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 September 30, 1995
                                                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
 incorporation or organization)               Identification Number)




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

Registrant's telephone number, including area code (708) 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/Colonial Storage Income Fund - 85
                     (An Illinois Limited Partnership)
                              Balance Sheets
                 September 30, 1995 and December 31, 1994

                                                        1995
                                                     (Unaudited)    1994
Assets
  Cash and cash equivalents                        $  3,680,597   4,014,486
  Accounts receivable, net of allowance for
   doubtful accounts of $26,825 at
   September 30, 1995 and $27,465
   at December 31, 1994                                 111,693     110,990
  Mortgage notes receivable                           1,656,722   1,676,085
  Other                                                 167,741     152,912
                                                      5,616,753   5,954,473
  Mini-warehouse facilities, at cost:
    Land                                             14,193,743  14,193,743
    Buildings                                        47,324,952  46,901,166
    Furniture, fixtures, and equipment                1,077,097     982,631
                                                     62,595,792  62,077,540
   Less accumulated depreciation                     18,735,420  17,267,608
   Mini-warehouse facilities, net of accumulated
       depreciation                                  43,860,372  44,809,932
                                                   $ 49,477,125  50,764,405

Liabilities and Partners' Capital
  Accounts payable                                 $      4,243       4,037
  Due to affiliates                                     119,842     190,858
  Accrued real estate taxes                             487,918     302,008
  Other accrued liabilities                              54,194      54,194
  Security deposits                                      59,482      76,487
  Deferred income                                       339,485     299,808
  Total liabilities                                   1,065,164     927,392
Partners' capital (276,918 Limited Partnership
   Interests issued and outstanding)                 48,411,961  49,837,013
                                                   $ 49,477,125  50,764,405





              See accompanying notes to financial statements.
{PAGE}
                   Balcor/Colonial Storage Income Fund - 85
                      (An Illinois Limited Partnership)
                            Statements of Income
  For the Three Months and Nine Months Ended September 30, 1995 and 1994
                                 (Unaudited)


                                    Three Months Ended   Nine Months Ended
                                       September 30,       September 30,
                                      1995      1994      1995      1994
Income:
  Rental                         $ 2,682,637 2,592,783 7,724,941 7,536,333
  Interest on short-term
    investments                       42,025    43,602   131,042    81,001
  Interest from mortgage
    notes receivable                  39,536    40,142   119,233   127,208
                                   2,764,198 2,676,527 7,975,216 7,744,542
Expenses:
  Property operating                 756,785   703,324 2,223,861 2,081,155
  Depreciation                       489,271   492,214 1,467,812 1,468,999
  Property management fees            76,943    74,780   228,780   222,760
  General and administrative         166,184   120,743   481,445   406,663
                                   1,489,183 1,391,061 4,401,898 4,179,577
    Net income                   $ 1,275,015 1,285,466 3,573,318 3,564,965

Limited Partners' share of net
   income ($4.56 and $4.60 per
   Interest for the quarter ended
   September 30, 1995 and 1994,
   respectively, and $12.77 and
   $12.74 per Interest for the
   nine months ended
   September 30,1995 and 1994,
   respectively)                 $ 1,262,265 1,272,611 3,537,585 3,529,316
General Partners' share of net
   income                             12,750    12,855    35,733    35,649
                                 $ 1,275,015 1,285,466 3,573,318 3,564,965

Distributions to Limited Partners
  ($5.47 and $4.63 per Interest
   for the quarter ended
   September 30, 1995 and 1994,
   respectively, and $18.05 and
   $13.73 per Interest for the
   nine months ended
   September 30, 1995 and 1994,
   respectively)                 $ 1,514,741 1,282,131 4,998,370 3,802,085





              See accompanying notes to financial statements.
{PAGE}
                   Balcor/Colonial Storage Income Fund - 85
                      (An Illinois Limited Partnership)
                          Statements of Cash Flows
           For the Nine Months Ended September 30, 1995 and 1994
                                (Unaudited)

                                                      1995         1994
Operating activities:
  Net income                                    $  3,573,318    3,564,965
  Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation                                  1,467,812    1,468,999
     Net change in:
       Net accounts receivable                          (703)       4,216
       Other assets                                  (14,829)     (22,530)
       Accounts payable                                  206
       Due to affiliates                             (71,016)      29,872
       Accrued real estate taxes                     185,910       91,458
       Other accrued liabilities                         -         10,121
       Security deposits                             (17,005)     (46,109)
       Deferred income                                39,677        3,269
         Net cash provided by operating
           activities                              5,163,370    5,104,261

Investing activities:
  Additions to mini-warehouse facilities, net       (518,252)    (472,530)
  Collection of principal payments on mortgage
    notes receivable                                  19,363      231,750
      Net cash used in investing activities         (498,889)    (240,780)

Financing activities:
  Distributions to Limited Partners               (4,998,370)  (3,802,085)
    Net cash used in financing activities         (4,998,370)  (3,802,085)

Net change in cash and cash equivalents             (333,889)   1,061,396
Cash and cash equivalents at beginning of period   4,014,486    2,834,883
Cash and cash equivalents at end of period      $  3,680,597    3,896,279





              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
      quarter and nine months ended September 30, 1995, 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 September 30, 1995,
      property management fees of $2,140,676 were deferred.

