8-K

                       SECURITIES AND EXCHANGE COMMISSION


                             Washington, D.C. 20549


                                    FORM 8-K


                                 CURRENT REPORT


                       Pursuant to Section 13 or 15(d) of


                       THE SECURITIES EXCHANGE ACT OF 1934


       Date of Report (Date of earliest event reported): November 11, 2002



                         Commission File Number: 0-18942


                           ILM II SENIOR LIVING, INC.
- --------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         Virginia                                             06-1293758
- -----------------------------------                  --------------------------
     (State of organization)                               (I.R.S. Employer
                                                            Identification No.)

1750 Tysons Boulevard, Suite 1200,
Tysons Corner, Virginia                                        22102
- ---------------------------------------                   -----------------
(Address of principal executive office)                       (Zip Code)

                 (888) 257-3550
- ----------------------------------------------------
(Registrant's telephone number, including area code)


                                  (Page 1 of 4)
                         Exhibit Index Appears on Page 5





ITEM 5.  OTHER EVENTS.

     As previously disclosed, in connection with its BRE/Independent Living, LLC
("BRE") litigation, on May 28, 2002, ILM II paid $750,000 to BRE in full
settlement of BRE's claims brought against ILM II. In September 2002, ILM II
received a $150,000 insurance recovery on that claim, resulting in a total
aggregate insurance recovery of $350,000 on the claim. ILM II does not
anticipate any further insurance recovery related to such claim.

     As previously reported, ILM II became subject to a built-in gain tax
liability of approximately $2,931,000 upon the sale of its Senior Housing
Facilities. On August 5, 2002, ILM II paid $1,423,000 of the built-in gain tax
and in September 2002, ILM II paid in full the then remaining balance.

     Further, as previously reported, ILM II is managing an arbitration claim it
has against another party relating to the termination of the merger transaction
with Capital Senior Living Corporation in February 2001. Upon enforcement and
collection of an arbitration award, if any, and subsequent to ILM II's payment
of the costs associated with its liquidation and dissolution, and the costs
associated with the pursuit of the arbitration claim, ILM II intends to make a
final liquidating distribution to its shareholders, equal to its then remaining
assets. While there can be no assurances, ILM II anticipates that an arbitration
decision will be rendered by the end of November 2002.

     As of September 30, 2002, ILM II's total assets approximated $6.1 million
and its total liabilities approximated $2.9 million, and it was anticipated that
ILM II would, in addition to its existing liabilities, incur as additional
expense between $700,000 and $1.4 million with respect to its future operations
and ultimate winding up.

     This report contains "forward-looking statements" based on ILM II's current
expectations and projections about future events. These forward-looking
statements are subject to a number of risks and uncertainties which could cause
actual results and events to differ materially from those anticipated. These
results and events include, without limitation, the amount and timing of future
distributions, if any, the costs and expenses associated with the liquidation
and distribution of ILM II's assets, the amount of an arbitration recovery, if
any, etc. Further, there can be no assurance or certainty that there will be any
further distributions paid to ILM II's shareholders. ILM II undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

        (a)  Not Applicable

        (b)  Not Applicable

        (c)  The following Exhibits are filed as part of this Current Report
             on Form 8-K:

             99.1  Press Release of ILM II Senior Living, Inc. dated
                   November 11, 2002.


                                    (Page 2)





                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.



                                      ILM II SENIOR LIVING, INC.


                                      By:/s/J. William Sharman, Jr.
                                         -------------------------------------
                                         J. William Sharman, Jr.
                                         Chairman of the Board of Directors,
                                         President and Chief Executive Officer


Dated:  November 11, 2002


                                    (Page 3)





                                  EXHIBIT INDEX

                                                                     Page No.

99.1     Press Release of ILM II Senior Living, Inc.                    5
         dated November 11, 2002.


                                    (Page 4)

EX-99.1

                                                                   EXHIBIT 99.1


                           ILM II SENIOR LIVING, INC.

+===============================================================================

     FOR IMMEDIATE RELEASE:

     TYSONS CORNER, VA.--November 11, 2002--ILM II Senior Living, Inc. announced
today that in connection with its previously reported BRE/Independent Living,
LLC litigation, on May 28, 2002, ILM II paid $750,000 to BRE in full settlement
of BRE's claims brought against ILM II, and that in September 2002, ILM II
received a $150,000 insurance recovery on that claim, resulting in a total
aggregate insurance recovery of $350,000 on the claim. ILM II indicated that it
does not anticipate any further insurance recovery related to such claim.

     ILM II announced that as previously reported, ILM II became subject to a
built-in gain tax liability of approximately $2,931,000 upon the sale of its
Senior Housing Facilities and that on August 5, 2002, ILM II paid $1,423,000 of
the built-in gain tax. ILM II added that in September 2002, ILM II paid the then
remaining balance in full.

     Further ILM II stated that as previously reported, ILM II is managing an
arbitration claim ILM II has against another party relating to the termination
of the merger transaction with Capital Senior Living Corporation in February
2001 and that upon enforcement and collection of an arbitration award, if any,
and subsequent to ILM II's payment of the costs associated with its liquidation
and dissolution of ILM II, and the costs associated with the pursuit of the
arbitration claim, ILM II intends to make a final liquidating distribution to
its shareholders, equal to its then remaining assets. While there can be no
assurances, ILM II anticipates that an arbitration decision will be rendered by
the end of November 2002.

     ILM II added that as of September 30, 2002, its total assets approximated
$6.1 million and its total liabilities approximated $2.9 million, and that it
was anticipated that it would, in addition to its existing liabilities, incur as
additional expense between $700,000 and $1.4 million with respect to its future
operations and ultimate winding up.

     If you have any questions regarding this press release, please call ILM II,
toll free at 1-888-257-3550.

     This press release contains "forward-looking statements" based on ILM II's
current expectations and projections about future events. These forward-looking
statements are subject to a number of risks and uncertainties which could cause
actual results and events to differ materially from those anticipated. These
results and events include, without limitation, the amount and timing of future
distributions, if any, the costs and expenses associated with the liquidation
and distribution of ILM II's assets, the timing of an arbitration recovery, if
any, etc. Further, there can be no assurance or certainty that there will be any
further distributions paid to ILM II's shareholders. ILM II undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.