8-K

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                       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): June 7, 2000



                         Commission File Number: 0-25880

                           ILM II LEASE CORPORATION
                           ------------------------
            (Exact name of registrant as specified in its charter)


        Virginia                                               04-3248639
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(State of organization)                                    (I.R.S. Employer
                                                          Identification No.)


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


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




                              (Page 1 of 3 pages)
                        Exhibit Index Appears on Page 3




ITEM 5.  OTHER EVENTS

      On June 7, 2000, ILM II Lease Corporation (the "Company") received a
notice from ILM II Holding, Inc. ("Holding II") indicating that pursuant to the
terms of the existing Facilities Lease Agreement by and between Holding II (as
lessor) and the Company (as lessee) dated September 1, 1995, as amended (the
"Facilities Lease Agreement"), the Facilities Lease Agreement would terminate on
the date of consummation of the pending merger of ILM II Senior Living, Inc.
("ILM II"), an affiliate of the Company, and Capital Senior Living Corporation
("Capital"). Subject to the satisfaction of certain conditions and the receipt
of requisite approvals, consummation of the merger is expected to occur on or
about July 30, 2000.

      Although the Facilities Lease Agreement, by its terms, is scheduled to
expire on December 31, 2000, it may be terminated earlier at the election of
Holding II upon the sale of Holding II's senior living communities to a
non-affiliated third party. If the merger is consummated, the Company's
operations would not be expected to continue beyond the termination of the
Facilities Lease Agreement. As a result of the termination of the Facilities
Lease Agreement, it is currently expected that the Company would have nominal
value after payment of expenses and other costs, and the Board accordingly would
review the Company's status and continued existence.

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 Lease Corporation dated June 14, 2000.

                                   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 hereunto duly authorized.

                                    ILM II LEASE CORPORATION

                                    By: /s/ Jeffry R. Dwyer
                                        -----------------------
                                            Name: Jeffry R. Dwyer
                                            Title: President

Dated:  June 14, 2000



                              (Page 2 of 3 pages)




                                  EXHIBIT INDEX

                                                                   Page No.

99.1     Press Release of ILM II Lease Corporation                     4
         dated June 14, 2000.






                              (Page 3 of 3 pages)

EX-99.1

                            ILM II LEASE CORPORATION

                               RECEIVES NOTICE OF

                                 TERMINATION OF

                           FACILITIES LEASE AGREEMENT

FOR IMMEDIATE RELEASE:

     June 14, 2000, Tysons Corner, Virginia: ILM II Lease Corporation announced
today that it received a notice from ILM II Holding, Inc. indicating that
pursuant to the terms of the existing Facilities Lease Agreement, the agreement
would terminate on the date of consummation of the pending merger by and between
ILM II Senior Living, Inc., an affiliate of Lease II, Capital Senior Living
Corporation (NYSE: CSU) and certain Capital affiliates. Subject to the
satisfaction of certain conditions and the receipt of requisite approvals,
consummation of the merger is expected to occur on or about July 30, 2000. If
the merger is consummated, Lease II's operations would not be expected to
continue beyond the termination of the lease agreement. As a result of the lease
agreement termination, it is currently expected that Lease II would have nominal
value after payment of expenses and other costs, and the Board accordingly would
review Lease II's status and continued existence.

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

                                    * * *

     THIS PRESS RELEASE CONTAINS "FORWARD-LOOKING STATEMENTS" BASED ON OUR
CURRENT EXPECTATIONS AND PROJECTIONS ABOUT FUTURE EVENTS. THESE FORWARD-LOOKING
STATEMENTS ARE SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES WHICH COULD CAUSE
OUR ACTUAL RESULTS TO DIFFER MATERIALLY FROM HISTORICAL RESULTS OR THOSE
ANTICIPATED AND CERTAIN OF WHICH ARE BEYOND OUR CONTROL. THE WORDS "BELIEVE,"
"EXPECT," "ANTICIPATE" AND SIMILAR EXPRESSIONS IDENTIFY FORWARD-LOOKING
STATEMENTS. WE UNDERTAKE NO OBLIGATION TO PUBLICLY UPDATE OR REVISE ANY
FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE
EVENTS OR OTHERWISE.