<PAGE>

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                                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, 1999

                        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.)

                 411 West Putnam Avenue, Greenwich, CT 06830
                   (Address of principal executive offices)

                                (203) 862-7444
             (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, 1999

                                    INDEX

                                                                    Page No.

  Part I. Financial Information:

  Balance Sheets - March 31, 1999 and December 31, 1998                 3

  Statements of Operations -- Three Months Ended
    March 31, 1999 and 1998                                             4

  Statement of Partners' Equity -- Three Months Ended
    March 31, 1999                                                      5

  Statements of Cash Flows -- Three Months Ended
    March 31, 1999 and 1998                                             6

  Notes to Financial Statements                                    7 - 12

  Management's Discussion and Analysis of Financial
    Condition and Results of Operations                           13 - 15

  Part II. Other Information:

  Legal Proceedings, Exhibits and Reports on Form 8-K                  16


                                      2


<PAGE>


             INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
                           FORM 10-Q-MARCH 31, 1999

                                BALANCE SHEETS

                                       March 31, 1999     December 31, 1998
                                       --------------     -----------------

ASSETS

Real estate - net                       $  32,332,828     $  32,518,352
Cash and cash equivalents                   7,571,079         6,301,641
Other assets                                1,930,463         1,847,273
Receivables                                   128,303           147,423
                                        -------------     -------------

                                        $  41,962,673     $  40,814,689
                                        =============     =============


LIABILITIES AND PARTNERS' EQUITY      

Accounts payable and accrued expenses   $   2,063,498     $   1,265,264
Distributions payable                         395,799           395,799
Due to affiliates                             266,002           362,440
                                        -------------     -------------
                                        
                                            2,725,299         2,023,503
                                        -------------     -------------

Commitments and contingencies

PARTNERS' EQUITY:

  Limited partners' equity (400,010
     units issued and outstanding)         37,274,555        36,850,676
  General partners' equity                  1,962,819         1,940,510
                                        -------------     -------------

                                           39,237,374        38,791,186
                                        -------------     -------------

                                        $  41,962,673     $  40,814,689
                                        =============     =============



                      See notes to financial statements

                                      3



<PAGE>


             INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
                           FORM 10-Q-MARCH 31, 1999

                           STATEMENTS OF OPERATIONS

                                                   For the Three Months Ended
                                                            March 31,
                                                   --------------------------
                                                       1999          1998
                                                   ----------      ----------

Rental Revenue                                      $2,868,073   $2,590,545
                                                    ----------   ---------- 

Costs and Expenses:

  Operating expenses                                   833,350      836,815
  Depreciation and amortization                        336,096      329,293
  Partnership management fee                           211,409      227,043
  Administrative expenses                              703,310      225,750
  Property management fee                               85,505       76,584
                                                    ----------   ---------- 

                                                     2,169,670    1,695,485
                                                    ----------   ---------- 

Income before interest and other income                698,403      895,060

  Interest income                                       61,294       26,201

  Other income                                          82,290        3,200
                                                    ----------   ---------- 

Net income                                          $  841,987   $  924,461
                                                    ==========   ========== 

Net income attributable to:

  Limited partners                                  $  799,888   $  878,238

  General partners                                      42,099       46,223
                                                    ----------   ---------- 

Net income                                          $  841,987   $  924,461
                                                    ==========   ==========

Net income per unit of limited
  partnership interest (400,010 units outstanding)  $     2.00   $     2.20
                                                    ==========   ==========


                        See notes to financial statements

                                      4


<PAGE>

             INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
                           FORM 10-Q-MARCH 31, 1999

                        STATEMENT OF PARTNERS' EQUITY

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

Balance, January 1, 1999                $1,940,510  $36,850,676  $38,791,186

Net income for the three
  months ended March 31, 1999               42,099      799,888      841,987


Distributions as a return of capital 
  for the three months ended March 31, 
  1999 ($ .94 per limited     
  partnership unit)                        (19,790)    (376,009)    (395,799)
                                        ----------  -----------  -----------

Balance, March 31, 1999                 $1,962,819  $37,274,555  $39,237,374
                                        ==========  ===========  ===========









                        See notes to financial statements


                                      5

<PAGE>

             INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
                           FORM 10-Q-MARCH 31, 1999

