FORM 10-Q

                    SECURITIES AND EXCHANGE COMMISSION

                          Washington, D.C. 20549

(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, 1997

                                    OR

[  ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                     SECURITIES EXCHANGE ACT OF 1934

For the transition period from      N/A

Commission file number            0-15680

            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
           (Exact name of registrant as specified in its charter)

          Massachusetts                             04-2921566
 (State or other jurisdiction of       (I.R.S. Employer Identification No.)
  incorporation or organization)

                 200 Clarendon Street, Boston, MA  02116
                 (Address of principal executive offices)
                                (Zip Code)

                              (800) 722-5457
           Registrant's telephone number, including area code:

                                   N/A
(Former name, former address and former fiscal year, if changed since last
report)

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>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)



                                   INDEX





PART I:     FINANCIAL INFORMATION                                    PAGE
        
 Item 1   -      Financial Statements:

                  Balance Sheets at September 30, 1997 and
                  December 31, 1996                                    3
                
                  Statements of Operations for the Three and Nine
                  Months Ended September 30, 1997 and 1996             4
                
                  Statements of Partners' Equity for the Nine
                  Months Ended September 30, 1997 and for
                  the Year Ended December 31, 1996                     5
                
                  Statements of Cash Flows for the Nine Months
                  Ended September 30, 1997 and 1996                    6
                
                  Notes to Financial Statements                     7-16
                
 Item 2   -       Management's Discussion and Analysis of
                  Financial Condition and Results of Operations    17-28


PART II:    OTHER INFORMATION                                       29-30





















                                    2
<PAGE>
           JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                  (A Massachusetts Limited Partnership)

                      PART I:  FINANCIAL INFORMATION
                      Item 1:  Financial Statements
                              BALANCE SHEETS
                               (Unaudited)

                                  ASSETS

                                            September 30,   December 31,
                                                 1997           1996
                                                 ----           ----

Cash and cash equivalents                    $4,723,504     $2,197,847
Restricted cash                                  54,355         59,132
Other assets                                    265,487         78,999

Property held for sale                                -      2,678,599

Deferred expenses, net of accumulated
 amortization of $450,962 in 1997 and
 $361,132 in 1996                               418,860        384,808

Investment in property:
 Land                                         6,198,330      6,198,330
 Buildings and improvements                  17,991,609     17,991,609
                                             ----------     ----------
                                             24,189,939     24,189,939
 Less:   accumulated depreciation           (4,717,074)    (4,214,134)
                                              ---------      ---------
                                             19,472,865     19,975,805
                                             ----------     ----------
   Total assets                             $24,935,071    $25,375,190
                                            ===========    ===========

                     LIABILITIES AND PARTNERS' EQUITY

Liabilities:
Accounts payable and accrued expenses          $380,480       $340,087
Accounts payable to affiliates                  139,779        108,961
                                                -------        -------
 Total liabilities                              520,259        449,048

Partners' equity/(deficit):

 General Partner's deficit                    (235,958)      (230,844)
 Limited Partners' equity                    24,650,770     25,156,986
                                             ----------     ----------
 Total partners' equity                      24,414,812     24,926,142
                                             ----------     ----------
 Total liabilities and partners' equity     $24,935,071    $25,375,190
                                            ===========    ===========

                    See Notes to Financial Statements

                                    3
<PAGE>
           JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                  (A Massachusetts Limited Partnership)
                         STATEMENTS OF OPERATIONS
                               (Unaudited)
<TABLE>
<CAPTION>
                                               Three Months Ended               Six Months Ended
                                                 September 30,                   September 30,
                                              1997           1996              1997          1996
                                              ----           ----              ----          ----
<S>                                           <C>            <C>               <C>           <C>
Income:

  Rental income                             $755,991       $619,709        $2,198,387     $1,887,993
  Interest income                             20,434         36,171            64,236        151,346
  Loss on sale of property                   (5,321)              -           (5,321)              -
                                            --------       --------         ---------      ---------

  Total income                               771,104        655,880         2,257,302      2,039,339

Expenses:

  Depreciation                               164,928        195,670           502,940        587,008
  Property operating expenses                 84,784         67,337           283,998        260,032
  General and administrative expenses        54,524         55,269           261,134        163,161
  Amortization of deferred expenses           40,207         48,271           100,330        129,456
  Management fee                              18,904         18,903            56,676         57,716
  Property write-down                              -              -                 -        660,000
                                            --------       --------          --------       --------

  Total expenses                             363,347        385,450         1,205,078      1,857,373
                                            --------       --------          --------      ---------

  Net income                                $407,757       $270,430        $1,052,224       $181,966
                                            ========       ========        ==========       ========


Allocation of net income:

  General Partner                             $4,077         $2,704           $10,522         $1,819
  John Hancock Limited Partner              (13,018)       (17,349)          (37,600)       (52,045)
  Investors                                  416,698        285,075         1,079,302        232,192
                                           ---------      ---------        ----------      ---------
                                            $407,757       $270,430        $1,052,224       $181,966
                                           =========      =========        ==========      =========
Net income per Unit                            $4.55          $3.11           $11.78          $2.53
                                           =========      =========        ==========     ==========
</TABLE>






                    See Notes to Financial Statements


                                     4
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                      STATEMENTS OF PARTNERS' EQUITY
                               (Unaudited)

                 Nine Months Ended September 30, 1997 and
                       Year Ended December 31, 1996

<TABLE>
<CAPTION>

                                                         General       Limited
                                                         Partner       Partners        Total
                                                         -------       --------        -----
<S>                                                        <C>           <C>            <C>
Partners' equity/(deficit) at January 1, 1996
 (91,647 Units outstanding)                            ($200,634)    $33,463,320    $33,262,686

Less:    Cash distributions                              (21,699)    (7,463,730)    (7,485,429)

Add:    Net Loss                                          (8,511)      (842,604)      (851,115)
                                                         --------     ----------     ----------

Partners' equity/(deficit) at December 31, 1996
 (91,647 Units outstanding)                             (230,844)     25,156,986     24,926,142

Less:   Cash distributions                               (15,636)    (1,547,918)    (1,563,554)

Add:    Net income                                         10,522      1,041,702      1,052,224
                                                         --------      ---------     ----------

Partners' equity/(deficit) at September 30, 1997
 (91,647 Units outstanding)                            ($235,958)    $24,650,770    $24,414,812
                                                         ========     ==========    ===========

</TABLE>

















                    See Notes to Financial Statements

                                    5
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)
                         STATEMENTS OF CASH FLOWS
                               (Unaudited)

                                                      Nine Months Ended
                                                        September 30,
                                                      1997           1996
                                                      ----          -----
Operating activities:

 Net income                                       $1,052,224       $181,966

 Adjustments to reconcile net income to net
 cash provided by operating activities:

 Depreciation                                        502,940        587,008
 Amortization of deferred expenses                   100,330        129,456
 Property write-down                                       -        660,000
 Loss on sale of property                              5,321              -
                                                   ---------      ---------
                                                   1,660,815      1,558,430

