SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-Q
(Mark One)
  X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
-----
     EXCHANGE ACT OF 1934.

For the quarterly period ended September 30, 1998
                               ------------------ 
                                      OR
     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
-----
     EXCHANGE ACT OF 1934.

For the transition period from              to             
                               ------------    ------------
Commission file number 0-13357
                       -------

                        BALCOR EQUITY PROPERTIES-XVIII
                       A REAL ESTATE LIMITED PARTNERSHIP
            ------------------------------------------------------
            (Exact name of registrant as specified in its charter)

          Illinois                                      36-3274349    
-------------------------------                     -------------------
(State or other jurisdiction of                      (I.R.S. Employer  
incorporation or organization)                      Identification No.)

2355 Waukegan Rd., Bannockburn, Illinois                   60015    
----------------------------------------            ------------------- 
(Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code (847) 267-1600
                                                   --------------
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     
    -----     -----
<PAGE>
                        BALCOR EQUITY PROPERTIES-XVIII
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                                BALANCE SHEETS
                   September 30, 1998 and December 31, 1997
                                  (Unaudited)

                                    ASSETS

                                                  1998           1997
                                             -------------- --------------
Cash and cash equivalents                    $   1,755,956  $   1,684,046
Accounts and accrued interest receivable             7,531          7,951
                                             -------------- --------------
                                             $   1,763,487  $   1,691,997
                                             ============== ==============


                        LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                             $      33,655  $      15,410
Due to affiliates                                   41,426         28,315
                                             -------------- --------------
     Total liabilities                              75,081         43,725
                                             -------------- --------------
Commitments and contingencies

Limited Partners' capital (52,811
  Interests issued and outstanding)              1,807,831      1,710,778
General Partner's deficit                         (119,425)       (62,506)
                                             -------------- --------------
     Total partners' capital                     1,688,406      1,648,272
                                             -------------- --------------
                                             $   1,763,487  $   1,691,997
                                             ============== ==============
                                                
The accompanying notes are an integral part of the financial statements.
<PAGE>
                        BALCOR EQUITY PROPERTIES-XVIII
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                       STATEMENTS OF INCOME AND EXPENSES
             for the nine months ended September 30, 1998 and 1997
                                  (Unaudited)

                                                  1998           1997
                                             -------------- --------------
Income:
  Rental                                                    $     692,173
  Service                                                          14,592
  Interest on short-term investments         $      66,514         97,557
  Other income                                     115,690
                                             -------------- --------------
    Total income                                   182,204        804,322
                                             -------------- --------------
Expenses:
  Interest on mortgage notes payable                              256,219
  Depreciation                                                    141,606
  Amortization of deferred expenses                                13,155
  Property operating                                              439,402
  Real estate taxes                                               107,537
  Property management fees                                         35,575
  Other expenses                                                  219,839
  Administrative                                   142,070        153,538
                                             -------------- --------------
    Total expenses                                 142,070      1,366,871
                                             -------------- --------------
Income (loss) before gain on sale of 
  property and extraordinary item                   40,134       (562,549)

Gain on sale of property                                        1,141,112
                                             -------------- --------------
Income before extraordinary item                    40,134        578,563

Extraordinary item:
  Debt extinguishment expense                                     (20,819)
                                             -------------- --------------
Net income                                   $      40,134  $     557,744
                                             ============== ==============
Loss before extraordinary item                
  allocated to General Partner               $     (56,919)         None 
                                             ============== ==============
Income before extraordinary item
  allocated to Limited Partners              $      97,053  $     578,563
                                             ============== ==============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                        BALCOR EQUITY PROPERTIES-XVIII
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                       STATEMENTS OF INCOME AND EXPENSES
             for the nine months ended September 30, 1998 and 1997
                                  (Unaudited)
                                  (Continued)