                           STATEMENTS OF CASH FLOWS

                                                    For the Three Months Ended 
                                                             March 31,
                                                    ---------------------------
                                                        1999         1998
                                                      ----------   ----------
Cash Flows From Operating Activities:

  Net income                                          $  841,987   $  924,461
  Adjustments to reconcile net income
  to net cash provided by operating activities:

    Depreciation and amortization                        336,096      329,293
    Straight-line adjustment for stepped
    lease rentals                                          8,519        1,000
  Changes in assets and liabilities:
    Accounts payable and accrued expenses                798,234      341,097
    Receivables                                           19,120       33,865
    Due to affiliates                                    (96,438)     (91,841)
    Other assets                                        (146,801)     (22,801)
                                                      ----------   ----------

  Net cash provided by operating activities            1,760,717    1,515,074
                                                      ----------   ----------

Cash Flows From Investing Activities:

  Improvements to real estate                            (95,480)    (438,329)
                                                      ----------   ----------

Cash Flows From Financing Activities:

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

Increase In Cash And Cash Equivalents                  1,269,438      680,946

Cash And Cash Equivalents, Beginning of Year           6,301,641    4,350,887
                                                      ----------   ----------

Cash And Cash Equivalents, End of Quarter             $7,571,079   $5,031,833
                                                      ==========   ==========


                       See notes to financial statement


                                      6

<PAGE>


             INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
                           FORM 10-Q-MARCH 31, 1999

                        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, 1998.

         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, 1999 are not necessarily indicative of the
         results to be expected for the entire year.

2.       SIGNIFICANT ACCOUNTING POLICIES

         Impairment of Assets

         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 estimates
         the future 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.

         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. The
         Partnership may in the future provide additional write-downs, which
         could be material, if real estate markets or local economic conditions
         change.

                                      7

<PAGE>


             INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
                           FORM 10-Q-MARCH 31, 1999

                          NOTES TO FINANCIAL STATEMENTS

3.       CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES

         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. Presidio has a management agreement with
         NorthStar Presidio Management Company LLC ("NorthStar Presidio"), an
         affiliate of NorthStar Capital Investment Corp., pursuant to which
         NorthStar Presidio provides the day-to-day management of Presidio and
         its direct and indirect subsidiaries and affiliates, including the
         Partnership. For the three months ended March 31, 1999, reimbursable
         expenses incurred by NorthStar Presidio related to the Partnership
         amounted to approximately $25,500.

         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. For the quarters ended
         March 31, 1999 and 1998, Resources Supervisory was entitled to receive
         $85,505 and $76,584 respectively, of which $68,412 and $65,229 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 the quarters ended March 31, 1999 and 1998, 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 equal to 1.05% of the amount of original gross proceeds paid or
         allocable to the acquisition of property by the Partnership, as
         adjusted for the properties sold. For the quarters ended March 31, 1999
         and 1998, the Managing General Partner received $211,409 and $227,043,
         respectively.

                                      8

<PAGE>

             INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
                           FORM 10-Q-MARCH 31, 1999

                          NOTES TO FINANCIAL STATEMENTS

3.       CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES (CONTINUED)

         The General Partners are allocated 5% of the net income of the
         Partnership, which amounted to $42,099 and $46,223 for the quarters
         ended March 31, 1999 and 1998, respectively. They are also entitled to
         receive 5% of distributions, which amounted to $19,790 and for each of
         the quarters ended March 31, 1999 and 1998.

         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. Presidio may be deemed to
         beneficially own the remaining units owned by Olympia as a consequence
         of the Agreement.

         Subsequent to the expiration of the tender offer described above,
         Millennium Funding II Corp. purchased an additional 17,785 limited
         partnership units from August 1998 through May 1999. The total number
         of units purchased by Millennium Funding II Corp. represents
         approximately 18.1% of the outstanding limited partnership units of the
         Partnership.

4.       REAL ESTATE

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

                                          March 31, 1999    December  31, 1998
                                          --------------    ------------------

         Land                              $ 10,370,965        $10,370,965
         Building and improvements           36,886,200         36,790,720
                                           ------------        -----------
                                             47,257,165         47,161,685
         Less: Accumulated depreciation     (14,924,337)       (14,643,333)
                                           ------------        -----------

                                           $ 32,332,828        $32,518,352
                                           ============        ===========

                                      9

<PAGE>

             INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
                           FORM 10-Q-MARCH 31, 1999

                        NOTES TO FINANCIAL STATEMENTS

5.       DISTRIBUTIONS PAYABLE

                                               March 31, 1999  December 31, 1998
                                               --------------  -----------------

         Limited partners ($.94 per unit)        $  376,009        $ 376,009
         General partners                            19,790           19,790
                                                 ----------        ---------  

                                                 $  395,799        $ 395,799
                                                 ==========        =========

         Such distributions were paid in the subsequent quarters.

