<PAGE>

================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

            /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended March 31, 2000

                         Commission file number 0-14438

             INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
                       A CALIFORNIA LIMITED PARTNERSHIP
            (Exact name of registrant as specified in its charter)

          CALIFORNIA                                            13-3239107
  (State or other jurisdiction of                           (I.R.S. Employer
  incorporation or organization)                            Identification No.)

              5 Cambridge Center, 9th Floor, Cambridge, MA 02142
                   (Address of principal executive offices)

                                (617) 234-3000
             (Registrant's telephone number, including area code)

                                      None
        (Former name, former address and former fiscal year, if changed
                               since last report)

Indicate by check 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>


              INTEGRATED RESOURCES HIGH EQUITY PARTNERS - SERIES 85

                           FORM 10-Q - MARCH 31, 2000


                                      INDEX

                                                                            Page
                                                                            ----

      Part I.  Financial Information
      Item 1.  Financial Statements:

         Balance Sheets - March 31, 2000 and December 31, 1999............   1

         Statements of Operations - Three Months Ended
           March 31, 2000 and 1999........................................   2

         Statement of Partners' Equity - Three Months Ended
              March 31, 2000..............................................   3

         Statements of Cash Flows - Three Months Ended
            March 31, 2000 and 1999.......................................   4

         Notes to Financial Statements....................................   5

      Item 2. Management's Discussion and Analysis of Financial
              Condition and Results of Operations.........................  11

      Item 3. Quantitative and Qualitative Disclosure about
              Market Risk.................................................  12


      Part II. Other Information:

         Exhibits and Reports on Form 8-K.................................  13

      Signatures..........................................................  14

<PAGE>

              INTEGRATED RESOURCES HIGH EQUITY PARTNERS - SERIES 85

                           FORM 10-Q - MARCH 31, 2000


                                 BALANCE SHEETS

                                              March 31, 2000   December 31, 1999
                                              --------------   -----------------

ASSETS

Real estate - net                               $32,107,480      $32,352,714
Cash and cash equivalents                        10,095,309        8,521,370
Other assets                                      2,993,796        3,095,251
Receivables - net                                   202,327          209,418
                                                -----------      -----------

                                                $45,398,912      $44,178,753
                                                ===========      ===========


LIABILITIES AND PARTNERS' EQUITY

Accounts payable and accrued expenses           $ 1,075,726      $ 1,224,373
Due to affiliates                                   221,216          107,255
                                                -----------      -----------

                                                  1,296,942        1,331,628
                                                -----------      -----------


Commitments and contingencies (Note 6 and 7)

PARTNERS' EQUITY:

   Limited partners' equity (400,010 units
      issued and outstanding)                    41,895,922       40,703,819
   General partners' equity                       2,206,048        2,143,306
                                                -----------      -----------

                                                 44,101,970       42,847,125
                                                -----------      -----------

                                                $45,398,912      $44,178,753
                                                ===========      ===========


                       See notes to financial statements.
<PAGE>

              INTEGRATED RESOURCES HIGH EQUITY PARTNERS - SERIES 85

                           FORM 10-Q - MARCH 31, 2000


                            STATEMENTS OF OPERATIONS

                                                     For the Three Months Ended
                                                              March 31,
                                                     ---------------------------
                                                         2000            1999
                                                         ----            ----

Rental Revenue                                       $2,882,227       $2,868,073
                                                     ----------       ----------

Costs and Expenses:

   Operating expenses                                   828,003          833,350
   Depreciation and amortization                        345,488          336,096
   Partnership management fee                           172,519          211,409
   Administrative expenses                              288,284          703,310
   Property management fee                               87,744           85,505
                                                     ----------       ----------

                                                      1,722,038        2,169,670
                                                     ----------       ----------

Income before interest and other income               1,160,189          698,403

   Interest income                                       94,656           61,294
   Other income                                               -           82,290
                                                     ----------       ----------