                                                  1998           1997
                                             -------------- --------------
Income before extraordinary item
  per Limited Partnership Interest
  (52,811 issued and outstanding) - 
  Basic and Diluted                          $        1.84  $       10.95
                                             ============== ==============
Extraordinary item allocated to General
  Partner                                            None           None 
                                             ============== ==============
Extraordinary item allocated to Limited
  Partners                                           None   $     (20,819)
                                             ============== ==============
Extraordinary item per Limited Partnership
  Interest (52,811 issued and outstanding)
  - Basic and Diluted                                None   $       (0.39)
                                             ============== ==============
Net loss allocated to General Partner        $     (56,919)         None 
                                             ============== ==============
Net income allocated to Limited Partners     $      97,053  $     557,744
                                             ============== ==============
Net income per Limited Partnership Interest
  (52,811 issued and outstanding) - 
  Basic and Diluted                          $        1.84  $       10.56
                                             ============== ==============
Distributions to Limited Partners                    None   $   8,463,491
                                             ============== ==============
Distributions per Limited Partnership 
  Interest                                           None   $      160.26
                                             ============== ==============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                        BALCOR EQUITY PROPERTIES-XVIII
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                       STATEMENTS OF INCOME AND EXPENSES
              for the quarters ended September 30, 1998 and 1997
                                  (Unaudited)

                                                  1998           1997
                                             -------------- --------------
Income:
  Rental                                                    $      89,531
  Service                                                           2,702
  Interest on short-term investments         $      22,197         31,675
  Other income                                     115,690
                                             -------------- --------------
    Total income                                   137,887        123,908
                                             -------------- --------------
Expenses:
  Interest on mortgage notes payable                               37,548
  Depreciation                                                     19,704
  Amortization of deferred expenses                                 1,831
  Property operating                                               84,804
  Real estate taxes                                                14,044
  Property management fees                                          5,220
  Administrative                                    40,834         29,096
                                             -------------- --------------
    Total expenses                                  40,834        192,247
                                             -------------- --------------
Income (loss) before gain on sale of 
  property and extraordinary item                   97,053        (68,339)

Gain on sale of property                                        1,141,112
                                             -------------- --------------
Income before extraordinary item                    97,053      1,072,773

Extraordinary item:
  Debt extinguishment expense                                     (20,819)
                                             -------------- --------------
Net income                                   $      97,053  $   1,051,954
                                             ============== ==============
Income before extraordinary item
  allocated to General Partner                       None   $     110,961
                                             ============== ==============
Income before extraordinary item
  allocated to Limited Partners              $      97,053  $     961,812
                                             ============== ==============

The accompanying notes are an integral part of the financial statements
<PAGE>
                         BALCOR EQUITY PROPERTIES-XVIII
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                       STATEMENTS OF INCOME AND EXPENSES
              for the quarters ended September 30, 1998 and 1997
                                  (Unaudited)
                                  (Continued)

                                                  1998           1997
                                             -------------- --------------
Income before extraordinary item
  per Limited Partnership Interest
  (52,811 issued and outstanding) - 
  Basic and Diluted                          $        1.84  $       18.21
                                             ============== ==============
Extraordinary item allocated to General
  Partner                                            None           None 
                                             ============== ==============
Extraordinary item allocated to Limited
  Partners                                           None   $     (20,819)
                                             ============== ==============
Extraordinary item per Limited Partnership
  Interest (52,811 issued and outstanding)
  - Basic and Diluted                                None   $       (0.39)
                                             ============== ==============
Net income allocated to General Partner              None   $     110,961
                                             ============== ==============
Net income allocated to Limited Partners     $      97,053  $     940,993
                                             ============== ==============
Net income per Limited Partnership Interest
  (52,811 issued and outstanding) - 
  Basic and Diluted                          $        1.84  $       17.82
                                             ============== ==============

The accompanying notes are an integral part of the financial statements.
<PAGE>
                        BALCOR EQUITY PROPERTIES-XVIII
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                           STATEMENTS OF CASH FLOWS
             for the nine months ended September 30, 1998 and 1997
                                  (Unaudited)