      Fees and expenses paid and payable by the Partnership to affiliates
      for the quarter and nine months ended September 30, 1995 are:

                                           Paid                Payable
                                    Quarter  Nine Months
      Property management fees   $  78,641     279,668        $  24,428
      General and administrative
         expenses                   71,878     360,918           21,504
      Property sales
         commissions (A)               -           -             73,910

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

      The General Parners are entitled to 8% of Net Cash Receipts
      available for distribution, subject to certain subordination levels
      following the termination of the offering, which from the inception
      of the offering through September 30, 1995 total approximately
      $4,161,000, all of which is subordinated.

3)    Subsequent Event

      In October 1995, the Partnership paid $1,603,355 to the
      Limited Partners representing the quarterly distribution for the
      third quarter of 1995.
{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 September 30,
1995 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
1994 for a more complete understanding of the Partnership's financial
position.

Operations

Summary of Operations

No material events occurred during 1995 or 1994 which significantly
impacted the net income of the Partnership.  Further discussion of the
Partnership's operations is summarized below.

1995 Compared to 1994

Due to increases in rental rates at certain of the mini-warehouse
facilities, particularly those located in Georgia, rental income and
therefore, property management fees increased during the quarter and
nine months ended September 30, 1995 as compared to the same periods in
1994. Rental income increased significantly in Georgia and decreased
slightly in Texas and New Mexico.  All other areas increased slightly.

Interest income from short-term investments increased during the nine 
months ended September 30, 1995 as compared to the same period in
1994 due to an increase in interest rates and amounts available for
investment.

Interest income from mortgage notes receivable decreased during the quarter
and nine months ended September 30, 1995 as compared to the same periods in
1994, due to a decrease in the average balance outstanding on such notes.

Higher maintenance costs and real estate taxes resulted in an increase in
property operating expenses for the quarter and nine months ended September
30, 1995 as compared to the same periods in 1994.  Maintenance expenses
increased due to an increase in non-capitalized repairs related to the
ongoing maintenance program. Real estate tax expense increased due to
increases in property values at certain of the Partnership's mini-warehouse
facilities for 1995.

Increases in professional fees resulted in an increase in general and 
administrative expenses for the quarter and nine months ended September 30, 1995
as compared to the same periods in 1994.


Liquidity and Capital Resources

The cash position of the Partnership decreased from December 31, 1994, to
September 30, 1995, primarily due to the payment of a special distribution
to Limited Partners in April 1995.  

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
following the termination of the offering.  From the inception of
the offering through September 30, 1995, the General Partner's share of Net
Cash Receipts totaled approximately $4,161,000, none of which has been
paid.  The General Partners are entitled to receive such subordinated
amounts only from distributed Net Cash Proceeds.

In October 1995, the Partnership paid $1,603,355 ($5.79 per Interest) 
to the Limited Partners representing the quarterly distribution for the 
third quarter of 1995. To date, the Partnership has distributed $182.27 
per $250 Interest. The Net Cash Receipts distribution amount is less than the 
full Special Distribution (as defined in the Partnership Agreement) of ten
percent per annum.  As stated in the Partnership Agreement, any deficiency
in the Special Distribution is payable from distributed Net Cash Proceeds.
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 increased from $5.47 per Interest for
the second quarter of 1995 to $5.79 per Interest for the third quarter of
1995 due to improved operating results at several of the Partnership's mini-
warehouse facilities.  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 September 30, 1992 (Commission File No.  0-14340)
                     are incorporated herein by reference.

                (27) Financial Data Schedule of the Registrant for the nine 
                     months ended September 30, 1995 is attached hereto.

           (b)  Reports on Form 8-K:

                There were no reports on Form 8-K filed during the quarter 
                ended September 30, 1995.
{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/ Brian D. Parker
                                    Brian D. Parker,
                                    Senior Vice President and Chief
                                    Accounting and Financial Officer
                                    (Principal Accounting and Financial
                                    Officer) of Balcor Storage Partners-85,
                                    a General Partner




                            By: /s/ James Pruett
                                    James 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:        November 13, 1995