FORM 10-Q
		      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 June 30, 1997
						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:  0-14340



		   Balcor/Colonial Storage Income Fund - 85  
			       
	   (Exact name of registrant as specified in its charter)


	   Illinois                                   36-3338930
(State or other jurisdiction of         (I.R.S. Employer Identification Number)
 incorporation or organization)


    2355 Waukegan Road Suite A200
	Bannockburn, Illinois                                            60015 
   (Address of principal executive                                    (Zip Code)
		offices)


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   .
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		   Balcor/Colonial Storage Income Fund - 85
		      (An Illinois Limited Partnership)
			       Balance Sheets
		     June 30, 1997 and December 31, 1996

							      1997
							  (Unaudited)    1996   
Assets
  Cash and cash equivalents                             $  2,594,428   4,187,645
  Accounts receivable, net of allowance for doubtful
   accounts of $16,944 at June 30, 1997 and $18,321 
   at December 31, 1996                                      142,743     122,698
   Other                                                     122,373     124,293
							   2,859,544   4,434,636
Mini-warehouse facilities:
   Land                                                   14,193,743  14,193,743
   Buildings                                              47,852,345  47,634,567
   Furniture, fixtures, and equipment                      1,141,608   1,127,156
							  63,187,696  62,955,466
   Less accumulated depreciation                          22,272,591  21,300,132
   Mini-warehouse facilities, net of accumulated
       depreciation                                       40,915,105  41,655,334
							$ 43,774,649  46,089,970
										
Liabilities and Partners' Capital
  Due to affiliates                                          283,330     902,658
  Accrued real estate taxes                                  401,308     302,408
  Other accrued liabilities                                   48,932      48,932
  Security deposits                                           38,879      43,333
  Deferred income                                            407,739     340,078
  Total liabilities                                        1,180,188   1,637,409
Partners' capital:
  Limited Partners  (276,918 Limited Partnership
   Interests issued and outstanding)                      42,306,854  44,118,058
  General Partners                                           287,607     334,503
							  42,594,461  44,452,561
							$ 43,774,649  46,089,970


















See accompanying notes to financial statements.
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		   Balcor/Colonial Storage Income Fund - 85
		      (An Illinois Limited Partnership)
			    Statements of Income
       For the Three Months and Six Months Ended June 30, 1997 and 1996
				 (Unaudited)


					 Three Months           Six Months
				       1997        1996        1997      1996   
Income:
  Rental                          $ 2,602,413   2,656,224   5,168,006  5,220,318
  Interest on short-term
   investments                         23,403      26,068      48,838     60,963
  Interest from mortgage 
   notes receivable                       -        39,042         -       78,252
				    2,625,816   2,721,334   5,216,844  5,359,533
Expenses:
  Property operating                  730,390     716,555   1,406,280  1,436,351
  Depreciation                        486,229     486,849     972,459    973,699
  Property management fees             76,982      77,744     231,830    233,698
  General and administrative          220,060     190,004     433,050    365 875
				    1,513,661   1,471,152   3,043,619  3,009,623
  Net income                      $ 1,112,155   1,250,182   2,173,225  2,349,910

Limited Partners' share of net 
  income ($3.98 and $4.47 per
  Interest for the three months
  ended June 30, 1997 and 1996,
  respectively, and $7.77 and
  $8.40 for the six months ended
  June 30, 1997 and 1996,
  respectively)                   $ 1,101,033   1,237,680   2,151,493  2,326,411
General Partners' share of net
  income                               11,122      12,502      21,732     23,499
				  $ 1,112,155   1,250,182   2,173,225  2,349,910

Distributions to Limited Partners
  ($5.72 and $6.25 per Interest
  for the three months ended 
  June 30, 1997 and 1996,
  respectively, and $14.31 and
  $12.35 for the six months ended
  June 30, 1997 and 1996,
  respectively)                   $ 1,583,971   1,730,738   3,962,697  3,419,938