 Changes in operating assets and liabilities:
 Decrease/(increase) in restricted cash                4,777        (9,527)
 Increase in other assets                          (186,488)       (39,992)
 Increase in accounts payable and accrued
 expenses                                             40,393        309,236
 Increase/(decrease) in accounts payable to
 affiliates                                           30,818        (2,678)
                                                   ---------      ---------
 Net cash provided by operating activities         1,550,315      1,815,469

Investing activities:

 Proceeds from sale of property                    2,673,278              -
 Increase in deferred expenses                     (134,382)      (894,032)
                                                   ---------      ---------
 Net cash provided by/(used in) investing
 activities                                        2,538,896      (894,032)

Financing activities:

 Cash distributed to Partners                    (1,563,554)    (6,964,245)
                                                   ---------      ---------
 Net cash used in financing activities           (1,563,554)    (6,964,245)
                                                   ---------      ---------
 Net increase/(decrease) in cash and
 cash equivalents                                  2,525,657    (6,042,808)

 Cash and cash equivalents at
 beginning of year                                 2,197,847      8,397,420
                                                   ---------      ---------
 Cash and cash equivalents at
 end of period                                    $4,723,504     $2,354,612
                                                  ==========     ==========

                    See Notes to Financial Statements
                                    6
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                      NOTES TO FINANCIAL STATEMENTS
                               (Unaudited)

1. Organization of Partnership
   ---------------------------
     John Hancock Realty Income Fund Limited Partnership (the
     "Partnership") was formed under the Massachusetts Uniform Limited
     Partnership Act on June 12, 1986.  As of September 30, 1997, the
     Partnership consisted of John Hancock Realty Equities, Inc. (the
     "General Partner"), a wholly-owned, indirect subsidiary of John
     Hancock Mutual Life Insurance Company; John Hancock Realty Funding,
     Inc. (the "John Hancock Limited Partner"); and 4,001 Investor Limited
     Partners (the "Investors"), owning 91,647 Units of Investor Limited
     Partnership Interests (the "Units").  The John Hancock Limited Partner
     and the Investors are collectively referred to as the Limited
     Partners.  The initial capital of the Partnership was $2,000,
     representing capital contributions of $1,000 from the General Partner
     and $1,000 from the John Hancock Limited Partner.  The Amended
     Agreement of Limited Partnership of the Partnership (the "Partnership
     Agreement") authorized the issuance of up to 100,000 Units of Limited
     Partnership Interests at $500 per Unit.  During the offering period,
     which terminated on September 9, 1987, 91,647 Units were sold and the
     John Hancock Limited Partner made additional capital contributions of
     $7,330,760.  There have been no changes in the number of Units
     outstanding subsequent to the termination of the offering period.

     The Partnership is engaged in the business of acquiring, holding for
     investment and disposing of existing, income-producing, commercial and
     industrial properties on an all-cash basis, free and clear of mortgage
     indebtedness.  Although the Partnership's properties were acquired and
     are held free and clear of mortgage indebtedness, the Partnership may
     incur mortgage indebtedness on its properties under certain
     circumstances, as specified in the Partnership Agreement.

     The latest date on which the Partnership is due to terminate is
     December 31, 2016, unless it is sooner terminated in accordance with
     the terms of the Partnership Agreement.  It is expected that in the
     ordinary course of the Partnership's business, the properties of the
     Partnership will be disposed of, and the Partnership terminated,
     before December 31, 2016.













                                   7
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                NOTES TO FINANCIAL STATEMENTS (continued)
                               (Unaudited)

2. Significant Accounting Policies (continued)
   -------------------------------------------
     The accompanying unaudited financial statements have been prepared in
     accordance with generally accepted accounting principles for interim
     financial information and with the instructions to Form 10-Q and Rule
     10-01 of Regulation S-X.  Accordingly, they do not include all of the
     information and footnotes required by generally accepted accounting
     principles for complete financial statements.  In the opinion of
     management, all adjustments (consisting of normal recurring accruals)
     considered necessary for a fair presentation have been included.
     Operating results for the nine month period ended September 30, 1997
     are not necessarily indicative of the results that may be expected for
     the year ending December 31, 1997.  For further information, refer to
     the financial statements and footnotes thereto included in the
     Partnership's Annual Report on Form 10-K for the year ended December
     31, 1996.

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates
     and assumptions that affect the reported amounts of assets and
     liabilities and disclosure of contingent assets and liabilities at the
     date of the financial statements and the reported amounts of revenue
     and expenses during the reporting period.  Actual results may differ
     from those estimates.

     Cash equivalents are highly liquid investments with maturities of
     three months or less when purchased.  These investments are recorded
     at cost plus accrued interest, which approximates market value.
     Restricted cash represents funds restricted for tenant security
     deposits and other escrows.

     The General Partner listed the 1300 North Dutton Avenue for sale
     during October 1996.  Accordingly, this property is classified in
     "Property Held For Sale" on the Balance Sheet at December 31, 1996 at
     its carrying value, which is not in excess of its estimated fair
     value, less selling costs.  This property was sold on September 29,
     1997.

     Investments in property are recorded at cost less any property write-
     downs for permanent impairment in values.  Cost includes the initial
     purchase price of the property plus acquisition and legal fees, other
     miscellaneous acquisition costs, and the cost of significant
     improvements.







                                   8

<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                NOTES TO FINANCIAL STATEMENTS (continued)
                               (Unaudited)

2.   Significant Accounting Policies (continued)
   -------------------------------------------
     Depreciation has been provided on a straight-line basis over the
     estimated useful lives of the various assets:  thirty years for the
     buildings and five years for related improvements.  Maintenance and
     repairs are charged to operations as incurred.

     Deferred expenses relating to tenant improvements and lease
     commissions are amortized on a straight-line basis over the terms of
     the leases to which they relate.  During 1993, the Partnership reduced
     the period over which its remaining deferred acquisition fees are
     amortized from thirty years, the estimated useful life of the
     buildings owned by the Partnership, to four and one-half years, the
     then estimated remaining life of the Partnership.

     The net income per Unit for the periods hereof are computed by
     dividing the Investors' share of net income by the number of Units
     outstanding at the end of such periods.

     No provision for income taxes has been made in the financial
     statements as such taxes are the responsibility of the individual
     partners and not of the Partnership.

     Certain 1996 amounts have been reclassified to be consistent with the
     1997 presentation.

3.   The Partnership Agreement
   -------------------------
     Distributable Cash from Operations (defined in the Partnership
     Agreement) is distributed 99% to the Limited Partners and 1% to the
     General Partner.  The Limited Partners' share of Distributable Cash
     from Operations is distributed as follows:  first, to the Investors
     until they receive a 7% non-cumulative, non-compounded annual cash
     return on their Invested Capital (defined in the Partnership
     Agreement); second, to the John Hancock Limited Partner until it
     receives a 7% non-cumulative, non-compounded annual cash return on its
     Invested Capital; and third, to the Investors and the John Hancock
     Limited Partner in proportion to their respective Capital
     Contributions (defined in the Partnership Agreement).  However, any
     Distributable Cash from Operations which is available as a result of
     the reduction of working capital reserves funded by Capital
     Contributions of the Investors will be distributed 100% to the
     Investors.