Net income                                           $1,254,845       $  841,987
                                                     ==========       ==========

Net income attributable to:

   Limited partners                                  $1,192,103       $  799,888
   General partners                                      62,742           42,099
                                                     ----------       ----------

Net income                                           $1,254,845       $  841,987
                                                     ==========       ==========

Net income per unit of limited partnership interest
   (400,010 units outstanding)                       $     2.98       $     2.00
                                                     ==========       ==========


                       See notes to financial statements.
<PAGE>

              INTEGRATED RESOURCES HIGH EQUITY PARTNERS - SERIES 85

                           FORM 10-Q - MARCH 31, 2000


                          STATEMENT OF PARTNERS' EQUITY

                                           General        Limited
                                          Partners'      Partners'
                                           Equity         Equity        Total
                                           ------         ------        -----

Balance, January 1, 2000                 $ 2,143,306  $ 40,703,819  $ 42,847,125

Net income for the three months
       ended March 31, 2000                   62,742     1,192,103     1,254,845
                                         -----------  ------------  ------------

Balance, March 31, 2000                  $ 2,206,048  $ 41,895,922  $ 44,101,970
                                         ===========  ============  ============




                       See notes to financial statements.
<PAGE>


              INTEGRATED RESOURCES HIGH EQUITY PARTNERS - SERIES 85

                           FORM 10-Q - MARCH 31, 2000


                            STATEMENTS OF CASH FLOWS

                                                         For the Three Months
                                                            Ended March 31,
                                                       ------------------------
                                                         2000            1999
                                                         ----            ----

Cash Flows From Operating Activities:

   Net income                                      $  1,254,845    $    841,987
   Adjustments to reconcile net income
   to net cash provided by operating activities:
      Depreciation and amortization                     345,488         336,096
      Straight-line adjustment for stepped
        lease rentals                                    10,837           8,519
   Changes in assets and liabilities:
      Accounts payable and accrued expenses            (148,647)        798,234
      Receivables                                         7,091          19,120
      Due to affiliates                                 113,961         (96,438)
      Other assets                                       27,734        (146,801)
                                                   ------------    ------------

   Net cash provided by operating activities          1,611,309       1,760,717
                                                   ------------    ------------

Cash Flows From Investing Activities:

   Improvements to real estate
                                                        (37,370)        (95,480)
                                                   -------------    ------------

Cash Flows From Financing Activities:

   Distributions to partners                                  -        (395,799)
                                                   ------------    ------------

Increase In Cash And Cash Equivalents                 1,573,939       1,269,438

Cash And Cash Equivalents, Beginning of Year          8,521,370       6,301,641
                                                   ------------    ------------

Cash And Cash Equivalents, End of Quarter          $ 10,095,309    $  7,571,079
                                                   ============    ============



                      See notes to financial statements.

<PAGE>

              INTEGRATED RESOURCES HIGH EQUITY PARTNERS - SERIES 85

                           FORM 10-Q - MARCH 31, 2000


                          NOTES TO FINANCIAL STATEMENTS

l.    GENERAL

      The accompanying financial statements, notes and discussions should be
      read in conjunction with the financial statements, related notes and
      discussions contained in the Partnership's Annual Report on Form 10-K for
      the year ended December 31, 1999.

      The financial information contained herein is unaudited; however, in the
      opinion of management, all adjustments (consisting only of normal
      recurring adjustments) necessary for a fair presentation of such financial
      information have been included. Results of operations for the three months
      ended March 31, 2000 are not necessarily indicative of the results to be
      expected for the entire year.

2.    SIGNIFICANT ACCOUNTING POLICIES

      Investment in Joint Ventures

      Certain properties were purchased in joint venture ownership with
      affiliated partnerships that have the same, or affiliated, general
      partners as the Partnership. The Partnership owns an undivided interest
      and is severally liable for indebtedness it incurs in connection with its
      ownership interest in those properties. Therefore, the Partnership's
      financial statements present the assets, liabilities, revenues and
      expenses of the joint ventures on a pro rata basis in accordance with the
      Partnership's percentage of ownership.