                                                  1998           1997
                                             -------------- --------------
Operating activities:
  Net income                                 $      40,134  $     557,744
  Adjustments to reconcile net income to
     net cash provided by or (used in) 
     operating activities:
     Gain on sale of property                                  (1,141,112)
     Debt extinguishment expense                                   20,819
     Depreciation of property                                     141,606
     Amortization of deferred expenses                             13,155
       Net change in:
         Escrow deposits                                          263,326
         Accounts and accrued interest
           receivable                                  420         87,159
         Note receivable                                           31,878
         Prepaid expenses                                          17,314
         Accounts payable                           18,245        (28,918)
         Due to affiliates                          13,111        (52,474)
         Accrued liabilities                                     (167,154)
         Security deposits                                        (14,456)
                                             -------------- --------------
  Net cash provided by or (used in) 
    operating activities                            71,910       (271,113)
                                             -------------- --------------
Investing activities:
  Proceeds from sale of real estate                             6,300,000
  Costs incurred in connection with sale
    of real estate                                               (154,363)
                                                            --------------
  Net cash provided by investing activities                     6,145,637
                                                            --------------
Financing activities:
  Distributions to Limited Partners                            (8,463,491)
  Repayment of mortgage note payable                           (5,071,928)
  Principal payments on mortgage note payable                     (29,914)
                                                            --------------
  Cash used in financing activities                           (13,565,333)
                                             -------------- --------------
Net change in cash and cash equivalents             71,910     (7,690,809)
Cash and cash equivalents at beginning
  of period                                      1,684,046     10,272,801
                                             -------------- --------------
Cash and cash equivalents at end of period   $   1,755,956  $   2,581,992
                                             ============== ==============
                                                
The accompanying notes are an integral part of the financial statements.
<PAGE>
                        BALCOR EQUITY PROPERTIES-XVIII
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                         NOTES TO FINANCIAL STATEMENTS

1. Accounting Policies:

(a) The income allocation between the Limited Partners and the General  Partner
has been adjusted for  financial statement purposes in  order that the  capital
account balances more accurately reflect their remaining economic interests  as
provided for in the Partnership Agreement.

(b) In  the  opinion  of  management, all  adjustments  necessary  for  a  fair
presentation have been made to the accompanying statements for the nine  months
and quarter ended September 30, 1998, and all such adjustments are of a  normal
and recurring nature.

2. Partnership Termination:

The Partnership Agreement provides for the dissolution of the Partnership  upon
the occurrence of certain events, including the disposition of all interests in
real estate.  During 1997,  the Partnership  sold its  remaining property.  The
Partnership has  retained a  portion of  the cash  from the  property sales  to
satisfy obligations  of the  Partnership as  well as  establish a  reserve  for
contingencies. The  timing of  the  termination of  the Partnership  and  final
distribution of cash will depend upon the nature and extent of liabilities  and
contingencies which exist or  may arise. Such  contingencies may include  legal
and other fees  and costs  stemming from litigation  involving the  Partnership
including, but not limited to, the lawsuits discussed in Note 5 of Notes to the
Financial Statements.  Due to  this  litigation, the  Partnership will  not  be
dissolved and reserves will be held by the Partnership until the conclusion  of
all contingencies.  There  can  be no  assurances  as  to the  time  frame  for
conclusion of these contingencies.

3. Interest Expense:

During the nine months ended September  30, 1997, the Partnership incurred  and
paid interest expense on mortgage note payable of $256,219.

4. Transactions with Affiliates:

Fees and expenses paid and payable by the Partnership to affiliates during  the
nine months and quarter ended September 30, 1998 are:

                                               
                                           Paid
                                   -------------------------
                                     Nine Months    Quarter    Payable
                                    ------------   ---------  ---------

   Reimbursement of expenses to
     the General Partner, at cost    $ 14,587      $ 5,549    $ 41,426
<PAGE>
5. Contingencies:

The Partnership is currently involved  in two lawsuits whereby the  Partnership
and certain affiliates  have been  named as  defendants alleging  substantially
similar claims involving  certain state  securities and  common law  violations
with regard to the property acquisition process of the Partnership, and to  the
adequacy and  accuracy of  disclosures of  information concerning,  as well  as
marketing efforts related to, the offering of the Limited Partnership Interests
of the  Partnership.  The  defendants  continue  to  vigorously  contest  these
actions. A  plaintiff  class  has  not been  certified  in  either  action.  No
determination of the merits has been made  in one action. The other action  was
dismissed without  prejudice by  the  trial court  on  September 24,  1998  for
failure to state a cause of action. It is not determinable at this time whether
or not an unfavorable decision in  either action would have a material  adverse
impact on the financial position  of the Partnership. The Partnership  believes
it has meritorious defenses to contest the claims.  
<PAGE>
                        BALCOR EQUITY PROPERTIES-XVIII
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                     MANAGEMENT'S DISCUSSION AND ANALYSIS

Balcor  Equity  Properties-XVIII  A   Real  Estate  Limited  Partnership   (the
"Partnership") is a limited partnership formed in 1984 to invest in and operate
income-producing real property. The Partnership raised $52,811,000 through  the
sale of Limited Partnership  Interests and utilized  these proceeds to  acquire
four real property  investments and a  minority joint venture  interest in  one
additional real property.  As of  September 30,  1998, the  Partnership has  no
properties remaining in its portfolio.

Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual  report for 1997 for  a more complete understanding  of
the Partnership's financial position.

Operations
----------

Summary of Operations
---------------------

The operations  of the  Partnership  in 1998  consisted primarily  of  interest
income earned on short-term investments  and income resulting from the  receipt
of escrow  funds which  were set  up in  connection with  the sale  of the  101
Marietta Office  Building,  which  were  partially offset  by  the  payment  of
administrative expenses.  During July  1997, the  Partnership sold  the  Canyon
Pointe Apartments and  recognized a gain  on the sale  of the property.   As  a
result, the  Partnership's net  income  decreased during  the nine  months  and
quarter ended  September 30,  1998 as  compared to  the same  periods in  1997.
Further discussion of the Partnership's operations is summarized below.

1998 Compared to 1997
---------------------

Unless otherwise noted, discussions of fluctuations between 1998 and 1997 refer
to both the nine months and quarters ended September 30, 1998 and 1997.

As a result  of the  sale of  the Canyon Pointe  Apartments in  July 1997,  the
Partnership recognized a gain in connection with the sale of $1,141,112.  As  a
result of the  sale, rental and  service income, interest  expense on  mortgage
notes payable, depreciation expense, amortization expense, property  operating,
real estate  tax expense  and property  management fees  expense ceased  during
1997.

The proceeds from  the October 1996  sale of the  Knollwood Village  Apartments
were not distributed to  Limited Partners until January  1997 and the  proceeds
from the July 1997 sale of the Canyon Pointe Apartments were not distributed to
Limited Partners until October 1997. As a result, the Partnership earned higher
interest income on short-term investments during 1997 as compared to 1998.
<PAGE>
The Partnership recognized other income during the quarter ended September  30,
1998 due to the receipt  of escrow funds which were  set up in connection  with
the sale of the 101 Marietta Office Building, which was sold in 1996.

During 1997, the Partnership  paid real estate tax  consulting fees related  to
the 101 Marietta  Tower office complex,  which was  sold in 1996,  and a  state
income tax liability related to the gain on the 1996 sale of Knollwood  Village
Apartments.  For financial statement purposes, these items have been classified
as other expenses.

Primarily as a result of legal fees accrued in connection with the class action
litigation,  administrative  expenses  increased   during  the  quarter   ended
September 30, 1998 as compared to the same period in 1997.

In connection  with the  sale of  the  Canyon Pointe  Apartments in  1997,  the
Partnership wrote off  the remaining unamortized  deferred expenses related  to
the mortgage loan  of $20,819.   This amount was  recorded as an  extraordinary
item and  classified as  debt extinguishment  expense for  financial  statement
purposes.

Liquidity and Capital Resources
-------------------------------

The cash position of the Partnership  increased by approximately $72,000 as  of
September 30, 1998 as compared to  December 31, 1997 due to  the    receipt  of
interest income earned on  short-term investments and  escrow funds which  were
set up in connection with the sale  of the 101 Marietta Office Building,  which
were partially offset by the payment of administrative expenses.

The Partnership Agreement provides for the dissolution of the Partnership  upon
the occurrence of certain events, including the disposition of all interests in
real estate.  During 1997,  the Partnership  sold its  remaining property.  The
Partnership has  retained a  portion of  the cash  from the  property sales  to
satisfy obligations  of the  Partnership as  well as  establish a  reserve  for
contingencies. The  timing of  the  termination of  the Partnership  and  final
distribution of cash will depend upon the nature and extent of liabilities  and
contingencies which exist or  may arise. Such  contingencies may include  legal
and other fees  and costs  stemming from litigation  involving the  Partnership
including, but not limited to, the lawsuits discussed in Note 5 of Notes to the
Financial Statements.  Due to  this  litigation, the  Partnership will  not  be
dissolved and reserves will be held by the Partnership until the conclusion  of
all contingencies.  There  can  be no  assurances  as  to the  time  frame  for
conclusion of these contingencies.