                                   9

<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                NOTES TO FINANCIAL STATEMENTS (continued)
                               (Unaudited)

3.   The Partnership Agreement (continued)
   -------------------------------------
     Cash from Sales or Financings (defined in the Partnership Agreement)
     is first used to pay all debts and liabilities of the Partnership then
     due and is then used to fund any reserves for contingent liabilities.
     Cash from Sales or Financings is then distributed as follows:  first,
     to the Limited Partners until they receive an amount equal to their
     Invested Capital with the distribution being made between the
     Investors and the John Hancock Limited Partner in proportion to their
     respective Capital Contributions; second, to the Investors until they
     have received, with respect to all previous distributions during the
     year, their Cumulative Return on Investment (defined in the
     Partnership Agreement); third, to the John Hancock Limited Partner
     until it has received, with respect to all previous distributions
     during the year, its Cumulative Return on Investment; fourth, to the
     General Partner to pay any Subordinated Disposition Fees (defined in
     the Partnership Agreement); and fifth, 99% to the Limited Partners and
     1% to the General Partner, with the distribution being made between
     the Investors and the John Hancock Limited Partner in proportion to
     their respective Capital Contributions.

     Cash from the sale of the last of the Partnership's properties is to
     be distributed in the same manner as Cash from Sales or Financings,
     except that before any other distribution is made to the Partners,
     each Partner shall first receive from such cash, an amount equal to
     the then positive balance, if any, in such Partner's Capital Account
     after crediting or charging to such account the profits or losses for
     tax purposes from such sale.  To the extent, if any, that a Partner is
     entitled to receive a distribution of cash based upon a positive
     balance in its capital account prior to such distribution, such
     distribution will be credited against the amount of such cash the
     Partner would have been entitled to receive based upon the manner of
     distribution of Cash from Sales or Financings, as specified in the
     previous paragraph.
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
                                   10
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                NOTES TO FINANCIAL STATEMENTS (continued)
                               (Unaudited)

3.   The Partnership Agreement (continued)
   -------------------------------------
     Profits from the normal operations of the Partnership for each fiscal
     year are allocated to the Limited Partners and General Partner in the
     same amounts as Distributable Cash from Operations for that year.  If
     such profits are less than Distributable Cash from Operations for any
     year, they are allocated in proportion to the amounts of Distributable
     Cash from Operations for that year.  If such profits are greater than
     Distributable Cash from Operations for any year, they are allocated
     99% to the Limited Partners and 1% to the General Partner, with the
     allocation made between the John Hancock Limited Partner and the
     Investors in proportion to their respective Capital Contributions.
     Losses from the normal operations of the Partnership are allocated 99%
     to the Limited Partners and 1% to the General Partner, with the
     allocation made between the John Hancock Limited Partner and the
     Investors in proportion to their respective Capital Contributions.
     Depreciation deductions are allocated 1% to the General Partner and
     99% to the Investors, and not to the John Hancock Limited Partner.
     
     Profits and Losses from Sales or Financings are generally allocated
     99% to the Limited Partners and 1% to the General Partners.  In
     connection with the sale of the last of the Partnership's properties,
     and therefore the dissolution of the Partnership, profits will be
     allocated to any Partners having a deficit balance in their Capital
     Account in an amount equal to the deficit balance.  Any remaining
     profits will be allocated in the same order as cash from the sale
     would be distributed.

     Neither the General Partner nor any Affiliate (defined in the
     Partnership Agreement) of the General Partner shall be liable,
     responsible or accountable in damages to any of the Partners or the
     Partnership for any act or omission of the General Partner in good
     faith on behalf of the Partnership within the scope of the authority
     granted to the General Partner by the Partnership Agreement and in the
     best interest of the Partnership, except for acts or omissions
     constituting fraud, negligence, misconduct or breach of fiduciary
     duty.  The General Partner and its Affiliates performing services on
     behalf of the Partnership shall be entitled to indemnity from the
     Partnership for any loss, damage, or claim by reason of any act
     performed or omitted to be performed by the General Partner in good
     faith on behalf of the Partnership and in a manner within the scope of
     the authority granted to the General Partner by the Partnership
     Agreement and in the best interest of the Partnership, except that
     they shall not be entitled to be indemnified in respect of any loss,
     damage, or claim incurred by reason of fraud, negligence, misconduct,
     or breach of fiduciary duty.  Any indemnity shall be provided out of
     and to the extent of Partnership assets only.  The Partnership shall
     not advance any funds to the General Partner or its Affiliates for
     legal expenses and other costs incurred as a result of any legal
     action initiated against the General Partner or its Affiliates by a
     Limited Partner in the Partnership, except under certain specified
     circumstances.

                                   11
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                NOTES TO FINANCIAL STATEMENTS (continued)
                               (Unaudited)

4.   Investment in Property
   ----------------------
     Investment in property at cost and reduced by write-downs consists of
     managed, fully-operating, commercial real estate as follows:
<TABLE>
<CAPTION>

                                                   September 30, 1997   December 31, 1996
                                                   ------------------    ----------------
       <S>                                                <C>                 <C>
      Marlboro Square Shopping Center                  $1,649,130          $1,649,130
      Crossroads Square Shopping Center                12,266,920          12,266,920
      Carnegie Center Office/Warehouse                  3,800,000           3,800,000
      Warner Plaza Shopping Center                      6,473,889           6,473,889
                                                        ---------          ----------
      Total                                           $24,189,939         $24,189,939
                                                      ===========         ===========
</TABLE>

     On September 29, 1997, the Partnership sold the 1300 North Dutton
     Avenue property to a non-affiliated buyer for a net sales price of
     $2,673,278, after deductions for commissions and selling expenses
     incurred in connection with the sale of the property.  This
     transaction resulted in a non-recurring loss of $5,321, representing
     the difference between the net sales price and the property's carrying
     value of $2,678,599.

     The real estate market is cyclical in nature and is materially
     affected by general economic trends and economic conditions in the
     market where a property is located.  As a result, determination of
     real estate values involves subjective judgments.  These judgments are
     based on current market conditions and assumptions related to future
     market conditions.  These assumptions involve, among other things, the
     availability of capital, occupancy rates, rental rates, interest rates
     and inflation rates.  Amounts ultimately realized from each property
     may vary significantly from the values presented and the differences
     could be material.  Actual market values of real estate can be
     determined only by negotiation between the parties in a sales
     transaction.
     