      Real Estate

      The Partnership evaluates the recoverability of the net carrying value of
      its real estate and related assets at least annually, and more often if
      circumstances dictate. If this review indicates that the carrying value of
      the property may not be recoverable, the Partnership prepares estimates of
      the future undiscounted cash flows expected to result from the use of the
      property and its eventual disposition, generally over a five-year holding
      period. In performing this review, management takes into account, among
      other things, the existing occupancy, the expected leasing prospects of
      the property and the economic situation in the region where the property
      is located.

      If the sum of the expected future cash flows, undiscounted, is less than
      the carrying amount of the property, the Partnership recognizes an
      impairment loss, and reduces the carrying amount of the asset to its
      estimated fair value. Fair value is the amount at which the asset could be
      bought or sold in a current transaction between willing parties, that is,
      other than in a forced or liquidation sale. Management estimates fair
      value using discounted cash flows or market comparables, as most
      appropriate for each property. Independent certified appraisers are
      utilized to assist management, when warranted.

      Impairment write-downs recorded by the Partnership do not affect the tax
      basis of the assets and are not included in the determination of taxable
      income or loss.

<PAGE>

              INTEGRATED RESOURCES HIGH EQUITY PARTNERS - SERIES 85

                           FORM 10-Q - MARCH 31, 2000


                          NOTES TO FINANCIAL STATEMENTS

2.    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      Because the expected cash flows used to evaluate the recoverability of the
      assets and their fair values are based upon projections of future economic
      events, such as property occupancy rates, rental rates, operating cost
      inflation and market capitalization rates, the amounts ultimately realized
      at disposition may differ materially from the net carrying values at the
      balance sheet dates. The cash flows and market comparables used in this
      process are based on good faith estimates and assumptions developed by
      management. Unanticipated events and circumstances may occur and some
      assumptions may not materialize; therefore, actual results may materially
      vary from the estimates and the variances may be material. The Partnership
      may in the future provide additional write-downs, which could be material,
      if real estate markets or local economic conditions change.

3.    RELATED PARTY TRANSACTIONS

      The Managing General Partner of the Partnership, Resources High Equity,
      Inc. is a wholly-owned subsidiary of Presidio Capital Corp., ("Presidio").
      Presidio AGP Corp., which is a wholly-owned subsidiary of Presidio is the
      Associate General Partner (together with the Managing General Partner, the
      "General Partners"). The General Partners and affiliates of the General
      Partners are also engaged in businesses related to the acquisition and
      operation of real estate. Presidio is also the parent of other
      corporations (and affiliated with other entities) that are or may in the
      future be engaged in businesses that may be in competition with the
      Partnership. Accordingly, conflicts of interest may arise between the
      Partnership and such other businesses. Subject to the right of the limited
      partners under the Limited Partnership Agreement, Presidio controls the
      Partnership through its indirect ownership of the General Partners.
      Effective July 31, 1998, Presidio is indirectly controlled by NorthStar
      Capital Investment Corp., a Maryland corporation.

      From August 28, 1997 to October 21, 1999, Presidio was party to a
      management agreement with NorthStar Presidio Management Company LLC
      ("NorthStar Presidio"), an affiliate of NorthStar Capital Investment
      Corp., pursuant to which NorthStar Presidio provided the day-to-day
      management of Presidio and its direct and indirect subsidiaries and
      affiliates, including the Partnership. Effective October 21, 1999,
      Presidio entered into a Services Agreement with AP-PCC III, L.P. (the
      "Agent") pursuant to which the Agent was retained to provide Asset
      Management and Investor Relation Services to the Partnership and other
      entities affiliated with the Partnership.