Distribution to General Partners  $       -         -          68,628     68,146









See accompanying notes to financial statements.
{page


		   Balcor/Colonial Storage Income Fund - 85
		      (An Illinois Limited Partnership)
			  Statements of Cash Flows
	       For the Six Months Ended June 30, 1997 and 1996
				(Unaudited)

							    1997         1996   
Operating activities:
  Net income                                           $ 2,173,225    2,349,910
  Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation                                          972,459      973,699
     Net change in:
       Net accounts receivable                             (20,045)      31,545
       Other assets                                          1,920       33,872
       Accounts payable                                        -         (1,503)
       Due to affiliates                                  (619,328)    (688,399)
       Accrued real estate taxes                            98,900       (6,457)
       Other accrued liabilities                               -        (32,358)
       Security deposits                                    (4,454)      (6,980)
       Deferred income                                      67,661       35,663
	 Net cash provided by operating
	   activities                                    2,670,338    2,688,992

Investing activities:
  Additions to mini-warehouse facilities, net             (232,230)     (86,144)
  Collection of principal payments on mortgage
    notes receivable                                           -         14,032
      Net cash used in investing activities               (232,230)     (72,112)

Financing activities:
  Distributions to Limited Partners                     (3,962,697)  (3,419,938)
  Distribution to General Partners                         (68,628)     (68,146)
    Net cash used in financing activities               (4,031,325)  (3,488,084)

Net change in cash and cash equivalents                 (1,593,217)    (871,204)
Cash and cash equivalents at beginning of period         4,187,645    3,643,915
Cash and cash equivalents at end of period             $ 2,594,428    2,772,711

















See accompanying notes to financial statements.
<PAGE>


		  Balcor/Colonial Storage Income Fund - 85
		      (An Illinois Limited Partnership)
			Notes to Financial Statements




1)     Summary of Significant Accounting Policies

       In the opinion of management, all adjustments necessary for a fair
       presentation have been made to the accompanying statements for the
       six months and quarter ended June 30, 1997, and all such adjustments are
       of a normal and recurring nature.  


2)     Transactions With Affiliates

       The Partnership has an agreement with Colonial Storage Management 85,
       Inc., an affiliate of Colonial Storage 85, Inc., a General Partner, to
       supervise and direct the business and affairs associated with the
       mini-warehouse facilities for a fee of 6% of the gross revenues of the
       facilities.  One-half of this property management fee is subordinated
       to receipt by the Limited Partners of a Special Distribution of 8%
       during the first twelve-month period after termination of the offering,
       9% during the second twelve-month period, and 10% during each 12-month
       period thereafter.  Any deferred portion of the property management fee 
       will be paid only from distributed Net Cash Proceeds. As of 
       June 30, 1997, property management fees of $2,068,872 were deferred.

       Fees and expenses paid and payable by the Partnership to affiliates
       for the six months ended June 30, 1997 are:

						Paid            Payable
       Property management fees (A)       $   464,140            27,645
       General and administrative expenses    185,813           181,775
       Incentive management fees (B)          480,398             -    
       Property sales commissions (C)             -              73,910

	     (A)    Includes payment of the subordinated 3% property management 
		    fee since Limited Partners received distributions equal to 
		    10% of Adjusted Original Capital for the twelve month period 
		    ending March 31, 1997.

	     (B)    Represents fees paid to the General Partners due to the
		    receipt by Limited Partners of the Special Distribution of
		    10% referred to above.

	     (C)    These commissions payable to the General
		    Partners have been subordinated in accordance
		    with the Partnership Agreement.



3)     Subsequent Event

       In July 1997, the Partnership paid $1,542,433 to the Limited Partners
       representing the quarterly distribution for the second quarter of 1997.
<PAGE>
		   Balcor/Colonial Storage Income Fund - 85
		      (An Illinois Limited Partnership)
		    MANAGEMENT'S DISCUSSION AND ANALYSIS




Balcor/Colonial Storage Income Fund - 85 (the "Partnership") is a limited 
partnership formed in September 1983.  The principal purpose of the Partnership 
is to acquire, own, maintain, operate, lease, and hold for capital appreciation 
and current income existing mini-warehouse facilities offering storage space 
for business and personal use.  The Partnership raised $69,229,500 through the 
sale of Limited Partnership Interests and utilized these proceeds to acquire 69 
mini-warehouse facilities from affiliates in 1985 and 4 mini-warehouse 
facilities from non-affiliated entities in 1986.  The Partnership sold one  
mini-warehouse facility in 1989, one facility in 1990 and two facilities in 
1993.  As of June 30, 1997 the Partnership continues to operate 69 mini-
warehouse facilities.