6.       DUE TO AFFILIATES

                                               March 31, 1999  December 31, 1998
                                               --------------  -----------------
         Partnership management fee              $  211,409        $ 211,409
         Property management fee                     17,093          113,531
         Non-accountable expense reimbursement       37,500           37,500
                                                 ----------        ---------  

                                                 $  266,002        $ 362,440
                                                 ==========        =========  


         Such amounts were paid in the subsequent quarters.

                                      10
<PAGE>

             INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
                           FORM 10-Q-MARCH 31, 1999

                        NOTES TO FINANCIAL STATEMENTS

7.       COMMITMENTS AND CONTINGENCIES

         In May 1993, limited partners in High Equity Partners L.P. - Series 86
         ("HEP-86"), an affiliated  partnership, commenced an action (the
         "Action") in the Superior Court for the State of California for the
         County of Los Angeles (the "Court") on behalf of a purported class
         consisting of all the purchasers of limited partnership interests in
         HEP-86. On April 7, 1994 the plaintiffs were granted leave to file an
         amended complaint on behalf of a class consisting of all the purchasers
         of limited partnership interests in HEP-86, the Partnership, and High
         Equity Partners L.P. - Series 88 ("HEP-88"), another affiliated
         partnership (collectively, the "HEP Partnerships").

         In November 30, 1995, the original plaintiffs and intervening
         plaintiffs filed a consolidated class and derivative action complaint
         (the "Consolidated Complaint") alleging various state law class and
         derivative claims, including claims for breach of fiduciary duty;
         breach of contract; unfair and fraudulent business practices under
         California Bus. & Prof. Code Section 17200; negligence; dissolution,
         accounting, receivership and removal of general partner; fraud; and
         negligent misrepresentation. The Consolidated Complaint alleges, among
         other things, that the general partners of the HEP Partnerships
         (collectively, "HEP General Partners") caused a waste of the HEP
         Partnerships' assets by collecting management fees General Partners
         diminished the value of the limited partners' equity in the HEP
         partnerships assets by collecting management fees in lieu of pursuing a
         strategy to maximize the value of the investments owned by the
         investors in the HEP Partnerships, that the HEP General Partners
         breached their duty of loyalty and due care to the investors by
         expropriating management fees from the HEP Partnerships without trying
         to run the HEP Partnerships for the purposes for which they were
         intended; that the HEP General Partners were acting improperly to
         entrench themselves in their position of control over the HEP
         Partnerships and that their actions prevented non-affiliated entities
         from making and completing tender offers to purchase units of limited
         partnership interest in the HEP Partnerships (collectively, the "HEP
         Units"); that, by refusing to seek the sale of the HEP Partnerships'
         properties, the HEP General Partners diminished the value of the
         investors' equity in the HEP Partnerships; that the HEP General
         Partners took heavily overvalued asset management fees; and that HEP
         Units were sold and marketed through the use of false and misleading
         statements.

         In early 1996, the parties submitted a proposed settlement to the Court
         (the "Proposed Settlement"), which contemplated a reorganization of the
         three HEP Partnerships into a single real estate investment trust,
         pursuant to which approximately 85% of the shares of the real estate
         investment trust would have been allocated to investors in the three
         HEP Partnerships (assuming each of the HEP Partnerships participated in
         the reorganization), and approximately 15% of the shares would have
         been allocated to the HEP General Partners. As a consequence, the
         Proposed Settlement would, among other things, have approximately
         tripled the HEP General Partners' equity interests in the HEP
         Partnerships. In late 1996, the California Department of Corporations
         informed the Court of the conclusion that the Proposed Settlement was
         unfair,

                                      11

<PAGE>

             INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
                           FORM 10-Q-MARCH 31, 1999

                          NOTES TO FINANCIAL STATEMENTS

7.       COMMITMENTS AND CONTINGENCIES (CONTINUED)

         and, in early 1997, the Court declined to grant final approval of the
         Proposed Settlement because the Court was not persuaded that the
         Proposed Settlement was fair, adequate or reasonable as to the proposed
         class.