      The Partnership has a property management services agreement with
      Resources Supervisory Management Corp. ("Resources Supervisory"), an
      affiliate of the General Partners, to perform certain functions relating
      to the management of the properties of the Partnership. A portion of the
      property management fees were paid to unaffiliated management companies
      which are engaged for the purpose of performing the management functions
      for certain properties.

<PAGE>

              INTEGRATED RESOURCES HIGH EQUITY PARTNERS - SERIES 85

                           FORM 10-Q - MARCH 31, 2000


                          NOTES TO FINANCIAL STATEMENTS

3.    RELATED PARTY TRANSACTIONS (CONTINUED)

      For the quarters ended March 31, 2000 and 1999, Resources Supervisory was
      entitled to receive $87,744 and $85,505 respectively, of which 76,548 and
      $68,412 was paid to unaffiliated management companies, respectively, for
      property management services and the balance was retained by Resources
      Supervisory.

      For the administration of the Partnership, the Managing General Partner is
      entitled to receive reimbursement of expenses up to a maximum of $150,000
      per year. For each of the quarters ended March 31, 2000 and 1999, the
      Managing General Partner received $37,500.

      For managing the affairs of the Partnership, the Managing General Partner
      is also entitled to receive an annual partnership management fee. Pursuant
      to the amendment to the Partnership Agreement, which became effective on
      August 20, 1999, the annual partnership management fee for 1999 was
      reduced to $418,769. Further, the Partnership Agreement was amended (for
      the year 2000 and beyond) so that the partnership management fee will be
      1.25% of the Gross Asset Value of the Partnership, defined as the
      appraised value of all the assets of the Partnership based on the most
      recent appraisal. For the quarters ended March 31, 2000 and 1999 the
      Managing General Partner earned $172,519 and $211,409, respectively.

      The General Partners are allocated 5% of the net income of the
      Partnership, which amounted to $62,742 and $42,099 for the quarters ended
      March 31, 2000 and 1999, respectively. They are also entitled to receive
      5% of distributions, which amounted to $19,790 for the quarter ended March
      31, 1999.

      During the liquidation stage of the Partnership, the Managing General
      Partner or an affiliate may be entitled to receive certain fees, which are
      subordinated to the limited partners receiving their original invested
      capital and certain specified minimum returns on their investment. All
      fees received by the General Partners are subject to certain limitations
      as set forth in the Partnership Agreement.

      From July 1996 through March 12, 1998, Millennium Funding II Corp., a
      wholly owned indirect subsidiary of Presidio, purchased 39,123 units of
      the Partnership from various limited partners.

      In connection with a tender offer for units of the Partnership made on
      March 12, 1998 (the "Offer") by Olympia Investors, L.P. ("Olympia"),
      Olympia and Presidio entered into an agreement dated March 6, 1998 (the
      "Agreement"). Subsequent to the expiration of the offer, Olympia announced
      that it had accepted for payment 31,132 units properly tendered pursuant
      to the Offer. Pursuant to the Agreement, Presidio purchased 50% of those
      units owned by Olympia as a result of the Offer, or 15,566 units, for
      $101.81 per unit. In addition, Olympia has the right to cause Presidio to
      purchase its remaining units for a price based on procedures set forth in
      the agreement. Olympia purported to exercise this right subsequent to
      quarter end.


<PAGE>


              INTEGRATED RESOURCES HIGH EQUITY PARTNERS - SERIES 85

                           FORM 10-Q - MARCH 31, 2000


                          NOTES TO FINANCIAL STATEMENTS


3.    RELATED PARTY TRANSACTIONS (CONTINUED)

      Subsequent to the expiration of the tender offer described above,
      Millennium Funding II Corp. purchased an additional 18,042 limited
      partnership units from August 1998 through July 1999. The total number of
      units purchased by Millennium Funding II Corp. represents approximately
      18.2% of the outstanding limited partnership units of the Partnership.

