of the Corporate General Partner, as defendants, had been involved in a class action litigation at the state court level regarding the payment of fees and other management issues.

On August 29, 2001, the parties entered into a Stipulation of Settlement (the “Settlement”). On October 4, 2001, the Court issued an “Order Preliminary Approving Settlement’ (the “Hearing Order”) and on November 29, 2001, the Court issued an “Order and Final Judgment Approving Settlement and Awarding Fees and Expenses” and dismissing the complaints with prejudice. The Settlement provided, among other things, that all of the Realmark Partnerships’ properties be disposed of. The general partners will continue to have primary authority to dispose of Partnerships’ properties. If either (i) the general partners have not sold or contracted to sell 50% of the Partnerships’ properties (by value) by April 2, 2002 or (ii) the general partners have not sold or contracted to sell 100% of the Partnerships’ properties by September 29, 2002, then the primary authority to dispose of the Partnerships’ properties will pass to a sales agent designated by plaintiffs’ counsel and approved by the Court. On October 4, 2002, the Court appointed a sales agent to work with the general partners to continue to sell the Partnerships’ remaining properties.

The settlement also provided for the payment by the Partnerships of fees to the plaintiffs’ attorneys. These payments, which are not calculable at this time but may be significant, are payable out of the proceeds from the sale of all of the properties owned by all of the Realmark Partnerships, following the sale of the last of these properties in each partnership. Plaintiffs’ counsel will receive 15% of the amount by which the sales proceeds distributable to limited partners in each partnership exceeds the value of the limited partnership units in each partnership (based on the weighted average of the units’ trading prices on the secondary market as reported by Partnership Spectrum for the period May through September 2001). In no event may the increase on which the fees are calculated exceed 100% of the market value of the units as calculated above.

REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - II

Management Discussion and Analysis

Nine Months ended September 30, 2014 and 2013

PART I - Item 2. Management’s Discussion and Analysis of Financial Condition and Result of Operations

Liquidity and Capital Resources

Effective January 1, 2001, management began formally marketing all remaining properties in the Partnership for sale. The Partnership made no distributions to partners in 2014 or 2013. In connection with the pending sale of the Partnership’s properties, it is anticipated that there will be no future distributions of net cash flow from operations. If there are any distributions as a result of the pending sale itself they will be reduced by the amount of fees payable to the plaintiffs’ legal counsel in connection with the settlement agreement (Part II, Item 1) and any outstanding liabilities incurred with regard to the sale of the Partnership’s properties.

Subsequent to September 30, 2014, management has retained national representation to market the Northwind Office Park property for sale at a price that is reasonable in relation to its current market value. While the remaining property has been actively managed during a period of depressed real estate values, the sale of the asset is probable and it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. As a result, the accounting is expected to change to show the property as an asset as held for sale. This does not impact the accounting treatment of the property as of the date of these consolidated financial statements.

Limited partners should be aware that it is possible that they will receive an allocation of income from gain on sale of properties on which they will be required to pay income taxes and there is no assurance that cash distributions from the sale of the properties will be sufficient to satisfy these obligations.

Except as described above and in the consolidated financial statements, the general partner is not aware of any trends or events, commitments or uncertainties that may impact liquidity in a material way.

Results of Operations

The results of operations of the Partnership, excluding equity in earnings from joint ventures for the nine months ended September 30, 2014 and 2013, produced a net loss of approximately $112,000 and $59,000, respectively.

Inflation has been consistently low during the periods presented in the consolidated financial statements and, as a result, has not had a significant effect on the operations of the Partnership or its properties.

2014 as compared to 2013

Rental income decreased approximately $49,000 due to an increase in vacancies. Total expenses increased by approximately $17,000 consisting of increases in real estate taxes, utilities, professional/filing/bank fees offset by a decrease in affiliate charges.

REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - II

Management Discussion and Analysis

Nine Months ended September 30, 2014 and 2013

Joint Venture

The Partnership owns 50% of a Joint Venture, which owned the Research Triangle Industrial Park West, an office/warehouse facility located in Durham County, North Carolina, which was sold in December 2006. The investment is accounted for under the equity method and the resulting income was approximately $9,000 less in 2014 compared to the restated value from 2013 of $52,000.

PART I - Item 3. Quantitative and Qualitative Disclosures About Market Risk

None.

PART I - Item 4. Controls and Procedures

The Partnership maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Partnership in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. An evaluation was carried out under the supervision and with the participation of the Partnership’s management, including the Partnership’s Principal Executive Officer and Principal Financial Officer, of the effectiveness of the Partnership’s disclosure controls and procedures as of the end of the period covered by this interim report. Based on that evaluation, the Partnership’s Principal Executive Officer and Principal Financial Officer concluded that the Partnership’s disclosure controls and procedures were not effective as of such period end. Management will endeavor to enhance the Partnership’s disclosure controls and procedures to cause them to become effective.

Internal Control Over Financial Reporting: There have been no significant changes in the Partnership’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934, as amended) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

As previously reported, the Partnership, as a nominal defendant, the General Partners of the Partnership and of affiliated public partnerships (the “Realmark Partnerships”) and the officers and directors of the Corporate General Partner, as defendants, had been involved in a class action litigation in New York State court. The Partnership’s settlement of this litigation was described in its Annual Report on Form 10-K/A for the year ended December 31, 2013.

Item 5. Other Information

Reports on Form 8-K

None.

REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - II

Nine Months ended September 30, 2014 and 2013

Item 6. Exhibits

	31.	Certification Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

	32.	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	101.INS	XBRL Instance Document*

	101.SCH	XBRL Taxonomy Extension Schema Document*

	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*

	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*

	101.LAB	XBRL Taxonomy Extension Label Linkbase Document*

	101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*

	* In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be “furnished” and not “filed.”

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.

REALMARK PROPERTY INVESTORS LIMITED PARTNERHIP – II

		/s/ Matthew P. Iak
		Matthew P. Iak
	Date: July 8, 2015	Principal Executive Officer and
		Principal Financial Officer

REALMARK PROPERTY INVESTORS LTD PARTNERSHIP II 10-Q