         In July 1997, the plaintiffs filed an amended complaint, which
         generally asserts the same claims as the earlier Consolidated Complaint
         but contains more detailed factual assertions and eliminates some
         claims they had previously asserted. The HEP General Partners
         challenged the amended complaint on legal grounds and filed demurrers
         and a motion to strike. In October 1997, the Court granted substantial
         portions of the HEP General Partners' motions. Thereafter, the HEP
         General Partners served answers denying the allegations and asserting
         numerous defenses. In February 1998, the Court certified three separate
         plaintiff classes consisting of the current owners of record of HEP
         Units (but excluding all defendants or entities related to such
         defendants), and appointed class counsel and liaison counsel.

         In mid-1998, the parties actively engaged in negotiations concerning a
         possible settlement of the Action. In September 1998, the parties
         reached an agreement in principle, and, during the following months,
         negotiated a more formal settlement stipulation (the "Settlement
         Stipulation"), which they executed in December 1998. The Settlement
         Stipulation was submitted to the Court for preliminary approval in
         early January 1999. In February 1999, the Court gave preliminary
         approval to the Settlement Stipulation and directed that notice of the
         proposed settlement be sent to the previously certified class. The
         proposed settlement contemplates (I) amendments to the Partnership
         Agreement that would modify the existing fee structure; (II) a tender
         offer whereby the General Partners would purchase up to 6.7% of the
         units from limited partners; and (III) that the General Partners will
         use their best efforts to effect a reorganization of the HEP
         Partnerships into REIT's or other publicly traded entities. At a
         hearing held on April 29, 1999, the Court approve the proposed
         settlement in its entirety and directed entry of judgement to that
         effect. The settlement is subject to a number of conditions. There can
         be no assurance that such conditions will be fulfilled.

         The General Partners believe that each of the claims asserted in the
         Action are meritless and, if for any reason a final settlement pursuant
         to the Settlement Stipulation is not consummated, intend to continue to
         vigorously defend the Action. At a hearing held on April 29, 1999, the
         Court also awarded a total of $2.5 million in attorneys' fees and
         reimbursement of expenses to Class and objectors' counsel. Of that
         total, $875,000 is to be paid by the General Partners and the balance
         by the HEP Partnerships. The Limited Partnership Agreement provides for
         indemnification of the General Partners and their affiliates in certain
         circumstances. The Partnership has agreed to reimburse the General
         Partners for their actual costs incurred in defending this litigation
         and the costs of preparing settlement materials. Through March 31,
         1999, the Partnership paid the General Partners a total of $1,034,510
         for these costs.

                                      12

<PAGE>

             INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
                           FORM 10-Q-MARCH 31, 1999

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

Working capital reserves 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. As of March 31,
1999 total working capital reserves amounted to approximately $2,587,000. The
Partnership intends to distribute to its partners less than all of its future
cash flow from operations in order to assure adequate reserves for capital
improvements and capitalized lease procurement costs.

During the three months ended March 31, 1999, cash and cash equivalents
increased $1,269,438 as a result of cash provided by operations in excess of
capital expenditures and distributions to partners. The Partnership's primary
source of funds is cash flow from the operation of its properties (principally
rents received from tenants less property operating expenses) which amounted to
$1,760,717 for the three months ended March 31, 1999. The Partnership used
$95,480 for capital expenditures related to capital and tenant improvements to
the properties and $395,799 for distributions to partners for the three months
ended March 31, 1999.

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. Although no additional properties are under contract
for sale, future cash flows will exclude cash flow from the Westbrook property
(sold in 1998) which amounted to approximately $38,000 in 1998. 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.

RESULTS OF OPERATIONS

The Partnership experienced a decrease in net income for the three months ended
March 31, 1999 as compared to the same period in the prior year. The decrease
was due to higher costs and expenses, partially offset by increases in rental
revenues and higher interest and other income during the three months ended
March 31, 1999.

Rental revenues increased during the three months ended March 31, 1999 compared
to 1998 at Southport and Seattle Tower due to higher overall rental rates at the
properties. These increases were partially offset by lower revenues during the
three months ended March 31, 1999 due to the sale of the Westbrook property in
1998.