To date, Limited Partners have received  distributions of Net Cash Receipts  of
$288.00 and Net Cash Proceeds of $428.26, totaling $716.26 per $1,000 Interest,
as well as certain tax benefits. No additional distributions are anticipated to
be made prior to  termination of the Partnership.  However, after paying  final
partnership expenses, any remaining cash reserves will be distributed.  Limited
Partners will not recover all of their original investment.
<PAGE>
                        BALCOR EQUITY PROPERTIES-XVIII
                       A REAL ESTATE LIMITED PARTNERSHIP
                       (An Illinois Limited Partnership)

                          PART II - OTHER INFORMATION

Item 1. Legal Proceedings
-------------------------

Klein, et al. vs Lehman Brothers, Inc., et al.
-----------------------------------------------

With regard to  the proposed class  action complaint, Klein,  et al. vs  Lehman
Brothers, Inc.,  et al.  (Superior Court  of New  Jersey, Law  Division,  Union
County, Docket  No. Unn-L-5162-96),  on June  9, 1998  the defendants  filed  a
motion to dismiss the complaint  for failure to state a  cause of action.   The
motion was briefed by all parties and  oral argument was heard by the court  on
August 21,  1998. On  September 24,  1998, the  judge issued  a letter  opinion
granting the defendant's motion  to dismiss the complaint,  and on October  23,
1998, the judge announced that he would enter an order dismissing the complaint
without prejudice.
  
Item 6.  Exhibits and Reports on Form 8-K 
-----------------------------------------

(a) Exhibits:

(4) Form  of  Subscription  Agreement,  previously  filed  as  Exhibit  4.1  to
Amendment No. 1 to Registrant's Registration  Statement on Form S-11 dated  May
15, 1984  (Registration  No.  2-89380),  and  Form  of  Confirmation  regarding
Interests in the Registrant set forth as Exhibit 4.2 to the Registrant's Report
on Form 10-Q for the quarter ended June 30, 1992 (Commission File No.  0-13357)
are incorporated herein by reference.

(10) Material Contracts:

(i) Agreement of Sale and attachment thereto relating to the sale of the Canyon
Pointe Apartments, San Antonio,  Texas previously filed as  Exhibit (2) to  the
Registrant's Current Report on  Form 8-K dated June  11, 1997, is  incorporated
herein by reference.

(ii) First Amendment to Agreement of Sale and Escrow Agreement relating to  the
sale of the Canyon Pointe Apartments,  San Antonio, Texas, previously filed  as
Exhibit (10)(d)(ii) to the Registrant's Quarterly  Report on Form 10-Q for  the
quarter ended September 30, 1997 is incorporated herein by reference.

(iii) Second Amendment to  Agreement of Sale and  Escrow Agreement relating  to
the sale of the Canyon Pointe Apartments, San Antonio, Texas, previously  filed
as Exhibit (10)(d)(iii) to the Registrant's  Quarterly Report on Form 10-Q  for
the quarter ended September 30, 1997 is incorporated herein by reference.
<PAGE>
(27) Financial  Data Schedule  of the  Registrant for  the nine  months  ending
September 30, 1998 is attached hereto.

(b)  Reports on Form  8-K: There were no reports  filed on Form 8-K during  the
quarter ended September 30, 1998. 
<PAGE>
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.


                                    BALCOR EQUITY PROPERTIES - XVIII
                                    A REAL ESTATE LIMITED PARTNERSHIP


                                    By:   /s/ Thomas E. Meador
                                           ----------------------------
                                          Thomas E. Meador
                                          President and Chief Executive
                                          Officer (Principal Executive
                                          Officer) of Balcor Equity 
                                          Partners - XVIII, the General 
                                          Partner



                                    By:   /s/ Jayne A. Kosik
                                          -----------------------------
                                          Jayne A. Kosik
                                          Senior Managing Director and
                                          Chief Financial Officer
                                          (Principal Accounting Officer) 
                                          of Balcor Equity Partners 
                                          - XVIII, the General Partner



Date: November 6, 1998
      -----------------
<PAGE>