     
     
     
     
     
     
     
     
     
     
                                   12
     
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                NOTES TO FINANCIAL STATEMENTS (continued)
                               (Unaudited)
     
5.   Deferred Expenses
   ----------------
     Deferred expenses consist of the following:
<TABLE>
<CAPTION>
                                                               Unamortized          Unamortized
                                                                Balance at           Balance at
                     Description                            September 30, 1997   December 31, 1996
                     ------------                           ------------------   -----------------
                  <S>                                               <C>                 <C>
       $114,494 of acquisition fees paid to the General
       Partner.  This amount was amortized over a period
       of thirty years prior to June 30, 1993.  Subsequent
       to June 30, 1993, the unamortized balance is
       amortized over a period of fifty-four months.                 $5,354             $21,415

       $450,279 of tenant improvements.  These amounts
       are amortized over the terms of the leases to which
       they relate.                                                 227,410             187,716

       $305,049 of lease commissions.  These amounts
       are amortized over the terms of the leases to which
       they relate.                                                 186,096             175,677
                                                                    -------             -------
                                                                   $418,860            $384,808
                                                                   ========            ========
</TABLE>























                                   13

<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                NOTES TO FINANCIAL STATEMENTS (continued)
                               (Unaudited)

6.   Transactions with the General Partner and Affiliates
   ----------------------------------------------------
     Fees and expenses incurred or paid by the General Partner or its
     Affiliates on behalf of the Partnership and to which the General
     Partner or its Affiliates are entitled to reimbursement from the
     Partnership were as follows:

                                                         Nine Months Ended
                                                           September 30,
                                                        1997          1996
                                                       -----         -----
       Reimbursement for operating expenses           $201,615       $123,126
       Partnership management fee expense               56,676         57,716
                                                      --------       --------
                                                      $258,291       $180,842
                                                      ========       ========

     These expenses are included in expenses on the Statements of
     Operations.

     The Partnership provides indemnification to the General Partner and
     its Affiliates for any acts or omissions of the General Partner or an
     Affiliate in good faith on behalf of the Partnership, except for acts
     or omissions constituting fraud, negligence, misconduct or breach of
     fiduciary duty.  The General Partner believes that this
     indemnification applies to the class action complaint described in
     Note 8.  Accordingly, included in the Statements of Operations for the
     nine months ended September 30, 1997 and 1996 were $40,759 and $0,
     respectively, representing the Partnership's share of costs incurred
     by the General Partner and its Affiliates relating to the class action
     complaint.  As of September 30, 1997, the Partnership has incurred a
     total of $82,234 as its share of the costs incurred by the General
     Partner and its Affiliates resulting from this matter.

     Accounts payable to affiliates represents amounts due to the General
     Partner or its Affiliates for various services provided to the
     Partnership, including amounts to indemnify the General Partner or its
     Affiliates for claims incurred by them in connection with their
     actions with respect to the Partnership.  All amounts accrued by the
     Partnership to indemnify the General Partner or its Affiliates for
     legal fees incurred by them shall not be paid unless or until all
     conditions set forth in the Partnership Agreement for such payment
     have been fulfilled.

     The General Partner serves in a similar capacity for two other
     affiliated real estate limited partnerships.



                                   14
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                NOTES TO FINANCIAL STATEMENTS (continued)
                               (Unaudited)

7.   Federal Income Taxes
   ---------------------
     A reconciliation of the net income reported on the Statements of
     Operations to the net income reported for federal income tax purposes
     is as follows:
<TABLE>
<CAPTION>
                                                                          Nine Months Ended
                                                                            September 30,
                                                                          1997           1996
                                                                          ----           ----
          <S>                                                             <C>            <C>
       Net income per Statements of Operations                        $1,052,224       $181,966

       Add/(deduct): Excess tax loss over book loss
                           on disposition of assets                    (111,709)              -
                     Excess of tax depreciation
                           over book depreciation                      (144,208)       (65,307)
                     Excess of book amortization
                           over tax amortization                          12,206         88,436
                     Reduction of property's
                           carrying value                                      -        660,000
                                                                       ---------      ---------
       Net income for federal income tax purposes                       $808,513       $865,095
                                                                       =========      =========

</TABLE>

8.   Contingencies
   -------------
     In February 1996, a putative class action complaint was filed in the
     Superior Court in Essex County, New Jersey by a single investor in a
     limited partnership affiliated with the Partnership.  The complaint
     named as defendants the Partnership, the General Partner, certain
     other Affiliates of the General Partner, and certain unnamed officers,
     directors, employees and agents of the named defendants.  The
     plaintiff sought unspecified damages stemming from alleged
     misrepresentations and omissions in the marketing and offering
     materials associated with the Partnership and two limited partnerships
     affiliated with the Partnership.  On March 18, 1997, the court
     certified a class of investors who were original purchasers in the
     Partnership.

     The Partnership provides indemnification to the General Partner and
     its Affiliates for acts or omissions of the General Partner in good
     faith on behalf of the Partnership, except for acts or omissions
     constituting fraud, negligence, misconduct or breach of fiduciary
     duty.  The General Partner believes that this indemnification applies
     to the class action complaint described above.
     

                                    15
<PAGE>
              JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

8.   Contingencies (continued)
   -------------------------
     The Partnership has incurred an aggregate of approximately $206,000 in
     legal expenses in connection with the class action lawsuit (see Part
     II, Item 1 of this Report).  Of this amount, approximately $124,000
     relates to the Partnership's own defense and approximately $82,000
     relates to the indemnification of the General Partner and its
     Affiliates for their defense.  These expenses are funded from the
     operations of the Partnership.
     
     At the present time, the General Partner can not estimate the
     aggregate amount of legal expenses and indemnification claims to be
     incurred and their impact on the Partnership's financial statements,
     taken as a whole.  Accordingly, no provision for any liability which
     could result from the eventual outcome of these matters has been made
     in the accompanying financial statements.
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
                                    16
     
<PAGE>
              JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

Item 2:  Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations
---------------------

General
-------
During the offering period from September 9, 1986 to September 9, 1987, the
Partnership sold 91,647 Units representing gross proceeds (exclusive of the
John Hancock Limited Partner's contribution which was used to pay sales
commissions, acquisition fees and organizational and offering expenses) of
$45,823,500.  The proceeds of the offering were used to acquire investment
properties and fund reserves.  The Partnership's properties are described
more fully in Note 4 to the Financial Statements included in Item 1 of this
Report.

Forward-looking Statements
--------------------------
In addition to historical information, certain statements contained herein
contain forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended.  Those statements appear in a number of
places in this Report and include statements regarding the intent, belief
or expectations of the General Partner with respect to, among other things,
the prospective sale of Partnership properties, actions that would be taken
in the event of lack of liquidity, unanticipated leasing costs, repair and
maintenance expenses, distributions to the General Partner and to
Investors, the possible effects of tenants vacating space at Partnership
properties, the absorption of existing retail space in certain geographical
areas, and the impact of inflation.

Forward-looking statements involve numerous known and unknown risks and
uncertainties, and they are not guarantees of future performance.  The
following factors, among others, could cause actual results or performance
of the Partnership and future events to differ materially from those
expressed or implied in the forward-looking statements:  general economic
and business conditions; any and all general risks of real estate
ownership, including without limitation adverse changes in general economic
conditions and adverse local conditions, the fluctuation of rental income
from properties, changes in property taxes, utility costs or maintenance
costs and insurance, fluctuations of real estate values, competition for
tenants, uncertainties about whether real estate sales under contract will
close; the ability of the Partnership to sell its properties; and other
factors detailed from time to time in the filings with the Securities and
Exchange Commission.