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 1996 for a more complete 
understanding of the Partnership's financial position.

Operations

Summary of Operations

Cessation of interest income from mortgage notes receivable, an increase in 
administrative expenses, a decrease in rental revenues and a decline in 
interest income from short-term investments were partially offset by a decrease 
in property operating expenses resulting in a decrease in net income during the 
quarter and six months ended June 30, 1997 as compared to the same periods in 
1996.  No material events occurred during these periods which significantly 
impacted the net income of the Partnership.  Further discussion of the 
Partnership's operations is summarized below.

1997 Compared to 1996

Rental revenues decreased slightly during the second quarter of 1997 as 
compared to the second quarter of 1996. Rental income increased slightly in the 
Carolina and East Texas Regions (three and one percent, respectively), 
decreased slightly in the Dallas/Fort Worth and Georgia regions (two percent, 
respectively), and remained relatively unchanged in the Western region.

Interest income on short term investments decreased during the quarter and six 
months ended June 30, 1997 as compared to the same periods in 1996 as a result 
of a decrease in amounts available for investment.

The Partnership received a repayment of the mortgage notes receivable during 
1996; consequently, interest income from mortgage notes receivable ceased 
during the quarter and six months ended June 30, 1997.

Higher payroll and professional fees resulted in an increase in general and 
administrative expenses for the quarter and six months ended June 30, 1997 as 
compared to the same periods in 1996.

A reduction in maintenance and supplies expenses resulted in a decrease in 
property operating expenses for the quarter and six months ended June 30, 
1997 as compared to the same periods in 1996.


<PAGE>
Liquidity and Capital Resources

The cash position of the Partnership decreased approximately $1,593,000 from 
December 31, 1996, to June 30, 1997 primarily due to distributions of Net Cash 
Proceeds to Limited Partners and the payment of additional property management 
fees and Partnership incentive management fees as discussed below.  The 
Partnership's cash flow provided by operating activities of  approximately 
$2,670,000 in the first half of 1997 was generated primarily by the operations 
of the mini-warehouse properties and interest income received on the 
Partnership's short term investments, which were partially offset by 
administrative expenses and the payment of additional property management fees 
and Partnership incentive management fees for 1996, as discussed below.  Cash 
flow of approximately $232,000 was used in investing activities to make capital 
improvements to the properties, which included security and roofing 
expenditures. In addition, cash of approximately $4,031,000 was used in 
financing activities to provide distributions to the Limited and General 
Partners.

Pursuant to the Partnership Agreement, the General Partners are entitled to 8% 
of Net Cash Receipts available for distribution, which is subordinated to the 
receipt by Limited Partners of specified distribution levels. The General 
Partners received $549,026 in January, 1997 ($480,398 as an incentive 
management fee and $68,628 as their distributive share of Net Cash Receipts). 
From the inception of the offering through June 30, 1997, the General Partner's 
share of Net Cash Receipts totaled approximately $5,101,000 of which $4,007,000 
is subordinated.  The General Partners are entitled to receive subordinated 
amounts only from distributed Net Cash Proceeds.  

Accounts receivable net of the related allowance for doubtful accounts 
increased from December 31, 1996 to June 30, 1997 due to the level and timing 
of collection efforts.  The timing of collection efforts are determined by 
individual state law.  There have been no changes in the credit terms extended 
to the Partnership's customers nor in the method used to allow for doubtful 
accounts.