      Pursuant to the settlement of a class action lawsuit (See Note 7), an
      affiliate of the General Partners, Millennium Funding II, LLC, made a
      tender offer to limited partners to acquire up to 26,936 Units
      (representing approximately 6.7% of the outstanding Units) at a price of
      $114.60 per Unit. The offer closed in January 2000 and all 26,936 Units
      were acquired in the offer. As a result of these purchases as well as the
      other purchases of Units by affiliates of the General Partners, affiliates
      of the General Partners own 118,903 Units representing approximately
      29.725% of the total outstanding Units.

4.    REAL ESTATE

      The following table is a summary of the Partnership's real estate as of:

                                           March 31, 2000     December 31, 1999
                                           --------------     -----------------

      Land                                  $ 10,370,965        $ 10,370,965
      Building and improvements               37,753,448          37,716,078
                                            ------------        ------------
                                              48,124,413          48,087,043
      Less: Accumulated depreciation        (16,016,933)        (15,734,329)
                                            ------------        ------------

                                            $ 32,107,480        $ 32,352,714
                                            ============        ============

5.    DUE TO AFFILIATES

                                          March 31, 2000      December 31, 1999
                                          --------------      -----------------

      Partnership management fee             $ 172,519           $       -
      Property management fee                   11,197              32,255
      Non-accountable expense                   37,500              75,000
                                             ---------           ---------

                                             $ 221,216           $ 107,255
                                             =========           =========



      Such amounts were paid in the subsequent quarters.

<PAGE>

              INTEGRATED RESOURCES HIGH EQUITY PARTNERS - SERIES 85

                           FORM 10-Q - MARCH 31, 2000


                          NOTES TO FINANCIAL STATEMENTS


6.  COMMITMENTS AND CONTINGENCIES

    a)    568 Broadway Joint Venture is currently involved in litigation with a
          number of present or former tenants who are in default on their lease
          obligations. Several of these tenants have asserted claims or counter
          claims seeking monetary damages. The plaintiffs' allegations include
          but are not limited to claims for breach of contract, failure to
          provide certain services, overcharging of expenses and loss of profits
          and income. These suits seek total damages in excess of $20 million
          plus additional damages of an indeterminable amount. The Broadway
          Joint Venture's action for rent against Solo Press was tried in 1992
          and resulted in a judgement in favor of the Broadway Joint Venture for
          rent owed. The Partnership believes this will result in dismissal of
          the action brought by Solo Press against the Broadway Joint Venture.
          Since the facts of the other actions which involve material claims or
          counterclaims are substantially similar, the Partnership believes that
          the Broadway Joint Venture will prevail in those actions as well.

    b)    A former retail tenant of 568 Broadway (Galix Shops, Inc.) and a
          related corporation which is a retail tenant of a building adjacent to
          568 Broadway filed a lawsuit in the Supreme Court of The State of New
          York, County of New York, against the Broadway Joint Venture which
          owns 568 Broadway. The action was filed on April 13, 1994. The
          Plaintiffs allege that by erecting a sidewalk shed in 1991, 568
          Broadway deprived plaintiffs of light, air and visibility to their
          customers. The sidewalk shed was erected, as required by local law, in
          connection with the inspection and restoration of the Broadway
          building facade, which is also required by local law. Plaintiffs
          further allege that the erection of the sidewalk shed for a continuous
          period of over two years is unreasonable and unjustified and that such
          conduct by defendants has deprived plaintiffs of the use and enjoyment
          of their property. The suit seeks a judgement requiring removal of the
          sidewalk shed (since removed), compensatory damages of $20 million,
          and punitive damages of $10 million. The Partnership believes that
          this suit is without merit and intends to vigorously defend it.


7.  SETTLEMENT OF LAWSUIT

    In April 1999, the California Superior Court approved the terms of the
    settlement of a class action and derivative litigation involving the
    Partnership. Under the terms of the settlement, the General Partners agreed
    to take the actions described below subject to first obtaining the consent
    of limited partners to amendments to the Agreement of Limited Partnership of
    the Partnership summarized below. The settlement became effective in August
    1999 following approval of the amendments.