Readers are cautioned not to place undue reliance on forward-looking
statements, which reflect the General Partner's analysis only as of the
date hereof.  The Partnership assumes no obligation to update forward-
looking statements.  See also the Partnership's reports to be filed from
time to time with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended.

                                    17

<PAGE>
              JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

Item 2:  Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations (continued)
---------------------

Liquidity and Capital Resources
-------------------------------
At September 30, 1997, the Partnership had $4,723,504 in cash and cash
equivalents and $54,355 in restricted cash.  The Partnership's cash and
cash equivalents increased by $2,525,657 from December 31, 1996 primarily
due to the sale of the 1300 North Dutton Avenue property on September 29,
1997.

The Partnership's working capital reserve has a current balance of
approximately 4.6% of the Investors' Invested Capital (defined in the
Partnership Agreement).  Liquidity would, however, be materially adversely
affected by a significant reduction in revenues or significant
unanticipated operating costs (including but not limited to litigation
expenses), unanticipated leasing costs or unanticipated capital
expenditures.  If any or all of these events were to occur, to the extent
that the working capital reserve would be insufficient to satisfy the cash
requirements of the Partnership, it is anticipated that additional funds
would be obtained through a reduction of cash distributions to Investors,
bank loans, short-term loans from the General Partner or its Affiliates, or
the sale or financing of Partnership properties.

As a result of a five-year lease for the entire property that commenced in
October 1996 and the existing favorable conditions of the Santa Rosa,
California real estate market, the General Partner listed the 1300 North
Dutton Avenue property for sale during October 1996.  On June 18, 1997, the
General Partner entered into a Purchase and Sale Agreement (the
"Agreement") on behalf of the Partnership for the sale of 1300 North Dutton
Avenue property to a non-affiliated buyer for a gross sales price of
$2,828,000.  On September 29, 1997, the Partnership sold the 1300 North
Dutton Avenue property for a net sales price of $2,673,278, after
deductions for commissions and selling expenses incurred in connection with
the sale.  Of this amount, $547,068 will be retained in working capital
reserves and $2,126,210 will be distributed to the Investors and the John
Hancock Limited Partner during the fourth quarter of 1997, in accordance
with the Partnership Agreement.  This transaction resulted in a non-
recurring loss of $5,321 representing the difference between the net sales
price and the property's carrying value of $2,678,599.  During the nine
months ended September 30, 1997, the 1300 North Dutton Avenue property
generated approximately 12% of the Partnership's net cash provided by
operations.

During the nine months ended September 30, 1997, cash from working capital
reserves in the amount of $134,382 was used for the payment of leasing
costs incurred at the Carnegie Center and Crossroads Square properties.
The General Partner estimates that the Partnership will incur approximately
$48,000 of additional leasing costs at the Marlboro Square and Carnegie
Center properties during the remainder of 1997.  The General Partner
anticipates that the current balance in the working capital reserve will be
sufficient to pay such costs.

                                    18

<PAGE>
              JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

Item 2:  Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations (continued)
---------------------

Liquidity and Capital Resources (continued)
-------------------------------------------
During the nine months ended September 30, 1997, approximately $32,000 of
cash from operations was used to fund non-recurring maintenance and repair
expenses incurred at the Partnership's properties.  The General Partner
estimates that the Partnership will incur additional non-recurring repair
and maintenance expenses of approximately $126,000 at the Warner Plaza,
Marlboro Square and Carnegie Center properties during the remainder of
1997.  These additional expenses will be funded from the operations of the
Partnership's properties and are not expected to have a significant impact
on the Partnership's liquidity.

Cash in the amount of $1,563,554, generated from the Partnership's
operations, was distributed to the General Partner and Investors during the
first three quarters of 1997.  The Partnership will make a comparable
distribution from its operations during the fourth quarter of 1997.

The Partnership has incurred an aggregate of approximately $206,000 in
legal expenses in connection with the class action lawsuit (see Part II,
Item 1 of this Report).  Of this amount, approximately $124,000 relates to
the Partnership's own defense and approximately $82,000 relates to the
indemnification of the General Partner and its Affiliates for their
defense.  At the present time, the General Partner cannot estimate the
aggregate amount of legal expenses and indemnification claims to be
incurred or their impact on the Partnership's future operations.  Liquidity
would, however, be materially adversely affected by a significant increase
in such legal expenses and related indemnification costs.  If such
increases were to occur, to the extent that cash from operations and the
working capital reserve would be insufficient to satisfy the cash
requirements of the Partnership, it is anticipated that additional funds
would be obtained through a reduction of cash distributions to Investors,
bank loans, short-term loans from the General Partner or its Affiliates, or
the sale or financing of Partnership properties.













                                    19

<PAGE>
              JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

Item 2:  Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations (continued)
---------------------

Liquidity and Capital Resources (continued)
-------------------------------------------
The following table summarizes the leasing activity and occupancy status at
the Partnership's properties during the nine months ended September 30,
1997:
<TABLE>
<CAPTION>
                           Marlboro Sq.   Crossroads Sq.     Carnegie      Warner Pl.
                          Shopping Ctr.   Shopping Ctr.       Center     Shopping Ctr.
                          -------------   -------------       ------     -------------
<S>                            <C>             <C>             <C>            <C>

Square Feet                   42,150         174,196         128,059         92,848

Occupancy at
 January 1, 1997                  70%            93%             64%             100%
                                 ====           ====            ====             ====

New Leases                         0%             2%              9%               0%
Lease Renewals                     0%             7%             18%               0%
Leases Expired (1)                 7%             0%              3%               2%
Occupancy at
 September 30, 1997               63%            95%             70%              98%
                                 ====           ====            ====             ====
Leases Scheduled to
Expire, Balance of 1997            0%             0%              0%               3%
                                 ====           ====            ====             ====
Leases Scheduled to
Commence, Balance of 1997          4%             0%              0%               0%
                                 ====           ====            ====             ====
</TABLE>

(1)  Includes leases terminated by the General Partner for non-payment of
rent.

During the second quarter of 1997, the anchor tenant at the Crossroads
Square property that occupies 49% of the property under a lease that is
scheduled to expire in August 2010 informed the General Partner of its
intention to vacate its space during the second half of 1998.  As a result,
the General Partner has commenced efforts to find a replacement tenant for
the space.  The General Partner does not believe that this situation will
have a materially adverse effect on the Partnership's liquidity.






                                    20

<PAGE>
              JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

Item 2:  Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations (continued)
---------------------

Liquidity and Capital Resources (continued)
-------------------------------------------
One tenant at the Crossroads Square property has a clause in its lease that
may be exercisable if the anchor tenant described above ceases to operate
at the property and a replacement tenant is not secured. Such clause
provides that the tenant may i) reduce rental payments to the lesser of the
fixed monthly rent or 2% of gross receipts if the anchor ceases to operate
for 180 days, and ii) terminate lease obligations if the cessation of
operations continues for an additional six months and a substitute tenant
has not been provided.  This tenant occupies approximately 10,500 square
feet, or 6% of the property, under a lease that is scheduled to expire in
July 2005.  The General Partner does not believe that any reduction in
rental payments or any possible lease termination that may result from the
anchor tenant vacating the property will have a materially adverse affect
on the Partnership's liquidity.