The General Partners' current strategy is to continue to operate the 
Partnership's properties in a manner to maximize cash flow and to provide the 
Limited Partners with regular quarterly distributions.  A further objective is 
to maximize the price at which the properties may ultimately be sold.  During 
the second half of 1996, the Partnership solicited and received bids from major 
institutional owners of mini-warehouse facilities for a sale of all of the 
Partnership's assets.  One of the General Partners has accepted an offer from 
Acquiport/Amsdell I Limited Partnership for all 69 properties for a sale price 
of $56 million.  The other General Partner does not approve of the offer.  It 
is anticipated that the offer will be presented to the Limited Partners for a 
vote in late summer 1997.  Limited Partner approval will be required to 
complete any sale of two-thirds or more of the Partnership's remaining real 
property assets.  The General Partners cannot presently predict whether any 
sale of the Partnership's assets will be consummated in the foreseeable future.

In July 1997, the Partnership paid $1,542,433 ($5.57 per Interest) to the 
Limited Partners representing the quarterly distribution for the second quarter 
of 1997.  Including the July 1997 distribution, the Partnership has distributed 
$227.00 per $250 Interest.  The General Partners believe the cash flow 
generated from property operations should enable the Partnership to continue 
making quarterly distributions to Limited Partners.  However, the level of 
future cash distributions to Limited Partners will be dependent upon the amount 
of cash flow generated by the Partnership's properties, as to which there can 
be no assurance.  Quarterly distributions decreased for the second quarter of 
1997 as compared to the first quarter of 1997.  Distributions were reduced in 
order to maintain cash reserves.  The General Partners intend to retain on 
behalf of the Partnership cash reserves deemed adequate to meet working capital 
requirements as they may arise. 

Inflation has several types of potentially conflicting impacts on real estate 
investments.  Short-term inflation can increase real estate operating costs 
which may or may not be recovered through increased rents and/or sales prices, 
depending on general or local economic conditions.  In the long-term, inflation 
can be expected to increase operating costs and replacement costs and may lead 
to increased rental revenues and real estate values.


<PAGE>
		   Balcor/Colonial Storage Income Fund - 85
		      (An Illinois Limited Partnership)

			 Part II - Other Information




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 the Registrant's
			Registration Statement on Form S-11 dated May 14, 1985
			and to the Registrant's Registration Statement on Form
			S-11 dated January 29, 1985 (Registration No. 2-95752,
			and No. 33-2977, respectively) 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. 
			0-14340) are incorporated herein by reference.
		 
		  (10)  (a)  The agreement between one of the General Partners 
			     and Acquiport/Amsdell I Limited Partnership to 
			     sell all 69 of the remaining real proproperty
			     assets is incorporated herein by reference.
			    
			(b)  First Amendment to Agreement of Sale and Escrow 
			     Agreement detailing amendments to the sale 
			     agreement between one of the General Partners and 
			     Acquiport/Amsdell I Limited Partnership are 
			     attached as exhibits hereto.

		  
		  (27)  Financial Data Schedule of the Registrant for the
			six months ended June 30, 1997 is attached hereto.

	     (b)  Reports on Form 8-K:

		  Report on Form 8-K was filed on June 30, 1997 detailing the 
		  agreement between one of the General Partners and 
		  Acquiport/Amsdell I Limited Partnership to sell all 69 of the 
		  remaining real property assets.





<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/Colonial Storage Income Fund - 85




			     By: /s/ Thomas E. Meador   
				     Thomas E. Meador,
				     President and Chief Executive Officer 
				     (Principal Executive Officer) of Balcor 
				     Storage Partners-85, a General Partner




			     By: /s/ Jayne A. Kosik     
				     Jayne A. Kosik, 
				     Managing Director and Chief Accounting
				     and Financial Officer (Principal Accounting
				     Officer) of Balcor Storage Partners-85, a 
				     General Partner




			     By: /s/ James R. Pruett    
				     James R. Pruett
				     President and Director of Colonial
				     Storage 85, Inc., a General Partner




			     By: /s/ James N. Danford   
				     James N. Danford,
				     Secretary/Treasurer (Principal Financial 
				     and Accounting Officer) of Colonial 
				     Storage 85, Inc., a General Partner


Date:        August 14, 1997