<PAGE>

              INTEGRATED RESOURCES HIGH EQUITY PARTNERS - SERIES 85

                           FORM 10-Q - MARCH 31, 2000


                          NOTES TO FINANCIAL STATEMENTS

7.    SETTLEMENT OF LAWSUIT (CONTINUED)

      As amended, the Partnership Agreement (a) provides for a Partnership
      Management Fee equal to 1.25% of the Gross Asset Value of the Partnership
      and a fixed 1999 Partnership Management Fee of $418,769 or $426,867 less
      than the amount that would have been paid for 1999 under the prior formula
      and (b) fixes the amount that the General Partners will be liable to pay
      to limited partners upon liquidation of the Partnership as repayment of
      fees previously received (the "Fee Give-Back Amount"). As of December 31,
      1999, the Fee Give-Back Amount was $8.80 per Unit which amount will be
      reduced by approximately $.98 per Unit for each full calendar year after
      1999 in which a liquidation does not occur. As amended, the Partnership
      Agreement provides that, upon a reorganization of the Partnership into a
      real estate investment trust or other public entity, the General Partners
      will have no further liability to pay the Fee Give-Back Amount. In
      accordance with the terms of the settlement, Presidio Capital Corp., an
      affiliate of the General Partners, guaranteed payment of the Fee Give-Back
      Amount.

      As required by the settlement, an affiliate of the General Partners,
      Millennium Funding II, LLC, made a tender offer to limited partners to
      acquire up to 26,936 Units (representing approximately 6.7% of the
      outstanding Units) at a price of $114.60 per Unit. The offer closed in
      January 2000 and all 26,936 Units were acquired in the offer.

      The final requirement of the settlement obligated the General Partners to
      use their best efforts to reorganize the Partnership into a real estate
      investment trust or other entity whose shares were listed on a national
      securities exchange or on the NASDAQ National Market System. A
      Registration Statement was filed with the Securities and Exchange
      Commission on February 11, 2000 with respect to the restructuring of the
      Partnership into a publicly-traded real estate investment trust. The
      Registration Statement has not yet become effective and the consent of a
      majority of limited partners will be needed to effect the restructuring.

<PAGE>

              INTEGRATED RESOURCES HIGH EQUITY PARTNERS - SERIES 85

                           FORM 10-Q - MARCH 31, 2000


                          NOTES TO FINANCIAL STATEMENTS


Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS
        OF OPERATIONS

        The matters discussed in this form 10-Q contain certain forward-looking
        statements and involve risks and uncertainties (including changing
        market conditions, competitive and regulatory matters, etc.) detailed in
        the disclosures contained in this Form 10-Q and the other filings with
        the Securities and Exchange Commission made by the Partnership from time
        to time. The discussion of the Partnership's liquidity, capital
        resources and results of operations, including forward-looking
        statements pertaining to such matters, does not take into account the
        effects of any changes to the Partnership's operations. Accordingly,
        actual results could differ materially from those projected in the
        forward-looking statements as a result of a number of factors, including
        those identified herein.

        This item should be read in conjunction with the financial statements
        and other items contained elsewhere in the report.

        Liquidity and Capital Resources

        The Partnership had $10,095,309 in cash and cash equivalents at March
        31, 2000. Cash and cash equivalents are temporarily invested in
        short-term instruments and, together with cash flow from operations, are
        expected to be sufficient to fund future capital improvements to the
        Partnership's properties.

        The Partnership's level of liquidity based upon cash and cash
        equivalents increased by $1,573,939 for the three months ended March 31,
        2000 as compared to December 31, 1999. The increase is due to $1,611,309
        of cash provided by operating activities which was partially offset by
        $37,370 of cash used in investing activities for capital expenditures.
        The Partnership's primary source of funds is cash flow from the
        operation of its properties, principally rents received from the tenants
        less property operating expenses.