A tenant at the Crossroads Square property with a lease for approximately
12,500 square feet, or 7% of the property, filed for bankruptcy protection
under Chapter 11 of the U.S. Bankruptcy Code in March 1996.  Prior to
filing for protection, this tenant discontinued satisfying its rental
obligations and subsequently requested a reduction in its rental payments
through the end of its lease, which is scheduled to expire in October 2003.
Given the favorable real estate market conditions in the area where
Crossroads Square is located at that time, the General Partner did not
agree to a reduced rental amount.  On March 11, 1997 the bankruptcy court
ordered that the tenant assume the lease at the property.  The tenant is
current on all its rental obligations as of the date hereof.

During August 1996, a tenant at the Warner Plaza property that occupied 14%
of the rentable space at the property, vacated its space.  Under the terms
of its lease agreement, the tenant is obligated to pay both base rent and
percentage rent, which is based on the tenant's sales at the property.  The
Partnership continues to receive the minimum rental payments due but
percentage rent payments have not been received because the tenant, having
vacated its space, has no sales at the property.  Under the terms of its
lease agreement, the tenant has an option to terminate its lease
obligations in April 1999.  The General Partner has commenced efforts to
find a replacement tenant for this space and negotiate a lease buyout with
the former tenant.  In addition, one tenant at the property that occupied
approximately 1,600 square feet, or 2% of the property, had a clause in its
lease allowing it to terminate its lease if the tenant described above were
to vacate the property.  This tenant terminated its lease, which had been
scheduled to expire in August 2000, effective February 24, 1997.





                                    21

<PAGE>
              JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

Item 2:  Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations (continued)
---------------------

Liquidity and Capital Resources (continued)
-------------------------------------------

Another tenant at the Warner Plaza property, with a lease for approximately
6,150 square feet, or 7% of the property, filed for bankruptcy protection
under Chapter 11 of the U.S. Bankruptcy Code in June 1997.  During May
1997, this tenant discontinued satisfying its rental obligations.  On
September 16, 1997, the bankruptcy court ordered the tenant to assume the
lease at the property and to pay such amounts required to bring all rental
obligations current by November 24, 1997.  As of the date hereof, the
tenant has made the payments required through the date hereof.

Effective November 1996, the amount of space occupied by the anchor tenant
at the Marlboro Square property declined from approximately 38% of the
property to approximately 28% of the property, in accordance with the terms
of its lease.  Also during 1996, an existing tenant at Marlboro Square,
whose lease was scheduled to expire during November 1996, expanded the
space it occupies at the property from 8% to 15%.  However, due to
declining market conditions in the area where the property is located, the
current rental rate paid by the tenant per square foot is 53% lower than
its previous rental rate.

A tenant at the Marlboro Square property that had taken occupancy of the
property's 3,000 square foot outparcel in October 1996 did not make rental
payments due beginning in December 1996.  As a result, the General Partner
terminated the tenant's lease effective February 28, 1997.  On July 15,
1997, the General Partner reached a settlement agreement with the former
tenant whereby the Partnership agreed to release the former tenant from all
past due and future rental obligations in exchange for a one-time payment
of $16,000, which amount has been received.  The General Partner continues
to seek a replacement tenant for this space.

The General Partner anticipates that absorption of existing retail space in
the Marlboro, Massachusetts area will remain sluggish through at least the
remainder of 1997 based upon both the lack of demand and the increase in
the amount of available retail space in the area.  This increase in retail
space is primarily due to a new retail development near to the Marlboro
Square property which commenced operations during August 1996 and the
departure of a tenant that occupied 60,000 square feet at a property near
to Marlboro Square.  The General Partner will continue to offer competitive
rental rates and concessions in an effort to retain existing tenants as
well as to lease the remaining vacant space at the property.






                                    22

<PAGE>
              JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

Item 2:  Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations (continued)
---------------------------------

Liquidity and Capital Resources (continued)
-------------------------------------------
During the first nine months of 1997 the General Partner secured leases
with three new tenants to occupy, in the aggregate, approximately 11,200
square feet, or 9%, of the Carnegie Center property.  In addition, the
General Partner secured lease renewals/extensions with two existing tenants
at the property. The first tenant, occupying approximately 19,500 square
feet, or 15% of the property, and whose lease was scheduled to expire in
August 1998, extended the term of its lease through July 2004.  The General
Partner also secured a lease renewal with a tenant occupying approximately
3,600 square feet, or 3% of the property, and, whose lease was scheduled to
expire in June 1997, through June 2000.  The Partnership incurred
approximately $125,000 in leasing costs in connection with these new and
renewal lease transactions.  One tenant at this property who occupied
approximately 2,900 square feet of space under a lease that was scheduled
to expire in May 1999 was evicted from the property for non-payment of
rent.  The General Partner reached a settlement agreement with this tenant
whereby the tenant agreed to pay approximately $2,800 in exchange for the
General Partner terminating its lease at the property.  The General Partner
is seeking a replacement tenant to occupy this space.

The Cincinnati industrial real estate market, where Carnegie Center is
located, has experienced an oversupply of office/industrial space in recent
years, which has resulted in a decline in rental rates and an increase in
vacancy rates. The General Partner continues to actively seek new tenants
for the existing vacant space.  Rental rates and concessions are priced
competitively in an effort to secure new tenants as well as retain existing
tenants at the property.

During the first quarter of 1997, the General Partner had the Warner Plaza
property independently appraised.  Based upon the appraiser's investigation
and analysis, the property's market value was estimated to be approximately
$5,600,000.  The carrying value of the Warner Plaza property was evaluated
in comparison to its estimated future undiscounted cash flows and the
independent appraisal.  Based upon such evaluation, the General Partner
determined that the property's estimated future undiscounted cash flows
were expected to exceed its carrying value and, therefore, that a write-
down in value was not required.  The Partnership's cumulative investment in
the property, before accumulated depreciation and write-downs, is
approximately $7,925,000.








                                    23

<PAGE>
              JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

Item 2:  Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations (continued)
---------------------------------

Liquidity and Capital Resources (continued)
-------------------------------------------
During the second quarter of 1996, the General Partner had the Marlboro
Square Shopping Center property independently appraised.  Based upon the
appraiser's investigation and analysis, the property's market value was
estimated to be approximately $1,650,000.  The net book value of the
Marlboro Square Shopping Center property of approximately $2,309,000 at
June 30, 1996 was evaluated in comparison to its estimated future
undiscounted cash flows and to the independent appraisal, and, based upon
such evaluation, the General Partner determined that a write-down of
$660,000 was required to reflect the estimated permanent impairment in the
value of the Marlboro Square Shopping Center property.  Weak absorption of
available retail space in Marlboro, Massachusetts, in general, contributed
to the decline in this property's value.  The carrying value of the
Marlboro Square property at December 31, 1996 was evaluated in comparison
to the property's future undiscounted cash flows and a recent internal
appraisal and, based on such evaluation, the General Partner determined
that no further impairment in value existed and, therefore, an additional
write-down in value was not required as of December 31, 1996.