                                      13

<PAGE>

             INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
                           FORM 10-Q-MARCH 31, 1999

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

Costs and expenses increased during the three months ended March 31, 1999
compared to the same period in 1998, primarily due to an increase in
administrative expenses as higher legal fees related to the ongoing litigation
and possible reorganization of the Partnership were incurred in 1999 as compared
to 1998. In addition, the Partnership experienced higher depreciation expense
due to real estate improvements in 1998 and an increase in property management
fees due to higher revenues, as previously discussed. These increases were
partially offset by lower operating expenses and partnership management fees as
a result of the Westbrook sale in 1998.

Interest income increased during the three months ended March 31, 1999 due to
higher cash balances during the first three months of 1999. Other income
increased during the three ended March 31, 1999 as compared to the same period
in 1998 due to a greater number of investor transfers, on which the Partnership
earns a transfer fee.

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

LEGAL PROCEEDINGS

The Partnership is a party to certain litigation. See Note 7 to the financial
statements for a description thereof.

FORWARD-LOOKING STATEMENTS

When used in this quarterly report on Form 10-Q, the words "believes,"
"anticipates," "expects" and similar expressions are intended to identify
forward-looking statements. Statements looking forward in time are included in
this quarterly report on Form 10-Q pursuant to the "safe harbor" provision on
the Private Securities Litigation Reform Act of 1995. Such statements are
subject to certain risks and uncertainties which could cause actual results to
differ materially, including, but not limited to, those set forth in
"management's discussion and analysis of financial condition and results of
operations." Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The
Partnership undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances occurring after the date hereof or
to reflect the occurrence of unanticipated events.

                                      14

<PAGE>

             INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
                           FORM 10-Q-MARCH 31, 1999

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

YEAR 2000 COMPLIANCE

The Year 2000 compliance issue concerns the inability of computerized
information systems and equipment to accurately calculate, store or use a date
after December 31, 1999, as a result of the year being stored as a two digit
number. This could result in a system failure or miscalculations causing
disruptions of operations. The Partnership and its Manager (NorthStar Presidio
Management Co., LLC) recognize the importance of ensuring that its business
operations are not disrupted as a result of Year 2000 related computer system
and software issues.

The manager has assessed its internal computer information systems and is now
taking the further steps necessary to remediate these systems so that they will
be Year 2000 compliant. In connection therewith, the manager installed a new
fully compliant accounting and reporting system in December 1998. Further, the
Manager anticipates that the internal computer systems will be fully Year 2000
compliant by the end of the third quarter of 1999. The Manager is also currently
reviewing other systems and programs of its unaffiliated third party service
providers, in order to insure compliance. This process is expected to be
completed during the third quarter of 1999.

Further, the Manager and these service providers are currently evaluating and
assessing those computer systems not related to information technology. These
systems, that generally operate in a building include, without limitation,
telecommunication systems, security systems (such as card-access door lock
systems), energy management systems and elevator systems. As a result of the
technology used in this type of equipment, it is possible that this equipment
may not be repairable, and accordingly may require complete replacement. Because
this assessment is ongoing, the total cost of bringing all systems and equipment
into Year 2000 compliance has not been fully quantified. Based upon available
information, the Manager does not believe that these costs will have a material
adverse effect on the Partnership's business, financial condition or results.
However, it is possible that there could be adverse consequences to the
Partnership as a result of Year 2000 issues that are outside the Partnership's
control. The Manager is in the preliminary stages of evaluating these issues and
will be developing contingency plans.


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<PAGE>

             INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
                           FORM 10-Q-MARCH 31, 1999

                         Part II. - Other Information


Item 1 - Legal Proceedings

         (a)      See Management's Discussion and Analysis of Financial
                  Condition and Results of Operations and Notes to Financial
                  Statements - Note 7 which is herein incorporated by reference.

Item 6 - Exhibits and Reports on Form 8-K

         (a)      Exhibits: There were no exhibits filed.

         (b)      Reports on Form 8-K:
                  None




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<PAGE>


             INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85
                           FORM 10-Q-MARCH 31, 1999

                                  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, 1999                  By:   /S/ Allan Rothschild
                                             --------------------
                                             Allan Rothschild
                                             President
                                             (Duly Authorized Officer)

Dated:   May 12, 1999                  By:   /S/ Lawrence Schachter
                                             ----------------------
                                             Lawrence Schachter
                                             Senior Vice President and
                                             Chief Financial Officer
                                             (Principal Financial and
                                             Accounting Officer)




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