        The Partnership expects to continue to utilize a portion of its cash
        flow from operations to pay for various capital and tenant improvements
        to the properties and leasing commissions. Capital and tenant
        improvements and leasing commissions may in the future exceed the
        Partnership's cash flow from operations. In that event, the Partnership
        would utilize its remaining working capital reserves, reduce
        distributions, or sell one or more properties. Except as discussed
        above, management is not aware of any other trends, events, commitments
        or uncertainties that will have a significant impact on liquidity.

        As discussed in "Item 1. Financial Statements-Note 7", the Partnership
        entered into a settlement agreement relating to a class action lawsuit.
        In light of the current implementation of the settlement and the filing
        of the Registration Statement pursuant to which the General Partners are
        using their best efforts to reorganize the Partnership into a real
        estate investment trust, the General Partners have suspended any
        distributions until such reorganization is either approved or
        disapproved.

<PAGE>

              INTEGRATED RESOURCES HIGH EQUITY PARTNERS - SERIES 85

                           FORM 10-Q - MARCH 31, 2000


Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS
        OF OPERATIONS (CONTINUED)

        Results of Operations

        The Partnership experienced an increase in net income of $412,858 for
        the three months ended March 31, 2000 as compared to the same period in
        the prior year.

        The increase was due to a decrease in costs and expenses of $447,632 and
        an increase in rental revenues of $14,154 which were partially offset by
        a decrease in interest and other income of $48,928 during the three
        months ended March 31, 2000 compared to the three months ended March 31,
        1999.

        Rental revenues increased during the three months ended March 31, 2000
        compared to 1999 at Southport and Seattle Tower due to higher overall
        rental rates at the properties.

        Costs and expenses decreased by $447,632 during the three months ended
        March 31, 2000 compared to the same period in 1999, primarily due to an
        decrease in administrative expenses of $415,026 as legal fees related to
        the class action litigation were incurred in 1999 with no similar
        charges in 2000. In addition the Partnership management fees paid during
        the first quarter of 2000 decreased by $38,890 as compared to the first
        quarter of 1999. See, Item 1. Financial Statements, Note 3. Property
        operating expenses and property management fees remained relatively
        stable. The Partnership experienced higher depreciation expense due to
        real estate improvements in 1999.

        Interest income increased during the three months ended March 31, 2000
        due to higher cash balances during the first three months of 2000 as
        compared to the comparable period in 1999. Other income decreased during
        the three ended March 31, 2000 as compared to the same period in due to
        decreased investor transfer fee.

        Inflation is not expected to have a material impact on the Partnership's
        operations or financial position.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        The Partnership is not subject to market risk as its cash and cash
        equivalents are invested in short term money market mutual funds. The
        Partnership has no loans outstanding.

<PAGE>

              INTEGRATED RESOURCES HIGH EQUITY PARTNERS - SERIES 85

                           FORM 10-Q - MARCH 31, 2000


Part II. Other Information

Item 6 - Exhibits and Reports on Form 8-K

         (a) Exhibits: There were no exhibits filed.

             27. Financial data schedule is filed as an Exhibit to this report

         (a) Reports on Form 8-K:

             No report of Form 8-K was filed during the period.

<PAGE>

              INTEGRATED RESOURCES HIGH EQUITY PARTNERS - SERIES 85

                           FORM 10-Q - MARCH 31, 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 thereunto duly authorized.


                                    Integrated Resources High Equity Partners,
                                    Series 85, A California Limited Partnership

                                    By:  Resources High Equity, Inc.,
                                         Managing General Partner


Dated:  May 12, 2000                     By:   /S/ Michael L. Ashner
                                               ---------------------
                                               Michael L. Ashner
                                               President and Director
                                               (Principal Executive Officer)


Dated:  May 12, 2000                     By:   /S/ Carolyn B. Tiffany
                                               ----------------------
                                               Carolyn B. Tiffany
                                               Vice President and Treasurer
                                               (Principal Financial and
                                               Accounting Officer)