The General Partner evaluated the carrying value of each of the
Partnership's other properties as of December 31, 1996 by comparing such
value to the respective property's future undiscounted cash flows and the
then most recent independent or internal appraisal based on such
evaluations, the General Partner determined that the Carnegie Center
property's estimated future undiscounted cash flows were not expected to
exceed its carrying value.  Therefore, a write-down in value of $1,247,093,
representing the difference between the property's carrying value and its
then estimated market value (and not its estimated future undiscounted cash
flows) was required as of December 31, 1996.  No permanent impairment in
values existed with respect to the Partnership's other properties as of
December 31, 1996 and, therefore, no additional write-downs were recorded.

The General Partner will continue to conduct property valuations, using
internal or independent appraisals, in order to determine whether a
permanent impairment in value exists on any of the Partnership's
properties.











                                    24

<PAGE>
              JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

Item 2:  Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations (continued)
---------------------------------

Results of Operations
---------------------
The Partnership generated net income of $1,052,224 for the nine months
ended September 30, 1997 as compared to net income of $181,966 for the same
period in 1996.  Included in the results for the period in 1997 is a non-
recurring loss of $5,321 resulting from the sale of the 1300 North Dutton
Avenue property.  Included in the results for the period in 1996 was a
$660,000 write-down in the value of the Marlboro Square property.
Excluding these amounts net income increased by 25% between periods
primarily due to an increase in the operating performance at the 1300 North
Dutton Avenue as well as increases in the performance at the Crossroads
Square and Carnegie Center properties.  These increases were partially
offset by legal fees incurred in connection with the class action lawsuit
(described in Item 1 of Part II of this Report), a decline in interest
earned on the Partnership's short-term investments, and declines in the
performance at the Warner Plaza and Marlboro Square properties.

Average occupancy for the Partnership's investments was as follows:
                                                          Nine Months Ended
                                                            September 30,
                                                           1997        1996
                                                          -----       -----
     1300 North Dutton Avenue Office Complex               N/A           0%
     Marlboro Square Shopping Center                       65%          79%
     Crossroads Square Shopping Center                     94%          93%
     Carnegie Center Office/Warehouse                      67%          60%
     Warner Plaza Shopping Center                          99%         100%

Rental income for the nine months ended September 30, 1997 increased by
$310,394, or 16%, as compared to the same period in 1996.  This increase is
primarily due to an increase in rental income at the 1300 North Dutton
Avenue.  In addition, increases in rental income at the Carnegie Center and
Crossroads Square properties were partially offset by decreases in rental
income at the Warner Plaza and Marlboro Square properties.  Rental income
increased at the 1300 North Dutton Avenue and Carnegie Center properties
due to increases in average occupancy at the properties.  Rental income
increased at the Crossroads Square property primarily because a tenant that
was delinquent in making some of its rental payments during 1996 made all
of its scheduled rental payments through September 30, 1997.  In addition,
this tenant satisfied its past due 1996 rental payments during the period
in 1997.

Rental income decreased by 11% at Warner Plaza due to a decline in
percentage rent at the property which resulted from one of the tenants at
the property vacating its space, as described above.  Rental income at
Marlboro Square decreased by 17% between periods primarily due to a decline
in average occupancy.  Rental income also decreased at Marlboro Square
because rental rates on leases executed during the year ended December 31,
1996 were less than rental rates contracted under prior leases.

                                    25

<PAGE>
              JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

Item 2:  Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations (continued)
---------------------------------

Results of Operations (continued)
---------------------
Interest income for the nine months ended September 30, 1997 decreased by
$87,110, or 58%, as compared to the same period in 1996.  This decrease was
primarily due to the interest earned during the first quarter of 1996 on
the net sales proceeds received from the sale of J.C. Penney, which was
sold on December 29, 1995.  The Partnership distributed the majority of
such net sales proceeds in February 1996.  Interest income declined further
due to a decrease in the interest earned on the Partnership's working
capital reserves as a result of a reduced amount of such reserves through
most of the nine month period in 1997.

Depreciation expense for the nine months ended September 30, 1997 decreased
by $84,068, or 14%, as compared to the same period in 1996.  This decrease
is primarily due to the reclassification of the 1300 North Dutton Avenue
property as "Property Held for Sale" during the fourth quarter of 1996.
Accordingly, no depreciation was recorded on this property during the nine
month period in 1997.  In addition, depreciation expense declined further
between periods due to the write-down of Carnegie Center's carrying value
at December 31, 1996.

The Partnership's share of property operating expenses for the nine months
ended September 30, 1997 increased by $23,966, or 9%, primarily due to
increases in such expenses at the 1300 North Dutton Avenue, Marlboro Square
and Crossroads Square properties.  This increase was partially offset by
decreases in the Partnership's share of property operating expenses at the
Carnegie Center and Warner Plaza properties.  The Partnership's share of
property operating expenses increased at the 1300 North Dutton Avenue
property between periods primarily because the property remained unoccupied
for all of the period in 1996 and, therefore, only minor routine expenses
were required during that period.  The Partnership's share of property
operating expenses increased at Marlboro Square primarily due to a decrease
in average occupancy and, therefore, a decrease in tenant reimbursements
for such expenses.  At Crossroads Square, the Partnership's share of
property operating expenses increased between periods primarily due to
legal fees paid in connection with the collection of past due rent from the
tenant that had been in bankruptcy.  The Partnership's share of property
operating expenses decreased at the Carnegie Center and Warner Plaza
properties primarily due to certain non-recurring maintenance and repair
expenses incurred at such properties during the period in 1996.

General and administrative expenses for the nine months ended September 30,
1997 increased by $97,973, or 60%, primarily due to legal fees incurred by
the Partnership in connection with the class action complaint (see Part II,
Item 1 of this Report).  Excluding such legal fees, general and
administrative expenses were consistent between periods.

                                    26

<PAGE>
              JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

Item 2:  Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations (continued)
---------------------------------

Results of Operations (continued)
---------------------
Amortization of deferred expenses for the nine months ended September 30,
1997 decreased by $29,126, or 22%, as compared to the same period in 1996.
This decrease is primarily due to the write-down in carrying value of the
Carnegie Center at December 31, 1996.  The net book value of the Carnegie
Center plus any unamortized deferred expenses relating to the property at
the time the property was written-down were combined to arrive at the
property's carrying value (estimated market value) after its write-down.
Accordingly, some deferred expense amounts that were amortized during 1996
are now included in the property's carrying value, and are depreciated
during 1997.  This decrease was partially offset by the amortization of
leasing costs incurred at the Crossroads Square property in 1996 and 1997,
and at the Carnegie Center property in 1997.  In addition, included in
amortization expense during the period in 1997 is a write off of
approximately $9,000 of unamortized leasing costs relating to the tenant's
lease at Marlboro Square that was terminated in February 1997 (as described
above).

The General Partner believes that inflation has had no significant impact
on the Partnership's operations during the nine months ended September 30,
1997, and the General Partner anticipates that inflation will not have a
significant impact during the remainder of 1997.

Cash Flow
---------
The following table provides the calculations of Cash from Operations and
Distributable Cash from Operations which are calculated in accordance with
Section 17 of the Partnership Agreement:
<TABLE>
<CAPTION>                                                             Nine Months Ended
                                                                        September 30,
                                                                    1997            1996
                                                                    ----            ----
<S>                                                                 <C>              <C>
Net cash provided by operating activities (a)                    $1,550,315       $1,815,469
Net change in operating assets and liabilities (a)                  110,500        (257,039)
                                                                 ----------       ----------
Cash provided by operations (a)                                   1,660,815        1,558,430
Increase in working capital reserves                               (97,261)                -
Add:  Accrual basis Partnership
      management fee                                                 56,676           57,716
                                                                 ----------       ----------
Cash from Operations (b)                                          1,620,230        1,616,146
Decrease in working capital reserves                                      -           32,895
Less: Accrual basis Partnership
      management fee                                               (56,676)         (57,716)
                                                                 ----------       ----------
Distributable Cash from Operations (b)                           $1,563,554       $1,591,325
                                                                 ==========       ==========
Allocation to General Partner                                       $15,636          $15,913
Allocation to John Hancock Limited Partner                                -                -
Allocation to Investors                                           1,547,918        1,575,412
                                                                 ----------       ----------
Distributable Cash from Operations (b)                           $1,563,554       $1,591,325
                                                                 ==========       ==========
</TABLE>
                                    27

<PAGE>
              JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

Item 2:  Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations (continued)
---------------------------------

Cash Flow (continued)
---------------------
 (a)  Net cash provided by operating activities, net change in
       operating assets and liabilities, and cash provided by
       operations are as calculated in the Statements of Cash Flows
       included in Item 1 of this Report.

 (b)  As defined in the Partnership Agreement.  Distributable Cash
       from Operations should not be considered as an alternative to
       net income (i.e. not an indicator of performance) or to
       reflect cash flows or availability of discretionary funds.

During the fourth quarter of 1997, the Partnership will make a distribution
in the aggregate amount of $2,647,394.  Of this amount, $521,184 was
generated from Distributable Cash from Operations for the quarter ended
September 30, 1997 and $2,126,210 was generated from Distributable Cash
from Sales during the same quarter in 1997.  These amounts will be
allocated as follows:

                           From Distributable     From Distributable
                               Cash From              Cash From
                               Operations               Sales
                               ----------             ----------

Investors                       $515,972             $1,832,940
John Hancock Limited Partner           -                293,270
General Partner                    5,212                      -
                               ---------             ----------
Total                           $521,184             $2,126,210
                               =========             ==========


The source of future cash distributions is dependent upon cash generated by
the Partnership's properties and the use of working capital reserves.  The
General Partner currently anticipates that the Partnership's Distributable
Cash from Operations during the fourth quarter of 1997 will be comparable
to that generated during each of the first three quarters of 1997.














                                    28

<PAGE>
              JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                       PART II:  OTHER INFORMATION

Item 1.   Legal Proceedings
     
     In February 1996, a putative class action complaint was filed in the
     Superior Court in Essex County, New Jersey by a single investor in a
     limited partnership affiliated with the Partnership.  The complaint
     named as defendants the Partnership, the General Partner, certain
     other affiliates of the General Partner, and certain unnamed
     officers, directors, employees and agents of the named defendants.
     
     The plaintiff sought unspecified damages stemming from alleged
     misrepresentations and omissions in the marketing and offering
     materials associated with the Partnership and two limited
     partnerships affiliated with the Partnership.  The complaint alleged,
     among other things, that the marketing materials for the Partnership
     and the affiliated limited partnerships did not contain adequate risk
     disclosures.
     
     On March 18, 1997, the court certified a class of investors who were
     original purchasers in the Partnership.  The certification order
     should not be construed as suggesting that any member of the class is
     entitled to recover, or will recover, any amount in the action.
     
     The General Partner believes the allegations are totally without
     merit and intends to vigorously contest the action.
     
     In September 1997 a complaint for damages was filed in the Superior
     Court of the State of California for the County of Los Angeles by a
     single Investor in the Partnership.  The complaint named as
     defendants the General Partner and certain unnamed agents and/or
     employees of one or more of the other defendants.
     
     The plaintiff sought unspecified damages stemming from alleged breach
     of contract and breach of fiduciary duty.  The complaint alleged,
     among other things, that the plaintiff requested a list of Investors
     from the General Partner, allegedly with the intention of making a
     tender offer to purchase up to 4.9% of the Units of the Partnership
     at a purchase price of $165 per Unit, and that the General Partner
     failed and refused to provide the plaintiff with such list.  The
     complaint alleged further that the plaintiff, acting pursuant to a
     special power of attorney granted to it by a limited partner in a
     limited partnership affiliated with the Partnership, also requested a
     list of limited partners in the affiliated limited partnership with
     the intention of making a tender offer for up to 4.9% of the limited
     partnership units of that affiliated limited partnership, and that
     the General Partner also failed and refused to provide the plaintiff
     with such list.
     
     There can be no assurances given as to the timing, costs or outcome
     of this legal proceeding.
     
     There are no other material pending legal proceedings, other than
     ordinary routine litigation incidental to the business of the
     Partnership, to which the Partnership is a party or to which any of
     its properties is subject.

                                    29

<PAGE>
              JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)
     
     
Item 2.   Changes in Securities

     There were no changes in securities during the third quarter of 1997.

Item 3.   Defaults Upon Senior Securities

     There were no defaults upon senior securities during the third
     quarter of 1997.

Item 4.   Submission of Matters to a Vote of Security Holders

     There were no matters submitted to a vote of security holders of the
     Partnership during the third quarter of 1997.

Item 5.   Other information

Item 6.   Exhibits and Reports on Form 8-K

     (a)  There are no exhibits to this report.
     (b)  During the quarter ended September 30, 1997, the Partnership
           filed a report on Form 8-K.  This report, dated September 29,
           1997, disclosed the terms of the sale of the 1300 North Dutton
           Avenue property and included the following Pro Forma Financial
           Statements:

           Pro Forma Balance Sheet at June 30, 1997
           Pro Forma Statement of Operations for the six months ended June
           30, 1997
           Pro Forma Statement of Operations for the year ended December
           31, 1996






















                                    30

<PAGE>
              JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)


                                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, on the 14th day of November, 1997.


                              John Hancock Realty Income Fund
                              Limited Partnership


                              By:  John Hancock Realty Equities, Inc.,
                                   General Partner




                                   By:  WILLIAM M. FITZGERALD
                                        --------------------------------
                                        William M. Fitzgerald, President



                                   By:  RICHARD E. FRANK
                                        --------------------------------
                                        Richard E. Frank, Treasurer
                                        (Chief Accounting Officer)